File No. 33-54567
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
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:
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 17
B. Name of Depositor:
PAINEWEBBER INCORPORATED
C. Complete address of Depositor's principal executive
office:
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
D. Name and complete address of agents for service:
PAINEWEBBER INCORPORATED
Attention: Mr. Robert E. Holley
1200 Harbor Boulevard
Weehawken, New Jersey 07087
Copy to:
ORRICK, HERRINGTON & SUTCLIFFE
Attention: Donald J. Robinson, Esq.
599 Lexington Avenue
New York, New York 10022
E. Total and amount of securities being registered:
An indefinite number of Units pursuant to Rule
24f-2 under the Investment Company Act of 1940.
F. Proposed maximum offering price to the public
of the securities being registered:
Indefinite
G. Amount of filing fee, computed at one/twenty-ninth
of 1 percent of the proposed maximum aggregate
offering price to the public:
pursuant to Rule 24f-2
$500 (paid with preliminary registration)
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF
THE REGISTRATION STATEMENT
/X/ Check box if it is proposed that this filing will
become effective on April 28, 1995 at 12:00 p.m.
pursuant to Rule 487.
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THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 17
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items required by Instruction 1
as to Prospectus on Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in
Prospectus
I. Organization and General Information
1. (a) Name of Trust ) Front Cover
(b) Title of securities issued )
2. Name and address of Depositor ) Back Cover
3. Name and address of Trustee ) Back Cover
4. Name and address of principal ) Back Cover
Underwriter )
5. Organization of Trust ) The Trust
6. Execution and termination of ) The Trust
Trust Agreement ) Termination of the
) Trust
7. Changes of name ) *
8. Fiscal Year ) *
9. Litigation ) *
II. General Description of the Trust
and Securities of the Trust
10. General Information regarding Trust's ) The Trust
Securities and Rights of Holders ) Rights of
Unitholders
- ---------------
* Not applicable, answer negative or not required.
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(a) Type of Securities ) The Trust
(Registered or Bearer) )
(b) Type of Securities ) The Trust
(Cumulative or Distributive) )
(c) Rights of Holders as to ) Rights of Unitholders
Withdrawal or Redemption ) Redemption
) Public Offering of
) Units, Secondary
) Market for Units
) Exchange Option
(d) Rights of Holders as to ) Public Offering of
conversion, transfer, etc. ) Units-Administration
) of the Trust
(e) Rights of Trust issues periodic ) *
payment plan certificates )
(f) Voting rights as to Securities, ) Rights of Unitholders
under the Indenture ) Amendment of the Trust
) Termination of the
) Trust
(g) Notice to Holders as to )
change in )
(1) Assets of Trust )
(2) Terms and Conditions )
of Trust's Securities )
(3) Provisions of Trust ) Amendment of the Indenture
(4) Identity of Depositor ) Administration of the Trust-
and Trustee ) Portfolio Supervision
(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 )
(4) Identity of Depositor and ) Amendment of the Indenture
Trustee )
11. Type of securities comprising ) The Trust Rights of Unit-
security holder's interest ) holders Administration of
) the Trust-Portfolio
) Supervision
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* Not applicable, answer negative or not required.
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12. Information concerning periodic ) *
payment certificates )
13. (a) Load, fees, expenses, etc. ) Public Offering Price of
) Units, Administration of
) the Trust, Expenses of the
) Trust
(b) Certain information regarding ) *
periodic payment certificates )
(c) Certain percentages ) Public offering of Units
(d) Certain other fees, etc. )
payable by holders ) Rights of Unitholders
(e) Certain profits receivable by ) Public Offering of Units-
depositor, principal under- ) Public Offering Price;
writers, trustee or affiliated ) -Sponsor's Profit-Secondary
persons ) Market for Units
(f) Ratio of annual charges to ) *
income )
14. Issuance of trust's securities ) The Trust
) Public Offering of Units
15. Receipt and handling of payments ) Public offering of Units
from purchasers )
16. Acquisition and disposition of ) The Trust, Administration
Underlying Securities ) of the Trust, Amendment of
) the Indenture, Termination
) of the Trust
17. Withdrawal or redemption ) Public Offering of Units
) Administration of the Trust
18. (a) Receipt and disposition of ) Distributions, The Trust,
income ) Distributions, Administra-
) tion of the Trust
(b) Reinvestment of distributions ) *
(c) Reserves or special fund ) Distributions, Redemption,
) Expenses of the Trust,
) Termination of the Trust,
) Amendment of the Indenture
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* Not applicable, answer negative or not required.
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(d) Schedule of distribution ) *
19. Records, accounts and report ) Distributions, Adminstra-
) tion of the Trust
20. Certain miscellaneous provisions ) Trustee, Sponsor, Termina-
of trust agreement ) tion of the Trust, Amend-
) ment of the Indenture
21. Loans to security holders ) *
22. Limitations on liability ) Sponsor, Trustee, Redemp-
) tion
23. Bonding arrangements ) Included in Form N-8B-2
24. Other material provisions of ) *
trust agreement )
III. Organization Personnel and
Affiliated Persons of Depositor
25. Organization of Depositor ) Sponsor
26. Fees received by Depositor ) Public Offering of
) Units-Public Offering
) Price, 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 Depositor ) Sponsor
31. Payments by Depositor for certain ) *
other services trust )
32. Payments by Depositor for certain ) *
certain other services )
rendered to trust )
33. Remuneration of employees of ) *
Depositor for certain services )
rendered to trust )
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* Not applicable, answer negative or not required.
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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 ) The Trust, Administration
(c) Selling agreements ) of The Trust
39. (a) Organization of principal ) Sponsor
Underwriter )
(b) N.A.S.D. membership of ) Sponsor
principal underwriter )
40. Certain fees received by ) Public Offering of Units,
principal underwriter ) Expenses of the Trust
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 of Units
) Valuation
(b) Schedule as to offering price ) *
(c) Variation in offering ) Public Offering of Units
Price to certain persons ) Administration of the Trust
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* Not applicable, answer negative or not required.
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45. Suspension of redemption rights ) *
46. (a) Redemption valuation ) Public Offering of Units
) -Public Offering Price
) -Secondary Market for Units
) Valuation, Redemption
(b) Schedule as to redemption ) *
price )
V. Information concerning the Trustee or Custodian
47. Maintenance of position in ) Redemption, Public Offering
underlying securities ) of Units-Public Offering
) Price
48. Organization and regulation of ) Trustee
Trustee )
49. Fees and expenses of Trustee ) Expenses of the Trust
50. Trustee's lien ) Expenses of the Trust
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 )
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* Not applicable, answer negative or not required.
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VII. Policy of Registrant
52. (a) Method of selecting and ) The Trust, Administration
eliminating securities from ) of the Trust
the Trust )
(b) Elimination of securities ) *
from the Trust )
(c) Policy of Trust regarding ) The Trust, Administration
substitution and elimination ) of the Trust
of securities )
(d) Description of any funda- ) The Trust, Administration
mental policy of the Trust ) of the Trust-Portfolio
) Supervision
53. (a) Taxable status of the Trust ) Federal Income Taxes
(b) Qualification of the Trust as )
a regulated investment company )
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 certificates )
59. Financial statements ) Statement of Financial
(Instruction 1(c) to Form S-6) ) Condition
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* Not applicable, answer negative or not required.
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d)
of the Securities Exchange Act of 1934, the undersigned
registrant hereby undertakes to file with the Securities and
Exchange Commission such supplementary and periodic information,
documents and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly
adopted pursuant to authority conferred in that section.
<PAGE>
<PAGE>
PAINEWEBBER EQUITY TRUST
Growth Stock Series 17
INSERT LOGO
STRATEGIC
ACTION 3
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The investment objective of this Trust is to provide for capital
appreciation through an investment in equity stocks having, in Sponsor's
opinion on the Initial 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 $1,000, except that the minimum purchase in
connection with an Individual Retirement Account (IRA) or other tax-deferred
retirement plan is $250. 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.
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SPONSOR:
PAINEWEBBER INCORPORATED
Read and retain this prospectus for future reference.
PROSPECTUS DATED APRIL 28, 1995
<PAGE>
<PAGE>
ESSENTIAL INFORMATION REGARDING THE TRUST
AS OF APRIL 27, 1995(1)
Sponsor: PaineWebber Incorporated
Co-Trustees: Investors Bank & Trust Company
The First National Bank of Chicago
Initial Date of Deposit: April 28, 1995
<TABLE>
<S> <C>
Aggregate Value of Securities in Trust: ................ $3,386,250
Number of Units: ....................................... 350,000
Fractional Undivided Interest in the Trust Represented
by Each Unit: ........................................ 1/350,000th
Calculation of Public Offering Price Per Unit(2)
Aggregate Value of Underlying Securities in Trust...... $3,386,250
Divided by 350,000 Units .............................. $9.675
Plus Sales Charge of 3.25% of Public Offering Price
(3.36% of net amount invested per Unit) ............. $.325
Public Offering Price per Unit ........................ $10.00
Redemption Value: ........................................... $9.675
Evaluation Time: ............................................ 4:00 P.M. New York time.
Income Account Distribution Dates(3): ....................... July 20, 1995 and quarterly thereafter
and on the Mandatory Termination Date.
Capital Account Distribution Dates(3): ...................... July 20, 1995 and quarterly thereafter
and on the Mandatory Termination Date.
No distributions of less than $.05 per
Unit need be made from the Capital
Account on any Distribution Date.
Record Dates: ............................................... June 30, 1995 and quarterly
thereafter.
Mandatory Termination Date: ................................. June 30, 1997
Discretionary Liquidation Amount: ........................... 50% of the value of Securities upon
completion of the deposit of
Securities.
Estimated Annual Expenses of the Trust(4): .................. $.0285 per Unit.
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(1) The date prior to the Initial Date of Deposit.
(2) 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. Following the Initial Date of Deposit, costs
other than commissions incurred in connection with the acquisition of
additional Stocks not listed on any national securities exchange will
be at the expense of the Trust (see "Essential Information Regarding
the Trust--Additional Deposits" and "Risk Factors and Special
Considerations"). (See "Valuation").
(3) See "Distributions".
(4) See "Expenses of the Trust". Estimated dividends from the Stocks,
based upon last dividends actually paid, are expected by the Sponsor to
be sufficient to pay estimated expenses of the Trust.
</TABLE>
2
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ESSENTIAL INFORMATION REGARDING THE TRUST (CONTINUED)
THE TRUST. The objective of the PaineWebber Equity Trust, Growth Stock
Series 17 (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
(referred to herein alternatively as the "Stocks" or the "Securities").
The Trust will seek to achieve its objective of capital appreciation
through an investment in a diversified portfolio of Stocks issued by
companies that PaineWebber believes are likely to be involved in the
alteration of corporate structures through "strategic action", those
activities such as takeovers, mergers, acquisitions or other similar takeover
arrangements as strategies to improve earnings and growth prospects during
the remainder of the 1990s. Taking these factors into account, PaineWebber's
Strategy Group, in conjunction with PaineWebber's industry analysts, selected
companies included in the Trust Portfolio which they believe are most likely
to benefit should these companies become or be considered acquisition
candidates during the life of the Trust.
SUMMARY OF RISK FACTORS. There are certain investment risks inherent in
unit trust portfolios which hold equity securities. The equity 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 the American Depositary Receipts ("ADRs") are susceptible to
additional risks, such as currency exchange rate fluctuations as well as
potential future political and economic developments, which might adversely
affect the payment or receipt of payments on dividends. The Trust's portfolio
has been diversified among the various industry groups involved in strategic
activities in an attempt to limit the risks inherent in owning a portfolio of
stock. The stocks may be categorized by industry groups as shown in the table
below under the caption "The Composition of the Trust." 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 Supervision"), thereby reducing the diversity of the
Trust's investments. Further, under certain circumstances, if a tender offer
is made for any of the Stocks in the Trust, or in the event of a merger or
reorganization, the Trust will either tender the Stocks or sell them as more
fully described under the caption "The Trust".
THE COMPOSITION OF THE PORTFOLIO. PaineWebber observes that, faced with
minimal growth prospects, coupled with pressure from shareholders seeking to
increase the value of their investment, corporate managements have continued
to focus on mergers and acquisitions (also known as "takeovers" or "M&A") as
methods to raise corporate profits. PaineWebber's experts, who refer to this
type of activity as "strategic action", assert that buying stock in companies
which successfully undertake these actions can be rewarding investments.
PaineWebber asserts that the alteration of the corporate structure through
strategic action is likely to prove an enduring trend, one through which
investors can potentially profit in three ways: (1) by identifying
acquisition candidates that may quickly experience a rise in their stock
prices due to the news of an impending takeover; (2) by identifying potential
acquirers that may benefit from the synergies of an acquisition; and (3) by
identifying restructuring candidates that may benefit from margin
improvements (restructuring is defined as reconfiguring the corporation in
order to increase shareholder value).
Based in part on its past research, PaineWebber believes that, although
investors who correctly identify acquisition candidates may realize the most
immediate profit, investments in companies that are considered acquisition
candidates can also be rewarding.
3
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<PAGE>
PaineWebber observes that the fast pace of merger and acquisition activity
that commenced in 1994 is continuing at a rapid rate in 1995. Such takeover
activity in 1994 reached $339 billion or 7.5% of the total value of all U.S.
equity securities, a level not seen since the very active merger years in the
late 1980s. Continuing this trend, during the first quarter of 1995, the
value of such mergers rose an additional 36% over the levels set during the
previous year-ago (first quarter 1994) period.
PaineWebber forecasts that heightened M&A activity should continue during
the life of the Trust primarily due to three compelling market forces which
are briefly described below.
The first such catalyst is that the economy of the United States (the
"U.S.") is slowing and therefore pricing power is becoming increasingly
difficult for U.S. companies to attain. Having previously implemented serious
cost-cutting measures, very few companies can produce satisfactory earnings
growth on a sustained basis simply by relying on their own top-line growth.
Those companies which have already cut costs to the limit may, in
PaineWebber's opinion, determine that the fastest way to increase
profitability is by acquiring another company's revenues, through making a
shrewd acquisition. In addition, PaineWebber believes that, during the
current period of falling inflation or "disinflation", it may be less risky
for companies to acquire new businesses than to build them, even if it is
initially costly to make such acquisitions.
The second factor, according to PaineWebber, is that, after three years of
solid profit growth, the corporate finances of certain companies are in
excellent condition. The result of this growth is that these companies are
eager to identify acquisition candidates and can afford to make acquisitions.
In addition, because many companies currently considered potential
acquisition candidates are holding a strong cash position, they are
considered even more tempting takeover targets.
Thirdly, PaineWebber believes that many foreign firms are eager to acquire
U.S. firms. Some foreign buyers are interested in gaining access to the huge
and prosperous U.S. market, while others may seek to acquire U.S.
technological expertise and skills. Other foreign companies may be seeking
access to natural resources. Most importantly, in PaineWebber's view, is that
the low current valuation of the dollar in relation to foreign currencies
makes U.S. corporate assets appear relatively inexpensive to foreigners.
Taking all of the above factors into account, PaineWebber's research
professionals selected for this Trust certain stocks which they believe are
likely acquisition candidates over the next couple of years.
In PaineWebber's search, there was no particular bias towards large
capitalization or small capitalization issues. In PaineWebber's view, the
list below which they have assembled is fairly evenly distributed among
small-capitalization, middle-capitalization and large-capitalization stocks.
These are common stocks issued by companies who may receive income and derive
revenues from multiple industry sources, but whose primary industry is listed
in the table below:
<TABLE>
<CAPTION>
APPROXIMATE PERCENTAGE OF
AGGREGATE NET ASSET VALUE OF
THE TRUST AS OF THE DATE OF
PRIMARY INDUSTRY AND NAME OF ISSUER DEPOSIT
- -------------------------------------- -----------------------------
<S> <C>
Banking and Financial Institutions ... 14%
Chemical .............................. 21
Computer Hardware/Software ............ 14
Electrical Equipment .................. 3
Industrial ............................ 24
Medical Devices ....................... 3
Oil Equipment and Services ............ 7
Packaging ............................. 3
Telecommunications .................... 11
</TABLE>
4
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The Sponsor anticipates that, based on the last dividend payments made by
the Stocks, the Trust will receive dividends sufficient (i) to pay expenses
of the Trust (see "Expenses of the Trust" herein) and (ii) after such
payment, to make distributions of such to Unitholders of record as described
below under "Distributions."
ADDITIONAL DEPOSITS. After the first deposit on the Initial Date of
Deposit the Sponsor may, from time to time, cause the deposit of additional
Securities in 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
certain adjustments. Costs incurred in acquiring such additional Stocks which
are either not listed on any national securities exchange or are ADRs,
including brokerage fees, will be borne by the Trust. Investors will
experience a dilution of their investment as a result of such costs incurred
by the Trust during the additional deposits of Securities purchased by the
Trustee with cash or cash equivalents pursuant to instructions to purchase
such Securities. (See "The Trust" and "Risk Factors and Special
Considerations".)
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 two (2) years after the
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 3.25% of the Public Offering Price (3.36% of
the net amount invested). The sales charge is reduced on a graduated scale
for volume purchasers and is reduced for certain other purchasers. Units are
offered at the Public Offering Price computed as of the Evaluation Time for
all sales subsequent to the previous evaluation. The Public Offering Price on
the Initial Date of Deposit, and on subsequent dates, will vary from the
Public Offering Price set forth on page 2. (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".)
5
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<PAGE>
THE TRUST
The Trust is one of a series of similar but separate unit investment
trusts created under New York law by the Sponsor pursuant to a Trust
Indenture and Agreement* (the "Indenture") dated as of the Initial Date of
Deposit, between PaineWebber Incorporated, as Sponsor and Investors Bank &
Trust Company 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 Initial
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 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 as closely as practicable 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.
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".)
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
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*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.
6
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<PAGE>
when and if, and in the amounts, declared by the issuer's board of directors
and to participate in amounts available for distribution by the issuer only
after all other claims against the issuer have been paid or provided for. By
contrast, holders of preferred stocks have the right to receive dividends at
a fixed rate when and as declared by the issuer's board of directors,
normally on a cumulative basis, but do not participate in other amounts
available for distribution by the issuing corporation. Dividends on
cumulative preferred stock must be paid before any dividends are paid on
common stock. Preferred stocks are also entitled to rights on liquidation
which are senior to those of common stocks. For these reasons, preferred
stocks generally entail less risk than common stocks.
Common stocks do not represent an obligation of the issuer. Therefore they
do not offer any assurance of income or provide the degree of protection of
debt securities. The issuance of debt securities or even preferred stock by
an issuer will create prior claims for payment of principal, interest and
dividends which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the rights of
holders of common stock with respect to assets of the issuer upon liquidation
or bankruptcy. Unlike debt securities which typically have a stated principal
amount payable at maturity, common stocks do not have a fixed principal
amount or a maturity. Additionally, the value of the 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 depending upon a variety of
factors, including the full range of economic and market influences affecting
corporate profitability, the financial condition of issuers, changes in
national or worldwide economic conditions and the prices of equity securities
in general and the Stocks in particular. Distributions of income, generally
made by declaration of dividends, is also dependent upon several factors,
including those discussed above in the preceding sentence.
Certain of the Stock in the Trust are ADRs which are subject to additional
risks. (See "Schedule of Investments" herein.) ADRs evidence American
Depositary Shares, which, in turn, represent common stock of foreign issuers
deposited with a custodian in a depositary. ADRs involve certain investment
risks that are different from those experienced by Stocks issued by domestic
issuers. These investment risks include potential future political and
economic developments and the potential establishment of exchange controls,
new or higher levels of taxation, or other governmental actions which might
adversely affect the payment or receipt of payment of dividends on the common
stock of foreign issuers underlying such ADRs. ADRs may also be subject to
current foreign taxes, which could reduce the yield on such securities. Also,
certain foreign issuers are not subject to reporting requirements under certain
U.S. securities laws and therefore may make less information publicly available
than that afforded by their domestic counterparts. Further, foreign issuers are
not necessarily subject to uniform financial reporting, auditing and accounting
standards, requirements and practices such as are applicable to domestic
issuers.
In addition, the securities underlying the ADRs held in the Trust are
generally denominated, and pay dividends, in foreign currency. An investment
in securities denominated and principally traded in foreign currencies
involves investment risk substantially different than an investment in
securities that are denominated and principal traded in U.S., dollars. This
is due to currency exchange rate risk, because the U.S. dollar value of the
shares underlying the ADRs and of their dividends will vary with the
fluctuations in the U.S. dollar foreign exchange rates for the relevant
currency in which the shares underlying the ADRs are denominated. PaineWebber
observes that, in the recent past, most foreign currencies have fluctuated
widely in value against the U.S. dollar for many reasons, including the
soundness of the world economy, supply and demand of the relevant currency,
and the strength of the relevant regional economy as compared to the
economies of the United States and other countries. Exchange rate
fluctuations are
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also dependent, in part, on a number of economic factors including economic
conditions within the relevant country, interest rate differentials between
currencies, the balance of imports and exports of goods and services, and
transfer of income and capital from one country to another. These economic
factors in turn are influenced by a particular country's monetary and fiscal
policies, perceived political stability (particularly with respect to
transfer of capital) and investor psychology, especially that of
institutional investors predicting the future relative strength or weakness
of a particular currency. As a general rule, the currency of a country with a
low rate of inflation and a favorable balance of trade should increase in
value relative to the currency of a country with a high rate of inflation and
deficits in the balance of trade. 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.
Investors should note that the creation of additional Units following the
Initial Date of Deposit may have an effect upon the value of previously existing
Units. To create additional Units the Sponsor may deposit cash (or a bank letter
of credit in lieu of cash) with instructions to purchase Securities in amounts
sufficient to maintain, to the extent practicable, the percentage relationship
among the Securities based on the price of the Securities at the Valuation Time
on the date such cash is deposited. To the extent the price of a Security
increases or decreases between the time such cash is deposited with instructions
to purchase the Security and the time such cash is used to purchase the
Security, Units will represent less or more of that Security and more or less
of the other Securities in the Trust. Unitholders will be at risk because of
price fluctuations during this period since if the price of shares of a
Security increases, Unitholders will have an interest in fewer shares of that
Security, and if the price of a Security decreases, Unitholders will have an
interest in more shares of that Security, than if the Security had been
purchased on the date such cash was deposited with instructions to purchase
the Security. In order to minimize these effects, the Trust will attempt to
purchase Securities as close as possible to the Valuation Time or at prices
as close as possible to the prices used to evaluate the Trust at the
Valuation Time. Thus price and currency fluctuations occurring during the
initial public offering period following the Initial Date of Deposit when
additional Units are created will affect the value of every Unitholder's
Units and the income per Unit received by the Trust. In addition, costs
incurred in connection with the acquisition of Securities not listed on any
national securities exchange (due to differentials between bid and offer
prices for the Securities) will be at the expense of the Trust and will
affect the value of every Unitholder's Units.
In the event a contract to purchase a Stock to be deposited on any 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".)
Certain of the Stocks have been selected for their capital appreciation
potential in light of the Sponsor's opinion on the Initial Date of Deposit
that the issuers of such Stocks may be attractive
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acquisition candidates pursuant to mergers, acquisitions and tender offers.
In general, tender offers involve a bid by an issuer or other acquiror to
acquire a stock pursuant to the terms of its offer. Payment generally takes
the form of cash, securities (typically bonds or notes), or cash and
securities. Pursuant to federal law a tender offer must remain open for at
least 20 days and withdrawal rights apply during the entire offering period.
Frequently offers are conditioned upon a specified number of shares being
tendered and upon the obtaining of financing. There may be other conditions
to the tender offer as well. Additionally, an offeror may only be willing to
accept a specified number of shares. In the event a greater number of shares
is tendered, the offeror must take up and pay for a pro rata portion of the
shares deposited by each depositor during the period the offer remains open.
Because certain of the Stocks have been selected with a view to potential
acquisitions, the Trust Indenture and Agreement sets forth criteria to be
applied in the event of a tender offer, merger or reorganization. The Trust
is not managed and has been structured with certain automatic provisions
contained in the Trust Indenture and Agreement. The foregoing may interfere
with the Trust's ability to maximize its objectives and, consequently, a
Unitholder's value. In such case, Unitholders shall have no rights against
the Trust, the Sponsor, the Trustee or any other party associated with the
Trust. The foregoing is not a disclaimer of responsibilities under Section 36
of the Investment Company Act of 1940.
In the event a tender offer is made for a Stock, on the third business day
prior to the expiration of the best tender offer then in effect, as
determined by the Sponsor, the Sponsor will instruct the Trustee, and the
Trustee will, tender the Stock; provided, however that the Trustee will sell
the Stock on such date if it can realize at least 90% of the value of the
price to be paid pursuant to the tender offer (such value to be determined by
the Sponsor) except where the best tender offer is an offer for any and all
outstanding Stock and is not conditioned upon the offeror's receipt of
financing. In the event the Trustee has tendered and, in Sponsor's opinion, a
better offer is made prior to the expiration of the prior offer, the Trustee
will use its best efforts to exercise its withdrawal rights and follow the
procedures set forth in the preceding sentence. Upon consummation of the
tender offer, in the event any of the Stock tendered is not purchased (which
could occur if such Stock is excluded due to pro rationing) the Trustee will
sell the Stock as soon as practicable. Any securities received pursuant to a
consummated tender offer will be sold by the Trustee as soon as practicable.
If a tender offer fails, the Stock will be returned to the Trust. The Trustee,
pursuant to the terms of the Trust Indenture and Agreement, will not tender or
sell any Stock subject to a tender offer during any period in which the Trustee
is purchasing stock to create additional Units.
In the event an issuer of a Stock announces a proposed merger into another
company and certain compensation is to be paid in exchange for the Stock, or
in the event the issuer of a Stock announces a sale of substantially all of
its assets, the Trustee will sell the Stock if it can realize 90% of the
value to be received by shareholders upon completion of the merger or sale
(such value to be determined by the Sponsor). If the Trust holds the Stock
upon completion of the merger, any securities received as compensation will
be sold by the Trustee as soon as practicable. In the event an issuer of
Stock announces that another company will be merged into it, the Stock of
such issuer will be retained unless the Sponsor directs the Trustee to sell
the Stock for reasons set forth under the heading "Portfolio Supervision". In
the event of a corporate reorganization any securities received by the Trust
will be sold as soon as practicable.
In its investment banking, underwriting or merchant banking activities the
Sponsor may acquire material non-public information about an issuer of Stocks
in the Trust. Use of this information by the Sponsor in connection with the
Trust may constitute a violation of the federal securities laws. Therefore,
in order to avoid the possible use of this information there may be
circumstances where the Sponsor is unable to give advice to the Trust,
including advice on the value of a transaction or whether an offer is
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the best offer. In such case the Sponsor shall immediately advise the Trustee
of its inability and, in such event, (a) with respect to a tender offer, the
Trustee is required to sell the applicable Stock as close to the opening of
the stock exchanges as is practicable on the last business day a tender offer
is in effect and (b) with respect to a sale of substantially all of an
issuer's assets or its merger into another issuer, the Trust will continue to
hold the Stocks.
In most circumstances the Trust has been structured to provide for the
sale of Stock at 90% of the value to be received upon completion of a tender,
merger or acquisition in order to provide the Trust a price close to the
price which could be received in the future if certain conditions to such
completion are met. The percentage accommodates a discount reflecting the
time value of money and the uncertainties of the tender, merger or
acquisition taking place.
There is no guarantee that there will be a tender offer for any of the
Stocks, or merger or acquisition of any of the issuers whose stock is
contained in the Trust. In addition, it is possible that legislation or
regulations affecting merger and acquisition activity in the future may be
passed and, if passed, the Sponsor cannot predict the impact upon the Trust.
There is also no guarantee that the price received upon sale or pursuant to
an acquisition will be the best price which could be received by the Trust at
any time. For example, after stock is sold, the value may increase due to
general market factors or due to subsequent tender offers. Additionally, the
price of a Stock may decline for Stocks not taken up pursuant to tender offer
or in the event a merger or acquisition is not completed.
FEDERAL INCOME TAXES
The Trust intends to qualify for and elect tax treatment as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). By qualifying for and electing such treatment, the Trust will not be
subject to federal income tax on taxable income or net capital gains
distributed to Unitholders provided it distributes 90% or more of its taxable
income (exclusive of net capital gains). However, a 4% excise tax is imposed
on regulated investment companies that fail to distribute all but a de
minimis amount of their income and gain. The Trust intends to distribute all
of its income, including capital gains, annually.
In any taxable year, the distributions of any ordinary income (such as
dividends) and any net short-term capital gain will be taxable as ordinary
income to Unitholders. A distribution paid shortly after a purchase of shares
may be taxable even though, in effect, it may represent a return of capital
to Unitholders. A dividend paid by the Trust in January will be considered
for federal income tax purposes to have been paid by the Trust and received
by the Unitholders on the preceding December 31, if the dividend was declared
in the preceding October, November or December to Unitholders of record in
any one of those months. Distributions which are taxable as ordinary income
to Unitholders will not constitute dividends for purposes of the
dividends-received deduction for corporations except, and only to the extent
of, a specific designation by the Trust.
The gross income of the Trust typically will include dividends and gains
on sales or other dispositions of portfolio securities. In order to maintain
its qualification as a "regulated investment company", the Trust must in the
course of a taxable year derive at least 90% of its gross income from
dividends, interest, gains on sales or other dispositions of Securities and
certain other sources (referred to as "eligible sources"), and must derive
less than 30% of its gross income from the sale or other disposition of
Stock, Securities and certain other assets held for less than three months.
If during a taxable year it appears that less than 90% of the Trust income
will be derived from eligible sources, the Sponsor may direct the Trustee to
sell Securities which, upon the realization of sufficient aggregate gain,
will enable the Trust to maintain its qualification as a regulated investment
company.
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Distributions by the Trust that are designated by it as long-term capital
gain distributions will be taxable to Unitholders as long-term capital gains,
regardless of the length of time the Units have been held by a Unitholder.
Distributions of proceeds derived from the sale or redemption of Securities
in the Trust portfolio (exclusive of net capital gain) will not be taxable to
Unitholders to the extent that they represent a return of capital; such
distributions will, however, reduce a Unitholder's basis in his Units, and to
the extent they exceed the basis of his Units will be taxed as capital gain.
Any loss realized by a Unitholder on the sale or exchange of Units that are
held by him for not more than six months will be treated as a long-term
capital loss if a long-term capital gain distribution had been paid to such
Unitholder with respect to such Units.
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 certain
aspects of 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 purchased 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, 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".) The
Public Offering Price on the Inital Date of Deposit or on any subsequent date
will vary from the Public Offering Price calculated on the business day prior
to the Inital Date of Deposit (as set forth on page 2 hereof) due to
fluctuations in the value of Stocks, among other factors.
Sales charges during the initial public offering period and 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 favorable to the purchaser.
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INITIAL PUBLIC OFFERING PERIOD AND SECONDARY MARKET THEREAFTER
<TABLE>
<CAPTION>
PERCENT OF
PUBLIC PERCENT OF
AGGREGATE DOLLAR VALUE OF OFFERING NET AMOUNT
UNITS* PRICE INVESTED
- ------------------------------- ------------ ------------
<S> <C> <C>
Less than $50,000 .............. 3.25% 3.36%
$50,000 to 99,999 .............. 3.00 3.09
$100,000 to 249,999 ............ 2.75 2.83
$250,000 to 499,999 ............ 2.50 2.56
$500,000 to 999,999 ............ 2.00 2.04
$1,000,000 or more ............. 1.50 1.52
- ---------------
* The sales charge applicable to volume purchasers according to the table
above will be applied either on a dollar or Unit basis, depending upon
which basis provides a more favorable purchase price to the purchaser.
</TABLE>
The volume discount 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 approximately $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
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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
generally will constitute a "taxable event" under the Code, i.e., a
Unitholder will recognize a tax gain or loss at the time of exchange.
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
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Exchange Trust with a current 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 aggregate $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
retirement 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 $.26 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, the District of Columbia and the Commonwealth of
Puerto Rico.
Secondary Market for Units. While not obligated to do so, the Sponsor
intends to maintain a secondary market for the Units and continuously offer
to purchase Units at the Trust Fund Evaluation per Unit next computed after
receipt by the Sponsor of an order from a Unitholder. The Sponsor may cease
to maintain such a market at any time, and from time to time, without notice.
In the event that a secondary market for the Units is not maintained by the
Sponsor, a Unitholder desiring to dispose of Units may tender such Units to
the Trustee for redemption at the price calculated in the manner set forth
under "Redemption". Redemption requests in excess of $100,000 may be redeemed
"in kind" as described under "Redemption." The Sponsor does not in any way
guarantee the enforceability, marketability, value or price of any Stocks in
the Trust, nor that of the Units.
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Investors should note that the Trust Fund Evaluation per Unit at the time
of sale or tender for redemption may be less than the price at which the Unit
was purchased.
The Sponsor may redeem any Units it has purchased in the secondary market
if it determines for any reason that it is undesirable to continue to hold
these Units in 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 saleability 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 during any offering period following
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 One Lincoln Plaza, 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 an eligible guarantor institution or in such other
manner as may be acceptable to the Trustee. In certain instances the Trustee
may require additional documents such as, but not limited to, trust
instruments, certificates of death, appointments as executor or
administrator, or certificates of corporate authority. Unitholders should
contact the Trustee to determine whether additional documents are necessary.
Units tendered to the Trustee for redemption will be cancelled, if not
repurchased by the Sponsor.
Units will be redeemed at the Redemption Value per Unit next determined
after receipt of the redemption request in good order by the Trustee. The
Redemption Value per Unit is determined by dividing the Trust Fund Evaluation
by the number of Units outstanding. (See "Valuation".)
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
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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, 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 distributed into cash. The availability of
redemption "in kind" is subject to compliance with all applicable laws and
regulations, including the Securities Act of 1933, as amended.
To the extent that Securities are redeemed in kind or sold, the size and
diversity of the Trust will be reduced. Sales will usually be required at a
time when Securities would not otherwise be sold and may result in lower
prices than might otherwise be realized. The price received upon redemption
may be more or less than the amount paid by the Unitholder depending on the
value of the Securities in the portfolio at the time of redemption. In
addition, because of the minimum amounts in which Securities are required to
be sold, the proceeds of sale may exceed the amount required at the time to
redeem Units; these excess proceeds will be distributed to Unitholders on the
Distribution Dates.
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
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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 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 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.
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION VALUE
On the business day prior to the Initial 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 $.0035
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.
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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 $.0080 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 wilful 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 the Sponsor is
maintaining a secondary market (including, but not limited to, legal,
auditing and printing expenses).
The accounts of the Trust shall be audited not less than annually by
independent public accountants selected by the Sponsor. The expenses of the
audit shall be an expense of the Trust. So long as the Sponsor maintains a
secondary market, the Sponsor will bear any audit expense which exceeds
$.0050 per Unit. Unitholders covered by the audit during the year may receive
a copy of the audited financials upon request.
The fees and expenses set forth above are payable out of the Trust and
when unpaid will be secured by a lien on the Trust. Based upon the last
dividend paid prior to the Date of Deposit, dividends on the Stocks are
expected to be sufficient to pay the entire amount of estimated expenses of
the Trust. To the extent that dividends paid with respect to the Stocks are
not sufficient to meet the expenses of the Trust, the Trustee is authorized
to sell Securities to meet the expenses of the Trust. Securities will be
selected in the same manner as is set forth under "Redemption".
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 an eligible guarantor institution 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 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 office in Boston 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
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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 net 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 quarterly Distribution Dates to Unitholders of record on the
preceding Record Date. Distributions of less than $.05 per Unit need not be
made from the Capital Account on any Distribution Date. See "Essential
Information". 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, if
any, and interest income, 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.
Investors Bank & Trust keeps records and accounts of the Trust at its
office in Boston, including records of the names and addresses of
Unitholders, a current list of underlying Securities in the portfolio and a
copy of the Indenture. Records pertaining to a Unitholder or to the Trust
(but not to other Unitholders) are available to the Unitholder for inspection
at reasonable times during business hours.
Within sixty (60) days after the end of each calendar year, the Trustee
will furnish each person who was a Unitholder at any time during the calendar
year an annual report containing the following information, expressed in
reasonable detail both as a dollar amount and as a dollar amount per Unit:
(1)
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a summary of transactions for such year in the Income and Capital Accounts
and any Reserves; (2) any Securities sold during the year and the Securities
held at the end of such year; (3) the Trust Fund Evaluation per Unit, based
upon a computation thereof on the 31st day of December of such year (or the
last business day prior thereto); 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 a 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 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 (as further described under "Risk Factors and Special
Considerations" herein);
(7) upon a decrease in the Sponsor's internal rating of the Security;
or
(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 Unitholders 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.
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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 deposit of Stocks, the Trustee may in its discretion, and
will when so directed by the Sponsor, terminate such Trust. The Trust may
also be terminated at any time by the written consent of 51% of the
Unitholders or by the Trustee upon the resignation or removal of the Sponsor
if the Trustee determines termination to be in the best interest of the
Unitholders. In no event will the Trust continue beyond the Mandatory
Termination Date.
Unless advised to the contrary by the Sponsor, approximately 20 days prior
to the termination of the Trust the Trustee will begin to sell the 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.
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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 principal office at
One Lincoln Plaza, 89 South Street, Boston, Massachusetts 02111, toll-free
number 800-356-2754 (which is subject to supervision by the Massachusetts
Commissioner of Banks, the Federal Deposit Insurance Corporation and the
Board of Governors of the Federal Reserve System).
The Indenture provides that the Trustee will not be liable for any action
taken in good faith in reliance on properly executed documents or the
disposition of moneys, Securities or Certificates or in respect of any
valuation which it is required to make, except by reason of its own gross
negligence, bad faith or willful misconduct, nor will the Trustee be liable
or responsible in any way for depreciation or loss incurred by reason of the
sale by the Trustee of any Securities in the Trust. In the event of the
failure of the Sponsor to act, the Trustee may act and will not be liable for
any such action taken by it in good faith. The Trustee will not be personally
liable for any taxes or other governmental charges imposed upon or in respect
of the Securities or upon the interest thereon or upon it as Trustee or upon
or in respect of the Trust which the Trustee may be required to pay under any
present or future law of the United States of America or of any other taxing
authority having jurisdiction. In addition, the Indenture contains other
customary provisions limiting the liability of the Trustee. The Trustee will
be indemnified and held harmless against any loss or liability accruing to it
without gross negligence, bad faith or willful misconduct on its part,
arising out of or in connection with its acceptance or administration of the
Trust, including the costs and expenses (including counsel fees) of defending
itself against any claim of liability.
INDEPENDENT AUDITORS
The Statement of Financial Condition and Schedule of Investments audited
by Ernst & Young LLP, independent auditors, have been included in reliance on
their report given on their authority as experts in accounting and auditing.
LEGAL OPINIONS
The legality of the Units offered hereby has been passed upon by Orrick,
Herrington & Sutcliffe, 599 Lexington Avenue, New York, New York, as counsel
for the Sponsor.
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REPORT OF INDEPENDENT AUDITORS
THE UNITHOLDERS, SPONSOR AND CO-TRUSTEES
THE PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES 17
We have audited the accompanying statement of financial condition of The
PaineWebber Equity Trust, Growth Stock Series 17, including the schedule of
investments, as of April 28, 1995. This financial statement is the
responsibility of the Co-Trustees. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. Our
procedures included confirmation with Investors Bank & Trust Company, a
Co-Trustee, of an irrevocable letter of credit deposited for the purchase of
securities, as shown in the financial statement as of April 28, 1995. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of The PaineWebber Equity
Trust, Growth Stock Series 17 at April 28, 1995, in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
April 28, 1995
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THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 17
STATEMENT OF FINANCIAL CONDITION
AS OF DATE OF DEPOSIT, APRIL 28, 1995
<TABLE>
<CAPTION>
TRUST PROPERTY
--------------
<S> <C>
Sponsor's Contracts to Purchase underlying Securities backed
by irrevocable letter of credit (a) .......................... $3,386,250
==========
INTEREST OF UNITHOLDERS
-----------------------
350,000 Units of fractional individual interest outstanding:
Cost to investors (b) ........................................ $3,500,000
Less: Gross underwriting commissions (c) ..................... 113,750
----------
Net amount applicable to investors ........................ $3,386,250
==========
- ---------------
(a) The aggregate cost to the Trust of the securities listed under
"Schedule of Investments" is determined by the Co-Trustees on the basis set
forth above under "Public Offering of Units--Public Offering Price." See also
the column headed Cost of Securities to Trust under "Schedule of
Investments." An irrevocable letter of credit drawn on Morgan Guaranty Trust
Company of New York in the amount of $5,000,000 has been deposited with the
Co-Trustees, Investors Bank & Trust Company and The First National Bank of
Chicago, in connection with contracts to purchase $3,386,250 aggregate value
of Securities in the initial deposit and for the purchase of Securities in
subsequent deposits.
(b) The aggregate public offering price is computed on the basis set forth
under "Public Offering of Units--Public Offering Price."
(c) Sales charge of 3.25% of the Public Offering Price per Unit is
computed on the basis set forth under "Public Offering of Units".
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THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 17
SCHEDULE OF INVESTMENTS
AS OF DATE OF DEPOSIT, APRIL 28, 1995
COMMON STOCKS (1)
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)
- ------------------------------------------ ----------- ------------------
<S> <C> <C>
Banking and Financial Institutions:
(13.77%)
BayBanks, Inc. .......................... 1,870 $ 116,875.00
California Federal Bank* ................ 9,510 116,497.50
Glendale Federal Bank FSB* .............. 9,320 116,500.00
Midlantic Corporation, Inc. ............. 3,140 116,572.50
Chemical: (20.61%)
Betz Laboratories, Inc. ................. 2,780 116,065.00
Calgon Carbon Corporation ............... 9,590 116,278.75
Eastman Chemical Company ................ 2,040 116,280.00
Rohm & Haas Company ..................... 1,990 116,415.00
Sigma-Aldrich Corporation ............... 2,810 116,615.00
Union Carbide Corporation ............... 3,740 116,407.50
Computer Hardware/Software: (13.76%)
Apple Computer, Inc. .................... 3,080 116,655.00
AST Research, Inc.* ..................... 6,510 116,366.25
Informix Corporation* ................... 2,920 116,435.00
Sybase, Inc.* ........................... 4,800 116,400.00
Electrical Equipment: (3.44%)
Honeywell, Inc. ......................... 2,990 116,610.00
Industrial: (24.35%)
Amtrol, Inc. ............................ 6,380 116,435.00
Cummins Engine Company, Inc. ............ 2,640 116,820.00
Farrel Corporation ...................... 1,750 9,187.50
Giddings & Lewis, Inc. .................. 6,470 116,460.00
Harnischfeger Industries, Inc. .......... 3,980 116,415.00
INDRESCO, Inc.* ......................... 8,320 116,480.00
Johnson Controls, Inc. .................. 2,160 116,370.00
Navistar International Corporation* .... 8,240 116,390.00
Medical Devices: (3.44%)
Cordis Corporation* ..................... 1,580 116,525.00
Oil Equipment and Services: (6.87%)
Halliburton Company ..................... 3,020 116,270.00
Smith International, Inc.* .............. 6,700 116,412.50
Packaging: (3.44%)
Sealright Company, Inc. ................. 6,950 116,412.50
Telecommunications: (10.32%)
IntelCom Group, Inc.* ................... 11,360 116,440.00
Metrocall, Inc.* ........................ 6,460 116,280.00
Vodafone Group plc (4) .................. 3,680 116,380.00
-------------
TOTAL INVESTMENTS ....................... $3,386,250.00
=============
- ---------------
(1) All Securities are represented entirely by contracts to purchase
Securities.
(2) Valuation of the Securities by the Co-Trustees was made as described
in "Valuation" as of the close of business on the business day prior to
the Date of Deposit.
(3) The loss to the Sponsor on the date of deposit is $1,625.
(4) American Depositary Receipts.
* Non-income producing security.
</TABLE>
25
<PAGE>
<PAGE>
PAINEWEBBER EQUITY TRUST
Growth Stock Series 17
[LOGO]
STRATEGIC
ACTION 3
CO-TRUSTEES:
INVESTORS BANK & TRUST COMPANY
89 South Street,
Boston, Mass. 02111
(800) 356-2754
THE FIRST NATIONAL BANK OF CHICAGO
One First National Plaza,
Suite 0126
Chicago, Illinois 60670-0126
SPONSOR:
PAINEWEBBER INCORPORATED
1200 Harbor Boulevard,
Weehawken, N.J. 07087
(201) 902-3000
<PAGE>
<PAGE>
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Essential Information Regarding the Trust 2
The Trust ............................... 5
Risk Factors and Special Considerations . 6
Federal Income Taxes .................... 9
Public Offering of Units ................ 10
Public Offering Price ................. 10
Employee Discount ..................... 11
Exchange Option ....................... 11
Conversion Option ..................... 13
Distribution of Units ................. 13
Secondary Market for Units ............ 13
Sponsor's Profits ..................... 14
Redemption .............................. 14
Valuation ............................... 16
Comparison of Public Offering Price and
Redemption Value ....................... 16
Expenses of the Trust ................... 16
Rights of Unitholders ................... 17
Distributions ........................... 18
Administration of the Trust ............. 18
Accounts .............................. 18
Reports and Records ................... 18
Portfolio Supervision ................. 19
Amendment of the Indenture .............. 20
Termination of the Trust ................ 20
Sponsor ................................. 20
Trustee ................................. 21
Independent Auditors .................... 21
Legal Opinions .......................... 21
Report of Independent Auditors .......... 22
Statement of Financial Condition ........ 23
Schedule of Investments ................. 24
</TABLE>
- -------------------------------------------------------------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS PROSPECTUS; AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED HEREIN MUST NOT BE RELIED ON AS HAVING BEEN AUTHORIZED BY THE
TRUST, THE TRUSTEE OR THE SPONSOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN ANY STATE TO
ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
- -------------------------------------------------------------------------------
THIS PROSPECTUS CONTAINS INFORMATION CONCERNING THE TRUST AND THE SPONSOR,
BUT DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE TRUST'S
REGISTRATION STATEMENTS, AMENDMENTS AND EXHIBITS RELATING THERETO, WHICH HAVE
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940, AND
TO WHICH REFERENCE IS HEREBY MADE.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following
documents:
The facing sheet.
The Prospectus.
The Undertaking to file reports.
The signatures.
Written consents of the following persons:
Ernst & Young
(included in Exhibit 99.C2)
Orrick, Herrington & Sutcliffe
(included in Exhibits 99.2 and 99.C1)
The following exhibits:
1. Ex.-27 - Financial Data Schedule
2. Ex.-99.A1 Standard Terms and Conditions of
Trust dated as of July 10, 1990 between
PaineWebber Incorporated, Depositor and
Investors Bank & Trust Company and The First
National Bank of Chicago, Co-Trustees
(incorporated by reference to Exhibit 2 in
File No. 33-30404).
3. Ex.-99.A2 Copy of Trust Indenture and
Agreement between PaineWebber Incorporated,
Depositor, and Investors Bank & Trust Company
and The First National Bank of Chicago, as
Co-Trustees, incorporating by reference
Standard Terms and Conditions of Trust dated
as of July 10, 1990.
4. Ex.-99.A5 Form of Certificate of Ownership
(included in Standard Terms and Conditions of
Trust).
5. Ex.-99.A6 Certificate of Incorporation of
PaineWebber Incorporated, as amended
(incorporated by reference to Exhibit 8 in
File No. 2-88344).
6. Ex.-99.A6 By-Laws of PaineWebber Incorporated,
as amended (incorporated by reference to
Exhibit A(6)(a) in File No. 811-3722).
7. Ex.-99.2 Opinion of Counsel as to legality of
securities being registered.
8. Ex.-99.C1 Opinion of Counsel as to income tax
status of securities being registered.
9. Ex.-99.C2 Consent of Ernst & Young,
Independent Auditors.
<PAGE>
FINANCIAL STATEMENTS
1. Statement of Condition of the Trust as shown in the current
Prospectus for this series.
2. Financial Statements of the Depositor.
PaineWebber Incorporated-Financial Statements incorporated by
reference to Form 10-K and Form 10-Q, (File No. 1-7367)
respectively.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant, The PaineWebber Equity Trust, Growth Stock
Series 17, has duly caused this Amendment to Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of
New York on the 28th day of April, 1995.
ALTERNATIVE FORM OF SIGNATURES FOR FILINGS UNDER RULE 487
The registrant, The PaineWebber Equity Trust, Growth
Stock Series 17 hereby identifies Growth Stock Series 15 and 16
and Special Situations Series 1 and 2 of the trust for purposes
of the representations required by Rule 487 and represents the
following:
1) That the portfolio securities deposited in the series as to
the securities of which this registration statement is being
filed do not differ materially in type or quality from those
deposited in such previous series;
2) That, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide
essential financial information for, the series with respect to
the securities of which this registration statement is being
filed, this registration statement does not contain disclosures
that differ in any material respect from those contained in the
registration statement for such previous series as to which the
effective date was determined by the Commission or the staff;
and
3) That it has complied with rule 460 under the Securities Act
of 1933.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Amendment to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of New York, and State of New York, on the 28th day of April,
1995.
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 17
(Registrant)
By: PaineWebber Incorporated
(Depositor)
-----------------------------------
Bart Rekucki
Corporate Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed on behalf of
PaineWebber Incorporated the Depositor by the following persons who
constitute a majority of the Executive Committee of its Board of Directors
in the following capacities and in the City of New York, and State of New
York, on this 28th day of April, 1995.
PAINEWEBBER INCORPORATED
Name Office
---- ------
Donald B. Marron Chairman, Chief Executive
Officer, Director & Member of
the Executive Committee*
Paul B. Guenther President, Chief
Administrative Officer, Director
Member of the Executive Committee*
Regina Dolan Senior Vice President, Chief
Financial Officer & Director*
Joseph J. Grano, Jr. President, Retail Sales & Marketing,
Director & Member of the Executive
Committee*
By
-------------------------------------
Bart Rekucki
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 No. 33-19786.
<PAGE>
EXHIBIT INDEX
Page
1. Ex.-27 - Financial Data Schedule
2. Ex.-99.A1 Standard Terms and Conditions of Trust dated as
of July 10, 1990 between PaineWebber Incorporated,
Depositor and Investors Bank & Trust Company and The
First National Bank of Chicago, Co-Trustees (incorporated
by reference to Exhibit 2 in File No. 33-30404).
3. Ex.-99.A2 Copy of Trust Indenture and Agreement between
PaineWebber Incorporated, Depositor, and Investors Bank &
Trust Company and The First National Bank of Chicago, as
Co-Trustees, incorporating by reference Standard Terms
and Conditions of Trust dated as of July 10, 1990.
4. Ex.-99.A5 Form of Certificate of Ownership (included in
Standard Terms and Conditions of Trust).
5. Ex.-99.A6 Certificate of Incorporation of PaineWebber
Incorporated, as amended (incorporated by reference to
Exhibit 8 in File No. 2-88344).
6. Ex.-99.A6 By-Laws of PaineWebber Incorporated, as amended
(incorporated by reference to Exhibit A(6)(a) in File No.
811-3722).
7. Ex.-99.2 Opinion of Counsel as to legality of securities
being registered.
8. Ex.-99.C1 Opinion of Counsel as to income tax status of
securities being registered.
9. Ex.-99.C2 Consent of Ernst & Young, Independent Auditors.
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 3,386,250
<INVESTMENTS-AT-VALUE> 3,386,250
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,386,250
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.675
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Exhibit 99.A2
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 17
TRUST INDENTURE AND AGREEMENT
Dated as of April 28, 1995
Incorporating
Standard Terms and Conditions of Trust
Dated as of July 10, 1990,
Between
PAINEWEBBER INCORPORATED,
as Depositor
and
INVESTORS BANK & TRUST CO.
and
THE FIRST NATIONAL BANK OF CHICAGO
as Co-Trustees
<PAGE>
THIS TRUST INDENTURE AND AGREEMENT dated as of April 28,
1995 between PaineWebber Incorporated, as Depositor and Investors
Bank & Trust Co. and The First National of Chicago, as Co-Trustees,
which sets forth certain of its provisions in full and incorporates
other of its provisions by reference to a document entitled
"Standard Terms and Conditions of Trust" dated as of July 10, 1990,
among the parties hereto (hereinafter called the "Standard Terms"),
such provisions as are set forth in full and such provisions as are
incorporated by reference constituting a single instrument.
W I T N E S S E T H T H A T :
WHEREAS, the parties hereto have heretofore or
concurrently herewith entered into the Standard Terms in order to
facilitate creation of a series of securities issued under a unit
investment trust pursuant to the provisions of the Investment
Company Act of 1940 and the laws of the State of New York, each of
which series will be composed of redeemable securities representing
undivided interests in a trust fund composed of publicly traded
common or preferred stocks issued by domestic companies, and, in
certain cases, (i) Restricted Securities as defined in the Standard
Terms and under certain circumstances described herein, (ii)
interest-bearing United States Treasury Obligations ("Treasury
Obligations"), (iii) Foreign Stocks as defined herein and under the
circumstances described herein, (iv) ADRs in respect of such
Foreign Stocks; and
WHEREAS, the parties now desire to create the seventeenth
Growth Stock trust of the aforesaid series;
NOW THEREFORE, in consideration of the premises and of
the mutual agreements herein contained, the Depositor and the
Trustee agree as follows:
Section 1. Incorporation of Standard Terms and
Conditions of Trust. Subject to the provisions of Section 1,
Section 2 and 3 of this Trust Indenture and Agreement set forth
below, all of the provisions of the Standard Terms incorporated by
reference in their entirety and shall be deemed to be a part of
this instrument as fully to all intents and purposes as though said
provisions had been set forth in full in this instrument. Unless
otherwise stated, section references shall refer to sections in the
Standard Terms.
Section 2. Specific Terms of this Series. The following
terms are hereby agreed to for this series of The PaineWebber
Equity Trust, which series shall be known and designated as "The
PaineWebber Equity Trust, Growth Stock Series 17".
<PAGE>
A. The definition of "Foreign Stocks" as set forth below
shall be added to the definitions contained in Article I:
"Foreign Stock
Any securities listed or referred to as Securities in
Schedule A to the Trust Indenture or any Supplemental
Indenture which are (a) equity securities issued by
either domestic or foreign issuers, (b) denominated in a
currency other than United States dollars, (c) traded
principally on exchanges or other systems outside the
United States, and (d) held in custody arrangements
outside the United States."
B. The definition of "Securities" in Section I shall be
amended as follows:
The phrase "and Foreign Stocks" shall be added to the
first line of the definition of Securities following the
words "contract securities" and prior to the comma.
C. The second paragraph of Section 2.02 is hereby
amended to read as follows:
"From time to time, following the Date of Deposit, the
Sponsor is hereby authorized, in its discretion to cause
the Trustee to issue additional Units upon the purchase
by the Trustee of additional Securities in respect
thereof. In such cases, the Sponsor shall instruct the
Trustee to create a specified number of additional Units
whereupon the Trustee shall purchase and deposit the
additional Securities in respect thereof. Such
additional Securities shall be held, managed and applied
by the Trustee as herein provided. In connection with
each such request to purchase additional Securities, the
Sponsor shall also deliver to the Trustee (i) cash, a
certified check or checks, other cash or equivalents or
an irrevocable letter or letters of credit issued by a
commercial bank or banks, in each case in an amount
necessary to consummate the purchase of any such
additional Securities pursuant to any contracts entered
into pursuant to this Section or (ii) instructions to
purchase such Additional Securities, along with cash, a
certified check or checks, or other cash equivalents, an
irrevocable letter or letters of credit issued by a
commercial bank or banks, in each case in the amount
based upon the price of such Additional Securities on the
date each such additional deposit occurs, multiplied by
the number of Units to be issued. All such amounts will
be based upon the price of such Additional Securities at
the Valuation Time on the date such amounts are
deposited. Such purchase and deposit of Additional
Securities shall be made, in each case, pursuant to a
Supplemental Indenture executed by the Sponsor and the
Trustee. The Trustee in each case shall ensure that each
deposit of Additional Securities pursuant to this Section
shall be made so as to match as close as is practicable
the Percentage Ratios for such Securities determined by
reference to Schedule A of the Trust Indenture for each
Trust Fund and subject to adjustment as provided in the
Standard Terms and the Trust Indenture."
<PAGE>
The Securities deposited pursuant to Section 2.02 are comprised of
(1) the Securities set forth in Schedule A hereto, including the
Foreign Stocks, (2) any Reinvestment Securities (hereinafter
defined) which may be deposited pursuant to paragraph M of this
Section 2, and (3) additional deposits of Securities pursuant to
paragraph N of this Section 2.
D. (1) The aggregate number of Units outstanding on the
date hereof for this Series is 350,000.
(2) The initial fractional undivided interest
represented by each Unit of this series shall be 1/350,000th of the
Trust Fund. A receipt evidencing the ownership of this total
number of Units outstanding on the date hereof is being delivered
by the Trustee to the Depositor.
E. The term "Record Date" shall mean June 30, 1995 and
quarterly thereafter; provided, however, that with respect to a
distribution required by Section 2.02(b), the Record Date shall be
the last business day of the month during which the contract to
purchase the Security fails.
Record Date shall also include such date or dates
determined by the Sponsor and the Trustee as necessary or desirable
and in the best interest of the Unitholders for federal or state
tax purposes, or for other purposes (hereinafter a "Special Record
Date") which date may replace a regularly scheduled Record Date if
such regularly scheduled Record Date is within 30 days of a Special
Record Date.
F. The term "Distribution Date" shall mean July 20,
1995, and quarterly thereafter, except that the Trustee may declare
a Record Date of December 31, 1995 for a Distribution Date of
January 20, 1996, if required for compliance with the rules and
regulations governing regulated investment companies. With respect
to a distribution required by Section 2.02(b), the Distribution
Date shall be twenty days after the Record Date with respect
thereto.
In the event a Special Record Date is declared,
Distribution Date shall also include such Date as is determined by
the Sponsor and the Trustee to be the Distribution Date in respect
of such Special Record Date.
<PAGE>
G. The Discretionary Liquidation Amount shall be fifty
per centum (50%) of the aggregate value of the Securities
originally deposited on the date hereof and subsequently deposited
pursuant to any Supplemental Indenture pursuant to Section 2.02 as
amended by paragraph C of this Section hereof.
H. The Mandatory Termination Date shall be June 30,
1997. Unless advised to the contrary by the Sponsor, the date on
which the Trustee shall begin to sell equity Securities in
accordance with Section 9.01 shall be June 10, 1997.
I. The Trustee's annual compensation as referred to in
Section 8.05 shall be $.0170 per Unit computed monthly based on the
largest number of Units outstanding during the preceding month.
J. The Sponsor's annual compensation pursuant to
Section 7.02 shall be computed as $.0035 per Unit, based on the
largest number of Units outstanding in a calendar year.
K. The balance in the Capital Account below which no
distribution need be made, as referred to in Section 3.04, is $.05
per Unit Outstanding.
L. In the event that the Sponsor directs the Trustee to
distribute Securities in lieu of a cash redemption pursuant to
Section 5.02 of the Standard Terms, the Trustee shall so distribute
Stock in a proportionate amount, rounding to avoid the delivery of
fractional shares and where such rounding is not possible by
delivering Stock and an amount equal to the difference between the
Redemption Value and the value of such Stocks delivered (determined
in accordance with Section 4.01 on the date of tender).
M. If Securities in the Trust are to be sold pursuant
to Section 3.06 or 9.01 of the Standard Terms or Section 2(O)
hereof, the proceeds of such sale may be reinvested by the Trustee,
if in the opinion of the Sponsor it is in the best interests of the
Unitholders and practical to do so, in Treasury Obligations
maturing on or prior to the next succeeding distribution date (the
"Reinvestment Securities"), to the extent permitted by the
Securities and Exchange Commission. Any proceeds of sale not so
reinvested in Reinvestment Securities shall be distributed to
Unitholders of record on the next Distribution Date. Any
Reinvestment Securities purchased pursuant to this Section 2(M)
shall be deposited into the Trust and shall be subject to the terms
of this Trust Indenture and the Agreement to the same extent as any
Security deposited into the Trust on the Date of Deposit and the
terms "Trust Fund" and "Securities" shall thereafter be defined as
including such Reinvestment Securities. Expenses with respect to
the purchase, including brokerage commissions, if any, of
Reinvestment Securities shall be an expense borne by the Trust.
<PAGE>
N. The Percentage Ratios referred to in paragraph C of
this Section hereof shall be subject to adjustment upon (i) a stock
split or a similar event which affects the capital structure of the
issuer of a Security in the Trust; (ii) the Trustee's disposal of a
Security, or other property in respect of a Security, pursuant to
paragraph Q of this Section hereof or Section 3.06; (iii) the
purchase of additional Securities pursuant to paragraph C of this
Section hereof or (iv) the purchase of Reinvestment Securities
pursuant to paragraph Q of this Section hereof; such that the
Percentage Ratio for each issue shall then equal, as nearly as
possible, the percentage of the aggregate market value of each
issue of Securities in the Trust as of the date immediately
preceding the date of the applicable Supplemental Indenture. In
addition, the Sponsor shall pay to the Trustee for deposit into the
Income Account an amount equal to the estimated net income per Unit
for the number of days from the initial Date of Deposit through the
settlement date for the additional securities, less the aggregate
amount of distributions per Unit from the initial Date of Deposit,
multiplied by the number of new Units created by the deposit of
additional Securities into the Trust Fund. Such amount shall be
paid by the Sponsor.
O. The Sponsor irrevocably instructs the Trustee as
follows:
(a) In the event of a tender offer for any Stock (a
"Tender Stock") deposited in the Trust, by 1:00 p.m.
three Business days before the expiration of the best
tender offer then in effect (that being the tender offer
of the highest value as determined by the Sponsor and
timely communicated to the Trustee) (the "Best Offer")
that (except as further provided in clause (d) below) the
Sponsor shall instruct the Trustee and the Trustee shall
tender the Tender Stock; provided however, the Trustee
shall place a limit order on such date, expiring at the
close of business on such date, for 90% of such Best
Offer's value as determined by the Sponsor; provided
further, that in the event the Best Offer is of an
unconditional tender offer for all outstanding Tender
Stock and is not conditioned upon the offeror's receipt
of financing, such Tender Stock shall be tendered and not
sold. Any securities received pursuant to a consummated
tender offer shall be sold by the Trustee as soon as
practicable. Any Tender Stock which cannot be sold as
set forth above will be tendered;
(b) In the event Tender Stock has been tendered but
a better tender offer (that being a tender offer with a
higher value than a previous Best Offer, as determined by
the Sponsor) (a "Better Offer") is thereafter made prior
to the expiration of any withdrawal rights, the Sponsor
shall timely notify the Trustee and the Trustee shall use
its best efforts to exercise its withdrawal rights and
apply the procedures set forth in (a) above for the
Better Offer;
<PAGE>
(c) Upon the consummation of a tender offer, in the
event any Tender Stock is not accepted pursuant to the
terms of a tender offer, the Trustee shall sell the
Tender Stock as soon as practicable;
(d) During the periods during which the Sponsor
creates Additional Units for the Trust, the Trustee shall
not tender or sell Tender Stock;
(e) In the event of a sale of substantially all of
the assets of an issuer of Stock or merger of an issuer
of Stock into another issuer, the Trustee shall sell the
affected Stock pursuant to a limit order for 90% of the
value to be received by shareholders in such transaction
(as determined by the Sponsor), after the announcement of
such transaction. If after such acquisition or merger
the Trustee still holds Stock upon such acquisition or
merger or any resulting securities are received in
respect of Stock the Trustee shall sell them as soon as
practicable;
(f) In the event the issuer of a Stock announces
that another company or companies will be merged into it,
the Trustee shall retain such Stock unless the Sponsor
directs the Trustee to sell the Stock for one or more of
the reasons set forth in Section 3.06.
(g) In the event of a corporate reorganization, the
Trustee shall sell securities received in respect of
Stock as soon as practicable.
P. Sponsor shall immediately advise the Trustee if it
is unable to determine (i) if an offer is a Best Offer or Better
Offer or (ii) the value of a tender offer, sale of substantially
all assets or merger. In such event (a) in the case of a tender
offer, the Trustee shall sell the Tender Stock as close to the
opening of the stock exchanges as is practicable on the last
business day a tender offer is in effect and (b) in the event of a
sale of substantially all assets or merger, the Trustee shall
continue to hold the Stock.
<PAGE>
Q. Paragraph (e) of Section 3.06 shall be amended to
read as follows:
"that a decline in price has occurred or such materially
adverse market or credit factors have occurred that, in
the opinion of the Sponsor, the retention of the
Securities would not be in the best interest of the
Unitholders."
R. The first paragraph of Section 3.07 shall not apply
to the Trust.
S. The Trustee will calculate the Trust's value, as
provided in Section 5.01 on the dates set forth in said
Section 4.01 and additionally upon termination (or the last
business day prior thereto). The value of Treasury Obligations, if
any, held in the Trust, pursuant to Section M above, shall be
determined as set forth in Section 4.01 except that for all
purposes such evaluation shall be based on the basis of bid prices
which may be obtained from an evaluation service.
T. In the event that any issuer of a Security in the
Trust issues a stock dividend in lieu of a cash dividend, such
dividend shall be sold by the Trustee, and the proceeds thereof
shall be Income, as defined in the Standard Terms, and shall be
deposited into the Income Account and distributed as of the next
succeeding Distribution Date.
U. All Units will be held in book-entry form, except
that upon request a Unitholder may receive a certificate
representing beneficial ownership of its Units.
V. The following shall be added to the end of the first
sentence in the paragraph following subparagraph (f) of Section
3.06:
"in the case of a Regulated Investment Company".
W. The second paragraph of Section 3.05 shall be
amended as follows:
the phrase "Within a reasonable period of time after
the last day of each calendar year. . ." shall be
deleted and the following phrase shall be
substituted therefor: "Within 60 days following the
last day of each calendar year. . ."
X. The text of Section 3.13 shall be deleted and the
following text shall be inserted in its place:
"Section 3.13. Diversification Test. In the case of a
trust which has elected to qualify as a Regulated
Investment Company the Trustee shall determine the value
of the Securities in the Trust Fund as of (1) the Friday
(or the immediately preceding Business Day if such Friday
is not a Business Day) before the last business day of
the first quarter of the Trust Fund's first taxable year
and (2) the last business day of the first quarter of the
Trust Fund's first taxable year. For purposes of this
Section 3.13 each said day and each such day in any
subsequent quarter in which additional Securities are
acquired shall except as the context may otherwise
require, be hereinafter referred to as the
"Diversification Test Date."
<PAGE>
On each Diversification Test Date the Trustee shall
determine whether or not the aggregate fair market value
of all Securities of any one issuer valued at greater
than 5% of the total assets of the Trust Fund exceeds 50%
of the total assets of the Trust Fund on such
Diversification Test Date. In making the necessary
computations the Trustee shall compute the fair market
value of the Securities by taking the value of the
Securities in the Trust Fund, including the amount of any
accrued interest or dividends receivable thereon, by
treating as Securities of the same issuer only those
securities whose name so dictates; by treating contracts
to purchase Securities as if the Securities subject to
such contracts had been acquired by the Trust Fund; and
by the settlement of contracts to purchase Securities as
the acquisition of Securities on their respective
settlement dates.
In the event the foregoing determination by the
Trustee states that the aggregate value of Securities of
any one issuer valued at more than 5% of the total assets
of the Trust Fund on the Friday (or the immediately prior
Business Day if such Friday is not a Business Day) before
the last Business Day in the first quarter of the first
taxable year of the Trust Fund exceeds 50% of the total
assets of the Trust Fund on such date, as provided in
Section 3.06, other than for Government Securities, the
Sponsor shall direct the Trustee to sell all or any
portion of the Securities whose value is greater than 50%
of total assets of the Trust Fund or take such other
action as is necessary, so that the aggregate fair market
value of Securities of any one issuer with values greater
than 5% of the total assets of the Trust Fund does not
exceed 50% of the total assets of the Trust Fund on the
last Business Day of the first quarter of the first
taxable year of the Trust Fund. On the last day of the
first quarter of the first taxable year of the Trust Fund
the Trustee shall provide a certificate satisfactory in
form and substance to the Sponsor and its counsel to the
effect that the aggregate fair market value of all
Securities of any one issuer valued at greater than 5% of
the assets does not exceed 50% of the fair market value
of the Trust's total assets on the last day of the
quarter.
<PAGE>
In order to ensure the continued qualification of
the Trust as a Regulated Investment Company, the Trustee
shall cause a reivew to be performed by the independent
certified public accountants designated by the Sponsor
pursuant to Section 8.01(e) of the Trust prior to the end
of each calendar year. The purpose of such review shall
be to determine whether the Trust is deriving at least
90% of its gross income, from interest, dividends, and
gains from the sale or other disposition of the
underlying Trust Securities. The Trustee shall submit
the written results of such review to the Sponsor.
In the event that the foregoing review states that
less than 90% of the gross income of the Trust is derived
from interest, dividends and gains from the sale or other
disposition of the underlying Trust Securities the
Sponsor shall direct the Trustee to sell certain of the
Trust Securities pursuant to Section 3.06 in an amount
deemed necessary by the Sponsor to maintain the status of
the Trust as a Regulated Investment Company.
In performing the duties set forth in this Section 3.13,
the Trustee may seek the advice of the independent certified public
accountants designated by the Sponsor pursuant to Section 8.01
hereof and may rely upon the advice of such accountants.
Y. Section 3.15 as set forth below shall be added to the
Standard Terms as follows:
"Section 3.15. Foreign Exchange Transactions;
Reclaiming Foreign Taxes. (a) The Sponsor shall direct
the Trustee with regard to the Foreign Stocks held in the
Trust Fund, by means of written instructions, with
respect to the circumstances under which foreign exchange
transactions are to be entered into and calculations
under this Standard Terms are to be made, in order to
convert amounts receivable in respect of the Foreign
Stocks in foreign currencies into U.S. dollars.
(b) The Trustee shall use reasonable efforts to reclaim
or recoup any amounts of non-U.S. tax paid by the Trust
or withheld from income received by the Trust to which
the Trust may be entitled to a refund."
<PAGE>
(Z) Section 8.01 shall be amended to add new subsection
(j) thereto as follows:
"(j) (I) Subject to the provisions of subparagraphs (II)
and (III) of this clause (j), the Trustee may employ
agents and sub-custodians and shall not be answerable for
the default or misconduct of any such agents or sub-
custodian if such agents or sub-custodians shall have
been selected with reasonable care. If the Trustee shall
hold the Securities in bearer form, the Trust will hold
the Securities in such manner and the Trustee shall take
such steps as, in the opinion of counsel to the Trust,
are required by law or regulation to assure that the
limitations imposed by the applicable sections of the
Internal Revenue Code (including Sections 165 and 1287
and any successor sections thereof) on holders of
registration-required obligations that are not issued in
registered form will be inapplicable to the Trust. The
Trustee shall not be liable in respect of any action
taken or suffered under this Indenture in good faith, in
accordance with an opinion of counsel. The fees and
expenses charged by such agents and sub-custodians shall
constitute an expense of the Trustee reimbursable from
the Income and Capital Accounts as set forth in Section
3.04 hereof.
(II) The Trustee may place and maintain in the care
of an Eligible Foreign Custodian (defined herein) which
is employed by the Trustee as a sub-custodian as
contemplated by suparagraph (I) of this clause (j) and
which may be an affiliate or subsidiary of the Trustee or
any other entity in which the Trustee may have an
ownership interest the Trust's Foreign Securities, cash
and cash equivalents in amounts reasonably necessary to
effect the Trust's Foreign securities transactions,
provided that:
(l) the Trustee shall have:
(i) Determined that maintaining the Trust's assets
in a particular country or countries is consistent with
the best interests of the Trust and the Unitholders;
(ii) Determined that maintaining the Trust's assets
with such Eligible Foreign Custodian is consistent with
the best interests of the Trust and the Unitholders; and
(iii) Entered into a written contract which will
govern the manner in which such Eligible Foreign
Custodian will maintain the Trust's assets and which
provides that;
(A) The Trust will be adequately indemnified
and its assets adequately insured in the event of
loss;
<PAGE>
(B) The Trust's assets will not be subject to
any right, charge, security interest, lien or claim
of any kind in favor of the Eligible Foreign
Custodian or its creditors except a claim of payment
for their safe custody or administration;
(C) Beneficial ownership for the Trust's
assets will be freely transferable without the
payment of money or value other than for safe
custody or administration;
(D) Adequate records will be maintained
identifying the assets as belonging to the Trust;
(E) The Trust's independent public accountants
will be given access to records identifying assets
of the Trust or confirmation of the contents of
those records; and
(F) The Trustee will receive periodic reports
with respect to safekeeping of the Trust's asets,
including, but not necessarily limited to,
notification of any transfer to or from the
Trustee's accounts.
(2) The Trustee shall establish a system to monitor such
foreign custody arrangements to ensure compliance with the
conditions of this subparagraph.
(3) The Trustee, at least annually, reviews and approves
the continuing maintenance of Trust assets in a particular country
or countries with a particular eligible foreign custodian or
particular Eligible Foreign Custodians as consistent with the best
interests of the Trust and the Unitholders.
(4) The Trustee shall maintain and keep current written
records regarding the basis for the choice or continued use of a
particular Eligible Foreign Custodian pursuant to this
subparagraph, and such records shall be available for inspection by
Unitholders at the Trustee's offices at all reasonable times during
its usual business hours.
(5) Where the Trustee has determined that a foreign
custodian may no longer be considered eligible under this
subparagraph or that, pursuant to subparagraph (3) above,
continuance of the arrangement would not be consistent with the
best interests of the Trust and the Unitholders, the Trust must
withdraw its assets from the care of that custodian as soon as
reasonably practicable, and in any event within 180 days of the
date when the Trustee made the determination.
<PAGE>
As used in this subparagraph II
(1) "Foreign Securities" means, securities issued and
sold primarily outside the United States by a foreign government, a
national of any foreign country or a corporation or other
organization incorporated or organized under the laws of any
foreign country and securities issued or guaranteed by the
Government of the United States or by any state or any political
subdivision thereof or by any agency thereof or by any entity
organized under the laws of the United States or of any state
thereof which have been issued and sold primarily outside the
United States, and Foreign Stocks.
(2) "Eligible Foreign Custodian" means:
(a) The following securities depositories and
clearing agencies which operate transnational systems for the
central handling of securities or equivalent book entries which, by
appropriate exemptive order issued by the Commission, have been
qualified as Eligible Foreign Custodians for the Fund but only for
so long as such exemptive order continues in effect: Morgan
Guaranty Trust Company of New York, Brussels, Belgium in its
capacity as operator of the Euro-Clear System ("Euro-Clear") and
its sucessors and Central de Livraison de Valeuers Mobilieres, S.A.
("CEDEL").
(b) Any other entity that shall have been qualified
as an Eligible Foreign Custodian for the Foreign Securities of the
Trust by the Commission by exemptive order, rule or other
appropriate action, commencing on such date as it shall have been
so qualified but only for so long as such exemptive order, rule or
other appropriate action continues in effect.
The determinations set forth above to be made by the
Trustee should be made only after consideration of all matters
which the Trustee, in carrying out its fiduciary duties, finds
relevant, including but not necessarily limited to, consideration
of the following:
1. With respect to the selection of the country where
the Trust's assets will be maintained, the Trustee should consider:
a. Whether applicable foreign law would restrict
the access afforded the Trust's independent public accountants to
books and records kept by an eligible foreign custodian located in
that country;
b. Whether applicable foreign law would restrict
the Trust's ability to recover its assets in the event of the
bankruptcy of an Eligible Foreign Custodian located in that
country;
<PAGE>
c. Whether applicable foreign law would restrict
the Trust's ability to recover assets that are lost while under the
control of an Eligible Foreign Custodian located in that country;
d. The likelihood or expropriation,
nationalization, freezes, or confiscation of the Trust's assets;
and
e. Whether difficulties in converting the Trust's
cash and cash equivalents to U.S. dollars are reasonably
foreseeable;
2. With respect to the selection of an Eligible Foreign
Custodian, the Trustee should consider:
a. The financial strength of the Eligible Foreign
Custodian, its general reputation and standing in the country in
which it is located, its ability to provide efficiently the
custodial services required and the relative cost for those
services;
b. Whether the Eligible Foreign Custodian would
provide a level of safeguards for maintaining the Trust's assets
not materially different from that provided by the Trustee in
maintaining the Trust's securities in the United States;
c. Whether the Eligible Foreign Custodian has
branch offices in the United States in order to facilitate the
assertion of jurisdiction over and enforcement of judgments against
such custodian; and
d. In the case of an Eligible Foreign Custodian
that is a foreign securities depository, the number of participants
in, and operating history of, the depository; and
3. The extent of the Trust's exposure to loss because
of the use of an Eligible Foreign Custodian. The potential effect
of such exposure upon Unitholders shall be disclosed, if material,
by the Sponsor in the Prospectus relating to the Trust.
(III) The Trustee will indemnify and hold the Trust
harmless from and against any loss which shall occur as the result
of the failure of an Eligible Foreign Custodian holding the Foreign
Securities of the Trust to exercise reasonable care with respect to
the safekeeping of such Foreign Securities to the same extent that
the Trustee would be required to indemnify and hold the Trust
harmless if the Trustee were holding such foreign securities in the
United States' jurisdiction whose laws govern the Indenture,
provided, however, that the Trustee will not have liability for
loss except by reason of conduct on the part of the Trustee or the
eligible foreign custodian which would contravene the standard of
care to which the Trustee is required to adhere as provided in the
Indenture."
<PAGE>
AA. For the purpose of this Trust, Section 10.03 shall
be amended so that the text below shall be added to the paragraph
following the last sentence thereof:
"The accounts of the Trust shall be audited not less
than annually by independent public accountants
selected by the Sponsor. So long as the Sponsor is
maintaining a secondary market for Units, the
Sponsor shall bear any audit expense which exceeds
$.0050 per Unit".
BB. Section 3.06 shall be amended by adding the
following subparagraph (j) thereto:
"or (j) that any of the Foreign Stocks held by an
Eligible Foreign Custodian (as defined in Section
8.01 (j) herein) as the Trustee may employ hereunder
shall have been declared ineligible for deposit by
any Eligible Foreign Custodian."
CC. Section 4.01 shall be amended by adding the
following paragraph to the end of Section 4.01:
"The Trustee shall determine the value of the
Foreign Stocks based on the U.S. dollar equivalent
for such securities calculated at the relevant
exchange rate for such securities. The relevant
exchange rate so used will include the cost of any
forward foreign exchange contract in the relevant
foreign currency, if any, purchased by the Trustee
in accordance with the provisions set forth in
Section 3.15 hereof."
Section 3. The Trustee shall not be required to make
advances.
Section 4. The Trust hereby elects to qualify as a
Regulated Investment Company under the Internal Revenue Code of
1986, as amended.
<PAGE>
IN WITNESS WHEREOF, PaineWebber Incorporated has caused
this Trust Indenture and Agreement to be executed by one of its
Vice Presidents and its corporate seal to be hereto affixed and
attested by one of its Assistant Secretaries, and Investors Bank &
Trust Co. and The First National Bank of Chicago have caused this
Trust Indenture to be executed by one of their Authorized
Signatories and their corporate seals to be hereto affixed and
attested by one of their Authorized Signatories, all as of the date
first above written.
PAINEWEBBER INCORPORATED
as Depositor and Sponsor
SEAL By________________________
Corporate Vice President
Attest:
_____________________________
Secretary
<PAGE>
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this 28th day of April, 1995 before me personally
appeared Bart Rekucki, to me known, who being by me duly sworn,
said that he is a Corporate Vice President of PaineWebber
Incorporated, one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto
by like authority.
______________________________
Notary Public
<PAGE>
FIRST NATIONAL BANK OF CHICAGO
By _______________________________
Title
SEAL
Attest:
__________________________
Title
<PAGE>
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this 28th day of April, 1995 before me personally appeared
, to me known, who being by me duly sworn, said
that he is a of First National Bank of Chicago, one
of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was
so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
____________________________________________
Notary Public
<PAGE>
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 17
SCHEDULE OF INVESTMENTS
AS OF DATE OF DEPOSIT, APRIL 28, 1995
COMMON STOCKS (1)
<TABLE>
<CAPTION>
NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)
- ------------------------------------------ ----------- ------------------
<S> <C> <C>
Banking and Financial Institutions:
(13.77%)
BayBanks, Inc. .......................... 1,870 $ 116,875.00
California Federal Bank* ................ 9,510 116,497.50
Glendale Federal Bank FSB* .............. 9,320 116,500.00
Midlantic Corporation, Inc. ............. 3,140 116,572.50
Chemical: (20.61%)
Betz Laboratories, Inc. ................. 2,780 116,065.00
Calgon Carbon Corporation ............... 9,590 116,278.75
Eastman Chemical Company ................ 2,040 116,280.00
Rohm & Haas Company ..................... 1,990 116,415.00
Sigma-Aldrich Corporation ............... 2,810 116,615.00
Union Carbide Corporation ............... 3,740 116,407.50
Computer Hardware/Software: (13.76%)
Apple Computer, Inc. .................... 3,080 116,655.00
AST Research, Inc.* ..................... 6,510 116,366.25
Informix Corporation* ................... 2,920 116,435.00
Sybase, Inc.* ........................... 4,800 116,400.00
Electrical Equipment: (3.44%)
Honeywell, Inc. ......................... 2,990 116,610.00
Industrial: (24.35%)
Amtrol, Inc. ............................ 6,380 116,435.00
Cummins Engine Company, Inc. ............ 2,640 116,820.00
Farrel Corporation ...................... 1,750 9,187.50
Giddings & Lewis, Inc. .................. 6,470 116,460.00
Harnischfeger Industries, Inc. .......... 3,980 116,415.00
INDRESCO, Inc.* ......................... 8,320 116,480.00
Johnson Controls, Inc. .................. 2,160 116,370.00
Navistar International Corporation* .... 8,240 116,390.00
Medical Devices: (3.44%)
Cordis Corporation* ..................... 1,580 116,525.00
Oil Equipment and Services: (6.87%)
Halliburton Company ..................... 3,020 116,270.00
Smith International, Inc.* .............. 6,700 116,412.50
Packaging: (3.44%)
Sealright Company, Inc. ................. 6,950 116,412.50
Telecommunications: (10.32%)
IntelCom Group, Inc.* ................... 11,360 116,440.00
Metrocall, Inc.* ........................ 6,460 116,280.00
Vodafone Group plc (4) .................. 3,680 116,380.00
-------------
TOTAL INVESTMENTS ....................... $3,386,250.00
=============
- ---------------
(1) All Securities are represented entirely by contracts to purchase
Securities.
(2) Valuation of the Securities by the Co-Trustees was made as described
in "Valuation" as of the close of business on the business day prior to
the Date of Deposit.
(3) The loss to the Sponsor on the date of deposit is $1,625.
(4) American Depositary Receipts.
* Non-income producing security.
</TABLE>
Exhibit 99.2
April 28, 1995
PaineWebber Inc.
1200 Harbor Boulevard
Weehawken, New Jersey 07087
The First National Bank of Chicago
Corporate Trust Administration
1 First National Plaza
Chicago, Illinois 60670-0126
Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
Re: PaineWebber Equity Trust,
Growth Stock Series 17
Ladies and Gentlemen:
We have served as counsel for PaineWebber Incorporated as
sponsor and depositor (the "Sponsor") of PaineWebber Equity Trust,
Growth Stock Series 17 (hereinafter referred to as the "Trust") in
connection with the issuance by the Trust of an initial 350,000
units of fractional undivided interest in the Trust (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 Sponsor, as amended,
certified by the Secretary of the Sponsor on the date
hereof;
(b) Resolutions of the Board of Directors of the
Sponsor adopted on December 3, 1971 relating to the Trust
and the sale of the Units, certified by the Secretary of
the Sponsor on the date hereof;
<PAGE>
(c) Resolutions of the Executive Committee of the
Sponsor adopted on September 24, 1984, certified by the
Secretary of the Sponsor on the date hereof;
(d) Powers of Attorney as set forth in the
certificate of the Secretary of the Sponsor dated the
date hereof;
(e) The Registration Statement on Form S-6 (File
No. 33-54567) 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") and amendments thereto
including Amendment No. 1 ("Amendment No. 1") proposed to
be filed on April 28, 1995 (the "Registration
Statement");
(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, (the "1940 Act Notification");
(g) The registration of the Trust filed with the
Commission under the 1940 Act on Form N-8B-2 (File No.
811-5841), as amended (the "1940 Act Registration);
(h) The prospectus included in Amendment No. 1 (the
"Prospectus");
(i) The Standard Terms and Conditions of the Trust
dated as of July 10, 1990, as amended, between the
Sponsor and Investors Bank & Trust Company and The First
National Bank of Chicago (the "Co-Trustees") (the
"Standard Terms");
(j) The Trust Indenture dated as of April 28, 1995
between the Sponsor and the Co-Trustees (the "Trust
Indenture" and, collectively with the Standard Terms, the
"Indenture and Agreement");
(k) The Closing Memorandum dated April 28, 1995,
between the Sponsor and the Co-Trustees (the "Closing
Memorandum");
(l) Officers Certificates required by the Closing
Memorandum;
(m) The form of certificate of ownership for units
(the "Certificate") to be issued under the Indenture and
Agreement; and
<PAGE>
(n) 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 Sponsor and the Indenture and Agreement in
paragraphs (i) and (iii) 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 Sponsor 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 Sponsor is duly qualified as a foreign
corporation and is in good standing as such within the State of New
York;
(iii) The Indenture and Agreement has been duly
authorized, executed and delivered by the Sponsor and, assuming the
due authorization, execution and delivery by the Trustee, is a
valid and binding agreement of the Sponsor, enforceable against the
Sponsor in accordance with its terms;
(iv) The Trust has been duly formed and is validly
existing as an investment trust under the laws of the State of New
York and has been duly registered under the Investment Company Act
of 1940;
<PAGE>
(v) The terms and provisions of the Units conform in all
material respects to the description thereof contained in the
Prospectus;
(vi) 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 Sponsor'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 Sponsor in effect on the date hereof;
(vii) The Certificates to be issued by the Trust, when
duly executed by the Sponsor and the Co-Trustees in accordance with
the Indenture and Agreement, upon delivery against payment therefor
as described in the Registration Statement and 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; and
(viii) While the Registration Statement has not yet
become effective we have no reason to believe that such
Registration Statement will not become effective on the date and at
the time requested therein pursuant to Rule 487.
In addition, we have participated in conferences with
representatives of the Sponsor, the Co-Trustees, the Trust's
accountants and others concerning the Registration Statement and
the Prospectus and have considered the matters required to be
stated therein and the statements contained therein, although we
have not independently verified the accuracy, completeness or
fairness of such statements. Based upon and subject to the
foregoing, nothing has come to our attention to cause us to believe
that the Registration Statement, as of the date hereof, contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading, or that the Prospectus, as of the
date hereof, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being
understood that we have not been requested to and do not make any
comment in this paragraph with respect to the financial statements,
schedules and other financial and statistical information contained
in the Registration Statement or the Prospectus).
<PAGE>
SIGNATURE
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 consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of our name
wherever it appears in the Registration Statement and the
Prospectus.
Very truly yours,
ORRICK, HERRINGTON & SUTCLIFFE
Exhibit 99.C1
April 28, 1995
PaineWebber Incorporated
1200 Harbor Boulevard
Weehawken, New Jersey 07087
The First National Bank of Chicago
Corporate Trust Administration
1 First National Plaza
Chicago, Illinois 60670-0126
Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
Ladies & Gentlemen:
As counsel for PaineWebber Incorporated (the
"Depositor"), we have examined an executed copy of the Trust
Indenture and Agreement dated as of April 28, 1995 (the
"Indenture") and Standard Terms and Conditions of Trust, dated as
of July 10, 1990 (the "Agreement"), both between the Depositor, and
Investors Bank & Trust Company and The First National Bank of
Chicago as Co-Trustees. The Indenture established a trust called
The PaineWebber Equity Trust, Growth Stock Series 17 (the "Trust")
into which the Depositor deposited certain stocks, American
Depository Receipts, (the "Securities"), and moneys to be held by
the Trustee upon the terms and conditions set forth in the
Indenture and Agreement. Under the Indenture, units were issued
representing fractional undivided interests in the Trust (the
"Units").
Based upon the foregoing and upon an examination of such
other documents and an investigation of such matters of law as we
have deemed necessary, we are of the opinion that, under existing
statutes and decisions:
<PAGE>
SIGNATURE
1. The Trust intends to qualify for and elect tax
treatment as a regulated investment company under the Internal
Revenue Code of 1986, as amended (the "Code"). Assuming that such
election is made and the Trust so qualifies, the Trust would not be
subject to federal income tax on such part of its net income and
capital gain, if any, as is timely distributed to Unitholders.
2. The Trust will be subject to New York State and New
York City franchise and income tax. However, in any fiscal year in
which the Trust qualifies as a regulated investment company under
Section 851 of the Code, and in which the Trust distributes all of
its net income and capital gains to Unitholders, the sum of such
New York State and New York City tax to which the Trust will be
subject will not exceed $675.00.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 33-54567) relating
to the Units referred to above and to the use of our name and to
the reference to our firm in said Registration Statement and in the
related Prospectus.
Very truly yours,
ORRICK, HERRINGTON & SUTCLIFFE
SIGNATURE
Exhibit 99.C2
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in this Amendment to the Registration
Statement of our report dated April 28, 1995 relating to the
Statement of Financial Condition of The PaineWebber Equity Trust,
Growth Stock Series 17, including the Schedule of Investments,
included herein, and to the reference made to us under the caption
"Independent Auditors".
ERNST & YOUNG LLP
April 28, 1995
New York, New York
