<PAGE>
File No. 333-15797
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 20
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:
CARTER, LEDYARD & MILBURN
Attention: Kathleen H. Moriarty, Esq.
2 Wall Street
New York, New York 10005
E. Total and amount of securities being registered:
An indefinite number of Units pursuant to Rule 24f-2
of the Investment Company Act of 1940.
F. Proposed maximum offering price to the public
of the securities being registered:
Indefinite
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G. Amount of filing fee, computed at one-thirty-third
of 1 percent of the proposed maximum aggregate
offering price to the public:
None required pursuant to Rule 24f-2.
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF
THE REGISTRATION STATEMENT
/ / Check box if it is proposed that this filing will
become effective on _________________ at ____ p.m.
pursuant to Rule 487.
2
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THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 20
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.
3
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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
- --------------
* Not applicable, answer negative or not required.
4
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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
- --------------
* Not applicable, answer negative or not required.
5
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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 )
- --------------
* Not applicable, answer negative or not required.
6
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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
- --------------
* Not applicable, answer negative or not required.
7
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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 )
- --------------
* Not applicable, answer negative or not required.
8
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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
- --------------
* Not applicable, answer negative or not required.
9
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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.
10
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PAINEWEBBER EQUITY TRUST
Growth Stock Series 20
#############################################################################
GRAPHIC OMITTED
#############################################################################
- -----------------------------------------------------------------------------
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. FOCUSING ON GROWTH IN THE INFORMATION TECHNOLOGY SECTOR,
PAINEWEBBER HAS IDENTIFIED SEVERAL KEY SEGMENTS OF SUCH SECTOR THAT IT BELIEVES
ARE GROWING PARTICULARLY RAPIDLY DUE TO THE CONVERGENCE OF COMPUTER,
COMMUNICATIONS, CONSUMER AND INFORMATION APPLICATIONS. The value of the Units
will fluctuate with the value of the portfolio of underlying securities.
The minimum purchase 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.
- -----------------------------------------------------------------------------
SPONSOR:
PAINEWEBBER INCORPORATED
Read and retain this prospectus for future reference.
PROSPECTUS DATED SEPTEMBER 4, 1997
<PAGE>
ESSENTIAL INFORMATION REGARDING THE TRUST
AS OF SEPTEMBER 3, 1997(1)
<TABLE>
<CAPTION>
<S> <C>
Sponsor: PaineWebber Incorporated
Co-Trustees: Investors Bank & Trust Company
The First National Bank of Chicago
</TABLE>
Initial Date of Deposit: September 4, 1997
<TABLE>
<CAPTION>
<S> <C>
Aggregate Value of Securities in Trust: ................. $962,500
Number of Units: ........................................ 100,000
Fractional Undivided Interest in the Trust Represented by
Each Unit: ............................................. 1/100,000th
Calculation of Public Offering Price Per Unit(2)
Aggregate Value of Underlying Securities in Trust ...... $962,500
Divided by 100,000 Units ............................... $9.625
Plus Sales Charge of 3.75% of Public Offering Price
(3.90% of net amount invested per Unit) ............... $.375
Public Offering Price per Unit ......................... $10.00
Redemption Value: ....................................... $9.625
Evaluation Time:......................................... 4:00 P.M. New York time.
Income Account Distribution Dates(3): ................... January 20, 1998 and quarterly
thereafter and on the Mandatory
Termination Date.
Capital Account Distribution Dates(3):................... January 20, 1998 and annually
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:............................................ December 31, 1997 and quarterly
thereafter.
Mandatory Termination Date:.............................. September 30, 2002
Discretionary Liquidation Amount:........................ 50% of the value of Securities upon
completion of the deposit of
Securities.
Estimated Annual Organizational Expenses of the Trust(4): $.0040 per Unit.
Estimated Other Expenses of the Trust.................... $.0280 per Unit.
--------------------------------------
Total Estimated Annual Expenses of the Trust(5): ....... $.0320 per Unit.
</TABLE>
- ------------
(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 incurred in
connection with the acquisition of additional Stocks will be at the
expense of the Trust. (See "Essential Information Regarding the
Trust--Additional Deposits," "Risk Factors and Special Considerations"
and "Valuation").
(3) See "Distributions".
(4) This Trust (and therefore the investors) will bear all or a portion of
its organizational costs--including costs of preparing the initial
registration statement, the trust indenture and other closing documents,
registering Units with the SEC and the states and the initial audit of
the Portfolio--as is common for mutual funds. Historically, the sponsors
of unit investment trusts have paid all the costs of establishing those
trusts.
(5) See "Expenses of the Trust". Estimated dividends from the Stocks, based
upon last dividends actually paid, plus income from the U.S. Treasury
Obligations are expected by the Sponsor to be sufficient to pay estimated
expenses of the Trust. If such dividends and income paid are insufficient
to pay expenses, the Trustee is authorized to sell Securities in an
amount sufficient to pay such expenses. (See "Administration of the
Trust" and "Expenses of the Trust".)
2
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ESSENTIAL INFORMATION REGARDING THE TRUST (CONTINUED)
THE TRUST. The objective of the PaineWebber Equity Trust, Growth Stock
Series 20 (the "Trust") is to provide for capital appreciation through an
investment primarily in equity stocks (approximately 98 1/4% of the Trust
Portfolio) which have, in the Sponsor's opinion, on the Initial Date of
Deposit, an above-average potential for capital appreciation (referred to
herein as the "Stocks"). The balance of the Trust Portfolio (approximately
1 3/4%) will be invested in United States Treasury Obligations, (the "Treasury
Obligations", together with the Stocks, are collectively referred to herein as
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 benefit from growth in the information
technology sector. In PaineWebber's view, the information technology sector of
the U.S. economy will be a key source of economic growth for the next several
years. PaineWebber has therefore identified certain trends discussed briefly
below which it believes will help highlight those companies which should
benefit from the growth potential in the information technology sector.
SUMMARY OF RISK FACTORS. There are certain investment risks inherent in unit
trust portfolios which hold equity securities. The Stocks may appreciate or
depreciate in value or pay dividends depending on the full range of economic
and market influences affecting corporate profitability, the financial
condition of 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. See "Risk Factors and Special
Considerations" for a discussion of these risks. The Trust Portfolio is
diversified among the various industry groups involved in the provision of
information technologies in an attempt to limit the risks inherent in owning a
portfolio of stock which does not provide a broad base of industry groupings as
shown below in the table included under the caption "The Composition of the
Portfolio". There is no assurance, however, that such diversification will
eliminate an investor's risk of earnings or market price volatility or trading
liquidity. The Trust is considered "concentrated" in stocks of issuers that
manufacture and market personal computers or computer components. See "Risk
Factors and Special Considerations" for a discussion of some of the risks which
may be involved with the ownership of such stocks. There can also be no
assurance that the Trust portfolio will remain constant during the life of the
Trust. For example, the Trustee may be required to sell Securities to pay for
the expenses of the Trust (see "Expenses of the Trust" and "Administration of
the Trust--Accounts"). Also, 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 captions "The Trust" and "Administration of the
Trust--Portfolio Supervision," herein.
3
<PAGE>
THE COMPOSITION OF THE PORTFOLIO.
PaineWebber believes the relentless advance of semiconductor technology
converging with the emergence of the installed PC base in office and home, and
the shift to inter-networking have laid groundwork for the Information Age in
which the creation, distribution and manipulation of information is a central
wealth-creating activity.
To put this shift into perspective, some of the previous evolutionary
"tools" around which people have reorganized their society include: the
factory, the steam engine, electricity and the telephone. Perhaps the most
appropriate historical analogy to what is occurring today is, however, the
automobile. Although autos entered mass production in the second decade of the
20th century, they became much more ubiquitous after World War II. The key
reason for this was that it was not until after World War II that a fully
integrated "auto infrastructure"--consisting of interstate highways, shopping
malls, and greatly expanded suburbs--was built. Similarly, although the
personal computer has been around since the 1970s, today there is finally a
widespread installed base in the office and home. And it is just recently that
the "information age infrastructure" consisting of networks, Internet Service
Providers and Web sites, has begun to be built. In the last few years, U.S.
firms have poured money into the Information Age infrastructure at an
astonishing pace. Information processing now accounts for about 45% of total
equipment investment, up from 15% in the early 1980s. Therefore, with the shift
to the Information Age just getting underway, it is the investment implications
of this shift that are the focus of PaineWebber's opinion.
The next major Information Age development can be summarized by "five Cs",
or the Convergence of the Computer, Communications, Consumer applications and
Content. The key factor that is enabling this convergence is the shift to
digital technology. Digital technology makes it possible to convert text,
sound, graphics and moving images into coded digital messages which can be
combined, stored, manipulated and transmitted quickly, efficiently and in large
volumes over wired and wireless networks without loss of quality. As a result,
the computer broadcast, cable, telephone, satellite and media entertainment
industries are gradually becoming part of one single market place. This
convergence will accelerate in coming years, so that the leading growth
companies of the future will not be defined as software or hardware or content
or communications companies but rather as information companies.
PaineWebber believes the key beneficiaries of converging technologies in the
Information Age will be involved with:
o PCS--To access information, some analysts have predicted that there
will be a single information appliance which will be the primary device
for computing, communicating, entertaining, etc. PaineWebber disagrees.
Rather PaineWebber believes there will be many smart devices most of
which will be linked together and many of which will perform several
functions. But while there will not be one single information
appliance, the PC will be the single most important tool. It will be
the central, multipurpose consumer device adapting to the mainstream
needs of users for business, communications and visual entertainment,
becoming the only device which performs all of these functions easily
and efficiently. The PC will be as ubiquitous in the home as the
telephone is today.
If the PC is to become the central, multipurpose device of the
Information Age, it must offer even greater power at even lower cost
than is the case today--in other words, Moore's Law (Intel co-founder
Gordon Moore's prediction that transistor density on integrated
circuits would double every two years) must hold true for many years to
come.
4
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o INTERNET--A key medium. Net is home to three business models chasing
three revenue sources: entertainment (advertising/subscription revenues);
information (subscription revenues); commerce (sales revenues). The most
valuable Web sites will be owned by companies with strong brands. The
Internet also offers huge cost savings opportunities.
o DATA MANAGEMENT AND DATA WAREHOUSING--With information the basic economic
resource, data management and data warehousing are critical for
organizing and exploiting data.
o BANDWIDTH--In order to truly move to an Information Age, consumers at
home must have significantly higher connection speeds made available to
them. Bandwidth to the home will always be in short supply as it lags
advances in chip technology and content.
o DATA STORAGE--When it comes to the area of storage two things are very
clear. First, there will be huge demand for vast amounts of storage.
Second, the primary storage method is still likely to be magnetic.
PaineWebber's research professionals have selected certain stocks in the
industries listed below which they believe will benefit from one or more of the
trends listed above. In PaineWebber's search for such potential growth stocks,
there was no particular bias toward large capitalization or small
capitalization issues. 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 "Schedule of Investments."
<TABLE>
<CAPTION>
APPROXIMATE PERCENT OF AGGREGATE
PRIMARY INDUSTRY SOURCE MARKET VALUE OF THE TRUST
----------------------------- --------------------------------
<S> <C>
Commercial Services .......... 3.64%
Computer Software ............ 7.49%
Computers--Memory Devices ... 14.56%
Computers--Micro ............. 7.24%
Computers--Mini .............. 3.65%
Data Processing/Management .. 3.64%
Electronics/Semi-Conductor .. 14.44%
Internet Software ............ 7.28%
Multimedia/Entertainment .... 10.89%
Networking Products .......... 10.92%
Publishing--Newspapers ....... 3.63%
Retail--Office Supplies ..... 3.64%
Telecommunications ........... 3.62%
Telecommunications Equipment 3.58%
</TABLE>
PaineWebber believes the following issuers will be key beneficiaries of
converging technologies in the Information Age:
O AMERICA ONLINE--The company has the premier brand name in interactive
online services. It is effectively leveraging this position to develop
the high margin, high growth areas of the Internet, i.e., advertising and
electronic commerce.
O APPLIED MATERIALS--A leading "Moore's Law" beneficiary. It is the
principal independent supplier of wafer fabrication systems to the
worldwide semiconductor industry.
O CISCO SYSTEMS--A leading supplier of networking equipment to the three
key networking markets: the service providers (who are constructing the
backbone of the Internet), corporations (Intranets, Extranets), the
home/consumer.
5
<PAGE>
O COGNOS--A developer of retrieval and analysis tools that make it easy for
businesses to access and analyze data. As the amount of raw data
increases, businesses will be challenged to understand and use
information constructively.
O COMPAQ--A leading PC maker which is a key beneficiary of the emergence of
the PC as the central, multipurpose consumer device. Heavy corporate
spending on the Internet and Intranets is very positive for its server
business.
O CUC INTERNATIONAL--The nearly 68 million member shopping club claims over
500,000 online members for its Net Market Internet site. Its merger with
HPS means that CUC now has well known brand names to offer on Net Market.
O DISNEY--One of the companies at the forefront of the convergence of the
computer, communications, consumer applications and content. Acquired
ABC; establishing Web sites for many of its branded products.
O EMC CORP.--It benefits from strong demand for disk storage because it
buys disk drives and packages them with specialized software to create a
storage subsystem for managing data in large corporations.
O FORE SYSTEMS--Its products, ATM switches, are well suited for carrying
voice, video and data and are popular devices among companies
constructing the backbone of the Internet.
O GANNETT--The company controls a vast array of news and information
content both in text and visual form from its newspapers and local
television stations. It is already leveraging the USA Today brand
successfully on the Web.
O HEWLETT-PACKARD--Its dominance of the printer market gives the company an
important franchise. And its acquisition of Verifone bolsters H-Ps
efforts to gain market share in the fast growing Internet commerce and
smart-card markets.
O INTEL--The supplier of one of the principal engines of the Information
Age--the X86 microprocessor architecture. It is a key player in the
convergence of the PC and TV--its video/graphics advances are enhancing
the utility of the PC as a visual entertainment device. INTC is also
closely involved in efforts to increase bandwidth to the home.
O KLA-TENCOR--The company has a dominant position in an essential corner of
the semiconductor chip-making industry: chip measurement and inspection
systems that enable semiconductor manufacturers to improve yields.
O MICROSOFT--Given its dominant position across the entire Information Age
spectrum, it is perhaps the leading beneficiary of the convergence of the
computer, communications, consumer applications and content.
O NEW YORK TIMES--Owner of two of the major brand names in the newspaper
business: The New York Times and Boston Globe. It has already had success
in creating dynamic Web sites for these and several other of its
newspaper properties.
O NORTHERN TELECOM--The only large company with broad exposure to data
networking, telecommunications and wireless.
O OPEN MARKET--A software company whose products facilitate commerce on the
Internet.
O ORACLE--A key beneficiary of strong demand for data management products.
The amount of data that major corporations store doubles about every 3-4
years, and this will only accelerate as businesses capture more customer
data.
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<PAGE>
O QUANTUM--As one of the largest providers of disk drives to PC related
companies, it will continue to be a leading beneficiary of strong demand
for huge desktop storage capacity.
O SEAGATE TECHNOLOGY--It has the largest market share in the high end
(servers, workstations) of the storage market. Given the growth in Web
based activities, server growth is likely to continue to exceed PC
growth.
O STAPLES--As the Information Age advances, many more people will be
teleworking and working out of the home, which will spur even greater
demand for home office products ranging from paper clips to filing
cabinets.
O SUN MICROSYSTEMS--Arguably one of the top suppliers of servers with the
Internet and Intranet markets. Server growth is likely to continue to
exceed PC growth given rapid expansion of the Internet and Intranets.
O TERADYNE--A leading supplier of automatic test equipment to the
electronics industry. As device speeds increase, even faster test
equipment is required.
O TIME WARNER--One of the companies at the forefront of the convergence of
the computer, communications, consumer applications and content. Acquired
TBS; establishing Web sites for many of its branded products.
O 3COM CORP--A leading global data networking company. Following its merger
with US Robotics--a leading modem and remote access vendor--the company
also has the dominant position at the "edge" of the network.
O WESTERN DIGITAL--As one of the largest providers of disk drives to PC
related companies, it is highly focused on supplying low-cost, high
quality disk drives to the top PC vendors.
O WORLDCOM--Through its UUNet subsidiary, the company is the largest
Internet access provider. It is a key beneficiary of the emergence of the
Internet as a new medium and the associated demand for high-bandwidth
data transfers.
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, as closely as practicable, the original percentage relationships
between the number of shares of Stock and Treasury Obligations deposited on the
Initial Date of Deposit, subject to certain adjustments. Costs incurred in
acquiring such additional Stocks and Treasury Obligations will be borne by the
Trust. Unitholders will experience a dilution of their investment as a result
of such brokerage fees and other expenses paid by the Trust during additional
deposits of Securities purchased by the Trustee with cash or cash equivalents
pursuant to instructions to purchase such Securities. (See "The Trust" and
"Risk Factors and Special Considerations".)
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. The Trust
will terminate approximately five (5) years after the Initial Date of Deposit
regardless of market conditions at the time. (See "Termination of the Trust"
and "Federal Income Taxes".)
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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 3.75% of the Public Offering Price (3.90% 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 Stocks in the Trust were chosen for their capital
appreciation potential, not for their income potential. Many of the Stocks
currently pay little or no dividend income (see "Schedule of Investments"). It
is anticipated, therefore, that the Trust will receive little, if any, dividend
income. The Trustee will make distributions, if any, on the Distribution Dates.
(See "Distributions" and "Administration of the Trust".) Unitholders may elect
to have their distributions automatically reinvested into additional Units of
the Trust at no sales charge (see "Reinvestment Plan"). Upon termination of the
Trust, the Trustee will distribute to each Unitholder of record on such date
his pro rata share of the Trust's assets, less expenses. The sale of Securities
in the Trust in the period prior to termination and upon termination may result
in a lower amount than might otherwise be realized if such sale were not
required at such time due to impending or actual termination of the Trust. For
this reason, among others, the amount realized by a Unitholder upon termination
may be less than the amount paid by such Unitholder.
MARKET FOR UNITS. The Sponsor, though not obligated to do so, presently
intends to maintain a secondary market for Units. The public offering price in
the secondary market will be based upon the value of the Securities next
determined after receipt of a purchase order, plus the applicable sales charge.
(See "Public Offering of Units--Public Offering Price" and "Valuation".) If a
secondary market is not maintained, a Unitholder may dispose of his Units only
through redemption. With respect to redemption requests in excess of $100,000,
the Sponsor may determine in its sole discretion to direct the Trustee to
redeem units "in kind" by distributing Securities to the redeeming Unitholder.
(See "Redemption".)
THE TRUST
The Trust is one of a series of similar but separate unit investment trusts
created under New York law by the Sponsor pursuant to a Trust Indenture
and Agreement* (the "Indenture") dated as of the 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
principally 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 and Treasury Obligations
together with an irrevocable letter or letters of credit of a commercial bank
or banks in an amount at least equal to the purchase price. The value of the
Securities was determined on the basis described under "Valuation". In exchange
for the deposit of the contracts to purchase Securities, the Trustee delivered
to the Sponsor a receipt for Units representing the entire ownership of the
Trust.
With the deposit on the Initial Date of Deposit, the Sponsor established a
proportionate relationship between the Securities in the Trust (determined by
reference to the number of shares of each issue of
- ------------
*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.
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Stock and the face amount of the Treasury Obligations). The Sponsor may, from
time to time, cause the deposit of additional Securities in the Trust when
additional Units are to be offered to the public or pursuant to the
Reinvestment Plan, 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 issued in lieu of cash dividends, if
any, received by the Trust will be sold by the Trustee and the proceeds
therefrom shall be added to the Income Account. (See "Administration of the
Trust" and "Reinvestment Plan").
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 or pursuant to the Reinvestment Plan),
the aggregate value of Securities in the Trust will be increased and the
fractional undivided interest represented by each Unit in the balance will be
decreased. If any Units are redeemed, the aggregate value of Securities in the
Trust will be reduced, and the fractional undivided interest represented by
each remaining Unit in the balance will be increased. Units will remain
outstanding until redeemed upon tender to the Trustee by any Unitholder (which
may include the Sponsor) or until the termination of the Trust. (See
"Termination of the Trust".)
RISK FACTORS AND SPECIAL CONSIDERATIONS
An investment in Units of the Trust should be made with an understanding of
the risks inherent in an investment in common stocks in general. The general
risks are associated with the rights to receive payments from the issuer which
are generally inferior to creditors of, or holders of debt obligations or
preferred stocks issued by, the issuer. Holders of common stocks have a right
to receive dividends only when and if, and in the amounts, declared by the
issuer's board of directors and to participate in amounts available for
distribution by the issuer only after all other claims against the issuer have
been paid or provided for. By contrast, holders of preferred stocks have the
right to receive dividends at a fixed rate when and as declared by the issuer's
board of directors, normally on a cumulative basis, but do not participate in
other amounts available for distribution by the issuing corporation. Dividends
on cumulative preferred stock must be paid before any dividends are paid on
common stock. Preferred stocks are also entitled to rights on liquidation which
are senior to those of common stocks. For these reasons, preferred stocks
generally entail less risk than common stocks.
Common stocks do not represent an obligation of the issuer. Therefore they
do not offer any assurance of income or provide the degree of protection of
debt securities. The issuance of debt securities or even preferred stock by an
issuer will create prior claims for payment of principal, interest and
dividends which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the rights of holders
of common stock with respect to assets of the issuer upon liquidation or
bankruptcy. Unlike debt securities which typically have a stated principal
amount payable at maturity, common stocks do not have a fixed principal amount
or a maturity. Additionally, the value of the Stocks in the Trust may be
expected to fluctuate over the life of the Trust.
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
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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.
The Trust is considered "concentrated" in stocks of issuers that manufacture
and market personal computers or computer components. These types of companies
are rapidly developing and highly competitive, both domestically and
internationally, and tend to be relatively volatile as compared to other types
of investments. Certain of these companies may be smaller and newer companies
with limited product lines, markets or financial resources and limited
management or marketing personnel. These companies typically require a high
degree of investment to maintain competitiveness and are affected by
international scientific and technological developments and rapidly occurring
product obsolescence as well as government regulation, increases in material or
labor costs, changes in distribution channels and the need to manage inventory
levels closely. Other risk factors include short product life cycles,
aggressive pricing and reduced profit margins, dramatic and often unpredictable
changes in growth rates, frequent new product introduction, the need to enhance
existing products, intense competition from large established companies and
potential competition from small start up companies. These companies are also
dependent to a substantial degree upon skilled professional and technical
personnel and there is considerable competition for the services of qualified
personnel in the industry.
Investors should note that the creation of additional Units subsequent to
the Initial Date of Deposit may have an effect upon the value of previously
existing Units. To create additional Units the Sponsor may deposit cash (or
cash equivalents, e.g., a bank letter of credit in lieu of cash) with
instructions to purchase 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 Evaluation Time on the date the cash is
deposited. To the extent the price of a Security increases or decreases between
the time cash is deposited with instructions to purchase the Security and the
time the 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 cash was deposited with
instructions to purchase the Security. In order to minimize these effects, the
Trust will attempt to purchase Securities as closely as possible to the
Evaluation Time or at prices as closely as possible to the prices used to
evaluate the Trust at the Evaluation Time. Thus price fluctuations during this
period will affect the value of every Unitholder's Units and the income per
Unit received by the Trust. In addition, costs incurred in connection with the
acquisition of 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 the Initial
Date of Deposit or any other date fails, cash held or available under a letter
or letters of credit, attributable to such failed contract may be reinvested in
another stock or stocks having characteristics sufficiently similar to the
Stocks originally deposited (in which case the original proportionate
relationship shall be adjusted) or, if not so reinvested, distributed to
Unitholders of record on the last day of the month in which the failure
occurred. The distribution will be made twenty days following such record date
and, in the event of such a distribution, the Sponsor will refund to each
Unitholder the portion of the sales charge attributable to such failed
contract.
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
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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 THE DISCUSSION BELOW RELATING TO DISPOSITION OF STOCKS
WHICH MAY BE THE SUBJECT OF A TENDER OFFER, MERGER OR REORGANIZATION AND ALSO
THE DISCUSSION UNDER THE CAPTION "ADMINISTRATION OF THE TRUST--PORTFOLIO
SUPERVISION".)
Certain of the Stocks may be attractive acquisition candidates pursuant to
mergers, acquisitions and tender offers. In general, tender offers involve a
bid by an issuer or other acquiror to acquire a stock 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. In the event of a tender offer for a Stock in the Portfolio, the
Sponsor may, but is not required to, direct the Trustee to sell or tender such
Stock (see "Administration of the Trust-Portfolio Supervision" herein).
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.
The gross income of the Trust typically will include dividends, interest and
gains on sales or other dispositions of Securities. In order to maintain its
qualification as a "regulated investment company", the Trust must, among other
things (1) 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 herein as "eligible
sources"), (2) meet certain diversification tests, and (3) distribute in each
year at least 90% of its investment company taxable income. 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.
In any taxable year, the distributions of any ordinary income (such as
dividends) and the excess of net short-term capital gains over net long-term
capital losses 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 for, and only to the extent of, a specific designation by
the Trust.
Distributions by the Trust that are designated by it as 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
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Unitholder. Distributions 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 treated as a gain from the sale of his Units. 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 to the extent
of any long-term capital gain distributions paid to such Unitholder with
respect to such Units.
Long-term capital gains of individuals are generally taxed at a maximum
federal rate of 28%. Under the recently enacted Taxpayer Relief Act of 1997,
Unitholders who are individuals and have held their Units for more than 18
months may be entitled to a more favorable federal tax rate (generally, 20%,
but 10% for individuals otherwise in the 15% bracket) for gains from the sale
of these Units. Prior to the issuance of relevant regulations, it is not
certain whether or how this more favorable federal tax rate will be available
with respect to capital gain dividends paid by the Trust. Unitholders should
consult their own tax advisers in this regard.
Unitholders will be taxed in the manner described above regardless of
whether distributions from the Trust are actually received by the Unitholder or
are reinvested pursuant to the Reinvestment Plan.
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 of taxation is a general summary and relates only
to certain aspects of the federal income tax consequences of an investment in
the Trust for Unitholders that hold their Units as capital assets. 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 Securities, next determined after the receipt of
a purchase order, divided by the number of Units outstanding plus the sales
charge set forth below. The public offering price per Unit is computed by
dividing the Trust Fund Evaluation, next determined after receipt of a purchase
order by the number of Units outstanding plus the sales charge. (See
"Valuation".) The Public Offering Price on the Initial Date of Deposit or on
any subsequent date will vary from the Public Offering Price calculated on the
business day prior to the Initial Date of Deposit (as set forth on page 2
hereof) due to fluctuations in the value of the Stocks among other factors.
Sales Charge and Volume Discount. The Public Offering Price of Units of
the Trust includes a sales charge which varies based upon the number of Units
purchased by a single purchaser. (See the sales charge schedule set forth
below.) During the initial public offering period, the sales charge will be
based on the number of Trust Units purchased on the same or any preceding day
by a single purchaser. Such
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purchaser or his dealer must notify the Sponsor at the time of purchase of any
previous purchase of Trust Units in order to aggregate all such purchases and
must supply the Sponsor with sufficient information to permit confirmation of
such purchaser's eligibility; acceptance of such purchase order is subject to
confirmation. Purchases of Units of other trusts may not be aggregated with
purchases of Trust Units to qualify for this procedure. This procedure may be
amended or terminated at any time without notice. In the event of such
termination, the procedure will revert to that stated under the sales charge
schedule referred to below.
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.
INITIAL PUBLIC OFFERING PERIOD AND SECONDARY MARKET THEREAFTER
<TABLE>
<CAPTION>
PERCENT OF
PUBLIC PERCENT OF
OFFERING NET AMOUNT
AGGREGATE DOLLAR VALUE OF UNITS* PRICE INVESTED
-------------------------------- ------------ ------------
<S> <C> <C>
Less than $50,000................ 3.75% 3.90%
$50,000 to 99,999................ 3.50 3.63
$100,000 to 199,999.............. 3.25 3.36
$200,000 to 399,999.............. 2.75 2.83
$400,000 to 499,999.............. 2.50 2.56
$500,000 to 999,999.............. 2.00 2.04
$1,000,000 or more .............. 1.75 1.78
</TABLE>
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* 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.
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.
No sales charge will be imposed on Units of the Trust acquired by
Unitholders in connection with participation in the Reinvestment Plan (see
"Reinvestment Plan").
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 $1.00 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
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"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
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
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purchase Units of one or more of the Exchange Trusts from the Sponsor. If Units
of the applicable outstanding series of the Exchange Trust are at that time
available for sale, and if such Units may lawfully be sold in the state in
which the Unitholder is resident, the Unitholder may select the series or group
of series for which he desires his investment to be exchanged. The Unitholder
will be provided with a current prospectus or prospectuses relating to each
series in which he indicates interest.
The exchange transaction will operate in a manner essentially identical to
any secondary market transaction, i.e., Units will be repurchased at a price
based on the market value of the Securities in the portfolio of the Trust next
determined after receipt by the Sponsor of an exchange request and properly
endorsed documents. Units of the Exchange Trust will be sold to the Unitholder
at a price based upon the next determined market value of the Securities in the
Exchange Trust plus the reduced sales charge. Exchange transactions will be
effected only in whole units; thus, any proceeds not used to acquire whole
units will be paid to the selling Unitholder.
For example, assume that a Unitholder, who has three thousand units of a
trust with a current price of $1.30 per unit, desires to sell his units and
seeks to exchange the proceeds for units of a series of an Exchange Trust with
a 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 $250. Only whole Units may be purchased.
The Sponsor is the sole underwriter of the Units. Sales may, however, be
made to dealers who are members of the National Association of Securities
Dealers, Inc. ("NASD") at prices which include a concession of $.30 per Unit at
the highest sales charge, subject to change from time to time. The difference
between the sales charge and the dealer concession will be retained by the
Sponsor. In the event that the dealer concession is 90% or more of the sales
charge per Unit, dealers taking advantage of such concession may be deemed to
be underwriters under the Securities Act of 1933.
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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 of the
stocks in the Trust, nor that of the Units.
Investors should note the Trust Fund Evaluation per Unit at the time of sale
or tender for redemption may be less than the price at which the Unit was
purchased.
The Sponsor may redeem any Units it has purchased in the secondary market if
it determines for any reason that it is undesirable to continue to hold these
Units in its inventory. Factors which the Sponsor may consider in making this
determination will include the number of units of all series of all trusts
which it holds in its inventory, the saleability of the Units and its estimate
of the time required to sell the Units and general market conditions.
A Unitholder who wishes to dispose of his Units should inquire of his bank
or broker as to current market prices in order to determine if over-the-counter
prices exist in excess of the redemption price and the repurchase price (see
"Redemption").
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 an expense of the Trust.
Cash, if any, received from Unitholders prior to the settlement date for the
purchase of Units or prior to the payment for Securities upon their delivery
may be used in the Sponsor's business subject to the limitations of Rule 15c3-3
under the Securities and Exchange Act of 1934 and may be of benefit to the
Sponsor.
In selling any Units in the initial public offering after the Initial Date
of Deposit, the Sponsor may realize profits or sustain losses resulting from
fluctuations in the net asset value of outstanding Units during the period. In
maintaining a secondary market for the Units, the Sponsor may realize profits
or sustain losses in the amount of any differences between the price at which
it buys Units and the price at which it resells or redeems such Units.
REDEMPTION
Units may be tendered to Investors Bank & Trust Company for redemption at
its office in person, or by mail at Hancock Towers, 200 Clarendon Street,
Boston, MA 02116 upon payment of any transfer or similar tax which must be paid
to effect the redemption. At the present time there are no such taxes. No
redemption fee will be charged by the Sponsor or Trustee. If the Units are
represented by a certificate it must be properly endorsed accompanied by a
letter requesting redemption. If held in uncertificated
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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 received on the next
business day. During the period in which the Sponsor maintains a secondary
market for Units, the Sponsor may repurchase any Unit presented for tender to
the Trustee for redemption no later than the close of business on the second
business day following such presentation and Unitholders will receive the
Redemption Value next determined after receipt by the Trustee of the redemption
request. Proceeds of a redemption will be paid to the Unitholder no later than
the seventh calendar day following the date of tender (or if the seventh
calendar day is not a business day on the first business day prior thereto).
With respect to cash redemptions, amounts representing income received shall
be withdrawn from the Income Account, and, to the extent such balance is
insufficient and for remaining amounts, from the Capital Account. The Trustee
is empowered, to the extent necessary, to sell Securities to meet redemptions.
The Trustee will sell Securities in such manner as is directed by the Sponsor.
In the event no such direction is given, Stocks will be sold pro rata, to the
extent possible, and if not possible 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 Stocks to the redeeming Unitholder. When Stocks are so
distributed, a proportionate amount of each Stock will be distributed, rounded
to avoid the distribution of fractional shares and using cash or checks where
rounding is not possible. The Sponsor may direct the Trustee to redeem Units
"in kind" even if it is then maintaining a secondary market in Units of the
Trust. Securities will be valued for this purpose as set forth under
"Valuation". A Unitholder receiving a redemption "in kind" may incur brokerage
or other transaction costs in converting the Stocks distributed into cash. The
availability of redemption "in kind" is subject to compliance with all
applicable laws and regulations, including the Securities Act of 1933, as
amended.
To the extent that Securities are redeemed in kind or sold, the size and
diversity of the Trust will be reduced. Sales will usually be required at a
time when Securities would not otherwise be sold and may result in lower prices
than might otherwise be realized. The price received upon redemption may be
more or less than the amount paid by the Unitholder depending on the value of
the Securities in the portfolio at the time of redemption. In addition, because
of the minimum amounts in which Securities are required to be sold, the
proceeds of sale may exceed the amount required at the time to redeem Units;
these excess proceeds will be distributed to Unitholders on the Distribution
Dates.
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
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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 Evaluation Time set forth under "Summary of Essential
Information Regarding the Trust" (1) on each business day as long as the
Sponsor is maintaining a bid in the secondary market, (2) on the business day
on which any Unit is tendered for redemption, (3) on any other day desired by
the Sponsor or the Trustee and (4) upon termination, by adding (a) the
aggregate value of the Securities and other assets determined by the Trustee as
set forth below, (b) cash on hand in the Trust, including dividends receivable
on Stock trading ex-dividend and income accrued and interest received, if any,
on the Treasury Obligations held but not yet distributed (other than any cash
held in any reserve account established under the Indenture or cash held for
the purchase of Contract Securities) and (c) accounts receivable for Securities
sold and any other assets of the Trust not included in (a) and (b) above, and
deducting therefrom the sum of (v) taxes or other governmental charges against
the Trust not previously deducted, (w) accrued fees and expenses of the Trustee
and the Sponsor (including legal and auditing expenses) and other Trust
expenses (x) cash allocated for distributions to Unitholders and (y) accounts
payable for Units tendered for redemption and any other liabilities of the
Trust Fund not included in (v), (w), (x) and (y) above. The per Unit Trust Fund
Evaluation is calculated by dividing the result of such computation by the
number of Units outstanding as of the date thereof. Business days do not
include Saturdays, Sundays, New Year's Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
and other days that the New York Stock Exchange is closed.
The value of Stocks shall be determined by the Trustee in good faith in the
following manner: (1) if the domestic Stocks are listed on one or more national
securities exchanges or on the National Market System maintained by the
National Association of Securities Dealers Automated Quotations System, such
evaluation shall be based on the 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 in the case of the domestic Stocks if such 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 such Stock. During the
initial offering period, the Treasury Obligations are valued on the basis of
their offering prices; thereafter and for purposes of determining Redemption
Value, they are valued on the basis of bid prices. The aggregate offering and
bid prices of the Treasury Obligations, is the price obtained
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from investment dealers or brokers (which may include the Sponsor) who
customarily deal in Treasury Obligations; or, if there is no market for
Treasury Obligations and bid and offering prices are not available, on the
basis of current bid and offering prices for comparable securities; or by
appraisal; or by any combination of the above, adjusted to reflect income
accrued.
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION VALUE
While the Public Offering Price of Units during the initial offering period
is determined, in part, on the basis of the current offering prices of the
Treasury Obligations as described above, the Public Offering Price of Units in
the secondary market, and the Redemption Value is determined, in part, on the
basis of the current bid prices of the Treasury Obligations. The Stocks are
valued on the same basis for the initial and secondary markets and for purposes
of redemptions. On the business day prior to the Date of Deposit, the Public
Offering Price per Unit (which figure includes the sales charge) exceeded the
Redemption Value. (See "Essential Information"). The bid and the offering
prices of the Treasury Obligations 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 and the Trustee's counsel, and
expenses incurred in establishing the Trust, including legal and auditing fees
(the "Organizational Expenses"), will be paid by the Trust, as is common for
mutual funds. Historically, the Sponsors of Unit Trusts have paid all
organizational expenses. The Sponsor will receive no fee from the Trust for its
services in establishing the Trust.
The Sponsor will receive a fee, which is earned for portfolio supervisory
services, and which is based upon the largest number of Units outstanding
during the calendar year. The Sponsor's fee, which is not to exceed $.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.
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 $.0115 which include, but
are not limited to Organizational Expenses of $.0040 per Unit, and 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
the Trust and paid from the Income Account, or, to the extent funds are not
available in such Account, from the Capital Account (see "Administration of the
Trust--Accounts"): (1) fees for the Trustee for extraordinary services; (2)
expenses of the Trustee (including legal and auditing expenses) and of counsel;
(3) various governmental charges; (4) expenses and costs of any action taken by
the Trustee to protect the Trust and the rights and
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interests of the Unitholders; (5) indemnification of the Trustee for any loss,
liabilities or expenses incurred by it in the administration of the Trust
without gross negligence, bad faith or wilful misconduct on its part; (6)
brokerage commissions and other expenses incurred in connection with the
purchase and sale of Securities; and (7) expenses incurred upon termination of
the Trust. In addition, to the extent then permitted by the 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 annual audit expense which exceeds
$.0050 per Unit. Unitholders covered by the audit during the year may receive a
copy of the audited financial statements upon request.
The fees and expenses set forth above are payable out of the Trust and when
unpaid will be secured by a lien on the Trust. Based upon the last dividend
paid prior to the Initial Date of Deposit, dividends on the Stocks and income
received on the Treasury Obligations 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 and income received on the Treasury Obligations
are not sufficient to meet the expenses of the Trust, the Trustee is authorized
to sell Securities to meet the expenses of the Trust. Securities will be
selected in the same manner as is set forth under "Redemption".
RIGHTS OF UNITHOLDERS
Ownership of Units is evidenced by recordation on the books of the Trustee.
In order to avoid additional operating costs and for investor convenience,
certificates will not be issued unless a request, in writing with signature
guaranteed by 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 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 annual 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 or capital on special Distribution Dates to
Unitholders of record on special Record Dates declared by the Trustee.
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If and to the extent that the Sponsor, on behalf of the Trust, receives a
favorable response to a no-action letter request which it intends to submit to
the Division of Investment Management of the Securities and Exchange Commission
(the "SEC") with respect to reinvesting cash proceeds received by the Trust,
the Trustee may reinvest such cash proceeds in additional Securities held in
the Trust Fund at such time. Such reinvestment shall be made so that each
deposit of additional Securities shall be made so as to match as closely as
practicable the percentage relationships of shares of Stocks and Treasury
Obligations, and such reinvestment shall be made in accordance with the
parameters set forth in the no-action letter response. If the Sponsor and the
Trustee determine that it shall be necessary to amend the Indenture to comply
with the parameters set forth in the no-action letter response, such documents
may be amended without the consent of Unitholders. There can be no assurance
that the Sponsor will receive a favorable no-action letter response.
Unitholders may elect to have their Income Account and Capital Account
distributions automatically reinvested into additional Units of the Trust at no
sales charge. (See "Reinvestment Plan").
Upon termination of the Trust, each Unitholder of record on such date will
receive his pro rata share of the amounts realized upon disposition of the
Securities plus any other assets of the Trust, less expenses of the Trust.
(See "Termination of the Trust".)
REINVESTMENT PLAN
Income Account and Capital Account distributions on Units may be reinvested
by participating in the Trust's Reinvestment Plan (the "Reinvestment Plan"). To
participate in the Reinvestment Plan, a Unitholder must contact his broker,
dealer or financial institution to determine whether he may participate in the
Reinvestment Plan. Under the Reinvestment Plan, the Units acquired for current
Unitholders will be either Units already held in inventory by the Sponsor or
new Units created by the Sponsor's deposit of additional Securities, contracts
to purchase additional Securities or cash (or a bank letter of credit in lieu
of cash) with instructions to purchase additional Securities. Deposits or
purchases of additional Securities will be made so as to maintain the
percentage relationships of shares of Stocks and Treasury Obligations.
Purchases made pursuant to the Reinvestment Plan will be made without any sales
charge at the net asset value for Units of the Trust. Under the Reinvestment
Plan, the Trust will pay the distributions to the Trustee which in turn will
purchase for those participating Unitholders whole Units of the Trust at the
price determined as of the close of business on the Distribution Date and will
add such Units to the Unitholder's account. The Unitholder's account statement
will reflect the reinvestment. The Trustee will not issue fractional Units,
thus any cash remaining after purchasing the maximum number of whole Units will
be distributed to the Unitholder. Unitholders wishing to terminate their
participation in the Reinvestment Plan must notify their broker, dealer or
financial institution of such decision. The Sponsor reserves the right to
amend, modify or terminate the Reinvestment Plan at any time without prior
notice.
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
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share of the Income Account and the pro rata share of the Capital Account
represented by each Unit will be computed by the Trustee as set forth under
"Valuation".
The Trustee will deduct from the Income Account and, to the extent funds are
not sufficient therein, from the Capital Account, amounts necessary to pay
expenses incurred by the Trust. (See "Expenses and Charges.") In addition, the
Trustee may withdraw from the Income Account and the Capital Account such
amounts as may be necessary to cover redemption of Units by the Trustee. (See
"Redemption.")
The Trustee may establish reserves (the "Reserve Account") within the Trust
for state and local taxes, if any, and any other governmental charges payable
out of the Trust.
Reports and Records. With any distribution from the Trust, Unitholders will
be furnished with a statement setting forth the amount being distributed from
each account.
The Trustee keeps records and accounts of the Trust at its office in Boston,
including records of the names and addresses of Unitholders, a current list of
underlying Securities in the portfolio and a copy of the Indenture. Records
pertaining to a Unitholder or to the Trust (but not to other Unitholders) are
available to the Unitholder for inspection at reasonable times during business
hours.
Within a reasonable period of time after the end of each calendar year,
commencing with calendar year 1997, 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) 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 (or tender a stock
for cash in the case of paragraph (6) below):
(1) upon the failure of the issuer to declare or pay anticipated
dividends or interest;
(2) upon the institution of a materially adverse action or proceeding at
law or in equity seeking to restrain or enjoin the declaration or payment
of dividends or interest on any such Securities or the existence of any
other materially adverse legal question or impediment affecting such
Securities or the declaration or payment of dividends or interest on the
same;
(3) upon the breach of covenant or warranty in any trust indenture or
other document relating to the issuer which might materially and adversely
affect either immediately or contingently the declaration or payment of
dividends on such Securities;
(4) upon the default in the payment of principal or par or stated value
of, premium, if any, or income on any other outstanding securities of the
issuer or the guarantor of such Securities which might materially and
adversely, either immediately or contingently, affect the declaration or
payment of dividends on the Securities;
(5) upon the decline in price or the occurrence of any materially adverse
credit factors, that in the opinion of the Sponsor, make the retention of
such Securities not in the best interest of the Unitholder;
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(6) upon a public tender offer being made for a Stock, or a merger or
acquisition being announced affecting a Stock that in the opinion of the
Sponsor make the sale or tender of the Stock in the best interests of the
Unitholders;
(7) upon a decrease in the Sponsor's internal rating of the Security;
(8) if the sale of such Securities is desirable to maintain the
qualification of the Trust Fund as a "regulated investment company"; or
(9) 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.
The Trustee may dispose of Securities where necessary to pay Trust expenses
or to satisfy redemption requests as directed by the Sponsor and in a manner
necessary to maximize the objectives of the Trust, or if not so directed in its
own discretion, and Stocks having the greatest appreciation shall be sold
first.
AMENDMENT OF THE INDENTURE
The Indenture may be amended by the Trustee and the Sponsor without the
consent of any of the Unitholders to cure any ambiguity or to correct or
supplement any provision thereof which may be defective or inconsistent or to
make such other provisions as will not adversely affect the interest of the
Unitholders.
The Indenture may also be amended by the Trustee and the Sponsor without the
consent of any of the Unitholders to implement a program to reinvest cash
proceeds received by the Trust in connection with corporate actions and in
other situations, when and if the Sponsor receives a favorable response to the
no-action letter request which it intends to submit to the Division of
Investment Management at the SEC discussed above (see "Distributions"). There
can be no assurance that a favorable no-action letter response will be
received.
The Indenture may be amended in any respect by the Sponsor and the Trustee
with the consent of the holders of 51% of the Units then outstanding; provided
that no such amendment shall (1) reduce the interest in the Trust represented
by a Unit or (2) reduce the percentage of Unitholders required to consent to
any such amendment, without the consent of all Unitholders.
The Trustee will promptly notify Unitholders of the substance of any
amendment affecting Unitholders' rights or their interest in the Trust.
TERMINATION OF THE TRUST
The Indenture provides that the Trust will terminate on the Mandatory
Termination Date. If the value of the Trust as shown by any evaluation is less
than 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
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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,
the Trust or to the Unitholders for taking any action or for refraining from
taking any action made in good faith or for errors in judgment, but will be
liable only for its own willful misfeasance, bad faith, gross negligence or
willful disregard of its duties. The Sponsor will not be liable or responsible
in any way for depreciation or loss incurred by reason of the sale of any
Securities in the Trust.
The Indenture is binding upon any successor to the business of the Sponsor.
The Sponsor may transfer all or substantially all of its assets to a
corporation or partnership which carries on the business of the Sponsor and
duly assumes all the obligations of the Sponsor under the Indenture. In such
event the Sponsor shall be relieved of all further liability under the
Indenture.
If the Sponsor fails to undertake any of its duties under the Indenture,
becomes incapable of acting, becomes bankrupt, or has its affairs taken over by
public authorities, the Trustee may either appoint a successor Sponsor or
Sponsors to serve at rates of compensation determined as provided in the
Indenture or terminate the Indenture and liquidate the Trust.
TRUSTEE
The 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 Hancock
Towers, 200 Clarendon Street, Boston, Massachusetts 02116, toll-free number
800-356-2754 (which is subject to supervision by the Massachusetts Commissioner
of Banks, the Federal Deposit Insurance Corporation and the Board of Governors
of the Federal Reserve System).
The Indenture provides that the Trustee will not be liable for any action
taken in good faith in reliance on properly executed documents or the
disposition of moneys, Securities or Certificates or in respect of any
valuation which it is required to make, except by reason of its own gross
negligence, bad faith or willful misconduct, nor will the Trustee be liable or
responsible in any way for depreciation or loss incurred by reason of the sale
by the Trustee of any Securities in the Trust. In the event of the failure of
24
<PAGE>
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 Carter,
Ledyard & Milburn, 2 Wall Street, New York, New York, as counsel for the
Sponsor.
25
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE UNITHOLDERS, SPONSOR AND CO-TRUSTEES
THE PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES 20
We have audited the accompanying Statement of Financial Condition of The
PaineWebber Equity Trust, Growth Stock Series 20, including the Schedule of
Investments, as of September 4, 1997. 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 September 4, 1997. 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 20 at September 4, 1997, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
September 4, 1997
26
<PAGE>
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 20
STATEMENT OF FINANCIAL CONDITION
AS OF INITIAL DATE OF DEPOSIT, SEPTEMBER 4, 1997
<TABLE>
<CAPTION>
<S> <C>
TRUST PROPERTY
--------------
Sponsor's Contracts to Purchase underlying Securities backed
by irrevocable letter of credit (a)........................... $ 962,500
Organizational Expenses (b).................................... 100,000
------------
Total...................................................... $1,062,500
============
INTEREST OF UNITHOLDERS
-----------------------
Accrued Liability (b).......................................... $ 100,000
------------
100,000 Units outstanding:
Cost to investors (c)......................................... 1,000,000
Less: Gross underwriting commissions (d)...................... 37,500
------------
Total liabilities and net assets........................... $1,062,500
============
</TABLE>
- ------------
(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." Pursuant to
contracts to purchase securities, an irrevocable letter of credit drawn on
Kredietbank N.V., New York Branch in the amount of $1,250,000 has been
deposited with the Co-Trustees, Investors Bank & Trust Company and The First
National Bank of Chicago, for the purchase of $962,500 aggregate value of
Securities in the initial deposit and for the purchase of Securities in
subsequent deposits.
(b) Organizational Expenses incurred by the Trust have been deferred and
will be amortized over the life of Trust. Organizational Expenses have been
estimated on projected total assets of $50 million. To the extent the Trust is
larger or smaller, the estimate may vary.
(c) The aggregate public offering price is computed on the basis set forth
under "Public Offering of Units--Public Offering Price."
(d) Sales charge of 3.75% of the Public Offering Price per Unit is computed
on the basis set forth under "Public Offering of Units--Sales Charge and Volume
Discount."
27
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 20
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, SEPTEMBER 4, 1997
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)
- --------------------------------------------- ------------ ------------------
<S> <C> <C>
Commercial Services (3.64%)
CUC International, Inc....................... 1,400 $35,000.00
Computer Software (7.49%)
Cognos, Inc. ................................ 1,070 35,176.25
Microsoft Corporation........................ 270 36,871.88
Computers -Memory Devices (14.56%)
EMC Corporation.............................. 660 35,145.00
Quantum Corporation.......................... 1,010 35,160.63
Seagate Technology, Inc...................... 960 34,980.00
Western Digital Corporation.................. 760 34,865.00
Computers -Micro (7.24%)
Compaq Computer Corporation.................. 520 34,742.50
Sun Microsystems, Inc........................ 690 34,931.25
Computers -Mini (3.65%)
Hewlett-Packard Company*..................... 550 35,131.25
Data Processing/Management (3.64%)
Oracle Corporation........................... 910 35,035.00
Electronics/Semi-Conductor (14.44%)
Applied Materials, Inc....................... 340 34,127.50
Intel Corporation*........................... 370 34,710.63
KLA-Tencor Corporation....................... 490 35,126.88
Teradyne, Inc................................ 620 35,030.00
Internet Software (7.28%)
America Online, Inc. ........................ 510 35,062.50
Open Market, Inc. ........................... 3,110 34,987.50
Multimedia/Entertainment (10.89%)
The Walt Disney Company*..................... 440 35,007.50
Gannett Company, Inc.*....................... 350 34,693.75
Time Warner, Inc.*........................... 680 35,105.00
Networking Products (10.92%)
Cisco Systems, Inc........................... 450 35,015.63
FORE Systems, Inc............................ 1,750 35,000.00
3Com Corporation............................. 720 35,055.00
Publishing -Newspapers (3.63%)
New York Times Company*...................... 720 34,965.00
Retail -Office Supplies (3.64%)
Staples, Inc................................. 1,450 35,071.88
Telecommunications (3.62%)
WorldCom, Inc................................ 1,100 34,856.25
</TABLE>
28
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 20
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, SEPTEMBER 4, 1997 (CONTINUED)
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)
- --------------------------------------------- ------------ ------------------
<S> <C> <C>
Telecommunications Equipment (3.58%)
Northern Telecom Limited*.......................... 340 $ 34,510.00
TREASURY SECURITIES (1)
$15,000 U.S. Treasury Note 7 7/8% due 2/15/2021
(1.78%) ........................................... 17,136.22
TOTAL INVESTMENTS ................................ $962,500.00
</TABLE>
- ------------
(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 $224.
* Income producing security.
29
<PAGE>
PaineWebber Equity Trust
Growth Stock Series 20
CO-TRUSTEES:
INVESTORS BANK & TRUST COMPANY
Hancock Towers
############################## 200 Clarendon Street
Boston, Mass. 02116
GRAPHIC OMITTED (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
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
Essential Information Regarding the
Trust .................................... 2
The Trust ............................... 8
Risk Factors and Special Considerations . 9
Federal Income Taxes .................... 11
Public Offering of Units ................ 12
Public Offering Price ................. 12
Sales Charge and Volume Discount ...... 12
Employee Discount ..................... 13
Exchange Option ....................... 13
Conversion Option ..................... 15
Distribution of Units ................. 15
Secondary Market for Units ............ 16
Sponsor's Profits ..................... 16
Redemption .............................. 16
Valuation ............................... 18
Comparison of Public Offering Price and
Redemption Value ....................... 19
Expenses of the Trust ................... 19
Rights of Unitholders ................... 20
Distributions ........................... 20
Reinvestment Plan ....................... 21
Administration of the Trust ............. 21
Accounts .............................. 21
Reports and Records ................... 22
Portfolio Supervision ................. 22
Amendment of the Indenture .............. 23
Termination of the Trust ................ 23
Sponsor ................................. 24
Trustee ................................. 24
Independent Auditors .................... 25
Legal Opinions .......................... 25
Report of Independent Auditors .......... 26
Statement of Financial Condition ........ 27
Schedule of Investments ................. 28
- -------------------------------------------------------------------------------
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 LLP (included in Exhibit
99.C2) Carter, Ledyard & Milburn (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, as 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.
11
<PAGE>
8. Ex.-99.C1 - Opinion of Counsel as to income tax status of
securities being registered.
9. Ex.-99.C2 - Consent of Ernst & Young LLP, Independent Auditors.
12
<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.
13
<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 4th day of September, 1997.
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 20
(Registrant)
By: PaineWebber Incorporated
(Depositor)
/s/ Robert E. Holley
----------------------
Robert E. Holley
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
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 4th of September, 1997.
PAINEWEBBER INCORPORATED
Name Office
---- ------
Donald B. Marron Chairman, Chief Executive
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
/s/ Robert E. Holley
----------------------
Robert E. Holley
Attorney-in-fact*
- --------------
* Executed copies of the powers of attorney have been filed with the
Securities and Exchange Commission in connection with the Registration
Statement No. 33-19786.
15
<PAGE>
EXHIBIT INDEX
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, as 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 LLP, Independent Auditors.
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 0
<SECURITIES> 962,500
<RECEIVABLES> 0
<ALLOWANCES> 100,000
<INVENTORY> 0
<CURRENT-ASSETS> 962,500
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,062,500
<CURRENT-LIABILITIES> 100,000
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,062,500
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<PAGE>
Exhibit 3
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 20
TRUST INDENTURE AND AGREEMENT
Dated as of September 4, 1997
Incorporating
Standard Terms and Conditions of Trust
Dated as of July 10, 1990,
Between
PAINEWEBBER INCORPORATED,
as Depositor
and
INVESTORS BANK & TRUST COMPANY
and
THE FIRST NATIONAL BANK OF CHICAGO
as Co-Trustees
17
<PAGE>
THIS TRUST INDENTURE AND AGREEMENT dated as of September 4, 1997
between PaineWebber Incorporated, as Depositor and Investors Bank & Trust
Company and The First National Bank 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,
interest-bearing United States Treasury Obligations ("Treasury Obligations");
and
WHEREAS, the parties now desire to create the Twentieth 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 Sections 2, 3 and 4 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 20".
A. (1) The aggregate number of Units outstanding on the date hereof
for this Series is 100,000.
(2) The initial fractional undivided interest represented by each
Unit of this series shall be 1/100,000th 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.
18
<PAGE>
B. The term "Record Date" shall mean December 31, 1997 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.
C. The term "Distribution Date" shall mean the 20th day following
each Record Date, commencing January 20, 1998, and quarterly thereafter with
respect to Income Account Distributions and shall mean January 20, 1998 and
annually thereafter with respect to Capital Account Distributions, except that
the Trustee may declare a Record Date of December 31 in any year for a
Distribution Date of January 20 of the following year, 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.
D. 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.
E. The Mandatory Termination Date shall be September 30, 2002. 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
September 10, 2002.
F. 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.
G. 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.
H. 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.
I. Article I shall be amended as follows:
19
<PAGE>
1. The definition of "Securities" shall be deleted in its entirety and
the following text shall be inserted in replacement thereof:
"Shall mean the Securities, including Contract Securities, (a) which
are listed or referred to as Securities in Schedule A to the Trust
Indenture or any Supplemental Indenture, (b) which have been received
by the Trust in exchange or substitution pursuant to Section 3.07
hereof as may from time to time continue to be held as part of a Trust
and (c) which are additional deposits of Securities made pursuant to
Section 2.02, 3.02 and 3.15."
2. The definition of "Supplemental Indenture" shall be deleted in its
entirety and the following text shall be inserted in replacement thereof:
"Shall mean a written direction from the Sponsor to the Trustee
instructing the Trustee to create additional Units pursuant to and in
accordance with 2.02(c) hereof".
3. The definition of "Percentage Ratios" shall be deleted in its
entirety and the following text shall be inserted in replacement thereof:
"Shall have the meaning assigned to it in Section 2.02."
J. Section 2.02 shall be deleted in its entirety and the following
text shall be inserted in its place:
"Section 2.02. Deposit of Securities. (a) The Sponsor concurrently
with the execution and delivery hereof, hereby grants and conveys all
of its right, title and interest in and to and hereby conveys to and
deposits with the Trustee in an irrevocable Trust, the Securities
(together with accrued and unpaid income thereon) and Contract
Securities, listed in Schedule A to the Indenture, duly endorsed in
blank or accompanied by all necessary instruments of assignment and
transfer in proper form, to be held, managed and applied by the
Trustee as herein provided for the benefit of each Unitholder to the
extent of such Unitholder's interest in the Trust Fund. The Sponsor
hereby also delivers to the Trustee a certified check or checks, cash
or cash equivalents or an irrevocable letter or letters of credit
issued by a commercial bank or banks in an amount necessary to
consummate the purchase of any Contract Securities. The Percentage
Ratios for the Trust Fund shall be the percentage ratios between the
number of shares of each issue of stock and the face amount of the
Treasury Obligations in such Trust
20
<PAGE>
deposited in such Trust Fund on the initial date of deposit thereof
(the "Initial Date of Deposit") and determined by reference to
Schedule A to the Indenture for such Trust Fund. Such Percentage
Ratios are subject to adjustment to reflect the occurrence of (i) 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, (ii) a merger or reorganization, (iii) sale of any
Securities from the Trust portfolio, or (iv) Securities deposited
pursuant to Section 2.02(b). Stock dividends received by the Trust,
if any, pursuant to Section 3.07(d) will be sold by the Trustee and
the proceeds therefrom shall be treated as income to the Trust.
(b) In the event that the purchase of Contract Securities pursuant to
any contract shall not be consummated in accordance with said
contracts, moneys held for the purchase of such Contract Securities
shall be credited to the Capital Account and the Trustee, as directed
by the Sponsor, shall either (1) use the cash held or available under
a letter or letters of credit to purchase other stock or stocks having
characteristics sufficiently similar to the stocks originally
deposited or (2) distribute such moneys pursuant to Section 3.04 to
Unitholders of record as of the Record Date next following the failure
of consummation of such purchase. The Sponsor shall cause to be
refunded to each Unitholder his pro rata portion of the sales charge
levied on the sale of Units to such Unitholder attributable to such
Contract Security.
(c) From time to time, following the Initial Date of Deposit, the
Sponsor is hereby authorized, in its discretion to cause the Trustee
to issue additional Units pursuant to a Supplemental Indenture
directing such additional Units to be created based upon the
following:
(1) the deposit of additional Securities in respect of such
additional Units and/or contracts for the purchase of such
additional Securities; and/or
(2) the deposit of cash in an amount to purchase such additional
Securities based upon the price of such additional Securities at
the Valuation Time on such date of deposit.
To accomplish the issuance of additional Units by means of a deposit
of additional Securities, the Sponsor is authorized to assign, convey
to and deposit with the Trustee (i) additional Securities, duly
endorsed in blank or accompanied by all necessary instruments of
assignment, and/or (ii) contracts for the purchase of such additional
Securities, and the Sponsor shall transfer and deliver such necessary
21
<PAGE>
instruments of assignment and/or contracts for the purchase of such
additional Securities to the Trustee along with a certified check or
checks, cash, cash equivalents or an irrevocable letter or letters of
credit issued by a commercial bank in an amount necessary to
consummate the purchase of any such additional Securities represented
by contracts for the purchase of additional Securities.
To accomplish the issuance of additional Units by means of depositing
sufficient cash amounts with the Trustee to enable the Trustee to
purchase and deposit the additional Securities, the Sponsor is hereby
authorized to, and 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.
Brokerage commissions with respect to the Trustee's purchase of
additional Securities, if any, shall be an expense borne by the Trust.
In all cases of creating additional Units, the Sponsor shall also pay
to the Trustee for deposit into the Income Account an amount equal to
the Cash Component per Unit (as defined below), multiplied by the
number of new Units created in respect of the additional Securities
deposited into the Trust Fund pursuant to this Section 2.02(c). For
purposes of this paragraph, Cash Component means cash on hand in the
Trust Fund (excluding cash held for the purchase of Contract
Securities) and/or cash receivable by the Trust as of the date of the
deposit of additional Securities, reduced by payables and accrued
expenses and amounts allocated for redemption of Units or for
distribution to holders of record as of a preceding Record Date. Such
purchase and deposit of additional Securities shall be made, in each
case, pursuant to a Supplemental Indenture. The Sponsor, if depositing
additional Securities with the Trustee pursuant to this Section
2.02(c), and the Trustee, if purchasing additional Securities with
amounts provided to it by the Sponsor pursuant to this Section
2.02(c), in each case shall ensure that each deposit of additional
Securities pursuant to this Section shall be made so as to maintain as
closely as 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 herein.
The Securities deposited pursuant to this Section 2.02 are comprised
of (1) the Securities set forth in Schedule A of the Trust Indenture,
(2) any additional deposits of Securities made in connection with the
22
<PAGE>
reinvestment of cash proceeds in accordance with Section 3.02 and
pursuant to the provisions of Section 3.15, (3) any Treasury
Securities which may be deposited as temporary reinvestment for sale
proceeds pursuant to Section 3.02, and (4) additional deposits of
Securities pursuant to Section 2.02(b) and this Section 2.02(c). Such
additional Securities shall be held, managed and applied by the
Trustee as herein provided and as provided in the applicable Trust
Indenture.
(d) The Trustee is hereby irrevocably authorized to effect
registration or transfer of the Securities in fully registered form to
the name of the Trustee or to the name of its nominee or the nominee
of its agent."
K. Section 3.01 shall be deleted in its entirety and the following
text shall be inserted in its place:
"Section 3.01. Certain Moneys to Be Credited to Income Account. The
Trustee shall collect the Income on the Securities as it becomes
payable and credit all income to a separate non-interest bearing
account to be known as the "Income Account", on the date on which the
Trust Fund receives such Income, or on the date it accrues with
respect to Securities issued at an original issue discount (including
all moneys realized by the Trustee from the sale of options, warrants
or other similar rights received in respect of the Securities and
including any stock dividends sold pursuant to Section 3.07)."
L. The text of Section 3.02 shall be deleted and the following text
shall be inserted in its place:
"Section 3.02. Certain Moneys to Be Credited to Capital Account. All
moneys other than amounts credited to the Income Account received by
the Trustee in respect of the Securities under this Indenture shall be
credited to a separate non-interest bearing account to be known as the
"Capital Account". If Securities in a Trust are to be sold pursuant to
Section 3.06 or 3.07, the proceeds of such sale, or moneys received as
a distribution of capital as the result of any corporate or other
business action of the issuer of a Security in the Trust, may be
reinvested, upon the instruction of the Sponsor, (x) in additional
Securities held at such time in the Trust Fund on a pro rata basis in
the manner set forth in, and to the extent permitted by, Section 3.15
or (y) if not so permitted by Section 3.15, if (1) at the time there
is no legal or regulatory impediment and (2) in the opinion of the
Sponsor it is in the best interests of the Unitholders to
23
<PAGE>
do so, in U.S. Treasury Obligations which mature on or prior to the
next scheduled Distribution Date (the "Short-Term Treasury
Obligations"). Any Short-Term Treasury Obligations purchased pursuant
to this Section 3.02 shall be deposited into the applicable Trust and
shall be subject to the terms of such Trust Indenture and Agreement to
the same extent as any Security deposited into such Trust on the
Initial Date of Deposit and the terms "Trust Fund" and "Securities"
shall thereafter be defined as including such Short-term Treasury
Obligations. Brokerage commissions with respect to the purchase of
such Securities or Short-Term Treasury Obligations, if any, shall be
an expense borne by the Trust. Anything in this Section 3.02 to the
contrary notwithstanding, moneys which are required to cover the
purchase of Contract Securities shall be held specially by the Trustee
for such purchase and shall not be deemed to be part of the Capital
Account until the Sponsor shall have notified the Trustee that such
contracts have failed, whereupon such moneys shall be credited to the
Capital Account and, unless reinvested pursuant to Section 2.02(b),
shall be held specially for distribution in the manner provided in
Section 2.02(b)."
M. The text of Section 3.04 shall be deleted and the following text
shall be inserted in its place:
"Section 3.04. Certain Deductions and Distributions. Each month the
Trustee shall satisfy itself as to the adequacy of the Reserve
Account, making any further credits thereto as may appear appropriate
in accordance with Section 3.03 and shall then:
(a) deduct from the Income Account or, to the extent such funds are
not available in such Account, from the Capital Account, or to the
extent such funds are not available in such Account, sell Securities
in accordance with Section 5.02, and pay to itself individually the
amounts that it is at the time entitled to receive pursuant to
Sections 8.01 and 8.05 on account of its services theretofore
performed and expenses, losses and liabilities theretofore incurred,
if any;
(b) deduct from the Income Account or, to the extent funds are not
available in such Account, from the Capital Account, and pay to itself
individually an amount equal to the portion of the advance for Initial
Costs specified in 10.02(b) for which it is then entitled to
reimbursement pursuant to such section;
24
<PAGE>
(c) deduct from the Income Account or, to the extent funds are not
available in such Account, from the Capital Account, and pay to the
Sponsor or successor Sponsor the amount that it is entitled to receive
pursuant to Sections 7.02 and 8.01(f); and
(d) to the extent that the Trustee has been advised that costs
incurred in keeping the registration of Units and the Trust on a
current basis are permitted to be deducted at that time by the
Securities and Exchange Commission, deduct from the Income Account, or
to the extent funds are not available in such Account, from the
Capital Account, an amount equal to the unpaid fees and expenses
incurred in keeping the registration statement current as provided in
Section 10.03.
Any amounts that the Trustee has paid pursuant to (c) above in excess
of the amount to which the Sponsor is entitled pursuant to Section
7.02, shall be returned to the Trust and distributed on the next
Distribution Date to Unitholders of record on the preceding Record
Date.
On each Distribution Date, or within a reasonable period of time
thereafter, the Trustee shall distribute by mail to each Unitholder of
record at the close of business on the preceding Record Date at his
address appearing on such Record Date on the registration books of the
Trustee or by such other means as may be mutually agreed upon by the
Trustee and the Unitholder, such Unitholder's pro rata share of the
balance of the Income and Capital Accounts, computed as of such Record
Date in the manner set forth below (the "Income Distribution")
provided, however that the Trustee, if so directed with respect to
distributions from the Income Account and the Capital Account in a
writing signed by the Sponsor on behalf of Unitholders electing the
Reinvestment Plan offered in the Prospectus and received by the
Trustee on or before the Record Date for the first distribution to
which such notice is to apply, use such distributions to purchase
Units from the Sponsor, which may be Units held by the Sponsor or
additional Units created pursuant to the provisions of Section 2.02,
for the accounts of such Unitholders under the terms and conditions
set forth in the Prospectus. Only whole Units shall be purchased
pursuant to this Section.
The Trustee shall on or before each Distribution Date compute the
amount of the distribution per Unit for such Distribution Date (i) by
deducting from the cash on hand in the Capital and Income
25
<PAGE>
Accounts as of the Record Date immediately preceding such Distribution
Date the total of (X) cash required for the redemption of unredeemed
tendered Units and (Y) the sum of the amounts to be deducted from such
Accounts on or before such Distribution Date pursuant to the foregoing
provisions of this Section 3.04 and (ii) dividing the amount so
obtained by the number of Units outstanding on the Record Date
immediately preceding such Distribution Date.
No distribution need be made from the Capital Account if the balance
therein is less than an amount set forth in the Indenture.
The amount to be so distributed to each Unitholder shall be that pro
rata share of the cash balance of the Income and Capital Accounts,
computed as set forth herein, as shall be represented by the number of
Units evidenced by the number of Units held of record by such
Unitholder. In making the computation of such holder's pro rata share
of the balance of the Income and Capital Accounts, fractions of less
than one cent shall be omitted.
In the event a Unitholder of a particular series of any Trust fund is
also a Unitholder of one or more other series of a trust for which the
Trustee is the trustee and for which the Sponsor is the sole
depositor, and such Unitholder has not elected to participate in the
Reinvestment Plan, then the Trustee shall consolidate in one check the
distribution required to be made to a Unitholder hereunder with all
other distributions required to be made on such Distribution Date to
such Unitholder pursuant to the indenture governing such other series;
provided that an appropriate statement of distribution be furnished
therewith as required by the applicable Trust Indenture."
N. 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 commencing with calendar year 1997.
O. The text of Section 3.06 shall be deleted in its entirety and the
following text shall be inserted in its place:
26
<PAGE>
"Section 3.06. Sale of Securities and of Certain Rights. The Sponsor
by written notice may direct the Trustee to sell, or tender for cash,
in the event of an event under subparagraph (g) below, Securities at
such price and time and in such manner as shall be deemed appropriate
by the Sponsor if the Sponsor shall have determined that any one or
more of the following conditions exist:
(a) that there has been a failure to declare or pay anticipated
dividends or interest;
(b) that any materially adverse action or proceeding has been
instituted at law or in equity seeking to restrain or enjoin the
declaration or payment of dividends or interest on any such Securities
or that there exists any other materially adverse legal question or
impediment affecting such Securities or the declaration or payment of
dividends or interest on the same;
(c) that there has occurred any breach of covenant or warranty in any
trust indenture or other document relating to the issuer or obligor or
guarantor which might materially and adversely affect either
immediately or contingently the declaration or payment of dividends or
interest on such Securities;
(d) that there has been a default in the payment of the 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;
(e) 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 such Securities would not be in the best
interest of the Unitholders;
(f) that the sale of such Securities is desirable in order to maintain
the qualification of the Trust Fund as a "Regulated Investment
Company" in the case of a trust which has elected to qualify as such;
(g) that a public tender offer has been made for a Security, or a
merger or acquisition has been announced affecting a Security, that
27
<PAGE>
in the opinion of the Sponsor, the sale or tender of such Security is
in the best interests of the Unitholders;
(h) that there has been a decrease in the Sponsor's internal rating of
the Security; or
(i) that there has been a happening of events which, in the opinion of
the Sponsor, negatively affects the economic fundamentals of the
issuer of the Security or the industry of which it is a part.
Upon receipt of such direction from the Sponsor with respect to any
Securities, or in the case of options, warrants or other rights to
purchase securities distributed to the Trust in respect of Securities
as soon as is practicable after receipt of such options, warrants or
other rights, the Trustee shall proceed to sell the specified
Securities or any such rights. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by reason of
any sale made pursuant to any such direction or by reason of the
failure of the Sponsor to give any such direction, and in the absence
of such direction the Trustee shall have no duty to sell any
Securities under this Section 3.06 except to the extent otherwise
required by Section 3.10. The Sponsor shall not be liable for errors
of judgment in directing or failing to direct the Trustee pursuant to
this Section 3.06. This provision, however, shall not protect the
Trustee or Sponsor against any liability for which they would
otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of their obligations and duties
hereunder."
P. The text of Section 3.07 shall be deleted in its entirety and the
following text shall be inserted in its place:
"Section 3.07. Refunding Securities, Reorganizations and Similar
Events, Stock Dividends.
(a) In the event the Trustee is notified of any vote to be taken or
proposed to be taken by holders of the Securities held by the Trust
Fund in connection with any proposed merger, reorganization, spin-off,
split-off or split-up by the issuer of Securities held in the Trust
Fund, the Trustee shall take such action with respect thereto as the
Sponsor shall direct.
28
<PAGE>
(b) In the event that an offer shall be made by any person to exchange
stock or securities for any Securities (including but not limited to a
tender offer), the Trustee shall take such action with respect thereto
as the Sponsor shall direct.
(c) If, stock or securities are received by the Trustee, with or
without cash, as a result of any merger, reorganization, tender offer,
spin-off, split-off, or split-up by the issuer of Securities held in
the Trust Fund or in exchange for Securities (including any stock or
securities received notwithstanding the Trustee's rejection of an
offer or received without an initial offer), the Trustee at the
direction of the Sponsor may retain or sell such stock or securities
in the Trust Fund. Any stock or securities so retained shall be
subject to the terms and conditions of the Indenture to the same
extent as the Securities originally deposited hereunder. The Trustee
shall give notice to the Unitholders of the retention of stock or
securities acquired in exchange for Securities within five days after
such acquisition.
(d) Additional shares of Securities received as a distribution on
Securities (other than shares received in a non-taxable distribution
which shall be retained by the Trust Fund) shall be sold and the
proceeds credited to the Income Account."
Q. The first paragraph of Section 3.10 shall be amended by deleting
the first word of the paragraph, "In", and inserting the following text in its
place:
"Except as otherwise provided for in Section 3.07, in".
R. 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 the stocks and distribute only
stocks in a proportionate amount, rounding to avoid the delivery of fractional
shares and where such rounding is not possible by delivering stocks 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).
S. The text of Section 3.13 shall be deleted and the following text
shall be inserted in its place:
"Section 3.13. Election to Qualify as Regulated Investment Company;
Diversification Tests. (a) The Trust intends to elect to be treated
and to qualify as a Regulated Investment Company as
29
<PAGE>
defined in the Internal Revenue Code and the Trustee is directed to
make such elections, including any appropriate election to be taxed as
a corporation, as shall be necessary to effect such qualification.
(b) The Trustee shall furnish to independent certified public
accountants designated by the Sponsor pursuant to Section 8.01(e) 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 (2) the last Business Day of the first
quarter of the Trust Fund's first taxable year, and (3) the last
Business Day of any subsequent quarter during which any Securities are
acquired by the Trust Fund. For purposes of this Section 3.13 each
said day shall, except as the context may otherwise require, be
hereinafter referred to as the "Diversification Test Date".
On each Diversification Test Date upon written request from the
Trustee no later than five Business Days prior thereto, which date
shall be specified by the Trustee in such request, such accountants
shall send a written report, in form and substance satisfactory to the
Trustee and its counsel, to the Trustee and to the Sponsor stating
whether or not the aggregate value of all Securities (other than U.S.
Government Securities) of each issuer, Securities issued by which are
valued at greater than 5% of the total assets of the Trust Fund,
exceeds 50% of the value of the total assets of the Trust Fund on such
Diversification Test Date. In making the necessary computations, such
accountants shall compute the value of the Securities by taking the
value of the Securities in the Trust Fund, as so furnished by the
Trustee, including the amount of any accrued interest thereon, by
treating as Securities of the same issuer only those Securities whose
name so indicates; 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 certification by such accountants states
that the aggregate value of Securities (other than U.S. Government
Securities) of each issuer, Securities issued by which are 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
30
<PAGE>
Trust Fund on such date, as provided in Section 3.06, the Sponsor
shall direct the Trustee to sell all or any portion of the Securities
whose value is greater than 5% of total assets of the Trust Fund or
take such other action as is necessary so that the aggregate value of
Securities (other than U.S. Government Securities) of each issuer,
Securities issued by which have values greater than 5% of the total
assets of the Trust Fund, does not exceed 50% of the value 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
Sponsor shall provide a certificate satisfactory in form and substance
to the Trustee and its counsel to the effect that the aggregate value
of all Securities (other than U.S. Government Securities) of each
issuer, Securities issued by which are valued at greater than 5% of
the total assets of the Trust Fund does not exceed 50% of the value of
the Fund's total assets on the last day of the quarter.
In order to ensure the continued qualification as a Regulated
Investment Company of a trust which has elected to so qualify, the
Trustee shall cause a review of the Trust to be performed by such
accountants prior to the end of the calendar year. The purpose of such
review shall be to determine whether the Trust is deriving at least
90% of its gross income from dividends, interest and gains from the
sale or other disposition of the Securities. The Trustee shall submit
the written results of such review to the Sponsor.
In the event that the foregoing audit states that less than 90% of the
gross income of the Trust is derived from dividends, interest and
gains from the sale or other disposition of the Securities, the
Sponsor shall direct the Trustee to sell certain of the 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."
S. The Trustee will calculate the Trust's value, as provided in
Section 5.01 on the dates set forth in said Section 5.01 and additionally upon
termination (or the last business day prior thereto).
31
<PAGE>
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 Income Account 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. Section 10.02 of the Standard Terms shall hereby be amended as
follows:
1. the text of Section 10.02 shall be deleted in its entirety and;
2. the following text set forth below shall be inserted in replacement
of such Section 10.02: "Section 10.02. Initial Costs (a) The
Initial Costs incurred by the Sponsor and the Trustee in connection
with the organization and establishment of the Trust (the "Initial
Costs") shall be paid by the Trust, or if paid for by the Trustee
initially, shall be reimbursed by the Trust to the Trustee in
accordance with Sections 3.04(b) and 8.05.
(b) Initial Costs to be charged to the Trust include, but are not
limited to
(1) the costs of the initial preparation, typesetting and
execution of the registration statement, prospectuses
(including preliminary prospectuses), the trust indenture
and other legal documents relating to the establishment of
the Trust, and the costs of submitting such documents in
electronic format to the SEC,
(2) SEC and state blue sky registration fees for the initial
registration of Trust Units,
(3) the cost of the initial audit of the Trust,
(4) the legal costs incurred by the Sponsor and the Trustee
related to any and all of the foregoing, and
(5) other out-of-pocket expenses related to any and all of the
foregoing.
(c) Costs and expenses incurred in the marketing and selling of
Trust Units, shall not be borne by the Trust but shall be paid
for by the Sponsor. Such costs and expenses include but are not
limited to (1)
32
<PAGE>
any expenses incurred in the printing of prospectuses
(including preliminary prospectuses), (2) the preparation and
printing of brochures and other advertising or marketing
materials, including any legal costs incurred in the review
thereof, and (3) any other selling or promotional costs or
expenses.
(d) Promptly after the Initial Date of Deposit, upon written
certification to the Trustee, the Sponsor shall receive
reimbursement for any of the Initial Costs set forth in
subsection (b) above which are payable from the Trust but which
were paid for by the Sponsor, without profit. The Trustee shall
advance out of its own funds such reimbursement, provided,
however that the Trustee shall be entitled to be reimbursed
without interest out of the Trust Fund for any and all amounts
advanced by it pursuant to this Section 10.02(d), in the manner
set forth in Section 3.04(a). Such advances shall be considered
a lien on the Trust Fund, and the Trustee shall have a priority
over Unitholders on funds received in respect of the Securities
in the Trust, as such funds are received.
(e) The Trustee shall reimburse itself for the advances made
pursuant to subsection (d) above in 60 months approximately
equal installments over a five (5) year period unless (i) the
Trust is sooner terminated, in which case all amounts still due
and owing shall be payable to the Trustee from the assets of
the Trust or (ii) by law or regulation the Trust is required to
amortize costs set forth in subsection (b) over a period of
time shorter than 60 months, in which case the Trustee shall
follow the requisite time period for such reimbursement.
(f) The Sponsor shall bear the Initial Costs, if any, in excess of
$100,000."
W. For the purpose of this Trust, Section 10.03(e) shall be amended so
that the text below shall be added to the paragraph following the last sentence
thereof:
"So long as the Sponsor is maintaining a secondary market for Units,
the Sponsor shall bear any audit expense which exceeds $.0050 per
Unit".
Section 3. The Trust hereby elects to qualify as a Regulated
Investment Company under the Internal Revenue Code of 1986, as amended.
Section 4. The Standard Terms shall be amended to add new Section 3.15
as follows:
33
<PAGE>
Section 3.15. Reinvestment of Cash Proceeds. If and to the extent that
the Sponsor, on behalf of the Trust, receives a favorable response to
its no-action letter request submitted to the Securities and Exchange
Commission with respect to reinvesting cash proceeds received by the
Trust, the Trustee shall, upon receipt of instructions from the
Sponsor, reinvest such cash proceeds in additional Securities held in
the Trust Fund at such time. Such reinvestment shall be made so that
each deposit of additional Securities shall be made so as to match as
closely as practicable the Percentage Ratios, and such reinvestment
shall be made in accordance with the parameters set forth in the
no-action letter response. If the Sponsor and the Trustee determine
that it shall be necessary to amend the Standard Terms and Agreement
and/or the Indenture to comply with the parameters set forth in the
no-action letter response, such documents may be so amended without
the consent of Unitholders.
34
<PAGE>
SCHEDULE A
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 20
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, SEPTEMBER 4, 1997
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)
- --------------------------------------------- ------------ ------------------
<S> <C> <C>
Commercial Services (3.64%)
CUC International, Inc....................... 1,400 $35,000.00
Computer Software (7.49%)
Cognos, Inc. ................................ 1,070 35,176.25
Microsoft Corporation........................ 270 36,871.88
Computers -Memory Devices (14.56%)
EMC Corporation.............................. 660 35,145.00
Quantum Corporation.......................... 1,010 35,160.63
Seagate Technology, Inc...................... 960 34,980.00
Western Digital Corporation.................. 760 34,865.00
Computers -Micro (7.24%)
Compaq Computer Corporation.................. 520 34,742.50
Sun Microsystems, Inc........................ 690 34,931.25
Computers -Mini (3.65%)
Hewlett-Packard Company*..................... 550 35,131.25
Data Processing/Management (3.64%)
Oracle Corporation........................... 910 35,035.00
Electronics/Semi-Conductor (14.44%)
Applied Materials, Inc....................... 340 34,127.50
Intel Corporation*........................... 370 34,710.63
KLA-Tencor Corporation....................... 490 35,126.88
Teradyne, Inc................................ 620 35,030.00
Internet Software (7.28%)
America Online, Inc. ........................ 510 35,062.50
Open Market, Inc. ........................... 3,110 34,987.50
Multimedia/Entertainment (10.89%)
The Walt Disney Company*..................... 440 35,007.50
Gannett Company, Inc.*....................... 350 34,693.75
Time Warner, Inc.*........................... 680 35,105.00
Networking Products (10.92%)
Cisco Systems, Inc........................... 450 35,015.63
FORE Systems, Inc............................ 1,750 35,000.00
3Com Corporation............................. 720 35,055.00
Publishing -Newspapers (3.63%)
New York Times Company*...................... 720 34,965.00
Retail -Office Supplies (3.64%)
Staples, Inc................................. 1,450 35,071.88
Telecommunications (3.62%)
WorldCom, Inc................................ 1,100 34,856.25
</TABLE>
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 20
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, SEPTEMBER 4, 1997 (CONTINUED)
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)
- --------------------------------------------- ------------ ------------------
<S> <C> <C>
Telecommunications Equipment (3.58%)
Northern Telecom Limited*.......................... 340 $ 34,510.00
TREASURY SECURITIES (1)
$15,000 U.S. Treasury Note 7 7/8% due 2/15/2021
(1.78%) ........................................... 17,136.22
TOTAL INVESTMENTS ................................ $962,500.00
</TABLE>
- ------------
(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 $224.
* Income producing security.
<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 Company 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
----------------------------
Senior Vice President
Attest:
- -----------------------------
Secretary
35
<PAGE>
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this 4th day of September, 1997 before me personally appeared
Robert E. Holley, to me known, who being by me duly sworn, said that he is a
Senior 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
36
<PAGE>
FIRST NATIONAL BANK OF CHICAGO
By
----------------------------
Title
SEAL
Attest:
- ----------------------------------
Title
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STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this 4th day of September, 1997 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.
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Notary Public
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Exhibit 99.2
September 4, 1997
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
Hancock Towers
200 Clarendon Street
Boston, Massachusetts 02116
Re: PaineWebber Equity Trust,
Growth Stock Series 20
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Ladies and Gentlemen:
We have served as counsel for PaineWebber Incorporated as sponsor and
depositor (the "Sponsor") of PaineWebber Equity Trust, Growth Stock Series 20
(hereinafter referred to as the "Trust") in connection with the issuance by the
Trust of an initial 100,000 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,
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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;
(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. 333-15797)
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 September
4, 1997 (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. 811-3722), 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 September 4, 1997 between the
Sponsor and the Co-Trustees (the "Trust Indenture" and, collectively
with the Standard Terms, the "Indenture and Agreement");
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(k) The Closing Memorandum dated September 4, 1997, 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
(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 laws of the State of New York (except "Blue Sky" laws)and the federal laws
of 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;
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(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;
(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 within 30 days after the date hereof.
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
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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).
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,
CARTER, LEDYARD & MILBURN
KHM:def
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Exhibit 99.C1
September 4, 1997
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
Hancock Towers
200 Clarendon Street
Boston, Massachusetts 02116
Ladies & Gentlemen:
As counsel for PaineWebber Incorporated (the "Depositor"), we have
examined an executed copy of the Trust Indenture and Agreement dated as of
September 4, 1997 (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 20 (the "Trust") into which the Depositor deposited
certain stocks, (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:
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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 $2,055.00.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-15797) 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,
CARTER, LEDYARD & MILBURN
KHM:def
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Exhibit 99.C2
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in this Amendment to the Registration Statement of our
report dated September 4, 1997 relating to the Statement of Financial Condition
of The PaineWebber Equity Trust, Growth Stock Series 20, including the Schedule
of Investments, included herein, and to the reference made to us under the
caption "Independent Auditors" in the Prospectus.
ERNST & YOUNG LLP
September 4, 1997
New York, New York
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