<PAGE>
DEFINED ASSET FUNDS-REGISTERED TRADEMARK-
----------------------------------------------------
MUNICIPAL INVESTMENT TRUST FUND
INTERMEDIATE TERM SERIES--268
(LADDERED MATURITIES)
(A UNIT INVESTMENT TRUST)
- PORTFOLIO OF LADDERED INTERMEDIATE TERM MUNICIPAL
BONDS
- DESIGNED FOR INCOME FREE FROM REGULAR FEDERAL
INCOME TAX
- MONTHLY INCOME DISTRIBUTIONS
SPONSORS:
MERRILL LYNCH,
PIERCE, FENNER & SMITH
INCORPORATED -----------------------------------------------------
SALOMON SMITH BARNEY INC. The Securities and Exchange Commission has not
PRUDENTIAL SECURITIES approved or disapproved these Securities or passed
INCORPORATED upon the adequacy of this prospectus. Any
PAINEWEBBER INCORPORATED representation to the contrary is a criminal offense.
DEAN WITTER REYNOLDS INC. Prospectus dated September 29, 2000.
<PAGE>
--------------------------------------------------------------------------------
Defined Asset Funds-Registered Trademark-
Defined Asset Funds-Registered Trademark- is America's oldest and largest family
of unit investment trusts, with over $160 billion sponsored over the last 28
years. Defined Asset Funds has been a leader in unit investment trust research
and product innovation. Our family of Funds helps investors work toward their
financial goals with a full range of quality investments, including municipal,
corporate and government bond portfolios, as well as domestic and international
equity portfolios.
Defined Asset Funds offer a number of advantages:
- A disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
- Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
- Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
- Professional research: Our dedicated research team seeks out stocks or
bonds appropriate for a particular fund's objectives.
- Ongoing supervision: We monitor each portfolio on an ongoing basis.
No matter what your investment goals, tolerance for risk or time horizon,
there's probably a Defined Asset Fund that suits your investment style. Your
financial professional can help you select a Defined Asset Fund that works best
for your investment portfolio.
THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF MAY 31, 2000, THE
EVALUATION DATE.
CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Risk/Return Summary............................... 3
What You Can Expect From Your Investment.......... 7
Monthly Income.................................. 7
Return Figures.................................. 7
Records and Reports............................. 7
The Risks You Face................................ 8
Interest Rate Risk.............................. 8
Call Risk....................................... 8
Reduced Diversification Risk.................... 8
Liquidity Risk.................................. 8
Concentration Risk.............................. 8
Bond Quality Risk............................... 8
Insurance Related Risk.......................... 8
Litigation and Legislation Risks................ 9
Selling or Exchanging Units....................... 9
Sponsors' Secondary Market...................... 9
Selling Units to the Trustee.................... 9
Exchange Option................................. 10
How The Fund Works................................ 10
Pricing......................................... 10
Evaluations..................................... 11
Income.......................................... 11
Expenses........................................ 11
Portfolio Changes............................... 12
Fund Termination................................ 12
Certificates.................................... 12
Trust Indenture................................. 12
Legal Opinion................................... 13
Auditors........................................ 13
Sponsors........................................ 14
Trustee......................................... 14
Underwriters' and Sponsors' Profits............. 14
Public Distribution............................. 14
Code of Ethics.................................. 14
Year 2000 Issues................................ 15
Taxes............................................. 15
Supplemental Information.......................... 16
Financial Statements.............................. D-1
</TABLE>
2
<PAGE>
--------------------------------------------------------------------------------
RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular federal income
taxes by investing in a fixed portfolio consisting primarily of municipal
revenue bonds with an estimated average life of 6 years. Laddered maturities
provide a periodic return of principal each year 2004-2008.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states, municipalities and public
authorities to finance the cost of buying, building or improving various
projects intended to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer utilities.
Generally, payments on these bonds depend solely on the revenues generated by
the projects, excise taxes or state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 15 intermediate term tax-exempt municipal
bonds with a current aggregate face amount of $9,735,000.
- The Fund is a unit investment trust which means that, unlike a mutual fund,
the Fund's portfolio is not managed.
- When the bonds were initially deposited (June 14, 1996), they were rated A or
better by Standard & Poor's, Moody's or Fitch, or in the opinion of the agent
for the Sponsors had similar credit quality to bonds rated A or better. THE
CREDIT QUALITY OF THE BONDS MAY CURRENTLY BE LOWER.
- Many of the bonds can be called at a premium declining over time to par
value. Some bonds may be called earlier at par for extraordinary reasons.
- 17% of the bonds are backed by bank letters of credit.
- 38% of the bonds are insured by insurance companies.
Letters of credit and insurance guarantee timely payments of principal and
interest on the bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following types:
<TABLE>
<CAPTION>
APPROXIMATE
PORTFOLIO
PERCENTAGE
<S> <C>
-Airports/Ports/Highways 16%
-Financial Institutions 15%
-General Obligation 4%
-Housing 23%
-Industrial Development Revenue 17%
-Miscellaneous 3%
-Refunded Bonds 18%
-Universities/Colleges 4%
</TABLE>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's worsening financial condition or a drop in
bond ratings can reduce the price of your units.
- Assuming no changes in interest rates, when you sell your units, they will
generally be worth less than your cost because your cost included a sales
fee.
- The Fund will receive early returns of principal if bonds are called or sold
before they mature. If this happens your income will decline and you may not
be able to reinvest the money you receive at as high a yield or as long a
maturity.
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want monthly income free from regular federal income tax. You
will benefit from a professionally selected and supervised portfolio whose
risk is reduced by investing in bonds of several different issuers.
The Fund is NOT appropriate for you if you want a speculative investment that
changes to take advantage of market movements, if you do not want a
tax-advantaged investment, if you are subject to AMT or if you cannot
tolerate any risk.
3
<PAGE>
DEFINING YOUR INCOME
<TABLE>
<S> <C>
WHAT YOU MAY EXPECT (Payable on the 25th day of
each month):
Regular Monthly Income per unit $4.07
Annual Income per unit $48.84
RECORD DAY: 10th day of each month
THESE FIGURES ARE ESTIMATES ON THE EVALUATION DATE; ACTUAL
PAYMENTS MAY VARY.
</TABLE>
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay, directly or indirectly,
when you invest in the Fund.
<TABLE>
<S> <C>
INVESTOR FEES
Maximum Sales Fee (Load) on ne
purchases (as a percentage of
$1,000 invested) 2.75%
</TABLE>
Employees of some of the Sponsors and their affiliates may be charged a
reduced sales fee of no less than $5.00 per Unit.
The maximum sales fee is reduced if you invest at least $100,000, as follows:
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<S> <C>
Less than $100,000 2.75%
$100,000 to $249,999 2.50%
$250,000 to $499,999 2.25%
$500,000 to $999,999 2.00%
$1,000,000 and over 1.75%
Maximum Exchange Fee 1.75%
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<S> <C>
Trustee's Fee $0.60
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses) $0.50
Organization Costs $0.20
Evaluator's Fee $0.10
Other Operating Expenses $0.30
-----
TOTAL $1.70
</TABLE>
The Sponsors historically paid organization costs and updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
IN THE FOLLOWING CHART WE SHOW PAST PERFORMANCE OF PRIOR INTERMEDIATE SERIES,
WHICH HAD THE SAME INVESTMENT OBJECTIVES, STRATEGIES AND TYPES OF BONDS AS
THIS FUND. These prior Intermediate Series were offered after 1987 and were
outstanding on June 30, 2000. OF COURSE, PAST PERFORMANCE OF PRIOR SERIES IS
NO GUARANTEE OF FUTURE RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
REFLECTING ALL EXPENSES. FOR PERIODS ENDED 6/30/00.
<TABLE>
<CAPTION>
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------
High 6.38% 5.05% 5.75% 6.73% 5.97% 6.26%
Average 1.72 4.35 5.55 3.69 5.16 6.04
Low -2.78 2.65 5.26 -0.07 3.29 5.75
----------------------------------------------------------------------------------------
Average
Sales fee 1.96% 4.00% 4.87%
----------------------------------------------------------------------------------------
</TABLE>
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are not sold because
of market changes. Rather, experienced Defined Asset Funds financial analysts
regularly review the bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other broker-dealers. The
Sponsors are listed later in this prospectus. Some banks may offer units for
sale through special arrangements with the Sponsors, although certain legal
restrictions may apply.
4
<PAGE>
<TABLE>
<S> <C>
UNIT PRICE PER UNIT $893.36
(as of May 31, 2000)
</TABLE>
Unit price is based on the net asset value of the Fund plus the sales fee. An
amount equal to any principal cash, as well as net accrued but undistributed
interest on the unit, is added to the unit price. An independent evaluator
prices the bonds at 3:30 p.m. Eastern time every business day. Unit price
changes every day with changes in the prices of the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the Trustee for the net
asset value determined at the close of business on the date of sale. You will
not pay any other fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly. In the opinion of bond counsel when each bond
was issued, interest on the bonds in this Fund is generally 100% exempt from
regular federal income tax.
Interest on approximately 50% of the bonds will be taken into account in
determining your preference items for alternative minimum tax purposes. A
portion of the income may also be exempt from state and local personal income
taxes, depending on where you live.
You will also receive principal payments if bonds are sold or called or
mature, when the cash available is more than $5.00 per unit. You will be
subject to tax on any gain realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your monthly income in cash unless you choose to compound
your income by reinvesting with no sales fee in the Municipal Fund Investment
Accumulation Program, Inc. This program is an open-end mutual fund with a
comparable investment objective. Income from this program will generally be
subject to state and local income taxes. FOR MORE COMPLETE INFORMATION ABOUT
THE PROGRAM, INCLUDING CHARGES AND FEES, ASK THE TRUSTEE FOR THE PROGRAM'S
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST. THE TRUSTEE MUST RECEIVE
YOUR WRITTEN ELECTION TO REINVEST AT LEAST 10 DAYS BEFORE THE RECORD DAY OF
AN INCOME PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain other Defined Asset
Funds. You may also exchange into this Fund from certain other funds. We
charge a reduced sales fee on exchanges.
5
<PAGE>
--------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
<TABLE>
<CAPTION>
EFFECTIVE
TAXABLE INCOME 2000* % TAX TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN BRACKET 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5%
IS EQUIVALENT TO A TAXABLE YIELD OF
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------
$ 0- 26,250 $ 0- 43,850 15.00 3.53 4.12 4.71 5.29 5.88 6.47 7.06 7.65
-----------------------------------------------------------------------------------------------------------------
$ 26,251- 63,550 $ 43,851-105,950 28.00 4.17 4.86 5.56 6.25 6.94 7.64 8.33 9.03
-----------------------------------------------------------------------------------------------------------------
$ 63,551-132,600 $105,951-161,450 31.00 4.35 5.07 5.80 6.52 7.25 7.97 8.70 9.42
-----------------------------------------------------------------------------------------------------------------
$132,601-288,350 $161,451-288,350 36.00 4.69 5.47 6.25 7.03 7.81 8.59 9.38 10.16
-----------------------------------------------------------------------------------------------------------------
OVER $288,350 OVER $288,350 39.60 4.97 5.79 6.62 7.45 8.28 9.11 9.93 10.76
-----------------------------------------------------------------------------------------------------------------
</TABLE>
To compare the yield of a taxable security with the yield of a federally
tax-free security, find your taxable income and read across. The table
incorporates 2000 federal income tax rates and assumes that all income would
otherwise be taxed at a U.S. investor"s highest tax rate. Yield figures are for
example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase-out of
exemptions, itemized deductions, the possible partial disallowance of deductions
or state and local taxation. Consequently, investors are urged to consult their
own tax advisers in this regard.
MUNICIPAL BONDS AND THE ALTERNATIVE MINIMUM TAX
<TABLE>
<CAPTION>
INCOME+ MAXIMUM "PREFERENCE" INCOME
WITHOUT TRIGGERING AMT
(STATE INCOME TAX RATES)
SINGLE++ JOINT++ 0% 7% 11%
<S> <C> <C> <C> <C>
---------------------------------------------------
</TABLE>
NOTES:
<TABLE>
<CAPTION>
INCOME+ MAXIMUM "PREFERENCE" INCOME
WITHOUT TRIGGERING AMT
(STATE INCOME TAX RATES)
SINGLE++ JOINT++ 0% 7% 11%
<S> <C> <C> <C> <C>
$ 50,000 $20,000 $15,000 $13,000
---------------------------------------------------
</TABLE>
+
Regular
taxable
income
plus
<TABLE>
<CAPTION>
INCOME+ MAXIMUM "PREFERENCE" INCOME
WITHOUT TRIGGERING AMT
(STATE INCOME TAX RATES)
SINGLE++ JOINT++ 0% 7% 11%
<S> <C> <C> <C> <C>
$ 30,000 $19,000 $16,000 $14,000
--
</TABLE>
income
taxes
and
personal
exemptions.
<TABLE>
<CAPTION>
INCOME+ MAXIMUM "PREFERENCE" INCOME
WITHOUT TRIGGERING AMT
(STATE INCOME TAX RATES)
SINGLE++ JOINT++ 0% 7% 11%
<S> <C> <C> <C> <C>
$100,000 $24,000 $15,000 $11,000
---------------------------------------------------
</TABLE>
++
Assuming
no
dependents.
<TABLE>
<CAPTION>
INCOME+ MAXIMUM "PREFERENCE" INCOME
WITHOUT TRIGGERING AMT
(STATE INCOME TAX RATES)
SINGLE++ JOINT++ 0% 7% 11%
<S> <C> <C> <C> <C>
$ 55,000 $21,000 $16,000 $13,000
---------------------------------------------------
$225,000 $30,000 $12,000 $ 3,000
---------------------------------------------------
$205,000 $30,000 $14,000 $ 6,000
---------------------------------------------------
</TABLE>
Under federal tax law, interest income on certain municipal bonds, although
exempt from regular income tax, is treated as a "preference" item for purposes
of AMT. The table above shows amounts of such municipal bond "preference"
interest income, assuming no other "preference" or similar items apply, that
individual taxpayers could receive in 2000 without becoming subject to the AMT.
The table gives information for single and joint returns of U.S. individuals
having no dependents. The table provides three income levels and three
hypothetical state income tax rates. The table further assumes that the stated
amount of municipal bond "preference" interest income is subject to state income
taxes.
6
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
MONTHLY INCOME
The Fund will pay you regular monthly income. Your monthly income may vary
because of:
- elimination of one or more bonds from the Fund's portfolio because of calls,
redemptions or sales;
- a change in the Fund's expenses; or
- the failure by a bond's issuer to pay interest.
Changes in interest rates generally will not affect your monthly income because
the portfolio is fixed.
Along with your monthly income, you will receive your share of any available
bond principal.
RETURN FIGURES
We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.
ESTIMATED CURRENT RETURN equals the estimated annual cash to be received from
the bonds in the Fund less estimated annual Fund expenses, divided by the Unit
Price (including the maximum sales fee):
<TABLE>
<S> <C><C>
Estimated Annual Estimated
Interest Income - Annual Expenses
------------------------------------
Unit Price
</TABLE>
ESTIMATED LONG TERM RETURN is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the bonds in the Fund. It
is an average of the yields to maturity (or in certain cases, to an earlier call
date) of the individual bonds in the portfolio, adjusted to reflect the Fund's
maximum sales fee and estimated expenses. We calculate the average yield for the
portfolio by weighting each bond's yield by its market value and the time
remaining to the call or maturity date.
Yields on individual bonds depend on many factors including general conditions
of the bond markets, the size of a particular offering and the maturity and
quality rating of the particular issues. Yields can vary among bonds with
similar maturities, coupons and ratings.
These return quotations are designed to be comparative rather than predictive.
RECORDS AND REPORTS
You will receive:
- a monthly statement of income payments and any principal payments;
- a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
- an annual report on Fund activity; and
- annual tax information. THIS WILL ALSO BE SENT TO THE IRS. YOU MUST REPORT THE
AMOUNT OF TAX-EXEMPT INTEREST RECEIVED DURING THE YEAR.
You may request:
- copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
- audited financial statements of the Fund.
You may inspect records of Fund transactions at the Trustee's office during
regular business hours.
7
<PAGE>
THE RISKS YOU FACE
INTEREST RATE RISK
Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, bonds with longer maturities will
change in value more than bonds with shorter maturities. Bonds in the Fund are
more likely to be called when interest rates decline. This would result in early
returns of principal to you and may result in early termination of the Fund. Of
course, we cannot predict how interest rates may change.
CALL RISK
Many bonds can be prepaid or "called" by the issuer before their stated
maturity. For example, some bonds may be required to be called pursuant to
mandatory sinking fund provisions.
Also, an issuer might call its bonds during periods of falling interest rates,
if the issuer's bonds have a coupon higher than current market rates.
An issuer might call its bonds in extraordinary cases, including if:
- it no longer needs the money for the original purpose;
- the project is condemned or sold;
- the project is destroyed and insurance proceeds are used to redeem the
bonds;
- any related credit support expires and is not replaced; or
- interest on the bonds become taxable.
If the bonds are called, your income will decline and you may not be able to
reinvest the money you receive at as high a yield or as long a maturity. An
early call at par of a premium bond will reduce your return.
REDUCED DIVERSIFICATION RISK
If many investors sell their units, the Fund will have to sell bonds. This could
reduce the diversification of your investment and increase your share of Fund
expenses.
LIQUIDITY RISK
The bonds will generally trade in the over-the-counter market. We cannot assure
you that a liquid trading market will exist, especially since current law may
restrict the Fund from selling bonds to any Sponsor. The value of the bonds, and
of your investment, may be reduced if trading in bonds is limited or absent.
CONCENTRATION RISK
When a certain type of bond makes up 25% or more of the portfolio, the Fund is
said to be "concentrated" in that bond type, which makes the Fund less
diversified. However, this Fund is not concentrated in any particular type of
bond.
Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentration over time.
BOND QUALITY RISK
A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.
INSURANCE RELATED RISK
Some bonds may be backed by insurance companies (as shown under Portfolio).
Insurance policies generally make payments only according to a bond's original
payment schedule and do not make early payments when a bond defaults or becomes
taxable. Although the federal government does not regulate the insurance
business, various state
8
<PAGE>
laws and federal initiatives and tax law changes could significantly affect the
insurance business. The claims-paying ability of the insurance companies is
generally rated A or better by Standard & Poor's or another nationally
recognized rating organization. The insurance company ratings are subject to
change at any time at the discretion of the rating agencies.
LITIGATION AND LEGISLATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Fund.
Future tax legislation could affect the value of the portfolio by:
- limiting real property taxes,
- reducing tax rates,
- imposing a flat or other form of tax, or
- exempting investment income from tax.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:
- ADDING the value of the bonds, net accrued interest, cash and any other Fund
assets;
- SUBTRACTING accrued but unpaid Fund expenses, unreimbursed Trustee advances,
cash held to buy back units or for distribution to investors and any other
Fund liabilities; and
- DIVIDING the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the portfolio.
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge. We may resell the units to other buyers or to
the Trustee. You should consult your financial professional for current market
prices to determine if other broker-dealers or banks are offering higher prices.
We have maintained a secondary market continuously for over 28 years, but we
could discontinue it without prior notice for any business reason.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). Sometimes, additional documents are
needed such as a trust document, certificate of corporate authority, certificate
of death or appointment as executor, administrator or guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market
9
<PAGE>
for a higher price, but it is not obligated to do so. In that case, you will
receive the net proceeds of the sale.
If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at times when the
bonds would not otherwise be sold and may result in your receiving less than the
unit par value and also reduce the size and diversity of the Fund.
If you acquire 25% or more of the outstanding units of the Fund and you sell
units with a value exceeding $250,000, the Trustee may choose to pay you "in
kind" by distributing bonds and cash with a total value equal to the price of
those units. The Trustee will try to distribute bonds in the portfolio pro rata,
but it reserves the right to distribute only one or a few bonds. The Trustee
will act as your agent in an in kind distribution and will either hold the bonds
for your account or sell them as you instruct. You must pay any transaction
costs as well as transfer and ongoing custodial fees on sales of bonds
distributed in kind.
There could be a delay in paying you for your units:
- if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
- if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
bonds not reasonably practicable; and
- for any other period permitted by SEC order.
EXCHANGE OPTION
You may exchange units of certain Defined Asset Funds for units of this Fund at
a maximum exchange fee of 1.75%. You may exchange units of this Fund for units
of certain other funds at a reduced sales fee if your investment goals change.
In addition, you may exchange into this Fund from certain other Defined Asset
Funds and unit trusts. To exchange units, you should talk to your financial
professional about what funds are exchangeable, suitable and currently
available.
Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.
We may amend or terminate this exchange option at any time without notice.
HOW THE FUND WORKS
PRICING
The price of a unit includes interest accrued on the bonds, less expenses, from
the most recent Record Day up to, but not including, the settlement date, which
is usually three business days after the purchase date of the unit.
A portion of the price of a unit consists of cash so that the Trustee can
provide you with regular monthly income. When you sell your units you will
receive your share of this cash.
In addition, as with mutual funds, the Fund (and therefore the investors) pay
all or
10
<PAGE>
some of the costs of organizing the Fund including:
- cost of initial preparation of legal documents;
- federal and state registration fees;
- initial fees and expenses of the Trustee;
- initial audit; and
- legal expenses and other out-of-pocket expenses.
These costs are amortized over the first five years of the Fund.
EVALUATIONS
An independent Evaluator values the bonds on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas).
Bond values are based on current bid or offer prices for the bonds or comparable
bonds. In the past, the difference between bid and offer prices of publicly
offered tax-exempt bonds has ranged from 0.5% of face amount on actively traded
issues to 3.5% on inactively traded issues; the difference has averaged between
1 and 2%.
INCOME
The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a Reserve Account by withdrawing from
these accounts amounts it considers appropriate to pay any material liability.
These accounts do not bear interest.
EXPENSES
The Trustee is paid monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:
- to reimburse the Trustee for the Fund's operating expenses;
- for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
- costs of actions taken to protect the Fund and other legal fees and
expenses;
- expenses for keeping the Fund's registration statement current; and
- Fund termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 55 CENTS per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. Legal,
typesetting, electronic filing and regulatory filing fees and expenses
associated with updating the Portfolio's registration statement yearly are also
now chargeable to the Portfolio. While this fee may exceed the amount of these
costs and expenses attributable to this Fund, the total of these fees for all
Series of Defined Asset Funds will not exceed the aggregate amount attributable
to all of these Series for any calendar year. The Fund also pays the Evaluator's
fees.
The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.
The Sponsors will pay advertising and selling expenses at no charge to the Fund.
If Fund expenses exceed initial estimates, the
11
<PAGE>
Fund will owe the excess. The Trustee has a lien on Fund assets to secure
reimbursement of Fund expenses and may sell bonds if cash is not available.
PORTFOLIO CHANGES
The Sponsors and Trustee are not liable for any default or defect in a bond.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
bonds in the portfolio even if their credit quality declines or other adverse
financial circumstances occur. However, we may sell a bond in certain cases if
we believe that certain adverse credit conditions exist or if a bond becomes
taxable.
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which may affect the
composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
- diversity of the portfolio;
- size of the Fund relative to its original size;
- ratio of Fund expenses to income;
- current and long-term returns;
- degree to which units may be selling at a premium over par; and
- cost of maintaining a current prospectus.
FUND TERMINATION
The Fund will terminate following the stated maturity or sale of the last bond
in the portfolio. The Fund may also terminate earlier with the consent of
investors holding 51% of the units or if total assets of the Fund have fallen
below 40% of the face amount of bonds deposited. We will decide whether to
terminate the Fund early based on the same factors used in deciding whether or
not to offer units in the secondary market.
When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining bonds, and you will receive your final distribution. Any
bond that cannot be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final sale.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling bonds. This may reduce the amount you receive as your
final distribution.
CERTIFICATES
Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.
TRUST INDENTURE
The Fund is a "unit investment trust" governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to
12
<PAGE>
the Trustee. The following summarizes certain provisions of the Indenture.
The Sponsors and the Trustee may amend the Indenture without your consent:
- to cure ambiguities;
- to correct or supplement any defective or inconsistent provision;
- to make any amendment required by any governmental agency; or
- to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Fund without your written consent.
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
- it fails to perform its duties and the Sponsors determine that its
replacement is in your best interest; or
- it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsors and the Trustee without the consent of
investors. The resignation or removal of either becomes effective when a
successor accepts appointment. The Sponsors will try to appoint a successor
promptly; however, if no successor has accepted within 30 days after notice of
resignation, the resigning Trustee or Evaluator may petition a court to appoint
a successor.
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:
- remove it and appoint a replacement Sponsor;
- liquidate the Fund; or
- continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsors and the Evaluator.
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
special counsel for the Sponsors, has given an opinion that the units are
validly issued.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statement of Condition included in this
prospectus.
13
<PAGE>
SPONSORS
The Sponsors are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PRUDENTIAL SECURITIES INCORPORATED (an indirect wholly-owned subsidiary of the
Prudential Insurance Company of America)
One New York Plaza
New York, NY 10292
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.
TRUSTEE
The Chase Manhattan Bank, Unit Investment Trust Department, 4 New York
Plaza--6th Floor, New York, New York 10004, is the Trustee. It is supervised by
the Federal Deposit Insurance Corporation, the Board of Governors of the Federal
Reserve System and New York State banking authorities.
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. The Sponsors also
realized a profit or loss on the initial deposit of the bonds. Any cash made
available by you to the Sponsors before the settlement date for those units may
be used in the Sponsors' businesses to the extent permitted by federal law and
may benefit the Sponsors.
A Sponsor or Underwriter may realize profits or sustain losses on bonds in the
Fund which were acquired from underwriting syndicates of which it was a member.
In maintaining a secondary market, the Sponsors will also realize profits or
sustain losses in the amount of any difference between the prices at which they
buy units and the prices at which they resell or redeem them.
PUBLIC DISTRIBUTION
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
CODE OF ETHICS
The Fund and the Agent for the Sponsors have each adopted a code of ethics
requiring reporting of personal securities transactions by its employees with
access to information on Fund transactions. Subject to certain conditions, the
codes permit employees to invest in Fund securities for
14
<PAGE>
their own accounts. The codes are designed to prevent fraud, deception and
misconduct against the Fund and to provide reasonable standards of conduct.
These codes are on file with the Commission and you may obtain a copy by
contacting the Commission at the address listed on the back cover of this
prospectus.
YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the "Year
2000 Problem"). To date we are not aware of any major operational difficulties
resulting from the computer system changes necessary to prepare for the Year
2000. However, there can be no assurance that the Year 2000 Problem will not
adversely affect the issuers of the bonds contained in the Portfolio. We cannot
predict whether any impact will be material to the Fund as a whole.
TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances or subject to
special rules. You should consult your own tax adviser about your particular
circumstances.
At the date of issue of each bond, counsel for the issuer delivered an opinion
to the effect that interest on the bond is exempt from regular federal income
tax. However, interest may be subject to state and local taxes and may be taken
into account in determining your preference items for alternative minimum tax
purposes. Neither we nor our counsel have reviewed the issuance of the bonds,
related proceedings or the basis for the opinions of counsel for the issuers. We
cannot assure you that the issuers (or other users of bond proceeds) have
complied or will comply with any requirements necessary for a bond to be
tax-exempt. If any of the bonds were determined not to be tax-exempt, you could
be required to pay income tax for current and prior years, and if the Fund were
to sell the bond, it might have to sell it at a substantial discount.
In the opinion of our counsel, under existing law:
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Fund will not be taxed as a corporation for federal income tax purposes, and
you will be considered to own directly your share of each bond in the Fund.
GAIN OR LOSS UPON DISPOSITION
When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when you sell or exchange your
units), you will generally recognize capital gain or loss. Your gain, however,
will generally be ordinary income to the extent of any accrued "market
discount". Generally you will have market discount to the extent that your basis
in a bond when you purchase a unit is less than its stated redemption price at
maturity (or, if it is an original issue discount bond, the issue price
increased by original issue discount that has accrued on
15
<PAGE>
the bond before your purchase). You should consult your tax adviser in this
regard.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain from the Fund will be long-term if you are considered to have held
your investment on each bond for more than one year and short-term otherwise.
Because the deductibility of capital losses is subject to limitations, you may
not be able to deduct all of your capital losses. Consult your tax adviser in
this regard.
YOUR BASIS IN THE BONDS
Your aggregate basis in the bonds will be equal to the cost of your units,
including any sales charges and the organizational expenses you pay, adjusted to
reflect any accruals of "original issue discount," "acquisition premium" and
"bond premium". You should consult your tax adviser in this regard.
EXPENSES
If you are not a corporate investor, you will not be entitled to a deduction for
your share of fees and expenses of the Fund. Also, if you borrowed money in
order to purchase or carry your units, you will not be able to deduct the
interest on this borrowing for federal income tax purposes. The IRS may treat
your purchase of units as made with borrowed money even if the money is not
directly traceable to the purchase of units.
NEW YORK TAXES
Under the income tax laws of the State and City of New York, the Fund will not
be taxed as a corporation. If you are a New York taxpayer, your income from the
Fund will not be tax-exempt in New York except to the extent that the income is
earned on bonds that are tax-exempt for New York purposes. Depending on where
you live, your income from the Fund may be subject to state and local taxation.
You should consult your tax adviser in this regard.
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the types of bonds that may be in the Fund's portfolio, general risk
disclosure concerning any insurance securing certain bonds, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.
16
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 268,
DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Municipal Investment Trust Fund,
Intermediate Term Series - 268, Defined Asset Funds:
We have audited the accompanying statement of condition of Municipal
Investment Trust Fund, Intermediate Term Series - 268, Defined Asset
Funds, including the portfolio, as of May 31, 2000 and the related
statements of operations and of changes in net assets for the years
ended May 31, 2000, 1999 and 1998. These financial statements are the
responsibility of the Trustee. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Securities owned at May 31, 2000, as shown in such portfolio, were
confirmed to us by The Chase Manhattan Bank, the Trustee. An audit
also includes assessing the accounting principles used and significant
estimates made by the Trustee, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Municipal
Investment Trust Fund, Intermediate Term Series - 268, Defined Asset
Funds at May 31, 2000 and the results of its operations and changes in
its net assets for the above-stated years in accordance with
accounting principles generally accepted in the United States of
America.
DELOITTE & TOUCHE LLP
New York, N.Y.
September 13, 2000
D - 1.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 268,
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of May 31, 2000
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities
at value (cost $ 9,791,781)(Note 1) ......... $ 9,866,606
Accrued interest................................ 201,937
Proceeds receivable from sale of securities .... 174,813
Prepaid Trustee's fees and expenses ............ 5,114
Cash - principal ............................... 100,961
-------------
Total trust property ......................... 10,349,431
LESS LIABILITIES:
Income advance from Trustee..................... $ 171,928
Accrued Sponsors' fees ......................... 2,534
Redemptions payable ............................ 171,397 345,859
------------- -------------
NET ASSETS, REPRESENTED BY:
11,316 units of fractional undivided
interest outstanding (Note 3) ............... 9,971,641
Undistributed net investment income ............ 31,931 $10,003,572
------------- =============
UNIT VALUE ($10,003,572 / 11,316 units)........... $ 884.02
=============
</TABLE>
See Notes to Financial Statements.
D - 2.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 268,
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended May 31,
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 616,370 $ 659,987 $ 824,957
Trustee's fees and expenses ............ (14,295) (14,562) (17,175)
Sponsors' fees ......................... (6,153) (5,835) (6,503)
----------------------------------------------
Net investment income .................. 595,922 639,590 801,279
----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 39,574 64,473 192,456
Unrealized appreciation (depreciation)
of investments ....................... (566,148) (123,584) 439,709
----------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (526,574) (59,111) 632,165
----------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ 69,348 $ 580,479 $ 1,433,444
==============================================
</TABLE>
See Notes to Financial Statements.
D - 3.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 268,
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended May 31,
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income .................. $ 595,922 $ 639,590 $ 801,279
Realized gain on
securities sold or redeemed .......... 39,574 64,473 192,456
Unrealized appreciation (depreciation)
of investments ....................... (566,148) (123,584) 439,709
----------------------------------------------
Net increase in net assets
resulting from operations ............ 69,348 580,479 1,433,444
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (597,377) (641,208) (807,921)
Principal .............................. (31,263) (13,284) (1,820,934)
----------------------------------------------
Total distributions .................... (628,640) (654,492) (2,628,855)
----------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (2,327) (2,138) (2,814)
Redemption amounts - principal ......... (1,112,414) (1,209,265) (1,337,288)
----------------------------------------------
Total share transactions ............... (1,114,741) (1,211,403) (1,340,102)
----------------------------------------------
NET DECREASE IN NET ASSETS ............... (1,674,033) (1,285,416) (2,535,513)
NET ASSETS AT BEGINNING OF YEAR .......... 11,677,605 12,963,021 15,498,534
----------------------------------------------
NET ASSETS AT END OF YEAR ................ $10,003,572 $11,677,605 $12,963,021
==============================================
PER UNIT:
Income distributions during
year ................................. $ 48.85 $ 48.95 $ 55.33
==============================================
Principal distributions during
year ................................. $ 2.56 $ 1.02 $ 131.40
==============================================
Net asset value at end of
year ................................. $ 884.02 $ 929.75 $ 935.76
==============================================
TRUST UNITS:
Redeemed during year ................... 1,244 1,293 1,270
Outstanding at end of year ............. 11,316 12,560 13,853
==============================================
</TABLE>
See Notes to Financial Statements.
D - 4.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 268,
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a
Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
accordance with accounting principles generally accepted in the United
States of America.
(A) Securities are stated at value as determined by the Evaluator
based on bid side evaluations for the securities.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 11,316 units at Date of Deposit ..................... $11,785,008
Less sales charge .......................................... 467,690
-----------
Net amount applicable to Holders ........................... 11,317,318
Redemptions of units - net cost of 3,807 units redeemed
less redemption amounts (principal)....................... 148,476
Realized gain on securities sold or redeemed ............... 296,503
Principal distributions .................................... (1,865,481)
Net unrealized appreciation of investments.................. 74,825
-----------
Net capital applicable to Holders .......................... $ 9,971,641
===========
</TABLE>
4. INCOME TAXES
As of May 31, 2000, net unrealized appreciation of investments, based
on cost for Federal income tax purposes, aggregated $74,825, of which
$ 24,992 related to depreciated securities and $ 99,817 related to
appreciated securities. The cost of investment securities for Federal
income tax purposes was $9,791,781 at May 31, 2000.
D - 5.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 268,
DEFINED ASSET FUNDS
PORTFOLIO
As of May 31, 2000
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Alaska Stud. Loan Corp., Stud. Loan AAA $ 840,000 5.650 % 2004 None $ 845,359 $ 846,334
Rev. Bonds, Ser. 1996 A
(AMBAC Ins.) (AMT) (4)(5)
660,000 5.750 2005 None 664,600 666,904
2 Arkansas Dev. Fin. Auth., Econ. Dev. A 35,000 5.550 2007 05/01/04 34,576 34,447
Rev. Bonds (ADFA Guaranty Prog. - Ser. @ 101.000
1996 A) (Audio International, Inc.)
(AMT) (5) 60,000 5.600 2008 05/01/04 59,228 58,871
@ 101.000
35,000 5.300 2005 05/01/04 34,511 34,388
@ 101.000
25,000 5.400 2006 05/01/04 24,623 24,541
@ 101.000
50,000 5.400 2006 05/01/04 49,246 49,081
@ 101.000
3 City of Chicago, IL, Collateralized Aaa(m) 65,000 5.600 2004 None 65,000 65,020
Single Family Mtge. Rev. Bonds, Ser.
1996 B
</TABLE>
D - 6.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 268,
DEFINED ASSET FUNDS
PORTFOLIO
As of May 31, 2000
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
4 City of Sauk Rapids, MN, Indl. Rev. A1(m)(a) $ 210,000 5.700 % 2004 None $ 210,634 $ 211,004
Bonds (Bermo Inc. & Berdass Props.
Proj.), Ser. 1996 B (Firstar Bank
Milwaukee, N.A. - Letter of Credit) 210,000 5.800 2005 None 210,695 211,231
(AMT) (5)(7)
210,000 6.100 2008 04/01/05 210,853 212,879
@ 103.000
210,000 5.900 2006 04/01/05 210,752 211,340
@ 103.000
210,000 6.000 2007 04/01/05 210,804 211,877
@ 103.000
5 City of Watsonville, CA, Ins. Hosp. (b) 780,000 5.750 2005 None 782,699 809,125
Rev. Rfdg. Bonds (Watsonville Cmnty.
Hosp.), Ser. 1996 A
</TABLE>
D - 7.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 268,
DEFINED ASSET FUNDS
PORTFOLIO
As of May 31, 2000
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
6 Greater Peoria Arpt. Auth., Peoria, AAA $ 105,000 6.750 % 2006 None $ 113,594 $ 111,563
Tazewell and Woodford Cntys., IL, G.O.
Arpt. Bonds, Ser. 1996 B (Alternate
Rev. Source) (MBIA Ins.) (AMT) 100,000 7.050 2005 None 110,539 106,924
(4)(5)
120,000 6.550 2008 None 126,812 127,028
90,000 7.050 2004 None 99,339 95,491
115,000 6.750 2007 None 124,054 122,857
7 Illinois Hlth. Facs. Auth., Rev. Bonds, A- 690,000 5.750 2008(6) 09/01/03 675,138 711,783
Northern Illinois Med. Ctr. Proj., @ 102.000
McHenry, IL, Ser. 1993
8 Michigan Higher Educ. Facs. Auth., Ltd. (b) 335,000 5.800 2008 04/01/04 335,000 332,437
Oblig. Rev. Bonds (Hope College @ 100.000
Proj.), Ser. 1996 B
</TABLE>
D - 8.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 268,
DEFINED ASSET FUNDS
PORTFOLIO
As of May 31, 2000
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
9 Orange Cnty., NY, Indl. Dev. Agy., A1(m) $ 135,000 6.000 % 2008 05/01/06 $ 135,558 $ 136,516
Civic Fac. Rev. Bonds (The Orange @ 102.000
Mental Retardation Props., Inc. Proj. -
Letter of Credit Secured), Ser. 1996 A 145,000 5.625 2005 None 144,739 144,716
(Fleet Bank Providence, RI Letter of
Credit) (7)
165,000 5.875 2007 05/01/06 165,315 165,967
@ 102.000
130,000 5.800 2006 None 130,475 130,508
10 Pennsylvania Hsg. Fin. Agy., Single AA+ 155,000 5.550 2004 None 155,496 154,963
Family Mtge. Rev. Bonds, Ser. 1996-51
(AMT) (5)
11 Port of Seattle, WA, Ltd. Tax G.O. AA+ 130,000 5.500 2008 05/01/04 127,768 129,581
Bonds (AMT) (5) @ 102.000
12 State of Hawaii, Arpts. Sys. Rev. AAA 920,000 5.700 2007 07/01/04 920,000 928,409
Bonds, Third Rfdg. Series of 1994 @ 102.000
(AMBAC Ins.) (AMT) (5)
</TABLE>
D - 9.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 268,
DEFINED ASSET FUNDS
PORTFOLIO
As of May 31, 2000
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
13 The Health and Educl. Facs. Bd. of the A(m) $ 665,000 6.150 % 2006 01/01/06 $ 669,921 $ 666,629
Metro. Govt. of Nashville and @ 102.000
Davidson Cnty., TN (Dandridge Towers -
Sec. 8 Asstd. Proj.), Mtge. Rev.
Rfdg. Bonds, Ser. 1996 A 750,000 6.250 2008 01/01/06 756,098 750,848
@ 102.000
155,000 5.950 2004 None 155,977 155,057
150,000 5.950 2004 None 150,899 150,048
14 Washington State Hsg. Fin. Comm., Aaa(m) 85,000 5.800 2007 06/01/06 85,000 84,990
Single Family Prog. Bonds, Ser. 1996 @ 102.000
(AMT) (5)
125,000 5.900 2008 06/01/06 125,000 125,379
@ 102.000
125,000 5.600 2005 None 125,000 125,054
</TABLE>
D - 10.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 268,
DEFINED ASSET FUNDS
PORTFOLIO
As of May 31, 2000
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
15 West Wendover Rec. Dist., Elko Cnty., AA $ 135,000 5.550 % 2005 None $ 135,000 $ 137,623
NV, G.O. Rec. Facs. and Rfdg. Bonds,
Ser. 1996 (Asset Guaranty Ins.) (4)
150,000 5.550 2005 None 150,000 150,987
160,000 5.900 2008(6) 12/01/06 160,696 167,382
@ 101.000
65,000 5.750 2007 12/01/06 65,000 65,948
@ 101.000
180,000 5.900 2008 12/01/06 180,783 183,832
@ 101.000
55,000 5.750 2007(6) 12/01/06 55,000 57,044
@ 101.000
----------- ----------- -----------
$ 9,735,000 $ 9,791,781 $ 9,866,606
=========== =========== ===========
</TABLE>
See Notes to Portfolio.
D - 11.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 268,
DEFINED ASSET FUNDS
NOTES TO PORTFOLIO
As of May 31, 2000
(1) The ratings of the bonds themselves are by Standard & Poor's Ratings
Group, or by Moody's Investors Service, Inc. if followed by "(m)"; or
by Fitch Investors Services Inc. if followed by "(f)"; "(a)" indicates
that it is a rating of the outstanding debt obligations of the
institution providing a letter of credit or guarantee; "(b)" indicates
that while there is no such available rating, in the opinion of
Defined Asset Funds research analyst, the bond has credit
characteristics comparable to bonds rated "A" or better; "(c)"
indicates that while there is no such available rating, in the opinion
of Defined Asset Funds Research analysts, the bond does not have
credit characterisitics comparable to bonds rated "A" or better. Bond
ratings have been furnished by the Evaluator but not confirmed with
the rating agencies.
(2) See Notes to Financial Statements.
(3) Optional redemption provisions, which may be exercised in whole or in
part, are initially at prices of par plus a premium, then subsequently
at prices declining to par. Certain securities may provide for
redemption at par prior or in addition to any optional or mandatory
redemption dates or maturity, for example, through the operation of a
maintenance and replacement fund, if proceeds are not able to be used
as contemplated, the project is condemned or sold or the project is
destroyed and insurance proceeds are used to redeem the securities.
Many of the securities are also subject to mandatory sinking fund
redemption commencing on dates which may be prior to the date on which
securities may be optionally redeemed. Sinking fund redemptions are at
par and redeem only part of the issue. Some of the securities have
mandatory sinking funds which contain optional provisions permitting
the issuer to increase the principal amount of securities called on a
mandatory redemption date. The sinking fund redemptions with optional
provisions may, and optional refunding redemptions generally will,
occur at times when the redeemed securities have an offering side
evaluation which represents a premium over par. To the extent that the
securities were acquired at a price higher than the redemption price,
this will represent a loss of capital when compared with the Public
Offering Price of the Units when acquired. Distributions will
generally be reduced by the amount of the income which would otherwise
have been paid with respect to redeemed securities and there will be
distributed to Holders any principal amount and premium received on
such redemption after satisfying any redemption requests for Units
received by the Fund. The estimated current return may be affected by
redemptions.
(4) Insured by the indicated municipal bond insurance company.
(5) Securities that are tax preference items for purposes of the
Alternative Minimum Tax are indicated by "(AMT)".
(6) Bonds with an aggregate face amount of $ 905,000 have been
pre-refunded and are expected to be called for redemption on the
optional redemption provision dates shown.
(7) Certain bonds are covered by letters of credit which may expire prior
to the maturity dates of the bonds. Upon expiration of a letter of
credit, the issuer of the bond is obligated to obtain a replacement
letter of credit or call the bond.
D - 12.
<PAGE>
Defined
Asset Funds-Registered Trademark-
<TABLE>
<S> <C>
HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most recent free INTERMEDIATE TERM SERIES--268
Information Supplement (A Unit Investment Trust)
that gives more details about ---------------------------------------
the Fund, by calling: This Prospectus does not contain
The Chase Manhattan Bank complete information about the
1-800-323-1508 investment company filed with the
Securities and Exchange Commission in
Washington, D.C. under the:
- Securities Act of 1933 (file no.
333-02511) and
- Investment Company Act of 1940 (file
no. 811-1777).
TO OBTAIN COPIES AT PRESCRIBED RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
---------------------------------------
When units of this Fund are no longer
available, this Prospectus may be used
as a preliminary prospectus for a
future series, but some of the
information in this Prospectus will be
changed for that series.
UNITS OF ANY FUTURE SERIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED
UNTIL THAT SERIES HAS BECOME EFFECTIVE
WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO UNITS CAN BE SOLD IN ANY
STATE WHERE A SALE WOULD BE ILLEGAL.
15328--9/00
</TABLE>
