File No. 33-46434
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 3
TO
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:
PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES 12
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 Blvd.
Weehawken, New Jersey 07087
(x) Check if it is proposed that this filing should become effective
(immediately upon filing or on December 13, 1996) pursuant to
paragraph
(b) of Rule 485.
E. Title and amount of securities being registered:
9,372,400 Units
F. Proposed maximum offering price to the public of the securities being
registered:
$111,880,213.28**
* Estimated solely for the purpose of calculating the registration fee, at
$11.94 per unit.
G. Amount of filing fee, computed at one-thirty-third of 1 percent of the
proposed maximum aggregate offering price to the public:
$100.00*
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT.
* The method of calculation is made pursuant to Rule 24e-2 under the
Investment Company Act of 1940.The total amount of units redeemed or
repurchased during the previous fiscal year ending 1995 is 9,344,767.
There
have been no previous filings of post-effective amendments during the
current fiscal year 9,344,767 redeemed or repurchased units are being
used
to reduce the filing fee for this amendment.
PAINEWEBBER EQUITY TRUST, GROWTH STOCK
SERIES 12
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 ) Back Cover
Depositor
3. Name and address of ) Back Cover
Trustee
4. Name and address of ) Back Cover
Principal
Underwriter )
5. Organization of Trust ) The Trust
6. Execution and ) The Trust
termination of
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 ) The Trust;
regarding
Trust's Securities and ) Rights of Unit
Rights
of Holders ) holders
(a) Type of Securities ) The Trust
(Registered or Bearer) )
(b) Type of Securities ) The Trust
(Registered or Bearer) )
* Not applicable, answer
negative or not required.
(c) Rights of Holders as to ) Rights of Unit
Withdrawal or ) holders
Redemption
) Redemption;
) Public Offering of Units-
) Secondary Market for Units
(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 ) Rights of Unit
Securi-
ties, under the Indenture ) holders
(g) Notice to Holders as to )
change in )
(1)Assets of Trust ) Amendment of the
Indenture
(2)Terms and Conditions ) Administration of the
Trust-Portfolio Supervision
of Trust's Securities ) Investments
(3)Provisions of Trust ) Amendment of the
Indenture
(4)Identity of Depositor and ) Administration of the Trust
Trustee
(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 Trust
and Trustee )
11. Type of Securities ) The Trust
Comprising Units
12. Type of securities ) *
comprising
periodic payment )
certificates
13. (a)Load, fees, expenses, etc. ) Public Offering of
) Units; Expenses of the
) Trust
* Not applicable, answer
negative or not required.
(b)Certain information ) *
regarding periodic payment ) *
certificates )
(c)Certain percentages ) *
(d)Certain other fees, etc. ) Expenses of the Trust
payable by holders ) Rights of Unitholders
(e)Certain profits receivable ) Public Offering of
by depositor, principal ) Units
underwriters, trustee or ) Public Offering of Units
affiliated persons ) Market for Units
(f)Ratio of annual charges to ) *
income )
14. Issuance of Trust's ) The Trust
securities
) Public Offering of Units
15. Receipt and handling of ) *
payments from )
purchasers
16. Acquisition and ) The Trust; Administration
disposition of
underlying securities ) of the Trust; Termination
) of Trust
17. Withdrawal or ) Redemption
redemption
) Public offering of Units
) -Secondary Market for
) -Exchange Option
) -Conversion Option
18. (a)Receipt and disposition of ) Distributions of
income ) Unitholders
(b)Reinvestment of ) *
distributions
(c)Reserves or special fund ) Distributions to
) Unitholders; Expenses of
Trust
(d)Schedule of distribution ) *
19. Records, accounts and ) Distributions
report
) Administration
) of the Trust
20. Certain miscellaneous ) Administration of the Trust
pro-
visions of Trust )
agreement
21. Loans to security ) *
holders
22. Limitations on liability ) Sponsor, Trustee
23. Bonding arrangements ) Included in Form N-8B-2
24. Other material ) *
provisions of
trust agreement )
* Not applicable, answer
negative or not required.
III. Organization
Personnel and Affiliated
Persons of Depositor
25. Organization of ) Sponsor
Depositor
26. Fees received by ) Public Offering of
Depositor
) Units Expenses of the Trust
27. Business of Depositor ) Sponsor
28. Certain information as to ) Sponsor
officials and affiliated )
persons of Depositor )
29. Voting securities of ) *
Depositor
30. Persons controlling ) Sponsor
Depositor
31. Payments by Depositor ) *
for
certain other services )
rendered to Trust )
32. Payments by Depositor ) *
for
certain other services )
rendered to Trust )
33. Remuneration of ) *
employees of
Depositor for certain )
services
rendered to Trust )
34. Remuneration of other ) *
persons
for certain services )
rendered
to Trust )
IV. Distribution and Redemption of Securities
35. Distribution of Trust's ) Public Offering of Units
securities by states )
36. Suspension of sales of ) *
Trust's
securities )
37. Revocation of authority ) *
to
distribute )
38. (a)Method of distribution ) Public Offering of Units
(b)Underwriting agreements )
(c)Selling agreements ) Sponsor
* Not applicable, answer
negative or not required.
39. (a)Organization of principal ) Sponsor
underwriter )
(b)N.A.S.D. membership of ) Sponsor
principal underwriter )
40. Certain fees received by ) Public Offering Price of
principal underwriter ) Units
41. (a)Business of principal ) Sponsor
underwriter )
(b)Branch officers of ) *
principal underwriter )
(c)Salesman of principal ) *
underwriter )
42. Ownership of Trust's ) *
securities
by certain persons )
43. Certain brokerage ) *
commissions
received by principal )
underwriter )
44. (a)Method of valuation ) Public Offering Price of
) Units
(b)Schedule as to offering ) *
price )
(c)Variation in Offering ) Public Offering Price of
price to certain persons ) Units
45. Suspension of ) *
redemption rights
46. (a)Redemption valuation ) Public Offering of Units
) -Secondary Market for Units
) -Valuation
(b)Schedule as to redemption )
price )
V. Information concerning the Trustee or Custodian
47. Maintenance of position ) Public Offering of Units
in
underlying securities ) Redemption
) Trustee
) Evaluation of the Trust
48. Organization and )
regulation of
Trustee ) Trustee
49. Fees and expenses of ) Expenses of the Trust
Trustee
50. Trustee's lien ) Expenses of the Trust
* Not applicable, answer
negative or not required.
VI. Information
concerning Insurance of
Holders of Securities
51. (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 )
VII. Policy of Registrant
52. (a)Method of selecting and ) The Trust;
eliminating securities ) Administration of the Trust
from the Trust )
(b)Elimination of securities ) *
from the Trust )
(c)Policy of Trust regarding ) Portfolio Supervision
) Administration of Trust
substitution and
elimination of securities )
(d)Description of any funda- ) Administration of
mental policy of the Trust ) Trust
) Portfolio Supervision
53. (a)Taxable status of the ) Tax status of the Trust
Trust )
(b)Qualification of the Trust ) Tax status of the Trust
as a mutual investment )
company )
* Not applicable, answer
negative or not required.
VIII. Financial and
Statistical Information
54. Information regarding ) *
the
Trust's past ten fiscal )
years
55. Certain information ) *
regarding
periodic payment plan )
certificates )
56. Certain information ) *
regarding
periodic payment plan )
certificates )
57. Certain information ) *
regarding
periodic payment plan )
certificates )
58. Certain information ) *
regarding
periodic payment plan )
certi-
ficates )
59. Financial statements ) Statement of Financial
(Instruction 1(c) to ) Condition
Form S-6)
* Not applicable, answer
negative or not required.
PaineWebber Equity Trust
Growth Stock Series Twelve
(Information Highway Portfolio)
5,938,300 Units
The investment objective of this Trust is to
provide for capital appreciation through an
investment in equity stocks having, in the
Sponsor's opinion on the Date of Deposit, an
above average potential for capital appreciation.
The value of the Units will fluctuate with the
value of the portfolio of underlying securities.
The minimum purchase is 100 Units, except that
the minimum purchase in connection with an
Individual Retirement Account (IRA) or other tax-
deferred retirement plan is 25 Units. Only whole
Units may be purchased.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE INITIAL PUBLIC OFFERING OF UNITS IN THE TRUST
HAS BEEN COMPLETED. THE UNITS OFFERED HEREBY ARE
ISSUED AND OUTSTANDING UNITS WHICH HAVE BEEN
ACQUIRED BY THE SPONSOR EITHER BY PURCHASE FROM
THE TRUSTEE OF UNITS TENDERED FOR REDEMPTION OR
IN THE SECONDARY MARKET.
SPONSOR:
PaineWebber
Incorporated
Read and retain this prospectus for
future reference.
Prospectus dated December 13, 1996
Essential Information Regarding The Trust
The Trust. The objective of the PaineWebber
Equity Trust, Growth Stock Series 12 (the
"Trust") is to provide for capital appreciation
through an investment in equity stocks which
have, in the Sponsor's opinion, on the Initial
Date of Deposit, an above-average potential for
capital appreciation (the "Stocks").
The Trust will seek to achieve its objective of
capital appreciation through an investment in a
diversified portfolio of Stocks representing
companies engaged in providing electronic
information. The Stocks have been selected by
PaineWebber.
PaineWebber believes that the explosion in the
provision of electronic information occurring
during the last decade which generated strong
performances for certain companies in the
semiconductor, telecommunications, cable TV,
software and entertainment industries, will
continue to provide strong growth potential to
those companies centrally involved with the
"information highway". PaineWebber uses the term
"information highway" to describe the integration
of television, telephone, radio, computer, and
other methods of disseminating, transmitting and
storing electronic information for both household
and business use on a national and global basis.
Three key dimensions of the rapid expansion in
the digital information area have been identified
by PaineWebber as having immediate or near term
impact on the growth potential of companies in
the industries identified above. These are: (1)
the continued rapid expansion of electronic
information gathering and dissemination in the
business world, (2) the accelerated development
of the 150-500 channel cable TV system and (3)
the onset of CD ROM use. PaineWebber believes
that, during the life of the Trust, electronic
communication used by the business world will
continue to grow rapidly, driven both by
technological change and the globalization of
business activity. In addition to facsimile trans-
missions, the business world is expected to use
video conferencing techniques and equipment to
save both travel time and costs. Hand in hand
with these developments will be the continued,
rapid expansion of cellular telecommunications
and long distance telecommunications.
International telecommunication services are
especially likely to experience growth in
developing markets such as those of China and
Latin America, and in the European Community,
where deregulation, expected in 1998, will permit
users to choose more innovative and sophisticated
services.
Further, PaineWebber also believes that during
the life of the Trust there will be an expansion
in the number of cable TV channels available to
the average American household. Companies
involved in upgrading the basic cable system
itself, as well as those engaged in manufacturing
or providing the cable converter box, will stand
to profit from the cable TV expansion. Similarly,
companies involved in electronic retailing and
entertainment may be positioned to take advantage
of the increased consumer exposure that 150-500
cable TV will provide.
Similarly, in PaineWebber's opinion, the
combination of attractive pricing and industry-
wide accepted standards have made CD ROM systems
very likely to proliferate rapidly during the
life of the Trust. PaineWebber believes that CD
ROM systems will follow the pattern of CD players
and VCRs, gathering sales momentum as lower
hardware prices, wider selection of titles and
improvements in the underlying CD ROM technology
become available to the average retail consumers.
Taking these three factors discussed above into
account, PaineWebber has selected certain
industries which it believes will benefit from
the expansion of the "information highway". Long
distance telecommunications firms such as AT&T
and MCI, cable TV companies such as Time-Warner
and Tele-communications Inc., entertainment
software firms such as Disney and Paramount,
semiconductor and electronics firms like Intel
and Motorola and cellular providers such as the
Allen Group and Rogers Cantel are, in
PaineWebber's opinion, well-positioned to take
advantage of this information expansion and the
new evolving opportunities presented.
Summary of Risk Factors. There are certain
investment risks inherent in unit trust
portfolios which hold equity securities. The
securities may appreciate or depreciate in value
or pay dividends depending on the full range of
economic and market influences affecting
corporate profitability, the financial condition
of the issuers, the prices of equity securities,
the condition of the stock markets in general and
the prices of the stocks in particular. In
addition, rights of common stock holders are
generally inferior to those of holders of debt
obligations or preferred stock. In addition,
currency fluctuations may have an impact on the
American Depositary Receipts in the Portfolio.
(See "The Trust--Risk Factors and Special
Considerations.") The Trust's portfolio has been
diversified among the various industry groups
involved in the information highway in an attempt
to limit the risks inherent in owning a portfolio
of stock which does not provide a broad base of
industry groupings. Of the 16 stocks deposited in
the Portfolio, 23.64% are long distance
telecommunications companies, 9.60% are cable TV
companies, 8.43% are entertainment software
firms, 20.43% are semiconductor and electronic
firms, 19.03% are cellular providers, .38% are
metal processors and 18.49% are software firms.
There is no assurance, however, that such
diversification will eliminate an investor's risk
of earnings or market price volatility or trading
liquidity. There can also be no assurance that
the Trust portfolio will remain constant during
the life of the Trust. Certain events might occur
which could lead to the elimination of one or
more Stocks from the Portfolio (see:
"Administration of the Trust--Portfolio Super-
vision"), thereby reducing the diversity of the
Trust's investments.
Additional Deposits. After the initial deposit
on the Initial Date of Deposit the Sponsor may,
from time to time, cause the deposit of
additional Securities in the Trust where
additional Units are to be offered to the public,
maintaining the original percentage relationships
between the number of shares of Stock deposited
on the Initial Date of Deposit, subject to cer-
tain adjustments. (See "The Trust".)
Termination. Unless advised to the contrary by
the Sponsor, the Trustee will begin to sell the
Securities held in the Trust 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. During the life of the
Trust, Securities will not be sold to take
advantage of market fluctuations. The Trust will
terminate approximately five years after the
Initial Date of Deposit regardless of market
conditions at the time. (See "Termination of the
Trust" and "Federal Income Taxes".)
Public Offering Price. The Public Offering Price
per Unit is computed by dividing the Trust Fund
Evaluation by the number of Units outstanding and
then adding a sales charge of 3.00% of the Public
Offering Price (3.09% of the net amount
invested). The sales charge is reduced on a
graduated scale for volume purchasers and is
reduced for certain other purchasers. (See
"Public Offering of Units--Public Offering
Price".)
Distributions. The Trustee will make
distributions on the Distribution Dates. (See
"Distributions" and "Administration of the Trust-
- -Reinvestment".) 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.
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".) 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
$100,000, 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".)
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 Date of Deposit, between PaineWebber
Incorporated, as Sponsor and Investors Bank &
Trust Company and The First National Bank of
Chicago, N.A., as Co-Trustees (the "Trustee").
The objective of the Trust is capital
appreciation through an investment in equity
stocks having, in Sponsor's opinion on the Date
of Deposit, potential for capital appreciation.
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 Stocks was determined on the basis described
under "Valuation". 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 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, maintaining the original percentage
relationship between the Securities deposited on
the Initial Date of Deposit and replicating any
cash or cash equivalents held by the Trust (net
of expenses). 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 Stock 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 sale or maturity of Security or to
reflect a merger or reorganization. Stock
dividends, if any, received by the Trust will be
sold by the Trustee and the proceeds therefrom
shall be distributed on the next Income Account
Distribution Date.
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
_____________
* 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.
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.
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 is-
suer 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 Stock in the Trust
may be expected to fluctuate over the life of the
Trust.
In addition, there are investment risks common
to all equity issues. The Stocks may appreciate
or depreciate in value (or pay dividends)
depending on the full range of economic and
market influences affecting corporate
profitability, the financial condition of issuers
and the prices of equity securities in general
and the Stocks in particular. Certain of the
Stocks in the Trust are additional risks.
American Depositary Receipts ("ADRs") evidence
American Depositary Shares which, in turn,
represent common stock of foreign issuers
deposited with a custodian in a depositary.
Currency fluctuations will affect the U.S. dollar
equivalent of the local currency price of the
underlying domestic share and as a result, are
likely to affect the value of ADRs and the value
of any dividends actually received by the Trust.
In addition, the rights of holders of ADRs may be
different than those of holders of the underlying
shares, and the market for ADRs may be less
liquid than that for the underlying shares.
Therefore, investment in this Trust should be
made with an understanding that the value of the
ADRs may fluctuate with fluctuations in the
values of the particular foreign currency
relative to the U.S. dollar. There is no
assurance that the Trust's objective will be
achieved. (The Stocks may be referred to as
"Securities" herein.) The value of the Securities
and, therefore, the value of Units may be
expected to fluctuate.
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". However, if additional Units are issued
by the Trust (through the deposit of additional
Securities for purposes of the sale of additional
Units), 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".)
Investors should note that the Trust contains
stock issued by AT&T Corporation ("AT&T"). The
company has restructured by dividing AT&T
Corporation into three separate companies under
different management. As of September 30, 1996,
the company spun off Lucent Technologies and as
of December 31, 1996, the company intends to spin
off NCR Corporation. The Trust has received shares
of each of the newly created companies. It is the
current intention of the Trust to retain such
shares of the newly created companies in the
Trust Portfolio.
In the event a contract to purchase a Stock to
be deposited on the Date of Deposit 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.
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 limited circumstances. (See
"Administration of the Trust--Portfolio
Supervision".)
FEDERAL INCOME TAXES
In the opinion of Orrick, Herrington & Sutcliffe
LLP, 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.
2. Each Unitholder will have a taxable event
when the Trust disposes of a Security (whether by
sale or exchange) or when the Unitholder redeems
or sells its Units. 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 in order
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 Treasury
regulations promulgated thereunder 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. 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 its 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 from common stocks, interest from
Treasury Obligations, gains or losses upon sales
of Securities by the Trust and a pro rata share
of the expenses of the Trust.
Distributions with respect to common 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
common 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 re-
turn of capital and would reduce a Unitholder's
tax cost for such common stock. After such 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 sale of common 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 Units.
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 will exceed amounts distributed since
taxable income would include amounts that are not
distributed to Unitholders but are used by the
Trust to pay expenses.
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 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.
The Clinton Administration has proposed a
reduction in the dividends-received deduction
from 70 percent to 50 percent and there have
been, from time to time, other proposals to
reduce such deduction. The Sponsor is unable to
predict whether the Clinton administration
proposal or any other proposal will be adopted
during the life of the Trust.
Gain or Loss on Sale. If a Unitholder sells or
otherwise disposes of a Unit, the Unitholder
generally will recognize gain or loss in an
amount equal to the difference between the amount
realized on the disposition allocable to the Se-
curities and the Unitholder's adjusted tax bases
in the Securities. In general, such adjusted tax
bases will equal the Unitholder's aggregate cost
for the Unit. Such gain or loss will be capital
gain or loss if the Unit and underlying Securi-
ties were held as capital assets. Each Unitholder
will also recognize taxable gain or loss when all
or part of its pro rata portion of a Security is
sold or otherwise disposed of for an amount
greater or less than its per Unit tax cost
therefor.
Withholding For Citizen or Resident Investors.
In the case of any noncorporate Unitholder that
is a citizen or resident of the United States a
31 percent "backup" withholding tax will apply to
certain distributions of the Trust unless the
Unitholder properly completes and files under
penalties of perjury, IRS Form W-9 (or its
equivalent).
The foregoing discussion is a general summary
and relates only to the federal income tax
consequences of an investment in the Trust.
Unitholders may also be subject to state and
local taxation. Each Unitholder should consult
its own tax advisor regarding the Federal, state
and local tax consequences to it of ownership of
Units.
Investment in the Trust may be suited for
purchase by funds and accounts of individual
investors that are exempt from federal income
taxes such as Individual Retirement Accounts,
tax-qualified retirement plans including Keogh
Plans, and other tax-deferred retirement plans.
Unitholders desiring to purchase Units for tax-
deferred plans and IRA's should consult their
PaineWebber Investment Executive for details on
establishing such accounts. Units may also be pur-
chased by persons who already have self-directed
accounts established under tax-deferred
retirement plans.
PUBLIC OFFERING OF UNITS
Public Offering Price. The public offering price
per Unit is based on the aggregate market value
of the Stocks and any Treasury Obligations
(determined on the bid side of the market), 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 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".)
Sales charges for secondary market sales are set
forth below. A discount in the 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 sales charge applicable to volume purchasers
of Units is reduced on a graduated scale for
sales to any person of at least $50,000 or 5,000
Units, applied on whichever basis is more favor-
able to the purchaser.
Secondary Market From October 1, 1995 Secondary Market on and After
Through September 30, 1996 October 1, 1996
Percent of Percent of
Public Percent of Public Percent of
Offering Net Amount Offering Net Amount
Price Invested Price Invested
3.00% 3.09% 2.00% 2.04%
The volume discount 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 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 sales charges
are also applicable to a trustee or other
fiduciary purchasing Units for a single trust
estate or single fiduciary account.
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 of $5.00 per
100 Units.
Exchange Option. Unitholders may elect to
exchange any or all of their Units of this series
for units of one or more of any series of
PaineWebber Municipal Bond Fund (the "PaineWebber
Series"); The Municipal Bond Trust (the "National
Series"); The Municipal Bond Trust, Multi-State
Program (the "Multi-State Series"); The Municipal
Bond Trust, California Series (the "California
Series"); The Corporate Bond Trust (the
"Corporate Series"); PaineWebber Pathfinder's
Trust (the "Pathfinder's Trust"); the PaineWebber
Federal Government Trust (the "Government
Series"); The Municipal Bond Trust, Insured
Series (the "Insured Series"); or the PaineWebber
Equity Trust (the "Equity Series") (collectively
referred to as the "Exchange Trusts"), at a
Public Offering Price for the Units of the
Exchange Trusts to be acquired based on a reduced
sales charge of $15 per Unit, per 100 Units in
the case of a trust whose Units cost ap-
proximately $10 or per 1,000 units in the case of
a trust whose Units cost approximately one
dollar. Unitholders of this Trust are not
eligible for the Exchange Option into an Equity
Trust, Growth Stock Series designated as a
rollover series for the 30 day period prior to
termination of the Trust. The purpose of such
reduced sales charge is to permit the Sponsor to
pass on to the Unitholder who wishes to exchange
Units the cost savings resulting from such
exchange of Units. The cost savings result from
reductions in time and expense related to advice,
financial planning and operational expenses
required for the Exchange Option. Each Exchange
Trust has different investment objectives,
therefore a Unitholder should read the prospectus
for the applicable exchange trust carefully prior
to exercising this option. Exchange Trusts having
as their objective the receipt of tax-exempt
interest income would not be suitable for tax-
deferred investment plans such as Individual
Retirement Accounts. A Unitholder who purchased
Units of a series and paid a per Unit, per 100
Unit or per 1,000 Unit sales charge that was less
than the per Unit, per 100 Unit or per 1,000 Unit
sales charge of the series of the Exchange Trusts
for which such Unitholder desires to exchange
into, will be allowed to exercise the Exchange
Option at the Unit Offering Price plus the
reduced sales charge, provided the Unitholder has
held the Units for at least five months. Any such
Unitholder who has not held the Units to be
exchanged for the five-month period will be
required to exchange them at the Unit Offering
Price plus a sales charge based on the greater of
the reduced sales charge, or an amount which,
together with the initial sales charge paid in
connection with the acquisition of the Units
being exchanged, equals the sales charge of the
series of the Exchange Trust for which such
Unitholder desires to exchange into, determined
as of the date of the exchange.
The Sponsor will permit exchanges at the reduced
sales charge provided there is either a primary
market for Units or a secondary market maintained
by the Sponsor in both the Units of this series
and units of the applicable Exchange Trust and
there are units of the applicable Exchange Trust
available for sale. While the Sponsor has
indicated that it intends to maintain a market
for the Units of the respective Trusts, there is
no obligation on its part to maintain such a
market. Therefore, there is no assurance that a
market for Units will in fact exist on any given
date at which a Unitholder wishes to sell his
Units of this series and thus there is no
assurance that the Exchange Option will be
available to a Unitholder. Exchanges 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. An exchange of Units pursuant to the
Exchange Option will normally constitute a
"taxable event" under the Code, i.e., a
Unitholder will recognize a tax gain or loss at
the time of exchange. However, under the position
taken by the Internal Revenue Service in Revenue
Ruling 81-204 (relating to the exchange of pools
of residential mortgage loans by several savings
and loan associations), an exchange of units for
units of any other similar series of an Exchange
Trust, may not constitute a taxable event if the
units exchanged do not differ materially either
in kind or in extent from each other or if the
exchange has no significant economic or business
purpose or utility apart from the anticipated tax
consequences. Unitholders are urged to consult
their own tax advisors as to the tax consequences
to them of exchanging Units in particular cases.
The Sponsor reserves the right to modify,
suspend or terminate this Exchange Option at any
time with notice to Unitholders. In the event the
Exchange 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.
To exercise the Exchange Option, a Unitholder
should notify the Sponsor of his desire to
exercise the Exchange Option and to use the
proceeds from the sale of his Units to the
Sponsor of this series to purchase Units of one
or more of the Exchange Trusts from the Sponsor.
If Units of the applicable outstanding series of
the Exchange 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 may select the series or group of
series for which he desires his investment to be
exchanged. The Unitholder will be provided with a
current prospectus or prospectuses relating to
each series in which he indicates interest.
The exchange transaction will operate in a
manner essentially identical to any secondary
market transaction, i.e., Units will be
repurchased at a price based on the market value
of the Securities in the portfolio of the Trust
next determined after receipt by the Sponsor of
an exchange request and properly endorsed
documents. Units of the Exchange Trust will be
sold to the Unitholder at a price based upon the
next determined market value of the Securities in
the Exchange Trust plus the reduced sales charge.
Exchange transactions will be effected only in
whole units; thus, any proceeds not used to
acquire whole units will be paid to the selling
Unitholder.
For example, assume that a Unitholder, who has
three thousand units of a trust with a current
price of $1.30 per unit, desires to sell his
units and seeks to exchange the proceeds for
units of a series of an Exchange Trust with a cur-
rent price of $890 per Unit based on the bid
prices of the underlying securities. In this
example, which does not contemplate any rounding
up to the next highest number of Units, the
proceeds from the Unitholder's Units would aggre-
gate $3,900. Since only whole units of an
Exchange Trust may be purchased under the
Exchange Option, the Unitholder would be able to
acquire four Units in the Exchange Trust for a
total cost of $3,620 ($3,560 for the Units and
$60 for the sales charge). If all 3,000 Units
were tendered, the remaining $280 would be
returned to the Unitholder.
Conversion Option. Owners of units of any
registered unit investment trust sponsored by
others which was initially offered at a maximum
applicable sales charge of at least 3.0% (a
"Conversion Trust") may elect to apply the cash
proceeds of the sale or redemption of those units
directly to acquire available units of any
Exchange Trust at a reduced sales charge of $15
per Unit, per 100 Units in the case of Exchange
Trusts having a Unit price of approximately $10,
or per 1,000 Units in the case of Exchange Trusts
having a Unit price of approximately $1, subject
to the terms and conditions applicable to the
Exchange Option (except that no secondary market
is required for Conversion Trust units). To
exercise this option, the owner should notify his
retail broker. He will be given a prospectus for
each series in which he indicates interest and
for which units are available. The dealer must
sell or redeem the units of the Conversion Trust.
Any dealer other than PaineWebber must certify
that the purchase of the units of the Exchange
Trust is being made pursuant to and is eligible
for the Conversion Option. The dealer will be
entitled to two thirds of the applicable reduced
sales charge. The Sponsor reserves the right to
modify, suspend or terminate the Conversion
Option at any time with notice, including the
right to increase the reduced sales charge
applicable to this option (but not in excess of
$5 more per Unit, per 100 Units or per 1,000
Units, as applicable than the corresponding fee
then being charged for the Exchange Option). For
a description of the tax consequences of a
conversion reference is made to the Exchange
Option section herein.
Distribution of Units. The minimum purchase in
the initial public offering is 100 Units, except
that the minimum purchase is 25 Units for
purchases made in connection with Individual
Retirement Accounts or other tax-deferred retire-
ment plans. 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 $.30 per Unit at the
highest sales charge, subject to change from time
to time. 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 and does not
intend to sell Units to persons who are non-
resident aliens.
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". Redemption requests in excess
of $100,000 may be redeemed "in kind" as
described under "Redemption."
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 their
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 their inventory, the salability of
the Units and their 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").
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". The cost of Stock to
the Sponsor includes the amount paid by the
Sponsor for brokerage commissions. These amounts
are not an expense of the Trust.
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 and 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 89 South Street, Boston, MA 02111
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. If the Units are represented by a
certificate it must be properly endorsed
accompanied by a letter requesting redemption. If
held in uncertificated form, 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 a national bank or trust
company, or by a member of the New York, Midwest
or Pacific Stock Exchange, 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 ten-
dered to the Trustee for redemption will be
canceled, 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".)
A redemption request is deemed received on the
business day (see, "Valuation" 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, Treasury Obligations, if any, will be sold
first, thereafter, Stock will be sold pro rata,
to the extent possible and if not possible Stocks
having the greatest amount of capital
appreciation will be sold first. (See
"Administration of the Trust".) However, with
respect to redemption requests in excess of
$100,000, the Sponsor may determine in its
discretion to direct the Trustee to redeem Units
"in kind" by distributing Securities 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". A Unitholder receiving a
redemption "in kind" may incur brokerage or other
transaction costs in converting the Stock distrib-
uted 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.
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 Securities and Exchange Commission
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 Securities and Exchange Commission
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
Valuation Time set forth under "Summary of
Essential Information Regarding the Trust" (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 and (b) cash on hand
in the Trust, income accrued and interest
received, if any, on Treasury Obligations but not
distributed or held for distribution and
dividends receivable on Stock trading ex-dividend
(other than any cash held in any reserve account
established under the Indenture) and deducting
therefrom the sum of (x) taxes or other
governmental charges against the Trust not
previously deducted, (y) accrued fees and
expenses of the Trustee and the Sponsor
(including legal and auditing expenses) and other
Trust expenses. 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 New Year's Day, Washington's
Birthday, 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 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 closing 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 if the Stocks are listed
thereon),
(2) if there is no such appropriate closing
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 14 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 Stock.
The Treasury Obligations are valued on the basis
of bid prices. The aggregate bid prices of the
Treasury Obligations are the prices obtained from
investment dealers or brokers (which may include
the Sponsor) who customarily deal in Treasury
Obligations; or, if there is no market for the
Treasury Obligations, and bid prices are not
available, on the basis of current bid prices for
comparable securities; or by appraisal; or by any
combination of the above.
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION VALUE
On the business day prior to the Date of
Deposit, the Public Offering Price per Unit
(which figure includes the sales charge) exceeded
the Redemption Value (see "Essential
Information"). The prices of the Securities 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.
EXPENSES OF THE TRUST
The cost of the preparation and printing of the
Indenture and this Prospectus, the initial fees
of the Trustee, advertising expenses and expenses
incurred in establishing the Trust, including
legal and auditing fees, are paid by the Sponsor
and not by the Trust. The Sponsor will receive no
fee from the Trust for its services as Sponsor.
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 $.0025 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 $.0170 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 $.0060
per Unit annually which include, but are not
limited to certain mailing, printing, and audit
expenses. Expenses in 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 each 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"):
(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 trusts 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 willful misconduct on
its part;
(6) brokerage commissions in connection with the
sale of Securities; and
(7) expenses incurred upon termination of the
Trust. In addition, to the extent then permitted
by the Securities and Exchange Commission, 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 Sponsor is maintaining a secondary market
(including, but not limited to, legal, auditing
and printing expenses).
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 entire amount of estimated
expenses of the Trust. Therefore, Treasury
Obligations have been deposited in an amount
sufficient to generate annual income needed to
make up the shortfall from dividend payments. To
the extent that dividends paid with respect to
the Stocks and income generated by the Treasury
Obligations 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".
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
unless a request, in writing with signature
guaranteed by a national bank or trust company,
or by a member firm of the NASD or in such other
manner as may be acceptable to the Trustee, is
delivered by the Unitholder to the Sponsor.
Issued Certificates are transferable by
presentation and surrender to the Trustee at its
Financial Product Services Office in Boston,
Massachusetts, properly endorsed or accompanied
by a written instrument or instruments of
transfer. Uncertificated Units are transferable
by presentation to the Trustee at its Financial
Products Services Office of a written instrument
of transfer.
Certificates may be issued in denominations of
one Unit or any integral multiple thereof as
deemed appropriate by the Trustee. A Unitholder
may be required to pay $2.00 per certificate
reissued or transferred, and shall be required to
pay any governmental charge that may be imposed
in connection with each such transfer or
interchange. For new certificates issued to
replace destroyed, mutilated, stolen or lost
certificates, the Unitholder must furnish
indemnity satisfactory to the Trustee and must
pay such expenses as the Trustee may incur.
Mutilated certificates must be surrendered to the
Trustee for replacement.
DISTRIBUTIONS
The Trustee will distribute dividends and
interest, if any, from the Income Account on the
quarterly Distribution Dates to Unitholders of
record on the preceding Record Date.
Distributions from the Capital Account will be
made on annual Distribution Dates to Unitholders
of record on the preceding Record Date. See
"Essential Information" Whenever required for
regulatory or tax purposes the Trustee will make
special distributions of any dividends on special
Distribution Dates to Unitholders of record on
special Record Dates declared by the Trustee.
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".)
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, 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".
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 and Charges.') 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.")
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 Financial Products Services Office,
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
termination of the Trust, the Trustee will
furnish each person who was a Unitholder at any
time during such calendar year a 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 the Trust in the Income and
Capital Accounts and any Reserves; (2) any
Securities sold and purchased; (3) amounts
distributed to Unitholders; and (4) amounts
distributed to Unitholders during such year.
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:
(1) upon the failure of the issuer to declare or
pay anticipated dividends or interest;
(2) upon the institution of materially adverse
action or proceeding at law or in equity seeking
to restrain or enjoin the declaration or payment
of dividends 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 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 market or 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 a public tender offer being made for a
Security, or a merger or acquisition being
announced affecting a Security that in the
opinion of the Sponsor make the sale or tender of
the Security in the best interests of the
Unitholders;
(7) upon a decrease in the Sponsor's internal
rating of the Security;
(8) 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 sold in the manner
described under "The Trust". The Trustee may
dispose of Securities where necessary to pay
Trust expenses or to satisfy redemption requests
as directed by the Sponsor, and the proceeds of
such sale may not be reinvested.
Cash received upon the sale of Stock (including
sales to meet redemption requests) and dividends
received will not be reinvested and will be held
in a non-interest bearing account until
distribution on the next Distribution Date to Uni-
tholders of record.
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 make such other
provisions as will not adversely affect the
interest of the Unitholders.
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 fifty per cent (50%) of the market
value of the Stocks upon completion of the de-
posit 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
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
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, any of the Trusts 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 Co-Trustees are The First National Bank of
Chicago, a national banking association with its
corporate trust office at One First National
Plaza, Suite 0126, Chicago, Illinois 60670-0126
(which is subject to supervision by the
Comptroller of the Currency, the Federal Deposit
Insurance Corporation and the Board of Governors
of the Federal Reserve System) and Investors Bank
& Trust Company, a Massachusetts trust company
with its office at One Lincoln Plaza, 89 South
Street, Boston, Massachusetts 02111, telephone
no. 1-800-356-2754 (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 re-
quired 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 financial statements, including the schedule
of investments, of the Trust in this prospectus
have been audited by Ernst & Young LLP,
Independent Auditors, and have been included
herein in reliance upon 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 Orrick, Herrington &
Sutcliffe LLP, 666 Fifth Avenue, New York, New
York, as counsel for the Sponsor.
<TABLE>
ESSENTIAL INFORMATION REGARDING THE TRUST
As of August 31, 1996
Sponsor: PaineWebber Incorporated
Co-Trustees: Investors Bank & Trust Company and
The First National Bank of Chicago
Date of Deposit: September 21, 1993
<S> <C>
Aggregate Market Value of Securities in Trust: $58,850,915
Number of Units: 5,938,300
Fractional Undivided Interest in the Trust Represented by
Each Unit: 1/5,938,300th
Calculation of Public Offering Price Per Unit*
Aggregate Value of Net Assets in Trust $58,863,268
Divided by 5,938,300 Units $9.9125
Plus Sales Charge of 3.00% of Public Offering Price $.3066
Public Offering Price per Unit $10.2191
Redemption Value per Unit: $9.9125
Excess of Public Offering Price over Redemption Value per Unit: $.3066
Sponsor's Repurchase Price Per Unit: $9.9125
Excess of Public Offering Price over Sponsor's Repurchase Price per Unit: $.3066
Evaluation Time: 4 P.M. New York Time
Distribution Dates* *: January 20, and quarterly thereafter
Record Dates: December 31, and quarterly thereafter
Mandatory Termination Date: September 20, 1998
Discretionary Liquidation Amount: 50% of the value of the Securities
upon completion of the deposit of
the Securities
Estimated Annual Expenses of the Trust* * * $.0255 per Unit
* The Public Offering Price will be based
upon the value of the Stocks next computed
following receipt of the
purchase order plus the applicable sales
charges. (See " Valuation " ).
* * See " Distributions "
* * * See " Expenses of Trust ".
</TABLE>
<TABLE>
REPORT OF INDEPENDENT AUDITORS
<C> <S>
THE UNITHOLDERS, SPONSOR AND CO-TRUSTEES
THE PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES
TWELVE:
We have audited the accompanying statement of
financial condition of The PaineWebber Equity
Trust, Growth Stock Series Twelve, including the
schedule of investments, as of August 31, 1996
and the related statements of operations and
changes in net assets for the years ended August
31, 1996 and 1995, and for the period from
September 21, 1993 (date of deposit) to August
31, 1994. These financial statements are the
responsibility of the Co-Trustees. Our respon-
sibility is to express an opinion on these fi-
nancial statements based on our audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about
whether the financial statements are free of
material misstatement. An audit includes
examining, on a test basis, evidence supporting
the amounts and disclosures in the financial
statements. Our procedures included confirmation
of the securities owned as of August 31, 1996, as
shown in the statement of financial condition and
schedule of investments, by correspondence with
the Co-Trustees. An audit also includes assessing
the accounting principles used and significant
estimates made by the Co-Trustees, as well as
evaluating the overall financial statement
presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material
respects, the financial position of The
PaineWebber Equity Trust, Growth Stock Series
Twelve at August 31, 1996 and the results of its
operations and changes in its net assets for the
years ended August 31, 1996 and 1995, and for the
period from September 21, 1993 to August 31,
1994, in conformity with generally accepted ac-
counting principles.
ERNST & YOUNG LLP
New York, New York
December 2, 1996
</TABLE>
<TABLE>
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES TWELVE
STATEMENT OF FINANCIAL CONDITION
<CAPTION>
August 31, 1996
ASSETS
<S> <C> <C>
Common Stock - at market value (Cost $49,492,148)
(note 1 to schedule of investments) $58,850,915
Dividends receivable 12,506
Cash 49,203
Total Assets $58,912,624
LIABILITIES AND NET ASSETS
Accrued expenses payable $49,356
Total Liabilities $49,356
Net assets (5,938,300 units of fractional undivided interest outstanding):
Cost to investors (note B) $51,022,833
Less sales charge (note C) (1,530,685)
49,492,148
Net unrealized market appreciation (note D) 9,358,767
Net amount applicable to unitholders 58,850,915
Undistributed investment income-net 10,892
Undistributed proceeds from securities sold 1,461
Net assets 58,863,268
Total liabilities and net assets $58,912,624
Net asset value per unit $9.91
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES TWELVE
STATEMENT OF OPERATIONS
<CAPTION>
Period from
September21,
1993 (date of
Year Ended Year Ended deposit) to
August 31, August 31, August 31,
1996 1995 1994
<S> <C> <C> <C>
Operations:
Dividend Income $419,580 $699,193 $626,759
Total investment income 419,580 699,193 626,759
Less expenses:
Trustee's fees, expenses and evaluator's expense 187,685 282,157 281,063
Total expenses 187,685 282,157 281,063
Investment Income-net 231,895 417,036 345,696
Realized and unrealized gain (loss) on investments-net:
Net realized gain (loss) on securities transactions 4,447,139 (656,556) (492,650)
Net change in unrealized market appreciation (depreciation) (4,547,756) 17,949,037 (4,042,514)
Net realized and unrealized gain (loss) on investments (100,617) 17,292,481 (4,535,164)
Net increase (decrease) in net assets resulting from operations $131,278 $17,709,517 ($4,189,468)
See accompanying notes to financial statements
</TABLE>
<TABLE>
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES TWELVE
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
September21,
1993 (date of
Year Ended Year Ended deposit) to
August 31, August 31, August 31,
1996 1995 1994
<S> <C> <C> <C>
Operations:
Investment income-net $231,895 $417,036 $345,696
Net realized gain (loss) on securities transactions 4,447,139 (656,556) (492,650)
Net change in unrealized market appreciation (depreciation) (4,547,756) 17,949,037 (4,042,514)
Net increase (decrease) in net assets resulting from operations 131,278 17,709,517 (4,189,468)
Less: Distributions to Unitholders (Note E)
Principal --- 13,270,319 8,748,630
Investment Income 203,055 431,667 358,537
Total Distributions 203,055 13,701,986 9,107,167
Less: Units Redeemed By Unitholders (Note F)
Value of units redeemed at date of redemption 27,382,311 41,183,301 5,068,783
Undistributed income at date of redemption 4,230 15,026 909
Total Redemptions 27,386,541 41,198,327 5,069,692
Decrease in net assets (27,458,318) (37,190,796) (18,366,327)
Net Assets:
Beginning of Period 86,321,586 123,512,382 2,887,500
Supplemental Deposits --- --- 138,991,209
End Of Period $58,863,268 $86,321,586 $123,512,382
See accompanying notes to financial statements
</TABLE>
<TABLE>
NOTES TO FINANCIAL STATEMENTS
August 31, 1996
(A) The financial statements of the Trust are
prepared on the accrual basis of accounting.
Security transactions are
accounted for on the date the securities are
purchased or sold.
(B) Cost to investors represents the initial
public offering price as of the date of deposit,
and the value of units
through supplemental deposits computed on the
basis set forth under "Public Offering Price of
Units".
(C) Sales charge in the Initial Public Offering
period was 3.00% (3.09% of the net amount
invested). See "Public
Offering of Units - Sales Charge and Volume
Discount", for information relating to the
secondary market.
(D) At August 31, 1996, the gross unrealized
market appreciation was $17,487,349 and the gross
unrealized market
depreciation was ($8,128,582). The net
unrealized market appreciation was $9,358,767.
(E) Regular distributions of net income and
principal receipts not used for redemption of
units are made quarterly.
Special distributions may be made as the Sponsor
and Trustee deem necessary to comply with income
tax
regulations.
(F) The following units were redeemed with
proceeds of securities sold as follows:
<CAPTION> Period from
September 21,
1993 (date of
Year Ended Year Ended deposit) to
August 31, August 31, August 31,
1996 1995 1994
<S> <C> <C> <C>
Total number of units redeemed 2,742,000 4,753,000 586,700
Redemption amount $27,386,541 $41,198,327 $5,069,692
The following units were sold through supplemental
deposits:
Number of units sold --- --- 13,720,000
Value of amount, net of sales charge --- --- $138,991,209
</TABLE>
<TABLE>
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES TWELVE
SCHEDULE OF INVESTMENTS
As of August 31, 1996
<CAPTION>
COMMON STOCKS (100%)
Name of Issuer Number of Shares Market Value
<C> <C> <C>
Cable TV: (9.60%)
Liberty Media Group* 34,653 913,973
Tele-Communications, Inc.* 137,738 2,048,853
Time Warner, Inc. 80,494 2,686,487
Cellular: (19.03%)
Allen Group, Inc. 127,807 1,996,984
Nextel Communications, Inc.* 88,778 1,453,740
Rogers Cantel Mobil Communications, Inc.* 137,584 2,820,472
Vodafone Group plc ~ 130,180 4,930,568
Entertainment Software: (8.43%)
Walt Disney Company 87,018 4,960,026
Long Distance Telecommunication: (23.64%)
AT&T Corporation (2) 56,766 2,980,215
MCI Communications Corporation 117,587 2,954,373
Telefonos de Mexico, S.A. ~ 67,676 2,224,849
WorldCom, Inc.* 273,873 5,751,333
Metals: (.38%)
Transpro Inc 31,949 223,643
Semiconductor and Electronics: (20.43%)
Intel Corporation 102,911 8,213,584
Motorola, Inc.* 71,366 3,809,160
Software: (18.49%)
Microsoft Corporation* 88,838 10,882,655
TOTAL INVESTMENTS $58,850,915
(1) Valuation of Securities was made by the
Co-Trustees was made as described in "Valuation".
(2) See "Special Considerations" herein.
* Non-income producing.
~ American Depositary Receipts.
</TABLE>
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following
documents:
The facing sheet.
The Prospectus.
The signatures.
The following exhibits:
EX-99.2 Opinion of Counsel as to legality of securities
being registered.
EX-27 Financial Data Schedule
EX-99.1 Consent of Independent Auditors
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 Incorporated - Financial Statements
incorporated by reference to Form 10-k and
Form 10-Q (File No. 1-7367) respectively.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, PaineWebber Equity Trust, Growth Stock Series 12
certifies that it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this registration statement to be
signed on its behalf by the undersigned thereunto duly authorized,
and its seal to be hereunto affixed and attested, all in the City of
New York, and the State of New York on the 13th day of December,
1996.
PAINEWEBBER EQUITY TRUST, GROWTH
STOCK SERIES 12
(Registrant)
By: PaineWebber Incorporated
(Depositor)
/s/ ROBERT E. HOLLEY
Robert E. Holley
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on behalf of PaineWebber
Incorporated, the Depositor, by the following persons in the
following capacities and in the City of New York, and State of New
York, on this 13th day of December, 1996.
PAINEWEBBER INCORPORATED
Name Office
Donald B. Marron Chairman, Chief Executive Officer,
Director & Member of the Executive
Committee *
Regina A. Dolan Senior Vice President, Chief Financial Officer
and Director *
Joseph J. Grano, Jr. President, Retail Sales & Marketing,
Director and Member of the Executive
Committee *
By:/s/ ROBERT E. HOLLEY
Attorney-in-fact*
* Executed copies of the powers of attorney have been filed with the
Securities and Exchange Commission in connection with the Registration
Statement for File No. 33-19786.
December 13, 1996
PaineWebber Incorporated
1200 Harbor Blvd.
Weehawken, New Jersey 07087
Ladies and Gentlemen:
We have served as counsel for PaineWebber Incorporated as
sponsor and depositor (the "Depositor") of PaineWebber Equity
Trust, Growth Stock Series 12 (hereinafter referred to as the
"Trust"). The Depositor seeks by means of Post-Effective
Amendment No. 3 to register for reoffering 9,372,400 Units acquired
by the Depositor in the secondary market (hereinafter referred to as
the "Units").
In this regard, we have examined executed originals or copies of the
following:
(a) The Restated Certificate of Incorporation, as amended, and the
By-Laws of the Depositor, as amended;
(b) Resolutions of the Board of Directors of the Depositor adopted on
December 3, 1971 relating to the Trust and the sale of the Units;
(c) Resolutions of the Executive Committee of the Depositor adopted
on September 24, 1984;
(d) Powers of Attorney referred to in the Amendment;
(e) Post-Effective Amendment No. 3 to the Registration Statement on
Form S-6 (File No. 33-46434) to be filed with the Securities and
Exchange Commission (the "Commission") in accordance with
the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder
(collectively, the "1933 Act") proposed to be filed on or about the
date hereof (the "Amendment");
(f) The Notification of Registration of the Trust filed with the
Commission under the Investment Company Act of 1940, as
amended (collectively, the "1940 Act") on Form N-8A, as
amended;
(g) The registration of the Trust filed with the Commission under the
1940 Act on Form N-8B-2 (File No. 811-3722), as amended;
(h) The prospectus included in the Amendment (the "Prospectus");
(i) The Standard Terms and Conditions of the Trust dated as of
July 10, 1990, as amended, among the Depositor, and
Investors Bank & Trust Company and The First National Bank of
Chicago (the "Trustee"), as successor Co-Trustee, (the "Standard
Terms");
(j) The Trust Indenture dated as of the Date of Deposit, among the
Depositor, the Co-Trustees and the Evaluator (the "Trust
Indenture" and, collectively with the Standard Terms, the
"Indenture and Agreement");
(k) The form of certificate of ownership for units (the "Certificate") to
be issued under the Indenture and Agreement; and
(l) Such other pertinent records and documents as we have deemed
necessary.
With your permission, in such examination, we have assumed
the following: (a) the authenticity of original documents and the
genuineness of all signatures; (b) the conformity to the originals of
all documents submitted to us as copies; (c) the truth, accuracy,
and completeness of the information, representations, and warranties
contained in the records, documents, instruments and certificates we
have reviewed; (d) except as specifically covered in the opinions set
forth below, the due authorization, execution, and delivery on behalf
of the respective parties thereto of documents referred to herein and
the legal, valid, and binding effect thereof on such parties; and (e)
the absence of any evidence extrinsic to the provisions of the written
agreement(s) between the parties that the parties intended a
meaning contrary to that expressed by those provisions. However,
we have not examined the securities deposited pursuant to the
Indenture and Agreement (the "Securities") nor the contracts for the
Securities.
We express no opinion as to matters of law in jurisdictions other
than the States of New York and California and the United States,
except to the extent necessary to render the opinion as to the
Depositor in paragraph (i) below with respect to Delaware law. As
you know we are not licensed to practice law in the State of
Delaware, and our opinion in paragraph (i) and (iii) as to Delaware
law is based solely on review of the official statutes of the State of
Delaware.
Based upon such examination, and having regard for legal
considerations which we deem relevant, we are of the opinion that:
(i) The Depositor is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Delaware with full
corporate power to conduct its business as described in the
Prospectus;
(ii) The Depositor is duly qualified as a foreign corporation and is in
good standing as such within the State of New York;
(iii)The terms and provisions of the Units conform in all material
respects to the description thereof contained in the Prospectus;
(iv) The consummation of the transactions contemplated under the
Indenture and Agreement and the fulfillment of the terms thereof
will not be in violation of the Depositor's Restated Certificate of
Incorporation, as amended, or By-Laws, as amended and will not
conflict with any applicable laws or regulations applicable to the
Depositor in effect on the date hereof; and
(v) The Certificates to be issued by the Trust, when duly executed by
the Depositor and the Trustee in accordance with the Indenture
and Agreement, upon delivery against payment therefor as
described in the Prospectus will constitute fractional undivided
interests in the Trust enforceable against the Trust in accordance
with their terms, will be entitled to the benefits of the Indenture
and Agreement and will be fully paid and non-assessable.
Our opinion that any document is valid, binding, or enforceable in
accordance with its terms is qualified as to:
(a) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium, or other laws
relating to or affecting the enforcement of creditors' rights
generally;
(b) rights to indemnification and contribution which may be limited by
applicable law or equitable principles; and
(c) general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
We hereby represent that the Amendment contains no disclosure
which would render it ineligible to become effective immediately
upon filing pursuant to paragraph (b) of Rule 485 of the
Commission.
We hereby consent to the filing of this opinion as an exhibit to
the Amendment and to the use of our name wherever it appears in
the Amendment and the Prospectus.
Very truly yours,
/s/ ORRICK, HERRINGTON & SUTCLIFFE LLP
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 12
<NAME> EQUITY TRUST, GROWTH STOCK SERIES
<MULTIPLIER> 1
<CURRENCY> U.S.Dollars
<S> <C> <C> <C>
<PERIOD-TYPE> YEAR YEAR OTHER
<FISCAL-YEAR-END> AUG-31-1996 AUG-31-1995 AUG-31-1994
<PERIOD-START> SEP-01-1995 SEP-01-1994 SEP-21-1993
<PERIOD-END> AUG-31-1996 AUG-31-1995 AUG-31-1994
<EXCHANGE-RATE> 1 1 1
<INVESTMENTS-AT-COST> 49,492,148 0 0
<INVESTMENTS-AT-VALUE> 58,850,915 0 0
<RECEIVABLES> 12,506 0 0
<ASSETS-OTHER> 49,203 0 0
<OTHER-ITEMS-ASSETS> 0 0 0
<TOTAL-ASSETS> 58,912,624 0 0
<PAYABLE-FOR-SECURITIES> 0 0 0
<SENIOR-LONG-TERM-DEBT> 0 0 0
<OTHER-ITEMS-LIABILITIES> 49,356 0 0
<TOTAL-LIABILITIES> 49,356 0 0
<SENIOR-EQUITY> 0 0 0
<PAID-IN-CAPITAL-COMMON> 0 0 0
<SHARES-COMMON-STOCK> 5,938,300 0 0
<SHARES-COMMON-PRIOR> 8,680,300 0 0
<ACCUMULATED-NII-CURRENT> 10,892 0 0
<OVERDISTRIBUTION-NII> 0 0 0
<ACCUMULATED-NET-GAINS> 1,461 0 0
<OVERDISTRIBUTION-GAINS> 0 0 0
<ACCUM-APPREC-OR-DEPREC> 9,358,767 0 0
<NET-ASSETS> 58,863,268 0 0
<DIVIDEND-INCOME> 419,580 699,193 626,759
<INTEREST-INCOME> 0 0 0
<OTHER-INCOME> 0 0 0
<EXPENSES-NET> 187,685 282,157 281,063
<NET-INVESTMENT-INCOME> 231,895 417,036 345,696
<REALIZED-GAINS-CURRENT> 4,447,139 (656,556) (492,650)
<APPREC-INCREASE-CURRENT> (4,547,756) 17,949,037 (4,042,514)
<NET-CHANGE-FROM-OPS> 131,278 17,709,517 (4,189,468)
<EQUALIZATION> 0 0 0
<DISTRIBUTIONS-OF-INCOME> 203,055 431,667 358,537
<DISTRIBUTIONS-OF-GAINS> 0 0 0
<DISTRIBUTIONS-OTHER> 0 13,270,319 8,748,630
<NUMBER-OF-SHARES-SOLD> 0 0 0
<NUMBER-OF-SHARES-REDEEMED> 2,742,000 4,753,000 586,700
<SHARES-REINVESTED> 0 0 0
<NET-CHANGE-IN-ASSETS> (27,458,318) (37,190,796) (18,366,327)
<ACCUMULATED-NII-PRIOR> 0 0 0
<ACCUMULATED-GAINS-PRIOR> 0 0 0
<OVERDISTRIB-NII-PRIOR> 0 0 0
<OVERDIST-NET-GAINS-PRIOR> 0 0 0
<GROSS-ADVISORY-FEES> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<GROSS-EXPENSE> 0 0 0
<AVERAGE-NET-ASSETS> 0 0 0
<PER-SHARE-NAV-BEGIN> 0 0 0
<PER-SHARE-NII> 0 0 0
<PER-SHARE-GAIN-APPREC> 0 0 0
<PER-SHARE-DIVIDEND> 0 0 0
<PER-SHARE-DISTRIBUTIONS> 0 0 0
<RETURNS-OF-CAPITAL> 0 0 0
<PER-SHARE-NAV-END> 10 0 0
<EXPENSE-RATIO> 0 0 0
<AVG-DEBT-OUTSTANDING> 0 0 0
<AVG-DEBT-PER-SHARE> 0 0 0
</TABLE>
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to our firm under the caption
"Independent Auditors" and to the use of our report dated December 2,
1996, in the Registration Statement and related Prospectus of the
PaineWebber Equity Trust, Growth Stock Series 12.
/s/ ERNST & YOUNG LLP
New York, New York
December 13, 1996
