<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
For Registration Under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on Form N-8B-2
A. Exact name of Trust:
THE PAINEWEBBER EQUITY TRUST,
HIGH 10 DIVIDEND YIELD, SERIES 1999A
B. Name of Depositor:
PAINEWEBBER INCORPORATED
C. Complete address of Depositor's principal
executive office:
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas,
New York, New York 10019
D. Name and complete address of agents for service:
PAINEWEBBER INCORPORATED
Attention: Mr. Robert E. Holley
1200 Harbor Boulevard
Weehawken, N.J. 07087
copy to:
CARTER LEDYARD & MILBURN
Attention: Kathleen H. Moriarty, Esq.
2 Wall Street,
New York, NY 10005
E. Title and amount of securities being registered:
An indefinite number of Units pursuant to Rule 24f-2
under the Investment Company Act of 1940.
F. Proposed maximum aggregate offering price to
the public of the securities being registered:
Indefinite
G. Amount of filing fee, computed at one-thirty-fourth
of 1 percent of the proposed maximum aggregate
offering price to the public:
None Required
Pursuant to Rule 24f-2
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF
THE REGISTRATION STATEMENT
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.
<PAGE>
THE PAINEWEBBER EQUITY TRUST,
HIGH 10 DIVIDEND YIELD, SERIES 1999A
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items required by Instruction 1
as to Prospectus on Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. Organization and General Information
1. (a) Name of Trust ) Front Cover
(b) Title of securities issued )
2. Name and address of Depositor ) Back Cover
3. Name and address of Trustee ) Back Cover
4. Name and address of principal ) Back Cover
Underwriter )
5. Organization of Trust ) Nature of Trust
6. Execution and termination of ) Nature of Trust
Trust Agreement ) Termination of the Trust
7. Changes of name ) *
8. Fiscal Year ) *
9. Litigation ) *
II. General Description of the Trust
and Securities of the Trust
10. General Information regarding ) Summary of Portfolio
Trust's Securities and Rights ) Rights of Certificate-
of Holders ) holders
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*Not applicable, answer negative or not required.
<PAGE>
(a) Type of Securities ) Creation of Trust
(Registered or Bearer) )
(b) Type of Securities ) Creation of Trust
(Cumulative or Distributive) )
(c) Rights of Holders as to ) Rights of Certificate-
Withdrawal or Redemption ) holders
) Redemption of Units by
) Trustee
) The Municipal Bond Trust
) Reinvestment Program
(d) Rights of Holders as to ) Secondary Market for
conversion, transfer, etc. ) Units, Exchange Option
(e) Rights of Trust issues ) *
periodic payment plan )
certificates )
(f) Voting rights as to Secu- ) Rights of Certificate-
rities, under the Indenture ) holders
(g) Notice to Holders as to )
change in )
(1) Assets of Trust ) Amendment of the Indenture
(2) Terms and Conditions ) Supervision of Trust
of Trust's Securities ) Investments
(3) Provisions of Trust ) Amendment of the Indenture
(4) Identity of Depositor ) Administration of the
and Trustee ) Trust
(h) Consent of Security Holders )
required to change )
(1) Composition of assets ) Amendment of the Indenture
of Trust
(2) Terms and conditions ) Amendment of the Indenture
of Trust's Securities )
(3) Provisions of Indenture ) Amendment of the Indenture
(4) Identity of Depositor ) Administration of the
and Trustee ) Trust
11. Type of securities comprising ) *
periodic payment certificates )
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*Not applicable, answer negative or not required.
<PAGE>
12. (a) Load, fees, expenses, etc. ) Public Offering Price of
) Units Expenses of the
) Trust
(b) Certain information regard- ) *
ing periodic payment )
certificates )
(c) Certain percentages ) *
(d) Certain other fees, etc. ) Expenses of the Trust
payable by holders )
(e) Certain profits receivable ) Public Offering Price of
by depositor, principal ) Units
underwriters, trustee or ) Public Offering of Units
affiliated persons )
(f) Ratio of annual charges ) *
to income )
13. Issuance of trust's securities ) Nature of the Trust
) Public Offering of Units
14. Receipt and handling of ) *
payments from purchasers )
15. Acquisition and disposition of ) Acquisition of Securities
underlying securities ) for the Trust Supervision
) of Trust Investments
16. Withdrawal or redemption ) Redemption of Units by
) Trustee
17. (a) Receipt and disposition of ) Distributions to Certifi-
income ) cateholders
(b) Reinvestment of )
distributions ) *
(c) Reserves or special fund ) Distributions to Certifi-
) cateholders
(d) Schedule of distribution ) *
18. Records, accounts and report ) Statements to Certificate-
) holders Administration of
) the Trust
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*Not applicable, answer negative or not required.
<PAGE>
19. Certain miscellaneous ) Administration of the
provisions of trust agreement ) Trust
20. Loans to security holders ) *
21. Limitations on liability ) Limitation of Liabilities
22. Bonding arrangements ) Included in Form N-8B-2
23. Other material provisions of ) *
trust agreement )
III. Organization Personnel and
Affiliated Persons of Depositor
24. Organization of Depositor ) Sponsor
25. Fees received by Depositor ) Public Offering Price of
) Units Expenses of the
) Trust
26. Business of Depositor ) Sponsor
27. Certain information as to ) Sponsor
officials and affiliated )
persons of Depositor )
28. Voting securities of Depositor ) *
29. Persons controlling Depositor ) Sponsor
30. Payments by Depositor for ) *
certain other services trust )
31. Payments by Depositor for ) *
certain other services )
rendered to trust )
32. Remuneration of employees of ) *
Depositor for certain services )
rendered to trust )
33. Remuneration of other persons ) *
for certain services rendered )
to trust )
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*Not applicable, answer negative or not required.
<PAGE>
IV. Distribution and Redemption of Securities
34. Distribution of trust's ) Public Offering of Units
securities by states )
35. Suspension of sales of trust's ) *
securities )
36. Revocation of authority to ) *
distribute )
37. (a) Method of distribution ) Public Offering of Units
(b) Underwriting agreements )
(c) Selling agreements )
38. (a) Organization of principal ) Sponsor
underwriter )
(b) N.A.S.D. membership of ) Sponsor
principal underwriter )
39. Certain fees received by ) Public Offering Price of
principal underwriter ) Units
40. (a) Business of principal ) Sponsor
underwriter )
(b) Branch officers of )
principal underwriter )
(c) Salesman of principal ) *
underwriter )
41. Ownership of trust's securities ) *
by certain persons )
42. Certain brokerage commissions ) *
received by principal )
underwriter )
43. (a) Method of valuation ) Public Offering Price
) Units
(b) Schedule as to offering ) *
price )
(c) Variation in offering ) Public Offering
price to certain persons ) Units
44. Suspension of redemption rights ) *
- ----------
*Not applicable, answer negative or not required.
<PAGE>
45. (a) Redemption valuation ) Redemption of Units by
) Trustee
(b) Schedule as to redemption ) *
price )
V. Information concerning the Trustee or Custodian
46. Maintenance of position in ) Secondary Market for Units
underlying securities ) Redemption of Units by
) Trustee
) Evaluation of the Trust
47. Organization and regulation of ) Administration of the
Trustee ) Trust Trustee
48. Fees and expenses of Trustee ) Expenses of the Trust
49. Trustee's lien ) Expenses of the Trust
VI. Information concerninq Insurance of Holders of Securities
50. (a) Name and address of ) *
Insurance Company )
(b) Type of policies ) *
(c) Type of risks insured and ) *
excluded )
(d) Coverage of policies ) *
(e) Beneficiaries of policies ) *
(f) Terms and manner of ) *
cancellation )
(g) Method of determining ) *
premiums )
(h) Amount of aggregate ) *
premiums paid )
(i) Who receives any part of ) *
premiums )
(j) Other material provisions ) *
of the Trust relating to )
insurance )
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*Not applicable, answer negative or not required.
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VII. Policy of Registrant
51. (a) Method of selecting and ) Acquisition of Securities
eliminating securities ) for the Trust
from the Trust )
(b) Elimination of securities ) *
from the Trust )
(c) Policy of Trust regarding ) Supervision of Trust
substitution and elimina- ) Investment
tion of securities )
(d) Description of any funda- ) Acquisition of Securities
mental policy of the Trust ) for the Trust
) Supervision of Trust
) Investments
52. (a) Taxable status of the Trust ) Tax status of the Trust
(b) Qualification of the Trust ) Tax status of the Trust
as a mutual investment )
company )
VIII. Financial and Statistical Information
53. Information regarding the ) *
Trust's past ten fiscal years )
54. Certain information regarding ) *
periodic payment plan certifi- )
cates )
55. Certain information regarding ) *
periodic payment plan certifi- )
cates )
56. Certain information regarding ) *
periodic payment plan certifi- )
cates )
57. Certain information regarding ) *
periodic payment plan certifi- )
cates )
58. Financial statements ) Statement of Financial
(Instruction 1(c) to Form S-6) ) Condition
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*Not applicable, answer negative or not required.
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d)
of the Securities Exchange Act of 1934, the undersigned
registrant hereby undertakes to file with the Securities and
Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by
any rule or regulation of the Commission heretofore or
hereafter duly adopted pursuant to authority conferred in that
section.
<PAGE>
[sidebar]
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 JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO THE REGISTRATION STATEMENT OR QUALIFICATION UNDER
THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
[end sidebar]
PRELIMINARY, SUBJECT TO COMPLETION, DATED OCTOBER 29, 1999
PAINEWEBBER EQUITY TRUST
High 10 Dividend Yield Series 1999A
(A Unit Investment Trust)
- -----------------------------------------------------------------------------
o Portfolio of 10 Highest Dividend Yielding Dow Stocks as of
o Designed for Total Return From:
o Current Dividend Income
o Capital Appreciation
- -----------------------------------------------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -----------------------------------------------------------------------------
SPONSOR:
PAINEWEBBER INCORPORATED
THIS PROSPECTUS CONSISTS OF TWO PARTS: PART A AND PART B.
PROSPECTUS PART A DATED , 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
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<S> <C>
HIGH 10 DIVIDEND YIELD SERIES 1999A PROSPECTUS PART A PAGE
--------
Brief Description of the Trust and its Portfolio ............ A-3
Summary of Risks ............................................ A-3
Fees and Expenses............................................ A-6
Brief Description of the Portfolio........................... A-7
Availability of Rollover Option.............................. A-7
Is This Investment Appropriate for You? ..................... A-8
Essential Information ....................................... A-9
Report of Independent Auditors .............................. A-11
Statement of Net Assets ..................................... A-12
Schedule of Investments ..................................... A-13
HIGH 10 DIVIDEND YIELD SERIES 1999A PROSPECTUS PART B
Summary of Certain Trust Features............................ B-1
The Trust ................................................... B-2
Risk Factors and Special Considerations ..................... B-4
Federal Income Taxes ........................................ B-6
Public Offering of Units .................................... B-8
Public Offering Price ...................................... B-8
Sales Charge and Volume Discount ........................... B-8
Employee Discount .......................................... B-9
Distribution of Units ...................................... B-9
Secondary Market for Units ................................. B-10
Sponsor's Profits .......................................... B-10
Redemption .................................................. B-11
Valuation ................................................... B-12
Comparison of Public Offering Price and Redemption Value ... B-13
Expenses of the Trust ....................................... B-13
Rights of Unitholders ....................................... B-14
Distributions ............................................... B-14
Reinvestment Plan............................................ B-15
Rollover Option.............................................. B-15
Administration of the Trust ................................. B-17
Accounts ................................................... B-17
Reports and Records ........................................ B-18
Portfolio Supervision ...................................... B-18
Amendment of the Indenture .................................. B-19
Termination of the Trust .................................... B-19
Sponsor ..................................................... B-19
Trustee ..................................................... B-20
Independent Auditors ........................................ B-20
Legal Opinions .............................................. B-20
</TABLE>
A-2
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PAINEWEBBER EQUITY TRUST, HIGH 10 DIVIDEND YIELD SERIES 1999A -
PROSPECTUS PART A
BRIEF DESCRIPTION OF THE TRUST AND ITS PORTFOLIO
1. OBJECTIVES.
o The High 10 Dividend Yield Series 1999A ("the Trust") seeks total
return through a combination of current dividend income of capital
appreciation by investing in a fixed portfolio of 10 stocks (the
"Portfolio") chosen from the 30 stocks in the Dow Jones Industrial
Average* ("DJIA").
o The 10 stocks included in the Portfolio were chosen by the Sponsor
on because at that time they had the highest dividend yield of
all the stocks in the DJIA.
2. THE HIGH 10 DIVIDEND YIELD SERIES INVESTMENT STRATEGY.
o The Trust plans to hold a fixed portfolio of approximately equal
amounts of the 10 highest dividend-yielding stocks in the DJIA,
chosen days before the date of this prospectus.
o The Trust plans to hold the stocks in the Portfolio for approximately
one year. At the end of such period, the Trust will be terminated, the
stocks will be liquidated and the proceeds will be used to buy stocks
for the portfolio of a new High 10 Dividend Yield Trust, if one is then
available. The stocks in the portfolio of the new High 10 Dividend
Yield Trust will be the 10 highest dividend-yielding stocks of the DJIA
on the date they are chosen for the new High 10 Dividend Yield Trust.
o The Investment Strategy is based upon three investment principles: time
in the market is more important than timing of investment, the stocks
to buy are the ones that are losing favor and dividend can be an
important element of total return.
3. FOLLOWING THE HIGH 10 DIVIDEND YIELD SERIES STRATEGY OVER A PERIOD OF
TIME.
o Investors can sell their units at any time, or receive their share of
the liquidation proceeds once this High 10 Trust is terminated. The
Sponsor believes, however, that to obtain the benefits of the
Investment Strategy investors should reinvest or "rollover" their
liquidation proceeds into the next available Series of the High 10
Trust for a period of at least 3 to 5 years.
o The Trust is a unit investment trust which means that, unlike a mutual
fund, the Trust's Portfolio is not managed and stocks are not sold
because of market changes.
SUMMARY OF RISKS
YOU CAN LOSE MONEY BY INVESTING IN THE TRUST. This can happen for various
reasons. A further discussion of the risks summarized below can be found in
Part B of this Prospectus.
1. SPECIAL RISKS OF INVESTING IN THE TRUST
The 10 common stocks held by the Portfolio generally have higher dividend
yields or lower prices relative to the other stocks in the DJIA for a variety
of reasons. For example,
- ------------
* The name "Dow Jones Industrial Average" is the property of Dow Jones &
Company, Inc. which is not affiliated with the Sponsor, has not
participated in the creation of the Trust or the Investment Strategy,
and has not reviewed or approved any information in this Prospectus.
A-3
<PAGE>
o the issuers of the stocks may be having financial difficulties;
o the stocks may be reacting negatively to general market cycles;
o the stocks may not be viewed favorably by the market because of poor
earnings forecasts, negative publicity, weak performance or adverse
litigation or legislation;
o other market factors have caused relatively lower prices and higher
dividend yields on the stocks.
The 10 Portfolio stocks may experience changes in their dividend rates or
share prices which may reduce their total return potential during the life of
the Trust.
o Portfolio performance can be expected to vary from the performance of the
DJIA or the historical performance of the Investment Strategy.
2. RISKS OF INVESTING IN THE TRUST
Certain risks are involved with an investment in a unit trust which holds
common stocks. For example:
THE TRUST IS NOT "MANAGED"
o The Trust, unlike a mutual fund, is not "managed" and stocks will not
be sold by the Trust from the Portfolio to take advantage of market
fluctuations.
o The Trust's Portfolio is the fixed stocks chosen from the 10 highest
yielding dividend stocks on the first day of the Trust. Since the Trust
is fixed, and not managed like a mutual fund, the Trust will not buy
and sell the list stocks held in the Portfolio to match the most
current highest dividend yielding DJIA stocks. Additionally, because
the stocks on the DJIA may change, the stocks in the Portfolio may no
longer be included in the DJIA.
o The Trust may, in the future, continue to buy more of the stocks held
by the Trust, in the same proportion, when additional Units are offered
to the public or for the Reinvestment Plan, even though those stocks
may no longer be the highest dividend yielding DJIA stocks or may no
longer be on the DJIA at the time such purchases are made.
o The Portfolio does not reflect any investment recommendations and one
or more of the stocks in the Portfolio, may, from time to time, be
subject to the Sponsor's sale recommendation.
PORTFOLIO STOCKS MAY BE SOLD PRIOR TO TERMINATION
o The Trustee may be required to sell stocks to pay expenses, to meet
redemptions, to sell, exchange or tender stocks under certain
circumstances. Stocks will be sold in a way to maintain, as closely as
possible, the portionate relationship among the stocks. Stocks may be
sold in the event certain serious negative events occur.
o The sale of stocks from the Portfolio in the period prior to
termination and upon termination may result in a lower amount than
might otherwise be realized if such sale were not required at such time
due to impending or actual termination of the Trust. For this reason,
among others, the amount you receive upon termination may be less than
the amount you paid.
o If many investors sell their Units, the Trust will have to sell stocks.
This could increase your share of Trust expenses.
A-4
<PAGE>
THE PRICE AND VALUE OF UNITS WILL FLUCTUATE DURING THE TRUST'S TERM.
o The price of your Units depends upon the full range of economic and
market influences including the prices of equity securities, the
condition of the stock markets and other economic influences that
affect the global or United States economy.
o Assuming no changes occur in the prices of the stocks held by the
Trust, the price you receive for your Units will generally be less than
the price you paid because your purchase price included a sales charge.
o The stocks in the Trust's portfolio are generally highly liquid, but
the value of the Trust's portfolio, and of your investment, may be
reduced if trading in one or more stocks is limited or absent.
o Additional stocks may be purchased by the Trust when additional Units
are offered to the public or for the Reinvestment Plan. Costs, such as
brokerage fees, incurred in purchasing such additional stocks will be
borne by the Trust. Your Units will be worth less as a result of the
Trust's payment of these brokerage fees and other expenses.
3. GENERAL RISKS OF INVESTING IN STOCKS
INVESTING ALWAYS INVOLVES RISKS. The risks described below are the most
significant risks associated with investing in the stocks held by the Trust.
o The stocks held by the Trust can be expected to fluctuate in value
depending on a wide variety of factors, such as economic and market
influences affecting corporate profitability, financial condition of
issuers, changes in worldwide or national economic conditions, the
prices of equity securities in general and the Trust's stocks in
particular.
o There is no guarantee that the Investment Strategy will be successful,
and other trusts with similar investment objectives may hold stocks
that outperform the Trust's stocks during the Trust's lifetime.
o Holders of common stocks such as those held by the Trust have rights
that are generally inferior to the holders of debt obligations or
preferred stocks.
o Common stocks are not obligations of the issuer of the stocks.
Therefore, they do not provide any guaranteed income or provide the
degree of protection of debt securities.
4. YEAR 2000 PROBLEM RISKS
o Many computer systems were designed in such a way that they may be
unable to distinguish between the year 2000 and the year 1900 and
therefore may not properly process and calculate date-related
information and data (commonly known as the "Year 2000 Problem").
o As with all investment and financial companies, the Year 2000 Problem
may have an adverse impact upon the Trust. The Sponsor and the Trustee
are taking reasonable steps to address the Year 2000 Problem with
respect to the computer systems they use and to obtain reasonable
assurances that similar steps are being taken by the Trust's other
service providers. At this time, however, there can be no assurance
that these steps will be sufficient to avoid any adverse impact on the
Trust.
o The Year 2000 Problem is expected to have an impact on all
corporations, including those whose stocks are contained in the Trust's
portfolio. The Sponsor cannot predict what impact, if any, the Year
2000 Problem will have on the stocks in the Trust.
A-5
<PAGE>
5. LITIGATION RISKS
Philip Morris Companies common stock represents approximately % of the
value of the Portfolio. Pending or threatened legal proceedings against
Philip Morris cover a wide range of matters including product liability and
consumer protection. Damages claimed in many of the smoking and health cases
alleging personal injury (both individual and class actions), and in health
cost recovery cases brought by governments, unions and similar entities
seeking reimbursement for healthcare expenditures, aggregate many billions of
dollars.
On November 23, 1998, Philip Morris entered into a Master Settlement
Agreement with 46 state governments to settle the asserted and unasserted
healthcare cost recovery and certain other claims against them. The Agreement
is subject to final judicial approval in each of the settling states. Philip
Morris charged approximately $3.1 billion as a pretax expense in 1998 as a
result of the settlement, and as of December 31, 1998, had accrued costs of
its obligations under the settlement and to tobacco growers aggregating $1.4
billion, payable principally before the end of the year 2000. Philip Morris
believes the agreement will likely materially adversely affect the business,
volume, cash flows and/or operating income and financial position of the
company in future years. The degree of the adverse impact will depend, among
other things, on the rates of decline in United States cigarette sales in the
premium and discount segments, the company's share of the domestic premium
and discount cigarette segments, and the effect of any resulting cost
advantage of manufacturers not subject to the agreement.
The Sponsor cannot predict the outcome of the litigation pending against
Philip Morris or how the current uncertainty concerning the settlement will
ultimately be resolved. The Sponsor cannot predict whether these and other
possible developments will have a material effect on the price of Philip
Morris stock over the term of the Portfolio, which could in turn adversely
affect Unit prices.
FEES AND EXPENSES
This table shows the fees and expenses a Unitholder may pay, either
directly or indirectly, when investing in Units of the Trust.
SALES CHARGES(1)
Maximum 1% Initial Sales Charge(2)
Total Deferred Sales Charges of $20.00 per 100 units(3)
ESTIMATED ANNUAL OPERATING EXPENSES OF THE TRUST
<TABLE>
<CAPTION>
AMOUNT
AS A % OF AMOUNT PER
NET ASSETS $1,000 INVESTED
(AS OF THE (AS OF THE
FIRST DAY OF FIRST DAY OF
THE TRUST) THE TRUST)
---------------- -------------------
<S> <C> <C>
Trustee's Fee % $
Portfolio, Bookkeeping and Administrative Expenses % $
Other Operating Expenses % $
---------------- -------------------
Total % $
================ ===================
ESTIMATED INITIAL ORGANIZATION COSTS OF THE TRUST(4) % $
---------------- -------------------
</TABLE>
- ------------
(1) Unitholders pay a combination of Initial and Deferred Sales Charges.
A-6
<PAGE>
(2) The Initial Sales Charge of 1% of the Public Offering Price is reduced
for purchasers of Units worth $50,000 or more. Also, certain classes of
investors are entitled to reduced sales charges. For futher details,
see "Public Offering of Units -- Sales Charge and Volume Discount" and
"--Employee Discount" in Part B of this Prospectus.
(3) The Deferred Sales Charge of $2.00 per 100 Units will be deducted from
the Trust's net asset value from the 3rd through 12th months of the 13
month life of the Trust, aggregating $20.00 per 100 Units during such
period. If Units are redeemed prior to [ ], the amount of any
remaining Deferred Sales Charge installments will be deducted from the
redemption proceeds. See "Public Offering Price -- Sales Charge and
Volume Discount" and "Administration of the Trust" in Part B of this
Prospectus for further details.
(4) Applicable only to purchasers of Units during the initial offering
period (approximately 6 weeks).
EXAMPLE
This example may help you compare the cost of investing in the Trust to
the cost of investing in other funds.
The example below assumes that you invest $10,000 in the Trust for the
periods indicated and then either redeem or do not redeem your Units at the
end of those periods. The example also assumes a 5% return on your investment
each year and that the Trust's annual operating expenses stay the same.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------- ----------- ----------- ------------
$ $ $ $
While the Trust has a term of approximately 13 months, you may be able to
invest in future High 10 Dividend Yield Trusts with reduced sales charges.
These future sales charges are included in the amounts provided above.
See "Expenses of the Trust" in Part B of this Prospectus for additional
information regarding expenses.
BRIEF DESCRIPTION OF THE TRUST'S PORTFOLIO.
o The common stocks in the Trust's Portfolio have been issued by companies
who receive income and derive revenues from multiple industry sources, but
whose primary industry is listed in the "Schedule of Investments" in this
Prospectus Part A.
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<CAPTION>
APPROXIMATE PERCENT OF AGGREGATE
PRIMARY INDUSTRY SOURCE MARKET VALUE OF THE TRUST
- --------------------------- ------------------------------------
<S> <C>
</TABLE>
AVAILABILITY OF ROLLOVER OPTION
o When this Trust portfolio is about to terminate, you may elect the
Rollover Option and acquire units of another High 10 Dividend Yield Series
if one is available.
A-7
<PAGE>
o Unitholders electing the Rollover Option may rollover their Units of this
Trust for units of a future High 10 Dividend Yield Series, at no Initial
Sales Charge. Units acquired through the Rollover Option will, of course,
be subject to the Deferred Sales Charges aggregating $20.00 per 100
Units.
o If you notify the Sponsor by , your Units will be redeemed and your
proceeds from the sale of the Trust's securities will be reinvested in
units of a new High 10 Dividend Yield Series [ ].
o If you decide not to elect the Rollover Option, you will receive a cash
distribution after the Trust terminates.
o For a discussion of the tax effects of electing the Rollover Option see
"Rollover Option" in this Prospectus Part B. Unitholders are encouraged to
consult with their own tax advisors as to the consequences to them of
electing the Rollover Option.
IS THIS INVESTMENT APPROPRIATE FOR YOU?
Yes, if you are seeking total return over the life of the Trust by
investing in common stocks issued by companies with current dividend income
and capital appreciation potential. You will benefit from a portfolio whose
risk is reduced by investing in stocks of several different issuers.
No, if you want a managed investment that changes to take advantage of
market movements, if you are uncomfortable with the Investment Strategy, you
are unable or unwilling to assume the risks involved generally with equity
investments or if you need high current income or seek preservation of
capital.
HISTORICAL PERFORMANCE OF THE INVESTMENT STRATEGY
The Investment Strategy is based on investing equal amounts in the 10
highest dividend-yielding stocks in the DJIA in each year. The Sponsor
recommends following this strategy for at least three to five years.
The results set forth below are hypothetic and do not reflect any sales
charges, expenses or brokerage commissions which investors would bear. The
performance will also differ from the hypothetical below because the Trust is
established at various times during a year, the Trust may not always be fully
invested or equally weighted in all 10 stocks and stocks are normally
purchased or sold at prices different from the closing price which is used to
value units. Past performance is no guarantee of future results of the Trust
or the Investment Strategy.
COMPARISON OF DIVIDENDS,
APPRECIATION OF TOTAL RETURN
<TABLE>
<CAPTION>
INVESTMENT DOW JONES
STRATEGY INDUSTRIAL
STOCKS AVERAGE
--------------------------------------------------------------------------------------------------------------
TOTAL TOTAL
YEAR APPRECIATION ACTUAL DIVIDEND YIELD RETURN APPRECIATION ACTUAL DIVIDEND YIELD RETURN
- -------- ---------------- ------------------------- ---------- ---------------- ------------------------- ----------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
A-8
<PAGE>
ESSENTIAL INFORMATION REGARDING THE TRUST
AS OF (1)
SPONSOR: PaineWebber Incorporated
TRUSTEE: Investors Bank & Trust Company
INITIAL DATE OF DEPOSIT: , 1999
<TABLE>
<CAPTION>
<S> <C>
TOTAL VALUE OF SECURITIES HELD BY THE TRUST: ...................... $
TOTAL NUMBER OF UNITS(2): ......................................... 100,000
FRACTIONAL UNDIVIDED INTEREST IN THE TRUST REPRESENTED BY EACH 1/100,000th
UNIT: ..............................................................
CALCULATION OF PUBLIC OFFERING PRICE PER UNIT(2), (3)
Public Offering Price per Unit .................................... $10.00
Less Reimbursement to Sponsor for Initial Organizational Costs(6) . $
Less Initial Sales Charge(4)* of 1% of Offering Price
(1.00% of net amount invested per 100 Units) ..................... $0.10
Net Asset Value per Unit .......................................... $
Net Asset Value for 100,000 Units ................................. $
Divided by 100,000 Units(2) ....................................... $
REDEMPTION VALUE**: .................................................... $
EVALUATION TIME:........................................................ 4:00 P.M. New York time.
INCOME ACCOUNT DISTRIBUTION DATES(5): .................................. and quarterly
thereafter and on or after the
Mandatory Termination Date.
CAPITAL ACCOUNT DISTRIBUTION DATES(5):.................................. and on or after the
Mandatory Termination Date. No
distributions of less than $.05
per Unit need be made from the
Capital Account on any
Distribution Date.
RECORD DATES:........................................................... and quarterly
thereafter.
MANDATORY TERMINATION DATE:.............................................
DISCRETIONARY LIQUIDATION AMOUNT:....................................... 40% of the value of stocks upon
completion of the deposit of
the stocks.
ESTIMATED INITIAL ORGANIZATIONAL COSTS OF THE TRUST(6): ................ $ per Unit.
Continued on page A-10
</TABLE>
A-9
<PAGE>
ESSENTIAL INFORMATION REGARDING THE TRUST (CONTINUED)
ESTIMATED ANNUAL OPERATING EXPENSES OF THE $ per Unit.
TRUST(7)....................................
Trustees Fee .............................. $ per Unit.
Portfolio Supervision, Bookkeeping and $ per Unit.
Administrative Expenses ..................
Other Operating Expenses .................. $ per Unit.
ROLLOVER NOTIFICATION DATE................
ROLLOVER DATE.............................
- ------------
(1) The date prior to the Initial Date of Deposit.
(2) As of the close of business on the Initial Date of Deposit, the number
of Units may be adjusted so that the Public Offering Price per Unit will
equal approximately $10.00, based on the 4:00 p.m. Eastern time
valuation of the stocks in the Portfolio on such date. Subsequently, to
the extent of any such adjustment in the number of Units, the fractional
undivided interest per Unit will increase or decrease accordingly, from
the amounts indicated above.
(3) The Public Offering Price will be based upon the value of the stocks
next computed following any purchase orders received plus the applicable
sales charges and will vary on any date after from the Public
Offering Price per Unit shown above. Following the Initial Date of
Deposit, costs incurred in purchasing additional stocks will be at the
expense of the Trust. Any investor purchasing Units after the Initial
Date of Deposit will also pay a proportionate share of any accumulated
dividends in the Income Account. (See "Summary of Certain Trust
Features--Additional Deposits," "Risk Factors and Special
Considerations" and "Valuation" in Part B of this Prospectus).
(4) The Initial Sales Charge is 1% per 100 Units. In addition, ten (10)
monthly Deferred Sales Charges of $2.00 per 100 Units (totalling $20.00
per 100 Units) will be deducted from the Trust's net asset value during
the third (3rd) through twelfth (12th) months of the Trust's thirteen
(13) month life. The Initial Sales Charge is reduced on purchases of
Units worth $50,000 or more. See "Public Offering of Units--Sales Charge
and Volume Discount" in Part B of this Prospectus.
(5) See "Distributions" in Part B of this Prospectus.
(6) Investors purchasing Units during the initial offering period will
reimburse the Sponsor for all or a portion of the costs incurred by the
Sponsor in connection with organizing the Trust and offering the Units
for sale described more fully in "Public Offering Price" in Part B of
this Prospectus (collectively, the "Initial Organizational Costs").
These costs have been estimated at $ per Unit based upon the
expected number of Units to be created during the initial offering
period. Certain stocks purchased with the proceeds of the Public
Offering Price will be sold by the Trustee at the completion of the
initial public offering period to reimburse the Sponsor for Initial
Organizational Costs actually incurred. If the actual Initial
Organizational Costs are less than the estimated amount, only the actual
Initial Organizational Costs will be deducted from the assets of the
Trust. If, however, the amount of the actual Initial Organizational
Costs are greater than the estimated amount, only the estimated amount
of the Initial Organizational Costs will be deducted from the assets of
the Trust.
(7) See "Expenses of the Trust" in Part B of this Prospectus. Estimated
dividends from the stocks purchased, based upon last dividends actually
paid, are expected by the Sponsor to be sufficient to pay estimated
annual expenses of the Trust. If such dividends and income paid are
insufficient to pay expenses, the Trustee is authorized to sell
securities in an amount sufficient to pay such expenses. (See
"Administration of the Trust" and "Expenses of the Trust" in Part B of
this Prospectus.)
* The sales charge will not be assessed on securities sold to reimburse
the Sponsor for the Initial Organizational Costs.
** This figure reflects deduction of the Initial Sales Charge of 1.00% and
the Deferred Sales Charges of $0.20 per Unit. As of the close of the
initial offering period, the Redemption Value will be reduced to reflect
the payment of Initial Organizational Costs (see "Summary of Risk
Factors" and "Comparison of Public Offering Price and Redemption Value"
in Part B of this Prospectus).
A-10
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE UNITHOLDERS, SPONSOR AND TRUSTEE
THE PAINEWEBBER EQUITY TRUST, HIGH 10 DIVIDEND YIELD
SERIES 1999A
We have audited the accompanying Statement of Net Assets of The
PaineWebber Equity Trust, High 10 Dividend Yield Series 1999A,
including the Schedule of Investments, as of , . This
financial statement is the responsibility of the Trustee. Our
responsibility is to express an opinion on this financial statement
based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statement is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statement. Our procedures included
confirmation with Investors Bank & Trust Company, Trustee, of an
irrevocable letter of credit deposited for the purchase of
securities, as shown in the financial statement as of , . An
audit also includes assessing the accounting principles used and
significant estimates made by the Trustee, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents
fairly, in all material respects, the financial position of The
PaineWebber Equity Trust, High 10 Dividend Yield Series 1999A at
, , in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
New York, New York
,
A-11
<PAGE>
THE PAINEWEBBER EQUITY TRUST,
HIGH 10 DIVIDEND YIELD SERIES 1999A
STATEMENT OF NET ASSETS
AS OF INITIAL DATE OF DEPOSIT, ,
NET ASSETS
-----------------------
Sponsor's Contracts to Purchase underlying Securities backed
by irrevocable letter of credit (a)........................... $ 990,006
Reimbursement to Sponsor for Initial Organizational Costs (b) . (600)
------------
Total...................................................... $ 989,406
============
Units outstanding (c).......................................... 100,000
ANALYSIS OF NET ASSETS
----------------------
Cost to investors (d)......................................... $1,000,000
Less: Gross underwriting commissions (e)...................... (9,994)
Reimbursement to Sponsor for Initial Organizational
Costs.................................................... (600)
------------
Net Assets................................................. $ 989,406
============
- ------------
(a) The aggregate cost to the Trust of the securities listed under
"Schedule of Investments" in this Prospectus Part A is determined by the
Trustee on the basis set forth under "Public Offering of Units--Public
Offering Price" in Part B of this Prospectus. See also the column headed
"Cost of Securities to Trust" under "Schedule of Investments" in this
Prospectus Part A. Pursuant to contracts to purchase securities, an
irrevocable letter of credit drawn on The Bank of America, in the amount of
$1,500,000 has been deposited with the Trustee, Investors Bank & Trust
Company for the purchase of $990,006 aggregate value of Securities in the
initial deposit and for the purchase of Securities in subsequent deposits.
(b) Investors purchasing Units during the initial offering period will
reimburse the Sponsor for all or a portion of the costs incurred by the
Sponsor in connection with organizing the Trust and offering the Units for
sale as described more fully in "Public Offering Price" in Part B of this
Prospectus (collectively, the "Initial Organizational Costs"). These costs
have been estimated at $0.006 per Unit based upon the expected number of
Units to be created during the initial offering period. Certain stocks
purchased with the proceeds of the Public Offering Price will be sold by the
Trustee at the completion of the initial public offering period to reimburse
the Sponsor for Initial Organizational Costs actually incurred. If the actual
Initial Organizational Costs are less than the estimated amount, only the
actual Initial Organizational Costs will be deducted from the assets of the
Trust. If, however, the amount of the actual Initial Organizational Costs are
greater than the estimated amount, only the estimated amount of the Initial
Organizational Costs will be deducted from the assets of the Trust.
(c) Because the value of stocks at the Valuation Time on the Initial Date
of Deposit may differ from the amounts shown in this Statement of Net Assets,
the number of Units offered on the Initial Date of Deposit will be adjusted
from the initial number of Units shown to maintain the $10 per Unit offering
price only for that day. The Public Offering Price on any subsequent day will
vary.
(d) The aggregate public offering price is computed on the basis set forth
under "Public Offering of Units--Public Offering Price" in Part B of this
Prospectus.
(e) Assumes the maximum Initial Sales Charge of 1.00% of the Public
Offering Price. Additionally, Deferred Sales Charges of $2.00 per 100 Units,
payable in ten equal monthly installments on the tenth (10th) day of each
month from the third (3rd) through twelfth (12th) months of the Trust for an
aggregate amount of $20.00 per 100 Units, will be deducted. Amounts will be
credited to an account maintained by the Trustee from which the Deferred
Sales Charge obligation of the Unitholders to the Sponsor will be met upon
termination of the Trust. If Units are sold, redeemed or exchanged prior to
[ , ], the remaining portion of the Deferred Sales Charge applicable
to such redeemed Units will be deducted from the proceeds and will be
credited to the account on such sale, exchange or redemption date. The sales
charges are computed on the basis set forth under "Public Offering of
Units--Sales Charge and Volume Discount" in Part B of this Prospectus. Based
on the projected total assets of $500,000,000, the estimated maximum Deferred
Sales Charge would be $10,000,000.
A-12
<PAGE>
THE PAINEWEBBER EQUITY TRUST
HIGH 10 DIVIDEND YIELD SERIES 1999A
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, ,
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRICE PER
NAME OF PERCENTAGE OF CURRENT DIVIDEND SHARE TO COST OF SECURITIES
ISSUER PORTFOLIO(2) YIELD(3) TRUST(4)(5) TO TRUST
- ------------------ ----------------- -------------------- ------------- ----------------------
<S> <C> <C> <C> <C>
$
A-13
<PAGE>
THE PAINEWEBBER EQUITY TRUST
HIGH 10 DIVIDEND YIELD SERIES 1999A
SCHEDULE OF INVESTMENTS (CONTINUED)
AS OF INITIAL DATE OF DEPOSIT, ,
COMMON STOCKS (1)
PRICE PER
NAME OF PERCENTAGE OF CURRENT DIVIDEND SHARE TO COST OF SECURITIES
ISSUER PORTFOLIO(2) YIELD(3) TRUST(4)(5) TO TRUST
- ------------------ ----------------- -------------------- ------------- ----------------------
$
----------------------
$
======================
</TABLE>
- ------------
(1) All Stocks are represented entirely by contracts to purchase such
Stocks.
(2) Based on Cost of Securities to Trust.
(3) Current Dividend Yield for each security was calculated by
annualizing the last monthly, quarterly or semi-annual ordinary
dividend declared on such security and dividing the result by its
market value as of the close of trading on .
(4) Valuation of the Securities by the Trustee was made as described in
"Valuation" in Part B of this Prospectus as of the close of business
on the business day prior to the Initial Date of Deposit.
(5) The [gain] [loss] to the Sponsor on the Initial Date of Deposit is
$ .
A-14
<PAGE>
PAINEWEBBER EQUITY TRUST
HIGH 10 DIVIDEND YIELD SERIES 1999A
- -----------------------------------------------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES NOR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -----------------------------------------------------------------------------
SPONSOR:
PAINEWEBBER INCORPORATED
Prospectus Part B may not be distributed unless accompanied by
Prospectus Part A.
This Prospectus Part B contains a description of the important features of
the PaineWebber Equity Trust, High 10 Dividend Yield Series 1999A and also
includes a more detailed discussion of the investment risks that a Unitholder
might face while holding Trust Units.
THIS PROSPECTUS CONSISTS OF TWO PARTS: PART A AND PART B.
PROSPECTUS PART B DATED .
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
PAINEWEBBER EQUITY TRUST
HIGH 10 DIVIDEND YIELD SERIES 1999A
PROSPECTUS PART B
- -----------------------------------------------------------------------------
SUMMARY OF CERTAIN TRUST FEATURES
Additional Deposits. After the first deposit on the Initial Date of
Deposit the Sponsor may, from time to time, cause the deposit of additional
Securities, in approximately the same proportional relationship, ("Additional
Securities") in the Trust's Portfolio where additional Units are to be
offered to the public. (See "The Trust" in this Prospectus Part B). The
Trust, when acquiring such Additional Securities, may purchase Stocks
notwithstanding that, at the time of such purchase, such Stocks are no longer
included in the 10 highest dividend-yielding stocks on the DJIA or included
among the 30 current DJIA stocks. Costs incurred in acquiring such Additional
Securities will be borne by the Trust. Unitholders will experience a dilution
of their investment as a result of such brokerage fees and other expenses
paid by the Trust during additional deposits of Securities purchased by the
Trustee with cash or cash equivalents pursuant to instructions to purchase
such Securities. (See "The Trust" and "Risk Factors and Special
Considerations" in this Prospectus Part B.)
Public Offering Price. Units will be charged a combination of an Initial
Sales Charge on the date of purchase of 1.00% of the Public Offering Price,
plus Deferred Sales Charges which will aggregate $20.00 per 100 Units over
the third (3rd) through twelfth (12th) months of the thirteen (13) month life
of the Trust. For example, on a $1,000 investment, $990.00 is invested in the
Trust and a $10.00 Initial Sales Charge is collected. In addition, a Deferred
Sales Charge of $2.00 per 100 Units will be deducted from the Trust's net
asset value on the tenth (10th) day of each month from months three (3)
through twelve (12) of the Trust's life for a total of $20.00. This deferred
method of payment keeps more of the investor's money invested over a longer
period of time than would be the case if a single sales charge of the same
amount were collected on the initial date of purchase. The Initial Sales
Charge is reduced on a graduated scale for volume purchasers and is reduced
for certain other purchasers. 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 any date subsequent to the Initial
Date of Deposit, will vary from the Public Offering Price set forth on page
A-[ ] of this Prospectus. Units redeemed or repurchased prior to the accrual
of the final Deferred Sales Charge installment will have any amount of any
remaining installments deducted from the redemption or repurchase proceeds or
deducted in calculating an in-kind redemption. (See "Public Offering of
Units" in this Prospectus Part B). In addition, during the initial public
offering period, the Public Offering Price per 100 Units will include an
amount sufficient to reimburse the Sponsor for the payment of all or a
portion of the Initial Organizational Costs described more fully in "Public
Offering Price" in this Prospectus Part B.
Distributions. The Trustee will make distributions of income and capital
appreciation, if any, on the Distribution Dates. (See "Distributions",
"Exchange Option" and "Administration of the Trust" in this Prospectus Part
B.) Unitholders may elect to have their Income and Capital Account
distributions automatically reinvested into additional Units of the Trust at
no Initial Sales Charge (see "Reinvestment Plan") in this Prospectus Part B.
(Such Units, like all Units, will be subject to Deferred Sales Charges.) Upon
termination of the Trust, the Trustee will distribute to each Unitholder of
record on such date his pro rata share of the Trust's assets, less expenses.
The sale of Securities in the Trust in the period prior to termination and
upon termination may result in a lower amount than might otherwise be
realized if such sale were not required at such time due to impending or
actual termination of the Trust. For this reason, among others, the amount
realized by a Unitholder upon termination may be less than the amount paid by
such Unitholder.
B-1
<PAGE>
Termination. Unitholders may receive their termination proceeds in cash
(or, at the Sponsor's election, in kind for distributions in excess of
$500,000) after the Trust terminates (see "Termination of the Trust" in this
Prospectus Part B). Unless advised to the contrary by the Sponsor, the
Trustee will begin to sell the Securities held in the Trust approximately
twenty days prior to the Mandatory Termination Date. Moneys held upon such
sale or maturity of Securities will be held in non-interest bearing accounts
created by the Indenture until distributed and will be of benefit to the
Trustee. The Trust will terminate approximately thirteen (13) months after
the Initial Date of Deposit regardless of market conditions at the time. (See
"Termination of the Trust" and "Federal Income Taxes" in this Prospectus Part
B.)
Rollover Option. So long as the Sponsor continues to offer new series of
the High 10 Trust, Unitholders may exercise their rollover option on
(the "Special Redemption Date"), and acquire units of the new
series of the High 10 Trust at a reduced sales charge described under
"Rollover Option" in this Prospectus Part B. The Sponsor reserves the right
not to offer new series of the High 10 Portfolio and there is no guarantee
that a new series will be available on or after the Special Redemption Date.
(See "Rollover Option" in this Prospectus Part B.)
Market for Units. The Sponsor, though not obligated to do so, presently
intends to maintain a secondary market for Units. The public offering price
in the secondary market will be based upon the value of the Securities next
determined after receipt of a purchase order, plus the applicable sales
charge. (See "Public Offering of Units--Public Offering Price" and
"Valuation" in this Prospectus Part B.) If a secondary market is not
maintained, a Unitholder may dispose of his Units only through redemption.
With respect to redemption requests in excess of $500,000, the Sponsor may
determine in its sole discretion to direct the Trustee to redeem units "in
kind" by distributing Securities to the redeeming Unitholder. (See
"Redemption" in this Prospectus Part B.)
THE TRUST
The Trust is one of a series of similar but separate unit investment
trusts created under New York law by the Sponsor pursuant to a Trust
Indenture and Agreement * (the "Indenture") dated as of the Initial Date of
Deposit, between PaineWebber Incorporated, as Sponsor and Investors Bank &
Trust Company, as Trustee (the "Trustee"). The objective of the Trust is
total return through an investment the 10 highest dividend-yielding stocks in
the DJIA at the time the Portfolio was constructed. Of course, there can be
no assurance that the objective of the Trust will be achieved.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee
confirmations of contracts for the purchase of Stocks together with an
irrevocable letter or letters of credit of a commercial bank or banks in an
amount at least equal to the purchase price. The value of the Securities was
determined on the basis described under "Valuation" in this Prospectus Part
B. In exchange for the deposit of the contracts to purchase Securities, the
Trustee delivered to the Sponsor a receipt for Units representing the entire
ownership of the Trust.
With the deposit on the Initial Date of Deposit, the Sponsor established a
proportionate relationship between the Securities in the Trust (determined by
reference to the number of shares of each issue of Stock). The Sponsor may,
from time to time, cause the deposit of Additional Securities in the Trust
when additional Units are to be offered to the public or pursuant to the
Reinvestment Plan. During the 90-day period following the Initial Date of
Deposit, deposits of Additional Securities or cash in connection with
- ------------
*Reference is hereby made to said Trust Indenture and Agreement and any
statements contained herein are qualified in their entirety by the provisions
of said Trust Indenture and Agreement.
B-2
<PAGE>
the issuance and sale of additional Units will maintain, to the extent
practicable, the original proportionate relationship among the number of
shares of each Security. The original proportionate relationship is subject
to adjustment to reflect the occurrence of a stock split or a similar event
which affects the capital structure of the issuer of a Security but which
does not affect the Trust's percentage ownership of the common stock equity
of such issuer at the time of such event, to reflect a merger or
reorganization, to reflect the acquisition of Securities or to reflect a sale
or other disposition of a Security. 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, brokerage commissions or unavailability of
Securities (see "Administration of the Trust--Portfolio Supervision" in this
Prospectus Part B). Units may be continuously offered to the public by means
of this Prospectus (see "Public Offering of Units--Public Offering Price" in
this Prospectus Part B) 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 the proportionate
relationship among the number of shares of each of the Securities comprising
the Portfolio immediately prior to such deposit of Additional Securities.
Stock dividends issued in lieu of cash dividends, if any, received by the
Trust will be sold by the Trustee and the proceeds therefrom shall be added
to the Income Account. (See "Administration of the Trust" and "Reinvestment
Plan" in this Prospectus Part B).
On the Initial Date of Deposit each Unit represented the fractional
undivided interest in the Securities and net income of the Trust set forth
under "Essential Information Regarding the Trust" in Part A of this
Prospectus. However, if additional Units are issued by the Trust (through the
deposit of Additional Securities for purposes of the sale of additional Units
or pursuant to the Reinvestment Plan), the aggregate value of Securities in
the Trust will be increased and the fractional undivided interest represented
by each Unit in the balance will be decreased. If any Units are redeemed, the
aggregate value of Securities in the Trust will be reduced, and the
fractional undivided interest represented by each remaining Unit in the
balance will be increased. Units will remain outstanding until redeemed upon
tender to the Trustee by any Unitholder (which may include the Sponsor) or
until the termination of the Trust. (See "Termination of the Trust" in this
Prospectus Part B.)
INVESTORS SHOULD BE AWARE THAT THE TRUST, UNLIKE A MUTUAL FUND, IS NOT A
"MANAGED" FUND AND AS A RESULT THE ADVERSE FINANCIAL CONDITION OF A COMPANY
WILL NOT RESULT IN ITS ELIMINATION FROM THE PORTFOLIO EXCEPT UNDER CERTAIN
LIMITED CIRCUMSTANCES (SEE "ADMINISTRATION OF THE TRUST--PORTFOLIO
SUPERVISION" IN THIS PROSPECTUS PART B). IN ADDITION, SECURITIES WILL NOT BE
SOLD BY THE TRUST TO TAKE ADVANTAGE OF MARKET FLUCTUATIONS OR CHANGES IN
ANTICIPATED DIVIDEND YIELDS OR RATES OF APPRECIATION.
Investors should note that PaineWebber, in its general securities
business, acts as agent or principal in connection with the purchases and
sales of equity securities, including the Securities in the Trust, and may
act as a market maker in certain of the Securities. PaineWebber also from
time to time issues reports and may make recommendations relating to equity
securities, including the Securities in the Trust, and has provided, and may
continue to provide, investment banking services to the issuers of the
Securities.
Investors should note in particular that the Securities were selected by
the Sponsor as of the Initial Date of Deposit. The Trust may continue to
purchase Additional Securities when additional Units are offered to the
public or pursuant to the Reinvestment Plan, or may continue to hold
Securities originally selected through this process. This may be the case
even though the Securities may no longer be included in the current DJIA or
remain one of the 10 highest dividend-yielding stocks in the DJIA. In
addition, the Sponsor may continue to sell Trust Units even if PaineWebber
changes a recommendation relating to one or more Securities in the Trust.
B-3
<PAGE>
RISK FACTORS AND SPECIAL CONSIDERATIONS
An investment in Units of the Trust should be made with an understanding
of the risks inherent in an investment in common stocks in general. The
general risks are associated with the rights to receive payments from the
issuer which are generally inferior to creditors of, or holders of debt
obligations or preferred stocks issued by, the issuer. Holders of common
stocks 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
against 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. Dividends on cumulative preferred stock must be paid
before any dividends are paid on common stock. Preferred stocks are also
entitled to rights on liquidation which are senior to those of common stocks.
For these reasons, preferred stocks generally entail less risk than common
stocks.
The Trust is not appropriate for investors who require high current income
or seek conservation of capital.
Common stocks do not represent an obligation of the issuer. Therefore,
they do not offer any assurance of income or provide the degree of protection
of debt securities. The issuance of debt securities or even preferred stock
by an issuer will create prior claims for payment of principal, interest 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. Unlike debt securities which typically have a stated principal
amount payable at maturity, common stocks do not have a fixed principal
amount or a maturity. Additionally, the value of the Stocks in the Trust may
be expected to fluctuate over the life of the Trust.
Any distributions of income to Unitholders will generally depend upon the
declaration of dividends by the issuers of Securities and the declaration of
dividends depends upon several factors, including the financial condition of
the issuers and general economic conditions. In addition, there are
investment risks common to all equity issues. The Stocks may appreciate or
depreciate in value depending upon a variety of factors, including the full
range of economic and market influences affecting corporate profitability,
the financial condition of issuers, changes in national or worldwide economic
conditions, and the prices of equity securities in general and the Stocks in
particular. Distributions of income, generally made by declaration of
dividends, is also dependent upon several factors, including those discussed
above in the preceding sentence.
Investors should note that the Trust's objective may not be realized
because the Securities held in the Trust's Portfolio may not perform as well
as expected, and other investment vehicles with similar investment objectives
may hold stocks that outperform the Trust's stocks during the Trust's
lifetime. Additionally, there is no guarantee that the Investment Strategy
will be successful.
The Sponsor's buying and selling of the Securities, especially during the
initial offering of Units of the Trust or to satisfy redemptions of Units or
to reimburse the Sponsor for the Initial Organizational Costs, or to pay the
accrued Deferred Sales Charge to the Sponsor may impact upon the value of the
underlying Securities and the Units. During the initial public offering
period the Sponsor may also purchase large blocks of the Securities in
connection with the offering of other investment funds holding substantially
the same portfolio of Securities as the Trust. The Sponsor's acquisition of
certain of the Securities in open market purchases may have the unintended
result of increasing the market price for such Securities during the period
that the Sponsor is acquiring Securities for the Trust.
B-4
<PAGE>
Investors should note that the creation of additional Units subsequent to
the Initial Date of Deposit may have an effect upon the value of previously
existing Units. To create additional Units the Sponsor may deposit cash (or
cash equivalents, e.g., a bank letter of credit in lieu of cash) with
instructions to purchase Additional Securities in amounts and in percentage
relationships described above under "The Trust." To the extent the price of a
Security increases or decreases between the time cash is deposited with
instructions to purchase the Additional Security and the time the cash is
used to purchase the Additional Security, Units will represent less or more
of that Security and more or less of the other Securities in the Trust.
Unitholders will be at risk because of price fluctuations during this period
since if the price of shares of a Security increases, Unitholders will have
an interest in fewer shares of that Security, and if the price of a Security
decreases, Unitholders will have an interest in more shares of that Security,
than if the Security had been purchased on the date cash was deposited with
instructions to purchase the Security. In order to minimize these effects,
the Trust will attempt to purchase Additional Securities as closely as
possible to the Evaluation Time or at prices as closely as possible to the
prices used to evaluate the Trust at the Evaluation Time. Thus price
fluctuations during this period will affect the value of every Unitholder's
Units and the income per Unit received by the Trust. In addition, costs
incurred in connection with the acquisition of Additional Securities will be
at the expense of the Trust and will affect the value of every Unitholder's
Units.
Investors should note that the Trust has adopted an internal policy which
prohibits the ownership of any issue of Securities by all series of the High
10 Dividend Yield Trust combined beyond 9.9% of the then-current outstanding
common stock of such issuer. The Sponsor is authorized to immediately
discontinue the offering of any additional Units of any High 10 Dividend
Yield Series, including those to be created for Reinvestment Plan purposes,
until such time as all High 10 Dividend Yield Trust series, in the aggregate,
hold less than 9.9% of the then-current outstanding common stock of such
issuer.
In the event a contract to purchase a Stock to be deposited on the Initial
Date of Deposit or any other date fails, cash held or available under a
letter or letters of credit, attributable to such failed contract may be
reinvested in another stock or stocks having characteristics sufficiently
similar to the Stocks originally deposited (in which case the original
proportionate relationship shall be adjusted) or, if not so reinvested,
distributed to Unitholders of record on the last day of the month in which
the failure occurred. The distribution will be made twenty days following
such record date and, in the event of such a distribution, the Sponsor will
refund to each Unitholder the portion of the sales charge attributable to
such failed contract.
To the extent that a significant number of Unitholders exercise their
rollover option on the Rollover Date, the Trust will experience a
correspondingly significant redemption at such time thereby reducing the size
of the Trust. Such redemptions may increase the expense ratios for
Unitholders who hold their Units until the Mandatory Termination Date. See
"Rollover Option" in this Prospectus Part B.
Because the Trust is organized as a unit investment trust, rather than as
a management investment company, the Trustee and the Sponsor do not have
authority to manage the Trust's assets fully in an attempt to take advantage
of various market conditions to improve the Trust's net asset value, but may
dispose of Securities only under certain limited circumstances. (See the
discussion below relating to disposition of Stocks which may be the subject
of a tender offer, merger or reorganization and also the discussion under the
caption "Administration of the Trust--Portfolio Supervision" in this
Prospectus Part B.)
A number of the Securities in the Trust may also be owned by other clients
of the Sponsor. However, because these clients may have investment objectives
which differ from that of the Trust, the Sponsor may
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<PAGE>
sell certain Securities from such clients' accounts in instances where a sale
of such Securities by the Trust would be impermissible, such as to maximize
return by taking advantage of attractive market fluctuations in such
Securities. As a result, the amount realized upon the sale of the Securities
from the Trust may not be the highest price attained for an individual
Security during the life of the Trust.
The Sponsor may have acted as underwriter, manager, or co-manager of a
public offering of the Securities deposited into the Trust on the Initial
Date of Deposit, or as an adviser to one or more of the issuers of the
Securities, during the last three (3) years. The Sponsor or affiliates of the
Sponsor may serve as specialists in the Securities on one or more stock
exchanges and may have a long or short position in any of these Securities or
in options on any of them, and may be on the opposite sides of public orders
executed on the floor of an exchange where the Securities are listed. The
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 on
them. The Sponsor, its affiliates, directors, elected officers and employee
benefits programs may have either a long or short position in any of the
Securities or in options on them.
Except as may be disclosed in Part A, the Sponsor does not know of any
pending litigation as of the Initial Date of Deposit that might reasonably be
expected to have a material adverse effect on the Portfolio, although pending
litigation may have a material adverse effect on the value of Securities in
the Portfolio. In addition, at any time after the Initial Date of Deposit,
litigation may be initiated on a variety of grounds, or legislation may be
enacted, affecting the Securities in the Portfolio or the issuers of such
Securities. Changing approaches to regulation may have a negative impact on
certain companies represented in the Portfolio. There can be no assurance
that future litigation, legislation, regulation or deregulation will not have
a material adverse effect on the Portfolio or will not impair the ability of
issuers of the Securities to achieve their business goals.
Certain of the Stocks may be attractive acquisition candidates pursuant to
mergers, acquisitions and tender offers. In general, tender offers involve a
bid by an issuer or other acquiror to acquire a stock based on the terms of
its offer. Payment generally takes the form of cash, securities (typically
bonds or notes), or cash and securities. The Indenture contains provisions
requiring the Trustee to follow certain procedures regarding mergers,
acquisitions, tender offers and other corporate actions. Under certain
circumstances, the Trustee, at the direction of the Sponsor, may hold or sell
any stock or securities received in connection with such corporate actions
(see "Administration of the Trust--Portfolio Supervision" in this Prospectus
Part B).
The Trust is not appropriate for investors who require high current income
or seek conservation of capital.
FEDERAL INCOME TAXES
In the opinion of Carter, Ledyard & Milburn, counsel for the Sponsor,
under existing law:
1. The Trust is not an association taxable as a corporation for federal
income tax purposes. Under the Internal Revenue Code of 1986, as amended
(the "Code"), each Unitholder will be treated as the owner of a pro rata
portion of the Trust, and income of the Trust will be treated as income of
the Unitholder. Each Unitholder will be considered to have received all of
the dividends paid on such Unitholder's pro rata portion of each Security
when such dividends are received by the Trust, whether or not such
dividends are used to pay a portion of Trust expenses or whether they are
automatically reinvested in additional Trust Units (see "Reinvestment
Plan" in this Prospectus Part B).
2. Each Unitholder will have a taxable event when the Trust disposes of a
Security (whether by sale, exchange, or other disposition) or when the
Unitholder sells its Units or redeems its Units for
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<PAGE>
cash. The total tax cost of each Unit to a Unitholder is allocated among
each of the Securities in accordance with the proportion of the Trust
comprised by each Security to determine the per Unit tax cost for each
Security.
3. The Trust is not an association taxable as a corporation for New York
State income tax purposes. Under New York State law, each Unitholder will
be treated as the owner of a pro rata portion of the Trust and the income
of the Trust will be treated as income of the Unitholders.
The following general discussion of the federal income tax treatment of an
investment in Units of the Trust is based on the Code and United States
Treasury Regulations (established under the Code) as in effect on the date of
this Prospectus. The federal income tax treatment applicable to a Unitholder
may depend upon the Unitholder's particular tax circumstances. The
tax-treatment applicable to non-U.S. investors is not addressed in this
Prospectus. Future legislative, judicial or administrative changes could
modify the statements below and could affect the tax consequences to
Unitholders. Accordingly, each Unitholder is advised to consult his or her
own tax advisor concerning the effect of an investment in Units.
General. Each Unitholder must report on its federal income tax return a
pro rata share of the entire income of the Trust, derived from dividends on
Stocks gains or losses upon dispositions of Securities by the Trust and a pro
rata share of the expenses of the Trust.
Distributions with respect to Stock, to the extent they do not exceed
current or accumulated earnings and profits of the distributing corporation,
will be treated as dividends to the Unitholders and will be subject to income
tax at ordinary rates. Corporate Unitholders may be entitled to the
dividends-received deduction discussed below.
To the extent distributions with respect to a Stock were to exceed the
issuing corporation's current and accumulated earnings and profits, they
would not constitute dividends. Rather, they would be treated as a tax free
return of capital and would reduce a Unitholder's tax cost for such Stock.
This reduction in basis would increase any gain, or reduce any loss, realized
by the Unitholder on any subsequent sale or other disposition of such stock
or of Units. After the tax cost has been reduced to zero, any additional
distributions in excess of current and accumulated earnings and profits would
be taxable as gain from the sale of Stock.
A Unitholder who is an individual, estate or trust may be disallowed
certain itemized deductions described in Code Section 67, including
compensation paid to the Trustee and administrative expenses of the Trust, to
the extent these itemized deductions, in the aggregate, do not exceed two
percent of the Unitholder's adjusted gross income. Thus, a Unitholder's
taxable income from an investment in Units may further exceed amounts
distributed to the extent amounts are used by the Trust to pay expenses.
Capital gains realized by noncorporate taxpayers are generally taxable at
a maximum rate of 20% if the taxpayer has a holding period of more than 12
months.
Unitholders will be taxed in the manner discussed above regardless of
whether distributions from the Trust are actually received by the Unitholder
in cash or are reinvested pursuant to the "Reinvestment Plan" described later
in this Prospectus Part B. Unitholders exercising the Rollover Option may
also experience certain adverse tax consequences as described in the
"Rollover Option" described later in this Prospectus Part B.
Corporate Dividends-Received Deduction. Corporate holders of Units may be
eligible for the dividends-received deduction with respect to distributions
treated as dividends, subject to the limitations provided in Sections 246 and
246A of the Code. The dividends-received deduction generally equals 70
B-7
<PAGE>
percent of the amount of the dividend. As a result, the maximum effective tax
rate on dividends received generally will be reduced from 35 percent to 10.5
percent. A portion of the dividends-received deduction may, however, be
subject to the alternative minimum tax. Individuals, partnerships, trusts, S
corporations and certain other entities are not eligible for the
dividends-received deduction.
PUBLIC OFFERING OF UNITS
Public Offering Price. The public offering price per Unit is based on the
aggregate market value of the Securities, next determined after the receipt
of a purchase order, divided by the number of Units outstanding plus the
sales charge set forth below. The public offering price per Unit is computed
by dividing the Trust Fund Evaluation, next determined after receipt of a
purchase order, by the number of Units outstanding plus the sales charge.
(See "Valuation" in this Prospectus Part B.) The Public Offering Price on any
date subsequent to the Initial Date of Deposit will vary from the Public
Offering Price calculated on the business day prior to the Initial Date of
Deposit (as set forth on page A-9 hereof) due to fluctuations in the value of
the Stocks among other factors. In addition, during the initial public
offering period, a portion of the Public Offering Price also consists of an
amount sufficient to reimburse the Sponsor for the payment of all or a
portion of the Initial Organizational Costs in the amount shown as a per Unit
amount in "Essential Information Regarding the Trust" in Part A of this
Prospectus. The Initial Organizational Costs include the cost of preparing
the registration statement, trust documents and closing documents for the
Trust, registering with the Securities and Exchange Commission (the "SEC")
and the 50 States, the initial fees of the Trustee's and Sponsor's counsel,
and the initial audit of the Trust's portfolio. The sales charge will not be
assessed on those Securities held in the Trust and sold by the Trustee at the
end of the public offering period to reimburse the Sponsor for the Initial
Organizational Costs. See "Administration of the Trust--Accounts" in this
Prospectus Part B for a description of the method by which the Trustee will
sell such Securities.
Sales Charge and Volume Discount. Units will be charged a Total Sales
Charge of approximately 3.00% per 100 Units which is a combination of the
Initial and Deferred Sales Charges. The Initial Sales Charge will be $10.00
per 100 Units on the Initial Date of Deposit (1.00% of the Public Offering
Price). Commencing in the third (3rd) month and continuing through the
twelfth (12th) month of the Trust's thirteen (13) month life, the Deferred
Sales Charge per 100 Units will be $20.00, approximately 2.00% of the Public
Offering Price. Because the Deferred Sales Charge per 100 Units is $20.00
regardless of the price paid for Units, the Total Sales Charge expressed as a
percentage of the Public Offering Price will vary with the price you pay to
purchase Units. So, for example, if an investor bought 100 Units for $1,000
(including the Initial Sales Charge of $10.00 and held the Units until the
Trust terminates, such investor would pay a Total Sales Charge of $30.00 or
3.00% of the acquisition price for such Units. If, however, an investor
bought 100 Units for $900 (including the Initial Sales Charge of $9.00), such
investor would pay a Total Sales Charge of $29.00 or 3.2% of the acquisition
price for such Units. Conversely, if an investor bought 100 Units for $1,100
(including the Initial Sales Charge of $11.00), such investor would pay a
total of $31.00 or 2.8% of the acquisition price for such Units.
The Deferred Sales Charge is a charge of $20.00 per 100 Units and is
accrued in ten (10) monthly installments during the first twelve (12) months
of the life of the Trust ($20.00 annual total) commencing in the third (3rd)
month of the Trust. UNITS REDEEMED OR REPURCHASED PRIOR TO THE ACCRUAL OF THE
FINAL DEFERRED SALES CHARGES INSTALLMENT WILL HAVE THE AMOUNT OF ANY
INSTALLMENTS REMAINING DEDUCTED FROM THE REDEMPTION OR REPURCHASE PROCEEDS OR
DEDUCTED IN CALCULATING AN IN-KIND REDEMPTION, ALTHOUGH THIS DEDUCTION WILL
BE WAIVED IN THE EVENT OF DEATH OR DISABILITY (AS DEFINED IN THE INTERNAL
REVENUE CODE) OF AN INVESTOR.
B-8
<PAGE>
The Deferred Sales Charge will be accrued on the books of the Trust and
will be paid to the Sponsor, upon the Sponsor's request. The Trustee is
directed to sell Securities to make this payment. It is anticipated that the
Securities will not be sold to pay the Deferred Sales Charges until after the
date of the final installment. Investors will be at risk for market price
fluctuations in the Securities from the several installment accrual dates to
the date of actual sales of Securities to satisfy this liability.
A discount in the Initial Sales Charge is available to volume purchasers
of Units due to economies of scale in sales effort and sales related expenses
relating to volume purchases. The Initial Sales Charge applicable to volume
purchasers of Units is reduced on a graduated scale as set forth below for
sales made on a single day to any person of at least $50,000 or 5,000 Units,
applied on whichever basis is more favorable to the purchaser.
<TABLE>
<CAPTION>
MAXIMUM DOLLAR
INITIAL SALES CHARGE TOTAL SALES CHARGE
AMOUNT OF
------------------------------- ------------------------------- DEFERRED SALES
AGGREGATE DOLLAR AS % OF PUBLIC AS % OF NET AS % OF PUBLIC AS % OF NET CHARGE PER
VALUE OF UNITS* OFFERING PRICE AMOUNT INVESTED OFFERING PRICE AMOUNT INVESTED 100 UNITS
- --------------------- -------------- --------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Up to $49,999 ........ 1.00% 1.01% 3.00% 3.09% $20.00
$50,000 to $99,999 .. 0.75 0.76 2.75 2.83 $20.00
$100,000 to $249,999 0.50 0.50 2.50 2.56 $20.00
$250,000 to $499,999 . 0.25 0.25 2.25 2.30 $20.00
$500,000 or more .... 0.00 0.00 2.00 2.04 $20.00
- ------------
* The Initial Sales Charge applicable to volume purchasers according to
the table above will be applied either on a dollar or Unit basis,
depending upon which basis provides a more favorable purchase price to
the purchaser.
</TABLE>
The volume discount on the Initial Sales Charge shown above will apply to
all purchases of Units on any one day by the same person in the amounts
stated herein, and for this purpose purchases of Units of this Trust will NOT
be aggregated with concurrent purchases of any other trust which may be
offered by the Sponsor. Units held in the name of the purchaser's spouse or
in the name of a purchaser's child under the age of 21 are deemed for the
purposes hereof to be registered in the name of the purchaser. The reduced
Initial Sales Charges are also applicable to a trustee or other fiduciary
purchasing Units for a single trust estate or single fiduciary account.
No Initial Sales Charge will be imposed on Units of the Trust acquired by
Unitholders in connection with participation in the Reinvestment Plan (see
"Reinvestment Plan" in this Prospectus Part B).
Employee Discount. Due to the realization of economies of scale in sales
effort and sales related expenses with respect to the purchase of Units by
employees of the Sponsor and its affiliates, the Sponsor intends to permit
employees of the Sponsor and its affiliates and certain of their relatives to
purchase Units of the Trust at a reduced sales charge.
Distribution of Units. The minimum purchase in the initial public offering
is $250. Only whole Units may be purchased.
The Sponsor is the sole underwriter of the Units. Sales may, however, be
made to dealers who are members of the National Association of Securities
Dealers, Inc. ("NASD") at prices which include a concession of 0.80% of the
Total Sales Charge (3.00%) per Unit, subject to change from time to time.
Volume incentives can be earned as a marketing allowance by "Eligible Dealer
Firms" who reach cumulative firm sales or sales arrangement levels of a
specified dollar amount of the PaineWebber Equity Trust High 10 Dividend
Yield Series 1999A sold in the primary market from through
(the "Incentive Period"), as set forth in the table below. Eligible Dealer
Firms are dealers
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<PAGE>
that are providing marketing support for PaineWebber unit trusts in the form of
distributing or permitting the distribution of marketing materials and other
product information. Eligible Dealer Firms will not include firms that solely
provide clearing services to broker/dealer firms. For firms that meet the
necessary volume level, volume incentives may be given on all trades involving
the High 10 Dividend Yield Series 1999A, originated from client accounts only,
during the Incentive Period.
<TABLE>
<CAPTION>
TOTAL DOLLAR AMOUNT SOLD OVER
INCENTIVE PERIOD VOLUME INCENTIVE
- --------------------------------- --------------------------------------------------------------
<S> <C>
$1,000,000 to $2,999,999.......... Additional 0.02% on sales between $1,000,000 and $2,999,999
$3,000,000 to $4,999,999.......... Additional 0.04% on sales between $3,000,000 and $4,999,999
$5,000,000 or more ............... Additional 0.07% on sales above/over $5,000,000
</TABLE>
Only sales through the Sponsor qualify for volume incentives and for
meeting minimum requirements. The Sponsor reserves the right to modify or
change the volume incentive schedule at any time and make the determination
as to which firms qualify for the marketing allowance and the amount paid.
The difference between the sales charge and the dealer concession will be
retained by the Sponsor. In the event that the dealer concession is 90% or
more of the sales charge per Unit, dealers taking advantage of such
concession may be deemed to be underwriters under the Securities Act of 1933.
The Sponsor reserves the right to reject, in whole or in part, any order
for the purchase of Units. The Sponsor intends to qualify the Units in all
states of the United States, the District of Columbia and the Commonwealth of
Puerto Rico.
Secondary Market for Units. While not obligated to do so, the Sponsor
intends to maintain a secondary market for the Units and continuously offer
to purchase Units at the Trust Fund Evaluation per Unit next computed after
receipt by the Sponsor of an order from a Unitholder. The Sponsor may cease
to maintain such a market at any time, and from time to time, without notice.
In the event that a secondary market for the Units is not maintained by the
Sponsor, a Unitholder desiring to dispose of Units may tender such Units to
the Trustee for redemption at the price calculated in the manner set forth
under "Redemption" in this Prospectus Part B. Redemption requests in excess
of $500,000 may be redeemed "in kind" as described under "Redemption." The
Sponsor does not in any way guarantee the enforceability, marketability,
value or price of any of the Stocks in the Trust, nor that of the Units.
Investors should note that the Trust Fund Evaluation per Unit at the time
of sale or tender for redemption may be less than the price at which the Unit
was purchased.
The Sponsor may redeem any Units it has purchased in the secondary market
if it determines for any reason that it is undesirable to continue to hold
these Units in its inventory. Factors which the Sponsor may consider in
making this determination will include the number of units of all series of
all trusts which it holds in its inventory, the saleability of the Units and
its estimate of the time required to sell the Units and general market
conditions.
A Unitholder who wishes to dispose of his Units should inquire of his bank
or broker as to current market prices in order to determine if
over-the-counter prices exist in excess of the redemption price and the
repurchase price (see "Redemption" in this Prospectus Part B).
Sponsor's Profits. In addition to the applicable sales charge, the Sponsor
realizes a profit (or sustains a loss) in the amount of any difference
between the cost of the Stocks to the Sponsor and the price at which it
deposits the Stocks in the Trust in exchange for Units, which is the value of
the Stocks, determined by the Trustee as described under "Valuation" in this
Prospectus Part B. The cost of Stock to the Sponsor includes the amount paid
by the Sponsor for brokerage commissions.
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<PAGE>
Cash, if any, received from Unitholders prior to the settlement date for
the purchase of Units or prior to the payment for Securities upon their
delivery may be used in the Sponsor's business subject to the limitations of
Rule 15c3-3 under the Securities Exchange Act of 1934 and may be of benefit
to the Sponsor.
In selling any Units in the initial public offering after the Initial Date
of Deposit, the Sponsor may realize profits or sustain losses resulting from
fluctuations in the net asset value of outstanding Units during the period.
In maintaining a secondary market for the Units, the Sponsor may realize
profits or sustain losses in the amount of any differences between the price
at which it buys Units and the price at which it resells or redeems such
Units.
REDEMPTION
Units may be tendered to Investors Bank & Trust Company for redemption at
its office in person, or by mail at Hancock Towers, 200 Clarendon Street,
Boston, MA 02116 upon payment of any transfer or similar tax which must be
paid to effect the redemption. At the present time, there are no such taxes.
No redemption fee will be charged by the Sponsor or Trustee. A written
instrument of redemption must be signed by the Unitholder. Unitholders must
sign exactly as their names appear on the records of the Trustee with
signatures guaranteed by an eligible guarantor institution or in such other
manner as may be acceptable to the Trustee. In certain instances the Trustee
may require additional documents such as, but not limited to, trust
instruments, certificates of death, appointments as executor or
administrator, or certificates of corporate authority. Unitholders should
contact the Trustee to determine whether additional documents are necessary.
Units tendered to the Trustee for redemption will be cancelled, if not
repurchased by the Sponsor.
Units will be redeemed at the Redemption Value per Unit next determined
after receipt of the redemption request in good order by the Trustee. The
Redemption Value per Unit is determined by dividing the Trust Fund Evaluation
by the number of Units outstanding. (See "Valuation" in this Prospectus Part
B.) Unitholders who redeem prior to the accrual of the final Deferred Sales
Charges installment will have the amount of any installments remaining
deducted from their redemption proceeds or deducted in calculating an in-kind
redemption, although this deduction will be waived in the event of death or
disability (as defined in the Internal Revenue Code) of an investor.
A redemption request is deemed received on the business day (see
"Valuation" in this Prospectus Part B for a definition of business day) when
such request is received prior to 4:00 p.m. If it is received after 4:00
p.m., it is deemed received on the next business day. During the period in
which the Sponsor maintains a secondary market for Units, the Sponsor may
repurchase any Unit presented for tender to the Trustee for redemption no
later than the close of business on the second business day following such
presentation and Unitholders will receive the Redemption Value next
determined after receipt by the Trustee of the redemption request. Proceeds
of a redemption will be paid to the Unitholder no later than the seventh
calendar day following the date of tender (or if the seventh calendar day is
not a business day on the first business day prior thereto).
With respect to cash redemptions, amounts representing income received
shall be withdrawn from the Income Account, and, to the extent such balance
is insufficient and for remaining amounts, from the Capital Account. The
Trustee is empowered, to the extent necessary, to sell Securities to meet
redemptions. The Trustee will sell Securities in such manner as is directed
by the Sponsor. In the event no such direction is given, Stocks will be sold
pro rata, to the extent possible, and if not possible, the Trustee may
designate Securities to be sold. (See "Administration of the Trust" in this
Prospectus Part B.) However, with respect to redemption requests in excess of
$500,000, the Sponsor may determine in its sole
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<PAGE>
discretion to direct the Trustee to redeem Units "in kind" by distributing
Stocks to the redeeming Unitholder. When Stocks are so distributed, a
proportionate amount of each Stock will be distributed, rounded to avoid the
distribution of fractional shares and using cash or checks where rounding is
not possible. The Sponsor may direct the Trustee to redeem Units "in kind"
even if it is then maintaining a secondary market in Units of the Trust.
Securities will be valued for this purpose as set forth under "Valuation" in
this Prospectus Part B. A Unitholder receiving a redemption "in kind" may
incur brokerage or other transaction costs in converting the Stocks
distributed into cash. The availability of redemption "in kind" is subject to
compliance with all applicable laws and regulations, including the Securities
Act of 1933, as amended.
To the extent that Securities are redeemed in kind or sold, the size and
diversity of the Trust will be reduced. 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 Unitholder 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 Unitholders on the
Distribution Dates.
To the extent that a significant number of Unitholders exercise the
Rollover Option on the Rollover Date, the Trust will experience a
correspondingly significant redemption at such time, thereby reducing the
size of the Trust. Such redemption may increase the expense ratios for
Unitholders who hold their Units until the Mandatory Termination Date. See
"Rollover Option" in this Prospectus Part B.
The Trustee may, in its discretion, and will, when so directed by the
Sponsor, suspend the right of redemption, or postpone the date of payment of
the Redemption Value, for more than seven calendar days following the day of
tender for any period during which the New York Stock Exchange, Inc. is
closed other than for weekend and holiday closings; or for any period during
which the SEC determined that trading on the New York Stock Exchange, Inc. is
restricted or for any period during which an emergency exists as a result of
which disposal or evaluation of the Securities is not reasonably practicable;
or for such other period as the SEC may by order permit for the protection of
Unitholders. The Trustee is not liable to any person or in any way for any
loss or damages which may result from any such suspension or postponement, or
any failure to suspend or postpone when done in the Trustee's discretion.
VALUATION
The Trustee will calculate the Trust's value (the "Trust Fund Evaluation")
per Unit at the Evaluation Time set forth under "Essential Information
Regarding the Trust" in Part A of this Prospectus (1) on each business day as
long as the Sponsor is maintaining a bid in the secondary market, (2) on the
business day on which any Unit is tendered for redemption, (3) on any other
day desired by the Sponsor or the Trustee and (4) upon termination, by adding
(a) the aggregate value of the Securities and other assets determined by the
Trustee as set forth below, (b) cash on hand in the Trust, including
dividends receivable on Stock trading ex-dividend and income accrued held but
not yet distributed (other than any cash held in any reserve account
established under the Indenture or cash held for the purchase of Contract
Securities) and (c) accounts receivable for Securities sold and any other
assets of the Trust not included in (a) and (b) above, and deducting
therefrom the sum of (v) taxes or other governmental charges against the
Trust not previously deducted, (w) accrued fees and expenses of the Trustee
and the Sponsor (including legal and auditing expenses), other Trust expenses
and any accrued Deferred Sales Charge installment not yet paid to the Sponsor
(x) cash allocated for distributions to Unitholders and amounts owed to the
Sponsor in reimbursement of Initial Organizational Costs and (y) accounts
payable for Units tendered for
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redemption and any other liabilities of the Trust Fund not included in (v),
(w), (x) and (y) above. The per Unit Trust Fund Evaluation is calculated by
dividing the result of such computation by the number of Units outstanding as
of the date thereof. Business days do not include Saturdays, Sundays, New
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
and other days that the New York Stock Exchange is closed.
The value of Stocks shall be determined by the Trustee in good faith in
the following manner: (1) if the domestic Stocks are listed on one or more
national securities exchanges or on the National Market System maintained by
the National Association of Securities Dealers Automated Quotations System,
such evaluation shall be based on the last reported sale price on that day
(unless the Trustee deems such price inappropriate as a basis for evaluation)
on the exchange which is the principal market thereof (deemed to be the New
York Stock Exchange in the case of the domestic Stocks if such Stocks are
listed thereon), (2) if there is no such appropriate sales price on such
exchange or system, at the mean between the closing bid and asked prices on
such exchange or system (unless the Trustee deems such price inappropriate as
a basis for evaluation), (3) if the Stocks are not so listed or, if so listed
and the principal market therefor is other than on such exchange or there are
no such appropriate closing bid and asked prices available, such evaluation
shall be made by the Trustee in good faith based on the closing sale price in
the over-the-counter market (unless the Trustee deems such price
inappropriate as a basis for evaluation) or (4) if there is no such
appropriate closing price, then (a) on the basis of current bid prices, (b)
if bid prices are not available, on the basis of current bid prices for
comparable securities, (c) by the Trustee's appraising the value of the Stock
in good faith on the bid side of the market or (d) by any combination
thereof. The tender of a Stock pursuant to a tender offer will not affect the
method of valuing such Stock.
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION VALUE
The Stocks are valued on the same basis for the initial and secondary
markets and for purposes of redemptions. On the business day prior to the
Initial Date of Deposit, the Public Offering Price per Unit (which figure
includes the Initial Sales Charge) exceeded the Redemption Value. (See
"Essential Information" in Part A of this Prospectus). The prices of Stocks
are expected to vary. For this reason and others, including the fact that the
Public Offering Price includes the sales charge, the amount realized by a
Unitholder upon redemption of Units may be less than the price paid by the
Unitholder for such Units. Also, as of the close of the initial public
offering period, the Redemption Value per Unit will be reduced to reflect the
sale of Securities made to reimburse the Sponsor for the Initial
Organizational Costs.
EXPENSES OF THE TRUST
The Sponsor will receive a fee, which is earned for portfolio supervisory
services, and which is based upon the largest number of Units outstanding
during the calendar year. The Sponsor's fee, which is not to exceed
$ per Unit per calendar year, may exceed the actual costs of providing
portfolio supervisory services for the Trust, but at no time will the total
amount it receives for portfolio supervisory services rendered to all series
of the PaineWebber Equity Trust in any calendar year exceed the aggregate
cost to it of supplying such services in such year.
For its services as Trustee and Evaluator, the Trustee will be paid in
monthly installments, annually $ per Unit, based on the largest number
of Units outstanding during the previous month. In addition, the regular and
recurring expenses of the Trust are estimated to be $ per Unit, which
include, but are not limited to certain mailing, printing, and audit
expenses. These expenses, including expenses in
B-13
<PAGE>
excess of this estimate, will be borne by the Trust. The Trustee could also
benefit to the extent that it may hold funds in non-interest bearing accounts
created by the Indenture.
The Sponsor's fee and Trustee's fee may be increased without approval of
the Unitholders by an amount not exceeding a proportionate increase in the
category entitled "All Services Less Rent" in the Consumer Price Index
published by the United States Department of Labor or, if the Price Index is
no longer published, a similar index as determined by the Trustee and
Sponsor.
In addition to the above, the following charges are or may be incurred by
the Trust and paid from the Income Account, or, to the extent funds are not
available in such Account, from the Capital Account (see "Administration of
the Trust--Accounts" in this Prospectus Part B): (1) fees for the Trustee for
extraordinary services; (2) expenses of the Trustee (including legal and
auditing expenses) and of counsel; (3) various governmental charges; (4)
expenses and costs of any action taken by the Trustee to protect the Trust
and the rights and interests of the Unitholders; (5) indemnification of the
Trustee for any loss, liabilities or expenses incurred by it in the
administration of the Trust without gross negligence, bad faith or wilful
misconduct on its part; (6) brokerage commissions and other expenses incurred
in connection with the purchase and sale of Securities; and (7) expenses
incurred upon termination of the Trust. In addition, to the extent then
permitted by the SEC, the Trust may incur expenses of maintaining
registration or qualification of the Trust or the Units under Federal or
state securities laws so long as the Sponsor is maintaining a secondary
market (including, but not limited to, legal, auditing and printing
expenses).
The accounts of the Trust shall be audited not less than annually by
independent public accountants selected by the Sponsor. The expenses of the
audit shall be an expense of the Trust. So long as the Sponsor maintains a
secondary market, the Sponsor will bear any annual audit expense which
exceeds $0.50 per Unit, unless the Trustee has been advised that such
expenses are permitted by the SEC to be deducted from the Trust. Unitholders
covered by the audit during the year may receive a copy of the audited
financial statements upon request.
The fees and expenses set forth above are payable out of the Trust and
when unpaid will be secured by a lien on the Trust. Based upon the last
dividend paid prior to the Initial Date of Deposit, dividends on the Stocks
are expected to be sufficient to pay the entire amount of estimated expenses
of the Trust. To the extent that dividends paid with respect to the Stocks
are not sufficient to meet the expenses of the Trust, the Trustee is
authorized to sell Securities to meet the expenses of the Trust. Securities
will be selected in the same manner as is set forth under "Redemption" in
this Prospectus Part B.
RIGHTS OF UNITHOLDERS
Ownership of Units is evidenced by recordation on the books of the
Trustee. In order to avoid additional operating costs and for investor
convenience, certificates will not be issued.
DISTRIBUTIONS
The Trustee will distribute net dividends, if any, from the Income Account
on the quarterly Income Account Distribution Dates to Unitholders of record
on the preceding Record Date. Distributions from the Capital Account will be
made on the Capital Account Distribution Date to Unitholders of record on the
preceding Record Date. Distributions of less than $.05 per Unit need not be
made from the Capital Account on any Distribution Date. See "Essential
Information" in Part A of this Prospectus. Whenever required for regulatory
or tax purposes, the Trustee will make special distributions of any dividends
or capital on special Distribution Dates to Unitholders of record on special
Record Dates declared by the Trustee.
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If and to the extent that the Sponsor, on behalf of the Trust, receives a
favorable response to a no-action letter request which it intends to submit
to the Division of Investment Management of the SEC with respect to
reinvesting cash proceeds received by the Trust, the Trustee may reinvest
such cash proceeds in additional Securities held in the Trust Fund at such
time. Such reinvestment shall be made so that each deposit of additional
Securities shall be made so as to match as closely as practicable the
percentage relationships of shares of Stocks and such reinvestment shall be
made in accordance with the parameters set forth in the no-action letter
response. If the Sponsor and the Trustee determine that it shall be necessary
to amend the Indenture to comply with the parameters set forth in the
no-action letter response, such documents may be amended without the consent
of Unitholders. There can be no assurance that the Sponsor will receive a
favorable no-action letter response.
Unitholders may elect to have their Income Account and Capital Account
distributions automatically reinvested into additional Units of the Trust at
no Initial Sales Charge. (See "Reinvestment Plan" in this Prospectus Part B).
Upon termination of the Trust, each Unitholder of record on such date will
receive his pro rata share of the amounts realized upon disposition of the
Securities plus any other assets of the Trust, less expenses of the Trust.
(See "Termination of the Trust" in this Prospectus Part B.)
REINVESTMENT PLAN
Income Account and Capital Account distributions on Units may be
reinvested by participating in the Trust's Reinvestment Plan (the
"Reinvestment Plan"). To participate in the Reinvestment Plan, a Unitholder
must contact his broker, dealer or financial institution to determine whether
he may participate in the Reinvestment Plan. Under the Reinvestment Plan, the
Units acquired for current Unitholders will be either Units already held in
inventory by the Sponsor or new Units created by the Sponsor's 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. Deposits or purchases of Additional Securities will be
made so as to maintain the percentage relationships of shares of Stocks,
except as discussed under "The Trust" in this Prospectus Part B. Purchases
made pursuant to the Reinvestment Plan will be made without any Initial Sales
Charge at the net asset value for Units of the Trust; of course, such Units
will be subject to the Deferred Sales Charges remaining on Units received.
Under the Reinvestment Plan, the Trust will pay the distributions to the
Trustee which in turn will purchase for those participating Unitholders whole
Units of the Trust at the price determined as of the close of business on the
Distribution Date and will add such Units to the Unitholder's account. The
Unitholder's account statement will reflect the reinvestment. The Trustee
will not issue fractional Units, thus any cash remaining after purchasing the
maximum number of whole Units will be distributed to the Unitholder.
Unitholders wishing to terminate their participation in the Reinvestment Plan
must notify their broker, dealer or financial institution of such decision.
The Sponsor reserves the right to amend, modify or terminate the Reinvestment
Plan at any time without prior notice. Unitholders receiving Units as a
result of their participation in the Reinvestment Plan will be taxed with
respect to such Units in the manner described in "Federal Income Taxes"
earlier in this Prospectus Part B.
ROLLOVER OPTION
So long as the Sponsor continues to offer new series of the High 10
Dividend Yield Trust, Unitholders, in lieu of redeeming their Units or
receiving liquidation proceeds upon termination of this Trust series, may
elect, by contacting the Sponsor no later than 12 noon EST on (the
"Rollover Notification Date"), to exchange their Units of this Trust series
for units of the next series of the High 10 Dividend Yield Trust on the
Special Redemption Rollover Date at no Initial Sales Charge.
B-15
<PAGE>
Units acquired by means of the Rollover Option will, of course, be subject to
the Deferred Sales Charges aggregating $20.00 per 100 Units. No election to
rollover may be made prior to 40 days before the Rollover Notification Date
and any exchange election will be revocable at any time prior to 12 noon EST
on the Rollover Notification Date. It is expected that the terms of the new
Trust series will be substantially the same as those of this Trust series.
The Sponsor reserves the right not to offer new series of the High 10
Dividend Yield Trust and there is no guarantee that a new Trust series will
be available on the Rollover Date.
Rollovers will be effected in whole Units only. Any excess proceeds from
Unitholders' Units being surrendered will be returned. Unitholders will be
permitted to advance new money in order to complete an exchange to round up
to the next highest number of Units.
A rollover of a Unitholder's Units will be accomplished by the in-kind
redemption of such Units, followed by the sale of the underlying Securities
by the Trustee acting as the distribution agent (the "Distribution Agent") on
behalf of participating Unitholders, and the reinvestment of the sale
proceeds (net of brokerage fees, governmental charges and other sale
expenses) in units of the next High 10 Dividend Yield Series at their
then-current net asset value.
Certain of the underlying Securities held in the Portfolio of an existing
High 10 Dividend Yield Series may also be included in the portfolio of a
future High 10 Dividend Yield Series made available to Unitholders electing
to rollover their Units on the Rollover Date. In such cases, a direct sale of
these stocks from one High 10 Dividend Yield Series to a new High 10 Dividend
Yield Series is now permitted pursuant to an SEC exemptive order. These
direct sales will be effected at the stocks' closing sales prices on the
exchanges where they are principally traded, free of any brokerage charges.
The remaining securities in the existing High 10 Dividend Yield Series which
will not be held in the portfolio of the new High 10 Dividend Yield Series
will be sold, in the manner discussed below in the next paragraph, and the
proceeds of such sale will be used to buy the other securities required for
deposit into the portfolio of the new High 10 Dividend Yield Series.
The Sponsor intends to direct the sale of the Securities by the
Distribution Agent, as quickly as practicable, subject to the concerns that
the concentrated sale of large volumes of securities may affect market prices
in a manner adverse to the interest of investors. Accordingly, the Sponsor
may, in its sole discretion, undertake to cause a more gradual sale of such
Securities to help mitigate any negative market price consequences caused by
this large volume of securities trades. In order to minimize potential losses
caused by market movement during this period, program trades may be utilized
in connection with the sales of the distributed Securities, which might
increase brokerage commissions payable by investors. There can be no
assurance, however, that any trading procedures will be successful or might
not result in less advantageous prices. Sales of Securities pursuant to
program trades will be made at such Securities' closing prices on the
exchange or system where they are principally traded.
Unitholders electing the Rollover Option may realize taxable capital gains
but will not be entitled to a deduction for certain capital losses realized.
Moreover, because of the rollover procedures described above, Unitholders
should be aware that they will not receive a cash distribution to pay any
taxes owed. Unitholders are encouraged to consult with their own tax advisors
as to the consequences to them of electing the Rollover Option.
The Sponsor reserves the right to modify, suspend or terminate this
Rollover Option at any time with notice to Unitholders. In the event the
Rollover Option is not available to a Unitholder at the time he wishes to
exercise it, the Unitholder will be immediately notified and no action will
be taken with respect to his Units without further instruction from the
Unitholder. If the Sponsor decides not to offer the Rollover Option, the
success of the Investment Strategy may be impaired.
B-16
<PAGE>
To exercise the Rollover Option, a Unitholder should notify the Sponsor by
no later than 12 noon EST on the Rollover Notification Date that such
Unitholder wishes to exercise the Rollover Option and to use the proceeds
from the sale of underlying Securities in respect of his in-kind redemption
of Units of this Trust to purchase Units of the next High 10 Dividend Yield
Series from the Sponsor. If Units of the next High 10 Dividend Yield Trust
are at that time available for sale, and if such Units may lawfully be sold
in the state in which the Unitholder is resident, the Unitholder will be
provided with a current prospectus or prospectuses relating to such next High
10 Dividend Yield Series.
Unitholders who do not exercise the Rollover Option, or otherwise sell or
redeem their Units, will continue to hold their Units until the termination
of the Trust; however, depending upon the extent of participation in the
Rollover Option, the aggregate size of the Trust may be sharply reduced,
resulting in a significant increase in per Unit expenses.
The Division of Investment Management of the SEC is of the view that the
Rollover Option 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 Sponsor has received exemptive
orders under Section 11(c) which the Sponsor believes permit the offering of
this Rollover Option, but no assurance can be given that the SEC will concur
with the Sponsor's position and additional regulatory approvals may be
required. In addition, Section 17(a) of the Investment Company Act prohibits
one trust series from selling securities to another trust series when such
trust series are under the control of a common sponsor. With regard to the
Rollover Option, Section 17(a) would prohibit the direct sale of securities
from one High 10 Dividend Yield Series to another on the books of the Trustee
without an exemptive order. The Sponsor has received an exemptive order from
the SEC which, subject to certain exceptions, permits the direct sale of
securities from one High 10 Dividend Yield Series to another on the books of
the Trustee.
ADMINISTRATION OF THE TRUST
Accounts. All dividends and interest received on Securities, proceeds from
the sale of Securities or other moneys received by the Trustee on behalf of
the Trust may be held in trust in non-interest bearing accounts until
required to be disbursed.
The Trustee will credit on its books to an Income Account dividends and
interest income, if any, on Securities in the Trust. All other receipts
(i.e., return of principal and gains) are credited on its books to a Capital
Account. A record will be kept of qualifying dividends within the Income
Account. The pro rata share of the Income Account and the pro rata share of
the Capital Account represented by each Unit will be computed by the Trustee
as set forth under "Valuation" in this Prospectus Part B.
The Trustee will deduct from the Income Account and, to the extent funds
are not sufficient therein, from the Capital Account, amounts necessary to
pay expenses incurred by the Trust. (See "Expenses of the Trust" in this
Prospectus Part B.) In addition, the Trustee may withdraw from the Income
Account and the Capital Account such amounts as may be necessary to cover
redemption of Units by the Trustee. (See "Redemption" in this Prospectus Part
B.) In addition, distributions of amounts necessary to pay (1) the Initial
Organizational Costs and (2) the Deferred Sales Charges will be made from the
Income Account and, to the extent funds are not sufficient therein, from the
Capital Account, to special accounts maintained by the Trustee for purposes
of (1) reimbursing the Sponsor and (2) satisfying Unitholders' Deferred Sales
Charges obligations, respectively. To the extent that funds are not available
in the Capital Account to meet certain charges or expenses, the Trustee may
sell Securities. Upon notification from the Sponsor that the initial offering
period is terminated, the Trustee, at the direction of the Sponsor, will
cause the sale of Securities in an amount equal to the Initial Organizational
Costs as certified to it by the
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Sponsor. Although the Sponsor may collect the Deferred Sales Charges monthly,
currently the Sponsor does not anticipate sales of Securities to pay such
sales charges until after the Special Redemption Date.
The Trustee may establish reserves (the "Reserve Account") within the
Trust for state and local taxes, if any, and any other governmental charges
payable out of the Trust.
Reports and Records. With any distribution from the Trust, Unitholders
will be furnished with a statement setting forth the amount being distributed
from each account.
The Trustee keeps records and accounts of the Trust at its office in
Boston, including records of the names and addresses of Unitholders, a
current list of underlying Securities in the portfolio and a copy of the
Indenture. Records pertaining to a Unitholder or to the Trust (but not to
other Unitholders) are available to the Unitholder for inspection at
reasonable times during business hours.
Within a reasonable period of time after the end of calendar year 1999,
the Trustee will furnish each person who was a Unitholder at any time during
such periods an annual report containing the following information, expressed
in reasonable detail both as a dollar amount and as a dollar amount per Unit:
(1) a summary of transactions for such year in the Income and Capital
Accounts and any Reserves; (2) any Securities sold during such periods and
the Securities held at the end of such periods; (3) the Trust Fund Evaluation
per Unit, based upon a computation thereof on the last business day of such
period); and (4) amounts distributed to Unitholders during such periods.
Portfolio Supervision. The Portfolio of the Trust is not "managed" by the
Sponsor or the Trustee; their activities described herein are governed solely
by the provisions of the Indenture. The Indenture provides that the Sponsor
may (but need not) direct the Trustee to dispose of a Security under the
following circumstances:
(1) upon the failure of the issuer to declare or pay anticipated
dividends or interest;
(2) upon the institution of a materially adverse action or proceeding at
law or in equity seeking to restrain or enjoin the declaration or payment
of dividends or interest on any such Securities or the existence of any
other materially adverse legal question or impediment affecting such
Securities or the declaration or payment of dividends or interest on the
same;
(3) upon the breach of covenant or warranty in any trust indenture or
other document relating to the issuer which might materially and adversely
affect either immediately or contingently the declaration or payment of
dividends on such Securities;
(4) upon the default in the payment of principal or par or stated value
of, premium, if any, or income on any other outstanding securities of the
issuer or the guarantor of such Securities which might materially and
adversely, either immediately or contingently, affect the declaration or
payment of dividends on the Securities;
(5) upon the decline in price or the occurrence of any materially adverse
credit factors, that in the opinion of the Sponsor, make the retention of
such Securities not in the best interest of the Unitholder;
(6) upon the happening of events which, in the opinion of the Sponsor,
negatively affect the economic fundamentals of the issuer of the Security
or the industry of which it is a part.
Securities may also be tendered or sold in the event of a tender offer,
merger or acquisition in the manner described under "The Trust" in this
Prospectus Part B.
B-18
<PAGE>
AMENDMENT OF THE INDENTURE
The Indenture may be amended by the Trustee and the Sponsor without the
consent of any of the Unitholders to cure any ambiguity or to correct or
supplement any provision thereof which may be defective or inconsistent or to
alter any provision as may be required by the SEC to make such other
provisions as will not adversely affect the interest of the Unitholders.
The Indenture may also be amended by the Trustee and the Sponsor without
the consent of any of the Unitholders to implement a program to reinvest cash
proceeds received by the Trust in connection with corporate actions and in
other situations, when and if the Sponsor receives a favorable response to
the no-action letter request which it intends to submit to the Division of
Investment Management at the SEC discussed above (see "Distributions" in this
Prospectus Part B). There can be no assurance that a favorable no-action
letter response will be received.
The Indenture may be amended in any respect by the Sponsor and the Trustee
with the consent of the holders of 51% of the Units then outstanding;
provided that no such amendment shall (1) reduce the interest in the Trust
represented by a Unit or (2) reduce the percentage of Unitholders required to
consent to any such amendment, without the consent of all Unitholders.
The Trustee will promptly notify Unitholders of the substance of any
amendment affecting Unitholders' rights or their interest in the Trust.
TERMINATION OF THE TRUST
The Indenture provides that the Trust will terminate on the Mandatory
Termination Date. If the value of the Trust as shown by any evaluation is
less than forty per cent (40%) of the market value of the Stocks upon
completion of the deposit of Stocks, the Trustee may in its discretion, and
will when so directed by the Sponsor, terminate such Trust. The Trust may
also be terminated at any time by the written consent of 51% of the
Unitholders or by the Trustee upon the resignation or removal of the Sponsor
if the Trustee determines termination to be in the best interest of the
Unitholders. In no event will the Trust continue beyond the Mandatory
Termination Date.
Unless advised to the contrary by the Sponsor, approximately 20 days prior
to the termination of the Trust the Trustee will begin to sell the remaining
Securities held in the Trust and will then, after deduction of any fees and
expenses of the Trust and payment into the Reserve Account of any amount
required for taxes or other governmental charges that may be payable by the
Trust, distribute to each Unitholder, after due notice of such termination,
such Unitholder's pro rata share in the Income and Capital Accounts. Moneys
held upon the sale of Securities may be held in non-interest bearing accounts
created by the Indenture until distributed and will be of benefit to the
Trustee. The sale of Securities in the Trust in the period prior to
termination may result in a lower amount than might otherwise be realized if
such sale were not required at such time due to impending or actual
termination of the Trust. For this reason, among others, the amount realized
by a Unitholder upon termination may be less than the amount paid by such
Unitholder.
SPONSOR
The Sponsor, PaineWebber Incorporated, is a corporation organized under
the laws of the State of Delaware. The Sponsor is a member firm of the New
York Stock Exchange, Inc. as well as other major securities and commodities
exchanges and is a member of the National Association of Securities Dealers,
Inc. The Sponsor is engaged in a security and commodity brokerage business as
well as underwriting and distributing new issues. The Sponsor also acts as a
dealer in unlisted securities and municipal bonds and in addition to
participating as a member of various selling groups or as an agent of other
investment
B-19
<PAGE>
companies, executes orders on behalf of investment companies for the purchase
and sale of securities of such companies and sells securities to such
companies in its capacity as a broker or dealer in securities.
The Indenture provides that the Sponsor will not be liable to the Trustee,
the Trust or to the Unitholders for taking any action or for refraining from
taking any action made in good faith or for errors in judgment, but will be
liable only for its own willful misfeasance, bad faith, gross negligence or
willful disregard of its duties. The Sponsor will not be liable or
responsible in any way for depreciation or loss incurred by reason of the
sale of any Securities in the Trust.
The Indenture is binding upon any successor to the business of the
Sponsor. The Sponsor may transfer all or substantially all of its assets to a
corporation or partnership which carries on the business of the Sponsor and
duly assumes all the obligations of the Sponsor under the Indenture. In such
event the Sponsor shall be relieved of all further liability under the
Indenture.
If the Sponsor fails to undertake any of its duties under the Indenture,
becomes incapable of acting, becomes bankrupt, or has its affairs taken over
by public authorities, the Trustee may either appoint a successor Sponsor or
Sponsors to serve at rates of compensation determined as provided in the
Indenture or terminate the Indenture and liquidate the Trust.
TRUSTEE
The Trustee is Investors Bank & Trust Company, a Massachusetts trust
company with its principal office at Hancock Towers, 200 Clarendon Street,
Boston, Massachusetts 02116, toll-free number 800-356-2754, which is subject
to supervision by the Massachusetts Commissioner of Banks, the Federal
Deposit Insurance Corporation and the Board of Governors of the Federal
Reserve System.
The Indenture provides that the Trustee will not be liable for any action
taken in good faith in reliance on properly executed documents or the
disposition of moneys, Securities or Certificates or in respect of any
valuation which it is required to make, except by reason of its own gross
negligence, bad faith or willful misconduct, nor will the Trustee be liable
or responsible in any way for depreciation or loss incurred by reason of the
sale by the Trustee of any Securities in the Trust. In the event of the
failure of the Sponsor to act, the Trustee may act and will not be liable for
any such action taken by it in good faith. The Trustee will not be personally
liable for any taxes or other governmental charges imposed upon or in respect
of the Securities or upon the interest thereon or upon it as Trustee or upon
or in respect of the Trust which the Trustee may be required to pay under any
present or future law of the United States of America or of any other taxing
authority having jurisdiction. In addition, the Indenture contains other
customary provisions limiting the liability of the Trustee. The Trustee will
be indemnified and held harmless against any loss or liability accruing to it
without gross negligence, bad faith or willful misconduct on its part,
arising out of or in connection with its acceptance or administration of the
Trust, including the costs and expenses (including counsel fees) of defending
itself against any claim of liability.
INDEPENDENT AUDITORS
The Statement of Net Assets and Schedule of Investments audited by Ernst &
Young LLP, independent auditors, have been included in reliance on their
report given on their authority as experts in accounting and auditing.
LEGAL OPINIONS
The legality of the Units offered hereby has been passed upon by Carter,
Ledyard & Milburn, 2 Wall Street, New York, New York, as counsel for the
Sponsor.
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<PAGE>
PAINEWEBBER EQUITY TRUST
HIGH 10 DIVIDEND YIELD SERIES 1999 A
TRUSTEE: SPONSOR:
INVESTORS BANK & TRUST COMPANY PAINEWEBBER INCORPORATED
Hancock Towers, 1200 Harbor Boulevard,
200 Clarendon Street Weehawken, N.J. 07087
Boston, Mass. 02116 (201) 352-3000
(800) 356-2754
- -----------------------------------------------------------------------------
This Prospectus does not include all of the information with respect to The
PaineWebber Equity Trust, High 10 Dividend Yield Series 1999A set forth in
its Registration Statement filed with the Securities and Exchange Commission
(the "Commission") in Washington, D.C. under the:
o Securities Act of 1933 (File No. 333- ) and
o Investment Company Act of 1940 (File No. 811-3722)
TO OBTAIN COPIES FROM THE COMMISSION AT PRESCRIBED RATES--
WRITE: Public Reference Section of the Commission
450 Fifth Street, N.W., Washington, D.C. 20549
CALL: 1-800-SEC-0330
VISIT: http://www.sec.gov
- -----------------------------------------------------------------------------
No person is authorized to give any information or make any representation
about this Trust not contained in this Prospectus, and you should not rely on
any other information. Read and keep both parts of the Prospectus for future
reference.
- -----------------------------------------------------------------------------
PROSPECTUS DATED , 1999
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following
documents:
The facing sheet.
The Prospectus.
The Undertaking to file reports.
The signatures.
The following exhibits:
1. Ex. 99.A1 Standard Terms and Conditions of Trust dated as
of July 1, 1998 between PaineWebber Incorporated, Depositor, Investors Bank &
Trust Co., as Trustee (incorporated by reference to Exhibit 2 in File No.
333-55697).
2. Ex. 99.A6 Certificate of Incorporation of PaineWebber
Incorporated, as amended (incorporated by reference to Exhibit
8 in File No. 2-88344).
3. Ex. 99.A6 By-Laws of PaineWebber Incorporated, as amended
(incorporated by reference to Exhibit A(6)(a) in File No.
811-3722).
The following exhibits to be supplied by amendment:
1. Ex.99.A2 Copy of Trust Indenture and Agreement between
PaineWebber Incorporated, Depositor, Investors Bank & Trust Co. as Trustee
incorporating by reference Standard Terms and Conditions of Trust dated as of
July 1, 1998.
2. Ex.99.A5 Form of Certificate of Ownership (included in
Standard Terms and Conditions of Trust).
3. Ex.99.2 Opinion of Counsel as to legality of securities
being registered.
4. Ex.99.C1 Opinion of Counsel as to income tax status of
securities being registered.
5. Ex.99.C2 Consent of Ernst and Young, LLP Independent
Auditors.
<PAGE>
FINANCIAL STATEMENTS
1. Statement of Condition of the Trust as shown in
the current Prospectus for this series.
2. Financial Statements of the Depositor.
PaineWebber Group-Financial Statements incorporated by
reference to Form 10-K and 10-Q, File No. 1-7367, respectively.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this 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 29th day of October, 1999.
THE PAINEWEBBER EQUITY TRUST,
HIGH 10 DIVIDEND YIELD, SERIES 1999A
(Registrant)
By: PaineWebber Incorporated
(Depositor)
/s/ Robert E. Holley
-----------------------------------
Robert Holley
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed on behalf of PaineWebber
Incorporated the Depositor by the following persons who constitute a majority of
the Executive Committee of its Board of Directors in the following capacities
and in the City of New York, and State of New York, on this 29th day of
October, 1999.
PAINEWEBBER INCORPORATED
Name Office
---- ------
Donald B. Marron Chairman, Chief Executive
Officer, Director & Member of
the Executive Committee*
Regina A. Dolan Executive Vice President, Chief
Financial Officer & Director of PaineWebber
Incorporated*
Joseph J. Grano, Jr. President, Retail Sales & Marketing,
Director & Member of the Executive
Committee*
Steve P. Baum Executive Vice President, Director of
PaineWebber Incorporated*
Robert H. Silver Executive Vice President Director of
Paine Webber Incorporated*
Mark B. Sutton Executive Vice President, Director of
PaineWebber Incorporated*
Margo N. Alexander Executive Vice President, Director of
PaineWebber Incorporated*
Terry L. Atkinson Managing Director, Director of PaineWebber
Incorporated*
Brian M. Barefoot Executive Vice President, Director of
PaineWebber Incorporated*
Michael Culp Managing Director, Director of PaineWebber
Incorporated*
Edward M. Kerschner Managing Director, Director of PaineWebber
Incorporated*
James P. MacGilvray Executive Vice President, Director of
PaineWebber Incorporated*
By /s/ Robert E. Holley
-----------------------------------
Robert Holley
Attorney-in-fact*
- --------------
* Executed copies of the powers of attorney have been filed with the
Securities and Exchange Commission in connection with Post Effective
Amendment No.19 to the Registration Statement File No. 2-61279.
