AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 20, 1996
REGISTRATION NO. 33-44844
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 4
TO
FORM S-6
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FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
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A. EXACT NAME OF TRUST:
DEFINED ASSET FUNDS--
EQUITY INCOME FUND
INDEX SERIES
S&P 500 TRUST 2
S&P MIDCAP TRUST
(UNIT INVESTMENT TRUSTS)
B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE,
FENNER & SMITH
INCORPORATED
DEFINED ASSET FUNDS
POST OFFICE BOX 9051
PRINCETON, N.J.
08543-9051 SMITH BARNEY INC.
388 GREENWICH
STREET--23RD FLOOR
NEW YORK, NY 10013
PRUDENTIAL SECURITIES PAINEWEBBER INCORPORATED DEAN WITTER REYNOLDS INC.
INCORPORATED 1285 AVENUE OF THE TWO WORLD TRADE
ONE SEAPORT PLAZA AMERICAS CENTER--59TH FLOOR
199 WATER STREET NEW YORK, N.Y. 10019 NEW YORK, N.Y. 10048
NEW YORK, N.Y. 10292
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
TERESA KONCICK, ESQ. LAURIE A. HESSLEIN DOUGLAS LOWE, ESQ
P.O. BOX 9051 388 GREENWICH ST. 130 LIBERTY STREET--29TH
PRINCETON, N.J. NEW YORK, N.Y. 10013 FLOOR
08543-9051 NEW YORK, N.Y. 10006
COPIES TO:
LEE B. SPENCER, JR. ROBERT E. HOLLEY PIERRE DE SAINT PHALLE,
ONE SEAPORT PLAZA 1200 HARBOR BLVD. ESQ.
199 WATER STREET WEEHAWKEN, N.J. 07087 450 LEXINGTON AVENUE
NEW YORK, N.Y. 10292 . NEW YORK, N.Y. 10017
The issuer has registered an indefinite number of Units under the Securities Act
of 1933 pursuant to Rule 24f-2 and filed the Rule 24f-2 Notice for the most
recent fiscal year on February 7, 1996.
Check box if it is proposed that this filing will become effective on March 29,
1996 pursuant to paragraph (b) of Rule 485. / x /
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<PAGE>
DEFINED ASSET FUNDSSM
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EQUITY INCOME FUND The objective of these Defined Funds is to provide
INDEX SERIES investors with the opportunity to purchase Units
S&P 500 TRUST 2 representing proportionate interests in defined
S&P MIDCAP TRUST portfolios of preselected securities consisting of
(UNIT INVESTMENT substantially all of the common stocks, in
TRUSTS) substantially the same proportions, which comprise
- ------------------------------the Standard & Poor's 500 Stock Price Composite
- -- MONTHLY INCOME Index or the Standard & Poor's MidCap 400 Index,
- -- PROFESSIONAL SELECTION respectively. The Trusts are designed to produce
- -- DIVERSIFICATION investment results that generally correspond to
- -- REINVESTMENT OPTION the price and yield performance of common stocks
represented by these Indices. There is no
assurance that these objectives will be met. The
Fund is not sponsored by or affiliated with
Standard and Poor's Corporation.
The value of Units will fluctuate with the value
of the Portfolios of underlying Securities and no
assurance can be given that dividends will be paid
or that the Units will appreciate in value.
An investor may invest in Units of one or both
Trusts.
Minimum purchase: 1,000 Units per Portfolio.
Minimum purchase for Individual Retirement/
Keogh Accounts: unrestricted.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
SPONSORS: OF THIS DOCUMENT. ANY REPRESENTATION TO THE
Merrill Lynch, CONTRARY IS A CRIMINAL OFFENSE.
Pierce, Fenner & Smith -------------------------------------------------
Incorporated INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
Smith Barney Inc. AND RETAIN IT FOR FUTURE REFERENCE.
Prudential Securities INQUIRIES SHOULD BE DIRECTED TO THE TRUSTEES AT
Incorporated THE TELEPHONE NUMBERS
Dean Witter Reynolds Inc. LISTED ON THE BACK OF THIS PROSPECTUS.
PaineWebber Incorporated PROSPECTUS DATED MARCH 29, 1996.
<PAGE>
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Defined Asset FundsSM
Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $100 billion sponsored in the last 25 years. Each Defined
Asset Fund is a portfolio of preselected securities. The portfolio is divided
into 'units' representing equal shares of the underlying assets. Each unit
receives an equal share of income and principal distributions.
Defined Asset Funds offer several defined 'distinctives'. You know in advance
what you are investing in and that changes in the portfolio are limited - a
defined portfolio. Most defined bond funds pay interest monthly - defined
income. The portfolio offers a convenient and simple way to invest - simplicity
defined.
Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:
o Municipal portfolios
o Corporate portfolios
o Government portfolios
o Equity portfolios
o International portfolios
The terms of Defined Funds are as short as one year or as long as 30 years.
Special defined bond funds are available including: insured funds, double and
triple tax-free funds and funds with 'laddered maturities' to help protect
against changing interest rates. Defined Asset Funds are offered by prospectus
only.
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Defining The Index Series
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Indexing is an investment strategy that allows the sponsors to create a
portfolio of stocks that is carefully structured to mirror, as closely as
possible, the total return of a market index. Investors often compare the
performance of their investments to a measure of overall market performance --
an index. Each Trust is designed to offer investors an opportunity, with a
single, convenient purchase, to participate in the total return performance of
an index broadly representing the market. This diversification reduces the risk
of selecting individual stocks or market sectors. Indexing is a strategy that
most equity investors can use as part of their overall investment plan, to seek
potential growth in otherwise conservative portfolios or to hedge an aggressive
strategy.
Investors in the Index Series do not select individual stocks or market sectors.
Investors, in effect, buy the major portion of the market represented by an
index. The portfolio is broadly diversified. Of course, a Trust may not hold all
of the stocks in the related index at all times, but will seek to reflect the
performance of that index. The Sponsors expect to have at least 95% of each
Trust's assets invested in the common stocks of the related index and to
maintain a correlation of .97-.99 between each index and the investment results
of the related trust.
The Fund was created on February 19, 1992. The information in this prospectus is
as of December 31, 1995, the evaluation date.
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Defining Your Investment
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MONTHLY INCOME DISTRIBUTIONS
The Trusts pay monthly income, even though the securities generally pay
dividends quarterly. Monthly distributions of dividends are payable on the 25th
of the month to holders of record on the 10th day of the month. In order to meet
certain tax requirements, a special distribution of income including capital
gains, may be paid to holders of record as of a date in December. Any capital
gain net income will generally be distributed after the end of each Trust's
taxable year.
It is expected that the proceeds of the sale or redemption of securities will
not be distributed but will be reinvested in additional securities. To the
extent these proceeds are available for distribution, they will be distributed
on the next distribution day.
REINVESTMENT OPTION
You can elect to automatically reinvest your distributions into additional units
of a Trust. Reinvesting helps to compound your income for a greater total
return.
TAXES
Distributions which are taxable as ordinary income to investors will constitute
dividends for Federal income tax purposes and will be eligible for the
dividends-received deduction for certain corporations. As of the date of this
prospectus, the dividends-received deduction is currently 70% (see Taxes in Part
B). However, on December 7, 1995 the Clinton Administration proposed reducing
the dividends-received deduction to 50% for dividends paid or accrued after
January 31, 1996.
MANDATORY TERMINATION DATE
The Trusts will terminate by February 28, 2017. The final distribution will be
made within a reasonable time afterward. A Trust may be terminated earlier if
its value is less than 40% of the value of the securities when deposited. On the
evaluation date the value of the S&P 500 Trust 2 was 124.55% of the value of its
securities when deposited and the value of the S&P MidCap Trust was 125.26% of
the value of its securities when deposited.
SELLING YOUR INVESTMENT
You may sell or redeem your units at any time prior to the termination of the
Portfolio. Your price will be based on the then current net asset value.
A-2
<PAGE>
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Defining Your Risks
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Unit price fluctuates with the value of a portfolio, and the value of the
portfolio will be affected by changes in the financial condition of the issuers,
general economic conditions, movements in stock prices generally, the impact of
the Sponsors' purchase and sale of the securities and other factors. An
investment in Units should be made with the understanding that the financial
condition of the issuers of the securities may become impaired or that the
general condition of the stock market may worsen. Common stocks are susceptible
to general stock market fluctuations and to volatile increases and decreases in
value as market confidence in and perceptions of the issuers change. These
perceptions are based on various unpredictable factors. Further distributions of
income on the underlying securities will generally depend upon the declaration
of dividends by the issuers, and there can be no assurance that the issuers of
securities will pay dividends or that the current level of dividends can be
maintained or increased. Therefore, there is no guarantee that the objective of
the Trusts will be achieved.
Unlike a mutual fund, the Trusts are not actively managed and the Sponsors
receive no management fee. Therefore, the adverse financial condition of an
issuer or any market movement in the price of a security will not necessarily
require the sale of securities from a Trust or mean that the Sponsors will not
continue to purchase the security in order to create additional Units. Although
the Trusts are regularly reviewed and evaluated and the Sponsors may instruct
the Trustee to sell securities under certain limited circumstances, securities
will not be sold to take advantage of market fluctuations or changes in
anticipated rates of appreciation.
Investors in the S&P MidCap Trust should note that the Trust may not invest more
than 5% of its assets in the stock of any issuer that derives more than 15% of
its revenues from securities-related activities or invest in a
securities-related issuer if its stock is not a marginable security under
Regulation T promulgated by the Board of Governors of the Federal Reserve
System. The foregoing restrictions are not expected to have a significant effect
on the correlation between the S&P MidCap Trust and the S&P MidCap 400 Index.
The S&P 500 Trust is not affected by the foregoing restrictions because it is
covered by an SEC exemptive order. (See Risk Factors in Part B.)
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Defining Your Costs
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S&P 500 TRUST 2:
PUBLIC OFFERING PRICE PER 1,000 UNITS $1,483.95
The Public Offering Price as of December 31, 1995, the evaluation date, is based
on the aggregate value of the underlying securities ($140,116,852) and any cash
held to purchase securities, divided by the number of units outstanding
(96,595,184) times 1,000, plus a maximum sales charge of 2.25% (2.302% on the
value of the underlying securities). The redemption and secondary market
repurchase price as of the evaluation date was $1,450.56 per 1,000 units ($33.39
per 1,000 units less than the Public Offering Price).
S&P MIDCAP TRUST:
PUBLIC OFFERING PRICE PER 1,000 UNITS $1,307.78
The Public Offering Price as of December 31, 1995, the evaluation date, is based
on the aggregate value of the underlying securities ($52,400,909) and any cash
held to purchase securities, divided by the number of units outstanding
(40,990,874) times 1,000, plus a maximum sales charge of 2.25% (2.302% on the
value of the underlying securities). The redemption and secondary market
repurchase price as of the evaluation date was $1,278.36 per 1,000 units ($29.42
per 1,000 units less than the Public Offering Price).
The Public Offering Prices and the redemption and secondary market repurchase
prices on any subsequent date will vary. The underlying securities are valued by
the Trustee on the basis of their closing sale prices at 4:00 p.m. Eastern time
on every business day.
SALES CHARGES
Although each Trust is a unit investment trust rather than a mutual fund, the
following information is presented to permit a comparison of fees and an
understanding of the direct or indirect costs and expenses that you pay
As a %
of Secondary
Market
Public
Offering Price
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Maximum Sales Charge 2.25%
ESTIMATED ANNUAL OPERATING EXPENSES
S&P 500 S&P MIDCAP
TRUST 2 TRUST
Amount per Amount per
1,000 Units 1,000 Units
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Trustee's Fee $ 0.81 $ 0.84
Maximum Portfolio Supervision,
Bookkeeping and Administrative
Fees $ 0.37 $ 0.37
Other Operating Expenses $ 0.77 $ 1.48
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TOTAL $ 1.95 $ 2.69
A-3
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Defined Asset Funds -
Equity Income Fund Index Series,
S&P 500 Trust 2:
We have audited the accompanying statement of condition of Defined Asset Funds -
Equity Income Fund Index Series, S&P 500 Trust 2, including the portfolio, as of
December 31, 1995 and the related statements of operations and of changes in net
assets for the years ended December 31, 1995, 1994 and 1993. These financial
statements are the responsibility of the Trustee. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits 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 statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Securities owned at
December 31, 1995, as shown in such portfolio, were confirmed to us by the Chase
Manhattan Bank, N.A., 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Defined Asset Funds - Equity
Income Fund Index Series, S&P 500 Trust 2 at December 31, 1995 and the results
of its operations and changes in its net assets for the above-stated years in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
February 22, 1996
D-1
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
STATEMENT OF CONDITION
AS OF DECEMBER 31, 1995
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $107,916,299) (Note 1) $140,116,852
Dividends receivable 260,739
Receivable for units purchased 500,000
Other receivable 250
Total trust property 140,877,841
LESS LIABILITY - Advance from Trustee 141,142
NET ASSETS, REPRESENTED BY:
96,595,184 units of fractional
undivided interest outstanding (Note 3) $140,626,359
Undistributed net investment income 110,340 $140,736,699
UNIT VALUE ($140,736,699 / 96,595,184 units) $1.45697
See Notes to Financial Statements.
D-2
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
<TABLE><CAPTION>
STATEMENTS OF OPERATIONS
Years Ended December 31,
1995 1994 1993
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividend income $ 2,605,520 $1,924,809 $1,418,147
Trustee's fees and expenses (127,500) (91,625) (96,992)
Sponsors' fees (29,100) (25,941) (11,785)
Net investment income 2,448,920 1,807,243 1,309,370
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain on securities sold or
redeemed 562,667 494,726 81,902
Unrealized appreciation (depreciation) of
investments 28,688,951 (1,429,745) 3,296,373
Net realized and unrealized gain (loss) on
investments 29,251,618 (935,019) 3,378,275
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $31,700,538 $ 872,224 $4,687,645
</TABLE>
See Notes to Financial Statements.
D-3
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
<TABLE><CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
Years Ended December 31,
1995 1994 1993
OPERATIONS:
<S> <C> <C> <C>
Net investment income $ 2,448,920 $ 1,807,243 $ 1,309,370
Realized gain on securities sold or
redeemed 562,667 494,726 81,902
Unrealized appreciation (depreciation) of
investments 28,688,951 (1,429,745) 3,296,373
Net increase in net assets resulting from
operations 31,700,538 872,224 4,687,645
DISTRIBUTIONS TO HOLDERS (Note 2):
Income (2,472,574) (1,793,155) (1,340,429)
Principal (594,288) (350,938) (38,724)
Total distributions (3,066,862) (2,144,093) (1,379,153)
CAPITAL SHARE TRANSACTIONS - Issuance of
31,833,731, 11,104,169 and 23,143,896 units,
respectively (Note 4) 41,587,777 12,228,709 24,748,345
REDEMPTION OF 684,158 and 978,667 units,
respectively (Note 4) (866,111) (1,074,397)
NET CAPITAL SHARE TRANSACTIONS 40,721,666 11,154,312 24,748,345
NET INCREASE IN NET ASSETS 69,355,342 9,882,443 28,056,837
NET ASSETS AT BEGINNING OF YEAR 71,381,357 61,498,914 33,442,077
NET ASSETS AT END OF YEAR $140,736,699 $71,381,357 $61,498,914
PER UNIT:
Income distributions during year $0.03020 $.02877 $0.02719
Principal distributions during year $.00620 $.00540 $.00070
Net asset value at end of year $1.45697 $1.09070 $1.11169
TRUST UNITS OUTSTANDING AT END OF YEAR 96,595,184 65,445,611 55,320,109
</TABLE>
See Notes to Financial Statements.
D-4
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(a) Securities are stated at market value; for securities listed on a
national securities exchange, value is based on the closing sale price
on such exchange and for securities not so listed, value is based on
the current bid price on the over-the-counter market. Realized gains
or losses on sales of securities are determined using the first-in,
first-out cost method.
(b) The Fund is not subject to income taxes. Accordingly, no provision for
such taxes is required.
(c) Dividend income is recorded on the ex-dividend date.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders on the twenty-
fifth day of each month. Receipts other than dividends, after deductions
for redemptions and applicable expenses, are distributed as explained in
"Administration of the Fund" in this Prospectus, Part B.
3. NET CAPITAL
Cost of 96,595,184 units at Dates of Deposit $110,915,720
Less charge 2,495,826
Net amount applicable to Holders 108,419,894
Redemptions of units - net cost of 1,662,825 units
redeemed less redemption amounts (147,778)
Realized gain on securities sold or redeemed 1,137,640
Principal distributions (983,950)
Net unrealized appreciation of investments 32,200,553
Net capital applicable to Holders $140,626,359
4. REDEMPTIONS
Holders may request redemptions of units by presentation thereof to the
Trustee, Chase Manhattan Bank, N.A.
5. INCOME TAXES
As of December 31, 1995, net unrealized appreciation of investments, based
on cost for Federal income tax purposes, aggregated $32,200,553 of which
$34,165,053 related to appreciated securities and $1,964,500 related to
depreciated securities. The aggregate cost of investment securities for
Federal income tax purposes was $107,916,299 at December 31, 1995.
D-5
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
of Total
Portfolio Market
No. Common Stocks Shares Cost(1) Value(1) Value
<S> <C> <C> <C> <C> <C>
1 General Electric Co. 51,400 $ 2,451,875 $ 3,700,800 2.6412%
2 American Tel. & Tel. 48,600 2,497,580 3,146,850 2.2459
3 Exxon Corp. 37,900 2,447,908 3,036,738 2.1673
4 Coca-Cola 38,300 1,841,493 2,843,775 2.0296
5 Merck & Co., Inc. 37,700 1,658,555 2,478,775 1.7691
6 Phillip Morris 25,700 1,809,185 2,325,850 1.6599
7 Royal Dutch Petroleum 16,400 1,631,745 2,314,450 1.6518
8 Proctor and Gamble 21,000 1,225,408 1,743,000 1.2440
9 Johnson & Johnson 19,800 1,058,500 1,695,375 1.2100
10 IBM 17,400 1,309,608 1,596,450 1.1394
11 Microsoft Corp. 18,100 1,135,000 1,588,275 1.1335
12 Wallmart Stores 70,100 1,895,438 1,568,488 1.1194
13 Intel Corp. 25,200 825,075 1,430,100 1.0206
14 Mobil Corp. 12,100 933,518 1,355,200 0.9672
15 Pepsico Inc. 24,100 967,330 1,346,588 0.9610
16 American Int'l Group, In. 14,450 844,343 1,336,625 0.9539
17 Bristol Myers Squibb 15,500 1,026,113 1,331,063 0.9500
18 Bell South Corp. 30,400 869,745 1,322,400 0.9438
19 Hewlett Packard Co. 15,600 749,203 1,306,500 0.9324
20 GTE Corp. 29,600 1,022,380 1,302,400 0.9295
21 Pfizer, Inc. 19,400 758,263 1,222,200 0.8723
22 General Motors Corp. 22,800 975,428 1,205,550 0.8604
23 Dupont (E.I.) De Nemours 17,000 947,350 1,187,875 0.8478
24 AMOCO Corp. 15,200 849,235 1,092,500 0.7797
25 SBC Communications Inc. 18,600 731,853 1,069,500 0.7633
26 Chevron Corp. 19,900 816,628 1,044,750 0.7456
27 Federal Nat'l Mortg Assn. 8,300 658,003 1,030,238 0.7353
28 Motorola Inc. 18,000 771,165 1,026,000 0.7322
29 Abbot Laboratories 24,100 767,235 1,006,175 0.7181
30 Ameritech 16,900 668,935 997,100 0.7116
31 McDonald's Corp. 21,200 602,850 956,650 0.6828
32 Ford 32,800 847,936 951,200 0.6789
33 Lilly (Eli) & C. 16,900 552,338 950,625 0.6785
34 Walt Disney Co. 16,000 721,109 944,000 0.6737
35 American Home Products 9,600 690,568 931,200 0.6646
36 Bell Atlantic Corp. 13,400 705,858 896,125 0.6396
37 Citicorp. 13,000 499,200 874,250 0.6239
38 Minnesota Mining & Mfg. 12,800 676,273 848,000 0.6052
39 Boeing Co. Com. 10,500 494,525 822,938 0.5873
40 BankAmerica Corp. 11,340 548,245 734,265 0.5240
41 Gillette Co. 13,600 448,718 708,900 0.5059
42 Nynex Corp. 13,100 541,289 707,400 0.5049
43 Kimberly Clark Corp. 8,510 400,606 704,203 0.5026
44 Home Depot Inc. 14,600 609,029 698,975 0.4989
45 Eastman Kodak 10,400 454,040 696,800 0.4973
46 Columbia Health Care Corp. 13,592 528,526 689,794 0.4923
47 Unilever 4,900 557,133 689,675 0.4922
48 Chrysler 11,700 474,035 647,888 0.4624
49 Texaco Inc. 8,100 517,568 635,850 0.4538
50 Cisco Systems 8,400 339,913 626,850 0.4474
51 Schering Plough 11,300 391,473 618,675 0.4415
52 American Express 14,800 427,828 612,350 0.4370
</TABLE>
D-6
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
of Total
Portfolio Market
No. Common Stocks Shares Cost(1) Value(1) Value
<S> <C> <C> <C> <C> <C>
53 Travelers Group Inc. 9,733 $ 352,432 $ 611,962 0.4368%
54 Pharmacia & Upjohn Inc. 15,350 450,293 594,813 0.4245
55 Capital Cities ABC Inc. 4,700 308,238 579,863 0.4138
56 Nations Bank 8,300 434,615 577,888 0.4124
57 Dow Chemicals 8,200 509,298 577,075 0.4119
58 Emerson Electric Co. 6,900 413,483 564,075 0.4026
59 Allstate Corp. 13,684 328,527 562,793 0.4017
60 Oracle Systems Corp. Com. 13,250 261,365 561,469 0.4007
61 Atlantic Richfield 4,900 544,645 542,675 0.3873
62 MCI Communications 20,700 444,275 540,788 0.3860
63 Anheuser-Busch 7,800 434,128 521,625 0.3723
64 Viacom Inc. 11,000 458,700 521,125 0.3719
65 Kellogg Co. 6,700 421,785 517,575 0.3694
66 US West Communications G 14,400 354,976 514,800 0.3674
67 Schlumberger Ltd. 7,400 454,783 512,450 0.3657
68 Southern Co. 20,400 405,960 502,350 0.3585
69 Lockheed Corp. 6,145 249,808 485,455 0.3465
70 Amgen Inc. 8,100 256,313 480,938 0.3432
71 Sara Lee Corp. 14,800 400,740 471,750 0.3367
72 Sears Roebuck 11,900 275,229 464,100 0.3312
73 Federal Home Loan 5,500 291,204 459,250 0.3278
74 Morgan J.P. 5,700 371,773 457,425 0.3265
75 Campbell Soup 7,600 319,718 456,000 0.3254
76 First Data Corp. 6,800 409,115 454,750 0.3246
77 Banc One Corp. 12,022 422,268 453,830 0.3239
78 Chemical Banking Corp. 7,700 325,410 452,375 0.3229
79 Xerox 3,300 316,803 452,100 0.3227
80 Time Warner Inc. 11,800 404,499 446,925 0.3190
81 WMX Technologies 14,800 491,940 442,150 0.3156
82 Pacific Telesis Group 13,100 517,817 440,488 0.3144
83 Monsanto Co. 3,500 249,663 428,750 0.3060
84 Sprint 10,700 328,835 426,663 0.3045
85 Airtouch Comm. 15,100 190,520 426,575 0.3044
86 Computer Assoc. Int'l. 7,350 183,635 418,031 0.2983
87 Union Pacific 6,300 361,440 415,800 0.2968
88 Allied-Signal Inc. 8,600 295,043 408,500 0.2915
89 Warner Lambert Co. 4,100 297,130 398,213 0.2842
90 Medtronic Inc. 7,100 198,223 396,713 0.2831
91 Tele Communications Inc. 19,900 333,402 395,513 0.2823
92 Seagram Ltd. 11,400 339,158 394,725 0.2817
93 Compaq Computer 8,100 213,046 388,800 0.2775
94 General Re. Corp. 2,500 292,263 387,500 0.2766
95 First Chicago 9,787 265,078 386,587 0.2759
96 Heinz H J 11,250 301,073 372,656 0.2660
97 Pacific Gas & Electric 12,900 395,720 366,038 0.2612
98 Norwest Corp. 10,800 274,550 356,400 0.2544
99 Baxter Int'l, Inc. 8,500 271,303 355,938 0.2540
100 Caterpillar Inc. 6,000 245,983 352,500 0.2516
101 United Technologies Corp. 3,700 226,523 351,038 0.2505
102 Raytheon 7,400 220,740 349,650 0.2495
103 Rockwell Int'l 6,600 225,255 348,975 0.2491
104 United Healthcare Corp. 5,300 242,065 347,150 0.2478
</TABLE>
D-7
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
of Total
Portfolio Market
No. Common Stocks Shares Cost(1) Value(1) Value
<S> <C> <C> <C> <C> <C>
105 Dun & Bradstreet 5,200 $ 296,835 $ 336,700 0.2403%
106 Burlington Northern 4,300 257,403 335,400 0.2394
107 Northern Telecom Ltd. 7,800 291,278 335,400 0.2394
108 Chase Manhattan 5,500 197,438 333,438 0.2380
109 Penney J.C. Co. Inc. 6,900 288,960 328,613 0.2345
110 Automatic Data Processing 4,400 240,670 326,700 0.2332
111 Wells Fargo & Co. 1,500 196,575 324,000 0.2312
112 May Department Stores 7,600 277,140 321,100 0.2292
113 Fleet Financial Group 7,800 289,890 317,850 0.2268
114 Norfolk Southern Corp. 4,000 259,163 317,500 0.2266
115 Colgate Palmolive 4,500 269,913 316,125 0.2256
116 First Interstate Bancorp 2,300 155,978 313,950 0.2241
117 McDonnell Douglas 3,400 118,590 312,800 0.2232
118 Conagra Inc. 7,500 229,425 309,375 0.2208
119 CPC Int'l Inc. 4,500 229,290 308,813 0.2204
120 Nike Inc. 4,400 166,753 306,350 0.2186
121 Texas Instruments 5,800 222,415 300,150 0.2142
122 Duke Power Co. 6,300 241,378 298,463 0.2130
123 Bank of New York Co. Inc. 6,100 220,830 297,375 0.2122
124 Int'l Paper 7,800 278,328 295,425 0.2108
125 Digital Equipment 4,600 191,493 294,975 0.2105
126 Archer-Daniels-Midland 16,377 251,404 294,786 0.2104
127 Enron Corp. 7,700 218,295 293,563 0.2095
128 CSX Corporation 6,400 232,985 292,000 0.2084
129 First Union Corp. 5,200 232,023 289,250 0.2064
130 Aluminum Co. of America 5,400 212,920 285,525 0.2038
131 Barrick Gold Corp. 10,800 282,428 284,850 0.2033
132 Texas Utilities Company 6,900 271,033 283,763 0.2025
133 PPG Ind. 6,200 219,388 283,650 0.2024
134 Loews Corp. 3,600 211,333 282,150 0.2014
135 Deere & Co. 8,000 172,328 282,000 0.2013
136 General Mills Com
w/rights 4,800 299,365 277,200 0.1978
137 Merrill Lynch Co. 5,400 202,793 275,400 0.1966
138 US West Media Group 14,400 236,216 273,600 0.1953
139 Phillips Petroleum 8,000 234,025 273,000 0.1948
140 Tenneco, Inc. 5,500 247,200 272,938 0.1948
141 Weyerhaeuser 6,200 249,960 268,150 0.1914
142 Sun Microsystems Inc. 5,800 108,850 264,625 0.1889
143 FPL Group 5,700 210,198 264,338 0.1887
144 Gannett Co. 4,300 221,403 263,913 0.1884
145 Chubb Corp. 2,700 223,585 261,225 0.1864
146 Keycorp 7,200 227,048 261,000 0.1863
147 American Brands 5,700 227,698 254,363 0.1815
148 AMP Inc. 6,600 220,248 253,275 0.1808
149 Albertsons Inc. 7,700 202,388 253,138 0.1807
150 Micron Tech. 6,300 185,111 249,638 0.1782
151 Aetna Life & Casualty 3,500 185,925 242,375 0.1730
152 Dean Witter Disc Corp. 5,141 229,746 241,627 0.1724
153 Boston Scientific Corp. 4,900 128,070 240,100 0.1714
154 Suntrust Bks. Inc. 3,500 164,850 239,750 0.1711
155 SCE Corp. Holding Corp. 13,500 270,261 239,625 0.1710
</TABLE>
D-8
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
of Total
Portfolio Market
No. Common Stocks Shares Cost(1) Value(1) Value
<S> <C> <C> <C> <C> <C>
156 Wachovia Corp. 5,200 $ 198,748 $ 237,900 0.1698%
157 CIGNA Corp. 2,300 157,640 237,475 0.1695
158 Mellon Bank Corp. 4,400 164,508 236,500 0.1688
159 American Electric Power 5,700 192,198 230,850 0.1648
160 Consolidated Edison 7,200 218,373 230,400 0.1644
161 Pub. Serv. Enterprise Gr. 7,500 219,538 229,688 0.1639
162 PNC Financial 7,000 192,108 225,750 0.1611
163 Walgreen Co. 7,500 159,678 224,063 0.1599
164 Corning Inc. 7,000 232,850 224,000 0.1599
165 Dominion Resources Corp. 5,300 207,878 218,625 0.1560
166 US Healthcare, Inc. 4,700 196,475 218,550 0.1560
167 Unocal Corp. 7,500 200,300 218,438 0.1559
168 American General Corp. 6,200 178,443 216,225 0.1543
169 Pitney Bowes 4,600 173,525 216,200 0.1543
170 Alcan Aluminum 6,900 159,933 214,763 0.1533
171 Goodyear Tire & Rubber 4,700 178,451 213,263 0.1522
172 Unicom Corp. 6,500 183,025 212,875 0.1519
173 Applied Materials Inc. 5,400 170,963 212,625 0.1517
174 Illinois Tool Wks. Inc. 3,600 148,560 212,400 0.1516
175 Mattel Inc. 6,758 133,631 207,809 0.1483
176 Occidental Petroleum 9,700 195,323 207,338 0.1480
177 Peco Energy Co. 6,800 184,378 204,850 0.1462
178 First Bank Systems Inc. 4,100 205,205 203,463 0.1452
179 Entergy Corp. 6,900 207,983 201,825 0.1440
180 Ralston-Ralston Purina
Co. 3,200 157,360 199,600 0.1425
181 Westinghouse Electric 12,000 182,663 198,000 0.1413
182 UST Inc. 5,900 175,020 196,913 0.1405
183 Marsh & Mclennan Cos.
Inc. 2,200 184,798 195,250 0.1393
184 Houston Industry Inc. 8,000 173,793 194,000 0.1385
185 Morgan Stanley 2,400 232,533 193,500 0.1381
186 Georgia-Pacific Corp. 2,800 194,453 192,150 0.1371
187 Browning Ferris Ind. 6,500 183,913 191,750 0.1369
188 Hercules 3,400 110,568 191,675 0.1368
189 ITT Corp. 3,600 132,016 190,800 0.1362
190 Honeywell Inc. 3,900 141,555 189,638 0.1353
191 Limited Inc. 10,900 246,095 189,388 0.1352
192 Wrigley Wm. Jr. Co. 3,600 134,125 189,000 0.1349
193 First Fidelity Banc
Corp. 2,500 118,538 188,438 0.1345
194 CUC International 5,450 150,075 185,981 0.1327
195 Donnelley RR & Sons 4,700 145,708 185,063 0.1321
196 Gap Inc. 4,400 161,720 184,800 0.1319
197 Loral Corp. 5,200 86,893 183,950 0.1313
198 Pacificorp 8,600 170,305 182,750 0.1304
199 Toys R Us 8,400 285,408 182,700 0.1304
200 Air Products & Chemicals 3,400 160,583 179,350 0.1280
201 Sysco Corp. 5,500 143,908 178,750 0.1276
202 Cabletron Systems 2,200 123,273 178,200 0.1272
203 Grace (W.R.) 3,000 134,788 177,375 0.1266
204 Household Int'l 3,000 110,085 177,375 0.1266
</TABLE>
D-9
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
of Total
Portfolio Market
No. Common Stocks Shares Cost(1) Value(1) Value
<S> <C> <C> <C> <C> <C>
205 Halliburton Co. 3,500 $ 119,638 $ 177,188 0.1265%
206 Barnett Banks of Florida 3,000 132,888 177,000 0.1263
207 Placer Dome Inc. 7,300 128,165 176,113 0.1257
208 Textron Inc. 2,600 126,630 175,500 0.1253
209 USX-Marathon Group, Inc. 9,000 172,363 175,500 0.1253
210 Freeport McMoran Copper 6,200 155,898 174,375 0.1244
211 ITT/Hartford Group Inc. 3,600 126,191 174,150 0.1243
212 Lincoln National Corp. 3,200 125,554 172,000 0.1228
213 AMR Corp. 2,300 153,278 170,775 0.1219
214 Winn Dixie Stores 4,600 132,383 169,625 0.1211
215 Alltel Corp. 5,700 168,548 168,150 0.1200
216 Conrail Inc. 2,400 128,583 168,000 0.1199
217 MBNA Corp. 4,550 99,945 167,781 0.1197
218 Federated Dept. Stores 6,100 172,618 167,750 0.1197
219 Tyco Labs. Inc. 4,700 112,638 167,438 0.1195
220 Dayton Hudson 2,200 158,410 165,000 0.1178
221 Fluor Corp. 2,500 116,775 165,000 0.1178
222 Lowe's Cos. Inc. 4,900 109,767 164,150 0.1172
223 Boatmens Bancshares 4,000 121,013 163,500 0.1167
224 Int'l Flavors & Fragrance 3,400 138,395 163,200 0.1165
225 Corestates Financial
Corp. 4,300 122,368 162,863 0.1162
226 Carolina Power & Light 4,700 133,823 162,150 0.1157
227 Central & Southwest
Corp. 5,800 159,935 161,675 0.1154
228 Morton Int'l Inc. 4,500 114,100 161,438 0.1152
229 Novell Corp. 11,300 262,450 161,025 0.1149
230 Bankers Trust of NY 2,400 157,370 159,600 0.1139
231 Avon Prods. Inc. 2,100 121,493 158,288 0.1130
232 Union Carbide Corp. 4,200 100,010 157,500 0.1124
233 Bank of Boston 3,400 95,295 157,250 0.1122
234 Hershey Foods Corp. 2,400 117,808 156,000 0.1113
235 Detroit Edison 4,500 142,950 155,250 0.1108
236 Alco Standard 3,400 95,953 155,125 0.1107
237 TRW Inc. 2,000 125,100 155,000 0.1106
238 Nucor Corp. 2,700 118,323 154,238 0.1101
239 Genuine Parts Co. 3,750 132,468 153,750 0.1097
240 Masco Corp. 4,900 140,820 153,738 0.1097
241 Burlington Resources 3,900 168,270 153,075 0.1092
242 Transamerica Corp. 2,100 108,430 153,038 0.1092
243 Eastman Chemical Co. 2,425 120,909 151,866 0.1084
244 Becton, Dickinson 2,000 88,108 150,000 0.1071
245 National City Corp. 4,500 128,175 149,063 0.1064
246 Amerada Hess Corp. 2,800 133,253 148,400 0.1059
247 Marriott International
Inc. 3,800 108,949 145,350 0.1037
248 Cinergy Corp. 4,727 86,138 144,764 0.1033
249 Pioneer W-Bred Intl 2,600 101,448 144,625 0.1032
250 St. Paul Cos. Inc. 2,600 110,210 144,625 0.1032
251 Praxair Inc. Com. 4,300 72,538 144,588 0.1032
252 Great Lakes Chemicals 2,000 132,263 144,000 0.1028
253 Kroger Co. 3,800 86,578 142,500 0.1017
</TABLE>
D-10
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
of Total
Portfolio Market
No. Common Stocks Shares Cost(1) Value(1) Value
<S> <C> <C> <C> <C> <C>
254 Quaker Oats Co. 4,100 $ 132,173 $ 141,450 0.1010%
255 Comerica Inc. 3,500 133,050 140,438 0.1002
256 Services Corp. Int'l 3,150 81,363 138,600 0.0989
257 Williams Cos. 3,100 82,953 136,013 0.0971
258 Rohm & Haas Co. 2,100 117,243 135,188 0.0965
259 Silicon Graphics Inc. 4,900 170,633 134,750 0.0962
260 Humana Inc. 4,900 133,145 134,138 0.0957
261 Dresser Industries Inc. 5,500 113,324 134,063 0.0957
262 Comcast Corp. Cl. A 7,300 149,375 132,769 0.0948
263 Consolidated Natural Gas 2,900 123,170 131,588 0.0939
264 Safeco Corp. 3,800 107,163 131,100 0.0936
265 Phelps Dodge Corp. 2,100 109,691 130,725 0.0933
266 McGraw-Hill Companies 1,500 101,663 130,688 0.0933
267 Block H & R Inc. 3,200 121,048 129,600 0.0925
268 Union Electric 3,100 113,580 129,425 0.0924
269 Dover Corp. 3,500 94,583 129,063 0.0921
270 DSC Communications 3,500 86,175 129,063 0.0921
271 Newmont Mining 2,847 110,903 128,827 0.0919
272 Eaton Corp. 2,400 113,911 128,700 0.0919
273 Baltimore Gas & Electric 4,500 107,528 128,250 0.0915
274 LSI Logic Corp. 3,900 134,258 127,725 0.0912
275 General Public Utilities 3,700 111,610 125,800 0.0898
276 Federal Express 1,700 98,598 125,588 0.0896
277 Panhandle Eastern Corp. 4,500 94,213 125,438 0.0895
278 Tenent Health Care Corp. 6,000 85,050 124,500 0.0889
279 Newell 4,800 102,580 124,200 0.0886
280 Whirlpool Corp. 2,300 115,540 122,475 0.0874
281 Rubbermaid Inc. 4,800 148,428 122,400 0.0874
282 Tribune Co. 2,000 107,238 122,250 0.0872
283 Champion Int'l. 2,900 103,670 121,800 0.0869
284 Cooper-Industries Inc. 3,300 148,053 121,275 0.0866
285 Unum Corp. 2,200 119,473 121,000 0.0864
286 American Stores 4,500 100,668 120,375 0.0859
287 PP&L Resources Inc. 4,800 120,228 120,000 0.0856
288 INCO Ltd. 3,600 99,343 119,700 0.0854
289 Dow Jones 3,000 99,025 119,625 0.0854
290 Computer Sciences Corp. 1,700 67,146 119,425 0.0852
291 Coastal Corp. 3,200 89,673 119,200 0.0851
292 Delta Airlines 1,600 95,330 118,200 0.0844
293 Providian Corp. 2,900 100,785 118,175 0.0843
294 Apple Computer Inc. 3,700 177,750 117,938 0.0842
295 Crown Cork & Seal Inc. 2,800 106,661 116,900 0.0834
296 Ingersoll-Rand Co. 3,300 111,459 115,913 0.0827
297 The Times Mirror Co. 3,400 81,205 115,175 0.0822
298 Clorox Co. 1,600 85,605 114,600 0.0818
299 Salomon Inc. 3,200 121,523 113,600 0.0811
300 General Dynamics 1,900 85,361 112,338 0.0802
301 Ohio Edison Co. 4,600 100,168 108,100 0.0772
302 Reynolds Metals 1,900 101,420 107,588 0.0768
303 Grainger W.W. 1,600 93,230 106,000 0.0757
304 Sherwin Williams 2,600 83,618 105,950 0.0756
305 Republic New York 1,700 97,298 105,613 0.0754
</TABLE>
D-11
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
of Total
Portfolio Market
No. Common Stocks Shares Cost(1) Value(1) Value
<S> <C> <C> <C> <C> <C>
306 V F Corp. 2,000 $ 98,088 $ 105,500 0.0753%
307 Baker Hughes Inc. 4,300 91,028 104,813 0.0748
308 Great Western Financial 4,100 76,693 104,550 0.0746
309 Interpublic Group 2,400 81,845 104,100 0.0743
310 Northern Sts. Power
Minn. 2,100 92,030 103,163 0.0736
311 Kerr-Mcgee 1,600 75,868 101,600 0.0725
312 Nordstrom 2,500 93,275 101,250 0.0723
313 Jefferson-Pilot Corp. 2,175 71,922 101,138 0.0722
314 US Bancorp 3,000 76,238 100,875 0.0720
315 KMART 13,900 274,565 100,775 0.0719
316 Union Camp Corp. 2,100 102,580 100,013 0.0714
317 Southwest Airlines 4,300 114,790 99,975 0.0714
318 Tellabs Inc. 2,700 131,763 99,900 0.0713
319 Torchmark Corp. 2,200 101,068 99,550 0.0710
320 Golden West Financial 1,800 77,515 99,450 0.0710
321 Melville Corp. 3,200 137,760 98,400 0.0702
322 Dillard Department
Stores 3,400 126,538 96,900 0.0692
323 Premark Int'l 1,900 65,603 96,188 0.0686
324 Northrop Corp. 1,500 59,400 96,000 0.0685
325 Williamette Industries 1,700 116,200 95,625 0.0682
326 Ahmanson (H.F.) & Co. 3,600 69,993 95,400 0.0681
327 Knight-Rider Inc. 1,500 87,400 93,750 0.0669
328 Englehard Corp. 4,300 75,240 93,525 0.0667
329 Sonat Inc. 2,600 68,180 92,625 0.0661
330 Pall Corp. 3,433 69,605 92,271 0.0659
331 Hilton Hotel Corp. 1,500 80,738 92,250 0.0658
332 Harcourt General 2,200 75,173 92,125 0.0657
333 Black & Decker 2,600 63,218 91,650 0.0654
334 Dana Corp. 3,100 76,293 90,675 0.0647
335 St Jude Medical 2,100 56,700 90,300 0.0644
336 Laidlaw Inc. - Class B 8,800 79,178 90,200 0.0644
337 Price/Costco 5,904 103,988 90,036 0.0643
338 Johnson Controls 1,300 64,153 89,375 0.0638
339 New York Times Cl. A 2,900 78,108 85,913 0.0613
340 Rite Aid Corp. 2,500 55,438 85,625 0.0611
341 Westvaco Corp. 3,050 77,055 84,638 0.0604
342 ITT Industries 3,500 63,527 84,000 0.0600
343 Mallinckrodt Group, Inc. 2,300 76,765 83,663 0.0597
344 Mead Corp. 1,600 70,305 83,600 0.0597
345 Tandy Corp. 2,000 76,113 83,000 0.0592
346 Dial Corp. 2,800 61,115 82,950 0.0592
347 Ceridian Corp. 2,000 58,025 82,500 0.0589
348 National Semiconductor 3,700 62,435 82,325 0.0588
349 Hasbro Inc. 2,650 82,130 82,150 0.0586
350 Western Atlas Inc. 1,600 70,643 80,800 0.0577
351 Avery Dennison Corp. 1,600 49,605 80,200 0.0572
352 Circuit City Stores 2,900 68,910 80,113 0.0572
353 Louisiana Pacific 3,300 93,403 80,025 0.0571
354 USX-US Steel Corp. 2,500 82,800 76,875 0.0549
</TABLE>
D-12
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
of Total
Portfolio Market
No. Common Stocks Shares Cost(1) Value(1) Value
<S> <C> <C> <C> <C> <C>
355 Brown-Forman Distillers
Co. 2,100 $ 60,668 $ 76,650 0.0547%
356 Sun Co. 2,800 77,990 76,650 0.0547
357 Parker-Hannifin 2,200 56,443 75,350 0.0538
358 Harrah's Entertainment 3,100 83,430 75,175 0.0537
359 Temple Inland Inc. 1,700 83,773 75,013 0.0535
360 Beneficial Corp. 1,600 59,093 74,600 0.0532
361 Whitman Corp. 3,200 51,498 74,400 0.0531
362 FMC Corp. 1,100 58,430 74,388 0.0531
363 Sigma Aldrich 1,500 57,360 74,250 0.0530
364 Raychem Corp. 1,300 48,990 73,938 0.0528
365 Pacific Enterprises 2,600 58,243 73,450 0.0524
366 Cypress Minerals 2,800 70,416 73,150 0.0522
367 Federal Paper Board Co. 1,400 44,370 72,625 0.0518
368 Deluxe Check Printers 2,500 95,300 72,500 0.0517
369 Stanley Works 1,400 58,245 72,100 0.0515
370 Owens Corning Fiberglass 1,600 61,155 71,800 0.0512
371 Brunswick Corp. 2,900 50,670 69,600 0.0497
372 Armstrong World Ind.
Inc. 1,100 43,618 68,200 0.0487
373 Reebok Int'l Ltd. 2,400 77,795 67,800 0.0484
374 Bausch & Lomb Inc. 1,700 80,673 67,363 0.0481
375 Ashland Oil 1,900 59,158 66,738 0.0476
376 Polaroid Corp. 1,400 46,220 66,325 0.0473
377 Super Valu Stores, Inc. 2,100 63,018 66,150 0.0472
378 Wendy's Int'l 3,100 47,505 65,875 0.0470
379 Columbia Gas System,
Inc. 1,500 36,588 65,813 0.0470
380 Echlin Inc. 1,800 48,278 65,700 0.0469
381 Harris Corp. Del 1,200 47,960 65,550 0.0468
382 Allergan 2,000 51,463 65,000 0.0464
383 Maytag Co. 3,200 52,873 64,800 0.0462
384 Manor Care Inc. 1,850 45,215 64,750 0.0462
385 Homestake Mining Co. 4,100 62,393 64,063 0.0457
386 Liz Claiborne, Inc. 2,300 74,165 63,825 0.0456
387 Biomet Inc. 3,500 55,963 62,563 0.0447
388 Alza Corp. Cl. N 2,500 78,525 61,875 0.0442
389 Cooper Tire & Rubber 2,500 69,898 61,563 0.0439
390 American Greetings
Cl. A 2,200 57,638 60,775 0.0434
391 James River Corp. (Va.) 2,500 54,276 60,313 0.0430
392 Nalco Chemical 2,000 68,813 60,250 0.0430
393 Ryder Sys. Inc. 2,400 52,665 59,400 0.0424
394 Penzoil Co. 1,400 70,233 59,150 0.0422
395 Roadway Services 1,200 74,225 58,650 0.0419
396 Millipore Corp. 1,400 29,990 57,575 0.0411
397 USF and G 3,400 49,608 57,375 0.0409
398 Worthington Ind. 2,750 49,638 57,234 0.0408
399 Ecolab Inc. 1,900 39,040 57,000 0.0407
400 Giant Food, Inc. 1,800 43,853 56,700 0.0405
401 Fruit of the Loom
Inc. C 2,300 59,940 56,063 0.0400
</TABLE>
D-13
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
of Total
Portfolio Market
No. Common Stocks Shares Cost(1) Value(1) Value
<S> <C> <C> <C> <C> <C>
402 Moore Ltd. 3,000 $ 55,925 $ 55,875 0.0399%
403 Darden Restaurants
Inc. C 4,700 8,915 55,813 0.0398
404 Bard C.R. Inc. 1,700 48,673 54,825 0.0391
405 Goodrich B.F. Co. 800 39,465 54,500 0.0389
406 Snap-on-Tools 1,200 42,773 54,300 0.0388
407 Boise Cascade Corp. 1,500 40,988 51,938 0.0371
408 Advanced Micro Devices 3,100 75,305 51,150 0.0365
409 Foster Wheeler Corp. 1,200 38,185 51,000 0.0364
410 Mercantile Stores Inc. 1,100 40,793 50,875 0.0363
411 Woolworth 3,900 95,108 50,700 0.0362
412 Paccar Inc. 1,190 58,600 50,129 0.0358
413 Harnishfeger Indus. 1,500 40,925 49,875 0.0356
414 Tektronix Inc. 1,000 32,238 49,125 0.0351
415 Perkin Elmer 1,300 44,953 49,075 0.0350
416 Pep Boys - Manny, Moe &
Jac. 1,900 48,008 48,688 0.0347
417 National Service Inds.
Inc. 1,500 40,450 48,563 0.0347
418 Autodesk 1,400 36,588 47,950 0.0342
419 Santa Fe Pacific Gold
Co. 3,939 20,993 47,772 0.0341
420 Andrew Corp. 1,225 29,363 46,856 0.0334
421 Bethlehem Steel 3,300 55,303 46,200 0.0330
422 General Signal Corp. 1,400 45,250 45,325 0.0323
423 Varity Corp. 1,200 40,298 44,550 0.0318
424 Cummins Engine Inc. 1,200 47,708 44,400 0.0317
425 Thomas & Betts Corp. 600 39,305 44,250 0.0316
426 Teledyne Inc. 1,700 37,570 43,563 0.0311
427 Louisiana Ld Expl Co. 1,000 37,225 42,875 0.0306
428 King World Productions 1,100 35,843 42,763 0.0305
429 Niagara Mohawk Power Co. 4,400 77,833 42,350 0.0302
430 Asarco Inc. 1,300 36,840 41,600 0.0297
431 Oryx Energy Co. 3,100 56,980 41,463 0.0296
432 Nicor Inc. 1,500 36,543 41,250 0.0294
433 Bemis 1,600 39,888 41,000 0.0293
434 Pittston Services Group 1,300 27,703 40,788 0.0291
435 Echo Bay Mines 3,900 34,683 40,463 0.0289
436 Stone Container Corp. 2,810 53,640 40,394 0.0288
437 TJX Cos. Common 2,100 46,280 39,638 0.0283
438 Briggs & Stratton 900 26,427 39,038 0.0279
439 EG&G 1,600 33,088 38,800 0.0277
440 Shared Medical Sys. Corp. 700 18,688 38,063 0.0272
441 Inland Stl. Inds. Inc. 1,500 41,213 37,688 0.0269
442 US Surgical Corp. 1,700 89,685 36,338 0.0259
443 Tandem Computers Inc. 3,400 45,595 36,125 0.0258
444 Fleetwood Enterprises 1,400 29,805 36,050 0.0257
445 Potlatch Corp. 900 40,345 36,000 0.0257
446 McDermott Int'l 1,600 37,493 35,200 0.0251
447 People's Energy Corp. 1,100 31,443 34,925 0.0249
448 Scientific Atlanta 2,300 33,923 34,500 0.0246
449 Consolidated Freightways 1,300 27,328 34,450 0.0246
</TABLE>
D-14
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
of Total
Portfolio Market
No. Common Stocks Shares Cost(1) Value(1) Value
<S> <C> <C> <C> <C> <C>
450 The Timken Co. 900 $ 29,333 $ 34,425 0.0246%
451 Meredith Corp. 800 15,100 33,500 0.0239
452 Russell Corp. 1,200 37,698 33,300 0.0238
453 Crane Co. 900 24,983 33,188 0.0237
454 Enserch Corp. 2,000 31,325 32,500 0.0232
455 Ogden Corp. 1,500 32,363 32,063 0.0229
456 Noram Energy Corp. 3,600 29,418 31,950 0.0228
457 Centex Corp. 900 26,628 31,275 0.0223
458 Beverly Enterprises 2,900 34,408 30,813 0.0220
459 US Life Corp. 1,000 24,798 29,875 0.0213
460 Amdahl Corp. 3,500 37,081 29,750 0.0212
461 Jostens Inc. 1,200 29,823 29,100 0.0208
462 Longs Drug Store 600 21,280 28,725 0.0205
463 Unisys Corp. 5,100 51,855 28,688 0.0205
464 Alberto Culver 800 20,415 27,500 0.0196
465 Pulte Corp. 800 22,040 26,900 0.0192
466 Safety Kleen 1,700 36,198 26,563 0.0190
467 Cincinnati Milacron 1,000 22,075 26,250 0.0187
468 Trinova Corp. 900 25,770 25,763 0.0184
469 Great Atlantic & Pacific 1,100 29,618 25,300 0.0181
470 Sante Fe Resources 2,600 23,743 25,025 0.0179
471 Springs Ind. 600 23,930 24,825 0.0177
472 Ball Corp. 900 27,741 24,750 0.0177
473 Alexander & Alexander 1,300 29,415 24,700 0.0176
474 Coors (Adolph) Cl. B. 1,100 16,915 24,338 0.0174
475 USAIR Group 1,800 23,140 23,850 0.0170
476 Rowan Cos. Inc. 2,400 18,295 23,700 0.0169
477 Navistar Int'l Corp. 2,180 47,818 22,890 0.0163
478 Fleming Cos. 1,100 32,468 22,688 0.0162
479 Intergraph Corp. 1,400 19,480 22,050 0.0157
480 Eastern Enterprises 600 16,543 21,150 0.0151
481 Helmerich & Payne 700 17,735 20,825 0.0149
482 Cray Research Inc. 800 21,853 19,800 0.0141
483 Bally Entertainment
Corp. 1,400 11,783 19,600 0.0140
484 ARMCO Inc. 3,200 20,848 18,800 0.0134
485 Harland, John 900 20,958 18,788 0.0134
486 Oneok Inc. 800 15,865 18,300 0.0131
487 NACCO Inds. Inc. Cl. A 300 17,328 16,650 0.0119
488 Giddings & Lewis Inc. 1,000 21,755 16,500 0.0118
489 Community Psychiatric
Center 1,300 15,565 15,925 0.0114
490 Luby's Cafeteria Inc. 700 13,835 15,575 0.0111
491 Data General Corp. 1,100 10,593 15,125 0.0107
492 Kaufman & Broad Home
Corp. 900 14,520 13,388 0.0095
493 Shoney's Inc. 1,200 22,510 12,300 0.0087
494 Outboard Marine Corp. 600 13,043 12,225 0.0086
495 Stride Rite 1,500 26,075 11,250 0.0079
496 Ryans Family Steak House 1,500 13,300 10,500 0.0074
497 Yellow Corp. 800 18,688 9,900 0.0070
498 Charming Shoppes Inc. 2,700 34,825 7,763 0.0054
</TABLE>
D-15
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND INDEX SERIES,
S&P 500 TRUST 2
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
of Total
Portfolio Market
No. Common Stocks Shares Cost(1) Value(1) Value
<S> <C> <C> <C> <C> <C>
499 Brown Group 500 $ 14,513 $ 7,125 0.0050%
500 Handleman Co. 1,000 11,778 5,777 0.0041
TOTALS 2,886,994 107,916,299 140,116,622 100.0000%
Preferred Stock
501 Teledyne 16 0 230
TOTAL 2,887,010 $107,916,299 $140,116,852
</TABLE>
(1) See Notes to Financial Statements.
D-16
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Defined Asset Funds - Equity Income Fund,
Index Series, S&P Midcap Trust:
We have audited the accompanying statement of condition of Defined
Asset Funds - Equity Income Fund Index Series, S&P Midcap Trust,
including the portfolio, as of December 31, 1995 and the related
statements of operations and of changes in net assets for the
years ended December 31, 1995, 1994 and 1993. These financial
statements are the responsibility of the Trustee. (See Note 5.) Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits 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 statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Securities
owned at December 31, 1995, as shown in such portfolio, were
confirmed to us by The Bank of New York, 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 audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Defined
Asset Funds - Equity Income Fund Index Series, S&P Midcap Trust at
December 31, 1995 and the results of its operations and changes in
its net assets for the above-stated years in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
March 5, 1996
D - 17
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
STATEMENT OF CONDITION
AS OF DECEMBER 31, 1995
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $43,744,098) (Note 1)................... $52,400,909
Dividends receivable............................ 65,625
Receivable from securities sold or redeemed..... 200,882
Cash............................................ 20,355
______________
Total trust property.................. 52,687,771
LESS LIABILITY - Accrued expenses.................. 32,974
______________
NET ASSETS, REPRESENTED BY:
40,990,874 units of fractional undivided
interest outstanding (Note 3)................. $52,602,416
Undistributed net investment income............. 52,381
____________
$52,654,797
==============
UNIT VALUE ($52,654,797/40,990,874 units)......... $1.28455
==============
See Notes to Financial Statements.
D - 18
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
<TABLE><CAPTION>
STATEMENTS OF OPERATIONS
........Years Ended December 31,........
1995 1994 1993
________________________________________
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend income...............................$ 834,190 $ 739,530 $ 589,506
Trustee's fees and expenses................... (86,123) (93,080) (118,503)
Sponsors' fees ............................... (8,820) (11,272) (9,486)
________________________________________
Net investment income......................... 739,247 635,178 461,517
________________________________________
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Realized gain on securities sold or
redeemed.................................... 2,734,923 919,206 947,793
Unrealized appreciation (depreciation)
of investments.............................. 7,773,441 (2,949,727) 2,350,501
________________________________________
Net realized and unrealized gain (loss) on
investments................................. 10,508,364 (2,030,521) 3,298,294
________________________________________
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS...............................$11,247,611 $(1,395,343) $3,759,811
========================================
</TABLE>
See Notes to Financial Statements.
D - 19
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
<TABLE><CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
........Years Ended December 31,........
1995 1994 1993
________________________________________
<S> <C> <C> <C>
OPERATIONS:
Net investment income...........................$ 739,247 $ 635,178 $ 461,517
Realized gain on securities sold
or redeemed.................................. 2,734,923 919,206 947,793
Unrealized appreciation (depreciation) of
investments.................................. 7,773,441 (2,949,727) 2,350,501
________________________________________
Net increase (decrease) in net assets resulting
from operations.............................. 11,247,611 (1,395,343) 3,759,811
________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income.......................................... (751,168) (633,412) (466,939)
Principal....................................... (1,350,239) (1,639,322) (206,835)
________________________________________
Total distributions............................. (2,101,407) (2,272,734) (673,774)
________________________________________
CAPITAL SHARE TRANSACTIONS:
Issuance of 8,893,945, 3,170,819 and 10,492,227
additional units, respectively ............... 10,613,011 3,516,996 11,043,575
Redemptions of 571,894 and 741,073 units,
respectively ................................. (742,879) (816,000)
________________________________________
Net capital share transactions.................. 9,870,132 2,700,996 11,043,575
________________________________________
NET INCREASE (DECREASE) IN NET ASSETS............. 19,016,336 (967,081) 14,129,612
NET ASSETS AT BEGINNING OF YEAR................... 33,638,461 34,605,542 20,475,930
________________________________________
NET ASSETS AT END OF YEAR.........................$52,654,797 $33,638,461 $34,605,542
========================================
PER UNIT:
Income distributions during year................ $.02019 $0.01981 $0.01685
========================================
Principal distributions during year............. $.03294 $0.05018 $0.00684
========================================
Net asset value at end of year.................. $1.28455 $1.02968 $1.14440
========================================
TRUST UNITS OUTSTANDING AT END OF YEAR............ 40,990,874 32,668,823 30,239,077
========================================
</TABLE>
See Notes to Financial Statements.
D - 20
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940
as a Unit Investment Trust. The following is a summary of
significant accounting policies consistently followed by the
Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting
principles.
(a) Securities are stated at market value; for securities listed
on a national securities exchange, value is based on the
closing price on such exchange and for securities not so
listed, value is based on the current bid price on the
over-the-counter market. Realized gains or losses on sales
of securities are determined using the first-in, first-out
cost method.
(b) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(c) Dividend income is recorded on the ex-dividend date.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders on
the twenty-fifth day of each month. Receipts other than
dividends, after deductions for redemptions and applicable
expenses, are distributed as explained in "Administration of
the Fund" in this Prospectus, Part B.
3. NET CAPITAL
Cost of 40,990,874 units at Date of Deposit................. $43,737,267
Less sales charge........................................... 947,344
_______________
Net amount applicable to Holders............................ 42,789,923
Redemptions of units - net cost of 1,312,967 units
redeemed less redemption amounts.......................... (249,900)
Realized gain on securities sold or redeemed................ 4,604,720
Principal distributions..................................... (3,199,139)
Net unrealized appreciation of investments.................. 8,656,812
_______________
Net capital applicable to Holders........................... $52,602,416
===============
D - 21
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
NOTES TO FINANCIAL STATEMENTS
4. INCOME TAXES
As of December 31, 1995, net unrealized appreciation of
investments, based on cost for Federal income tax purposes,
aggregated $8,656,812, of which $11,260,525 related to
appreciated securities and $2,603,713 related to depreciated
securities. The cost of investment securities for Federal
income tax purposes was $43,744,098 at December 31, 1995.
5. CHANGE OF TRUSTEE
On March 1, 1995, The Bank of New York assumed all of the
Trustee responsibilities from Investors Bank & Trust Company.
D - 22
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
Port of Total
folio Market
No. Commom Stocks Shares Cost (1) Value (1) Value
___ ______________ ______ __________ __________ _______
<S> <C> <C> <C> <C> <C>
1 Bay Networks Inc. 15,837 $ 326,505.21 $ 651,296.63 1.2429%
2 World Inc. (Formerly LLDS 17,504 377,124.53 617,016.00 1.1775
Communications)
3 AON Corp. 9,900 341,250.00 493,762.50 0.9423
4 Fifth Third Bancorp 6,150 319,145.83 450,487.50 0.8597
5 Frontier Corp. 14,400 347,030.00 432,000.00 0.8244
6 Chiron Corp. 3,800 240,637.50 419,900.00 0.8013
7 Adobe Systems Inc. 6,600 225,062.50 409,200.00 0.7809
8 Thermo Electron 7,850 225,033.06 408,200.00 0.7790
9 HFS Inc. 4,600 137,264.00 376,050.00 0.7176
10 AFLAC Inc. 8,625 255,775.50 374,109.38 0.7139
11 Franklin Resources Inc. 7,400 274,433.75 372,775.00 0.7114
12 Parametric Technology Corp. 5,600 192,250.00 372,400.00 0.7107
13 Informix Corp. 12,300 166,012.50 369,000.00 0.7042
14 Tyson Foods Inc. 13,200 291,937.50 344,850.00 0.6581
15 State Street Boston Corp. 7,500 282,480.00 337,500.00 0.6441
16 Green Tree Financial 12,500 263,637.50 329,687.50 0.6292
17 U.S. Robotics 3,700 352,575.14 324,675.00 0.6196
18 Progressive Corp. Ohio 6,600 217,280.83 322,575.00 0.6156
19 Charles Schwab Corp. 15,950 166,535.00 320,993.75 0.6126
20 Coca-Cola Enterprises Inc. 11,900 187,232.50 318,325.00 0.6075
21 EMC Corp. 20,700 419,985.00 318,262.50 0.6074
22 Seagate Technology Inc. 6,700 160,047.50 318,250.00 0.6073
23 Allegheny Power Systems Inc. 11,000 262,872.50 314,875.00 0.6009
24 Florida Progress Corp. 8,750 275,402.50 309,531.25 0.5907
25 IVAX Corp. 10,800 274,065.00 307,800.00 0.5874
26 Wisconsin Energy Corp. 10,000 266,597.50 306,250.00 0.5844
27 Equifax Inc. 14,300 171,495.00 305,662.50 0.5833
28 Anadarko Petroleum Corp. 5,400 198,270.00 292,275.00 0.5578
29 Molex Inc. 9,191 205,410.00 291,814.25 0.5569
30 Dell Computer Corp. 8,400 183,253.67 290,850.00 0.5550
31 Northern Trust Corp. 5,150 209,020.83 288,400.00 0.5504
32 Mirage Resorts Inc. 8,300 163,064.00 286,350.00 0.5465
33 Potomac Electric Power Co. 10,800 257,015.00 283,500.00 0.5410
34 Northeast Utilities 11,600 289,629.50 282,750.00 0.5396
35 Washington Post Co. 1,000 238,250.00 282,000.00 0.5382
36 Office Depot Inc. 14,150 263,740.00 279,462.50 0.5333
37 Teco Energy Inc. 10,700 225,542.50 274,187.50 0.5232
38 SCANA Corp. 9,400 208,005.00 269,075.00 0.5135
39 Linear Technology Corp. 6,700 122,950.00 262,975.00 0.5019
40 Circus Circus Enterprises Inc. 9,400 299,846.67 262,025.00 0.5000
41 Nextel Communications Inc. 17,600 472,837.50 259,600.00 0.4954
42 First of America Bank Corp. 5,800 215,427.50 257,375.00 0.4912
43 Mylan Laboratories Inc. 10,950 198,927.08 257,325.00 0.4911
44 Healthsouth Rehab. Corp. 8,800 148,532.50 256,300.00 0.4891
45 CMS Energy Corp. 8,300 176,190.00 247,962.50 0.4732
46 Analog Devices Inc. 7,000 111,562.50 247,625.00 0.4726
47 Meridian Bancorp Inc. 5,300 165,575.00 246,450.00 0.4703
48 Omnicom Group Co. 6,600 152,077.50 245,850.00 0.4692
49 Pacificare Health Sytems Inc. 2,800 186,975.00 243,600.00 0.4649
50 Cardinal Health Inc . 4,375 175,127.50 239,531.25 0.4571
</TABLE>
D - 23
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
Port of Total
folio Market
No. Commom Stocks Shares Cost (1) Value (1) Value
___ ______________ ______ __________ __________ _______
<S> <C> <C> <C> <C>
51 Sunamerica Inc. 5,000 $ 241,962.50 $ 237,500.00 0.4532%
52 Southern New England Tele. Corp. 5,900 200,382.50 234,525.00 0.4476
53 New England Electric System 5,900 212,707.50 233,787.50 0.4462
54 Mercantile Bancorporation 5,050 181,277.50 232,300.00 0.4433
55 Staples Inc. 9,525 143,439.81 232,171.88 0.4431
56 Stryker Corp. 4,400 156,325.00 231,000.00 0.4408
57 Consolidated Papers Inc. 4,100 185,555.00 230,112.50 0.4391
58 Pinnacle West Capital Corp. 8,000 166,500.00 230,000.00 0.4389
59 Foundation Health Corp. 5,200 189,172.50 223,600.00 0.4267
60 Marshall & Ilsley Corp. 8,600 187,287.50 223,600.00 0.4267
61 NIPSCO Industries Inc. 5,800 166,290.00 221,850.00 0.4234
62 IMC Global Inc. 5,400 119,206.25 220,725.00 0.4212
63 Sonoco Products Co. 8,350 184,081.79 219,187.50 0.4183
64 IBP Inc. 4,300 113,669.00 217,150.00 0.4144
65 Bear Stearns Co. Inc. 10,719 177,158.67 213,040.13 0.4066
66 Apache Corp. 7,100 173,317.50 209,450.00 0.3997
67 Telephone & Data Systems, Inc. 5,300 211,652.50 209,350.00 0.3995
68 Paychex Inc. 4,187 84,959.72 208,826.63 0.3985
69 Healthsource Inc. 5,800 131,132.50 208,800.00 0.3985
70 ADC Telecommunications Inc. 5,700 111,775.00 208,050.00 0.3970
71 McKesson Corp. 4,100 157,142.50 207,562.50 0.3961
72 Illinova Corp. 6,900 158,720.00 207,000.00 0.3950
73 Cadence Design System Inc. 4,900 67,352.50 205,800.00 0.3927
74 Public Service Co. of Colorado 5,800 169,577.50 205,175.00 0.3915
75 Harley-Davidson Inc. 7,000 136,807.50 201,250.00 0.3841
76 Southtrust Corp. 7,850 152,929.17 201,156.25 0.3839
77 Crestar Financial Corp. 3,400 135,820.00 201,025.00 0.3836
78 Altera Corp. 4,000 76,693.75 199,000.00 0.3798
79 Hubbell Inc. Class B 3,020 174,335.71 198,565.00 0.3789
80 Xilinx Inc. 6,500 99,150.00 198,250.00 0.3783
81 Sundstrand Corp. 2,800 123,290.00 197,050.00 0.3760
82 Atmel Corp. 8,800 178,125.00 196,900.00 0.3758
83 Biogen Inc. 3,200 122,437.50 196,800.00 0.3756
84 BMC Software Inc. 4,600 140,487.50 196,650.00 0.3753
85 Manpower Inc. 6,900 225,357.50 194,062.50 0.3703
86 Dole Food Inc. 5,500 145,651.77 192,500.00 0.3674
87 Cintas Corp. 4,300 135,362.50 191,350.00 0.3652
88 Arrow Electronics Inc. 4,400 164,070.00 189,750.00 0.3621
89 UJB Financial Corp. 5,300 132,002.50 189,475.00 0.3616
90 Cabot Corporation 3,500 98,632.50 188,562.50 0.3598
91 Teradyne Inc. 7,500 114,552.50 187,500.00 0.3578
92 Litton Industries Inc. 4,200 152,335.00 186,900.00 0.3567
93 Leggett & Platt Inc. 7,700 140,048.75 186,725.00 0.3563
94 Forest Laboratories Inc. 4,100 164,080.00 185,525.00 0.3540
95 Clayton Homes Inc. 8,645 110,317.03 184,786.88 0.3526
96 First Tennessee National Corp. 3,050 127,825.00 184,525.00 0.3521
97 Vulcan Material Co. 3,200 183,585.00 184,400.00 0.3519
98 Shaw Industries Inc. 12,400 195,485.00 182,900.00 0.3490
99 Paine Webber Group 9,000 156,462.50 180,000.00 0.3435
100 Regions Financial Corp. 4,180 137,947.73 179,740.00 0.3430
</TABLE>
D - 24
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
Port of Total
folio Market
No. Commom Stocks Shares Cost (1) Value (1) Value
___ ______________ ______ __________ __________ _______
<S> <C> <C> <C> <C>
101 Avnet Inc. 4,000 $ 143,262.50 $ 179,000.00 0.3416%
102 York International Corp. 3,800 153,372.58 178,600.00 0.3408
103 McCormick & Co., Inc. 7,400 180,012.50 178,525.00 0.3407
104 Kohl's Corp. 3,400 163,207.50 178,500.00 0.3406
105 First Security Corp. 4,550 123,962.50 175,175.00 0.3343
106 Revco D.S., Inc. 6,100 136,342.50 172,325.00 0.3289
107 Solectron Corp. 3,900 160,107.50 172,087.50 0.3284
108 Murphy Oil Corp. 4,100 160,467.50 170,150.00 0.3247
109 Century Telephone Enterprise 5,350 147,000.83 169,862.50 0.3242
110 Kansas City Southern Ind. Inc. 3,700 121,775.00 169,275.00 0.3230
111 Genzyme Corp. General Division 2,700 116,475.00 168,412.50 0.3214
112 Danaher Corp. 5,300 95,802.50 168,275.00 0.3211
113 NY State Electric & Gas Corp. 6,500 187,125.00 168,187.50 0.3210
114 Lyondell Petrochemical Co. 7,300 181,490.00 166,987.50 0.3187
115 Vishay Intertechnology 5,300 225,665.00 166,950.00 0.3186
116 Centocor Inc. 5,300 70,925.00 163,637.50 0.3123
117 AES Corporation 6,853 136,436.74 163,615.38 0.3122
118 Olin Corp. 2,200 114,297.50 163,350.00 0.3117
119 Lubizol Corp. 5,800 181,195.00 161,675.00 0.3085
120 Oklahoma Gas and Electric 3,700 129,235.00 159,100.00 0.3036
121 Kemper Corp. 3,200 123,560.00 158,800.00 0.3030
122 Tambrands Inc. 3,300 181,627.50 157,575.00 0.3007
123 Tidewater Inc. 4,900 96,982.50 154,350.00 0.2946
124 Midamerican Energy Co. 9,200 133,772.50 154,100.00 0.2941
125 Transatlantic Holdings 2,100 107,592.50 154,087.50 0.2941
126 Olsten Corp. 3,900 141,745.00 154,050.00 0.2940
127 Diebold Inc. 2,775 92,505.83 153,665.63 0.2932
128 American Financial Group 5,000 123,149.17 153,125.00 0.2922
(Formerly American Premier Underwriters Inc.)
129 Witco Corp. 5,200 141,727.50 152,100.00 0.2903
130 Loctite Corp. 3,200 142,097.50 152,000.00 0.2901
131 Nellcor Puritan Bennett I 2,600 108,700.00 150,800.00 0.2878
132 Cordis Corporation 1,500 61,475.00 150,750.00 0.2877
133 Kansas City Power & Light 5,700 129,235.00 148,912.50 0.2842
134 Fastenal Company 3,500 142,725.00 147,875.00 0.2822
135 Illinois Central Corp. 3,850 108,536.25 147,743.75 0.2819
136 Reynolds & Reynolds Co. 3,800 68,037.50 147,725.00 0.2819
137 Mapco Inc. 2,700 149,485.00 147,487.50 0.2815
138 Outback Steakhouse 4,000 114,325.00 143,500.00 0.2739
139 Callaway Golf Co. 6,300 108,513.75 142,537.50 0.2720
140 Provident Life & Acc. Ins. Co. 4,200 110,085.00 142,275.00 0.2715
141 MCN Corp. 6,100 97,153.75 141,825.00 0.2707
142 Flightsafety International 2,800 121,477.50 140,700.00 0.2685
143 Healthcare Compare Corp. 3,200 89,674.50 139,200.00 0.2656
144 Noble Affiliates Inc. 4,600 99,392.50 137,425.00 0.2623
145 Edward A.G. Inc. 5,725 117,553.30 136,684.38 0.2608
146 Bancorp Hawaii Inc. 3,800 117,221.67 136,325.00 0.2602
147 Unifi, Inc. 6,150 171,193.33 136,068.75 0.2597
148 Ethyl Corp. 10,800 121,215.00 135,000.00 0.2576
149 Puget Sound Power & Light 5,800 144,715.00 134,850.00 0.2573
150 Value Health, Inc. 4,900 182,945.00 134,750.00 0.2572
</TABLE>
D - 25
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
Port of Total
folio Market
No. Commom Stocks Shares Cost (1) Value (1) Value
___ ______________ ______ __________ __________ _______
<S> <C> <C> <C> <C>
151 Portland General Corp. 4,600 $ 88,630.00 $ 133,975.00 0.2557%
152 Varian Associates 2,800 81,065.00 133,700.00 0.2551
153 Harsco Corp. 2,300 94,402.50 133,687.50 0.2551
154 IPALCO Enterprises Inc. 3,500 121,437.50 133,437.50 0.2546
155 Weatherford Enterra Inc. 4,612 121,271.42 133,171.50 0.2541
(Formerly Enterra, Corp.)
156 Global Marine Inc. Com. New 15,100 57,005.00 132,125.00 0.2521
157 Brooklyn Union Gas Co. 4,450 104,605.00 130,162.50 0.2484
158 Tosco Corp. 3,400 92,332.50 129,625.00 0.2474
159 First Virginia Banks Inc. 3,100 108,057.50 129,425.00 0.2470
160 LG&E Energy Corp. 3,050 108,885.00 128,862.50 0.2459
161 International Game Technology 11,800 258,886.25 128,325.00 0.2449
162 Alumax Inc. 4,100 99,917.50 125,562.50 0.2396
163 Electronic Arts Co. 4,800 137,300.00 125,400.00 0.2393
164 Delmarva Power & Light Co. 5,500 120,212.50 125,125.00 0.2388
165 Bowater Inc. 3,500 96,462.50 124,250.00 0.2371
166 Questar Corp. 3,700 102,947.50 123,950.00 0.2365
167 Utilicorp United Inc. 4,200 118,372.50 123,375.00 0.2354
168 Fiserv Inc. 4,100 86,579.16 123,000.00 0.2347
169 Surgical Care Affiliates Inc. 3,600 78,885.11 122,400.00 0.2336
170 Bello A H Corp. 3,500 86,183.75 121,625.00 0.2321
171 Trinity Industries Inc. 3,850 113,229.17 121,275.00 0.2314
172 Southwestern Public Service Co. 3,700 113,397.50 121,175.00 0.2312
173 Micro Warehouse Inc. 2,800 128,525.00 121,100.00 0.2311
174 Nine West Group Co. 3,200 100,335.00 120,000.00 0.2290
175 Mercantile Bankshares Corp. 4,300 92,133.33 119,862.50 0.2287
176 Apria Healthcare Group Inc. 4,200 116,575.00 118,650.00 0.2264
177 Sensormatic Electronics Corp. 6,750 171,350.00 117,281.25 0.2238
178 Hibernia Bancorp 10,900 96,682.50 117,175.00 0.2236
179 Central Fidelity Banks Inc. 3,650 102,337.50 116,800.00 0.2229
180 Albemarle Corp. 6,000 89,062.50 116,250.00 0.2218
181 Chris Craft Industries Inc. 2,670 83,566.77 115,477.50 0.2204
182 Horizon/CMS Healthcare Co. 4,573 103,537.50 115,468.25 0.2204
(Formerly Continental Medical Systems Inc.)
183 CBI Industries Inc. 3,500 101,650.00 115,062.50 0.2196
184 Wallace Computer Services Inc. 2,100 67,755.00 114,712.50 0.2189
185 Allegheny Ludlum Corp. 6,200 117,432.50 114,700.00 0.2189
186 Storage Technology Corp. 4,800 134,027.50 114,600.00 0.2187
187 National Fuel Gas Company 3,400 99,820.00 114,325.00 0.2182
188 RPM Inc. 6,900 97,893.33 113,850.00 0.2173
189 Montana Power Co. 5,000 124,375.00 113,125.00 0.2159
190 Vons Companies Inc. 4,000 92,525.00 113,000.00 0.2156
191 Cirrus Logic Inc. 5,700 116,475.00 112,575.00 0.2148
192 Sealed Air Corp. 3,900 60,925.63 109,687.50 0.2093
193 Symantec Corp. 4,700 100,300.00 109,275.00 0.2085
194 Dollar General Corp. 5,266 102,540.46 109,269.50 0.2085
195 Comdisco Inc. 4,815 57,826.33 108,939.38 0.2079
196 Scholastic Corp. 1,400 90,737.50 108,850.00 0.2077
197 Mark IV Industries Inc. 5,478 93,470.67 108,190.50 0.2065
</TABLE>
D - 26
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
Port of Total
folio Market
No. Commom Stocks Shares Cost (1) Value (1) Value
___ ______________ ______ __________ __________ _______
<S> <C> <C> <C> <C>
198 Georgia Gulf Corp. 3,500 $ 85,112.50 $ 107,625.00 0.2054%
199 Brinker Intl. Inc. 7,025 133,332.51 106,253.13 0.2028
200 Federal Signal Corp. 4,100 73,415.00 106,087.50 0.2025
201 FHP International Corp. 3,700 83,137.50 105,450.00 0.2012
202 Laboratory Corp. of America 11,200 143,235.00 105,000.00 0.2004
203 Hawaiian Electric Ind. Inc. 2,700 97,685.00 104,625.00 0.1997
204 Promus Hotel 4,700 108,510.00 104,575.00 0.1996
205 Maxim Integrated Products 2,700 81,675.00 103,950.00 0.1984
206 Tecumseh Product 2,000 103,900.00 103,500.00 0.1975
207 Scherer (R.P.) 2,100 100,905.00 103,162.50 0.1969
208 Conner Peripherals Inc. 4,900 83,945.00 102,900.00 0.1964
209 Betz Laboratories Inc. 2,500 127,690.00 102,500.00 0.1956
210 Idaho Power Co. 3,400 91,845.00 102,000.00 0.1947
211 Dean Foods Co. 3,700 101,422.50 101,750.00 0.1942
212 Lancaster Colony Corp. 2,710 72,793.64 100,947.50 0.1926
213 Dentsply Intl. Inc. 2,500 85,987.50 100,000.00 0.1908
214 Lee Enterprises Inc. 4,300 77,851.72 98,900.00 0.1887
215 Wilmington Trust Co. 3,200 86,762.50 98,800.00 0.1885
216 Atlanta Gas Light co. 5,000 89,896.25 98,750.00 0.1885
217 Cypress Semiconducter Corp. 7,700 73,722.50 98,175.00 0.1874
218 Health Care & Retirement 2,800 84,865.00 98,000.00 0.1870
219 Valero Energy Corp. 4,000 95,275.00 98,000.00 0.1870
220 Kelly Services Inc. 3,500 105,935.00 97,125.00 0.1853
221 Alexander & Baldwin Inc. 4,200 103,550.00 96,600.00 0.1843
222 Universal Foods Corp. 2,400 78,457.50 96,300.00 0.1838
223 Hannaford Bros Co. 3,900 92,957.50 96,037.50 0.1833
224 Cracker Barrel Old Country Co. 5,550 139,473.61 95,737.50 0.1827
225 Nevada Power Co. 4,300 93,152.50 95,675.00 0.1826
226 Nordson Corp. 1,700 87,300.00 95,625.00 0.1825
227 Hartford Steam Boiler & Insp. 1,900 97,407.50 95,000.00 0.1813
228 Symbol Technological Co. 2,400 52,282.50 94,800.00 0.1809
229 Jones Apparel Group Inc. 2,400 72,507.60 94,500.00 0.1803
230 Atlantic Energy Inc. 4,800 103,153.75 92,400.00 0.1763
231 Beckman Instrs. Inc. 2,600 63,667.50 91,975.00 0.1755
232 Integrated Device Technology Co. 7,100 152,840.08 91,412.50 0.1744
233 Mentor Graphics Corp. 5,000 65,850.00 91,250.00 0.1741
234 Bergen Brunswig Corp. 3,640 71,439.52 90,545.00 0.1728
235 First Brand Corp. 1,900 61,595.00 90,487.50 0.1727
236 Rayonier Inc. 2,700 88,710.00 90,112.50 0.1720
237 California Energy Co. 4,600 81,242.50 89,700.00 0.1712
238 Hanna M.A. Co. 3,200 66,257.50 89,600.00 0.1710
239 El Paso National Gas Co. 3,100 110,980.00 87,962.50 0.1679
240 Gatx Corp. 1,800 65,915.00 87,525.00 0.1670
241 WPL Holdings 2,800 89,702.50 85,750.00 0.1636
242 Policy Management System Corp. 1,800 103,615.00 85,725.00 0.1636
243 Nabors Industries Inc. 7,700 58,128.75 85,662.50 0.1635
244 Smith Intl. Inc. 3,600 39,667.50 84,600.00 0.1614
245 Banta Corp. 1,900 55,641.67 83,600.00 0.1595
</TABLE>
D - 27
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
Percentage
Port of Total
folio Market
No. Commom Stocks Shares Cost (1) Value (1) Value
___ ______________ ______ __________ __________ _______
<S> <C> <C> <C> <C> <C>
246 Perrigo Co. 7,000 $ 187,387.50 $ 83,125.00 0.1586%
247 Minnesota Power and Light Co. 2,900 90,132.50 82,287.50 0.1570
248 Structural Dynamic 2,800 43,387.50 82,250.00 0.1570
249 Heilg-Meyers Co. 4,475 94,955.00 82,228.13 0.1569
250 Pentair Inc. 1,650 60,737.50 82,087.50 0.1567
251 American Power Conversion 8,500 122,050.00 80,750.00 0.1541
252 Dauphin Deposit Co. 2,800 68,100.00 80,500.00 0.1536
253 Comsat Corp. 4,300 100,957.50 80,087.50 0.1528
254 Washington Gas Light 3,900 73,356.25 79,950.00 0.1526
255 Universal Corp. 3,200 84,360.00 78,000.00 0.1489
256 Schulman A Inc. 3,450 86,710.00 77,625.00 0.1481
257 Quantum Corp. 4,800 81,950.00 77,400.00 0.1477
258 Vanguard Cellular 3,800 76,025.00 76,950.00 0.1468
259 Longview Fibre Co. 4,700 82,635.00 76,375.00 0.1458
260 Kennametal Inc. 2,400 53,727.50 76,200.00 0.1454
261 Stewart & Stevenson 3,000 103,662.50 75,750.00 0.1446
262 Precision Castparts Corp. 1,900 35,420.00 75,525.00 0.1441
263 B.J. Services 2,600 54,355.00 75,400.00 0.1439
264 PHH Corp. 1,600 63,355.00 74,800.00 0.1427
265 Home Shopping Newtwork Intl. 8,300 69,389.68 74,700.00 0.1426
266 Bob Evans Farms Inc. 3,900 76,456.30 74,100.00 0.1414
267 Wausau Paper Mill 2,711 61,190.99 73,874.75 0.1410
268 Burlington Industries Inc. 5,600 58,468.28 73,500.00 0.1403
269 Seagull Energy Corp. 3,300 63,780.00 73,425.00 0.1401
270 Media General Inc. 2,400 58,145.00 72,900.00 0.1391
271 Stratus Computer 2,100 74,155.00 72,712.50 0.1388
272 Sotheby's Holdings Inc. 5,100 67,217.50 72,675.00 0.1387
273 Compuware Corp. 3,900 134,900.00 72,150.00 0.1377
274 Rollins, Inc. 3,250 75,218.33 71,906.25 0.1372
275 Family Dollar Stores Inc. 5,200 94,297.50 71,500.00 0.1364
276 Superior Industries 2,700 79,035.00 71,212.50 0.1359
277 Octel Communications Corp. 2,200 53,112.50 70,950.00 0.1354
278 Tiffany & Co. 1,400 48,132.50 70,525.00 0.1346
279 Parker & Parsley Petroleum Co. 3,200 72,347.50 70,400.00 0.1343
280 Diamond Shamrock Inc. 2,700 59,885.00 69,862.50 0.1333
281 Lincoln Telecommunication Co. 3,300 47,712.50 69,712.50 0.1330
282 Miller Herman Inc. 2,300 50,550.00 69,000.00 0.1317
283 Glatfelter & Co. 4,000 72,037.50 68,500.00 0.1307
284 Wellman, Inc. 3,000 71,250.00 68,250.00 0.1302
285 Public Service Co. New Mexico 3,800 48,090.00 66,975.00 0.1278
286 Teleflex 1,600 55,380.00 65,600.00 0.1252
287 Chesapeake Corp. 2,200 55,535.00 65,175.00 0.1244
288 Hon Industries Inc. 2,800 69,000.00 65,100.00 0.1242
289 Modine Manufacturing Co. 2,700 62,675.00 64,800.00 0.1237
290 Atlantic Southeast Airlines 3,000 69,912.50 64,500.00 0.1231
291 Flowers Industries Inc. 5,300 65,132.50 64,262.50 0.1226
292 Keystone International Inc. 3,200 76,897.50 64,000.00 0.1221
293 Best Buy Inc. 3,900 86,570.00 63,375.00 0.1209
294 Federal-Mogul Corporation 3,200 70,172.50 62,800.00 0.1198
</TABLE>
D - 28
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
Port of Total
folio Market
No. Commom Stocks Shares Cost (1) Value (1) Value
___ ______________ ______ __________ __________ _______
<S> <C> <C> <C> <C> <C>
295 Watts Industries 2,700 $ 63,602.50 $ 62,775.00 0.1198%
296 Overseas Shipholding Group 3,300 62,177.50 62,700.00 0.1197
297 Battle Mountain Gold Co. 7,400 57,045.00 61,975.00 0.1183
298 Carpenter Technology Corp. 1,500 39,540.00 61,687.50 0.1177
299 TCA Cable TV Inc. 2,200 50,475.00 60,775.00 0.1160
300 Donaldson Co Inc. 2,400 46,875.00 60,300.00 0.1151
301 Verifone 2,100 46,867.50 60,112.50 0.1147
302 Smucker Inc Co. 2,700 69,660.00 59,400.00 0.1134
303 Ferro Corporation 2,550 70,745.00 59,287.50 0.1131
304 City National Corp. 4,200 40,492.78 58,800.00 0.1122
305 JB Hunt Transport Services Inc. 3,500 79,987.50 58,625.00 0.1119
306 Crompton Knowles Corp. 4,400 86,885.00 58,300.00 0.1113
307 Fingerhut Companies Inc. 4,200 106,922.50 58,275.00 0.1112
308 Thiokol Corp. 1,700 36,472.50 57,587.50 0.1099
309 Jacobs Engineering Group Inc. 2,300 58,077.50 57,500.00 0.1097
310 OEA Inc. 1,900 51,507.50 56,762.50 0.1083
311 Carlisle Co. Inc. 1,400 38,241.25 56,525.00 0.1079
312 Ametek, Inc. 3,000 48,400.00 56,250.00 0.1073
313 Ranger Oil Ltd. 9,000 54,625.00 56,250.00 0.1073
314 Waban Inc. 3,000 55,550.00 56,250.00 0.1073
315 Houghton Mifflin Co. 1,300 51,540.00 55,900.00 0.1067
316 American President Co. 2,400 57,177.50 55,200.00 0.1053
317 Fred Meyer Inc. 2,400 62,171.06 54,000.00 0.1031
318 Central LA Electric Inc. 2,000 48,757.50 53,750.00 0.1026
319 Duriron Inc. 2,250 45,720.83 52,593.75 0.1004
320 Standard Register Co. 2,600 49,850.00 52,325.00 0.0999
321 Dexter Corporation 2,200 54,147.50 51,975.00 0.0992
322 Albany International Corp. 2,800 50,277.50 50,750.00 0.0968
323 Airborne Freight Corp. 1,900 42,707.50 50,587.50 0.0965
324 Indiana Energy Inc. 2,100 41,841.67 50,137.50 0.0957
325 Stanhome Inc. 1,700 54,960.00 49,512.50 0.0945
326 Ruddick Corp. 4,200 41,270.00 48,300.00 0.0922
327 Carter Wallace Inc. 4,200 107,403.34 47,775.00 0.0912
328 International Dairy Queen Inc. 2,100 39,975.00 47,775.00 0.0912
329 Lawter International Inc. 4,100 53,505.00 47,662.50 0.0910
330 Goulds Pumps Inc. 1,900 45,450.00 47,500.00 0.0906
331 Lance Inc. 2,800 61,625.00 45,850.00 0.0875
332 Kaydon Corp. 1,500 38,645.00 45,562.50 0.0869
333 Service Merchandise Co. 9,100 88,033.33 45,500.00 0.0868
334 Diagnostic Products Corp. 1,200 33,897.50 45,450.00 0.0867
335 Fuller H.B. Co. 1,300 51,300.00 45,175.00 0.0862
336 Cleveland-Cliffs Inc. 1,100 40,305.00 45,100.00 0.0861
337 Morrison Restaurants Inc. 3,175 60,399.17 44,450.00 0.0848
338 Calgon Carbon Corp. 3,700 60,322.50 44,400.00 0.0847
339 Sequent Computer Systems Inc. 3,000 53,287.50 43,500.00 0.0830
340 Central Maine Power Co. 3,000 57,512.50 43,125.00 0.0823
341 Borland International Inc. 2,600 70,587.50 42,900.00 0.0819
342 Lands End Inc. 3,100 49,035.00 42,237.50 0.0806
343 Arnold Inds Co. 2,400 41,175.00 41,700.00 0.0796
</TABLE>
D - 29
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
Port of Total
folio Market
No. Commom Stocks Shares Cost (1) Value (1) Value
___ ______________ ______ __________ __________ _______
<S> <C> <C> <C> <C>
344 Sterling Chemicals 5,100 $ 30,042.50 $ 41,437.50 0.0791%
345 Sbarro Inc. 1,900 42,900.83 40,850.00 0.0780
346 NCH Corp. 700 44,522.50 40,425.00 0.0771
347 Duty Free International Inc. 2,500 63,887.50 40,000.00 0.0763
348 Dreyers Grand Ice Cream Inc. 1,200 29,850.00 39,900.00 0.0761
349 Measurex Corp. 1,400 27,545.00 39,550.00 0.0755
350 Lukens Inc. 1,350 49,840.83 38,812.50 0.0741
351 Buffets Inc. 2,800 45,100.00 38,500.00 0.0735
352 Calmat Co. 2,100 44,492.50 38,325.00 0.0731
353 Quaker State Corp. 3,000 39,712.50 37,875.00 0.0723
354 Gencorp Inc. 3,000 38,325.00 36,750.00 0.0701
355 Datascope Corp. 1,500 33,375.00 36,000.00 0.0687
356 AST Research Inc. 4,100 67,956.25 34,850.00 0.0665
357 Granite Construction Inc. 1,100 24,887.50 34,650.00 0.0661
358 Varco International 2,800 16,590.00 33,600.00 0.0641
359 Claire's Stores Inc. 1,900 25,507.50 33,487.50 0.0639
360 Church & Dwight Inc. 1,800 47,427.50 33,300.00 0.0636
361 Arvin Industries Inc. 2,000 55,000.00 33,000.00 0.0630
362 International Multifoods 1,600 38,342.50 32,200.00 0.0614
363 Mac Frugals Barg. Close Out Inc. 2,300 35,820.00 32,200.00 0.0614
364 Acuson Corp. 2,600 41,980.00 32,175.00 0.0614
365 Black Hills Corp. 1,300 32,602.50 32,175.00 0.0614
366 Parker Drilling Co. 5,100 27,917.50 31,237.50 0.0597
367 Southdown Inc. 1,600 22,167.50 31,200.00 0.0595
368 Information Resources Inc. 2,500 63,125.00 30,937.50 0.0590
369 NovaCare Inc. 6,000 98,125.00 30,750.00 0.0587
370 Advanced Technology Labs 1,200 19,604.67 29,400.00 0.0562
371 Exabyte Corp. 2,000 43,287.50 29,250.00 0.0558
372 MAXXAM Inc. 800 28,415.00 28,200.00 0.0538
373 National Presto Industries Inc. 700 35,847.50 27,825.00 0.0531
374 Sequa Corp. 900 28,695.00 27,450.00 0.0525
375 Savannah Foods & Industries Inc. 2,400 35,027.50 27,300.00 0.0521
376 Lawson Products Inc. 1,100 28,675.00 26,950.00 0.0514
377 Brush Wellman Inc.. 1,500 24,612.50 25,875.00 0.0494
378 Oregon Steel Mills Inc. 1,800 39,802.50 25,200.00 0.0482
379 Rohr Industries Inc. 1,700 21,235.00 24,437.50 0.0466
380 Gibson Greetings Inc. 1,500 30,775.00 24,000.00 0.0458
381 CML Group Inc. 4,500 81,172.50 23,062.50 0.0441
382 Cross A T Co. 1,500 28,712.50 22,687.50 0.0433
383 AnnTaylor Stores, Inc. 2,100 77,830.00 21,525.00 0.0411
384 Topps Co. Inc. 4,200 49,287.50 21,525.00 0.0411
385 Michael Foods Inc. 1,800 21,637.00 20,925.00 0.0399
386 CPI Corp. 1,300 25,377.50 20,800.00 0.0397
387 Alaska Air Group, Inc. 1,200 20,947.50 19,500.00 0.0373
388 Intelligent Electronics Inc. 3,200 39,987.50 19,200.00 0.0366
389 Magnetek Inc. 2,300 38,152.50 18,687.50 0.0357
390 Ennis Business Forms Inc. 1,500 24,112.50 18,375.00 0.0352
391 Hancock Fabrics Inc. 2,000 23,050.00 18,000.00 0.0344
</TABLE>
D - 30
<PAGE>
DEFINED ASSET FUNDS - EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
PORTFOLIO
AS OF DECEMBER 31, 1995
<TABLE><CAPTION>
Percentage
Port of Total
folio Market
No. Commom Stocks Shares Cost (1) Value (1) Value
___ ______________ ______ __________ __________ _______
<S> <C> <C> <C> <C> <C>
392 Air & Wtr. Technologies Corp. 2,900 $ 34,445.00 $ 17,762.50 0.0339%
393 Applied Bioscience Intl. Inc. 2,500 27,975.00 16,875.00 0.0323
394 Angelica Corp. 800 23,152.50 16,400.00 0.0313
395 Coram Healthcare Corp. 3,690 92,264.29 16,143.75 0.0308
396 Rollins Environmental Ser. 5,500 23,875.00 15,812.50 0.0302
397 Western Publishing Group Inc. 1,900 31,325.00 14,962.50 0.0286
398 Watson Pharmaceuticals 300 13,500.00 14,700.00 0.0281
399 Sizzler International Inc. 2,400 23,107.50 10,200.00 0.0196
_________ ______________ ______________ ________
1,825,451 $43,744,098.06 $52,400,909.75 100.0000%
========= ============== ============== ========
</TABLE>
NOTE:
(1) See Notes to Financial Statements.
D - 31
<PAGE>
AUTHORIZATION FOR REINVESTMENT
DEFINED ASSET FUNDS--EQUITY INCOME FUND
INDEX SERIES, S&P 500 TRUST 2
/ / Yes, I want to participate in the Fund's Reinvestment Plan and purchase
additional Units of the Fund each month.
I hereby acknowledge receipt of the Prospectus for Defined Asset
Funds--Equity Income Fund, Index Series, S&P 500 Trust 2 and authorize The Chase
Manhattan Bank, N.A. to pay distributions on my Units as indicated below
(distributions to be reinvested will be paid for my account to The Chase
Manhattan Bank, N.A.).
Income distributions
(check one): / / in cash / / reinvested
Capital
distributions (check
one): / / in cash / / reinvested
Please print or type
Name Registered Holder
Address
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(Two signatures required if
joint tenancy)
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This page is a self-mailer. Please complete the information above, cut
along the dotted line, fold along the lines on the reverse side, tape, and mail
with the Trustee's address displayed on the outside.
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<PAGE>
BUSINESS REPLY MAIL NO POSTAGE
FIRST CLASS PERMIT NO. 644, NEW YORK, N.Y. NECESSARY
IF MAILED
POSTAGE WILL BE PAID BY ADDRESSEE IN THE
THE CHASE MANHATTAN BANK, N.A. (MITF) UNITED STATES
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(Fold along this line.)
<PAGE>
AUTHORIZATION FOR REINVESTMENT
DEFINED ASSET FUNDS--EQUITY INCOME FUND
INDEX SERIES, S&P MIDCAP TRUST
/ / Yes, I want to participate in the Fund's Reinvestment Plan and purchase
additional Units of the Fund each month.
I hereby acknowledge receipt of the Prospectus for Defined Asset
Funds--Equity Income Fund, Index Series, S&P MidCap Trust and authorize The Bank
of New York to pay distributions on my Units as indicated below (distributions
to be reinvested will be paid for my account to The Bank of New York).
Income distributions
(check one): / / in cash / / reinvested
Capital
distributions (check
one): / / in cash / / reinvested
Please print or type
Name Registered Holder
Address
Registered Holder
(Two signatures required if
joint tenancy)
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BUSINESS REPLY MAIL NO POSTAGE
FIRST CLASS PERMIT NO. 1313 NEW YORK, N.Y. NECESSARY
IF MAILED
POSTAGE WILL BE PAID BY ADDRESSEE IN THE
DEFINED ASSET FUNDS--EQUITY INCOME FUND UNITED STATES
INDEX SERIES, S&P MIDCAP TRUST
THE BANK OF NEW YORK
UNIT INVESTMENT TRUST DEPARTMENT
P.O. BOX 974
WALL STREET STATION
NEW YORK, N.Y. 10268-0974
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DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
EQUITY INCOME FUND
FURTHER INFORMATION REGARDING THE FUND MAY BE OBTAINED
WITHIN FIVE DAYS BY WRITING OR CALLING THE TRUSTEE AT THE ADDRESS AND
TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF PART A OF THE PROSPECTUS.
INDEX
PAGE
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FUND DESCRIPTION..................................................... 1
RISK FACTORS......................................................... 2
HOW TO BUY UNITS..................................................... 6
HOW TO SELL UNITS.................................................... 7
INCOME, DISTRIBUTIONS AND REINVESTMENT............................... 8
FUND EXPENSES........................................................ 8
TAXES................................................................ 9
RECORDS AND REPORTS.................................................. 11
TRUST INDENTURE...................................................... 11
MISCELLANEOUS........................................................ 12
EXCHANGE OPTION...................................................... 14
SUPPLEMENTAL INFORMATION............................................. 14
FUND DESCRIPTION
PORTFOLIO SELECTION
Professional buyers and research analysts for Defined Asset Funds, with
access to extensive research, selected the Securities for the Portfolio after
considering the Fund's investment objective as well as the quality of the
stocks, the dividend payment record of the issuers and the prices of the stocks.
The yield and price of stocks of the type deposited in the Fund are dependent on
a variety of factors, including money market conditions, general conditions of
the corporate bond and equity markets, size of a particular offering and capital
structure of the issuer. While it may not be likely that dividends on any stocks
would be omitted, of course no assurances can be given since earnings available
for dividends, regardless of the size of the company, are subject to numerous
events which are often beyond the issuer's control.
Because each Defined Asset Fund is a preselected portfolio, you know the
securities before you invest. Of course, the Portfolio will change somewhat over
time, as Securities are purchased upon creation of additional Units, as
securities are sold to meet Unit redemptions or in other limited circumstances.
PORTFOLIO SUPERVISION
The Fund follows a buy and hold investment strategy in contrast to the
frequent portfolio changes of a managed fund based on economic, financial and
market analyses. In the event a public tender offer is made for a Security or a
merger or acquisition is announced affecting a Security, the Sponsors may
instruct the Trustee to tender or sell the Security in the open market when in
its opinion it is in the best interests of investors to do so. Although the
Portfolio is not actively managed, it is regularly reviewed and evaluated and
Securities can be sold in case of certain adverse developments concerning a
Security including the adverse financial condition of the
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issuer, the institution of legal proceedings against the issuer, a decline in
the price or the occurrence of other market or credit factors that might
otherwise make retention of the Security detrimental to the interest of
investors or if the disposition of these Securities is necessary in order to
enable the Fund to make distributions of the Fund's capital gain net income or
desirable in order to maintain the qualification of the Fund as a regulated
investment company under the Internal Revenue Code. Securities can also be sold
to meet redemption of Units. In Funds organized as regulated investment
companies, the Sponsors are also authorized to direct the reinvestment of the
proceeds of the sale of Securities, as well as moneys held to cover the purchase
of Securities pursuant to contracts which have failed, in additional Securities.
RISK FACTORS
An investment in the Fund entails certain risks, including the risk that
the value of your investment will decline if the financial condition of the
issuers of the Securities becomes impaired or if the general condition of the
stock market worsens. In addition, holders of common stocks have generally
inferior rights to receive payments from the issuer in comparison with the
rights of creditors of, or holders of debt obligations or preferred stocks
issued by, the issuer. Moreover, common stocks do not represent an obligation of
the issuer and therefore do not offer any assurance of income or provide the
degree of protection of capital provided by debt securities. Common stocks in
general may be especially susceptible to general stock market movements and to
volatile increases and decreases in value as market confidence in and
perceptions of the issuers change. These perceptions are based on unpredictable
factors including expectations regarding government, economic, monetary and
fiscal policies, inflation and interest rates, economic expansion or
contraction, and global or regional political, economic or banking crises. The
Sponsors cannot predict the direction or scope of any of these factors.
A Portfolio may be concentrated in one or more of the following categories.
Concentration may involve additional risk because of the decreased
diversification of economic, financial and market risks. Set forth below is a
brief description of certain risks associated with certain of the Securities.
Additional information is contained in the Information Supplement which is
available from the Trustee at no charge to the investor.
CONSUMER PRODUCTS COMPANIES
Risk factors include cyclicality of revenues and earnings, changing
consumer demands, regulatory restrictions, products liability litigation and
other litigation resulting from accidents, extensive competition (including that
of low-cost foreign companies), unfunded pension fund liabilities, employee and
retiree benefit costs and financial deterioration resulting from leveraged
buy-outs, takeovers or acquisitions. In general, expenditures on consumer
products will be affected by the economic health of consumers. A continuing weak
economy with its consequent effect on consumer spending would have an adverse
effect on the industry.
HEALTH CARE
Companies in the health care industry face several risks. Most health care
companies are extensively regulated. All are subject to extreme cost-containment
pressures. As a result they cannot readily raise the prices of their products
and services, and may experience price declines. Most are subject to intense
competition and are required to spend large amounts of capital to keep pace with
technological innovation. Many of the companies also face product obsolescence,
the threat of product liability suits and expensive liability insurance. In
addition, issuers in the health care industry will be affected by health reform
legislation. Proposed federal legislation would significantly reduce Medicare
and Medicaid payments to providers and impose stringent cost controls that would
affect insurance premiums and fees paid to providers; it is impossible to
predict what reforms may be adopted or when reforms might be implemented at the
federal or state level.
MANUFACTURING COMPANIES
Growth in the manufacturing industry is closely linked to expansion in the
domestic and global economies. Since the U.S. government and many state, local
and foreign governments now have a budget deficit, financial expenditures by
these entities on capital improvements may be extremely limited. The lack of
funds allocated by public entities to capital improvement projects may adversely
affect manufacturers engaged in the production of industrial materials used for
capital improvements or for the upgrade of the infrastructure. Cutbacks in
defense spending have adversely impacted many of the companies engaged in the
aerospace and arms/defense sectors of the manufacturing industry. Environmental
and safety issues increasingly affect the manufacturing industry.
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Issuers may experience decreases in profitability as legislative mandates impose
costs associated with compliance with environmental regulations and
manufacturing more environmentally sound and safer equipment. Furthermore, the
cost of product liability insurance and the inability of some manufacturing
companies to obtain this insurance may have an adverse impact on the industry.
The long-term outlook is largely dependent upon the growth and competitiveness
of the U.S. manufacturing base. Increased consolidation and merger activity
increases competitiveness in general but individual companies may experience
severe financial problems due to this increased competitiveness. Strong
competition from foreign nations, particularly those with lower labor costs,
will severely impact the profitability of the U.S. manufacturing business.
REAL ESTATE COMPANIES
Investment in securities issued by real estate companies should be made
with an understanding of the many factors which may have an adverse impact on
the credit quality of the particular company or industry. These include economic
recession, competitive overbuilding, unusually adverse weather conditions,
changing demographics, changes in government regulations (including tax laws and
environmental, building zoning and sales regulation by various federal, state
and local authorities), increases in real estate taxes or costs of material and
labor, the inability to secure performance guarantees as required and the
unavailability of construction financing or mortgage loans at rates acceptable
to builders and home buyers. Variations in rental income and space availability
and vacancy rates in terms of supply and demand are additional factors affecting
real estate generally and Real Estate Investment Trusts (REITs) in particular.
Performance by individual REITs is dependent on the types of real estate
investments held. For example, the effect of interest rate fluctuations on
mortgage REITs is greater than on equity REITs and the nature of the underlying
assets of a mortgage REIT may be considered less tangible than that of an equity
REIT. In addition, equity REITs may be affected by changes in the value of the
underlying property they own, while mortgage REITs may be affected by the
quality of credit extended.
TECHNOLOGY COMPANIES
Technology companies, such as semiconductor, computer and electronics
manufacturing companies, are rapidly developing and highly competitive, both
domestically and internationally, and tend to be relatively volatile as compared
to other types of investments. Certain of these companies may be smaller and
less seasoned companies with limited product lines, markets or financial
resources and limited management or marketing personnel. These companies are
characterized by a high degree of investment to maintain competitiveness and are
affected by worldwide scientific and technological developments (and resulting
product obsolescence) as well as government regulation, increase in material or
labor costs, changes in distribution channels and the need to manage inventory
levels in line with product demand. Other risk factors include short product
life cycles, aggressive pricing and reduced profit margins, dramatic and often
unpredictable changes in growth rates, frequent new product introduction, the
need to enhance existing products, intense competition from large established
companies and potential competition from small start up companies.
TELECOMMUNICATIONS
Payment on common stocks of companies in the telecommunications industry,
including local, long-distance and cellular service, the manufacture of
telecommunications equipment, and other ancillary services, is generally
dependent upon the amount and growth of customer demand, the level of rates
permitted to be charged by regulatory authorities and the ability to obtain
periodic rate increases, the effects of inflation on the cost of providing
services and the rate of technological innovation. The domestic
telecommunications industry is characterized by increasing competition in all
sectors and extensive regulation by the Federal Communications Commission and
various state regulatory authorities. To meet increasing competition, companies
may have to commit substantial capital, particularly in the formulation of new
products and services using new technology. Companies offering telephone
services are experiencing increasing competition from cellular telephones, and
the cellular telephone industry, because of its limited operating history, faces
uncertainty concerning the future of the industry and demand for cellular
telephones. Telecommunications companies in both developed
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and emerging countries are undergoing significant change due to varying and
evolving levels of governmental regulation or deregulation and other factors. As
a result, competitive pressures are intense and the securities of such companies
may be subject to significant price volatility. In addition, all
telecommunications companies in both developed and emerging countries are
subject to the additional risk that technological innovations will make their
products and services obsolete.
UTILITIES
Payments on utility stocks are dependent on various factors, including the
rates the utilities may charge, the demand for their services and their
operating costs, including expenses to comply with environmental legislation and
other energy and licensing laws and regulations. Utilities are particularly
sensitive to, among other things, the effects of inflation on operating and
construction costs, the unpredictability of future usage requirements, the costs
and availability of fuel and, with certain electric utilities, the risks
associated with the nuclear industry.
FOREIGN ISSUERS
Certain of the Securities in a Portfolio may consist of securities of
foreign issuers. An investment in such a Fund involves some investment risks
that are different in some respects from an investment in a fund that invests
entirely in securities of domestic issuers. Those investment risks include
future political and economic developments and the adoption of withholding
taxes, exchange controls or other restrictions which might adversely affect the
payment or receipt of payment of dividends on the relevant Securities. In
addition, there may be less publicly available information than is available
from a domestic issuer and foreign issuers are not necessarily subject to
uniform accounting, auditing and financial reporting standards, practices and
requirements comparable to those applicable to domestic issuers. In addition,
earnings and dividends for foreign companies are in non-U.S. currencies.
Therefore, the U.S. dollar value of the stock and dividends for these issuers
will vary with fluctuations in the U.S. dollar foreign exchange rates for the
relevant currencies. Most foreign currencies have fluctuated widely in value
against the U.S. dollar for many reasons, including supply and demand for the
respective currency, the soundness of the world economy and the strength of the
respective economy as compared to the economies of the United States and other
countries.
American Depositary Shares and Receipts. Many of the Securities of foreign
issuers were purchased in ADR form in the United States. ADRs evidence American
Depositary Shares which represent common stock deposited with a custodian in a
depositary. American Depositary Shares (ADSs) and receipts therefor (ADRs) are
issued by an American bank or trust company to evidence ownership of underlying
securities issued by a foreign corporation. These instruments may not
necessarily be denominated in the same currency as the securities into which
they may be converted. Generally, ADSs and ADRs are designed for use in the
United States securities markets. For purposes of this Prospectus, the term ADR
generally includes ADSs.
The terms and conditions of depositary facilities may result in less
liquidity or lower market prices for ADRs than for the underlying shares. For
those Securities that are ADRs, currency fluctuations will also affect the U.S.
dollar equivalent of the local currency price of the underlying domestic share
and, as a result, are likely to affect the value of the ADRs and consequently
the value of the Securities.
THE S&P 500 INDEX AND THE S&P MIDCAP INDEX
The S&P 500 Index is composed of 500 selected common stocks, most of which
are listed in the New York Stock Exchange. This well-known index, originally
consisting of 233 stocks in 1923, was expanded to 500 stocks in 1957 and was
restructured in 1976 to a composite consisting of four major industry sectors:
industrial, utility, financial and transportation. The four major industry
sectors are comprised of eleven regular industry sectors which are further
divided into industry groups. The S&P 500 Index contains a variety of stocks
which are market-value weighted to represent the overall market. The Index
represents approximately 69% of U.S. stock market capitalization. At present,
the mean market capitalization of the companies in the S&P 500 Index is
approximately $3.346 billion.
The S&P MidCap Index is composed of 400 selected common stocks; as of the
initial date of deposit, 279 were listed on the New York Stock Exchange, 9 were
listed on the American Stock Exchange and 112 were quoted on The Nasdaq National
Market. The MidCap Index stocks were chosen for market size, liquidity and
industry group representation. As of December 31, 1994, industrial stocks
accounted for approximately 69.5% of S&P MidCap Index market capitalization,
utilities approximately 14.1%, financial stocks approximately 14.6% and
transportation stocks approximately 1.8%. The capitalizations of individual
companies ranged from about $49
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million to over $10,066 million; the mean market capitalization of the companies
in the S&P MidCap Index was approximately $1.156 billion.
The weightings of stocks in the S&P 500 Index and the S&P MidCap Index are
primarily based on each stock's relative total market value; that is, its market
price per share times the number of shares outstanding.
Standard and Poor's only relationship to the Portfolios is the licensing of
the right to use the S&P 500 Index and the S&P MidCap Index as bases for
determining the composition of the Portfolios and to use the related trademarks
and tradenames in the name of the Fund and in the Prospectus and related sales
literature to the extent that the Sponsors deem appropriate or desirable under
Federal and state securities laws and to indicate the source of the Indexes. The
Indexes are determined, comprised and calculated without regard to the Funds.
S&P does not guarantee the accuracy and/or the completeness of the S&P 500
Index or the S&P MidCap Index or any data included therein and S&P shall have no
liability for any errors, omissions, or interruptions therein. S&P makes no
warranty, express or implied, as to results to be obtained by the sponsors, the
funds, any person or any entity from the use of the S&P index or the S&P MidCap
Index or any data included therein. S&P makes no express or implied warranties,
and expressly disclaims all warranties of merchantability or fitness for a
particular purpose or use, with respect to the S&P 500 Index or the S&P MidCap
Index or any data included therein. Without limiting any of the foregoing, in no
event shall S&P have any liability for any special, punitive, indirect, or
consequential damages (including lost profits), even if notified of the
possibility of such damages.
LIQUIDITY
Whether or not the Securities are listed on a national securities exchange,
the principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the Securities
may depend on whether dealers will make a market in the Securities. There can be
no assurance that a market will be made for any of the Securities, that any
market for the Securities will be maintained or of the liquidity of the
Securities in any markets made. In addition, the Fund may be restricted under
the Investment Company Act of 1940 from selling Securities to the Sponsors. The
price at which the Securities may be sold to meet redemptions and the value of
the Fund will be adversely affected if trading markets for the Securities are
limited or absent.
LITIGATION AND LEGISLATION
The Sponsors do not know of any pending litigation as of the initial date
of deposit that might reasonably be expected to have a material adverse effect
on the Fund, although pending litigation may have a material adverse effect on
the value of Securities in the Fund. In addition, at any time after the initial
date of deposit, litigation may be initiated on a variety of grounds, or
legislation may be enacted, affecting the Securities in the Portfolio or the
issuers of the Securities. Changing approaches to regulation may have a negative
impact on certain companies represented in the Portfolio. There can be no
assurance that future litigation, legislation, regulation or deregulation will
not have a material adverse effect on the Portfolio or will not impair the
ability of the issuers of the Securities to achieve their business goals. From
time to time Congress considers proposals to reduce the rate of the
dividends-received deduction. This type of legislation, if enacted into law,
would adversely affect the after-tax return to investors who can take advantage
of the deduction. See Taxes.
LIFE OF THE FUND; FUND TERMINATION
The size and composition of the Portfolio will be affected by the level of
redemptions of Units that may occur from time to time. Principally, this will
depend upon the number of investors seeking to sell or redeem their Units. The
Portfolio will be terminated no later than the mandatory termination date
specified in Part A of the Prospectus. It will terminate earlier upon the
disposition of the last Security or upon the consent of investors holding 51% of
the Units. The Portfolio may also be terminated earlier by the Sponsors once its
total assets have fallen below the minimum value specified in Part A of the
Prospectus. A decision by the Sponsors to terminate the Portfolio early will be
based on factors such as the size of the Portfolio relative to its original
size, the ratio of Portfolio expenses to income, and the cost of maintaining a
current prospectus.
Notice of impending termination will be provided to investors and
thereafter units will no longer be redeemable. On or shortly before termination,
the Trustee will seek to dispose of any Securities remaining in the
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Portfolio although any Security unable to be sold at a reasonable price may
continue to be held by the Trustee in a liquidating trust pending its final
disposition. A proportional share of the expenses associated with termination,
including brokerage costs in disposing of Securities, will be borne by investors
remaining at that time. This may have the effect of reducing the amount of
proceeds those investors are to receive in any final distribution.
HOW TO BUY UNITS
Units are available from any of the Sponsors, Underwriters and other
broker-dealers at the Public Offering Price, which includes the applicable sales
charge -- see Appendix A. The Public Offering Price varies each Business Day
with changes in the value of the Portfolio and other assets and liabilities of
the Fund.
PUBLIC OFFERING PRICE
In the secondary market (after the initial offering period), the Public
Offering Price is based on the next evaluation of the Securities, and includes a
sales charge based (a) on the number of Units of the Fund purchased in the
secondary market on the same day by a single purchaser (see Secondary Market
Sales Charge Schedule in Appendix A). To qualify for a reduced sales charge, the
dealer must confirm that the sale is to a single purchaser or is purchased for
its own account and not for distribution. For these purposes, Units held in the
name of the purchaser's spouse or child under 21 years of age are deemed to be
purchased by a single purchaser. A trustee or other fiduciary purchasing
securities for a single trust or single fiduciary account is also considered a
single purchaser.
Employees of certain Sponsors and Sponsor affiliates and non-employee
directors of Merrill Lynch & Co. Inc. may purchase Units at a reduced initial
sales charge of not less than $5.00 per 1,000 Units.
S&P 500 TRUST 2 AND S&P MIDCAP TRUST. The graduated sales charges shown in
Appendix A will apply on all purchases on any one day (with credit given for
previously purchased Units as described below under Right of Accumulation) by a
single purchaser of Units in one or both Trusts of this Fund only in the amounts
stated. For this purpose purchases will not be aggregated with concurrent
purchases of any other unit trusts sponsored by the Sponsors. However, Units
held in the name of the spouse of the purchaser or in the name of a child of the
purchaser under 21 years of age are deemed to be registered in the name of the
purchaser. The graduated sales charges are also applicable to a trustee or other
fiduciary purchasing securities for a single trust estate or single fiduciary
account. To qualify for the reduced sales charge and concession applicable to
quantity purchases, the dealer must confirm that the sale is to a single
purchaser. The sales charge is lower than sales charges on many other equity
investments.
Right of Accumulation. Reduced sales charges are applicable through a right
of accumulation under which eligible investors are permitted to purchase Units
of either Trust at the offering price applicable to the total of (a) the dollar
amount then being purchased plus (b) an amount equal to the then current net
asset value of the purchaser's holdings of Units of both Trusts. To be eligible
either for this right of accumulation or the reduced sales charge applicable to
purchases of both Trusts on the same day, the purchaser or the purchaser's
securities dealer must notify the Sponsors at the time of purchase that such
purchase qualifies under this accumulation provision and supply sufficient
information to permit confirmation of qualification. Acceptance of the purchase
order is subject to such confirmation. These reduced sales charge provisions may
be amended or terminated at any time without notice.
EVALUATIONS
Evaluations are determined by the Trustee on each Business Day. This
excludes Saturdays, Sundays and the following holidays as observed by the New
York Stock Exchange: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas. If the Securities are
listed on a national securities exchange or the Nasdaq National Market,
evaluations are generally based on closing sales prices on that exchange or that
system (unless the Trustee deems these prices inappropriate) or, if closing
sales prices are not available, at the mean between the closing bid and offer
prices. If the Securities are not listed or if listed but the principal market
is elsewhere, the evaluation is generally determined based on sales prices of
the Securities on the over-the-counter market or, if sales prices in that market
are not available, on the basis of the mean between current bid and offer prices
for the Securities or for comparable securities or by appraisal or by any
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combination of these methods. Neither the Sponsors nor the Trustee guarantee the
enforceability, marketability or price of any Securities.
CERTIFICATES
Certificates for Units may be issued for certain Funds upon request and may
be transferred by paying any taxes or governmental charges and by complying with
the requirements for redeeming Certificates (see How To Sell Units--Trustee's
Redemption of Units). Certain Sponsors collect additional charges for
registering and shipping Certificates to purchasers. Lost or mutilated
Certificates can be replaced upon delivery of satisfactory indemnity and payment
of costs. Units of certain Funds identified in Part A of the Prospectus must be
held in uncertificated form.
HOW TO SELL UNITS
SPONSORS' MARKET FOR UNITS
You can sell your Units at any time without a fee. The Sponsors (although
not obligated to do so) will normally buy any Units offered for sale at the
repurchase price next computed after receipt of the order. The Sponsors have
maintained secondary markets in Defined Asset Funds for the last 25 years.
Primarily because of the sales charge and fluctuations in the market value of
the Securities, the sale price may be less than the cost of your Units. You
should consult your financial professional for current market prices to
determine if other broker-dealers or banks are offering higher prices for Units.
The Sponsors may discontinue this market without prior notice if the supply
of Units exceeds demand or for other business reasons. The Sponsors may reoffer
or redeem Units repurchased.
TRUSTEE'S REDEMPTION OF UNITS
You may redeem your Units by sending the Trustee a redemption request.
Signatures must be guaranteed by an eligible institution. In certain instances,
additional documents may be required such as a certificate of death, trust
instrument, certificate of corporate authority or appointment as executor,
administrator or guardian. If the Sponsors are maintaining a market for Units,
they will purchase any Units tendered at the repurchase price described above.
If they do not purchase Units tendered, the Trustee is authorized in its
discretion to sell Units in the over-the-counter market if it believes it will
obtain a higher net price for the redeeming investor.
By the seventh calendar day after tender you will be mailed an amount equal
to the Redemption Price per Unit. Because of market movements or changes in the
Portfolio, this price may be more or less than the cost of your Units. The
Redemption Price per Unit is computed each Business Day by adding the value of
the Securities, declared but unpaid dividends on the Securities, cash and the
value of any other Fund assets; deducting unpaid taxes or other governmental
charges, accrued but unpaid Fund expenses, unreimbursed Trustee advances, cash
held to redeem Units, for purchase of Securities or for distribution to
investors and the value of any other Fund liabilities; and dividing the result
by the number of outstanding Units.
If cash is not available in the Fund's Income and Capital Accounts to pay
redemptions, the Trustee may sell Securities selected by the Agent for the
Sponsors based on market and credit factors determined to be in the best
interest of the Fund. These sales are often made at times when the Securities
would not otherwise be sold and may result in lower prices than might be
realized otherwise and will also reduce the size and diversity of the Fund.
Redemptions may be suspended or payment postponed if the New York Stock
Exchange is closed other than for customary weekend and holiday closings, if the
SEC determines that trading on that Exchange is restricted or that an emergency
exists making disposal or evaluation of the Securities not reasonably
practicable, or for any other period permitted by the SEC.
REDEMPTION IN KIND--CONCEPT SERIES, INCOME GROWTH FUND, REAL ESTATE INCOME
FUND, SECOND EXCHANGE SERIES--AT&T SHARES. You may request distribution in kind
from the Trustee instead of cash redemption, provided that you are tendering
Units with a required minimum value. By the seventh calendar day after tender,
an amount and value of Securities per Unit, together with a pro rata portion of
the cash balance in the Fund, equal to the Redemption Price per Unit, will be
paid over to the Trustee, as distribution agent, and either held for your
account or disposed of in accordance with your instructions. Any brokerage
commissions on sales of
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Securities in connection with in-kind redemptions will be borne by you. The
Sponsors may modify or terminate this redemption in kind option at any time
without notice to investors.
INCOME, DISTRIBUTIONS AND REINVESTMENT
INCOME AND DISTRIBUTIONS
The net annual income per Unit will depend primarily upon the amount of
dividends declared and paid by the issuers of the Securities and changes in the
expenses of the Fund and, to a lesser degree, upon the level of purchases of
additional Securities and sales of Securities. There is no assurance that
dividends on the Securities will continue at their current levels or be declared
or paid.
Each Unit receives an equal share of monthly or quarterly distributions of
dividend income. Because dividends on the Securities are not received at a
constant rate throughout the year, any income distribution may be more or less
than the amount then credited to the Income Account. Dividends payable to the
Fund are credited to an Income Account, as of the date on which the Fund is
entitled to receive the dividends, and other receipts are credited to a Capital
Account. A Reserve Account may be created by withdrawing from the Income and
Capital Accounts amounts considered appropriate by the Trustee to reserve for
any material amount that may be payable out of the Fund. Funds held by the
Trustee in the various accounts do not bear interest.
UTILITY STOCK SERIES, SECOND EXCHANGE SERIES--AT&T SHARES, REAL ESTATE
INCOME FUND, INCOME GROWTH FUND. Subject to the Reinvestment Plan, the Monthly
Income Distribution for each investor shall consist of an amount, computed
monthly by the Trustee, substantially equal to one-twelfth of the investor's pro
rata share of the estimated annual income to the Income Account, after deducting
estimated expenses.
ALL OTHER FUNDS: Unless otherwise indicated in Part A, dividend income
received by the Fund and available for distribution and the distributable
balance in the Capital Account (other than capital gains) as of any particular
record day will be distributed on or shortly after the related distribution day
to the holders of record on that record day.
There is no assurance that actual distributions will be made since all
dividends received may be used to pay expenses. An amount equal to any capital
gain net income (i.e. the excess of capital gains over capital losses)
recognized by the Fund in any taxable year will generally be distributed shortly
after the end of the year. In order to meet certain tax requirements a Fund may
make a special distribution of income, including capital gains, to holders of
record as of a date in December. Proceeds received from the disposition of any
of the Securities which are not used to make the distribution of capital gain
net income, for redemption of Units or reinvested in additional Securities will
be held in the Capital Account to be distributed on the next succeeding
distribution day.
REINVESTMENT PLAN -- UTILITY STOCK SERIES, INCOME GROWTH FUND, CONCEPT SERIES,
SECOND EXCHANGE SERIES -- AT&T SHARES AND S&P INDEX TRUSTS.
Income and principal distributions on Units may be reinvested by
participating in the Fund's reinvestment plan. Under the plan, the Units
acquired for investors will be either Units already held in inventory by the
Sponsors or new Units created by the Sponsors' deposit of additional Securities,
contracts to purchase additional Securities or cash (or a bank letter of credit
in lieu of cash) with instructions to purchase additional Securities. Purchases
made pursuant to the Reinvestment Plan will be made without sales charge at the
net asset value for Units of the Fund. Under the Reinvestment Plan, the Fund
will pay the distributions to the Trustee which in turn will purchase for the
investor full and fractional Units of the Fund at the price determined as of the
close of business on the distribution day and will add the Units to the
investor's account and send the investor an account statement reflecting the
reinvestment. The Sponsors reserve the right to amend, modify or terminate the
reinvestment plan at any time without prior notice. Investors holding Units in
'street name' should contact their broker, dealer or financial institution to
determine whether they may participate in the reinvestment plan.
FUND EXPENSES
Estimated annual Fund expenses are listed in Part A of the Prospectus; if
actual expenses exceed the estimate, the excess will be borne by the Fund. The
Trustee's annual fee is payable in monthly installments. The Trustee also
benefits when it holds cash for the Fund in non-interest bearing accounts.
Possible additional charges include Trustee fees and expenses for extraordinary
services, costs of indemnifying the Trustee and the Sponsors, costs of
8
<PAGE>
action taken to protect the Fund and other legal fees and expenses, Fund
termination expenses and any governmental charges. The Trustee has a lien on
Fund assets to secure reimbursement of these amounts and may sell Securities for
this purpose if cash is not available. The Sponsors receive an annual fee of a
maximum of $0.35 per 1,000 Units to reimburse them for the cost of providing
Portfolio supervisory services to the Fund. While the fee may exceed their costs
of providing these services to the Fund, the total supervision fees from all
Series of Equity Income Fund will not exceed their costs for these services to
all of those Series during any calendar year. The Sponsors may also be
reimbursed for their costs of providing bookkeeping and administrative services
to the Fund. The Trustee's and Sponsors' fees may be adjusted for inflation
without investors' approval.
Defined Asset Funds can be a cost-effective way to purchase and hold
investments. Annual operating expenses are generally lower than for managed
funds. Because Defined Asset Funds have no management fees, limited transaction
costs and no ongoing marketing expenses, operating expenses are generally less
than 0.25% a year. When compounded annually, small differences in expense ratios
can make a big difference in your investment results.
S&P Index Trusts. The Trusts have entered into license agreements with
Standard & Poor's that permit the Trusts to use the trademarks and tradenames
'S&P 500', 'S&P MidCap 400 Index' and other trademarks and tradenames, to the
extent the Sponsors deem appropriate and desirable under federal and state
securities laws to indicate the source of the Indices as a basis for determining
the composition of the Fund's investment portfolios. As consideration for the
grant of the license, each Portfolio will pay to Standard & Poor's Corporation
an annual fee equal to .02% of the average net asset value of the Portfolio (or,
if greater, $10,000). In addition, the Fund will pay approximately $45,000 per
year for access to independent computer services that track the S&P 500 Index
and the S&P MidCap Index. Computer expenses will be divided between the Trusts
in proportion to their respective assets during the relevant period.
TAXES
TAXATION OF THE FUND--EXCEPT FOR SECOND EXCHANGE SERIES--AT&T SHARES (SEE
PROSPECTUS PART A).
The Fund intends to qualify for and elect the special tax treatment
applicable to 'regulated investment companies' under Section 851-855 of the
Internal Revenue Code of 1986, as amended (the 'Code'). Qualification and
election as a 'regulated investment company' involve no supervision of
investment policy or management by any government agency. If the Fund qualifies
as a 'regulated investment company' and distributes to investors 90% or more of
its taxable income without regard to its net capital gain (i.e., the excess of
its net long-term capital gain over its net short-term capital loss), it will
not be subject to Federal income tax on any portion of its taxable income
(including any net capital gain) distributed to investors in a timely manner. In
addition, the Fund will not be subject to the 4% excise tax on certain
undistributed income of 'regulated investment companies' to the extent it
distributes to investors in a timely manner at least 98% of its taxable income
(including any net capital gain). It is anticipated that the Fund will not be
subject to Federal income tax or the excise tax because the Indenture requires
the distribution of the Fund's taxable income (including any net capital gain)
in a timely manner. Although all or a portion of the Fund's taxable income
(including any net capital gain) for a taxable year may be distributed shortly
after the end of the calendar year, such a distribution will be treated for
Federal income tax purposes as having been received by investors during the
calendar year.
DISTRIBUTIONS
Distribution to investors of the Fund's dividend income and net short-term
capital gain in any year will be taxable as ordinary income to investors to the
extent of the Fund's taxable income (without regard to its net capital gain) for
that year. Any excess will be treated as a return of capital and will reduce the
investor's basis in his Units and, to the extent that such distributions exceed
his basis, will be treated as a gain from the sale of his Units as discussed
below. It is anticipated that substantially all of the distributions of the
Fund's dividend income and net short-term capital gain will be taxable as
ordinary income to investors.
Distribution of the Fund's net capital gain (designated as capital gain
dividends by the Fund) will be taxable to investors as long-term capital gain,
regardless of the length of time the Units have been held by an investor. An
investor will recognize a taxable gain or loss if the investor sells or redeems
his Units. Any gain or loss arising from (or treated as arising from) the sale
or redemption of Units will be a capital gain or loss, except in the case of a
dealer in securities. Capital gains are currently taxed at the same rate as
ordinary income, however, the excess of
9
<PAGE>
net long-term capital gains over net short-term capital losses may be taxed at a
lower rate than ordinary income for certain noncorporate taxpayers. A capital
gain or loss is long-term if the asset is held for more than one year and
short-term if held for one year or less. However, any capital loss on the sale
or redemption of a Unit that an investor has held for six months or less will be
a long-term capital loss to the extent of any capital gain dividends previously
distributed to the investor by the Fund. The deduction of capital losses is
subject to limitations.
A distribution of Securities to an investor upon redemption of his Units
will be a taxable event to such investor, and that investor will recognize
taxable gain or loss upon such distribution (equal to the difference between
such an investor's tax basis in his Units and the fair market value of
Securities received in redemption), which will be capital gain or loss except in
the case of a dealer in securities. Investors should consult their own tax
advisers in this regard.
Distributions that are taxable as ordinary income to investors will
constitute dividends for Federal income tax purposes. To the extent that
distributions are appropriately designated by the Fund and are attributable to
dividends received by the Fund from domestic issuers with respect to whose
Securities the Fund satisfies the requirements for the dividends-received
deduction, such distributions will be eligible for the dividends-received
deduction for corporations (other than corporations such as 'S' corporations
which are not eligible for such deduction because of their special
characteristics and other than for purposes of special taxes such as the
accumulated earnings tax and the personal holding company tax). The
dividends-received deduction generally is currently 70%. However, Congress from
time to time considers proposals to reduce the rate, and enactment of such a
proposal would adversely affect the after-tax return to investors who can take
advantage of the deduction. Investors are urged to consult their own tax
advisers.
Sections 246 and 246A of the Code contain additional limitations on the
eligibility of dividends for the corporate dividends-received deduction.
Depending upon the corporate investor's circumstances (including whether it has
a 45-day holding period for its Units and whether its Units are debt financed),
these limitations may be applicable to dividends received by an investor from
the Fund which would otherwise qualify for the dividends-received deduction
under the principles discussed above. Accordingly, investors should consult
their own tax advisers in this regard. A corporate investor should be aware that
the receipt of dividend income for which the dividends-received deduction is
available may give rise to an alternative minimum tax liability (or increase an
existing liability) because the dividend income will be included in the
corporation's 'adjusted current earnings' for purposes of the adjustment to
alternative minimum taxable income required by Section 56(g) of the Code.
Dividends received by the Fund from foreign issuers will in most cases be
subject to foreign withholding taxes. The Fund will not be eligible for, and
therefore does not expect to make, an election that would enable investors to
credit foreign withholding taxes against their federal income tax liability on
distributions by the Fund.
Investors will be taxed in the manner described above regardless of whether
distributions from the Fund are actually received by the investor or are
reinvested pursuant to a Reinvestment Plan.
The Federal tax status of each year's distributions will be reported to
investors and to the Internal Revenue Service. The foregoing discussion relates
only to the Federal income tax status of the Fund and to the tax treatment of
distributions by the Fund to U.S. investors. Investors that are not United
States citizens or residents should be aware that distributions from the Fund
will generally be subject to a withholding tax of 30%, or a lower treaty rate,
and should consult their own tax advisers to determine whether investment in the
Fund is appropriate. Distributions may also be subject to state and local
taxation and investors should consult their own tax advisers in this regard.
RETIREMENT PLANS
Equity Income Funds may be well suited for purchase by Individual
Retirement Accounts ('IRAs'), Keogh plans, pension funds and other qualified
retirement plans, certain of which are briefly described below. Generally,
capital gains and income received in each of the foregoing plans are exempt from
Federal taxation. All distributions from such plans are generally treated as
ordinary income but may, in some cases, be eligible for special 5 or 10 year
averaging or tax-deferred rollover treatment. Holders of Units in IRAs, Keogh
plans and other tax-deferred retirement plans should consult their plan
custodian as to the appropriate disposition of
10
<PAGE>
distributions. Investors considering participation in any of these plans should
review specific tax laws related thereto and should consult their attorneys or
tax advisors with respect to the establishment and maintenance of any of these
plans. These plans are offered by brokerage firms, including the Sponsor of this
Fund, and other financial institutions. Fees and charges with respect to such
plans may vary.
Retirement Plans for the Self-Employed--Keogh Plans. Units of the Fund may
be purchased by retirement plans established for self-employed individuals,
partnerships or unincorporated companies ('Keogh plans'). The assets of a Keogh
plan must be held in a qualified trust or other arrangement which meets the
requirements of the Code. Keogh plan participants may also establish separate
IRAs (see below) to which they may contribute up to an additional $2,000 per
year ($2,250 in a spousal account).
Individual Retirement Account--IRA, Any individual can make use of a
qualified IRA arrangement for the purchase of Units of the Fund. Any individual
(including one covered by an employer retirement plan) can make a contribution
in an IRA equal to the lesser of $2,000 ($2,250 in a spousal account) or 100% of
earned income; such investment must be made in cash. However, the deductible
amount an individual may contribute will be reduced if the individual's adjusted
gross income exceeds $25,000 (in the case of a single individual), $40,000 (in
the case of married individuals filing a joint return) or $200 (in the case of a
married individual filing a separate return). Certain transactions which are
prohibited under Section 408 of the Code will cause all or a portion of the
amount in an IRA to be deemed to the distributed and subject to tax at that
time. Unless nondeductible contributions were made in 1987 or a later year, all
distributions from an IRA will be treated as ordinary income but generally are
eligible for tax-deferred rollover treatment. Taxable distributions made before
attainment of age 59 1/2, except in the case of the participant's death or
disability or where the amount distributed is part of a series of substantially
equal periodic (at least annual) payments that are to be made over the life
expectancies of the participant and his or her beneficiary, are generally
subject to a surtax in an amount equal to 10% of the distribution.
Corporate Pension and Profit-Sharing Plans. A pension or profit-sharing
plan for employees of a corporation may purchase Units of the Fund.
RECORDS AND REPORTS
The Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Fund,
including a current list of the Securities and a copy of the Indenture, which
may be inspected by investors at reasonable times during business hours.
With each distribution, the Trustee includes a statement of the amounts of
income and any other receipts being distributed. Following the termination of
the Fund, the Trustee sends each investor of record a statement summarizing
transactions in the Fund's accounts including amounts distributed from them,
identifying Securities sold and purchased and listing Securities held and the
number of Units outstanding at termination and stating the Redemption Price at
termination, and the fees and expenses paid by the Fund, among other matters.
Fund accounts may be audited by independent accountants selected by the Sponsors
and any report of the accountants will be available from the Trustee on request.
TRUST INDENTURE
The Fund is a 'unit investment trust' created under New York law (under
Massachusetts law for certain Funds) by a Trust Indenture among the Sponsors and
the Trustee. This Prospectus summarizes various provisions of the Indenture, but
each statement is qualified in its entirety by reference to the Indenture.
The Indenture may be amended by the Sponsors and the Trustee without
consent by investors to cure ambiguities or to correct or supplement any
defective or inconsistent provision, to make any amendment required by the SEC
or other governmental agency or to make any other change not materially adverse
to the interest of investors (as determined in good faith by the Sponsors). The
Indenture may also generally be amended upon consent of investors holding 51% of
the Units. No amendment may reduce the interest of any investor in the Fund
without the investor's consent or reduce the percentage of Units required to
consent to any amendment without unanimous consent of investors. Investors will
be notified of the substance of any amendment.
The Trustee may resign upon notice to the Sponsors. It may be removed by
investors holding 51% of the Units at any time or by the Sponsors without the
consent of investors if it becomes incapable of acting or
11
<PAGE>
bankrupt, its affairs are taken over by public authorities, or if under certain
conditions the Sponsors determine in good faith that its replacement is in the
best interest of the investors. The resignation or removal becomes effective
upon acceptance of appointment by a successor; in this case, the Sponsors will
use their best efforts to appoint a successor promptly; however, if upon
resignation no successor has accepted appointment within 30 days after
notification, the resigning Trustee may apply to a court of competent
jurisdiction to appoint a successor.
Any Sponsor may resign so long as one Sponsor with a net worth of
$2,000,000 remains. A new Sponsor may be appointed by the remaining Sponsors and
the Trustee to assume the duties of the resigning Sponsor. If there is only one
Sponsor and it fails to perform its duties or becomes incapable of acting or
bankrupt or its affairs are taken over by public authorities, the Trustee may
appoint a successor Sponsor at reasonable rates of compensation, terminate the
Indenture and liquidate the Fund or continue to act as Trustee without a
Sponsor. Merrill Lynch, Pierce, Fenner & Smith Incorporated has been appointed
as Agent for the Sponsors by the other Sponsors.
The Sponsors and the Trustee are not liable to investors or any other party
for any act or omission in the conduct of their responsibilities absent bad
faith, willful misfeasance, negligence (gross negligence in the case of a
Sponsor) or reckless disregard of duty. The Indenture contains customary
provisions limitingthe liability of the Trustee.
MISCELLANEOUS
LEGAL OPINION
The legality of the Units has been passed upon by Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017, as special counsel for the
Sponsors.
AUDITORS
The Statement of Condition in Part A of the Prospectus was audited by
Deloitte & Touche LLP, independent accountants, as stated in their opinion. It
is included in reliance upon that opinion given on the authority of that firm as
experts in accounting and auditing.
TRUSTEE
The Trustee and its address are stated on the back cover of the Prospectus.
The Trustee is subject to supervision by the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System and either the
Comptroller of the Currency or state banking authorities.
SPONSORS
The Sponsors are listed on the back cover of the Prospectus. They may
include Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly-owned
subsidiary of Merrill Lynch Co. Inc.; Smith Barney Inc., an indirect
wholly-owned subsidiary of The Travelers Inc.; Prudential Securities
Incorporated, an indirect wholly-owned subsidiary of the Prudential Insurance
Company of America, and Dean Witter Reynolds, Inc., a principal operating
subsidiary of Dean Witter Discover & Co. Each Sponsor, or one of its predecessor
corporations, has acted as Sponsor of a number of series of unit investment
trusts. Each Sponsor has acted as principal underwriter and managing underwriter
of other investment companies. The Sponsors, in addition to participating as
members of various selling groups or as agents of other investment companies,
execute orders on behalf of investment companies for the purchase and sale of
securities of these companies and sell securities to these companies in their
capacities as brokers or dealers in securities.
PUBLIC DISTRIBUTION
During the initial offering period and thereafter to the extent additional
Units continue to be offered for sale to the public by means of this Prospectus,
Units will be distributed directly to the public by this Prospectus at the
Public Offering Price determined in the manner provided above or to selected
dealers who are members of the National Association of Securities Dealers, Inc.
at a concession not in excess of the maximum sales charge. The Sponsors intend
to qualify Units for sale in all states in which qualification is deemed
necessary through the Underwriting Account and by dealers who are members of the
National Association of Securities Dealers, Inc..
12
<PAGE>
The Sponsors do not intend to qualify Units for sale in any foreign countries
and this Prospectus does not constitute an offer to sell Units in any country
where Units cannot lawfully be sold.
UNDERWRITERS' AND SPONSORS' PROFITS
Upon sale of the Units, the Underwriters will be entitled to receive sales
charges; each Underwriters' interest in the Underwriting Account will depend on
the number of Units acquired through the issuance of additional Units. The
Sponsors also realize a profit or loss on deposit of the Securities equal to the
difference between the cost of the Securities to the Fund (based on the
aggregate value of the Securities on their date of deposit) and the purchase
price of the Securities to the Sponsors plus commissions payable by the
Sponsors. In addition, a Sponsor or Underwriter may realize profits or sustain
losses on Securities it deposits in the Fund which were acquired from
underwriting syndicates of which it was a member. During the initial offering
period, the Underwriting Account also may realize profits or sustain losses as a
result of fluctuations after the initial date of deposit in the Public Offering
Price of the Units. In maintaining a secondary market for Units, the Sponsors
will also realize profits or sustain losses in the amount of any difference
between the prices at which they buy Units and the prices at which they resell
these Units (which include the sales charge) or the prices at which they redeem
the Units. Cash, if any, made available by buyers of Units to the Sponsors prior
to a settlement date for the purchase of Units may be used in the Sponsors'
businesses to the extent permitted by Rule 15c3-3 under the Securities Exchange
Act of 1934 and may be of benefit to the Sponsors.
PERFORMANCE INFORMATION
Information on the performance of the Fund for various periods, on the
basis of changes in Unit price plus the amount of dividends and capital gains
reinvested, may be included from time to time in advertisements, sales
literature, reports and other information furnished to current or prospective
Holders. Total return figures are not averaged, and may not reflect deduction of
the sales charge, which would decrease the return. Average annualized return
figures reflect deduction of the maximum sales charge. No provision is made for
any income taxes payable.
Past performance of any series may not be indicative of results of future
series. Fund performance may be compared to the performance of the Dow Jones
Industrial Average, the S&P 500 Composite Price Stock Index, the S&P MidCap 400
Index, or performance data from publications such as Lipper Analytical Services,
Inc., Morningstar Publications, Inc., Money Magazine, The New York Times, U.S.
News and World Report, Barron's, Business Week, CDA Investment Technology, Inc.,
Forbes Magazine or Fortune Magazine. Performance of the Stocks may be compared
in sales literature to performance of the S&P 500 Stock Price Composite Index,
to which may be added by year various national and international political and
economic events, and certain milestones in price and market indicators and in
offerings of Defined Asset Funds. This performance may also be compared for
various periods with an investment in short-term U.S. Treasury securities;
however, the investor should bear in mind that Treasury securities are fixed
income obligations, having the highest credit characterisitics, while the Stocks
involve greater risk because they have no maturities, and income thereon is
subject to the financial condition of, and declaration by, the issuers.
DEFINED ASSET FUNDS
For decades informed investors have purchased unit investment trusts for
dependability and professional selection of investments. Defined Asset Funds'
philosophy is to allow investors to 'buy with knowledge' (because, unlike
managed funds, the portfolio is relatively fixed) and 'hold with confidence'
(because the portfolio is professionally selected and regularly reviewed).
Defined Asset Funds offers an array of simple and convenient investment choices,
suited to fit a wide variety of personal financial goals--a buy and hold
strategy for capital accumulation, such as for children's education or
retirement, or attractive, regular current income consistent with the
preservation of principal. Unit investment trusts are particularly suited for
the many investors who prefer to seek long-term profits by purchasing sound
investments and holding them, rather than through active trading. Few
individuals have the knowledge, resources or capital to buy and hold a
diversified portfolio on their own; it would generally take a considerable sum
of money to obtain the breadth and diversity that Defined Asset Funds offer.
Your investment objectives may call for a combination of Defined Asset Funds.
One of the most important investment decisions you face may be how to
allocate your investments among asset classes. Diversification among different
kinds of investments can balance the risks and rewards of each one. Most
investment experts recommend stocks for long-term capital growth. Long-term
corporate bonds offer
13
<PAGE>
relatively high rates of interest income. By purchasing both defined equity and
defined bond funds, investors can receive attractive current income, as well as
growth potential, offering some protection against inflation. From time to time
various advertisements, sales literature, reports and other information
furnished to current or prospective investors may present the average annual
compounded rate of return of selected asset classes over various periods of
time, compared to the rate of inflation over the same periods.
EXCHANGE OPTION
You may be able to exchange Fund Units for units of certain other Defined
Asset Funds subject only to a reduced sales charge or to any remaining deferred
sales charge, as applicable. To make an exchange, you should contact your
financial professional to find out what suitable exchange funds are available
and to obtain a prospectus. You may acquire units of only those exchange funds
in which the Sponsors are maintaining a secondary market and which are lawfully
for sale in the state where you reside. Except for the reduced sales charge, an
exchange is a taxable event normally requiring recognition of any gain or loss
on the units exchanged. However, the Internal Revenue Service may seek to
disallow a loss if the portfolio of the units acquired is not materially
different from the portfolio of the units exchanged; you should consult your own
tax advisor. If the proceeds of units exchanged are insufficient to acquire a
whole number of exchange fund units, you may pay the difference in cash (not
exceeding the price of a single unit acquired).
As the Sponsors are not obligated to maintain a secondary market in any
series, there can be no assurance that units of a desired series will be
available for exchange. The Exchange Option may be amended or terminated at any
time without notice.
SUPPLEMENTAL INFORMATION
Upon writing or calling the Trustee shown on the back cover of Part A of
this Prospectus, investors will receive without charge supplemental information
about the Fund, which has been filed with the SEC. The supplemental information
includes more detailed risk factor disclosure about the types of securities that
may be part of the Portfolio and general information about the structure and
operation of the Fund.
14
<PAGE>
APPENDIX A
SECONDARY MARKET SALES CHARGE SCHEDULE
UTILITY STOCK SERIES
<TABLE><CAPTION>
SALES CHARGE
(GROSS UNDERWRITING PROFIT)
----------------------------------
AS PERCENT OF AS PERCENT OF DEALER CONCESSION AS
PUBLIC OFFERING NET AMOUNT PERCENT OF PUBLIC
AMOUNT PURCHASED PRICE INVESTED OFFERING PRICE
- -------------------------------------------------------------------- ----------------- --------------- -----------------------
<S> <C> <C> <C>
Less than $250,000.................................................. 4.50% 4.712% 2.925%
$250,000-$499,000................................................... 3.75 3.896 2.438
$500,000-$749,000................................................... 2.50 2.564 1.625
$750,000-$999,000................................................... 2.00 2.041 1.300
$1,000,000 or more.................................................. 1.50 1.523 0.975
<CAPTION>
S&P 500 TRUST 2, S&P MIDCAP TRUST
<S> <C> <C> <C>
Less than $25,000................................................... 2.25% 2.302% 1.463%
$25,000-$49,999..................................................... 2.00 2.041 1.300
$50,000-$74,999..................................................... 1.75 1.781 1.138
$75,000-$99,999..................................................... 1.50 1.523 0.975
$100,000-$249,999................................................... 1.25 1.266 0.813
$250,000 or more.................................................... 1.00 1.010 0.650
</TABLE>
INCOME GROWTH FUND 1993 SERIES
The sales charge consists of an initial portion and a deferred portion, the
total of which may equal a maximum of approximately 5.50% of the Public Offering
Price or 5.820% of the aggregate value of Securities, although these percentages
will vary should Units be purchased at a public offering price other than that
set forth on page A-3. For example, if you acquire Units for $1,050 (including
an initial sales charge of $15.75) and hold the Units until the termination of
the Fund, you will pay a total sales charge of $55.75 or 5.31% of the
acquisition price on those Units. At an acquisition price of $950 (including an
initial sales charge of $14.25), you would pay a total sales charge of $54.25 or
5.71% of the acquisition price. The initial portion of the sales charge is equal
to 1.50% of the Public Offering Price (1.523% of the aggregate value of
Securities) and the deferred portion of the sales charge is $10.00 per 1,000
Units payable by the Fund on behalf of investors out of net asset value of the
Fund on each Deferred Charge Payment Date through 1997. If you sell or redeem
Units before a Deferred Charge Payment Date, no future deferred sales charges
will be collected from you; this will have the effect of reducing the rate of
sales charge.
CONCEPT SERIES: BLUE CHIP STOCK SERIES, REAL ESTATE INCOME FUND, HEALTH CARE
TRUST II
The sales charge consists of an initial portion and a deferred portion, the
total of which may equal a maximum of approximately 5.35% of the Public Offering
Price or 5.501% of the net asset value of the Fund over its expected four-year
life. The initial portion of the sales charge is equal to 2.75% of the Public
Offering Price (2.828%) of the net amount invested in the Securities) and the
deferred portion of the sales charge is $1.625 per 1,000 Units ($6.50 per year)
payable by the Fund on behalf of investors out of net asset value of the Fund on
each quarterly Deferred Charge Payment Date until the Fund terminates. If you
sell or redeem Units before a Deferred Charge Payment Date, all future
deductions of deferred sales charges with respect to you will be waived; this
will have the effect of reducing your rate of sales charge.
The initial portion of the sales charge is reduced on a graduated scale for
sales to any purchaser of at least $250,000 of Units and will be applied on
whichever basis is more favorable to the purchaser.
<TABLE><CAPTION>
SALES CHARGE
(GROSS UNDERWRITING PROFIT)
----------------------------------
AS PERCENT OF AS PERCENT OF DEALER CONCESSION AS
PUBLIC OFFERING NET AMOUNT PERCENT OF PUBLIC
AMOUNT PURCHASED PRICE INVESTED OFFERING PRICE
- -------------------------------------------------------------------- ----------------- --------------- -----------------------
<S> <C> <C> <C>
Less than $250,000.................................................. 2.75% 2.828% 1.788%
$250,000-$499,000................................................... 2.25 2.302 1.463
$500,000-$749,000................................................... 1.75 1.781 1.138
$750,000-$999,000................................................... 1.25 1.266 0.813
$1,000,000 or more.................................................. 1.00 1.010 0.650
</TABLE>
a-1
<PAGE>
SECOND EXCHANGE SERIES--AT&T SHARES
The sales charge for Units of this Trust is 2.25% (2.302% of net amount
invested). There is no reduction for quantity purchases of Units.
CONCEPT SERIES: TELECOMMUNICATIONS TRUST 1, TELE-GLOBAL TRUST,
NATURAL GAS TRUST 2
The sales charge for Units of these Trusts is 2.00% (2.041% of net amount
invested). There is no reduction for quantity purchases of Units.
CONCEPT SERIES: FOOD FUND, NORTHWEST TRUST
The sales charge for Units of this Trust is 1.50% (1.523% of net amount
invested). There is no reduction for quantity purchases of Units.
a-2
<PAGE>
14101--12/95
<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
EQUITY INCOME FUND INDEX SERIES
FURTHER INFORMATION REGARDING THE FUND MAY BE OBTAINED
WITHIN FIVE DAYS BY WRITING OR CALLING THE TRUSTEE AT THE ADDRESS AND
TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF PART A OF THE PROSPECTUS.
INDEX
PAGE
---------
FUND DESCRIPTION........................................ 1
RISK FACTORS............................................ 2
HOW TO BUY UNITS........................................ 4
HOW TO SELL UNITS....................................... 5
INCOME, DISTRIBUTIONS AND REINVESTMENT.................. 6
FUND EXPENSES........................................... 6
TAXES................................................... 7
RECORDS AND REPORTS..................................... 9
TRUST INDENTURE......................................... 9
MISCELLANEOUS........................................... 10
EXCHANGE OPTION......................................... 11
SUPPLEMENTAL INFORMATION................................ 12
FUND DESCRIPTION
PORTFOLIO SELECTION
The Fund is designed to produce investment results that generally
correspond to the price and yield performance of the common stocks represented
by the related S&P Index. As a result, the Portfolio of each Trust will at any
time consist of as many of the Index Stocks as is feasible. Each Trust will at
all times be invested in no less than 95% of the Index Stocks. Although, at any
time, a Trust may fail to own certain of the Index Stocks, each Trust will be
substantially totally invested in Index Stocks and the Sponsors expect to
maintain a theoretical correlation of between .97 and .99 between the investment
performance of the relevant Index and that derived from ownership of Units.
Adjustments will be made in accordance with the computer program output to bring
the weightings of the Securities more closely into line with their weightings in
the relevant Index as each Trust invests in new Securities in connection with
the creation of new Units, as companies are dropped from or added to either
Index or as Securities are sold to meet redemptions. These adjustments will be
made on the business day following the relevant transaction in accordance with
computer program output showing which Securities are under-or over-represented
in each Portfolio. Adjustments may also be made at other times to bring either
Portfolio into line with the applicable Index. The proceeds from any such sale
will be invested in those Index Stocks which the computer program output
indicates are most under-represented.
The Sponsors anticipate that the selection of any additional Index Stocks
deposited or purchased in connection with the creation of additional Units of a
Trust will be those stocks which are most under-represented in the Portfolio
based upon the computer program output and the applicable Index as of the date
prior to the date of such subsequent
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deposit or purchase. Securities sold in order to meet redemptions will be those
stocks which are most over-represented in the Portfolio based upon the computer
program output and the applicable Index as of the date prior to the date of such
sale.
Finally, from time to time adjustments may be made in either Portfolio
because of changes in the composition of the applicable Index. Based on past
history, it is anticipated that most such changes will occur as a result of
merger or acquisition activity. In such cases, the Fund, as shareholder of a
company which is the object of such merger or acquisition activity, will
presumably receive various offers from would-be acquirors of the company. The
Trustees will not be permitted to accept any such offers until such time as the
company has been deleted from the applicable Index. Since, in most cases, a
company is removed from an Index only after the consummation of a merger or
acquisition of the company, it is anticipated that the Fund will generally
acquire, in exchange for the stock of the deleted company, whatever
consideration is being offered to shareholders of that company who have not
tendered their shares prior to such time. Any cash received in such transactions
will be reinvested in the most under-represented Index Stocks. Any securities
received as a part of the consideration which are not included in the relevant
Index will be sold as soon as practicable and reinvested in the most
under-represented Index Stocks.
In attempting to duplicate the proportionate relationships represented by
the S&P 500 Index and the S&P MidCap Index the Sponsors do not anticipate
purchasing or selling shares in quantities of less than round lots. In addition,
certain Index Stocks may at times not be available in the quantities in which
the computer program specifies that they be purchased. For these reasons, among
others, precise duplication of this proportionate relationship may not ever be
possible but nevertheless will continue to be the goal in connection with all
acquisitions or dispositions of Securities (see Administration of the
Fund--Portfolio Supervision). As the holder of the Securities, the Trustee will
have the right to vote all of the voting stocks in a Portfolio and will vote
such stocks in accordance with the instructions of the Sponsors except that, if
the Trustee holds any of the common stocks of Merrill Lynch & Co., Inc.,
Prudential Insurance Company of America (the parent of Prudential Securities
Incorporated) or The Travelers Inc. (as long as it remains the parent of Smith
Barney Inc.) or any other common stock of companies which are affiliates of the
Sponsors, the Trustee will vote such stock in the same proportionate
relationship as all other shares of such companies are voted.
The yield and price of stocks of the type deposited in the Fund are
dependent on a variety of factors, including money market conditions, general
conditions of the corporate bond and equity markets, size of a particular
offering and capital structure of the issuer. While it may not be likely that
dividends on any stocks would be omitted, of course no assurances can be given
since earnings available for dividends, regardless of the size of the company,
are subject to numerous events which are often beyond the issuer's control.
Because each Defined Asset Fund is a preselected portfolio, you know the
securities before you invest. Of course, the Portfolio will change somewhat over
time, as Securities are purchased upon creation of additional Units, as
securities are sold to meet Unit redemptions or in other limited circumstances.
PORTFOLIO SUPERVISION
The Fund follows a buy and hold investment strategy in contrast to the
frequent portfolio changes of a managed fund based on economic, financial and
market analyses. In the event a public tender offer is made for a Security or a
merger or acquisition is announced affecting a Security, the Sponsors may
instruct the Trustee to tender or sell the Security in the open market when in
its opinion it is in the best interests of investors to do so. Although the
Portfolio is not actively managed, it is regularly reviewed and evaluated and
Securities can be sold in case of certain adverse developments concerning a
Security including the adverse financial condition of the issuer, the
institution of legal proceedings against the issuer, a decline in the price or
the occurrence of other market or credit factors that might otherwise make
retention of the Security detrimental to the interest of investors or if the
disposition of these Securities is necessary in order to enable the Fund to make
distributions of the Fund's capital gain net income or desirable in order to
maintain the qualification of the Fund as a regulated investment company under
the Internal Revenue Code. Securities can also be sold to meet redemption of
Units; the Sponsors are also authorized to direct the reinvestment of the
proceeds of the sale of Securities, as well as moneys held to cover the purchase
of Securities pursuant to contracts which have failed, in additional Securities.
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RISK FACTORS
An investment in the Fund entails certain risks, including the risk that
the value of your investment will decline if the financial condition of the
issuers of the Securities becomes impaired or if the general condition of the
stock market worsens. In addition, holders of common stocks have generally
inferior rights to receive payments from the issuer in comparison with the
rights of creditors of, or holders of debt obligations or preferred stocks
issued by, the issuer. Moreover, common stocks do not represent an obligation of
the issuer and therefore do not offer any assurance of income or provide the
degree of protection of capital provided by debt securities. Common stocks in
general may be especially susceptible to general stock market movements and to
volatile increases and decreases in value as market confidence in and
perceptions of the issuers change. These perceptions are based on unpredictable
factors including expectations regarding government, economic, monetary and
fiscal policies, inflation and interest rates, economic expansion or
contraction, and global or regional political, economic or banking crises. The
Sponsors cannot predict the direction or scope of any of these factors.
THE S&P 500 INDEX AND THE S&P MIDCAP INDEX
The S&P 500 Index is composed of 500 selected common stocks, most of which
are listed in the New York Stock Exchange. This well-known index, originally
consisting of 233 stocks in 1923, was expanded to 500 stocks in 1957 and was
restructured in 1976 to a composite consisting of four major industry sectors:
industrial, utility, financial and transportation. The four major industry
sectors are comprised of eleven regular industry sectors which are further
divided into industry groups. The S&P 500 Index contains a variety of stocks
which are market-value weighted to represent the overall market. The Index
represents approximately 69% of U.S. stock market capitalization. As of November
30, 1995, the mean market capitalization of the companies in the S&P 500 Index
is approximately $8,988 million.
The S&P MidCap Index is composed of 400 selected common stocks; as of the
initial date of deposit, 279 were listed on the New York Stock Exchange, 9 were
listed on the American Stock Exchange and 112 were quoted on The Nasdaq National
Market. The MidCap Index stocks were chosen for market size, liquidity and
industry group representation. As of November 30, 1995, industrial stocks
accounted for approximately 68.8% of S&P MidCap Index market capitalization,
utilities approximately 13.9%, financial stocks approximately 15.5% and
transportation stocks approximately 1.7%. The capitalizations of individual
companies ranged from about $108 million to over $7,850 million; the mean market
capitalization of the companies in the S&P MidCap Index was approximately $1,456
million.
The weightings of stocks in the S&P 500 Index and the S&P MidCap Index are
primarily based on each stock's relative total market value; that is, its market
price per share times the number of shares outstanding.
Standard and Poor's only relationship to the Portfolios is the licensing of
the right to use the S&P 500 Index and the S&P MidCap Index as bases for
determining the composition of the Portfolios and to use the related trademarks
and tradenames in the name of the Fund and in the Prospectus and related sales
literature to the extent that the Sponsors deem appropriate or desirable under
Federal and state securities laws and to indicate the source of the Indexes. The
Indexes are determined, comprised and calculated without regard to the Funds.
S&P does not guarantee the accuracy and/or the completeness of the S&P 500
Index or the S&P MidCap Index or any data included therein and S&P shall have no
liability for any errors, omissions, or interruptions therein. S&P makes no
warranty, express or implied, as to results to be obtained by the sponsors, the
funds, any person or any entity from the use of the S&P index or the S&P MidCap
Index or any data included therein. S&P makes no express or implied warranties,
and expressly disclaims all warranties of merchantability or fitness for a
particular purpose or use, with respect to the S&P 500 Index or the S&P MidCap
Index or any data included therein. Without limiting any of the foregoing, in no
event shall S&P have any liability for any special, punitive, indirect, or
consequential damages (including lost profits), even if notified of the
possibility of such damages.
LIQUIDITY
Whether or not the Securities are listed on a national securities exchange,
the principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the Securities
may depend on whether dealers will make a market in the Securities. There can be
no assurance that a market will be made for any of the Securities, that any
market for the Securities will be maintained or of the liquidity
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of the Securities in any markets made. In addition, the Fund may be restricted
under the Investment Company Act of 1940 from selling Securities to the
Sponsors. The price at which the Securities may be sold to meet redemptions and
the value of the Fund will be adversely affected if trading markets for the
Securities are limited or absent.
LITIGATION AND LEGISLATION
The Sponsors do not know of any pending litigation as of the initial date
of deposit that might reasonably be expected to have a material adverse effect
on the Fund, although pending litigation may have a material adverse effect on
the value of Securities in the Fund. In addition, at any time after the initial
date of deposit, litigation may be initiated on a variety of grounds, or
legislation may be enacted, affecting the Securities in the Portfolio or the
issuers of the Securities. Changing approaches to regulation may have a negative
impact on certain companies represented in the Portfolio. There can be no
assurance that future litigation, legislation, regulation or deregulation will
not have a material adverse effect on the Portfolio or will not impair the
ability of the issuers of the Securities to achieve their business goals. From
time to time Congress considers proposals to reduce the rate of the
dividends-received deduction. This type of legislation, if enacted into law,
would adversely affect the after-tax return to investors who can take advantage
of the deduction. See Taxes.
LIFE OF THE FUND; FUND TERMINATION
The size and composition of the Portfolio will be affected by the level of
redemptions of Units that may occur from time to time. Principally, this will
depend upon the number of investors seeking to sell or redeem their Units. The
Portfolio will be terminated no later than the mandatory termination date
specified in Part A of the Prospectus. It will terminate earlier upon the
disposition of the last Security or upon the consent of investors holding 51% of
the Units. The Portfolio may also be terminated earlier by the Sponsors once its
total assets have fallen below the minimum value specified in Part A of the
Prospectus. A decision by the Sponsors to terminate the Portfolio early will be
based on factors such as the size of the Portfolio relative to its original
size, the ratio of Portfolio expenses to income, and the cost of maintaining a
current prospectus.
Notice of impending termination will be provided to investors and
thereafter units will no longer be redeemable. On or shortly before termination,
the Trustee will seek to dispose of any Securities remaining in the Portfolio
although any Security unable to be sold at a reasonable price may continue to be
held by the Trustee in a liquidating trust pending its final disposition. A
proportional share of the expenses associated with termination, including
brokerage costs in disposing of Securities, will be borne by investors remaining
at that time. This may have the effect of reducing the amount of proceeds those
investors are to receive in any final distribution.
HOW TO BUY UNITS
Units are available from any of the Sponsors, Underwriters and other
broker-dealers at the Public Offering Price, which includes the applicable sales
charge -- see Appendix A. The Public Offering Price varies each Business Day
with changes in the value of the Portfolio and other assets and liabilities of
the Fund.
PUBLIC OFFERING PRICE
In the secondary market (after the initial offering period), the Public
Offering Price is based on the next evaluation of the Securities, and includes a
sales charge based (a) on the number of Units of the Fund purchased in the
secondary market on the same day by a single purchaser (see Secondary Market
Sales Charge Schedule in Appendix A). To qualify for a reduced sales charge, the
dealer must confirm that the sale is to a single purchaser or is purchased for
its own account and not for distribution. For these purposes, Units held in the
name of the purchaser's spouse or child under 21 years of age are deemed to be
purchased by a single purchaser. A trustee or other fiduciary purchasing
securities for a single trust or single fiduciary account is also considered a
single purchaser.
Employees of certain Sponsors and Sponsor affiliates and non-employee
directors of Merrill Lynch & Co. Inc. may purchase Units at a reduced initial
sales charge of not less than $5.00 per 1,000 Units.
The graduated sales charges shown in Appendix A will apply on all purchases
on any one day (with credit given for previously purchased Units as described
below under Right of Accumulation) by a single purchaser of Units in one or both
Trusts of this Fund only in the amounts stated. For this purpose purchases will
not be aggregated with concurrent purchases of any other unit trusts sponsored
by the Sponsors. However, Units held in the name of the spouse of the purchaser
or in the name of a child of the purchaser under 21 years of age are deemed to
be registered in
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the name of the purchaser. The graduated sales charges are also applicable to a
trustee or other fiduciary purchasing securities for a single trust estate or
single fiduciary account. To qualify for the reduced sales charge and concession
applicable to quantity purchases, the dealer must confirm that the sale is to a
single purchaser. The sales charge is lower than sales charges on many other
equity investments.
Right of Accumulation. Reduced sales charges are applicable through a right
of accumulation under which eligible investors are permitted to purchase Units
of either Trust at the offering price applicable to the total of (a) the dollar
amount then being purchased plus (b) an amount equal to the then current net
asset value of the purchaser's holdings of Units of both Trusts. To be eligible
either for this right of accumulation or the reduced sales charge applicable to
purchases of both Trusts on the same day, the purchaser or the purchaser's
securities dealer must notify the Sponsors at the time of purchase that such
purchase qualifies under this accumulation provision and supply sufficient
information to permit confirmation of qualification. Acceptance of the purchase
order is subject to such confirmation. These reduced sales charge provisions may
be amended or terminated at any time without notice.
EVALUATIONS
Evaluations are determined by the Trustee on each Business Day. This
excludes Saturdays, Sundays and the following holidays as observed by the New
York Stock Exchange: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas. If the Securities are
listed on a national securities exchange or the Nasdaq National Market,
evaluations are generally based on closing sales prices on that exchange or that
system (unless the Trustee deems these prices inappropriate) or, if closing
sales prices are not available, at the mean between the closing bid and offer
prices. If the Securities are not listed or if listed but the principal market
is elsewhere, the evaluation is generally determined based on sales prices of
the Securities on the over-the-counter market or, if sales prices in that market
are not available, on the basis of the mean between current bid and offer prices
for the Securities or for comparable securities or by appraisal or by any
combination of these methods. Neither the Sponsors nor the Trustee guarantee the
enforceability, marketability or price of any Securities.
CERTIFICATES
Certificates for Units may be issued for certain Funds upon request and may
be transferred by paying any taxes or governmental charges and by complying with
the requirements for redeeming Certificates (see How To Sell Units-- Trustee's
Redemption of Units). Certain Sponsors collect additional charges for
registering and shipping Certificates to purchasers. Lost or mutilated
Certificates can be replaced upon delivery of satisfactory indemnity and payment
of costs. Units of certain Funds identified in Part A of the Prospectus must be
held in uncertificated form.
HOW TO SELL UNITS
SPONSORS' MARKET FOR UNITS
You can sell your Units at any time without a fee. The Sponsors (although
not obligated to do so) will normally buy any Units offered for sale at the
repurchase price next computed after receipt of the order. The Sponsors have
maintained secondary markets in Defined Asset Funds for the last 25 years.
Primarily because of the sales charge and fluctuations in the market value of
the Securities, the sale price may be less than the cost of your Units. You
should consult your financial professional for current market prices to
determine if other broker-dealers or banks are offering higher prices for Units.
The Sponsors may discontinue this market without prior notice if the supply
of Units exceeds demand or for other business reasons. The Sponsors may reoffer
or redeem Units repurchased.
TRUSTEE'S REDEMPTION OF UNITS
You may redeem your Units by sending the Trustee a redemption request.
Signatures must be guaranteed by an eligible institution. In certain instances,
additional documents may be required such as a certificate of death, trust
instrument, certificate of corporate authority or appointment as executor,
administrator or guardian. If the Sponsors are maintaining a market for Units,
they will purchase any Units tendered at the repurchase price described above.
If they do not purchase Units tendered, the Trustee is authorized in its
discretion to sell Units in the over-the-counter market if it believes it will
obtain a higher net price for the redeeming investor.
By the seventh calendar day after tender you will be mailed an amount equal
to the Redemption Price per Unit. Because of market movements or changes in the
Portfolio, this price may be more or less than the cost of your Units.
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The Redemption Price per Unit is computed each Business Day by adding the value
of the Securities, declared but unpaid dividends on the Securities, cash and the
value of any other Fund assets; deducting unpaid taxes or other governmental
charges, accrued but unpaid Fund expenses, unreimbursed Trustee advances, cash
held to redeem Units, for purchase of Securities or for distribution to
investors and the value of any other Fund liabilities; and dividing the result
by the number of outstanding Units.
If cash is not available in the Fund's Income and Capital Accounts to pay
redemptions, the Trustee may sell Securities selected by the Agent for the
Sponsors based on market and credit factors determined to be in the best
interest of the Fund. These sales are often made at times when the Securities
would not otherwise be sold and may result in lower prices than might be
realized otherwise and will also reduce the size and diversity of the Fund.
Redemptions may be suspended or payment postponed if the New York Stock
Exchange is closed other than for customary weekend and holiday closings, if the
SEC determines that trading on that Exchange is restricted or that an emergency
exists making disposal or evaluation of the Securities not reasonably
practicable, or for any other period permitted by the SEC.
INCOME, DISTRIBUTIONS AND REINVESTMENT
INCOME AND DISTRIBUTIONS
The net annual income per Unit will depend primarily upon the amount of
dividends declared and paid by the issuers of the Securities and changes in the
expenses of the Fund and, to a lesser degree, upon the level of purchases of
additional Securities and sales of Securities. There is no assurance that
dividends on the Securities will continue at their current levels or be declared
or paid.
Each Unit receives an equal share of monthly or quarterly distributions of
dividend income. Because dividends on the Securities are not received at a
constant rate throughout the year, any income distribution may be more or less
than the amount then credited to the Income Account. Dividends payable to the
Fund are credited to an Income Account, as of the date on which the Fund is
entitled to receive the dividends, and other receipts are credited to a Capital
Account. A Reserve Account may be created by withdrawing from the Income and
Capital Accounts amounts considered appropriate by the Trustee to reserve for
any material amount that may be payable out of the Fund. Funds held by the
Trustee in the various accounts do not bear interest.
Dividend income received by the Fund and available for distribution and the
distributable balance in the Capital Account (other than capital gains) as of
any particular record day will be distributed on or shortly after the related
distribution day to the holders of record on that record day.
There is no assurance that actual distributions will be made since all
dividends received may be used to pay expenses. An amount equal to any capital
gain net income (i.e. the excess of capital gains over capital losses)
recognized by the Fund in any taxable year will generally be distributed shortly
after the end of the year. In order to meet certain tax requirements a Fund may
make a special distribution of income, including capital gains, to holders of
record as of a date in December. Proceeds received from the disposition of any
of the Securities which are not used to make the distribution of capital gain
net income, for redemption of Units or reinvested in additional Securities will
be held in the Capital Account to be distributed on the next succeeding
distribution day.
REINVESTMENT PLAN
Income and principal distributions on Units may be reinvested by
participating in the Fund's reinvestment plan. Under the plan, the Units
acquired for investors will be either Units already held in inventory by the
Sponsors or new Units created by the Sponsors' deposit of additional Securities,
contracts to purchase additional Securities or cash (or a bank letter of credit
in lieu of cash) with instructions to purchase additional Securities. Purchases
made pursuant to the Reinvestment Plan will be made without sales charge at the
net asset value for Units of the Fund. Under the Reinvestment Plan, the Fund
will pay the distributions to the Trustee which in turn will purchase for the
investor full and fractional Units of the Fund at the price determined as of the
close of business on the distribution day and will add the Units to the
investor's account and send the investor an account statement reflecting the
reinvestment. The Sponsors reserve the right to amend, modify or terminate the
reinvestment plan at any time without prior notice. Investors holding Units in
'street name' should contact their broker, dealer or financial institution to
determine whether they may participate in the reinvestment plan.
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FUND EXPENSES
Estimated annual Fund expenses are listed in Part A of the Prospectus; if
actual expenses exceed the estimate, the excess will be borne by the Fund. The
Trustee's annual fee is payable in monthly installments. The Trustee also
benefits when it holds cash for the Fund in non-interest bearing accounts.
Possible additional charges include Trustee fees and expenses for extraordinary
services, costs of indemnifying the Trustee and the Sponsors, costs of action
taken to protect the Fund and other legal fees and expenses, Fund termination
expenses and any governmental charges. The Trustee has a lien on Fund assets to
secure reimbursement of these amounts and may sell Securities for this purpose
if cash is not available. The Sponsors receive an annual fee of a maximum of
$0.35 per 1,000 Units to reimburse them for the cost of providing Portfolio
supervisory services to the Fund. While the fee may exceed their costs of
providing these services to the Fund, the total supervision fees from all Series
of Equity Income Fund will not exceed their costs for these services to all of
those Series during any calendar year. The Sponsors may also be reimbursed for
their costs of providing bookkeeping and administrative services to the Fund.
The Trustee's and Sponsors' fees may be adjusted for inflation without
investors' approval.
Defined Asset Funds can be a cost-effective way to purchase and hold
investments. Annual operating expenses are generally lower than for managed
funds. Because Defined Asset Funds have no management fees, limited transaction
costs and no ongoing marketing expenses, operating expenses are generally less
than 0.25% a year. When compounded annually, small differences in expense ratios
can make a big difference in your investment results.
The Trusts have entered into license agreements with Standard & Poor's that
permit the Trusts to use the trademarks and tradenames 'S&P 500', 'S&P MidCap
400 Index' and other trademarks and tradenames, to the extent the Sponsors deem
appropriate and desirable under federal and state securities laws to indicate
the source of the Indices as a basis for determining the composition of the
Fund's investment portfolios. As consideration for the grant of the license,
each Portfolio will pay to Standard & Poor's Corporation an annual fee equal to
.02% of the average net asset value of the Portfolio (or, if greater, $10,000).
In addition, the Fund will pay approximately $45,000 per year for access to
independent computer services that track the S&P 500 Index and the S&P MidCap
Index. Computer expenses will be divided between the Trusts in proportion to
their respective assets during the relevant period.
TAXES
TAXATION OF THE FUND
Each Trust intends to qualify for and elect the special tax treatment
applicable to 'regulated investment companies' under Section 851-855 of the
Internal Revenue Code of 1986, as amended (the 'Code'). Qualification and
election as a 'regulated investment company' involve no supervision of
investment policy or management by any government agency. If a Trust qualifies
as a 'regulated investment company' and distributes to investors 90% or more of
its taxable income without regard to its net capital gain (i.e., the excess of
its net long-term capital gain over its net short-term capital loss), it will
not be subject to Federal income tax on any portion of its taxable income
(including any net capital gain) distributed to investors in a timely manner. In
addition, a Trust will not be subject to the 4% excise tax on certain
undistributed income of 'regulated investment companies' to the extent it
distributes to investors in a timely manner at least 98% of its taxable income
(including any net capital gain). It is anticipated that a Trust will not be
subject to Federal income tax or the excise tax because the Indenture requires
the distribution of the Trust's taxable income (including any net capital gain)
in a timely manner. Although all or a portion of a Trust's taxable income
(including any net capital gain) for a taxable year may be distributed shortly
after the end of the calendar year, such a distribution will be treated for
Federal income tax purposes as having been received by investors during the
calendar year.
DISTRIBUTIONS
Distribution to investors of a Trust's dividend income and net short-term
capital gain in any year will be taxable as ordinary income to investors to the
extent of the Trust's taxable income (without regard to its net capital gain)
for that year. Any excess will be treated as a return of capital and will reduce
the investor's basis in his Units and, to the extent that such distributions
exceed his basis, will be treated as a gain from the sale of his Units as
discussed below. It is anticipated that substantially all of the distributions
of a Trust's dividend income and net short-term capital gain will be taxable as
ordinary income to investors.
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Distribution of a Trust's net capital gain (designated as capital gain
dividends by the Trust) will be taxable to investors as long-term capital gain,
regardless of the length of time the Units have been held by an investor. An
investor will recognize a taxable gain or loss if the investor sells or redeems
his Units. Any gain or loss arising from (or treated as arising from) the sale
or redemption of Units will be a capital gain or loss, except in the case of a
dealer in securities. Capital gains are currently taxed at the same rate as
ordinary income, however, the excess of net long-term capital gains over net
short-term capital losses may be taxed at a lower rate than ordinary income for
certain noncorporate taxpayers. A capital gain or loss is long-term if the asset
is held for more than one year and short-term if held for one year or less.
However, any capital loss on the sale or redemption of a Unit that an investor
has held for six months or less will be a long-term capital loss to the extent
of any capital gain dividends previously distributed to the investor by the
Trust. The deduction of capital losses is subject to limitations.
Distributions that are taxable as ordinary income to investors will
constitute dividends for Federal income tax purposes. To the extent that
distributions are appropriately designated by a Trust and are attributable to
dividends received by the Trust from domestic issuers with respect to whose
Securities the Trust satisfies the requirements for the dividends-received
deduction, such distributions will be eligible for the dividends-received
deduction for corporations (other than corporations such as 'S' corporations
which are not eligible for such deduction because of their special
characteristics and other than for purposes of special taxes such as the
accumulated earnings tax and the personal holding company tax). The
dividends-received deduction generally is currently 70%. However, Congress from
time to time considers proposals to reduce the rate, and enactment of such a
proposal would adversely affect the after-tax return to investors who can take
advantage of the deduction. Investors are urged to consult their own tax
advisers.
Sections 246 and 246A of the Code contain additional limitations on the
eligibility of dividends for the corporate dividends-received deduction.
Depending upon the corporate investor's circumstances (including whether it has
a 45-day holding period for its Units and whether its Units are debt financed),
these limitations may be applicable to dividends received by an investor from a
Trust which would otherwise qualify for the dividends-received deduction under
the principles discussed above. Accordingly, investors should consult their own
tax advisers in this regard. A corporate investor should be aware that the
receipt of dividend income for which the dividends-received deduction is
available may give rise to an alternative minimum tax liability (or increase an
existing liability) because the dividend income will be included in the
corporation's 'adjusted current earnings' for purposes of the adjustment to
alternative minimum taxable income required by Section 56(g) of the Code.
Dividends received by a Trust from foreign issuers will in most cases be
subject to foreign withholding taxes. The Trust will not be eligible for, and
therefore does not expect to make, an election that would enable investors to
credit foreign withholding taxes against their federal income tax liability on
distributions by the Trust.
Investors will be taxed in the manner described above regardless of whether
distributions from the Fund are actually received by the investor or are
reinvested pursuant to the Reinvestment Plan.
The Federal tax status of each year's distributions will be reported to
investors and to the Internal Revenue Service. The foregoing discussion relates
only to the Federal income tax status of the Trust and to the tax treatment of
distributions by the Trust to U.S. investors. Investors that are not United
States citizens or residents should be aware that distributions from the Trust
will generally be subject to a withholding tax of 30%, or a lower treaty rate,
and should consult their own tax advisers to determine whether investment in a
Trust is appropriate. Distributions may also be subject to state and local
taxation and investors should consult their own tax advisers in this regard.
RETIREMENT PLANS
Equity Income Funds may be well suited for purchase by Individual
Retirement Accounts ('IRAs'), Keogh plans, pension funds and other qualified
retirement plans, certain of which are briefly described below. Generally,
capital gains and income received in each of the foregoing plans are exempt from
Federal taxation. All distributions from such plans are generally treated as
ordinary income but may, in some cases, be eligible for special 5 or 10 year
averaging or tax-deferred rollover treatment. Holders of Units in IRAs, Keogh
plans and other tax-deferred retirement plans should consult their plan
custodian as to the appropriate disposition of distributions. Investors
considering participation in any of these plans should review specific tax laws
related thereto and should consult their attorneys or tax advisors with respect
to the establishment and maintenance of any of these plans. These plans are
offered by brokerage firms, including the Sponsor of this Fund, and other
financial institutions. Fees and charges with respect to such plans may vary.
8
<PAGE>
Retirement Plans for the Self-Employed--Keogh Plans. Units of the Fund may
be purchased by retirement plans established for self-employed individuals,
partnerships or unincorporated companies ('Keogh plans'). The assets of a Keogh
plan must be held in a qualified trust or other arrangement which meets the
requirements of the Code. Keogh plan participants may also establish separate
IRAs (see below) to which they may contribute up to an additional $2,000 per
year ($2,250 in a spousal account).
Individual Retirement Account--IRA, Any individual can make use of a
qualified IRA arrangement for the purchase of Units of the Fund. Any individual
(including one covered by an employer retirement plan) can make a contribution
in an IRA equal to the lesser of $2,000 ($2,250 in a spousal account) or 100% of
earned income; such investment must be made in cash. However, the deductible
amount an individual may contribute will be reduced if the individual's adjusted
gross income exceeds $25,000 (in the case of a single individual), $40,000 (in
the case of married individuals filing a joint return) or $200 (in the case of a
married individual filing a separate return). Certain transactions which are
prohibited under Section 408 of the Code will cause all or a portion of the
amount in an IRA to be deemed to the distributed and subject to tax at that
time. Unless nondeductible contributions were made in 1987 or a later year, all
distributions from an IRA will be treated as ordinary income but generally are
eligible for tax-deferred rollover treatment. Taxable distributions made before
attainment of age 59 1/2, except in the case of the participant's death or
disability or where the amount distributed is part of a series of substantially
equal periodic (at least annual) payments that are to be made over the life
expectancies of the participant and his or her beneficiary, are generally
subject to a surtax in an amount equal to 10% of the distribution.
Corporate Pension and Profit-Sharing Plans. A pension or profit-sharing
plan for employees of a corporation may purchase Units of the Fund.
RECORDS AND REPORTS
The Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Fund,
including a current list of the Securities and a copy of the Indenture, which
may be inspected by investors at reasonable times during business hours.
With each distribution, the Trustee includes a statement of the amounts of
income and any other receipts being distributed. Following the termination of
the Fund, the Trustee sends each investor of record a statement summarizing
transactions in the Fund's accounts including amounts distributed from them,
identifying Securities sold and purchased and listing Securities held and the
number of Units outstanding at termination and stating the Redemption Price at
termination, and the fees and expenses paid by the Fund, among other matters.
Fund accounts may be audited by independent accountants selected by the Sponsors
and any report of the accountants will be available from the Trustee on request.
TRUST INDENTURE
The Fund is a 'unit investment trust' created under New York law (under
Massachusetts law for certain Funds) by a Trust Indenture among the Sponsors and
the Trustee. This Prospectus summarizes various provisions of the Indenture, but
each statement is qualified in its entirety by reference to the Indenture.
The Indenture may be amended by the Sponsors and the Trustee without
consent by investors to cure ambiguities or to correct or supplement any
defective or inconsistent provision, to make any amendment required by the SEC
or other governmental agency or to make any other change not materially adverse
to the interest of investors (as determined in good faith by the Sponsors). The
Indenture may also generally be amended upon consent of investors holding 51% of
the Units. No amendment may reduce the interest of any investor in the Fund
without the investor's consent or reduce the percentage of Units required to
consent to any amendment without unanimous consent of investors. Investors will
be notified of the substance of any amendment.
The Trustee may resign upon notice to the Sponsors. It may be removed by
investors holding 51% of the Units at any time or by the Sponsors without the
consent of investors if it becomes incapable of acting or bankrupt, its affairs
are taken over by public authorities, or if under certain conditions the
Sponsors determine in good faith that its replacement is in the best interest of
the investors. The resignation or removal becomes effective upon acceptance of
appointment by a successor; in this case, the Sponsors will use their best
efforts to appoint a successor promptly; however, if upon resignation no
successor has accepted appointment within 30 days after notification, the
resigning Trustee may apply to a court of competent jurisdiction to appoint a
successor.
9
<PAGE>
Any Sponsor may resign so long as one Sponsor with a net worth of
$2,000,000 remains. A new Sponsor may be appointed by the remaining Sponsors and
the Trustee to assume the duties of the resigning Sponsor. If there is only one
Sponsor and it fails to perform its duties or becomes incapable of acting or
bankrupt or its affairs are taken over by public authorities, the Trustee may
appoint a successor Sponsor at reasonable rates of compensation, terminate the
Indenture and liquidate the Fund or continue to act as Trustee without a
Sponsor. Merrill Lynch, Pierce, Fenner & Smith Incorporated has been appointed
as Agent for the Sponsors by the other Sponsors.
The Sponsors and the Trustee are not liable to investors or any other party
for any act or omission in the conduct of their responsibilities absent bad
faith, willful misfeasance, negligence (gross negligence in the case of a
Sponsor) or reckless disregard of duty. The Indenture contains customary
provisions limitingthe liability of the Trustee.
MISCELLANEOUS
LEGAL OPINION
The legality of the Units has been passed upon by Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017, as special counsel for the
Sponsors.
AUDITORS
The Statement of Condition in Part A of the Prospectus was audited by
Deloitte & Touche LLP, independent accountants, as stated in their opinion. It
is included in reliance upon that opinion given on the authority of that firm as
experts in accounting and auditing.
TRUSTEE
The Trustee and its address are stated on the back cover of the Prospectus.
The Trustee is subject to supervision by the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System and either the
Comptroller of the Currency or state banking authorities.
SPONSORS
The Sponsors are listed on the back cover of the Prospectus. They may
include Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly-owned
subsidiary of Merrill Lynch Co. Inc.; Smith Barney Inc., an indirect wholly-
owned subsidiary of The Travelers Inc.; Prudential Securities Incorporated, an
indirect wholly-owned subsidiary of the Prudential Insurance Company of America;
Dean Witter Reynolds, Inc., a principal operating subsidiary of Dean Witter
Discover & Co. and PaineWebber Incorporated, a wholly owned subsidiary of
PaineWebber Group Inc. Each Sponsor, or one of its predecessor corporations, has
acted as Sponsor of a number of series of unit investment trusts. Each Sponsor
has acted as principal underwriter and managing underwriter of other investment
companies. The Sponsors, in addition to participating as members of various
selling groups or as agents of other investment companies, execute orders on
behalf of investment companies for the purchase and sale of securities of these
companies and sell securities to these companies in their capacities as brokers
or dealers in securities.
PUBLIC DISTRIBUTION
During the initial offering period and thereafter to the extent additional
Units continue to be offered for sale to the public by means of this Prospectus,
Units will be distributed directly to the public by this Prospectus at the
Public Offering Price determined in the manner provided above or to selected
dealers who are members of the National Association of Securities Dealers, Inc.
at a concession not in excess of the maximum sales charge. The Sponsors intend
to qualify Units for sale in all states in which qualification is deemed
necessary through the Underwriting Account and by dealers who are members of the
National Association of Securities Dealers, Inc.. The Sponsors do not intend to
qualify Units for sale in any foreign countries and this Prospectus does not
constitute an offer to sell Units in any country where Units cannot lawfully be
sold.
UNDERWRITERS' AND SPONSORS' PROFITS
Upon sale of the Units, the Underwriters will be entitled to receive sales
charges; each Underwriters' interest in the Underwriting Account will depend on
the number of Units acquired through the issuance of additional Units. The
Sponsors also realize a profit or loss on deposit of the Securities equal to the
difference between the cost of the Securities to the Fund (based on the
aggregate value of the Securities on their date of deposit) and the purchase
price of
10
<PAGE>
the Securities to the Sponsors plus commissions payable by the Sponsors. In
addition, a Sponsor or Underwriter may realize profits or sustain losses on
Securities it deposits in the Fund which were acquired from underwriting
syndicates of which it was a member. During the initial offering period, the
Underwriting Account also may realize profits or sustain losses as a result of
fluctuations after the initial date of deposit in the Public Offering Price of
the Units. In maintaining a secondary market for Units, the Sponsors will also
realize profits or sustain losses in the amount of any difference between the
prices at which they buy Units and the prices at which they resell these Units
(which include the sales charge) or the prices at which they redeem the Units.
Cash, if any, made available by buyers of Units to the Sponsors prior to a
settlement date for the purchase of Units may be used in the Sponsors'
businesses to the extent permitted by Rule 15c3-3 under the Securities Exchange
Act of 1934 and may be of benefit to the Sponsors.
PERFORMANCE INFORMATION
Information on the performance of the Fund for various periods, on the
basis of changes in Unit price plus the amount of dividends and capital gains
reinvested, may be included from time to time in advertisements, sales
literature, reports and other information furnished to current or prospective
Holders. Total return figures are not averaged, and may not reflect deduction of
the sales charge, which would decrease the return. Average annualized return
figures reflect deduction of the maximum sales charge. No provision is made for
any income taxes payable.
Past performance of any series may not be indicative of results of future
series. Fund performance may be compared to the performance of the Dow Jones
Industrial Average, the S&P 500 Composite Price Stock Index, the S&P MidCap 400
Index, or performance data from publications such as Lipper Analytical Services,
Inc., Morningstar Publications, Inc., Money Magazine, The New York Times, U.S.
News and World Report, Barron's, Business Week, CDA Investment Technology, Inc.,
Forbes Magazine or Fortune Magazine. Performance of the Stocks may be compared
in sales literature to performance of the S&P 500 Stock Price Composite Index,
to which may be added by year various national and international political and
economic events, and certain milestones in price and market indicators and in
offerings of Defined Asset Funds. This performance may also be compared for
various periods with an investment in short-term U.S. Treasury securities;
however, the investor should bear in mind that Treasury securities are fixed
income obligations, having the highest credit characterisitics, while the Stocks
involve greater risk because they have no maturities, and income thereon is
subject to the financial condition of, and declaration by, the issuers.
DEFINED ASSET FUNDS
For decades informed investors have purchased unit investment trusts for
dependability and professional selection of investments. Defined Asset Funds'
philosophy is to allow investors to 'buy with knowledge' (because, unlike
managed funds, the portfolio is relatively fixed) and 'hold with confidence'
(because the portfolio is professionally selected and regularly reviewed).
Defined Asset Funds offers an array of simple and convenient investment choices,
suited to fit a wide variety of personal financial goals--a buy and hold
strategy for capital accumulation, such as for children's education or
retirement, or attractive, regular current income consistent with the
preservation of principal. Unit investment trusts are particularly suited for
the many investors who prefer to seek long-term profits by purchasing sound
investments and holding them, rather than through active trading. Few
individuals have the knowledge, resources or capital to buy and hold a
diversified portfolio on their own; it would generally take a considerable sum
of money to obtain the breadth and diversity that Defined Asset Funds offer.
Your investment objectives may call for a combination of Defined Asset Funds.
One of the most important investment decisions you face may be how to
allocate your investments among asset classes. Diversification among different
kinds of investments can balance the risks and rewards of each one. Most
investment experts recommend stocks for long-term capital growth. Long-term
corporate bonds offer relatively high rates of interest income. By purchasing
both defined equity and defined bond funds, investors can receive attractive
current income, as well as growth potential, offering some protection against
inflation. From time to time various advertisements, sales literature, reports
and other information furnished to current or prospective investors may present
the average annual compounded rate of return of selected asset classes over
various periods of time, compared to the rate of inflation over the same
periods.
EXCHANGE OPTION
You may be able to exchange Fund Units for units of certain other Defined
Asset Funds subject only to a reduced sales charge or to any remaining deferred
sales charge, as applicable. To make an exchange, you should contact your
11
<PAGE>
financial professional to find out what suitable exchange funds are available
and to obtain a prospectus. You may acquire units of only those exchange funds
in which the Sponsors are maintaining a secondary market and which are lawfully
for sale in the state where you reside. Except for the reduced sales charge, an
exchange is a taxable event normally requiring recognition of any gain or loss
on the units exchanged. However, the Internal Revenue Service may seek to
disallow a loss if the portfolio of the units acquired is not materially
different from the portfolio of the units exchanged; you should consult your own
tax advisor. If the proceeds of units exchanged are insufficient to acquire a
whole number of exchange fund units, you may pay the difference in cash (not
exceeding the price of a single unit acquired).
As the Sponsors are not obligated to maintain a secondary market in any
series, there can be no assurance that units of a desired series will be
available for exchange. The Exchange Option may be amended or terminated at any
time without notice.
SUPPLEMENTAL INFORMATION
Upon writing or calling the Trustee shown on the back cover of Part A of
this Prospectus, investors will receive without charge supplemental information
about the Fund, which has been filed with the SEC. The supplemental information
includes more detailed risk factor disclosure about the types of securities that
may be part of the Portfolio and general information about the structure and
operation of the Fund.
12
<PAGE>
APPENDIX A
SALES CHARGE SCHEDULE
UTILITY STOCK SERIES
<TABLE><CAPTION>
SALES CHARGE
(GROSS UNDERWRITING PROFIT)
--------------------------------
AS PERCENT OF AS PERCENT OF DEALER CONCESSION AS
PUBLIC OFFERING NET AMOUNT PERCENT OF PUBLIC
AMOUNT PURCHASED PRICE INVESTED OFFERING PRICE
- ---------------------------------------------------------------------- ----------------- ------------- ---------------------
<S> <C> <C> <C>
Less than $25,000..................................................... 2.25% 2.302% 1.463%
$25,000-$49,999....................................................... 2.00 2.041 1.300
$50,000-$74,999....................................................... 1.75 1.781 1.138
$75,000-$99,999....................................................... 1.50 1.523 0.975
$100,000-$249,999..................................................... 1.25 1.266 0.813
$250,000 or more...................................................... 1.00 1.010 0.650
</TABLE>
a-1
<PAGE>
Defined
Asset FundsSM
SPONSORS: EQUITY INCOME FUND
Merrill Lynch, INDEX SERIES,
Pierce, Fenner & Smith IncorporatedS&P 500 TRUST 2
Defined Asset Funds S&P MIDCAP TRUST
P.O. Box 9051
Princeton, N.J. 08543-9051 PROSPECTUS PART A
(609) 282-8500 This Prospectus does not contain all of the
Smith Barney Inc. information with respect to the investment
Unit Trust Department company set forth in its registration
388 Greenwich Street--23rd Floor statement and exhibits relating thereto which
New York, NY 10013 have been filed with the Securities and
1-800-223-2532 Exchange Commission, Washington, D.C. under
Prudential Securities Incorporated the Securities Act of 1933 and the Investment
One Seaport Plaza Company Act of 1940, and to which reference
199 Water Street is hereby made.
New York, N.Y. 10292 ------------------------------
(212) 776-1000 No person is authorized to give any
Dean Witter Reynolds Inc. information or to make any representations
Two World Trade Center--59th Floor with respect to this investment company not
New York, N.Y. 10048 contained in its registration statement and
(212) 392-2222 exhibits relating thereto; and any
PaineWebber Incorporated information or representation not contained
1200 Harbor Blvd. therein must not be relied upon as having
Weehawken, N.J. 07087 been authorized. This Prospectus shall not
(201) 902-3000 constitute an offer to sell or the
TRUSTEE FOR THE S&P 500 TRUST 2: solicitation of an offer to buy nor shall
The Chase Manhattan Bank, N.A. there be any sale of these securities in any
(a National Banking Association) State in which such offer solicitation or
Customer Service Retail Department sale would be unlawful prior to registration
770 Broadway--7th Floor or qualification under the securities laws of
New York, N.Y. 10003-9598 any such State.
1-800-323-1508
TRUSTEE FOR THE S&P MIDCAP TRUST:
The Bank of New York
(a New York Banking Corporation)
Box 974--Wall Street Station
New York, N.Y. 10268-0974
1-800-221-7771
14124--03/96
<PAGE>
DEFINED ASSET FUNDS--EQUITY INCOME FUND
CONTENTS OF REGISTRATION STATEMENT
This Post-Effective Amendment to the Registration Statement on Form S-6
comprises the following papers and documents:
The facing sheet of Form S-6.
The cross-reference sheet (incorporated by reference to the Cross-Reference
Sheet of the Registration Statement of Defined Asset Funds Municipal Insured
Series, 1933 Act File No. 33-54565).
The Prospectus.
The Signatures.
The following exhibit:
1.1.1--Form of Standard Terms and Conditions of Trust Effective as of
October 21, 1993 (incorporated by reference to Exhibit 1.1.1 to the
Registration Statement of Municipal Investment Trust Fund,
Multi-State Series--48, 1933 Act File No. 33-50247).
5.1 --Consent of independent accountants.
9.1 --Information Supplement (incorporated by reference to Exhibit 9.1 to
the Registration Statement of Equity Income Fund, Blue Chip Stock
Series 3, 1933 Act File No. 33-61155).
R-1
<PAGE>
DEFINED ASSET FUNDS--EQUITY INCOME FUND
INDEX SERIES, S&P 500 TRUST 2, S&P MIDCAP TRUST
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
DEFINED ASSET FUNDS--EQUITY INCOME FUND, INDEX SERIES, S&P 500 TRUST 2, S&P
MIDCAP TRUST (A UNIT INVESTMENT TRUST), CERTIFIES THAT IT MEETS ALL OF THE
REQUIREMENTS FOR EFFECTIVENESS OF THIS REGISTRATION STATEMENT PURSUANT TO RULE
485(B) UNDER THE SECURITIES ACT OF 1933 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT OR AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED IN THE CITY OF NEW YORK AND STATE
OF NEW YORK ON THE 20TH DAY OF MARCH, 1996.
SIGNATURES APPEAR ON PAGES R-3, R-4, R-5, R-6 AND R-7.
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Smith Barney Inc.
has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
A majority of the members of the Board of Directors of Prudential
Securities Incorporated has signed this Registration Statement or Amendment to
the Registration Statement pursuant to Powers of Attorney authorizing the person
signing this Registration Statement or Amendment to the Registration Statement
to do so on behalf of such members.
A majority of the members of the Board of Directors of Dean Witter Reynolds
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
A majority of the members of the Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Merrill Lynch, Pierce, have been filed
Fenner & Smith Incorporated: under
Form SE and the
following 1933 Act
File
Number: 33-43466
and 33-51607
HERBERT M. ALLISON, JR.
BARRY S. FREIDBERG
EDWARD L. GOLDBERG
STEPHEN L. HAMMERMAN
JEROME P. KENNEY
DAVID H. KOMANSKY
DANIEL T. NAPOLI
THOMAS H. PATRICK
JOHN L. STEFFENS
DANIEL P. TULLY
ROGER M. VASEY
ARTHUR H. ZEIKEL
By
ERNEST V. FABIO
(As authorized signatory for Merrill Lynch, Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons listed above)
R-3
<PAGE>
PRUDENTIAL SECURITIES INCORPORATED
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Prudential Securities have been filed
Incorporated: under Form SE and
the following 1933
Act File Number:
33-41631
ALAN D. HOGAN
GEORGE A. MURRAY
LELAND B. PATON
HARDWICK SIMMONS
By
WILLIAM W. HUESTIS
(As authorized signatory for Prudential Securities
Incorporated and Attorney-in-fact for the persons
listed above)
R-4
<PAGE>
SMITH BARNEY INC.
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Smith Barney Inc.: have been filed
under the 1933 Act
File Number:
33-49753 and
33-51607
STEVEN D. BLACK
JAMES BOSHART III
ROBERT A. CASE
JAMES DIMON
ROBERT DRUSKIN
JEFFREY LANE
ROBERT H. LESSIN
By GINA LEMON
(As authorized signatory for
Smith Barney Inc. and
Attorney-in-fact for the persons listed above)
R-5
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form SE and the following 1933
the Board of Directors of Dean Witter Act File Number: 33-17085
Reynolds Inc.:
NANCY DONOVAN
CHARLES A. FIUMEFREDDO
JAMES F. HIGGINS
STEPHEN R. MILLER
PHILIP J. PURCELL
THOMAS C. SCHNEIDER
WILLIAM B. SMITH
By
MICHAEL D. BROWNE
(As authorized signatory for
Dean Witter Reynolds Inc.
and Attorney-in-fact for the persons listed above)
R-6
<PAGE>
PAINEWEBBER INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Executive Committee of the Board the following 1933 Act File
of Directors of PaineWebber Number: 33-55073
Incorporated:
JOSEPH J. GRANO, JR.
DONALD B. MARRON
By
ROBERT E. HOLLEY
(As authorized signatory for
PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)
R-7
Exhibit 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee of
Defined Asset Funds--Equity Income Fund--Index Series, S&P 500 Trust 2 and S&P
MidCap Trust:
We consent to the use in this Post-Effective Amendment No. 4 to Registration
Statement No. 33-44844 of our opinion dated February 22, 1996 and March 5, 1996
appearing in the Prospectus, which is part of such Registration Statement, and
to the reference to us under the heading 'Miscellaneous--Auditors' in such
Prospectus.
DELOITTE & TOUCHE LLP
New York, N.Y.
March 20, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> S&P 500 TRUST 2
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 107,916,299
<INVESTMENTS-AT-VALUE> 140,116,852
<RECEIVABLES> 760,739
<ASSETS-OTHER> 250
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 140,877,841
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 141,142
<TOTAL-LIABILITIES> 141,142
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 108,425,806
<SHARES-COMMON-STOCK> 96,595,184
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 110,340
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 28,688,951
<NET-ASSETS> 140,736,699
<DIVIDEND-INCOME> 2,605,520
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 156,600
<NET-INVESTMENT-INCOME> 2,448,920
<REALIZED-GAINS-CURRENT> 562,667
<APPREC-INCREASE-CURRENT> 28,688,951
<NET-CHANGE-FROM-OPS> 31,700,538
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,472,574
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 594,288
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 1,662,825
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 69,355,342
<ACCUMULATED-NII-PRIOR> 56,392
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> S&P MIDCAP TRUST
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 43,744,098
<INVESTMENTS-AT-VALUE> 52,400,909
<RECEIVABLES> 266,507
<ASSETS-OTHER> 20,355
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 52,687,771
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32,974
<TOTAL-LIABILITIES> 32,974
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 43,945,604
<SHARES-COMMON-STOCK> 40,990,874
<SHARES-COMMON-PRIOR> 32,668,823
<ACCUMULATED-NII-CURRENT> 52,381
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8,656,812
<NET-ASSETS> 52,654,797
<DIVIDEND-INCOME> 834,190
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 94,943
<NET-INVESTMENT-INCOME> 739,247
<REALIZED-GAINS-CURRENT> 2,734,923
<APPREC-INCREASE-CURRENT> 7,773,441
<NET-CHANGE-FROM-OPS> 11,247,611
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 751,168
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 1,350,239
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 571,894
<SHARES-REINVESTED> 8,893,945
<NET-CHANGE-IN-ASSETS> 19,016,336
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0.000
<PER-SHARE-NII> 0.000
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 0.000
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
March 20, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
We hereby represent that the Post-Effective Amendments to the registered
unit investment trusts described in Exhibit A attached hereto do not contain
disclosures which would render them ineligible to become effective pursuant to
Rule 485(b) under the Securities Act of 1933.
Very truly yours,
Davis Polk & Wardwell
Attachment
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
1933 ACT 1940 ACT
FUND NAME CIK FILE NO. FILE NO.
- --------- --- -------- --------
<S> <C> <C> <C>
DEFINED ASSET FUNDS-MITF AMT MPS-17 877292 33-43359 811-1777
DEFINED ASSET FUNDS-- EIF S&P 500 TRUST 2/S&P MIDCAP 882432 33-44844 811-3044
DEFINED ASSET FUNDS-IS-22 DAF 895583 33-49833 811-2295
DEFINED ASSET FUNDS- IS-199 DAF 803884 33-51321 811-1777
DEFINED ASSET FUNDS- IS-216 DAF 804011 33-56493 811-1777
DEFINED ASSET FUNDS- IS-217 DAF 804012 33-56845 811-1777
DEFINED ASSET FUNDS-CIF ITS-33 791021 33-44587 811-2295
DEFINED ASSET FUNDS-MITF MPS-514 803721 33-43631 811-1777
DEFINED ASSET FUNDS- MPS-535 DAF 892757 33-50765 811-1777
DEFINED ASSET FUNDS- MPS-536 DAF 892758 33-51197 811-1777
DEFINED ASSET FUNDS- MPS-553 DAF 924289 33-56713
DEFINED ASSET FUNDS-MITF MSS-25 892850 33-49271 811-1777
DEFINED ASSET FUNDS- MSS-79 DAF 924258 33-56691
DEFINED ASSET FUNDS-MITF MSS 9S 868190 33-44311 811-1777
DEFINED ASSET FUNDS-MITF MSS 9T 868191 33-44742 811-1777
TOTAL: 15 FUNDS
</TABLE>
