AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 4, 1994
REGISTRATION NO. 33-51985
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
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:
EQUITY INCOME FUND
SELECT GROWTH PORTFOLIO
(FORMERLY CONCEPT SERIES 17)
DEFINED ASSET FUNDS
B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE, SMITH BARNEY INC.
FENNER & SMITH TWO WORLD TRADE CENTER
INCORPORATED 101ST FLOOR
UNIT INVESTMENT TRUST NEW YORK, N.Y. 10048
DIVISION
P.O. BOX 9051
PRINCETON, N.J.
08543-9051
PAINEWEBBER INCORPORATED PRUDENTIAL SECURITIES DEAN WITTER REYNOLDS INC.
1285 AVENUE OF THE INCORPORATED TWO WORLD TRADE
AMERICAS ONE SEAPORT PLAZA CENTER--59TH FLOOR
NEW YORK, N.Y. 10019 199 WATER STREET NEW YORK, N.Y. 10048
NEW YORK, N.Y. 10292
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
TERESA KONCICK, ESQ. THOMAS D. HARMAN, ESQ. ROBERT E. HOLLEY
P.O. BOX 9051 388 GREENWICH ST. 1200 HARBOR BLVD.
PRINCETON, N.J. NEW YORK, N.Y. 10013 WEEHAWKEN, NJ 07087
08543-9051
COPIES TO:
LEE B. SPENCER, JR. DOUGLAS LOWE, ESQ. PIERRE DE SAINT PHALLE,
ONE SEAPORT PLAZA 130 LIBERTY STREET--29TH ESQ.
199 WATER STREET FLOOR 450 LEXINGTON AVENUE
NEW YORK, N.Y. 10292 NEW YORK, N.Y. 10006 NEW YORK, N.Y. 10017
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Beneficial Interest pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as amended.
F. PROPOSED MAXIMUM OFFERING PRICE TO THE PUBLIC OF THE SECURITIES BEING
REGISTERED: Indefinite
G. AMOUNT OF FILING FEE: $500 (as required by Rule 24f-2)
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, PROSPECTUS DATED NOVEMBER , 1994
DEFINED
ASSET FUNDSSM
EQUITY This Defined Fund is a portfolio of preselected
INCOME FUND securities, formed to obtain capital appreciation
SELECT GROWTH PORTFOLIO by investing for a period of about one year in a
portfolio of ten common stocks expected to show
superior growth in earnings per share over the
next year and having reasonable valuation levels
and strong recent price performance. The common
stocks included in the Fund were selected for
their potential for earnings growth over the next
three to five years. Current dividend income is
not an objective of the Fund.
The value of Units will fluctuate with the value
of the Portfolio of underlying Securities and no
assurance can be given that the underlying common
stocks will show growth in earnings per share or
that the underlying common stocks and the Units
will appreciate in value.
Minimum purchase: $1,000.
Minimum purchase for Individual Retirement/Keogh
Accounts: $250.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
SPONSORS: HAS THE COMMISSION OR ANY STATE SECURITIES
Merrill Lynch, COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
Pierce, Fenner & Smith OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
Incorporated CONTRARY IS A CRIMINAL OFFENSE.
Smith Barney Inc. Inquiries should be directed to the Trustee at
PaineWebber Incorporated 1-800-221-7771.
Prudential Securities Prospectus dated , 1994.
Incorporated READ AND RETAIN THIS PROSPECTUS FOR FUTURE
Dean Witter Reynolds Inc. REFERENCE.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
<PAGE>
DEFINED ASSET FUNDSSM is America's oldest and largest family of unit investment
trusts, with over $90 billion sponsored since 1970. Each Defined 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.
With Defined Asset Funds you know in advance what you are investing in and that
changes in the portfolio are limited. Most defined bond funds pay interest
monthly and distribute principal as bonds are called, redeemed, sold or as they
mature. Defined equity funds offer preselected stock portfolios with defined
termination dates.
Your financial professional can help you select a Defined Fund to meet your
personal investment objectives. Our size and market presence enable us to offer
a wide variety of investments. Defined Funds invest in many types of securities:
municipal bonds, corporate bonds, government bonds, utility stocks, growth
stocks, real estate investment trusts, even international securities denominated
in foreign currencies.
The termination dates of Defined Funds are as short as one year or as long as 30
years. Special funds are available for investors seeking extra features: insured
funds, double and triple tax-free funds, and funds with 'laddered maturities' to
help protect against rising interest rates. Defined Funds are offered by
prospectus only.
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CONTENTS
Investment Summary.......................................... A-3
Underwriting Account........................................ A-7
Report of Independent Accountants........................... A-8
Statement of Condition...................................... A-8
Portfolio................................................... A-9
Description of Fund Investments............................. 1
Risk Factors................................................ 3
The Select Strategy......................................... 4
Income and Distributions.................................... 5
Fund Performance............................................ 5
Taxes....................................................... 5
Public Sale of Units........................................ 8
Market for Units............................................ 10
Redemption.................................................. 10
Reinvestment Plan........................................... 11
Special Redemption, Liquidation and Investment in New
Fund........................................................ 12
Expenses and Charges........................................ 14
Administration of the Fund.................................. 15
Trust Indenture............................................. 16
Resignation, Removal and Limitations on Liability........... 17
Miscellaneous............................................... 17
Exchange Option............................................. 19
A-2
<PAGE>
INVESTMENT SUMMARY AS OF , 1994 (THE BUSINESS DAY PRIOR TO THE
INITIAL DATE OF DEPOSIT)(a)
OBJECTIVE OF THE FUND
The objective of the Fund is to provide capital appreciation by investing
for about one year in approximately equal values of ten common stocks that were
selected for their potential for growth in earnings per share and having a price
to earnings ratio that does not exceed the expected rate of earnings growth as
well as strong recent price performance. Current dividend income is not an
objective of the Fund. There is no guarantee that the objective of the Fund will
be achieved.
RISK FACTORS
The value of the Units may fluctuate with changes in the financial
condition of the issuers of the stocks held, the value of stocks generally, the
impact of the Fund's purchase and sale of stocks and other factors. Although the
Portfolio is monitored, it is not actively managed and therefore, even if the
stock market decreases in value or if there are adverse developments involving
any issuers of stock held by the fund, or the assessment of their earnings
growth potential may have changed, it is unlikely that the Portfolio will
change. (See Other Risk Factors on page A-5; Description of Fund
Investments--Portfolio Supervision.)
EXPENSES(b)
<TABLE><CAPTION>
UNITHOLDER TRANSACTION EXPENSES AMOUNT PER
1,000 UNITS
------------
<S> <C> <C>
Maximum Initial Sales Charge Imposed on Purchase (as a percentage of offering price)................ 1.00%(c) $ 10.00
Deferred Sales Charge per Year (as a percentage of original purchase price)......................... 1.75%(d) 17.50
--------- ------------
2.75% $ 27.50
--------- ------------
--------- ------------
Maximum Sales Charge Imposed Per Year on Reinvested Dividends....................................... 1.58%(e) $ 15.75
ESTIMATED ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Trustee's Fee....................................................................................... 0. % $ 0.
Portfolio Supervision, Bookkeeping and Administrative Fees.......................................... 0. % 0.
Other Operating Expenses............................................................................ 0. % 0.
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Total........................................................................................... 0. % $
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</TABLE>
<TABLE><caption
Cumulative Expenses Paid for Period of:
--------------------------------------------------
1 year 3 years 5 years 10 years
----------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
EXAMPLE: An investor would pay the following expenses on a $1,000 investment,
assuming the estimated operating expense ratio of % and a 5% annual
return on the investment throughout the periods............................. $ $ $ $
</TABLE>
The Example assumes reinvestment of all dividends and distributions and utilizes
a 5% annual rate of return as mandated by Securities and Exchange Commission
regulations applicable to mutual funds. For purposes of the Example, the
Deferred Sales Charge imposed on reinvestment of dividends is not reflected
until the year following payment of the dividend; the cumulative expenses would
be higher if sales charges on reinvested dividends were reflected in the year of
reinvestment. Because the reductions to the repurchase and cash redemption
prices described in footnote (c) on page A-4 apply only to the secondary market,
these reductions have not been reflected in the figures above. The Example
should not be considered a representation of past or future expenses or annual
rate of return; the actual expenses and annual rate of return may be more or
less than those assumed for purposes of the Example.
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(a) The Indenture was signed and the initial deposit was made on the date of
this Prospectus.
(b) This Fee Table is intended to assist investors in understanding the costs
and expenses that an investor in the Fund will bear directly or indirectly.
See Public Sale of Units and Expenses and Charges. Although the Fund has a
term of only one year, and is a unit investment trust rather than a mutual
fund, this information is presented to permit a comparison of fees, assuming
the principal amount and distributions are rolled over each year into a new
Portfolio subject only to the Deferred Sales Charge.
(c) The Maximum Initial Sales Charge is actually the difference between 2.75%
and the Deferred Sales Charge ($17.50 per 1,000 Units) and would exceed 1%
if the Public Offering exceeds $1,000 per 1,000 Units.
(d) The actual fee is $1.75 per month per 1,000 Units, irrespective of purchase
or redemption price, deducted in each of the last 10 months of each one-year
Portfolio. If a Holder sells Units before all of these deductions have been
made, the balance of the Deferred Sales Charge will be deducted from the
sales proceeds. If Unit price exceeds $1 per Unit, the Deferred Sales Charge
will be less than 1.75%; if Unit price is less than $1 per Unit, the
Deferred Sales Charge will exceed 1.75%.
(e) Reinvested dividends will be subject only to the deferred sales charge
remaining at the time of reinvestment (see Reinvestment Plan on page A-6).
A-3
<PAGE>
DEFINED
ASSET FUNDSSM
INVESTOR'S GUIDE DEFINED EQUITY INCOME FUND, SELECT SERIES
EQUITY INCOME FUND Our defined equity portfolios offer investors a
SELECT GROWTH simple and convenient way to participate in the
PORTFOLIO equity markets. By purchasing defined equity
funds, investors not only avoid the problem of
selecting individual securities by themselves, but
also gain the advantage of diversification by
investing in securities of several different
issuers. Spreading your investment among different
securities and issuers reduces your risk, but does
not eliminate it.
The Select Series is designed to permit an
investor to buy and hold a portfolio of equity
securities for a period of approximately one year
based upon a strategy. At the end of the year the
portfolio is adjusted through reapplication of the
strategy and the investor may reinvest in the new
portfolio, if available.
SELECT GROWTH PORTFOLIO
INVESTMENT STRATEGY
The objective of this Fund is to provide capital
appreciation by investing in a portfolio of ten
common stocks expected to show superior growth in
earnings per share and having reasonable valuation
levels and strong recent price performance. We
believe that these stocks are attractively priced
to provide growth. There can be no assurance that
the Fund will achieve its objective.
PORTFOLIO SELECTION
O'Shaughnessy Capital Management, Inc., the
Portfolio Consultant applied its quantitative
model to a universe of 1,600 common stocks. The
stocks identified by the model were next screened
for minimum market capitalization of $500 million.
Then the Sponsors selected each company after
considering liquidity, capitalization and other
factors. The selection criteria do not necessarily
reflect the research recommendations of any of the
Sponsors.
A LIQUID INVESTMENT
Although not legally required to do so, the
Sponsors have maintained a secondary market for
Defined Asset Funds for over 20 years. You can
cash in your Units at any time. Your price is
based on the market value of the Fund's securities
at that time. Or, you can exchange your investment
for certain other Defined Funds at a reduced sales
charge. There is never a fee for cashing in your
investment.
THIS MATERIAL MAY NOT BE DISTRIBUTED UNLESS INCLUDED IN A CURRENT PROSPECTUS.
INVESTORS SHOULD REFER TO THE PROSPECTUS FOR FURTHER INFORMATION.
<PAGE>
RISK FACTORS
The value of the Units will fluctuate with changes
in the financial condition of the issuers of
stocks held, the value of stocks generally, the
impact of the Fund's purchase and sale of stocks
and other factors. Although the portfolio is
monitored, it is not actively managed and
therefore, even if the stock market decreases in
value or if there are adverse developments
involving any issuers of stock held by the Fund,
it is unlikely that the Portfolio will change.
SALES CHARGE
First-time investors pay a 1% sales charge when
they buy. In addition, a Deferred Sales Charge of
$1.75 per 1,000 units will be deducted from the
portfolio's net asset value each month over the
last 10 months of the life of the portfolio.
Deferring part of the sales charge permits more of
your money to go to work for you. Because payment
of a portion of the sales charge is deferred until
the termination of the Fund, or, in the case of a
Rollover Holder, until redemption, the proceeds
you receive will reflect deduction of the Deferred
Sales Charge. Because the portfolio will remain
relatively fixed, there are no management fees.
VOLUME PURCHASE DISCOUNT
The initial sales charge will be reduced starting
at purchases of $50,000. For purchases of $250,000
or more, only the Deferred Sales Charge is
payable.
REINVESTMENT OPTION
You can elect to reinvest your distributions
automatically in additional units of the Fund
subject only to the remaining portion of the
Deferred Sales Charge. Reinvestment allows you to
increase your overall investment in the Fund and
compound income for a greater total return.
Contact your financial professional to participate
in this Reinvestment Plan.
TAX REPORTING
The proceeds received when you sell this
investment will reflect the deduction of the
Deferred Sales Charge. The annual statement and
the relevant tax reporting forms you receive will
also reflect the actual amount paid to you, net of
the Deferred Sales Charge. Accordingly, you should
not increase your basis in your units by the
Deferred Sales Charge amount.
<PAGE>
AUTHORIZATION FOR REINVESTMENT
EQUITY INCOME FUND
SELECT GROWTH PORTFOLIO
DEFINED ASSET FUNDS
/ / Yes, I want to participate in the Fund's Reinvestment Plan and purchase
additional Units or fractions of additional Units of the Fund.
I hereby acknowledge receipt of the Prospectus for Equity Income Fund
Select Growth Portfolio, Defined Asset Funds 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).
/ / I want to reinvest all distributions (including capital gains) in additional
Units of the Fund.
Please print or type Name
-------------------- ---------------------------
Registered Holder
Address
-------------------------------------- ---------------------------
Registered Holder
City State Zip (Two signatures
------ --------- ----------- required if joint tenancy)
Unless you complete and return this form, all distributions to you from the
Select Growth Portfolio will be paid in cash.
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.
1 2 3 4 5 6 7 8
<PAGE>
BUSINESS REPLY MAIL NO POSTAGE
FIRST CLASS PERMIT NO. 1313 NEW YORK, NY NECESSARY
IF MAILED
POSTAGE WILL BE PAID BY ADDRESSEE IN THE
THE BANK OF NEW YORK UNITED STATES
UNIT INVESTMENT TRUST DEPARTMENT
P.O. BOX 974
WALL STREET STATION
NEW YORK, NY 10268-0979
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<PAGE>
INVESTMENT SUMMARY AS OF , 1994 (CONTINUED)
INITIAL NUMBER OF UNITS--
FRACTIONAL UNDIVIDED INTEREST IN FUND REPRESENTED BY EACH
UNIT-- 1/
CALCULATION OF PUBLIC OFFERING PRICE PER 1,000 UNITS
Aggregate value of Securities in Fund and cash held to
purchase Securities(a)..................................$
----------------
Divided by Units..................................$ 990.00
(times 1,000)
Plus maximum sales charge of 2.75%(b) of Public Offering
Price (2.778% of net amount invested in Securities and
cash held to purchase Securities)....................... 27.50
Less Deferred Sales Charge................................ (17.50)
----------------
Public Offering Price per 1,000 Units 1,000.00
Plus the amount per 1,000 Units in the Income Account (see
Administration of the Fund-- Accounts and
Distributions).......................................... 0.00
----------------
Total per 1,000 Units.....................................$ 1,000.00
----------------
----------------
SPONSORS' REPURCHASE PRICE AND REDEMPTION PRICE PER 1,000
UNITS...................................................$ 972.50(c)
INCOME DISTRIBUTIONS
Distributions of income, if any, will be paid on the
25th of , and
1995 (each a 'Distribution Day') to Holders of re-
cord on the 10th of the month (each a 'Record
Day').
SPECIAL REDEMPTION AND LIQUIDATION PERIOD
Beginning on , 1995 until no later than
, 1995 (the 'Special Redemption
and Liquidation Period').
PROCEDURES FOR SPECIAL REDEMPTION, LIQUIDATION
AND INVESTMENT IN NEW FUND
If a Holder (a 'Rollover Holder') so specifies by
, 1995 or another date as determined
by the Sponsors (the 'Rollover Notification
Date'), the Rollover Holder's Units will be
redeemed in kind and the underlying distributed
Securities will be sold by the Distribution Agent
during the Special Redemption and Liquidation
Period. The proceeds will be invested as received
in the '1995 Portfolio,' if offered (see Special
Redemption, Liquidation and Investment in New
Fund).
EVALUATION TIME--4:00 P.M., New York Time
SPONSORS' PROFIT OR (LOSS) ON DEPOSIT--
TRUSTEE'S ANNUAL FEE AND EXPENSES--$ per
1,000 Units (see Expenses and Charges)(d)
PORTFOLIO SUPERVISION FEE(e)--
Maximum of $.35 per 1,000 Units (see Expenses
and Charges).
MINIMUM VALUE OF FUND
Trust Indenture may be terminated if value of
Fund is less than 40% of the value of the
Securities when deposited in the Portfolio.
MANDATORY TERMINATION DATE
, 1995. The final distribution will be
made within a reasonable time thereafter (see
Termination).
DEFERRED SALES CHARGE PAYMENT DATES
The 1st of each month commencing 1, 199
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(a) After deduction of the Deferred Sales Charge then payable (zero on the
date of this Investment Summary).
(b) The sales charge consists of an Initial Sales Charge and a Deferred
Sales Charge. The Initial Sales Charge is computed by deducting the
Deferred Sales Charge ($17.50 per 1,000 Units) from the aggregate sales
charge (a maximum of 2.75% of the Public Offering Price); thus on the
date of this Investment Summary, the maximum Initial Sales Charge is
$10 per 1,000 Units or 1% of the Public Offering Price. The Initial
Sales Charge is deducted from the purchase price at the time of
purchase and is reduced on a graduated basis on purchases of $50,000 or
more (see Public Sale of Units--Public Offering Price). The Deferred
Sales Charge is paid through reduction of the net asset value of the
Fund by $1.75 per 1,000 Units on each Deferred Sales Charge Payment
Date (the 1st day of each month, commencing 1, 199 ). On a
repurchase or redemption of Units before the last Deferred Sales Charge
Payment Date, any remaining Deferred Sales Charge payments will be
deducted from the proceeds. Units purchased pursuant to the
Reinvestment Plan are subject to that portion of the Deferred Sales
Charge remaining at the time of reinvestment (see Reinvestment Plan).
(c) Reflects deductions for remaining Deferred Sales Charge payments
($17.50 initially). In addition, after the initial offering period, the
repurchase and cash redemption prices will be further reduced to
reflect the Fund's estimated costs of liquidating Securities to meet
the redemption, currently estimated $ per 1,000 Units.
(d) Assumes the Fund will reach a size targeted by the Sponsors; expenses
will vary with the size of the Fund. Of this amount, the Trustee
receives annually for its services as Trustee $0.84 per 1,000 Units,
subject to reduction as the size of the Fund increases, calculated
monthly based on the largest number of Units outstanding at any time
during that month.
(e) In addition to this amount the Sponsors may be reimbursed for
bookkeeping or other administrative expenses not exceeding their actual
costs, currently at a maximum annual rate of $.10 per 1,000 Units.
A-4
<PAGE>
INVESTMENT SUMMARY AS OF , 1994 (CONTINUED)
PORTFOLIO STRUCTURE--The Portfolio contains 10 common stocks issued by
companies engaged primarily in the following industries:
companies ( % of the aggregate value of the Securities in the Fund*),
company, company,
company, companies, company and
company. Although there are certain risks of price volatility
associated with investment in common stocks (particularly with an investment in
one or two common stocks), your risk is reduced because your capital is divided
among 10 stocks from different industry groups.
FUND PORTFOLIO--The Securities included in the Portfolio were selected for
their potential for growth rates in earnings per share, reasonable valuation
levels and strong recent price performance, from a database of 1,600 common
stocks. O'Shaughnessy Capital Management, Inc. (the 'Portfolio Consultant'),
applied its quantitative model (the 'Model') to this database and then screened
the resulting stocks for a minimum market capitalization of $500,000,000. The
Sponsors then reviewed the identified stocks for liquidity, market
capitalization and other factors. The selection criteria may not necessarily
reflect the research recommendations of any of the Sponsors. (See Description of
the Fund Investments--Selection Criteria.) Of course, there can be no assurance
that the expectations of the Sponsors will be realized or that the objective of
the Fund will be achieved.
OTHER RISK FACTORS--Investment in the Fund should be made with an
understanding that the value of the underlying Portfolio may fluctuate in
accordance with changes in the financial condition of the issuers of the
Securities in the Portfolio, changes in the various industry sectors represented
in the Fund, the value of stocks generally, the impact of the Sponsors' purchase
and sale of the Securities (especially during the primary offering period of
Units of the Fund and during the Special Redemption and Liquidation Period and
particularly for stocks that are relatively illiquid) and other factors. Certain
of the issuers of the Securities in the Portfolio may be thinly capitalized or
have a limited operating history and, consequently, may be more susceptible to
stock market fluctuations than more established companies or companies with
greater capitalization. In addition, the Fund is considered to be 'concentrated'
in stocks*. (See Risk Factors.)
Unlike a mutual fund, the Portfolio is not actively managed and the
Sponsors receive no management fee. Therefore, the adverse financial condition
of an issuer will not necessarily require the sale of Securities from the
Portfolio or mean that the Sponsors will not continue to purchase the Security
in order to create additional Units. Although the Portfolio is regularly
reviewed and evaluated and the Sponsors may instruct the Trustee to sell
Securities under certain limited circumstances, given the investment philosophy
of the Fund, the Sponsors are not likely to sell Securities. Securities will not
be sold by the Fund to take advantage of market fluctuations or changes in
anticipated rates of appreciation. The Securities were selected on the basis of
the criteria set forth under Objective of the Fund and Fund Portfolio. These
criteria may not necessarily reflect the research recommendations of any of the
Sponsors. The Fund may continue to purchase or hold Securities originally
selected through this process even though the assessment of their earnings
growth potential may have changed or the Securities may no longer qualify for
selection were the Model to be applied on any later date. (See Description of
Fund Investments--Portfolio Supervision.)
MARKET FOR UNITS; DEFERRED SALES CHARGE--Although not obligated to do so,
the Sponsors intend to maintain a market for Units based on the aggregate value
of the underlying Securities. If a market is not maintained, it is unlikely that
a Holder would be able to dispose of his Units other than through redemption
(see Redemption). The Sponsors' Repurchase Price, like the Redemption Price,
will reflect the deduction from the value of the underlying Securities of any
unpaid amount of the Deferred Sales Charge. In addition, after the initial
offering period the repurchase and cash redemption prices will be further
reduced to reflect the Fund's estimated costs of liquidating Securities to meet
the redemption in the amount shown on page A-4. Investors should note that the
Deferred Sales Charge of $1.75 per 1,000 Units will be deducted from assets of
the Fund on the first of each month commencing on the first Deferred Sales
Charge Payment Date shown on page A-4, and to the extent the entire Deferred
Sales Charge has not been so deducted or paid at the time of redemption of the
Units, the remainder will be deducted from the proceeds of redemption or in
calculating an in-kind redemption.
- ---------------
* A fund is considered to be 'concentrated' in a particular category when the
securities in that category constitute 25% or more of the aggregate value of
the portfolio (see Risk Factors below).
A-5
<PAGE>
INVESTMENT SUMMARY AS OF , 1994 (CONTINUED)
DISTRIBUTIONS--Distributions of net investment income, if any, will be made
in cash on the dates set forth under Investment Summary on page A-4 to Holders
of record on the record days set forth on page A-4 (see Administration of the
Fund--Accounts and Distributions). Alternatively, Holders may elect to have
their Income Distributions reinvested as described more fully below. The Fund
will be terminated by the Mandatory Termination Date and the Portfolio
liquidated and the final distribution made as soon thereafter as is reasonable.
Holders who elect to become Rollover Holders will not receive the final
liquidation distribution, but will receive the
1995 Income Distribution (see Special Redemption, Liquidation and Investment in
New Fund).
REINVESTMENT PLAN--Holders electing to participate in the Reinvestment Plan
may purchase additional Units of this Select Growth Portfolio ('Reinvestment
Units') at the net asset value per 1,000 Units, subject only to the remaining
Deferred Sales Charge. For example, Holders electing reinvestment at the time of
the first Income Distribution ( 199 ) would be subject to a Deferred
Sales Charge of $ per 1,000 Units on their Reinvestment Units (the full
Deferred Sales Charge of $17.50 minus $ already deducted in 1994).
Holders electing to reinvest their second Income Distribution ( 1995)
would be subject to a Deferred Sales Charge of $ per 1,000 Units on their
Reinvestment Units (the full Deferred Sales Charge of $17.50 minus a total of
$ already deducted in 1994, 1995, 1995 and
1995). Holders electing to reinvest their dividends will receive
additional Units and therefore will own a greater percentage of the Fund than
Holders who receive their distributions in cash. The Sponsors reserve the right
to amend, modify or terminate the Reinvestment Plan at any time without prior
notice. (See Reinvestment Plan.)
TAXATION--In the opinion of special counsel to the Sponsors, each Holder
will be considered to have received all of the dividends paid on his pro rata
portion of each Security in the Fund when those dividends are received by the
Fund, even though the dividend payments are used to pay expenses of the Fund.
Under current law, any dividend payments which constitute dividends for Federal
income tax purposes generally will be eligible for the 70% dividends-received
deduction for corporations. (See Taxes.)
PUBLIC OFFERING PRICE--The Public Offering Price per 1,000 Units is based
on the aggregate value of the underlying Securities and any cash held to
purchase Securities, divided by the number of Units outstanding times 1,000 plus
the applicable sales charge. A proportionate share of the amount in the Income
Account and the amount in the Capital Account to the extent not allocated to the
purchase of specific Securities (described under Administration of the
Fund--Accounts and Distributions) on the date of delivery of the Units to the
purchaser is added to the Public Offering Price. The total sales charge consists
of an Initial Sales Charge and a Deferred Sales Charge, the maximum total of
which equals 2.75% of the Public Offering Price or 2.778% of the net asset value
of the Fund. The Initial Sales Charge is computed by deducting the Deferred
Sales Charge ($17.50 per 1,000 Units) from the aggregate sales charge; thus on
the date of the Investment Summary, the maximum Initial Sales Charge is $10 per
1,000 Units or 1% of the Public Offering Price. The Initial Sales Charge is
deducted from the purchase price at the time of purchase. The Initial Sales
Charge will be reduced on a graduated basis on purchases of $50,000 or more. The
Deferred Sales Charge is paid through reduction of the net asset value of the
Fund by $1.75 per 1,000 Units monthly on each Deferred Sales Charge Payment Date
commencing on the first Deferred Sales Charge Payment Date shown on page A-4.
Units purchased pursuant to the Reinvestment Plan are only subject to remaining
deductions of the Deferred Sales Charge (see Reinvestment Plan). If a Holder
redeems or sells his Units to the Sponsors prior to the last Deferred Sales
Charge Payment Date, the Holder is obligated to pay any remaining Deferred Sales
Charge which has not been deducted from the value underlying his Units. Units
are offered at the Public Offering Price computed as of the Evaluation Time for
all sales subsequent to the previous evaluation. The Public Offering Price on
the Initial Date of Deposit, and on subsequent dates, will vary from the Public
Offering Price set forth on page A-4. (See Public Sale of Units--Public Offering
Price.) The minimum purchase is $1,000 ($250 for IRAs and Keogh Accounts).
DESCRIPTION OF SPECIAL REDEMPTION, LIQUIDATION AND INVESTMENT IN NEW
FUND--Holders of Units have the right, subject only to the Deferred Sales
Charge, to exchange Units of the Fund for units of other Select Portfolios (see
Exchange Option). In addition, Holders will have the option of specifying by the
Rollover Notification Date (see page A-4) to have all of their Units redeemed in
kind and the distributed Securities sold by the Distribution Agent during the
Special Redemption and Liquidation Period (as defined under Investment Summary).
The proceeds of the redemption will be invested in units of the 1995 Select
Growth Portfolio, if offered, subject only to the Deferred Sales Charge. (See
Special Redemption, Liquidation and Investment in New Fund.)
Units of Rollover Holders will be redeemed in kind on the first day of the
Special Redemption and Liquidation Period. By participating in the Special
Redemption and Liquidation, each Rollover Holder will be deemed to
have irrevocably instructed the Distribution Agent to sell his portion of the
total distributed Securities during the Special Redemption and Liquidation
Period. The Distribution Agent will appoint the Sponsors as its agents to
determine the manner, timing and execution of sales of underlying Securities.
A-6
<PAGE>
INVESTMENT SUMMARY AS OF , 1994 (CONTINUED)
For each Rollover Holder who confirms his interest in buying units of the
1995 Select Growth Portfolio, the proceeds of the redemption of the underlying
Securities (as the proceeds become available) will be invested in 1995 Select
Growth Portfolio units. The Sponsors may, however, stop creating new units at
any time in their sole discretion without regard to whether all Rollover
proceeds have been invested. The Sponsors are under no obligation to create a
1995 Select Growth Portfolio, however, and may modify the terms of the Special
Redemption, Liquidation and Investment in New Fund upon notice to Holders of
Units at any time. The Sponsors also reserve the right to extend the Rollover
Notification Date stated herein.
Holders who do not wish to have their Units redeemed as described above may
continue to hold Units of the Fund in accordance with the terms described in
this Prospectus until the Fund is terminated or until the Mandatory Termination
Date listed on page A-3, whichever occurs first. (See Termination.) These
Holders may, of course, redeem their Units at any time as set forth under
Redemption. If these Holders choose to redeem during the Special Redemption and
Liquidation Period, or possibly for some period thereafter, the redemption
proceeds they receive may also be affected by the same negative market price
consequences described in the preceding paragraphs. In addition, any brokerage
commissions on sales of the underlying Securities distributed in connection with
in-kind redemptions and on cash redemptions after the initial offering period
will be borne by the redeeming Holder. (See Redemption; Special Redemption,
Liquidation and Investment in New Fund.)
PURCHASE OF UNITS--Units can be purchased by contacting the Sponsors, whose
addresses are listed on the back cover of this Prospectus. The minimum purchase
is $1,000 except that Individual Retirement Accounts and certain other tax
deferred retirement plans may purchase as little as $250 (see Retirement Plans).
UNDERWRITING--None of the Sponsors has participated as sole underwriter,
managing underwriter or member of an underwriting syndicate from which the
Securities in the Portfolio were acquired but one of the Sponsors may have been
managing underwriter of a public offering of one or more issues of Securities
within the last three years (see Portfolio).
UNDERWRITING ACCOUNT
The names and addresses of the Underwriters are:
<TABLE>
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith P.O. Box 9051, Princeton, N.J. 08543-9051
Incorporated
Smith Barney Inc. Two World Trade Center--101st Floor, New York, N.Y. 10048
PaineWebber Incorporated 1285 Avenue of the Americas, New York, N.Y. 10019
Prudential Securities Incorporated One Seaport Plaza--199 Water Street, New York, N.Y. 10292
Dean Witter Reynolds Inc. Two World Trade Center--59th Floor, New York, N.Y. 10048
Each Underwriter's interest in the Underwriting Account will depend upon the
number of Units acquired through the issuance of additional Units.
A-7
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders of Equity Income Fund,
Select Growth Portfolio, Defined Asset Funds:
We have audited the accompanying statement of condition, including the
portfolio, of Equity Income Fund, Select Growth Portfolio, Defined Asset Funds
as of , 1994. This financial statement is the responsibility of
the Trustee. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. The deposit on
, 1994 of an irrevocable letter or letters of credit for the
purchase of securities, as described in the statement of condition, was
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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of Equity Income Fund, Select
Growth Portfolio, Defined Asset Funds at , 1994 in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
New York, N.Y.
, 1994
EQUITY INCOME FUND
SELECT GROWTH PORTFOLIO
DEFINED ASSET FUNDS
STATEMENT OF CONDITION AS OF INITIAL DATE OF DEPOSIT, , 1994
TRUST PROPERTY
Investment in Securities:
Contracts to purchase underlying Securities(1)..... $
--------------
--------------
LIABILITY AND INTEREST OF HOLDERS
Liability--
Payment of deferred portion of sales charge(2)............. $
--------------
Interest of Holders--
Units of fractional undivided interest outstanding:
Cost to investors(3)............................... $
Gross underwriting commissions(4)..................
--------------
Net amount applicable to investors........................... $
--------------
Total................................................... $
--------------
--------------
- ------------------------------------
(1) Aggregate cost to the Fund of the Securities listed under Portfolio
determined by the Trustee one business day prior to the Initial Date of
Deposit on the basis set forth above under Public Sale of Units--Public
Offering Price. See also the column headed Cost of Securities to Fund under
Portfolio. In connection with contracts to purchase Securities, an
irrevocable letter or letters of credit in the amount of $ has
been deposited with the Trustee for the purchase of $ aggregate
value of Securities. The letter or letters of credit has been issued by
, New York Branch.
(2) Represents the aggregate amount of mandatory distributions of $1.75 per
1,000 Units per month payable on the 1st day of each month from
1, 1994 through 1, 1995. Distributions will be made to an account
maintained by the Trustee from which the Holders' Deferred Sales Charge
obligation to the Sponsors will be satisfied. If Units are redeemed prior to
1, 1995, the remaining portion of the distribution applicable to
such Units will be transferred to such account on the redemption date.
(3) Aggregate public offering price computed on the basis of the value of the
underlying Securities as of the Evaluation Time on the day prior to the
Initial Date of Deposit.
(4) Assumes the maximum sales charge per 1,000 Units of 2.75% of the Public
Offering Price computed on the basis set forth under Public Sale of
Units--Public Offering Price and Underwriters' and Sponsors' Profits.
A-8
<PAGE>
PORTFOLIO OF EQUITY INCOME FUND
SELECT GROWTH PORTFOLIO ON THE INITIAL DATE OF DEPOSIT,
DEFINED ASSET FUNDS , 1994
</TABLE>
<TABLE><CAPTION>
NUMBER OF CURRENT ANNUAL PRICE
PORTFOLIO NO. AND NAME OF TICKER SHARES OF PERCENTAGE OF DIVIDEND PER PER SHARE
ISSUER OF SECURITIES CONTRACTED FOR SYMBOL COMMON STOCK FUND(1) SHARE(2) TO FUND
--------------------------------------------- --------- ----------------- -------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
1. % $ $
2.
3.
4.
5.
6.
7.
8.
9.
10.
--------------
100.00%
--------------
--------------
<CAPTION>
COST OF PRICE TO CONSENSUS
SECURITIES EARNINGS EARNINGS
TO FUND(3) RATIO(4) ESTIMATES(5)
----------- -------------- ---------------
<S> <C> <C> <C>
1. % $ %
2.
3.
4.
5.
6.
7.
8.
9.
10.
--------------
$
--------------
--------------
</TABLE>
- ------------------------------------
NOTES
(1) Based on Cost of Securities to Fund.
(2) Based on the latest quarterly or semi-annual ordinary dividend received.
There can be no assurance that future dividend payments, if any, will be
maintained at the indicated amount.
(3) Valuation by the Trustee made on the basis of closing sale prices at the
Evaluation Time on the day prior to the Initial Date of Deposit.
(4) Price to Earnings Ratio is calculated by dividing Price per Share to Fund by
the Concensus Earnings Estimate.
(5)
---------------------------------------------
The Securities were acquired on , 1994 and are represented
entirely by contracts to purchase the Securities. Any of the Sponsors may have
acted as underwriters, managers or comanagers of a public offering of the
Securities in this Fund during the last three years. Affiliates of the Sponsors
may serve as specialists in the Securities in this Fund on one or more stock
exchanges and may have a long or short position in any of these stocks or in
options on any of these stocks, and may be on the opposite side of public orders
executed on the floor of an exchange where the Securities are listed. An
officer, director or employee of any of the Sponsors may be an officer or
director of one or more of the issuers of the Securities in the Fund. A Sponsor
may trade for its own account as an odd-lot dealer, market maker, block
positioner and/or arbitrageur in any of the Securities or options relating
thereto. Any Sponsor, its affiliates, directors, elected officers and employee
benefits programs may have either a long or short position in any Security or
option relating thereto.
A-9
<PAGE>
EQUITY INCOME FUND
SELECT GROWTH PORTFOLIO
DEFINED ASSET FUNDS
DESCRIPTION OF FUND INVESTMENTS
GENERAL
The Portfolio contains ten common stocks selected from a universe of 1,600
stocks, through the application of a quantitative model (the 'Model') developed
by the Portfolio Consultant, O'Shaughnessy Capital Management, Inc. The
Portfolio Consultant is a registered investment adviser, organized in 1988 and
based in Greenwich, Connecticut. The Portfolio Consultant is unaffiliated with
any of the Sponsors. As used herein, the term 'Securities' means the common
stocks initially deposited in the Fund and described under Portfolio and any
additional common stocks acquired and held by the Fund pursuant to the
provisions of the Indenture (see Portfolio Supervision below).
SELECTION CRITERIA
The Fund is a fixed, diversified Portfolio of ten common stocks selected
for potential capital appreciation through the application of the Model to a
universe of 1,600 common stocks.
The Portfolio Consultant applied the Model to the universe of 1,600 stocks.
The Model was designed to identify those stocks that have a strong potential for
increasing earnings and thus providing capital appreciation. The Model
identifies stocks with the following characteristics, among others: (i) expected
growth rates of earnings per share of at least 20% over the next fiscal year;
(ii) expected annual growth rates of at least 20% over the next three to five
years; (iii) a price to earnings ratio not exceeding the expected earnings
growth rate and (iv) strong recent price performance.
The following table shows the percentage of stocks comprising the universe
of 1,600 common stocks that passed the Model's expected earnings growth screens.
PERCENTAGE
YEAR OF STOCKS
- ----------------------------------------------------------- -----------
1985....................................................... 7.56%
1986....................................................... 9.00
1987....................................................... 13.00
1988....................................................... 13.06
1989....................................................... 9.94
1990....................................................... 8.75
1991....................................................... 7.88
1992....................................................... 9.56
1993....................................................... 13.30
1994 (as of , 1994).............................
- ---------------
Copyright 1994. O'Shaughnessy Capital Management, Inc. All Rights Reserved.
The Stocks identified by the Model were next screened for minimum market
capitalization of $500,000,000. The Sponsors further reviewed the market
capitalization, liquidity and other characteristics of the identified stocks.
The Securities selected through this process were those believed to have
significant potential for future earnings growth, without regard to expected
dividend income.
The Fund consists of the Securities (or contracts to purchase the
Securities) listed under Portfolio (including any Additional Securities
deposited in the Fund in connection with the sale of additional Units to the
public as described under Portfolio Supervision below) as long as they may
continue to be held from time to time in the Fund together with accrued and
undistributed income therefrom and undistributed and uninvested cash realized
from the disposition of Securities. Neither the Sponsors nor the Trustee shall
be liable in any way for any default, failure or defect in any of the
Securities. However, should any contract deposited hereunder (or to be deposited
in connection with the sale of additional Units) fail (a 'Failed Security'), the
Sponsors are authorized under the Indenture to acquire replacement Securities.
If replacement Securities are not acquired, the Sponsors shall, on or
before the next following Distribution Day, cause to be refunded the
attributable sales charge, plus the attributable Cost of Securities to Fund
listed under Portfolio.
1
<PAGE>
Each portfolio is divided into units, representing equal shares of
underlying assets. On the Initial Date of Deposit each Unit represented the
fractional undivided interest in the Securities plus net income of the Fund set
forth under the Investment Summary. Thereafter, if any Units are redeemed by the
Trustee, the aggregate value of Securities in the Fund will be reduced by
amounts allocable to redeemed Units, and the fractional undivided interest
represented by each Unit in the balance will be increased. However, if
additional Units are issued by the Fund, the aggregate value of Securities in
the Fund will be increased by amounts allocable to additional Units, and the
fractional undivided interest represented by each Unit in the balance will be
decreased. Units will remain outstanding until redeemed upon tender to the
Trustee by any Holder (which may include the Sponsors) or until the termination
of the Indenture (see Redemption; Termination).
The Fund may be an appropriate medium for investors who desire to
participate in a portfolio of growth stocks without assurances of dividend
income, but with greater diversification than investors might be able to acquire
individually.
PORTFOLIO SUPERVISION
The Fund is a unit investment trust which normally follows a buy and hold
investment strategy. Traditional methods of investment management for a managed
fund (such as a mutual fund) typically involve frequent changes in a portfolio
of securities on the basis of economic, financial and market analyses. The
Portfolio of the Fund, however, will not be actively managed and therefore the
adverse financial condition of an issuer will not necessarily require the sale
of its Securities from the Portfolio. 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 on the open
market when in its opinion it is in the best interest of the Holders of the
Units to do so.
The Sponsors may also direct the disposition of Securities upon default in
payment of amounts due on any of the Securities, institution of certain legal
proceedings, default under certain documents materially and adversely affecting
future declaration or payment of amounts due, or decline in price or the
occurrence of other market or credit factors that in the opinion of the Sponsors
would make the retention of these Securities detrimental to the interest of the
Holders. However, given the investment philosophy of the Fund, the Sponsors are
not likely to sell Securities for any of these reasons; and even though the
assessment of certain Securities may have changed subsequent to the Initial Date
of Deposit and even though a Stock may no longer satisfy the Fund's selection
criteria, the Fund may continue to hold the Securities and may continue to
purchase the Securities in connection with the issuance of Additional Units or
the purchase of Additional Securities.
With the deposit of the Securities in the Fund on the Initial Date of
Deposit, the Sponsors established a proportionate relationship among the number
of shares of each Security deposited in the Portfolio. During the 90-day period
following the Initial Date of Deposit, the Sponsors may deposit additional
Securities ('Additional Securities') or cash (or a bank letter of credit) with
instructions to purchase Additional Securities in order to create new Units,
maintaining to the extent practicable the original proportionate relationship
among the number of shares of each stock in the Portfolio. It may not be
possible to maintain the exact original proportionate relationship among the
Securities deposited on the Initial Date of Deposit because of, among other
reasons, purchase requirements, changes in prices or unavailability of
Securities. Units may be continuously offered to the public by means of this
Prospectus (see Public Sale of Units--Public Distribution) resulting in a
potential increase in the number of Units outstanding. Deposits of Additional
Securities subsequent to the 90-day period following the Initial Date of Deposit
must replicate exactly the proportionate relationship among the face amounts of
Securities comprising the Portfolio at the end of the initial 90-day period,
subject to certain events.
With respect to deposits of Additional Securities (or cash or a letter of
credit with instructions to purchase Additional Securities), in connection with
creating additional Units of the Fund during the 90-day period following the
Initial Date of Deposit, the Sponsors may specify the minimum numbers in which
Additional Securities will be deposited or purchased. If a deposit is not
sufficient to acquire minimum amounts of each Security, Additional Securities
may be acquired in the order of the Security most under-represented immediately
before the deposit when compared to the Original Proportionate Relationship. If
Securities of an issue originally deposited are unavailable at the time of
subsequent deposit, or cannot be purchased at reasonable prices or their
purchase is prohibited or restricted by law, regulation or policies applicable
to the Fund or the Sponsors, the Sponsors may (1) deposit cash or a letter of
credit with instructions to purchase the Security when it becomes available
(provided that it becomes available within 110 days after the Initial Date of
Deposit) or (2) deposit (or instruct the Trustee to purchase) Securities of one
or more other issues originally deposited. Any funds held to acquire Additional
Securities which have not been used to purchase Securities at the end of the
90-day period beginning with the
2
<PAGE>
Initial Date of Deposit, shall be used to purchase Securities as described
above or shall be distributed to Holders together with the attributable sales
charge.
The holders of record ('Holders') of Units will have the right to have
their Units redeemed (see Redemption) at a price computed as set forth under
'Computation of Redemption Price per Unit' ('Redemption Price per Unit') if they
cannot be sold in the over-the-counter market which the Sponsors propose to
maintain (see Market for Units). Redemptions will be made in cash or in
Securities ('in kind') (see Redemption). On the Initial Date of Deposit each
Unit represented the fractional undivided interest in the Securities and net
income of the Fund set forth under Investment Summary.
RISK FACTORS
An investment in Units of the Fund should be made with an understanding of
the risks inherent in an investment in equity securities, including the risk
that the financial condition of the issuers of the Securities may become
impaired or that the general condition of the stock market may worsen (both of
which may contribute directly to a decrease in the value of the Securities and
thus in the value of the Units). In addition, the Model and the Portfolio
Consultant have only a limited track record. There can be no guarantee that the
Model will be effective in achieving the objective of the Fund. In addition, the
common stocks of certain of these issuers may be relatively illiquid and,
therefore, the Sponsors' purchases may tend to raise their market prices and
sales may tend to decrease their prices. Certain of the issuers of the
Securities in the Portfolio may be thinly capitalized or have a limited
operating history and, consequently, may be more susceptible to stock market
fluctuations than more established companies or companies with greater
capitalization. Of course, there can be no assurance that the expectations of
the Sponsors will be realized or that the objective of the Fund will be
achieved. Common stocks in general and growth stocks, in particular, 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.
Holders of common stocks incur more risk than holders of preferred stocks
and debt obligations because common stockholders, as owners of the entity, 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. Indeed, the
issuance of debt securities or even preferred stock will create prior claims for
payment of principal, interest, liquidation preferences and dividends which
could adversely affect the ability and inclination of the issuer to declare or
pay dividends on its common stock or the rights of holders of common stock with
respect to assets of the issuer upon liquidation or bankruptcy. Further, unlike
debt securities which typically have a stated principal amount payable at
maturity (whose value, however, will be subject to market fluctuations prior
thereto), common stocks have neither a fixed principal amount nor a maturity and
have values which are subject to market fluctuations for as long as the stocks
remain outstanding. The value of the Securities in the Portfolio thus may be
expected to fluctuate over the entire life of the Fund to values higher or lower
than those prevailing on the Initial Date of Deposit. Any monies allocated to
the purchase of a Security will generally be held for the purchase of the
Security. However, the Fund may not be able to buy each Security at the same
time, because of availability of the Security, any restrictions applicable to
the Fund relating to the purchase of the Security by reason of the federal
securities laws or otherwise. Holders of common stocks generally have a right to
receive dividends only when and if, and in the amounts, declared by the issuer's
board of directors and to participate in amounts available for distribution by
the issuer only after all other claims on the issuer have been paid or provided
for. By contrast, holders of preferred stocks have the right to receive
dividends at a fixed rate when and as declared by the issuer's board of
directors, normally on a cumulative basis, but do not participate in other
amounts available for distribution by the issuing corporation. Cumulative
preferred stock dividends must be paid before common stock dividends and any
cumulative preferred stock dividend omitted is added to future dividends payable
to the holders of cumulative preferred stock. Preferred stocks are also entitled
to rights on liquidation which are senior to those of common stocks. However,
with respect to this Select Growth Portfolio, dividend income is not an
objective of the Fund.
Investors should note that additional Units may be offered to the public.
This may have an effect upon the value of previously existing Units. To create
additional Units the Sponsors may deposit cash (or a bank letter of credit) with
instructions to purchase Additional Securities. If cash is deposited with
instructions to purchase Securities, the Fund will incur brokerage expenses, and
price fluctuations during the period from the time of deposit of cash (or a
letter of credit) to the time the Securities are purchased will affect the value
of every Holder's Units.
3
<PAGE>
In order to minimize these effects, the Fund will try to purchase Securities as
close as possible to the Evaluation Time or at prices as close as possible to
the prices used to evaluate the Fund at the Evaluation Time. In addition,
brokerage fees incurred in purchasing Securities with cash deposited with
instructions to purchase the Securities will be an expense of the Fund. Thus,
price fluctuations during this period and payment of any brokerage fees by the
Fund will affect the value of every Holder's Units and the income per Unit
received by the Fund. In particular, Holders who purchase Units during the
primary offering period of the Units would experience a dilution of their
investment as a result of any brokerage fees paid by the Fund during subsequent
deposits of additional Securities purchased with cash deposited with
instructions to purchase Securities.
Investors should be aware that the Fund may not be able to buy each
Security at the same time because of availability of the Security, any
restrictions applicable to the Fund relating to the purchase of the Security by
reason of the federal securities laws or otherwise. Any monies allocated to the
purchase of a Security will generally be held for the purchase of the Security.
If the Fund receives the securities of another issuer as a result of the spinoff
by the issuer of any Security included in the original portfolio, the Fund will
hold those securities as if they were one of the Securities initially deposited
and adjust the original proportionate relationship accordingly for all future
subsequent deposits.
As it is anticipated that Securities generally will not be sold to pay the
Deferred Sales Charge until after the last Deferred Sales Charge Payment Date,
Holders will be at risk with respect to changes in the market value of
Securities between the accrual of each monthly deferred sales charge and the
actual sale of Securities to satisfy this liability. In addition, Units
purchased shortly before a Deferred Charge Payment Date would nevertheless incur
the full sales charge for that period. Furthermore, sales of Securities to pay
the Deferred Sales Charge will result in some reduction of aggregate Fund income
following each Deferred Sales Charge Payment Date.
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
From time to time Congress considers proposals to reduce the rate of the
dividends-received deduction. Enactment into law of a proposal to reduce the
rate would adversely affect the after-tax return to investors who can take
advantage of the deduction. Holders are urged to consult their own tax advisers.
Further, at any time after the Initial Date of Deposit, litigation may be
initiated on a variety of grounds, or legislation may be enacted, with respect
to the Securities in the Fund or the issuers of the Securities. Changing
approaches to regulation may have a negative impact on certain companies
represented in the Fund. There can be no assurance that future litigation,
legislation, regulation or deregulation will not have a material adverse effect
on the Fund or will not impair the ability of the issuers of the Securities to
achieve their business goals.
THE SELECT STRATEGY
The Select Series is designed to permit an investor to buy and hold a
portfolio of equity securities for a period of approximately one year based upon
a strategy. At the end of the year the portfolio is adjusted through
reapplication of the strategy and the investor may reinvest in the new
portfolio, if available.
Simple strategies can sometimes be the most effective. To outperform the
market is more difficult than just outperforming other asset classes. The Fund
seeks capital appreciation by acquiring these ten Securities and holding them
for about one year. There can be no assurance that the goal of the Fund will be
attained. Purchasing a portfolio of these ten Securities as opposed to one or
two can achieve a more diversified holding. An investment in the Fund can be
cost-efficient, avoiding the odd-lot costs of buying small quantities of
securities directly. Investment in a number of companies with anticipated strong
earnings growth and reasonable valuation levels is designed to increase the
Fund's potential for capital appreciation. The Fund will terminate in about one
year, when investors may choose to either receive the distribution in cash or
reinvest in the next Select Growth Portfolio (if available) at a reduced sales
charge.
4
<PAGE>
INCOME AND DISTRIBUTIONS
The net annual income per Unit that is earned by the Fund is determined by
subtracting from the annual dividend income of the Securities in the Portfolio
the annual expenses (total annual Trustee's, Sponsors' and administrative fees
and expenses) and dividing by the number of Units outstanding. The net annual
income per Unit will depend upon the amount of dividends declared and paid by
the issuers of the Securities and sales of Securities and the purchase of
additional Securities (recognizing, however, that the sale or purchase of
Securities by itself should have a minimal effect on income per Unit because
each Unit will continue to represent a fractional undivided interest in the same
number of shares of Securities of the same issuers except to the extent the
proportionate relationship between shares changes due to liquidation to pay the
deferred portion of the sales charge) and changes in the expenses of the Fund.
There is no assurance that any dividends will be declared or paid in the
future on the Securities in the Fund.
Record Days and Distribution Days are set forth under the Investment
Summary. Dividend income per Unit received by the Fund, if any, and available
for distribution as of the next preceding Record Day will be distributed on or
shortly after each Distribution Day to the Holders of record on the preceding
Record Day (see Administration of the Fund--Accounts and Distributions).
Further, because dividends on the Securities are not necessarily received by the
Fund at a constant rate throughout the year or at a time that precedes or
coincides with a Record Day, any distribution may be more or less than the
amount credited to the Income Account as of the Record Day. Holders who roll
over their Units will not receive the final distribution upon termination of the
Fund on the Mandatory Termination Date as set forth under the Investment
Summary. (See Special Redemption, Liquidation and Investment in New Fund.) Upon
receipt of dividend payments, the Trustee will hold the sum in the Income
Account until the following Distribution Day.
FUND PERFORMANCE
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 may not be indicative of future results. The Fund is not
actively managed. Unit price and return fluctuate with the value of the common
stocks in the portfolio, so there may be a gain or loss when Units are sold.
Fund performance may be compared to performance on the same basis of the
Dow Jones Industrial Average, the S&P 500 Stock Price Composite 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. As with other
performance data, performance comparisons should not be considered
representative of the Fund's relative peformance for any future period.
TAXES
The following discussion addresses only the tax consequences of Units held
as capital assets and does not address the tax consequences of Units held by
dealers, financial institutions or insurance companies.
In the opinion of Davis Polk & Wardwell, special counsel for the Sponsors, under
existing law:
The Fund is not an association taxable as a corporation for Federal
income tax purposes, and income received by the Fund will be treated as
income of the Holders in the manner set forth below.
Each Holder will be considered the owner of a pro rata portion of each
Security in the Fund under the grantor trust rules of Sections 671-679 of
the Internal Revenue Code of 1986, as amended (the 'Code'). The total cost
to a Holder of his Units, including sales charges, is allocated among his
pro rata portion of each Security, in proportion to the fair market values
thereof on the date the Holder purchases his Units, in order to determine
his tax cost for his pro rata portion of each Security.
A Holder will be considered to have received all of the dividends paid
on his pro rata portion of each Security when such dividends are received
by the Fund regardless of whether such dividends are used to pay a portion
of the deferred sales charge. Holders will be taxed in this manner
regardless of whether distributions from the Fund are actually received by
the Holder or are automatically reinvested (see Reinvestment Plan).
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Dividends considered to have been received by a Holder from domestic
corporations which constitute dividends for Federal income tax purposes
will qualify for the dividends-received deduction for corporate Holders
(other than corporations such as 'S' corporations which are not eligible
for such deductions 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). Depending upon the individual corporate
Holder's circumstances (including whether it has a 45-day holding period
for its Units and whether its Units are debt financed), the limitations
contained in Sections 246 and 246A on the availability of the
dividends-received deduction may be applicable to dividends received by a
Holder from the Fund.
The dividends-received deduction is generally 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. Holders are urged to consult their
own tax advisers.
A corporate Holder 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.
An individual Holder who itemizes deductions will be entitled to deduct
his pro rata share of fees and expenses paid by the Fund only to the extent
that this amount together with the Holder's other miscellaneous deductions
exceeds 2% of his adjusted gross income.
The Holder's basis in his Units will be equal to the cost of his Units,
including the initial sales charge. A portion of the sales charge is
deferred until the termination of the Fund or the redemption of the Units.
The proceeds received by a Holder upon such event will reflect deduction of
the deferred amount (the 'Deferred Sales Charge'). The annual statement and
the relevant tax reporting forms received by Holders will reflect the
actual amounts paid to them, net of the Deferred Sales Charge. Accordingly,
Holders should not increase their basis in their Units by the Deferred
Sales Charge amount.
A distribution of Securities by the Trustee to a Holder (or to his
agent, including the Distribution Agent) upon redemption of Units (or an
exchange of Units for Securities by the Holder with the Sponsor) will not
be a taxable event to the Holder or to other Holders. The redeeming or
exchanging Holder's basis for such Securities will be equal to his basis
for the same Securities (previously represented by his Units) prior to such
redemption or exchange, and his holding period for such Securities will
include the period during which he held his Units. A Holder will have a
taxable gain or loss, which will be a capital gain or loss except in the
case of a dealer or a financial institution, when the Holder (or his agent,
including the Distribution Agent) sells the Securities so received in
redemption for cash, when a redeeming or exchanging Holder receives cash in
lieu of fractional shares, when the Holder sells his Units for cash or when
the Trustee sells the Securities from the Fund. However, to the extent a
Rollover Holder invests his redemption proceeds in units of the 1995 Select
Growth Portfolio, such Holder generally will not be entitled to a deduction
for any losses recognized upon the disposition of any Securities to the
extent that such Holder is considered the owner of substantially identical
securities under the grantor trust rules described above as applied to such
Holder's ownership of units in the 1995 Select Growth Portfolio, if such
substantially identical securities were acquired within a period ending 30
days after such disposition. Capital gains are generally 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. Therefore, such lower rate will be unavailable
to those noncorporate holders who, as of the Mandatory Termination Date (or
earlier termination of the Fund), have held their units for less than a
year and a day. Similarly, with respect to noncorporate Rollover Holders,
this lower rate will be unavailable if, as of the beginning of the Special
Redemption and Liquidation Period, such Rollover Holders have held their
shares for less than a year and a day. The deduction of capital losses is
subject to limitations.
Under the income tax laws of the State and City of New York, the Fund is
not an association taxable as a corporation and the income of the Fund will
be treated as the income of the Holders in the same manner as for Federal
income tax purposes.
The foregoing discussion relates only to the tax treatment of U.S.
Holders with regard to Federal and certain aspects of New York State and
City income taxes. Holders may be subject to taxation in New York or
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in other jurisdictions and should consult their own tax advisors in this
regard. Holders that are not U.S. citizens or residents ('Foreign Holders')
should be aware that dividend distributions from the fund will generally be
subject to a withholding tax of 30%, or a lower treaty rate, depending on
their country of residence. Pursuant to treaties between the United States
and the relevant country of residence, residents of France, Germany, the
Netherlands, the United Kingdom, Japan, the Republic of Korea and Canada
will generally be subject to a reduced withholding rate of 15% on dividend
distributions from the Fund. Foreign Holders should consult their tax
advisors on their eligibility for the withholding rate under the above
mentioned treaties or under treaties between the United States and
countries of residence other than those referred to herein.
* * *
At the termination of the Fund, the Trustee will furnish to each Holder an
annual statement containing information relating to the dividends received by
the Fund on the Securities, the gross proceeds received by the Fund from the
disposition of any Security (resulting from redemption or the sale by the Fund
of any Security), and the fees and expenses paid by the Fund. The Trustee will
also furnish annual information returns to each Holder and to the Internal
Revenue Service.
RETIREMENT PLANS
This Series of Equity Income Fund may be well suited for purchase by
Individual Retirement Accounts ('IRAs'), Keogh plans, pension funds and other
qualified retirement plans, certain of which are briefly described below.
Generally, capital gains and income received in each of the foregoing plans are
exempt from Federal taxation. All distributions from such plans are generally
treated as ordinary income but may, in some cases, be eligible for special 5 or
10 year averaging 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 such plan should review specific tax laws
related thereto and should consult their attorneys or tax advisers with respect
to the establishment and maintenance of any such plan. Such 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 pursuant to Self-Employed
Individuals Tax Retirement Act of 1962 ('Keogh plans') for self-employed
individuals, partnerships or unincorporated companies. Qualified individuals may
generally make annual tax-deductible contributions up to the lesser of 20% of
annual compensation or $30,000 to Keogh plans. The assets of the plan must be
held in a qualified trust or other arrangement which meets the requirements of
the Code. Generally, there are penalties for premature distributions from a plan
before attainment of age 59 1/2, except in the case of a participant's death or
disability and certain other related circumstances. 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 (including one covered
by an employer retirement plan) can establish an IRA or make use of a qualified
IRA arrangement set up by an employer or union for the purchase of Units of the
Fund. Any individual 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). A married individual filing a separate return will
not be entitled to any deduction if the individual is covered by an
employer-maintained retirement plan without regard to whether the individual's
spouse is an active participant in an employer retirement plan. 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. It should be noted that 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 be distributed and subject to tax at
that time. A participant's entire interest in an IRA must be, or commence to be,
distributed to the participant not later than the April 1 following the taxable
year during which the participant attains age 70 1/2. 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.
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Corporate Pension and Profit-Sharing Plans. An employer who has established
a pension or profit-sharing plan for employees may purchase Units of the fund
for such a plan.
PUBLIC SALE OF UNITS
PUBLIC OFFERING PRICE
The Public Offering Price of the Units is computed by dividing the
aggregate value of the Securities (as determined by the Trustee) and any cash
held to purchase Securities, by the number of Units outstanding and adding
thereto the applicable sales charge. A proportionate share of any cash held by
the Fund in the Capital Account not allocated to the purchase of specific
Securities and net income in the Income Account (described under Administration
of the Fund--Accounts and Distributions) on the date of delivery of the Units to
the purchaser is added to the Public Offering Price. The Public Offering Price
on the date of this Prospectus or on any subsequent date will vary from the
Public Offering Price on the business day prior to the date of this Prospectus
(set forth under the Investment Summary) in accordance with fluctuations in the
aggregate value of the underlying Securities.
The sales charge consists of an Initial Sales Charge and a Deferred Sales
Charge. The Initial Sales Charge is computed by deducting the Deferred Sales
Charge ($17.50 per 1,000 Units) from the aggregate sales charge; thus on the
date of the Investment Summary, the maximum Initial Sales Charge is $10 per
1,000 Units or 1% of the Public Offering Price. The Initial Sales Charge is
deducted from the purchase price at the time of purchase. The Deferred Sales
Charge will initially be $17.50 per 1,000 Units but will be reduced each month
by one tenth; the Deferred Sales Charge will be paid through monthly deductions
of $1.75 per 1,000 Units per month commencing on the first Deferred Sales Charge
Payment Date as shown on page A-3. To the extent the entire Deferred Sales
Charge has not been so deducted at the time of repurchase or redemption of the
Units, any unpaid amount will be deducted from the proceeds or in calculating an
in kind distribution. However, any remaining Deferred Sales Charge will be
waived when Units of any Select Portfolio held at the time of the death
(including the death of a single joint tenant with rights of survivorship) or
disability (as defined in the Internal Revenue Code of 1986) of a Holder are
repurchased or redeemed. The Sponsors may require receipt of satisfactory proof
of the death or disability before releasing the portion of the proceeds
representing the amount waived. For purchases of $50,000 or more, the Initial
Sales Charge is reduced on a graduated basis as shown below. Units purchased
pursuant to the Reinvestment Plan are subject only to any remaining Deferred
Sales Charge deductions (see Reinvestment Plan).
The following table sets forth the applicable percentages of sales charges,
which are reduced on a graduated scale for sales to any purchaser of at least
$50,000 and will be applied on whichever basis is more favorable to the
purchaser. To qualify for the reduced sales charge applicable to quantity
purchases, a Sponsor must confirm that the sale is to a single purchaser as
defined below or is purchased for its own account and not for distribution.
Sales charges are as follows:
INITIAL OFFERING PERIOD
<TABLE><CAPTION>
SALES CHARGE
(GROSS UNDERWRITING PROFIT)
----------------------------------
AS PERCENT OF AS PERCENT OF
PUBLIC OFFERING NET AMOUNT DOLLAR AMOUNT DEFERRED
AMOUNT PURCHASED PRICE INVESTED PER 1,000 UNITS
- ------------------------------------------------------------------- ------------------- ------------- -----------------------
<S> <C> <C> <C>
Less than $50,000.................................................. 2.75% 2.778% $ 17.50
$50,000 - $99,999.................................................. 2.50 2.519 17.50
$100,000 - $249,999................................................ 2.00 2.005 17.50
$250,000 or more................................................... 1.75 1.750 17.50
</TABLE>
The above graduated sales charges will apply on all purchases on any one
day by the same purchaser of Units only in the amounts stated. For this purpose
purchases during the initial offering period will not be aggregated with
concurrent purchases of any other unit trusts sponsored by the Sponsors other
than Select Ten Portfolios as described in the following paragraph. 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.
The applicable rate of sales charge in the table above will be determined
on the basis of the aggregate number of units of all Select Portfolios purchased
by the same purchaser on the same day. To be eligible for this reduced
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sales charge, the purchaser or the purchaser's securities dealer must notify the
Sponsors at the time of purchase that such purchase qualifies under this reduced
sales charge provision and supply sufficient information to permit confirmation
of qualification. Acceptance of the purchase order is subject to such
confirmation. This reduced sales charge provision may be amended or terminated
at any time without notice.
Employees of certain of the Sponsors and their affiliates and non-employee
directors of Merrill Lynch & Co., Inc. may purchase Units of this Fund subject
only to the Deferred Sales Charge.
The value of the Securities is determined on each business day by the
Trustee based on the last reported closing prices at the Evaluation Time on the
day the evaluation is made or, if there are no reported sales or if closing sale
prices are not reported or a Security is not listed on a national securities
exchange or if the principal market therefor becomes other than on an exchange,
taking into account the same factors referred to under Redemption--Computation
of Redemption Price per Unit (Section 4.01). The term 'business day', as used
herein and under 'Redemption', shall exclude Saturdays, Sundays and the
following holidays as observed by the New York Stock Exchange, Inc.: New Year's
Day, Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
PUBLIC DISTRIBUTION
On the Initial Date of Deposit, the Sponsors, acting as managers for the
underwriters named under Underwriting Account, deposited the underlying
Securities with the Trustee at a price equal to the aggregate value of the
Securities on that date as determined by the Trustee, and the Trustee delivered
to the Sponsors Units representing the entire ownership of the Fund. Except as
otherwise indicated under Portfolio (the 'Portfolio'), the Securities so
deposited were represented by purchase contracts assigned to the Trustee
together with an irrevocable letter or letters of credit issued by a commercial
bank or banks in the amount necessary to complete the purchase thereof.
During the primary offering period and thereafter to the extent additional
Units continue to be offered for sale to the public by means of this Prospectus,
Units will be distributed directly to the public by this Prospectus at the
Public Offering Price determined in the manner provided above. The Sponsors
intend to qualify Units for sale in all states in the U.S. 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
Assuming no volume discounts, the Sponsors will receive a total maximum
sales charge per 1,000 Units of 2.75% of the Public Offering Price (2.778% of
the net amount invested). The Sponsors also realized a profit or loss on deposit
of the Securities in the Fund in the amount set forth under the Investment
Summary. This profit or loss is the difference between the cost of the
Securities to the Fund (which is based on the aggregate value of the Securities
on the Initial Date of Deposit) and the purchase price of the Securities to the
Sponsors plus commissions payable by the Sponsors. On each subsequent deposit of
Securities with respect to the sale of additional Units to the public the
Sponsors may realize a profit or loss. In addition, the Sponsors or Underwriters
may realize profits or sustain losses in respect of Securities deposited in the
Fund which were acquired by the Sponsors or Underwriters from underwriting
syndicates of which the Sponsors or Underwriters were a member. During the
primary offering period and thereafter to the extent additional Units continue
to be offered for sale to the public, the Underwriting Account also may realize
profits or sustain losses as a result of fluctuations after the Initial Date of
Deposit in the aggregate value of the Securities and hence in the Public
Offering Price of the Units (see the Investment Summary). Cash, if any, made
available by buyers of Units to the Sponsors prior to the settlement date for
purchase of Units may be used in the Sponsors' businesses subject to the
limitations of Rule 15c3-3 under the Securities Exchange Act of 1934 and may be
of benefit to the Sponsors.
Except as indicated under Portfolio, the Sponsors have not participated as
sole underwriters or managers or members of underwriting syndicates from which
syndicates the Securities in the Portfolio were acquired.
In maintaining a market for the Units (see 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 (based on the aggregate value of the
Securities) and the prices at which they resell these Units (which includes the
sales charge) or the prices at which they redeem the Units (based on the
aggregate value of the Securities), as the case may be.
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<PAGE>
MARKET FOR UNITS
While the Sponsors are not obligated to do so, they intend to maintain a
secondary market for Units of this Series and continuously to offer to purchase
Units of this Series at prices, subject to change at any time, which will be
computed on the basis of the aggregate value of the Securities, taking into
account the same factors referred to in determining the Redemption Price per
Unit (see Redemption). This secondary market provides Holders with a fully
liquid investment. They can cash in units at any time without a fee (other than
the deduction after the initial offering period for the costs of liquidating
securities). The Sponsors may discontinue purchases of Units of this
Series at prices based on the aggregate value of the Securities should
the supply of Units exceed demand or for other business reasons.
The Sponsors, of course, do not in any way guarantee the enforceability,
marketability or price of any Securities in the Portfolio or of the
Units. During the primary public offering period or thereafter, on a given
day the price offered by the Sponsors for the purchase of Units shall be an
amount not less than the Redemption Price per Unit, based on the aggregate value
of Securities in the Fund on the date on which the Units are tendered for
redemption (see Redemption).
The Sponsors may redeem any Units they have purchased in the secondary
market if they determine that it is undesirable to continue to hold these Units
in their inventories. Factors which the Sponsors will consider in making this
determination will include the number of units of all series of all funds which
they hold in their inventories, the saleability of the units and their estimate
of the time required to sell the units and general market conditions. For a
description of certain consequences of any redemption for remaining Holders, see
Redemption.
A Holder who wishes to dispose of his Units should inquire of his bank or
broker as to current market prices in order to determine if there exist
over-the-counter prices in excess of the redemption price and the repurchase
price (see Redemption).
REDEMPTION
While it is anticipated that Units in most cases can be sold in the
over-the-counter market for an amount at least equal to the Redemption Price per
Unit (see Market for Units), Units may be redeemed at the office of the Trustee
set forth on the back cover of this Prospectus, on any business day, as defined
under Public Sale of Units--Public Offering Price, upon delivery of a request
for redemption, and payment of any relevant tax, without any other fee (Section
5.02). Holders' signatures must be guaranteed by an eligible guarantor
institution or in some other manner acceptable to the Trustee. In certain
instances the Trustee may require additional documents including, but not
limited to, trust instruments, certificates of death, appointments as executor
or administrator or certificates of corporate authority.
On the seventh calendar day following the tender (or if the seventh
calendar day is not a business day on the first business day prior thereto), the
Holder will be entitled to receive the proceeds of the redemption in an amount
per Unit equal to the Redemption Price per Unit (see below) as determined as of
the day of tender. The Trustee is authorized in its discretion, if the Sponsors
do not elect to repurchase any Units tendered for redemption or if the Sponsors
tender Units for redemption, to sell the Units in the over-the-counter market at
prices which will return to the Holder a net amount in cash equal to or in
excess of the Redemption Price per Unit for the Units (Section 5.02).
Securities are to be sold from the Portfolio in order to make funds
available for redemption (Section 5.02) if funds are not otherwise available in
the Capital and Income Accounts to meet redemptions (see Administration of the
Fund--Accounts and Distributions). The Securities to be sold will be selected by
the Sponsors in accordance with procedures specified in the Indenture in order
to maintain, to the extent practicable, the proportionate relationship among the
number of shares of each Security. Provision is made in the Indenture under
which the Sponsors may, but need not, specify minimum amounts in which blocks of
Securities are to be sold in order to obtain the best price for the Fund. While
these minimum amounts may vary from time to time in accordance with market
conditions, the Sponsors believe that the minimum amounts which would be
specified would be approximately 100 shares for readily marketable Securities.
Certain Holders tendering Units for redemption may request distribution in
kind from the Trustee in lieu of cash redemption. A Holder may request
distribution in kind of an amount and value of Securities per Unit equal to the
Redemption Price per Unit as determined as of the Evaluation Time next following
the tender, provided that the tendering Holder is entitled to receive at least
$ ] in total value of Portfolio Securities as part of his distribution
and the Holder has elected to redeem prior to the Rollover Notification Date
specified on page A-3. If the Holder can receive this requisite number of
shares, the distribution in kind on redemption of Units
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<PAGE>
will be held by a distribution agent (the 'Distribution Agent') for the
account of, and for disposition in accordance with the instructions of, the
tendering Holder. The tendering Holder shall be entitled to receive whole
shares of each of the Securities comprising the Portfolio and cash from the
Capital Account equal to the fractional shares to which the tendering Holder
is entitled less any deferred sales charge payable. Any brokerage commissions
on sales of the underlying Securities distributed in connection with in-kind
redemptions will be borne by the redeeming Holder. In implementing these
redemption procedures, the Trustee and Distribution Agent shall make any
adjustments necessary to reflect differences between the Redemption Price of
the Units and the value of the Securities distributed in kind as of the date
of tender. If funds in the Capital Account are insufficient to cover the
required cash distribution to the tendering Holder, the Trustee may sell
Securities according to the criteria discussed above. The in-kind redemption
option may be terminated by the Sponsors on a date other than the Rollover
Notification Date specified on page A-3 upon notice to the Holders prior to
that date.
To the extent that Securities are redeemed in kind or sold, the size and
diversity of the Fund will be reduced but each remaining Unit will continue to
represent approximately the same proportional interest in each Security. Sales
will usually be required at a time when Securities would not otherwise be sold
and may result in lower prices than might otherwise be realized. The price
received upon redemption may be more or less than the amount paid by the Holder
depending on the value of the Securities in the Portfolio at the time of
redemption. In addition, because of the minimum amounts in which Securities are
required to be sold, the proceeds of sale may exceed the amount required at the
time to redeem Units; these excess proceeds will be distributed to Holders (see
Administration of the Fund--Accounts and Distributions).
The right of redemption may be suspended and payment postponed (1) for any
period during which the New York Stock Exchange, Inc. is closed other than for
customary weekend and holiday closings or (2) for any period during which, as
determined by the Securities and Exchange Commission ('SEC'), (i) trading on
that Exchange is restricted or (ii) an emergency exists as a result of which
disposal or evaluation of the Securities is not reasonably practicable or (3)
for any other periods which the SEC may by order permit (Section 5.02).
COMPUTATION OF REDEMPTION PRICE PER UNIT
Redemption Price per Unit is computed by the Trustee, as of the Evaluation
Time, on each June 30 and December 31 (or the last business day prior thereto),
on any day on which the New York Stock Exchange is open as of the Evaluation
Time next following the tender of any Unit for redemption, and on any other
business day desired by the Trustee or the Sponsors, by adding (a) the aggregate
value of the Securities, (b) cash on hand in the Fund (other than cash covering
contracts to purchase Securities or credited to a reserve account), (c) declared
but unpaid dividends on the Securities and (d) the aggregate value of all other
assets of the Fund; deducting therefrom the sum of (v) taxes or other
governmental charges against the Fund not previously deducted, (w) accrued but
unpaid expenses of the Fund and accrued Deferred Sales Charges declared but not
yet paid, (x) amounts payable for reimbursement of Trustee advances, (y) cash
held for redemption of Units for distribution to Holders of record as of a date
prior to the evaluation and (z) the aggregate value of all other liabilities of
the Fund; and dividing the result by the number of Units outstanding as of the
date of computation (Section 5.01). After the initial offering period, the
repurchase and cash redemption prices will be reduced to reflect the cost to the
Fund (estimated as shown on page A-3) of liquidating Securities to meet the
redemption.
The aggregate value of the Securities is determined in good faith by the
Trustee in the following manner: if the Securities are listed on a national
securities exchange or the NASDAQ national market system, this evaluation is
generally based on the closing sale prices on that exchange or that system
(unless the Trustee deems these prices inappropriate as a basis for valuation)
or, if there is no closing sale price on that exchange or system, at the mean
between the closing bid and asked prices. If the Securities are not so listed
or, if so listed and the principal market therefor is other than on the
exchange, the evaluation shall generally be based on the current bid price on
the over-the-counter market (unless the Trustee deems these prices inappropriate
as a basis for evaluation). If current bid prices are unavailable, the
evaluation is generally determined (a) on the basis of current bid prices for
comparable securities, (b) by appraising the value of the Securities on the bid
side of the market or (c) by any combination of the above.
REINVESTMENT PLAN
Income Distributions on Units may be reinvested by participating in the
Fund's reinvestment plan (the 'Reinvestment Plan'). Holders of Units held in
'street name' by their broker, dealer or financial institution should contact
their financial professional if they wish to participate in the Reinvestment
Plan.
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Deposits of Additional Securities in connection with the Reinvestment Plan
will be made so as to maintain the proportionate relationship (subject to
adjustment under certain circumstances) among the number of shares of each
Security in the Fund at the time of such deposits (see Administration of the
Fund--Portfolio Supervision).
Purchases made pursuant to the Reinvestment Plan will be made on (or as
soon as possible after) the close of business on the Distribution Date, at the
net asset value per 1,000 Units, subject to any remaining deductions of the
Deferred Sales Charge. (Reinvestment Units are not subject to the Initial Sales
Charge.) For example, Holders electing reinvestment at the time of the first
Income Distribution ( 199 ) would be subject to a Deferred Sales
Charge of $ on their Reinvestment Units (the full Deferred Sales Charge of
$17.50 minus $ already deducted in 199 ). Holders electing to
reinvest their second Income Distribution ( 1995)
would be subject to a Deferred Sales Charge of $10.50 on their Reinvestment
Units (the full Deferred Sales Charge of $17.50 minus a total of $7.00 already
deducted in 199 , 1995, 1995 and 1995).
Under the Reinvestment Plan the Fund will pay the distributions to the
brokers, dealers or financial institutions who are holders of record on the
books of the Depository Trust Company; in turn they will purchase for the Holder
Units of the Fund at the price and time indicated above, will add the Units to
the Holder's account, and will send the Holder an account statement reflecting
the reinvestment. These Units may be Units already held in inventory by the
Sponsors (see Market for Units) 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 (see Description of the Fund--The Portfolio). Each
Holder's account will be credited with the number of Units purchased with such
Holder's reinvested distribution. Holders of Units participating in the
Reinvestment Plan will receive confirmation of their reinvestments in their
regular account statements or on a periodic basis.
The Sponsors reserve the right to amend, modify or terminate the
Reinvestment Plan at any time without prior notice.
SPECIAL REDEMPTION, LIQUIDATION AND INVESTMENT IN NEW FUND
It is expected that a special redemption and liquidation will be made of
all Units of this Fund held by any Holder (a 'Rollover Holder') who
affirmatively notifies the Trustee in writing by the Rollover Notification Date
specified on page A-3 that he elects to participate. It should also be noted
that Rollover Holders may realize taxable capital gains on the Special
Redemption and Liquidation but generally will not be entitled to a deduction for
certain capital losses and, due to the procedures for investing in the 1995
Select Growth Portfolio, no cash would be distributed at that time to pay any
taxes (for the tax consequences of participation in the Special Redemption,
Liquidation and Investment in New Fund, see Taxes).
All Units of Rollover Holders will be redeemed in kind (see Redemption) on
the first day of the Special Redemption and Liquidation Period (as herein under
Investment Summary) and the underlying Securities will be distributed to the
Distribution Agent on behalf of the Rollover Holders (Section 5.03). During the
Special Redemption and Liquidation Period (as described under Investment
Summary--Special Redemption, Liquidation and Investment in New Fund), the
Distribution Agent will be required to sell all of the underlying Securities on
behalf of Rollover Holders. The sale proceeds will be net of brokerage fees,
governmental charges or any expenses involved in the sales.
Rollover Holders may purchase units of a new Select Growth Portfolio (the
'1995 Series') if available, subject only to the Deferred Sales Charge; provided
that Rollover Holders who no longer hold their Units in an account maintained
with one of the Sponsors at the time of the Special Redemption, Liquidation and
Investment in New Portfolio may not be eligible to participate in the direct
reinvestment in the new portfolio.
If a Holder of Units so specifies by the Rollover Notification Date, his
Units will be redeemed in kind and the Securities disposed of over the Special
Redemption and Liquidation Period. As long as the Holder confirms his interest
in purchasing units of the 1995 Series and units are available, the proceeds of
the sales (net of brokerage commissions, governmental charges and any other
selling expenses) will be invested in units of the 1995 Series at daily prices
over the Special Redemption and Liquidation Period based on the asset value per
1995 Series unit plus the applicable sales charge. It is expected that the terms
of the 1995 Series will be substantially the same as the terms of the Fund
described in this Prospectus, and that a similar procedure for redemption,
liquidation and investment in a subsequent Select Growth Portfolio will be
available for each new Fund approximately one year after the creation of that
Fund. The Sponsors are under no obligation to create a 1995 Series, however, and
may
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modify the terms of the Special Redemption, Liquidation and Investment in
New Fund upon notice to Holders at any time.
Depending on the volume of proceeds to be invested in the 1995 Series
through the Special Redemption, Liquidation and Investment in New Fund and the
volume of other orders for units in the 1995 Series, the Sponsors may purchase
large volumes of the securities for the 1995 Series in a short period of time.
This concentrated buying may tend to raise the market prices of these
securities. The actual market impact of the Sponsors' purchases, however, is
currently unpredictable because the actual volume of securities to be purchased
and the supply and price of those securities are unknown. A similar problem may
occur in connection with the Sponsors' sales of Securities during the Special
Redemption and Liquidation Period. Depending on the volume of sales required,
and the prices of and demand for Securities, sales by the Sponsors may tend to
depress the market prices and the value of Units, and thus reduce the proceeds
to be credited to Rollover Holders for investment in the 1995 Series.
The Distribution Agent will engage the Sponsors as its agents to sell the
distributed Securities. The Sponsors will attempt to sell the Securities as
quickly as is practicable during the Special Redemption and Liquidation Period
without in their judgment materially adversely affecting the market price of the
Securities, but all of the Securities will in any event be disposed of by the
end of the Special Redemption and Liquidation Period. The Sponsors do not
anticipate that the period will be longer than business days, and it could be
as short as one day, given that the Securities are usually highly liquid. The
liquidity of any Security depends on the daily trading volume of the Security
and the amount that the Sponsors have available for sale on any particular day.
It is expected (but not required) that the Sponsors will generally follow
the following guidelines in selling the Securities: for highly liquid
Securities, the Sponsors will generally sell Securities on the first day of the
Special Redemption and Liquidation Period; for less liquid Securities, on each
of the first two days of the Special Redemption and Liquidation Period, the
Sponsors will generally sell any amount of any underlying Securities at a price
no less than 1/2 of one point under the closing sale price of those Securities
on the preceding day. Thereafter, the Sponsors intend to sell without any price
restrictions at least a portion of the remaining underlying Securities, the
numerator of which is one and the denominator of which is the total number of
days remaining (including that day) in the Special Redemption and Liquidation
Period.
The Rollover Holders' proceeds will be invested in the 1995 Series, if it
is available, the portfolio of which will contain stocks that meet the selection
criteria for the Select Growth Portfolio as of that time. The proceeds of
redemption available on each day will be used to buy 1995 Series units as the
proceeds become available.
The Sponsors intend to create 1995 Series units as quickly as possible,
dependent upon the availability and reasonably favorable price of the securities
included in the 1995 Series portfolio, and it is intended that Rollover Holders
will be given first priority to purchase 1995 Series units. There can be no
assurance, however, as to the exact timing of the creation of 1995 Series units
or the aggregate number of 1995 Series units which the Sponsors will create. The
Sponsors may, in their sole discretion, stop creating new units (whether
permanently or temporarily) at any time they choose, regardless of whether all
proceeds of the Special Redemption and Liquidation have been invested on behalf
of Rollover Holders. Cash which has not been invested on behalf of the Rollover
Holders in 1995 Series units will be distributed at the end of the Special
Redemption and Liquidation Period. However, since the Sponsors can create units
by depositing cash (or bank letter of credit) with instructions to buy
securities, the Sponsors anticipate that sufficient units can be created,
although moneys in the 1995 Series may not be fully invested on the next
business day.
Any Rollover Holder may thus be redeemed out of the Fund and become a
holder of an entirely different trust, the 1995 Series, with a different
portfolio of securities. The Rollover Holder's Units will be redeemed in kind
and the distributed Securities shall be sold during the Special Redemption and
Liquidation Period. In accordance with the Rollover Holders' offers to purchase
1995 Series units, the proceeds of the sales (and any other cash distributed
upon redemption), less the amount of any deferred sales charge still unpaid,
will be invested in 1995 Series units, at the Public Offering Price, including
the applicable sales charge per unit.
This process of redemption, liquidation, and investment in a new trust is
intended to allow for the fact that the portfolios selected by the Sponsors are
chosen on the basis of growth potential only for a year, at which point a new
portfolio is chosen. It is contemplated that a similar process of redemption,
liquidation and investment in a new fund will be available for the 1995 Series,
and each subsequent series of the Fund, approximately a year after the creation
of that series.
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The Sponsors believe that the gradual redemption, liquidation and
investment in the 1995 Series will help mitigate any negative market price
consequences stemming from the trading of large volumes of Securities and of the
underlying securities in the 1995 Series in a short, publicized period of time.
The above procedures may, however, be insufficient or unsuccessful in avoiding
such price consequences. There can be no assurance that the procedures will
effectively mitigate any adverse price consequences of heavy volume trading or
that the procedures will produce a better price for Holders than might be
obtained on any given day during the Special Redemption and Liquidation Period.
In fact, market price trends may make it advantageous to sell or buy more
quickly or more slowly than permitted by these procedures. Rollover Holders
could then receive a less favorable average unit price than if they bought all
their units of the 1995 Series on any given day of the period. Historically, the
prices of securities selected by the Sponsors as good investments have generally
risen over the first few days following the announcement.
It should also be noted that Rollover Holders may realize taxable capital
gains on the Special Redemption and Liquidation but generally will not be
entitled to a deduction for certain capital losses and, due to the procedures
for investing in the new Series, no cash would be distributed at that time to
pay any taxes (see Taxes).
In addition, during this period a Holder will be at risk to the extent that
Securities are not sold and will not have the benefit of any stock appreciation
to the extent that monies have not been invested; for this reason, the Sponsors
will be inclined to sell and purchase the Securities in as short a period as
they can without materially adversely affecting the price of the Securities.
Holders who do not inform the Trustee that they wish to have their Units so
redeemed and liquidated ('Remaining Holders') will continue to hold Units of the
Fund as described in this Prospectus until the Fund is terminated or until the
Mandatory Termination Date listed in the Investment Summary, whichever occurs
first. These Remaining Holders will not realize capital gains or losses due to
the Special Redemption and Liquidation, and will not be charged any additional
sales charge. If a large percentage of Holders become Rollover Holders, the
aggregate size of the Fund will be sharply reduced. As a consequence, expenses,
if any, in excess of the amount to be borne by the Trustee would constitute a
higher percentage amount per Unit than prior to the Special Redemption,
Liquidation and Investment in New Fund. The Fund might also reduce to the
Minimum Value of Fund listed on page A-3 because of the lesser number of Units
in the Fund, and possibly also due to a value reduction, however temporary, in
Units caused by the Sponsors' sales of Securities (see Investment
Summary--Special Redemption, Liquidation and Investment in New Fund); if so, the
Sponsors could then choose to liquidate the Fund without the consent of the
remaining Holders. See Description of Fund--Structure. The Securities remaining
in the Fund after the Special Redemption and Liquidation Period will be sold by
the Sponsors as quickly as possible without, in their judgment, materially
adversely affecting the market price of the Securities.
The Sponsors may for any reason, in their sole discretion, decide not to
sponsor the 1995 Series or any subsequent series of the Fund, without penalty or
incurring liability to any Holder. If the Sponsors so decide, the Sponsors shall
notify the Holders before the Special Redemption and Liquidation Period would
have commenced. All Holders will then be Remaining Holders, with rights to
ordinary redemption as before (see Redemption). The Sponsors may modify the
terms of the 1995 Series or any subsequent series of the Fund. The Sponsors may
also modify the terms of the Special Redemption, Liquidation and Investment in
New Fund upon notice to the Holders prior to the Rollover Notification Date
specified on page A-3.
Investors should be aware that the staff of the Division of Investment
Management of the SEC is of the view that the rollover option described in this
Prospectus constitutes an 'exchange offer' for the purposes of Section 11(c) of
the Investment Company Act of 1940, and would therefore be prohibited absent an
exemptive order. The Sponsors have received exemptive orders under Section 11(c)
which they believe permit them to offer the rollover option, but no assurance
can be given that the SEC will concur with the Sponsors' position and additional
regulatory approvals may be required.
EXPENSES AND CHARGES
INITIAL EXPENSES
Certain expenses incurred in establishing the Fund, including the cost of
the initial preparation and printing of documents relating to the Fund, the
initial fees and expenses of the Trustee, legal expenses, and any other out-
of-pocket expenses, will be paid by the Fund. Printing and mailing of
prospectuses and confirmations of purchases, fees of the Portfolio Consultant,
and advertising and selling expenses will be paid by the Underwriting Account at
no charge to the Fund.
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FEES
An estimate of the total annual expenses of the Fund is set forth under the
Investment Summary. The Portfolio Supervision Fee is based on the average daily
number of Units outstanding. (Section 3.04). This fee, which is not to exceed
the maximum amount set forth under the Investment Summary, may exceed the actual
costs of providing portfolio supervisory services for this Fund, but at no time
will the total amount they receive for portfolio supervisory services rendered
to all series of Equity Income Fund in any calendar year exceed the aggregate
cost to them of supplying these services in that year (Section 7.06). In
addition, the Sponsors may also be reimbursed for bookkeeping or other
administrative services provided to the Fund in amounts not exceeding their
costs of providing these services (Sections 3.04 and 7.06). The Trustee receives
for its services as Trustee and for reimbursement of expenses incurred on behalf
of the Fund, payable in monthly installments, the amount per 1,000 Units set
forth under Investment Summary, which includes the estimated Portfolio
Supervision Fee, estimated reimbursable bookkeeping or other administrative
expenses paid to the Sponsors and certain evaluation,
auditing, printing and mailing expenses. The Trustee also receives benefits to
the extent that it holds funds on deposit in the various non-interest bearing
accounts created under the Indenture. The foregoing fees may be adjusted for
inflation in accordance with the terms of the Indenture without approval of
Holders (Sections 4.02, 7.06 and 8.05).
OTHER CHARGES
Other charges which may be incurred by the Fund include: (a) fees of the
Trustee for extraordinary services (Section 8.05), (b) certain extraordinary
expenses of the Trustee (including legal and auditing expenses) and of counsel
designated by the Sponsors (Sections 3.04, 3.10, 8.01(e), 8.03 and 8.05), (c)
various governmental charges (Sections 3.03 and 8.01 (h)), (d) expenses and
costs of action taken to protect the Fund and the rights and interests of
Holders (Sections 7.06 and 8.01(d)), (e) indemnification of the Trustee for any
losses, liabilities and expenses incurred without gross negligence, bad faith or
wilful misconduct on its part (Section 8.05), (f) indemnification of the
Sponsors for any losses, liabilities and expenses incurred without gross
negligence, bad faith or wilful misconduct (Section 7.05(b)) and (g)
expenditures incurred in contacting Holders upon termination of the Fund
(Section 9.02). The amounts of these charges and fees are secured by a lien on
the Fund and, if the balances in the Income and Capital Accounts (see below) are
insufficient, the Trustee has the power to sell Securities to pay these amounts
(Section 8.05).
ADMINISTRATION OF THE FUND
RECORDS
The Trustee keeps a register of the names, addresses and holdings of all
Holders. The Trustee also keeps records of transactions of the Fund, including a
current list of the Securities and a copy of the Indenture, which records are
available to Holders for inspection at the office of the Trustee at reasonable
times during business hours (Sections 8.02 and 8.04).
ACCOUNTS AND DISTRIBUTIONS
Dividends payable to the Fund are credited by the Trustee to an Income
Account, as of the date on which the Fund is entitled to receive the dividends
as a Holder of record of the Securities. Other receipts, including amounts
received upon the sale of rights pursuant to Section 3.08 of the Indenture, are
credited to a Capital Account (Sections 3.01 and 3.02). The Income Distribution
for each Holder as of each Record Day will be made on the following Distribution
Day or shortly thereafter and shall consist of an amount substantially equal to
the Holder's pro rata share of the distributable cash balance in the Income
Account after deducting amounts required to satisfy estimated expenses computed
as of the close of business on the preceding Record Day. It is anticipated that
the deferred sales charge will be collected from the Capital Account and that
amounts in the Capital Account will be sufficient to cover the cost of the
deferred sales charge. Distributions of amounts necessary to pay the deferred
portion of the sales charge will be made to an account maintained by the Trustee
for purposes of satisfying Holders' deferred sales charge obligations. Although
the Sponsors have the right to collect the deferred sales charge monthly, in
order to keep Holders of Units as fully invested as possible, it is anticipated
that no Securities will be sold to pay the deferred sales charge to the Sponsors
until after the Rollover Notification Date set forth on page A-3. The amount of
the Income Distribution will change with fluctuations in the relevant dividend
rates and as Securities are sold or as substitute Securities are purchased.
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Proceeds received from the disposition of any of the Securities which are
not used to pay the deferred portion of the sales charge or for redemption of
Units will be held in the Capital Account to be distributed on the final
Distribution Day or following liquidation of the Fund. The first distribution
for persons who purchase Units between a Record Day and a Distribution Day will
be made on the second Distribution Day following their purchase of Units.
A Reserve Account may be created by the Trustee by withdrawing from the
Income or Capital Accounts, from time to time, those amounts as it deems
requisite to establish a reserve for any taxes or other governmental charges
that may be payable out of the Fund (Section 3.03). Funds held by the Trustee in
the various accounts created under the Indenture do not bear interest (Section
8.01).
Voting rights with respect to the Securities will be exercised by the
Trustee in accordance with directions given by the Sponsors.
REPORTS TO HOLDERS
With any distribution, the Trustee will furnish Holders with a statement of
the amounts of income and the amounts of other receipts, if any, which are being
distributed, expressed in each case as a dollar amount per Unit. Following the
termination of the Fund, the Trustee will furnish to each person who at any time
during the year was a Holder of record, a statement (i) summarizing transactions
in the Income and Capital Accounts, (ii) identifying Securities sold and
purchased and listing Securities held and the number of Units outstanding at
termination, (iii) stating the Redemption Price per 1,000 Units based upon the
computation thereof made at termination and (iv) specifying the amounts
distributed from the Income and Capital Accounts (Section 3.07). The accounts of
the Fund may be audited by independent accountants designated by the Sponsor and
any report of the accountants shall be furnished by the Trustee to Holders upon
request (Section 8.01(e)).
UNCERTIFICATED UNITS
All Holders are required to hold their Units in uncertificated form and in
'street name' by their broker, dealer or financial institution at the Depository
Trust Company ('DTC'). Units are transferable between accounts of brokers,
dealers or financial institutions which are members of DTC.
TRUST INDENTURE
The Fund is a 'unit investment trust' created under New York law by a Trust
Indenture (the 'Indenture') among the Sponsors and the Trustee. This Prospectus
summarizes various provisions of the Indenture but each statement herein is
qualified in its entirety by reference to the Indenture.
The Sponsors and Trustee may amend the Indenture, without the consent of
the Holders, (a) to cure any ambiguity or to correct or supplement any provision
thereof which may be defective or inconsistent, (b) to change any provision
thereof as may be required by the SEC or any successor governmental agency or
(c) to make any other provisions which do not materially adversely affect the
interest of the Holders (as determined in good faith by the Sponsors). The
Indenture may also be amended in any respect by the Sponsors and the Trustee, or
any of the provisions thereof may be waived, with the consent of the Holders of
51% of the Units, provided that none of these amendments or waivers will reduce
the interest in the Fund of any Holder without the consent of the Holder or
reduce the percentage of Units required to consent to any of these amendments or
waivers without the consent of all Holders (Section 10.01).
The Indenture will terminate upon the sale, or other disposition of the
last Security held thereunder but in no event is it to continue beyond the
Mandatory Termination Date set forth under the Investment Summary. The Indenture
may be terminated by the Sponsors if the value of the Fund is less than the
Minimum Value of Fund set forth under the Investment Summary, and may be
terminated at any time by Holders of 51% of the Units (Sections 8.01(g) and
9.01). The Trustee will deliver written notice of any termination to each Holder
within a reasonable period of time prior to the termination. Within a reasonable
period of time after the termination, the Trustee must sell all of the
Securities then held and distribute to each Holder, after deductions for accrued
but unpaid fees, taxes and governmental and other charges, the Holder's interest
in the Income and Capital Accounts (Section 9.01). This distribution will
normally be made by mailing a check in the amount of each Holder's interest in
these accounts to the address of the Holder appearing on the record books of the
Trustee.
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RESIGNATION, REMOVAL AND LIMITATIONS ON LIABILITY
TRUSTEE
The Trustee or any successor may resign upon notice to the Sponsors. The
Trustee may be removed upon the direction of the Holders of 51% of the Units at
any time or by the Sponsors without the consent of any of the Holders if the
Trustee becomes incapable of acting or becomes bankrupt or its affairs are taken
over by public authorities or if for any reason the Sponsors determine in good
faith that the replacement of the Trustee is in the best interest of the
Holders. The resignation or removal shall become effective upon the acceptance
of appointment by the successor which may, in the case of a resigning or removed
Co-Trustee, be one or more of the remaining Co-Trustees. In case of resignation
or removal, the Sponsors are to use their best efforts to appoint a successor
promptly and if upon resignation of the Trustee no successor has accepted
appointment within thirty days after notification, the Trustee may apply to a
court of competent jurisdiction for the appointment of a successor (Section
8.06). The Trustee shall be under no liability for any action taken in good
faith in reliance on prima facie properly executed documents or for the
disposition of monies or Securities, under the Indenture. This provision,
however, shall not protect the Trustee in cases of wilful misfeasance, bad
faith, negligence or reckless disregard of its obligations and duties. In the
event of the failure of the Sponsors to act, the Trustee may act under
the Indenture and shall not be liable for any of these actions taken in good
faith. The Trustee shall not be personally liable for any taxes or other
governmental charges imposed upon or in respect of the Securities or upon the
interest thereon. In addition, the Indenture contains other customary provisions
limiting the liability of the Trustee (Sections 8.01 and 8.05).
SPONSORS
Any Sponsor may resign if the remaining Sponsor maintains a net worth of
$2,000,000 and is agreeable to the resignation (Section 7.04). A new Sponsor may
be appointed by the remaining Sponsor 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 becomes bankrupt or its affairs are
taken over by public authorities, then the Trustee may (a) appoint a successor
Sponsor at rates of compensation deemed by the Trustee to be reasonable and as
may not exceed amounts prescribed by the SEC, or (b) terminate the Indenture and
liquidate the Fund or (c) continue to act as Trustee without terminating the
Indenture (Section 8.01(e)). The Agent for the Sponsors has been appointed by
the other Sponsors for purposes of taking action under the Indenture (Section
7.01). If the Sponsors are unable to agree with respect to action to be taken
jointly by them under the Indenture and they cannot agree as to which Sponsors
shall continue to act as Sponsors, then Merrill Lynch, Pierce, Fenner & Smith
Incorporated shall continue to act as sole Sponsor (Section 7.02(b)). If one of
the Sponsors fails to perform its duties or becomes incapable of acting or
becomes bankrupt or its affairs are taken over by public authorities, then that
Sponsor is automatically discharged and the other Sponsor shall act as Sponsor
(Section 7.02(a)). The Sponsors shall be under no liability to the Fund or to
the Holders for taking any action or for refraining from taking any action in
good faith or for errors in judgment and shall not be liable or responsible in
any way for depreciation or loss incurred by reason of the sale of any Security.
This provision, however, shall not protect the Sponsors in cases of wilful
misfeasance, bad faith, gross negligence or reckless disregard of their
obligations and duties (Section 7.05). The Sponsors and their successors are
jointly and severally liable under the Indenture. A Sponsor may transfer all or
substantially all of its assets to a corporation or partnership which carries on
its business and duly assumes all of its obligations under the Indenture and in
that event it shall be relieved of all further liability under the Indenture
(Section 7.03).
MISCELLANEOUS
TRUSTEE
The Trustee of the Fund and its address are named on the back cover page of
this 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.
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.
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AUDITORS
The Statement of Condition, including the Portfolio of the Fund, included
herein, has been audited by Deloitte & Touche LLP, independent accountants, as
stated in their opinion appearing herein and has been so included in reliance
upon that opinion given on the authority of that firm as experts in accounting
and auditing.
SPONSORS
Each Sponsor is a Delaware corporation and is engaged in the underwriting,
securities and commodities brokerage business, and is a member of the New York
Stock Exchange, Inc., other major securities exchanges and commodity exchanges,
and the National Association of Securities Dealers, Inc. Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Merrill Lynch Asset Management, a Delaware
corporation, each of which is a subsidiary of Merrill Lynch & Co., Inc., are
engaged in the investment advisory business. Smith Barney Shearson Inc., an
investment banking and securities broker-dealer firm, is an indirect
wholly-owned subsidiary of The Travelers Inc. Prudential Securities
Incorporated, a wholly-owned subsidiary of Prudential Securities Group Inc. and
an indirect wholly-owned subsidiary of the Prudential Insurance Company of
America, is engaged in the investment advisory business. PaineWebber
Incorporated is engaged in the investment advisory business and is a wholly-
owned subsidiary of PaineWebber Group Inc. Dean Witter Reynolds Inc., a
principal operating subsidiary of Dean Witter, Discover & Co., is engaged in the
investment advisory business. Each Sponsor, or one of its predecessor
corporations, has acted as a 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.
Each Sponsor (or a predecessor) has acted as Sponsor of various series of
Defined Asset Funds. A subsidiary of Merrill Lynch, Pierce, Fenner & Smith
Incorporated succeeded in 1970 to the business of Goodbody & Co., which had been
a co-Sponsor of Defined Asset Funds since 1964. That subsidiary resigned as
Sponsor of each of the Goodbody series in 1971. Merrill Lynch, Pierce, Fenner &
Smith Incorporated has been co-Sponsor and the Agent for the Sponsors of each
series of Defined Asset Funds created since 1971. Shearson Lehman Brothers Inc.
(Shearson) and certain of its predecessors were underwriters beginning in 1962
and co-Sponsors from 1965 to 1967 and from 1980 to 1993 of various Defined Asset
Funds. As a result of the acquisition of certain of Shearson's assets by Smith
Barney, Harris Upham & Co. Incorporated and Primerica Corporation (now The
Travelers Inc), Smith Barney Inc. now serves as co-Sponsor of various Defined
Asset Funds. Prudential Securities Incorporated and its predecessors have been
underwriters of Defined Asset Funds since 1961 and co-Sponsors since 1964, in
which year its predecessor became successor co-Sponsor to the original Sponsor.
Dean Witter Reynolds Inc. and its predecessors have been underwriters of various
Defined Asset Funds since 1964 and co-Sponsors since 1974. PaineWebber
Incorporated and its predecessor have co-Sponsored certain Defined Asset Funds
since 1983.
The Sponsors have maintained secondary markets for Defined Asset Funds for
over 20 years. For decades informed investors have purchased unit investment
trusts for dependability and professional selection of investments. 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 a nest egg for
retirement, or attractive, regular current income consistent with relative
protection of capital. There are Defined Funds to meet the needs of just about
any investor. 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 offered by Defined Funds. Sometimes it takes a combination of
Defined Funds to plan for an investor's objectives.
DEFINED ASSET FUNDS
Because each Defined Fund is a portfolio of preselected securities,
purchasers know in advance what they are investing in. Of course, the Portfolio
will change somewhat over time as Additional Securities are deposited, or as
Securities are sold to meet redemptions and in the limited other circumstances
described above under Description of Fund Investments--Portfolio Supervision.
However, since the Portfolio will remain relatively fixed, there are no
management fees.
Defined Asset Funds offers a variety of fund types. The tax exemption of
municipal securities, which makes them attractive to high-bracket taxpayers, is
offered by Defined Municipal Investment Trust Funds. Municipal Defined Funds
offer a simple and convenient way for investors to earn monthly income free from
regular Federal income tax. Defined Municipal Investment trust funds have
provided investors with tax-free income for more
18
<PAGE>
than 30 years. Defined Corporate Income Funds, with higher current returns than
municipal or government funds, are suitable for Individual Retirement Accounts
and other tax-advantaged accounts and provide monthly income. Defined
Government Securities Income Funds provide a way to participate in markets for
U.S. government securities while earning an attractive current return. Defined
International Bond Funds, invested in bonds payable in foreign currencies,
offer the potential to profit from changes in currency values and possibly
from interest rates higher than paid on comparable US bonds, but investors
incur a higher risk for these potentially greater returns. Historically,
stocks have offered growth of capital, and thus some protection against
inflation, over the long term. Defined Equity Income Funds offer participation
in the stock market, providing current income as well as the possibility of
capital appreciation. The S&P Index Trusts offer a convenient and inexpensive
way to participate in broad market movements. Concept Series seek to
capitalize on selected anticipated economic, political or business trends.
Utility Stock Series, consisting of stocks of issuers with established
reputations for regular cash dividends, seek to benefit from dividend
increases. Select Ten Portfolios seek total return by investing for one
year in the ten highest yielding stocks on a designated stock index.
The following chart shows the average annual compounded rate of return of
selected asset classes over the 10-year and 20-year periods ending December 31,
1993, compared to the rate of inflation over the same periods. Of course, this
chart represents past performance of these investment categories and there is no
guarantee of future results, either of these categories or of any Defined Fund.
Defined Funds also have sales charges and expenses which are not reflected in
the chart.
Stocks (S&P 500)
20 yr 12.76%
10 yr 14.94%
Small-company stocks
20 yr 18.82%
10 yr 9.96%
Long-term corporate bonds
20 yr 10.16%
10 yr 14.00%
U.S. Treasury bills (short-term)
20 yr 7.49%
10 yr 6.35%
Consumer Price Index
20 yr 5.92%
10 yr 3.73%
0 2 4 6 8 10 12 14 16 18 20%
Source: Ibbotson Associates (Chicago).
Used with permission. All rights reserved.
Instead of having to select individual securities on their own, purchasers
of Defined Funds benefit from the expertise of Defined Asset Funds' experienced
buyers and research analysts. In addition, they gain the advantage of
diversification by investing in units of a Defined Fund holding securities of
several different issuers. Such diversification can reduce risk, but does not
eliminate it. While the portfolio of a managed fund, such as a mutual fund,
continually changes, defined bond funds offer a defined portfolio and a schedule
of income distributions identified in the prospectus. Investors know, generally,
when they buy, the issuers, maturities, call dates and ratings of the securities
in the portfolio. Of course, the portfolio may change somewhat over time as
additional securities are deposited, as securities mature or are called or
redeemed or as they are sold to meet redemptions and in certain other limited
circumstances. Investors also know at the time of purchase their estimated
income and current and long-term returns, subject to credit and market risks and
to changes in the portfolio or the funds expenses.
EXCHANGE OPTION
Under this Option, Holders may exchange Fund Units at a reduced sales
charge. Fund Units may be exchanged for units of any Equity Income Fund Select
Ten Portfolio at their relative net asset values determined at the next
Evaluation Time after entry of the exchange order, subject only to the remaining
deferred sales charges on the units received. Holders of units of any Select Ten
Portfolio, of any other Defined Asset Fund with a regular maximum sales
19
<PAGE>
charge of at least 3.50% and of any unaffiliated unit trust with a regular
maximum sales charge of at least 3.0%, may exchange their units of those series
for units of the Fund at their relative net asset values so determined,
similarly subject only to the remaining deferred sales charge on Fund Units.
To make an exchange, a Holder should contact his financial professional to
find out what suitable Exchange Funds are available and to obtain a prospectus.
The Holder may only acquire units of an Exchange Fund in which the Sponsors
maintain a secondary market and which are lawfully available for sale in the
state where the Holder resides. Except for the reduced sales charge, an exchange
is like any other purchase and sale of units. 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; Holders should consult their own tax advisers. If the
proceeds of units exchanged is insufficient to acquire a whole number of
Exchange Fund units, the Holder 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 by the
Sponsors at any time, without notice to Holders.
20
<PAGE>
DEFINED
ASSET FUNDSSM
SPONSORS: EQUITY INCOME FUND
Merrill Lynch, SELECT GROWTH PORTFOLIO
Pierce, Fenner & Smith Incorporated
Unit Investment Trusts (A Unit Investment Trust)
P.O. Box 9051 PROSPECTUS
Princeton, N.J. 08543-9051 This Prospectus does not contain all of
(609) 282-8500 the information with respect to the
Smith Barney Inc. investment company set forth in its
Unit Trust Department registration statement and exhibits
Two World Trade Center relating thereto which have been filed
101st Floor with the Securities and Exchange
New York, N.Y. 10048 Commission, Washington, D.C. under the
1-800-298-UNIT Securities Act of 1933 and the
PaineWebber Incorporated Investment Company Act of 1940, and to
1200 Harbor Blvd. which reference is hereby made.
Weehawken, N.J. 07087 No person is authorized to give any
(201) 902-3000 information or to make any
Prudential Securities Incorporated representations with respect to this
One Seaport Plaza investment company not contained in
199 Water Street this Prospectus; and any information or
New York, N.Y. 10292 representation not contained herein
(212) 776-1000 must not be relied upon as having been
Dean Witter Reynolds Inc. authorized. This Prospectus does not
Two World Trade Center constitute an offer to sell, or a
59th Floor solicitation of an offer to buy,
New York, NY 10048 securities in any state to any person
(212) 392-2222 to whom it is not lawful to make such
INDEPENDENT ACCOUNTANTS: offer in such state.
Deloitte & Touche LLP
1633 Broadway
3rd Floor
New York, N.Y. 10019
TRUSTEE:
The Bank of New York
Unit Investment Trust Department
P.O. Box 974
Wall Street Station
New York, NY 10286
1-800-221-7771
14991--11/94
<PAGE>
PART II
ADDITIONAL INFORMATION NOT INCLUDED IN THE PROSPECTUS
A. The following information relating to the Depositors is incorporated by
reference to the SEC filings
indicated and made a part of this Registration Statement.
SEC FILE OR
IDENTIFICATION
NUMBER
--------------------
I. Bonding Arrangements and Date of Organization of the
Depositors filed pursuant to Items A and B of
Part II of the Registration Statement on Form
S-6 under the Securities Act of 1933:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 2-52691
Smith Barney Inc. .............................. 33-29106
PaineWebber Incorporated........................ 2-87965
Prudential Securities Incorporated.............. 2-61418
Dean Witter Reynolds Inc. ...................... 2-60599
II. Information as to Officers and Directors of the
Depositors filed pursuant to Schedules A and D
of Form BD under Rules 15b1-1 and 15b3-1 of the
Securities Exchange Act of 1934:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 8-7221
Smith Barney Inc. .............................. 8-8177
PaineWebber Incorporated........................ 8-16267
Prudential Securities Incorporated.............. 8-12321
Dean Witter Reynolds Inc. ...................... 8-14172
III. Charter documents of the Depositors filed as
Exhibits to the Registration Statement on Form
S-6 under the Securities Act of 1933 (Charter,
By-Laws):
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 2-73866, 2-77549
Smith Barney Inc. .............................. 33-20499
PaineWebber Incorporated........................ 2-87965, 2-87965
Prudential Securities Incorporated.............. 2-86941, 2-86941
Dean Witter Reynolds Inc. ...................... 2-60599, 2-86941
B. The Internal Revenue Service Employer Identification
Numbers of the Sponsors and Trustee are as
follows:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 13-5674085
Smith Barney Inc. .............................. 13-1912900
PaineWebber Incorporated........................ 13-2638166
Prudential Securities Incorporated.............. 13-6134767
Dean Witter Reynolds Inc. ...................... 94-0899825
The Bank of New York, Trustee................... 13-4941102
II-1
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
The Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet of Form S-6.
The Cross-Reference Sheet (incorporated by reference from the
Cross-Reference Sheet of the Registration Statement of The Equity Income Fund,
Sixth Utility Common Stock Series, 1933 Act File No. 2-86836).
The Prospectus.
Additional Information not included in the Prospectus (Part II).
Consent of independent public accountants.
The following exhibits:
*1.1 --Form of Trust Indenture
1.1.1 --Form of Standard Terms and Conditions of Trust Effective as of October
21, 1993 (incorporated by reference to Exhibit 1.1.1 to the
Registration Statement of Municipal Investment Trust Fund, Multistate
Series-48, 1933 Act File No. 33-50247).
1.2 --Form of Master Agreement Among Underwriters (incorporated by reference
to Exhibit 1.2 to the Registration Statement under the Securities Act
of 1933 of The Corporate Income Fund, One Hundred Ninety-Fourth
Monthly Payment Series, 1933 Act File No. 2-90925).
*3.1 --Opinion of counsel as to the legality of the securities being issued
including their consent to the use of their names under the headings
'Taxes' and 'Miscellaneous--Legal Opinion' in the Prospectus.
- ------------------------------------
* To be filed by amendment.
R-1
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS
DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 4TH DAY OF
NOVEMBER, 1994.
SIGNATURES APPEAR ON PAGE 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 Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of 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.
R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Board of Directors of Merrill Form SE and the following 1933 Act
Lynch, Pierce, File
Fenner & Smith Incorporated: Number: 33-43466
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>
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
33-55073
STEVEN D. BLACK
JAMES BOSHART III
ROBERT A. CASE
JAMES DIMON
ROBERT DRUSKIN
ROBERT F. GREENHILL
JEFFREY LANE
JACK L. RIVKIN
By GINA LEMON
(As authorized signatory for
Smith Barney Inc. and
Attorney-in-fact for the persons listed above)
R-4
<PAGE>
PAINEWEBBER INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Executive Committee of the Board the following 1933 Act File
of Directors Number: 33-55073
of PaineWebber Incorporated:
PAUL B. GUENTHER
DONALD B. MARRON
JOSEPH J. GRANO, JR.
LEE FENSTERSTOCK
By
ROBERT E. HOLLEY
(As authorized signatory for PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)
R-5
<PAGE>
PRUDENTIAL SECURITIES INCORPORATED
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 Prudential Act File Number: 33-41631
Securities
Incorporated:
ALAN D. HOGAN
HOWARD A. KNIGHT
GEORGE A. MURRAY
LELAND B. PATON
HARDWICK SIMMONS
By
RICHARD R. HOFFMANN
(As authorized signatory for Prudential Securities
Incorporated and Attorney-in-fact for the persons listed above)
R-6
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form
the Board of Directors of Dean Witter SE and the following 1933 Act File
Reynolds Inc.: Number:
33-17085
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-7
