<PAGE>
File No. 333-45757
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2
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 22
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:
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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
G. Amount of filing fee, computed at one-thirty-fourth of 1 percent of
the proposed maximum aggregate offering price to the public:
None required pursuant to Rule 24f-2.
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF
THE REGISTRATION STATEMENT
/ / Check box if it is proposed that this filing will
become effective on May _, 1999 at 3:00 p.m. pursuant
to Rule 487.
<PAGE>
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 22
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
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* Not applicable, answer negative or not required.
<TABLE>
<S> <C>
(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 )
</TABLE>
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<TABLE>
<S> <C>
(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
</TABLE>
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* Not applicable, answer negative or not required.
<PAGE>
<TABLE>
<S> <C>
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,
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) Termination of the Trust,
) Amendment of the Indenture
</TABLE>
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* Not applicable, answer negative or not required.
<PAGE>
<TABLE>
<S> <C>
(d) Schedule of distribution ) *
19. Records, accounts and report ) Distributions, Administra-
) tion of the Trust
20. Certain miscellaneous provisions ) Trustee, Sponsor, Termination
of trust agreement ) of the Trust, Amendment 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 )
<CAPTION>
III. Organization Personnel and
Affiliated Persons of Depositor
<S> <C>
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 )
<PAGE>
33. Remuneration of employees of ) *
Depositor for certain services )
rendered to trust )
</TABLE>
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* Not applicable, answer negative or not required.
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<TABLE>
<S> <C>
34. Remuneration of other persons ) *
for certain services rendered )
to trust )
</TABLE>
<TABLE>
<CAPTION>
IV. Distribution and Redemption of Securities
<S> <C>
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 ) *
<PAGE>
(c) Variation in offering ) Public Offering of Units
Price to certain persons ) Administration of the Trust
</TABLE>
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* Not applicable, answer negative or not required.
<PAGE>
<TABLE>
<S> <C>
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 )
<CAPTION>
V. Information concerning the Trustee or Custodian
<S> <C>
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
<CAPTION>
VI. Information concerning Insurance of Holders of Securities
<S> <C>
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 )
</TABLE>
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<PAGE>
* Not applicable, answer negative or not required.
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<TABLE>
<CAPTION>
VII. Policy of Registrant
<S> <C>
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 )
<CAPTION>
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
</TABLE>
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* Not applicable, answer negative or not required.
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
<PAGE>
PAINEWEBBER EQUITY TRUST
Growth Stock Series 22
[GRAPHIC OF INFORMATION REVOLUTION WARS]
(INTENSE COMPETITION AMONG ALL BUSINESSES
RESULTING FROM THE NEW INFORMATION TECHNOLOGY)
- --------------------------------------------------------------------------------
The investment objective of this Trust is to provide capital appreciation
through an investment in equity stocks which, in the Sponsor's opinion on the
Initial Date of Deposit, are likely to prosper in what it calls "The
Information Revolution Wars" and, therefore, have an above-average potential
for capital appreciation. The value of the Trust's 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 MAY 19, 1999
<PAGE>
ESSENTIAL INFORMATION REGARDING THE TRUST
AS OF MAY 18, 19991
Sponsor: PaineWebber Incorporated
Trustee: Investors Bank & Trust Company
Initial Date of Deposit: May 19, 1999
<TABLE>
<S> <C>
Aggregate Value of Securities in Trust: .................... $990,020
Number of Units2: .......................................... 100,000
Fractional Undivided Interest in the Trust Represented by
Each Unit: ................................................ 1/100,000th
Calculation of Public Offering Price Per Unit2, 3
Public Offering Price per Unit ........................... $ 10.00
Less Reimbursement to Sponsor for Initial
Organizational Costs6 .................................... $ 0.020
Less Initial Sales Charge4*of 1% of Public Offering Price
(1.01% of net amount invested per Unit) .................. $ 0.10
Net Asset Value per Unit .................................. $ 9.880
Net Asset Value for 100,000 Units ......................... $988,020
Divided by 100,000 Units2 ................................. $ 9.88
Redemption Value:** ........................................... $ 9.75
Evaluation Time: .............................................. 4:00 P.M. New York time.
Income Account Distribution Dates5: ........................... September 25, 1999 and quarterly
thereafter and on the Mandatory
Termination Date.
Capital Account Distribution Dates5: .......................... December 31, 1999 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: ................................................. September 10, 1999 and quarterly
thereafter.
Mandatory Termination Date: ................................... June 1, 2004
Discretionary Liquidation Amount: ............................. 50% of the value of Securities upon
completion of the deposit of
Securities.
Estimated Initial Organizational Costs of the Trust6: ......... $.020 per Unit.
Estimated Annual Expenses of the Trust:7 ...................... $.0295 per Unit.
</TABLE>
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1 The date prior to the Initial Date of Deposit.
2 As of the close of business on the Initial Date of Deposit, the number of
Units may be adjusted so that the Public Offering Price Per Unit will equal
approximately $10.00, based on the 4:00 p.m. Eastern time valuation of the
Securities in the Portfolio on such date. Thereafter, to the extent of any
such adjustment in the number of Units, the fractional undivided interest
per Unit will increase or decrease accordingly, from the amounts indicated
above.
3 The Public Offering Price will be based upon the value of the Stocks next
computed following receipt of the purchase order plus the applicable sales
charges and will vary on any date subsequent to May 19, 1999 from the Public
Offering Price per Unit shown above. Following the Initial Date of Deposit,
costs incurred in connection with the acquisition of additional Stocks will
be at the expense of the Trust. Any investor purchasing Units after the
Initial Date of Deposit will also pay a pro-rata share of any accumulated
dividends in the Income Account. (See "Essential Information Regarding the
Trust--Additional Deposits," "Risk Factors and Special Considerations" and
"Valuation").
4 The Initial Sales Charge is 1% per Unit. In addition, twelve (12)
monthly Deferred Sales Charges of $2.50 per 100 Units (totalling $30.00 per
100 Units) will be deducted from the Trust's net asset value on the tenth
(10th) day of each month from month 7 (November) through month 12 (April) in
both years one (1) and two (2) of the Trust's sixty (60) month life. The
Initial Sales Charge is reduced on purchases of Units worth $50,000 or more.
See "Public Offering of Units--Sales Charge and Volume Discount."
5 See "Distributions".
2
<PAGE>
6 Investors purchasing Units during the initial offering period will reimburse
the Sponsor for all or a portion of the costs incurred by the Sponsor in
connection with organizing the Trust and offering the Units for sale
described more fully in "Public Offering Price" (collectively, the "Initial
Organizational Costs"). These costs have been estimated at $0.0200 per Unit
based upon the expected number of Units to be created during the initial
offering period. Certain Securities purchased with the proceeds of the
Public Offering Price will be sold by the Trustee at the completion of the
initial public offering period to reimburse the Sponsor for Initial
Organizational Costs actually incurred. If the actual Initial Organizational
Costs are less than the estimated amount, only the actual Initial
Organizational Costs will be deducted from the assets of the Trust. If,
however, the amount of the actual Initial Organizational Costs are greater
than the estimated amount, only the estimated amount of the Initial
Organizational Costs will be deducted from the assets of the Trust.
7 See "Expenses of the Trust". Estimated dividends from the Stocks, based upon
last dividends actually paid, are expected by the Sponsor to be sufficient
to pay estimated annual expenses of the Trust. If such dividends and income
paid are insufficient to pay expenses, the Trustee is authorized to sell
Securities in an amount sufficient to pay such expenses. (See
"Administration of the Trust" and "Expenses of the Trust".)
* The sales charge will not be assessed on these Securities sold to
reimburse the Sponsor for the Initial Organizational Costs.
** This figure reflects deduction of the Initial Sales Charge of 1.00% and
the Deferred Sales Charges for the first year of $0.15 per Unit. As of
the close of the initial offering period, the Redemption Value will be
reduced to reflect the payment of Initial Organizational Costs (see
"Summary of Risk Factors" and "Comparison of Public Offering Price and
Redemption Value").
ESSENTIAL INFORMATION REGARDING THE TRUST (CONTINUED)
THE TRUST. The objective of the PaineWebber Equity Trust, Growth Stock
Series 22 (the "Trust") is to provide for capital appreciation through an
investment in equity stocks which have, in the Sponsor's opinion on the Initial
Date of Deposit, an above-average potential for capital appreciation, because
the issuers of such stocks are likely to prosper in what PaineWebber calls "The
Information Revolution Wars." (Such stocks are referred to herein as the
"Stocks" or the "Securities".) OF COURSE, THERE CAN BE NO ASSURANCE THAT THE
OBJECTIVE OF THE TRUST WILL BE ACHIEVED.
In PaineWebber's opinion, the U.S. economy is undergoing a fundamental
transformation at least as dynamic and important as that brought about by the
industrial revolutions of the late 18th and 19th centuries. PaineWebber calls
this successor to those earlier industrial revolutions the "Information
Revolution" because radical changes in the way information is stored,
transmitted and used has altered, and will continue to alter, the U.S. economy.
PaineWebber believes that the "Information Revolution" will create a different
and better economy, a genuinely new model, not simply a more efficient version
of the old model. In PaineWebber's opinion, "The Information Revolution Wars"
will occur as the "Information Revolution" continues to transform the U.S.
economy; these "Wars" will be struggles between companies for survival and
market dominance in the 21st century. Therefore, on the Initial Date of
Deposit, PaineWebber has identified certain companies that it believes will
survive and thrive amidst "The Information Revolution Wars." The Trust will
seek to achieve its objectives of capital appreciation through an investment in
a diversified portfolio of the Stocks of these companies. See the discussion
under the heading "The Composition of the Portfolio" for the reasons why
PaineWebber has chosen these Stocks.
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.
There can also be no assurance that the Trust portfolio will remain
constant during the life of the Trust. For example, the Trustee will sell
Securities to reimburse the Sponsor for the Initial Organizational Costs and
for the Deferred Sales Charge payments, and 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 or addition of one or more Stocks (see
"Administration of the Trust--Portfolio Supervision"). 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 may tender the Stocks, or
sell them, or acquire new Securities, as more fully described under the
captions "The Trust" and "Administration of the Trust--Portfolio Supervision,"
herein.
3
<PAGE>
THE COMPOSITION OF THE PORTFOLIO.
THE "INFORMATION REVOLUTION"
PaineWebber believes that Phase I of the "Information Revolution"
consisted of the "digitization" of individual enterprises. PaineWebber uses the
term "digitization" to refer to the process by which information is transformed
into digital code ("bits" and "bytes") so that such information can be read,
manipulated and stored by a computer. Once this "digitization" process began,
networks of increasingly ubiquitous computers were created, starting with
mainframe computers in the 1950s and 1960s, minicomputers in the 1970s and
1980s, and personal computers ("PCs") in the 1980s and 1990s. PaineWebber
observes that this "digitization" process mainly increased the speed and
efficiency of conducting traditional ways of doing business.
In PaineWebber's opinion, the Internet represents Phase II of the
"Information Revolution", during which electronic devices will proliferate and
will all be digitally linked to each other. PaineWebber believes that the
Internet is more than just a communication tool and is a revolutionary new
technology that redefines the concept of information or "content." "Content",
in PaineWebber's opinion, is no longer the information that historically has
been delivered via traditional media, such as books, movies and recordings, but
is now becoming any portion of global Gross Domestic Product that can be
"digitized." Thus, the Internet promises wealth producing activities to the
creators and distributors of "content" as well as facilitating easy delivery of
"content" to anyone with access to the Internet.
"THE INFORMATION REVOLUTION WARS"
PaineWebber believes that the Internet will significantly alter the
landscape of the global economy, and that it will enhance and intensify the
struggles for survival, growth prospects and market dominance among businesses
worldwide. PaineWebber terms these struggles the "The Information Revolution
Wars".
FACTORS AND TRENDS WHICH HELP IDENTIFY COMPANIES THAT MAY PROSPER IN "THE
INFORMATION REVOLUTION WARS"
PaineWebber believes that the hallmark of the "Information
Revolution"--instantaneous, low-cost, digital communication--made available via
the Internet, will, among other things, create bigger and better product
markets, lower inventories of goods, increased worker productivity, finer
divisions of labor and more efficient consumers. In PaineWebber's opinion, the
Internet will pose both opportunities and threats to virtually all segments of
the U.S. economy. PaineWebber has analyzed the past and present impact of the
Internet and has identified certain factors and trends, discussed below, which
it believes may help identify those companies poised to survive and thrive
amidst "The Information Revolution Wars."
1. Information Age vs. Industrial Age:
PaineWebber believes that in the "Information Age", the creation,
distribution and manipulation of information or "content" will be the central
wealth-producing activity, rather than the production, transportation and
fabrication of physical materials so important in the Industrial Age. In
PaineWebber's opinion, certain companies involved in the information network,
(e.g.) builders of the data network, wireless, cable and telephone companies
are well positioned to experience strong growth prospects.
4
<PAGE>
2. Start-Up Companies vs. Entrenched Companies:
PaineWebber believes that the Internet threatens many entrenched
businesses because it facilitates the expansion of industrial capacity at
relatively low costs, and new start-up companies often do not have entrenched
costs, such as long-term leases. The Internet's ability to provide faster, more
efficient and more specific information to its users makes it a threat to
traditional providers of consumer information, such as newspapers.
3. Producers vs. Distributors:
PaineWebber believes that the Internet increases the power of producers;
direct selling activity between producers and consumers will continue to
diminish the need for distributors and middlemen, and retailers will have to
compete directly with manufacturers to sell goods to consumers.
4. "E-tailing"--i.e. Electronic Retailing vs. Bricks and Mortar Retailing:
In PaineWebber's opinion, the Internet presents both a threat and an
opportunity for established retailers. Certain companies with catalogue
operations, distinctive product lines or a strong brand and those providing
"added value" such as a wide range of products and services stand to survive in
the "Information Age", while those who have weaker brand names or catalogue
operations who do not make the transition onto the Internet may suffer.
5. New Brands vs. Established Brands:
PaineWebber believes that the Internet can be an effective medium for
reinforcing existing brands while creating challenges for companies trying to
build new brands. PaineWebber also observes that in some cases, the Internet
could threaten some established brands over the long-term because it
facilitates comparison-shopping. "Infomediaries" (those Web sites which provide
comparison shopping) may be a particular threat to certain retailers selling
product-based brands, such as classic department stores, but may have little
impact on those retailers selling "lifestyle" brands.
6. Dominant vs. Smaller Sized Companies:
In PaineWebber's opinion, while the "barriers to entry" on the Internet
are extremely low, the barriers to profitable prosperity and growth on the
Internet are extremely high. PaineWebber believes that a few large and
well-known Internet companies have several key advantages over their
smaller-sized competitors: mass-market brand identity, economies of scale and
scope, financial clout and market presence to enter into partnering
arrangements with other major firms, and wide market reach for advertisers.
7. "Commoditized" Information vs. Proprietary Content vs. Specialized Insight:
PaineWebber observes that much information formerly available only through
specialized providers for a fee is now freely available; PaineWebber refers to
this process as the "commoditization" of information. Although this
"commoditization" of information has negative implications for many companies,
including many traditional providers of news, sports data and financial
information, PaineWebber believes that proprietary content and individualized
insight will remain valuable. In PaineWebber's opinion, certain companies will
profit in the "Information Age" for one of several reasons: their ability to
create original content, their monopoly on a particular market sector, or their
provision of tailored services to solve individual problems, such as on-line
financial planning.
5
<PAGE>
8. Paper vs. Paperless:
PaineWebber believes that the Internet is fundamentally but subtly
changing the relationship between people, paper and words. Although people
continue to prefer reading lengthy text passages on paper, they now prefer to
store it electronically. This trend is negative for commercial printers, but
positive for manufacturers of computer printers, and companies that can scan,
download and collate documents.
9. "Cyberspace" vs. Real Estate:
PaineWebber observes that two trends, consumers buying directly from
producers of goods and consumers buying from Internet retailers in "cyberspace"
(i.e. directly on-line on the Internet), have led to an increasing demand for
warehouse space and other distribution centers. Retailers in upscale malls will
probably not be threatened by the Internet, whereas stores selling commodity
items in strip malls may be hurt, in PaineWebber's opinion.
PaineWebber's research analysts have selected stocks in the industries
listed below which they believe are likely to profit from one or more of the
trends discussed above and provide capital appreciation during the next several
years. 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
PRIMARY INDUSTRY SOURCE AGGREGATE MARKET VALUE OF THE TRUST
- ------------------------------------------------------ ------------------------------------
<S> <C>
Air Freight Transportation .................... 1.57%
Airlines ...................................... 1.51%
Apparel Manufacturers ......................... 3.14%
Auction House/Art Dealer ...................... 1.58%
Beverages ..................................... 1.60%
Broadcast Services ............................ 1.54%
Computers--Hardware/Software .................. 6.14%
Cosmetics & Toiletries ........................ 1.60%
Cruise Lines .................................. 1.59%
Financial Institutions/Banks .................. 12.84%
Insurance--Multi-Line ......................... 7.91%
Internet Software ............................. 3.09%
Multimedia .................................... 3.18%
Networking Products ........................... 1.53%
Office Automation & Equipment ................. 1.59%
Printers & Related Products ................... 1.60%
Radio ......................................... 1.57%
REITS--Warehouse/Industrial ................... 3.16%
Retail--Apparel/Shoe .......................... 7.95%
Retail--Building Products ..................... 3.10%
Retail--Catalog Shopping/Mail Order ........... 3.95%
Retail--Discount .............................. 3.16%
Retail--Internet .............................. 4.65%
Retail--Jewelry ............................... 3.20%
Retail--Office Supplies ....................... 3.14%
Retail--Restaurants ........................... 1.56%
Telecommunications ............................ 9.39%
Toys .......................................... 1.58%
Travel Services ............................... 1.58%
</TABLE>
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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
. (See "The Trust"). Costs incurred in acquiring such additional Stocks 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
such deposits of Additional Securities purchased by the Trustee with cash or
cash equivalents pursuant to instructions to purchase such Additional
Securities. (See "The Trust" and "Risk Factors and Special Considerations".)
PUBLIC OFFERING PRICE. Units will be charged a combination of an Initial
Sales Charge on the date of purchase of 1.00% of the Public Offering Price,
plus Deferred Sales Charges which will aggregate $30.00 per 100 Units over the
first (1st) and second (2nd) years of the Trust. For example, on the Initial
Date of Deposit, on a $1,000 investment, $990.00 is invested in the Trust and a
$10.00 Initial Sales Charge is collected. In addition, a Deferred Sales Charge
of $2.50 per 100 Units will be deducted from the Trust's net asset value on the
tenth (10th) day of each month from month 7 (November) through month 12 (April)
in both years one (1) and two (2) of the Trust's five (5) year term, for a total
of $30.00. This deferred method of payment keeps more of the investor's money
invested over a longer period of time than would be the case if a single sales
charge of the same amount were collected on the initial date of purchase. The
sales charges are reduced on a graduated scale for volume purchasers and are
reduced for employees of the Sponsor. 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. Units redeemed or repurchased prior to the accrual of the final Deferred
Sales Charge installment may, depending upon the date of such redemption or
repurchase, have the amount of any remaining installments deducted from the
redemption or repurchase proceeds. (See "Public Offering of Units".) In
addition, during the initial public offering period, the Public Offering Price
will include an amount sufficient to reimburse the Sponsor for the payment of
all or a portion of the Initial Organization Costs described more fully in
"Public Offering Price".
DISTRIBUTIONS. The Stocks in the Trust were chosen for their potential for
capital appreciation, not for their income potential. The Trustee will make
distributions, on the Distribution Dates. (See "Distributions" and
"Administration of the Trust".) Unitholders may elect to have their Income
Account and Capital Account distributions automatically reinvested into
additional Units of the Trust at no Initial Sales Charge (see "Reinvestment
Plan"). (Such Units will be subject to the Deferred Sales Charges.) Upon
termination of the Trust, the Trustee will distribute to each Unitholder of
record on such date his pro rata share of the Trust's assets, less expenses. The
sale of Securities in the Trust in the period prior to termination and upon
termination may result in a lower amount than might otherwise be realized if
such sale were not required at such time due to impending or actual termination
of the Trust. For this reason, among others, the amount realized by a Unitholder
upon termination may be less than the amount paid by such Unitholder.
TERMINATION. Unitholders may receive their termination proceeds in cash
(or, at the Sponsor's election, in kind for distributions in excess of
$500,000) after the Trust terminates (see "Termination of the Trust"). 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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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 $500,000,
the Sponsor may determine in its sole discretion to direct the Trustee to
redeem units "in kind" by distributing Securities to the redeeming Unitholder.
(See "Redemption".)
THE TRUST
The Trust is one of a series of similar but separate unit investment
trusts created under New York law by the Sponsor pursuant to a Trust Indenture
and Agreement* (the "Indenture") dated as of the Initial Date of Deposit,
between PaineWebber Incorporated, as Sponsor and Investors Bank & Trust
Company, as Trustee (the "Trustee"). The objective of the Trust is capital
appreciation through an investment principally in equity stocks having, in
Sponsor's opinion on the Initial Date of Deposit, potential for capital
appreciation. Of course, there can be no assurance that the objective of the
Trust will be achieved.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee
confirmations of contracts for the purchase of Stocks together with an
irrevocable letter or letters of credit of a commercial bank or banks in an
amount at least equal to the purchase price. The value of the Securities was
determined on the basis described under "Valuation". In exchange for the
deposit of the contracts to purchase Securities, the Trustee delivered to the
Sponsor a receipt for Units representing the entire ownership of the Trust.
With the deposit on the Initial Date of Deposit, the Sponsor established a
proportionate relationship between the Securities in the Trust (determined by
reference to the number of shares of each issue of Stock). The Sponsor may,
from time to time, cause the deposit of Additional Securities in the Trust when
additional Units are to be offered to the public or pursuant to the
Reinvestment Plan, 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 a Security or to reflect a
merger or reorganization or other similar occurrence. In addition, under
certain circumstances, e.g., if a Security held in the Trust is not readily
available, in the opinion of the Sponsor, the Trust may acquire other
securities, which, in its opinion, are of the same general quality as that of
the Security originally deposited. 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
- ----------
*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.
8
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will be reduced, and the fractional undivided interest represented by each
remaining Unit in the balance will be increased. Units will remain outstanding
until redeemed upon tender to the Trustee by any Unitholder (which may include
the Sponsor) or until the termination of the Trust. (See "Termination of the
Trust".)
INVESTORS SHOULD BE AWARE THAT THE TRUST, UNLIKE A MUTUAL FUND, IS NOT A
"MANAGED" FUND AND AS A RESULT THE ADVERSE FINANCIAL CONDITION OF A COMPANY
WILL NOT RESULT IN ITS ELIMINATION FROM THE PORTFOLIO EXCEPT UNDER CERTAIN
LIMITED CIRCUMSTANCES (SEE "TRUST ADMINISTRATION--PORTFOLIO ADMINISTRATION").
IN ADDITION, SECURITIES WILL NOT BE SOLD BY THE TRUST TO TAKE ADVANTAGE OF
MARKET FLUCTUATIONS OR CHANGES IN ANTICIPATED RATES OF APPRECIATION.
Investors should note that PaineWebber, in its general securities
business, acts as agent or principal in connection with the purchases and sales
of equity securities, including the Securities in the Trust, and may act as a
market maker in certain of the Securities. PaineWebber also from time to time
issues reports and may make recommendations relating to equity securities,
including the Securities in the Trust, and has provided, and may continue to
provide, investment banking services to the issuers of the Securities.
Investors should note in particular that the Securities were selected by
the Sponsor as of the Initial Date of Deposit. The Trust may continue to
purchase Additional Securities when additional Units are offered to the public
or pursuant to the Reinvestment Plan, or may continue to hold Securities
originally selected through this process. This may be the case even though the
evaluation of the attractiveness of such Securities may have changed and, if
the evaluation were performed again at that time, the Securities would not be
selected for the Trust. In addition, the Sponsor may continue to sell Trust
Units even if PaineWebber changes a recommendation relating to one or more
Securities in the Trust.
RISK FACTORS AND SPECIAL CONSIDERATIONS
An investment in Units of the Trust should be made with an understanding
of the risks inherent in an investment in common stocks in general. The general
risks are associated with the rights to receive payments from the issuer which
are generally inferior to creditors of, or holders of debt obligations or
preferred stocks issued by, the issuer. Holders of common stocks have a right
to receive dividends only when and if, and in the amounts, declared by the
issuer's board of directors and to participate in amounts available for
distribution by the issuer only after all other claims against the issuer have
been paid or provided for. By contrast, holders of preferred stocks have the
right to receive dividends at a fixed rate when and as declared by the issuer's
board of directors, normally on a cumulative basis, but do not participate in
other amounts available for distribution by the issuing corporation. Dividends
on cumulative preferred stock must be paid before any dividends are paid on
common stock. Preferred stocks are also entitled to rights on liquidation which
are senior to those of common stocks. For these reasons, preferred stocks
generally entail less risk than common stocks.
The Trust is not appropriate for investors who require high current income
or seek conservation of capital.
Common stocks do not represent an obligation of the issuer. Therefore they
do not offer any assurance of income or provide the degree of protection of
debt securities. The issuance of debt securities or even preferred stock by an
issuer will create prior claims for payment of principal, interest and
dividends which could adversely affect the ability and inclination of the
issuer to declare or pay dividends on its common stock or the rights of holders
of common stock with respect to assets of the issuer upon liquidation or
bankruptcy. Unlike debt securities which typically have a stated principal
amount payable at maturity, common stocks do not have a fixed principal amount
or a maturity. Additionally, the value of the Stocks in the Trust may be
expected to fluctuate over the life of the Trust.
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<PAGE>
In addition, there are investment risks common to all equity issues. The
Stocks may appreciate or depreciate in value depending upon a variety of
factors, including the full range of economic and market influences affecting
corporate profitability, the financial condition of issuers, changes in
national or worldwide economic conditions, and the prices of equity securities
in general and the Stocks in particular. Distributions of income, generally
made by declaration of dividends, is also dependent upon several factors,
including those discussed above in the preceding sentence.
Certain of the Stocks in the Trust may be ADRs which are subject to
additional risks. (See "Schedule of Investments.") ADRs evidence American
Depositary Shares ("ADS"), which, in turn, represent common stock of foreign
issuers deposited with a custodian in a depositary. (For purposes of this
Prospectus, the term "ADR" generally includes "ADS".) ADRs involve certain
investment risks that are different from those found in stocks issued by
domestic issuers. These investment risks include potential political and
economic developments, potential establishment of exchange controls, new or
higher levels of taxation, or other governmental actions which might adversely
affect the payment or receipt of payment of dividends on the common stock of
foreign issuers underlying such ADRs. ADRs may also be subject to current
foreign taxes, which could reduce the yield on such securities. Also, certain
foreign issuers are not subject to reporting requirements under U.S. securities
laws and therefore may make less information publicly available than that
provided by domestic issuers. Further, foreign issuers are not necessarily
subject to uniform financial reporting, auditing and accounting standards and
practices which are applicable to publicly traded domestic issuers.
In addition, the securities underlying the ADRs held in the Trust are
generally denominated, and pay dividends, in foreign currency. An investment in
securities denominated and principally traded in foreign currencies involves
investment risk substantially different than an investment in securities that
are denominated and principally traded in U.S. dollars. This is due to currency
exchange rate risk, because the U.S. dollar value of the shares underlying the
ADRs and of their dividends will vary with the fluctuations in the U.S. dollar
foreign exchange rates for the relevant currency in which the shares underlying
the ADRs are denominated. The Trust, however, will compute its income in United
States dollars, and to the extent any of the Stocks in the Trust pay income or
dividends in foreign currency, the Trust's computation of income will be made
on the date of its receipt by the Trust at the foreign exchange rate then in
effect. PaineWebber observes that, in the recent past, most foreign currencies
have fluctuated widely in value against the U.S. dollar for many reasons,
including the soundness of the world economy, supply and demand of the relevant
currency, and the strength of the relevant regional economy as compared to the
economies of the United States and other countries. Exchange rate fluctuations
are also dependent, in part, on a number of economic factors including economic
conditions within the relevant country, interest rate differentials between
currencies, the balance of imports and exports of goods and services, and the
transfer of income and capital from one country to another. These economic
factors in turn are influenced by a particular country's monetary and fiscal
policies, perceived political stability (particularly with respect to transfer
of capital) and investor psychology, especially that of institutional
investors, who make assessments of the future relative strength or weakness of
a particular currency. As a general rule, the currency of a country with a low
rate of inflation and a favorable balance of trade should increase in value
relative to the currency of a country with a high rate of inflation and
deficits in the balance of trade.
Investors should note that the creation of additional Units subsequent to
the Initial Date of Deposit may have an effect upon the value of previously
existing Units. To create additional Units the Sponsor may deposit cash (or
cash equivalents, e.g., a bank letter of credit in lieu of cash) with
instructions to purchase Additional Securities in amounts and in percentage
relationships described above under "The
10
<PAGE>
Trust." To the extent the price of a Security increases or decreases between
the time cash is deposited with instructions to purchase the Additional
Security and the time the cash is used to purchase the Additional Security,
Units will represent less or more of that Security and more or less of the
other Securities in the Trust. Unitholders will be at risk because of price
fluctuations during this period since if the price of shares of a Security
increases, Unitholders will have an interest in fewer shares of that Security,
and if the price of a Security decreases, Unitholders will have an interest in
more shares of that Security, than if the Security had been purchased on the
date cash was deposited with instructions to purchase the Security. In order to
minimize these effects, the Trust will attempt to purchase Additional
Securities as closely as possible to the Evaluation Time or at prices as
closely as possible to the prices used to evaluate the Trust at the Evaluation
Time. Thus price fluctuations during this period will affect the value of every
Unitholder's Units and the income per Unit received by the Trust. In addition,
costs incurred in connection with the acquisition of Additional Securities will
be at the expense of the Trust and will affect the value of every Unitholder's
Units.
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 ATTEMPT TO TAKE ADVANTAGE OF
VARIOUS MARKET CONDITIONS TO IMPROVE THE TRUST'S NET ASSET VALUE, BUT MAY
DISPOSE OF SECURITIES OR ACQUIRE NEW 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 UNDER THE CAPTION
"ADMINISTRATION OF THE TRUST--PORTFOLIO SUPERVISION".)
A number of the Securities in the Trust may also be owned by other clients
of the Sponsor. However, because these clients may have investment objectives
which differ from that of the Trust, the Sponsor may sell certain Securities
from such clients' accounts in instances where a sale of such Securities by the
Trust would be impermissible, such as to maximize return by taking advantage of
attractive market fluctuations in such Securities. As a result, the amount
realized upon the sale of the Securities from the Trust may not be the highest
price attained for an individual Security during the life of the Trust.
Many computer systems were designed in such a way that they may be unable
to distinguish between the year 2000 and the year 1900 and therefore may not
properly process and calculate date-related information and data (commonly
known as the "Year 2000 Problem"). As with all investment and financial
companies the Year 2000 Problem may have an adverse impact upon the handling of
securities trades, pricing and account services and other activities conducted
by or for the Trust. The Sponsor and Trustee are taking steps that they believe
are reasonably designed to address the Year 2000 Problem with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by the Trust's other service providers. At
this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Trust. The Year 2000 Problem is
expected to impact corporations, which may include issuers of Securities
contained in the Trust, to varying degrees based upon various factors,
including, but not limited to, their industry sector and degree of
technological sophistication. The Sponsor is unable to predict what impact, if
any, the Year 2000 Problem will have on issuers of the Securities contained in
the Trust.
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The Sponsor may have acted as underwriter, manager, or co-manager of a
public offering of the Securities deposited into the Trust on the Initial Date
of Deposit, or as an adviser to one or more of the issuers of the Securities,
during the last three (3) years. The Sponsor or affiliates of the Sponsor may
serve as specialists in the Securities on one or more stock exchanges and may
have a long or short position in any of these Securities or in options on any
of them, and may be on the opposite sides of public orders executed on the
floor of an exchange where the Securities are listed. The Sponsor may trade for
its own account as an odd-lot dealer, market maker, block positioner and/or
arbitrageur in any of the Securities or options on them. The Sponsor, its
affiliates, directors, elected officers and employee benefits programs may have
either a long or short position in any of the Securities or in options on them.
The Sponsor does not know of any pending litigation as of the Initial Date
of Deposit that might reasonably be expected to have a material adverse effect
on the Portfolio, although pending litigation may have a material adverse
effect on the value of Securities in the Portfolio. In addition, at any time
after the Initial Date of Deposit, litigation may be initiated on a variety of
grounds, or legislation may be enacted, affecting the Securities in the
Portfolio or the issuers of such Securities. Changing approaches to regulation
may have a negative impact on certain companies represented in the Portfolio.
There can be no assurance that future litigation, legislation, regulation or
deregulation will not have a material adverse effect on the Portfolio or will
not impair the ability of issuers of the Securities to achieve their business
goals.
Certain of the Stocks may be attractive acquisition candidates pursuant to
mergers, acquisitions and tender offers. In general, tender offers involve a
bid by an issuer or other acquiror to acquire a stock based on the terms of its
offer. Payment generally takes the form of cash, securities (typically bonds or
notes), or cash and securities. The Indenture contains provisions requiring the
Trustee to follow certain procedures regarding mergers, acquisitions, tender
offers and other corporate actions. Under certain circumstances, the Trustee,
at the direction of the Sponsor, may hold or sell any stock or securities
received in connection with such corporate actions (see "Administration of the
Trust--Portfolio Supervision").
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, subject to certain
conditions and requirements, the Trust will not be subject to federal income
tax to the extent its income is distributed to Unitholders in a timely manner.
Any undistributed income may be subject to tax, including a four percent (4%)
excise tax imposed by Section 4982 of the Code on certain undistributed income
of a regulated investment company that does not distribute to shareholders in a
timely manner at least ninety-eight percent (98%) of its taxable income
(including capital gains). 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 qualify 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.
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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 "net capital gain"
will be taxable to Unitholders as long-term capital gain, regardless of the
length of time the Units have been held by a 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.
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. In
addition, during the initial public offering period, a portion of the
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Public Offering Price also consists of an amount sufficient to reimburse the
Sponsor for the payment of all or a portion of the Initial Organizational Costs
in the amount shown as a per Unit amount in "Essential Information Regarding
the Trust". The Initial Organizational Costs include the cost of preparing the
registration statement, trust documents and closing documents for the Trust,
registering with the Securities and Exchange Commission (the "SEC") and the 50
States, the initial fees of the Trustee's and Sponsor's counsel, and the
initial audit of the Trust's portfolio. The sales charge will not be assessed
on those Securities held in the Trust and sold by the Trustee at the end of the
public offering period to reimburse the Sponsor for the Initial Organizational
Costs. See "Administration of the Trust--Accounts" for a description of the
method by which the Trustee will sell such Securities.
Sales Charge and Volume Discount. Subject to variations discussed below,
Units will be charged a Total Sales Charge of 4.00% per Unit which is a
combination of the Initial and Deferred Sales Charges. The Initial Sales Charge
will be 1.00% of the Public Offering Price. In the first year, assuming a
purchase on the Initial Date of Deposit of 100 Units, the Initial Sales Charge
will be $10.00. Commencing in the seventh (7th) month of the Trust's first year
(November, 1999) and continuing through the twelfth (12th) month of the Trust's
first year (April, 2000) and then commencing again in the seventh (7th) month of
the Trust's second year (November, 2000) and continuing through the twelfth
(12th) month of the Trust's second year (April, 2001), the Deferred Sales Charge
per 100 Units will be $15.00 per year, approximately 1.50% of the Public
Offering Price. Because the Deferred Sales Charge per 100 Units is $15.00 per
year for the first two years of the Trust, regardless of the price paid for
Units, the Total Sales Charges expressed as a percentage of the Public Offering
Price will vary with the price you pay to purchase Units. So, for example, if
you buy 100 Units for $1,000 (including the Initial Sales Charge of $10.00 and
hold the Units until the Trust terminates, you will pay a Total Sales Charge of
$40.00 or 4.00% of the acquisition price for such Units. If, however, you buy
100 Units for $950.00 (including the Initial Sales Charge of $9.50), you will
pay a Total Sales Charge of $39.50 or 4.16% of the acquisition price for such
Units.
The monthly Deferred Sales Charge is a charge of $2.50 per 100 Units and
is accrued in six (6) installments each year of the Trust during the first
(1st) and second (2nd) full years of the life of the Trust ($15.00 annual
total). Units purchased after an accrual date for a Deferred Sales Charge
installment are not subject to any Deferred Sales Charge installments prior to
such purchase date. Units redeemed or repurchased prior to the accrual of the
final Deferred Sales Charge installment will have the amount of any
installments remaining deducted from the redemption or repurchase proceeds,
although this deduction will be waived in the event of death or disability (as
defined in the Internal Revenue Code) of an investor. If Units are sold,
redeemed or exchanged prior to May 1, 2000, only the balance of the Deferred
Sales Charges remaining for the first year of the Trust will be deducted. If
Units are sold, redeemed or exchanged on or after May 1, 2000, the remaining
balance of the Deferred Sales Charges for the second year of the Trust will be
deducted.
It is anticipated that the Securities will not be sold to pay the Deferred
Sales Charges until after the date of the final installment in the first and
second years of the Trust. Investors will be at risk for market price
fluctuations in the Securities from the several installment accrual dates to
the dates of actual sales of Securities to satisfy this liability.
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 as set forth below for sales made on a single
day to any person of at least $50,000 or 5,000 Units, applied on whichever
basis is more favorable to the purchaser.
14
<PAGE>
SALES CHARGES ON THE INITIAL DATE OF DEPOSIT THROUGH APRIL 5, 2001
<TABLE>
<CAPTION>
INITIAL SALES CHARGE TOTAL SALES CHARGE
---------------------------------- ----------------------------------
MAXIMUM DOLLAR
AMOUNT OF
DEFERRED SALES
AGGREGATE DOLLAR AS % OF PUBLIC AS % OF NET AS % OF PUBLIC AS % OF NET CHARGE PER
VALUE OF UNITS* OFFERING PRICE AMOUNT INVESTED OFFERING PRICE AMOUNT INVESTED 100 UNITS
- ------------------------------- ---------------- ----------------- ---------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
Less than $50,000 ............ 1.00% 1.01% 4.00% 4.17% $ 30.00
$50,000 to $99,999 ........... .75 -- 3.75 3.90 $ 30.00
$100,000 to $249,999.......... .50 -- 3.50 3.63 $ 30.00
$250,000 to $499,999 ......... .25 -- 3.25 3.36 $ 30.00
$500,000 to $999,999.......... .00 -- 3.00 3.09 $ 30.00
$1,000,000 or more............ negotiable
</TABLE>
SALES CHARGES FROM APRIL 6, 2001 THROUGH APRIL 30, 2002
<TABLE>
<CAPTION>
INITIAL SALES CHARGE
----------------------------------
AGGREGATE DOLLAR AS % OF PUBLIC AS % OF NET
VALUE OF UNITS* OFFERING PRICE AMOUNT INVESTED DEFERRED SALES CHARGE
- ----------------------------- ---------------- ----------------- ----------------------
<S> <C> <C> <C>
Less than $50,000............ 2.50% 2.56% None
$50,000 to $99,999........... 2.00 2.04
$100,000 to $249,999......... 1.75 1.78
$250,000 to $499,999......... 1.50 1.52
$500,000 to $999,999......... 1.25 1.27
$1,000,000 or more........... 1.00 1.01
</TABLE>
SALES CHARGES FROM MAY 1, 2002 AND THEREAFTER
<TABLE>
<CAPTION>
INITIAL
SALES CHARGE
----------------
AGGREGATE DOLLAR AS % OF PUBLIC AS % OF NET
VALUE OF UNITS* OFFERING PRICE AMOUNT INVESTED DEFERRED SALES CHARGE
- ----------------------------- ---------------- ----------------- ----------------------
<S> <C> <C> <C>
Less than $50,000............ 2.00% 2.04% None
$50,000 to $99,999........... 1.75 1.78
$100,000 to $249,999......... 1.50 1.52
$250,000 to $499,999......... 1.25 1.27
$500,000 to $999,999......... 1.00 1.01
$1,000,000 or more........... .75 --
</TABLE>
- ----------
* The Initial Sales Charge applicable to volume purchasers according to the
table above will be applied either on a dollar or Unit basis, depending upon
which basis provides a more favorable purchase price to the purchaser.
The volume discount on the Initial Sales Charge shown above will apply to
all purchases of Units on any one day by the same person in the amounts stated
herein, and for this purpose purchases of Units of this Trust will NOT be
aggregated with concurrent purchases of any other trust which may be offered by
the Sponsor. Units held in the name of the purchaser's spouse or in the name of
a purchaser's child under
15
<PAGE>
the age of 21 are deemed for the purposes hereof to be registered in the name
of the purchaser. The reduced Initial Sales Charges are also applicable to a
trustee or other fiduciary purchasing Units for a single trust estate or single
fiduciary account.
No Initial Sales Charge will be imposed on Units of the Trust acquired by
Unitholders in connection with participation in the Reinvestment Plan (see
"Reinvestment Plan").
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.
Exchange Option. Unitholders may elect to exchange any or all of their
Units of this Growth Stock Series 22 of the PaineWebber Equity Trust for units
of one or more of any series of PaineWebber Municipal Bond Fund (the
"PaineWebber Series"); The Municipal Bond Trust (the "National Series"); The
Municipal Bond Trust, Multi-State Program (the "Multi-State Series"); The
Municipal Bond Trust, California Series (the "California Series"); The
Corporate Bond Trust (the "Corporate Series"); PaineWebber Pathfinder's Trust
(the "Pathfinder's Trust"); the PaineWebber Federal Government Trust (the
"Government Series"); The Municipal Bond Trust, Insured Series (the "Insured
Series"); or the PaineWebber Equity Trust (the "Equity Series") (collectively
referred to as the "Exchange Trusts"), at a Public Offering Price for the Units
of the Exchange Trusts to be acquired based on a reduced sales charge as
discussed below. Unitholders of this Trust are not eligible for the Exchange
Option into any Exchange Trust designated as a rollover series for the 30 day
period prior to termination of such Exchange 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 this Growth Stock Series 22 and paid the
Initial Sales Charge and any Deferred Sales Charges that, in total, was an
amount 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. Owners of
Units of this Growth Stock Series 22 electing to use the Exchange Option in
connection with units of other Exchange Trusts subject to a deferred sales
charge ("Deferred Sales Charge Units") will be permitted to acquire Deferred
Sales Charge Units, at their then-current net asset value, with no Initial
Sales Charge imposed. Deferred Sales Charge Units acquired through the Exchange
Option will continue to be subject to the deferred sales charge installments
remaining on those Deferred Sales Charge Units so acquired.
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 Growth Stock
16
<PAGE>
Series 22 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 Growth Stock Series 22 to purchase
Units of one or more of the Exchange Trusts from the Sponsor. If Units of the
applicable outstanding series of the Exchange Trust are at that time available
for sale, and if such Units may lawfully be sold in the state in which the
Unitholder is resident, the Unitholder may select the series or group of series
for which he desires his investment to be exchanged. The Unitholder will be
provided with a current prospectus or prospectuses relating to each series in
which he indicates interest.
The exchange transaction will operate in a manner essentially identical to
any secondary market transaction, i.e., Units will be repurchased at a price
based on the market value of the Securities in the portfolio of the Trust next
determined after receipt by the Sponsor of an exchange request and properly
endorsed documents. Units of the Exchange Trust will be sold to the Unitholder
at a price based upon the next determined market value of the Securities in the
Exchange Trust plus the reduced sales charge. Exchange transactions will be
effected only in whole units; thus, any proceeds not used to acquire whole
units will be paid to the selling Unitholder.
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 ("Conversion Trust 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). Owners of Conversion Trust Units will
be permitted to use the cash proceeds received from the sale or redemption of
those units to acquire units of this Growth Stock Series 22, or any other
Deferred Sales Charge Units, at their then-current net asset value, with no
Initial Sales Charge imposed. Deferred Sales Charge Units acquired through the
Conversion Option will continue to be subject to the deferred sales charge
installments remaining on those Deferred Sales Charge Units so acquired. 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
17
<PAGE>
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 $20 per 100
Units in the first year, and $12 per 100 Units in the second year, of the
Trust, subject to change from time to time. The difference between the sales
charge and the dealer concession will be retained by the Sponsor. In the event
that the dealer concession is 90% or more of the sales charge per Unit, dealers
taking advantage of such concession may be deemed to be underwriters under the
Securities Act of 1933.
The Sponsor reserves the right to reject, in whole or in part, any order
for the purchase of Units. The Sponsor intends to qualify the Units in all
states of the United States, the District of Columbia and the Commonwealth of
Puerto Rico.
Secondary Market for Units. While not obligated to do so, the Sponsor
intends to maintain a secondary market for the Units and continuously offer to
purchase Units at the Trust Fund Evaluation per Unit next computed after
receipt by the Sponsor of an order from a Unitholder. The Sponsor may cease to
maintain such a market at any time, and from time to time, without notice. In
the event that a secondary market for the Units is not maintained by the
Sponsor, a Unitholder desiring to dispose of Units may tender such Units to the
Trustee for redemption at the price calculated in the manner set forth under
"Redemption". Redemption requests in excess of $500,000 may be redeemed "in
kind" as described under "Redemption." The Sponsor does not in any way
guarantee the enforceability, marketability, value or price of any of the
stocks in the Trust, nor that of the Units.
Investors should note 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.
18
<PAGE>
Cash, if any, received from Unitholders prior to the settlement date for
the purchase of Units or prior to the payment for Securities upon their
delivery may be used in the Sponsor's business subject to the limitations of
Rule 15c3-3 under the Securities 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, but any remaining
Deferred Sales Charge installments will be deducted at that time. 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.") Unitholders who redeem
prior to the accrual of the final Deferred Sales Charges installment, may,
depending upon the date of such redemption, have the amount of any installments
remaining deducted from their redemption proceeds or deducted in calculating an
in-kind redemption, although this deduction will be waived in the event of
death or disability (as defined in the Internal Revenue Code) of an investor
(see "Public Offering of Units").
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, the
19
<PAGE>
Trustee may designate Securities to be sold. (See "Administration of the
Trust.") However, with respect to redemption requests in excess of $500,000,
the Sponsor may determine in its sole discretion to direct the Trustee to
redeem Units "in kind" by distributing 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
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 held but not yet distributed
(other than any cash held in any reserve account established under the
Indenture or cash held for the purchase of Contract Securities) and (c)
accounts receivable for Securities sold and any other assets of the Trust not
included in (a) and (b) above, and deducting therefrom the sum of (v) taxes or
other governmental charges against the Trust not previously deducted, (w)
accrued fees and expenses of the Trustee and the Sponsor (including legal and
auditing expenses), other Trust expenses and any accrued Deferred Sales Charge
installment not yet paid to the Sponsor (x) cash allocated for distributions to
Unitholders and amounts owed to the Sponsor in reimbursement of Initial
Organizational Costs and (y) accounts payable for Units tendered for 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
20
<PAGE>
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day and other days
that the New York Stock Exchange is closed.
The value of Stocks shall be determined by the Trustee in good faith in
the following manner: (1) if the domestic Stocks are listed on one or more
national securities exchanges or on the National Market System maintained by
the National Association of Securities Dealers Automated Quotations System,
such evaluation shall be based on the 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.
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION VALUE
The Stocks are valued on the same basis for the initial and secondary
markets and for purposes of redemptions. On the business day prior to the
Initial Date of Deposit, the Public Offering Price per Unit (which figure
includes the Initial Sales Charge) exceeded the Redemption Value. (See
"Essential Information"). The prices of Stocks are expected to vary. For this
reason and others, including the fact that the Public Offering Price includes
the sales charge, the amount realized by a Unitholder upon redemption of Units
may be less than the price paid by the Unitholder for such Units. Also, as of
the close of the initial public offering period, the Redemption Value per Unit
will be reduced to reflect the sale of Securities made to reimburse the Sponsor
for the Initial Organizational Costs.
EXPENSES OF THE TRUST
The Sponsor will receive a fee, which is earned for portfolio supervisory
services, and which is based upon the largest number of Units outstanding
during the calendar year. The Sponsor's fee, which is not to exceed $.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 $.0090 which include, but
are not limited to certain mailing, printing, and audit expenses. Expenses in
excess of this estimate will be borne by the Trust. The Trustee could also
benefit to the extent that it may hold funds in non-interest bearing accounts
created by the Indenture.
21
<PAGE>
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 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 are
expected to be sufficient to pay the entire amount of estimated expenses of the
Trust. To the extent that dividends paid with respect to the Stocks are not
sufficient to meet the expenses of the Trust, the Trustee is authorized to sell
Securities to meet the expenses of the Trust. Securities will be selected in
the same manner as is set forth under "Redemption".
RIGHTS OF UNITHOLDERS
Ownership of Units is evidenced by recordation on the books of the
Trustee. In order to avoid additional operating costs and for investor
convenience, certificates will not be issued.
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 $.0500 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.
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
22
<PAGE>
such time. Such reinvestment shall be made so that each deposit of additional
Securities shall be made so as to match as closely as practicable the
percentage relationships of shares of Stocks and such reinvestment shall be
made in accordance with the parameters set forth in the no-action letter
response. If the Sponsor and the Trustee determine that it shall be necessary
to amend the Indenture to comply with the parameters set forth in the no-action
letter response, such documents may be amended without the consent of
Unitholders. There can be no assurance that the Sponsor will receive a
favorable no-action letter response.
Unitholders may elect to have their Income Account and Capital Account
distributions automatically reinvested into additional Units of the Trust at no
Initial Sales Charge. (See "Reinvestment Plan").
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, except as discussed under "The
Trust". Purchases made pursuant to the Reinvestment Plan will be made without
any Initial Sales Charge at the net asset value for Units of the Trust; of
course, such Units will be subject to the Deferred Sales Charges remaining on
Units received. Under the Reinvestment Plan, the Trust will pay the
distributions to the Trustee which in turn will purchase for those participating
Unitholders whole Units of the Trust at the price determined as of the close of
business on the Distribution Date and will add such Units to the Unitholder's
account. The Unitholder's account statement will reflect the reinvestment. The
Trustee will not issue fractional Units, thus any cash remaining after
purchasing the maximum number of whole Units will be distributed to the
Unitholder. Unitholders wishing to terminate their participation in the
Reinvestment Plan must notify their broker, dealer or financial institution of
such decision. The Sponsor reserves the right to amend, modify or terminate the
Reinvestment Plan at any time without prior notice.
ADMINISTRATION OF THE TRUST
Accounts. All dividends and interest received on Securities, proceeds from
the sale of Securities or other moneys received by the Trustee on behalf of the
Trust may be held in trust in non-interest bearing accounts until required to
be disbursed.
The Trustee will credit on its books to an Income Account dividends, if
any, and interest income, on Securities in the Trust. All other receipts (i.e.,
return of principal and gains) are credited on its books to a Capital Account.
A record will be kept of qualifying dividends within the Income Account. The
pro rata share of the Income Account and the pro rata share of the Capital
Account represented by each Unit will be computed by the Trustee as set forth
under "Valuation".
The Trustee will deduct from the Income Account and, to the extent funds
are not sufficient therein, from the Capital Account, amounts necessary to pay
expenses incurred by the Trust. (See "Expenses and
23
<PAGE>
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.")
In addition, distributions of amounts necessary to pay (1) the Initial
Organizational Costs and (2) the Deferred Sales Charges will be made from the
Income Account and, to the extent funds are not sufficient therein, from the
Capital Account, to special accounts maintained by the Trustee for purposes of
(1) reimbursing the Sponsor and (2) satisfying Unitholders' Deferred Sales
Charges obligations, respectively. To the extent that funds are not available
in the Capital Account to meet certain charges or expenses, the Trustee may
sell Securities. Upon notification from the Sponsor that the initial offering
period is terminated, the Trustee, at the direction of the Sponsor, will cause
the sale of Securities in an amount equal to the Initial Organizational Costs
as certified to it by the Sponsor. Although the Sponsor may collect the
Deferred Sales Charges monthly, currently the Sponsor does not anticipate sales
of Securities to pay such sales charges until after April 5, 2000 and April 6,
2001.
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 1999, 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 under the following
circumstances:
(1) upon the failure of the issuer to declare or pay anticipated
dividends or interest;
(2) upon the institution of a materially adverse action or proceeding at
law or in equity seeking to restrain or enjoin the declaration or payment
of dividends or interest on any such Securities or the existence of any
other materially adverse legal question or impediment affecting such
Securities or the declaration or payment of dividends or interest on the
same;
(3) upon the breach of covenant or warranty in any trust indenture or
other document relating to the issuer which might materially and adversely
affect either immediately or contingently the declaration or payment of
dividends on such Securities;
(4) upon the default in the payment of principal or par or stated value
of, premium, if any, or income on any other outstanding securities of the
issuer or the guarantor of such Securities which might materially and
adversely, either immediately or contingently, affect the declaration or
payment of dividends on the Securities;
24
<PAGE>
(5) upon the decline in price or the occurrence of any materially adverse
credit factors, that in the opinion of the Sponsor, make the retention of
such Securities not in the best interest of the Unitholder;
(6) upon a decrease in the Sponsor's internal rating of the Security;
(7) if the sale of such Securities is desirable to maintain the
qualification of the Trust Fund as a "regulated investment company"; or
(8) upon the happening of events which, in the opinion of the Sponsor,
negatively affect the economic fundamentals of the issuer of the Security
or the industry of which it is a part.
Securities may also be tendered or sold in the event of a tender offer,
merger or acquisition in the manner described under "The Trust." The Trustee
may also dispose of Securities where necessary to pay Initial Organizational
Costs, Trust expenses, Deferred Sales Charge installments 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.
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
25
<PAGE>
fees and expenses of the Trust and payment into the Reserve Account of any
amount required for taxes or other governmental charges that may be payable by
the Trust, distribute to each Unitholder, after due notice of such termination,
such Unitholder's pro rata share in the Income and Capital Accounts. Moneys
held upon the sale of Securities may be held in non-interest bearing accounts
created by the Indenture until distributed and will be of benefit to the
Trustee. The sale of Securities in the Trust in the period prior to termination
may result in a lower amount than might otherwise be realized if such sale were
not required at such time due to impending or actual termination of the Trust.
For this reason, among others, the amount realized by a Unitholder upon
termination may be less than the amount paid by such Unitholder.
SPONSOR
The Sponsor, PaineWebber Incorporated, is a corporation organized under
the laws of the State of Delaware. The Sponsor is a member firm of the New York
Stock Exchange, Inc. as well as other major securities and commodities
exchanges and is a member of the National Association of Securities Dealers,
Inc. The Sponsor is engaged in a security and commodity brokerage business as
well as underwriting and distributing new issues. The Sponsor also acts as a
dealer in unlisted securities and municipal bonds and in addition to
participating as a member of various selling groups or as an agent of other
investment companies, executes orders on behalf of investment companies for the
purchase and sale of securities of such companies and sells securities to such
companies in its capacity as a broker or dealer in securities.
The Indenture provides that the Sponsor will not be liable to the Trustee,
the Trust or to the Unitholders for taking any action or for refraining from
taking any action made in good faith or for errors in judgment, but will be
liable only for its own willful misfeasance, bad faith, gross negligence or
willful disregard of its duties. The Sponsor will not be liable or responsible
in any way for depreciation or loss incurred by reason of the sale of any
Securities in the Trust.
The Indenture is binding upon any successor to the business of the
Sponsor. The Sponsor may transfer all or substantially all of its assets to a
corporation or partnership which carries on the business of the Sponsor and
duly assumes all the obligations of the Sponsor under the Indenture. In such
event the Sponsor shall be relieved of all further liability under the
Indenture.
If the Sponsor fails to undertake any of its duties under the Indenture,
becomes incapable of acting, becomes bankrupt, or has its affairs taken over by
public authorities, the Trustee may either appoint a successor Sponsor or
Sponsors to serve at rates of compensation determined as provided in the
Indenture or terminate the Indenture and liquidate the Trust.
TRUSTEE
The Trustee is Investors Bank & Trust Company, a Massachusetts trust
company with its principal office at Hancock Towers, 200 Clarendon Street,
Boston, Massachusetts 02116, toll-free number 800-356-2754, which is subject to
supervision by the Massachusetts Commissioner of Banks, the Federal Deposit
Insurance Corporation and the Board of Governors of the Federal Reserve System.
The Indenture provides that the Trustee will not be liable for any action
taken in good faith in reliance on properly executed documents or the
disposition of moneys, Securities or Certificates or in respect of any
valuation which it is required to make, except by reason of its own gross
negligence, bad faith or willful misconduct, nor will the Trustee be liable or
responsible in any way for depreciation or loss incurred by reason of the sale
by the Trustee of any Securities in the Trust. In the event of the failure of
the Sponsor to act, the Trustee may act and will not be liable for any such
action taken by it in good faith. The Trustee will not be personally liable for
any taxes or other governmental charges imposed upon or
26
<PAGE>
in respect of the Securities or upon the interest thereon or upon it as Trustee
or upon or in respect of the Trust which the Trustee may be required to pay
under any present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Indenture contains other
customary provisions limiting the liability of the Trustee. The Trustee will be
indemnified and held harmless against any loss or liability accruing to it
without gross negligence, bad faith or willful misconduct on its part, arising
out of or in connection with its acceptance or administration of the Trust,
including the costs and expenses (including counsel fees) of defending itself
against any claim of liability.
INDEPENDENT AUDITORS
The Statement of Net Assets and Schedule of Investments audited by Ernst &
Young LLP, independent auditors, have been included in reliance on their report
given on their authority as experts in accounting and auditing.
LEGAL OPINIONS
The legality of the Units offered hereby has been passed upon by Carter,
Ledyard & Milburn, 2 Wall Street, New York, New York, as counsel for the
Sponsor.
27
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE UNITHOLDERS, SPONSOR AND TRUSTEE
THE PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES 22
We have audited the accompanying Statement of Net Assets of The
PaineWebber Equity Trust, Growth Stock Series 22, including the Schedule of
Investments, as of May 19, 1999. This financial statement is the responsibility
of the Trustee. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation with Investors Bank & Trust Company, Trustee, of an irrevocable
letter of credit deposited for the purchase of securities, as shown in the
financial statement as of May 19, 1999. An audit also includes assessing the
accounting principles used and significant estimates made by the Trustee, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of The PaineWebber Equity
Trust, Growth Stock Series 22 at May 19, 1999, in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
May 19, 1999
28
<PAGE>
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 22
STATEMENT OF NET ASSETS
AS OF INITIAL DATE OF DEPOSIT, MAY 19, 1999
<TABLE>
<S> <C>
NET ASSETS
- ------------------------------------------------------------------------------------------
Sponsor's Contracts to Purchase underlying Securities backed by
irrevocable letter of credit (a) ................................. $ 990,020
Reimbursement to Sponsor for Initial Organizational Costs (b) ..... (2,000)
----------
Total ......................................................... $ 988,020
==========
Units outstanding (c) ............................................. 100,000
ANALYSIS OF NET ASSETS
- ------------------------------------------------------------------------------------------
Cost to investors (d) ............................................. $1,000,000
----------
Less: Gross underwriting commissions (e) .......................... (9,980)
Reimbursement to Sponsor for Initial Organizational Costs . ..... (2,000)
----------
Net Assets .................................................... $ 988,020
==========
</TABLE>
- ----------
(a) The aggregate cost to the Trust of the securities listed under
"Schedule of Investments" is determined by the Trustee on the basis set forth
above under "Public Offering of Units--Public Offering Price." See also the
column headed "Cost of Securities to Trusts" under "Schedule of Investments."
Pursuant to contracts to purchase securities, an irrevocable letter of credit
drawn on Credit Lyonnais, in the amount of $5,000,000 has been deposited with
the Trustee, Investors Bank & Trust Company, for the purchase of $990,020
aggregate value of Securities in the initial deposit and for the purchase of
Securities in subsequent deposits.
(b) Investors purchasing Units during the initial offering period will
reimburse the Sponsor for all or a portion of the costs incurred by the Sponsor
in connection with organizing the Trust and offering the Units for sale as
described more fully in "Public Offering Price" (collectively, the "Initial
Organizational Costs"). These costs have been estimated at $0.020 per Unit
based upon the expected number of Units to be created during the initial
offering period. Certain Securities purchased with the proceeds of the Public
Offering Price will be sold by the Trustee at the completion of the initial
public offering period to reimburse the Sponsor for Initial Organizational
Costs actually incurred. If the actual Initial Organizational Costs are less
than the estimated amount, only the actual Initial Organizational Costs will be
deducted from the assets of the Trust. If, however, the amount of the actual
Initial Organizational Costs are greater than the estimated amount, only the
estimated amount of the Initial Organizational Costs will be deducted from the
assets of the Trust.
(c) Because the value of Securities at the Valuation Time on the Initial
Date of Deposit may differ from the amounts shown in this Statement of Net
Assets, the number of Units offered on the Initial Date of Deposit will be
adjusted from the initial number of Units shown to maintain the $10 per Unit
offering price only for that day. The Public Offering Price on any subsequent
day will vary.
(d) The aggregate public offering price is computed on the basis set forth
under "Public Offering of Units--Public Offering Price."
(e) Assumes the maximum Initial Sales Charge of 1.00% of the Public
Offering Price. Additionally, Deferred Sales Charges of $2.50 per 100 Units,
payable in twelve equal monthly installments on the tenth (10th) day of each
month from the seventh (7th) through twelfth(12th) months of the Trust for an
aggregate amount of $30.00 per 100 Units, will be deducted in each of the first
(1st) and second (2nd) years of the Trust's five (5) year life. Distributions
will be made to an account maintained by the Trustee from which the Deferred
Sales Charges obligation of the Unitholders to the Sponsor will be met. If
Units are sold, redeemed or exchanged prior to May 1, 2000, only the balance of
the Deferred Sales Charges remaining for the first year of the Trust will be
deducted. If Units are sold, redeemed or exchanged after May 1, 2000, the
remaining balance of the Deferred Sales Charges for the second year of the
Trust will be deducted, the remaining portion of the distribution applicable to
such redeemed Units will be transferred to the account on such sale, exchange
or redemption date. The sales charges are computed on the basis set forth under
"Public Offering of Units--Sales Charge and Volume Discount." Based on the
projected total assets of $50,000,000, the estimated maximum Deferred Sales
Charge would be $1,500,000.
29
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 22
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, MAY 19, 1999
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)
- -------------------------------------------------------------- ----------- -------------------
<S> <C> <C>
Air Freight Transportation (1.57%)
FDX Corporation* .......................................... 260 $ 15,567.50
Airlines (1.51%)
AMR Corporation* .......................................... 210 14,975.63
Apparel Manufacturers (3.14%)
Gucci Group ............................................... 210 15,408.75
Tommy Hilfiger Corporation* ............................... 200 15,725.00
Auction House/Art Dealer (1.58%)
Sotheby's Holdings, Inc. .................................. 400 15,675.00
Beverages (1.60%)
LVMH (Louis Vuitton Moet Hennessy)+ ....................... 280 15,820.00
Broadcast Services (1.54%)
Clear Channel Communications, Inc.* ....................... 220 15,290.00
Computers--Hardware/Software (6.14%)
Dell Computer Corporation* ................................ 350 15,421.88
International Business Machines Corporation (IBM) ......... 60 14,295.00
Microsoft Corporation* .................................... 200 15,737.50
Sun Microsystems, Inc.* ................................... 240 15,315.00
Cosmetics & Toiletries (1.60%)
The Estee Lauder Companies Inc. ........................... 170 15,810.00
Cruise Lines (1.59%)
Carnival Corporation ...................................... 360 15,750.00
Financial Institutions/Banks (12.84%)
Bank One Corporation ...................................... 260 15,892.50
Citigroup Inc. ............................................ 240 16,575.00
Donaldson, Lufkin & Jenrette, Inc. ........................ 210 15,540.00
Merrill Lynch & Co., Inc. ................................. 200 15,562.50
Morgan Stanley Dean Witter & Co. .......................... 160 15,830.00
State Street Corporation .................................. 200 15,987.50
The Bank of New York Company, Inc. ........................ 430 15,453.13
Wells Fargo Company ....................................... 400 16,150.00
Insurance--Multi-Line (7.91%)
Berkshire Hathaway Inc.* .................................. 7 16,618.00
Hartford Life, Inc. ....................................... 310 15,500.00
Nationwide Financial Services, Inc. ....................... 340 15,406.25
The Allstate Corporation .................................. 420 15,435.00
The Progressive Corporation ............................... 110 15,372.50
</TABLE>
30
<PAGE>
SCHEDULE A TO TRUST INDENTURE (CONTINUED)
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 22
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, MAY 19, 1999 (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>
Internet Software (3.09%)
America Online, Inc.* ...................... 110 $ 14,863.75
Yahoo! Inc.* ............................... 100 15,681.25
Multimedia (3.18%)
The Walt Disney Company .................... 530 15,668.13
Time Warner Inc. ........................... 220 15,812.50
Networking Products (1.53%)
Cisco Systems, Inc.* ....................... 130 15,104.38
Office Automation & Equipment (1.59%)
Xerox Corporation .......................... 260 15,778.75
Printers & Related Products (1.60%)
Lexmark International Group, Inc.* ......... 120 15,877.50
Radio (1.57%)
Infinity Broadcasting Corporation* ......... 550 15,537.50
REITS--Warehouse/Industrial (3.16%)
AMB Property Corporation ................... 700 15,662.50
EastGroup Properties, Inc. ................. 790 15,602.50
Retail--Apparel/Shoe (7.95%)
Abercrombie & Fitch Co.* ................... 190 15,805.63
AnnTaylor Stores Corporation* .............. 350 16,187.50
Intimate Brands, Inc. ...................... 320 15,720.00
The Gap, Inc. .............................. 250 15,328.13
The Talbots, Inc. .......................... 490 15,649.38
Retail--Building Products (3.10%)
Lowe's Companies, Inc. ..................... 290 15,351.88
The Home Depot, Inc. ....................... 260 15,372.50
Retail--Catalog Shopping/Mail Order (3.95%)
Lands' End, Inc.* .......................... 360 15,660.00
Lillian Vernon Corporation ................. 580 7,830.00
Spiegel, Inc.* ............................. 1,880 15,627.50
Retail--Discount (3.16%)
Costco Companies, Inc.* .................... 200 15,512.50
Wal-Mart Stores, Inc. ...................... 340 15,767.50
Retail--Internet (4.65%)
Amazon.com, Inc.* .......................... 120 15,915.00
eBay, Inc.* ................................ 80 15,165.00
Priceline.com Incorporated* ................ 110 14,973.75
</TABLE>
31
<PAGE>
SCHEDULE A TO TRUST INDENTURE (CONTINUED)
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 22
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, MAY 19, 1999 (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>
Retail--Jewelry (3.20%)
Tiffany & Co. .................................... 190 $ 15,983.75
Zale Corporation* ................................ 400 15,700.00
Retail--Office Supplies (3.14%)
Office Depot, Inc.* .............................. 751 15,582.50
Staples, Inc.* ................................... 570 15,532.50
Retail--Restaurants (1.56%)
Starbucks Corporation* ........................... 420 15,408.75
Telecommunications (9.39%)
AT&T Corp. ....................................... 260 15,323.82
Level 3 Communications, Inc.* .................... 180 15,480.00
Lucent Technologies Inc. ......................... 260 15,340.00
MCI WorldCom, Inc.* .............................. 180 15,997.50
Nextel Communications, Inc.* ..................... 410 15,503.13
Qwest Communications International Inc.* ......... 170 15,268.13
Toys (1.58%)
Mattel, Inc. ..................................... 600 15,675.00
Travel Services (1.58%)
The SABRE Group Holdings, Inc.* .................. 250 15,656.25
------------
TOTAL INVESTMENTS ................................. $ 990,020.00
============
</TABLE>
- ----------
(1) All Securities are represented entirely by contracts to purchase
Securities.
(2) Valuation of the Securities by the Trustee was made as described in
"Valuation" as of the close of business on the business day prior to the
Initial Date of Deposit.
(3) The loss to the Sponsor on the Initial Date of Deposit is $59.
* Non-income producing security.
+ These shares are U.S. dollar denominated and pay dividends in U.S. dollars
but are subject to investment risks generally facing common stocks of
foreign issuers. (See "Risk Factors and Special Considerations.")
32
<PAGE>
PAINEWEBBER EQUITY TRUST
Growth Stock Series 22
[GRAPHIC OF INFORMATION REVOLUTION WARS]
(INTENSE COMPETITION AMONG ALL BUSINESSES
RESULTING FROM THE NEW INFORMATION TECHNOLOGY)
TRUSTEE:
INVESTORS BANK & TRUST COMPANY
Hancock Towers
200 Clarendon Street
Boston, Mass. 02116
(800) 356-2754
SPONSOR:
PAINEWEBBER INCORPORATED
1200 Harbor Boulevard,
Weehawken, N.J. 07087
(201) 352-3000
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Essential Information Regarding the Trust ..... 2
The Trust .................................... 8
Risk Factors and Special Considerations....... 9
Federal Income Taxes ......................... 12
Public Offering of Units ..................... 13
Public Offering Price ...................... 13
Sales Charge and Volume Discount ........... 14
Employee Discount .......................... 16
Exchange Option ............................ 16
Conversion Option .......................... 17
Distribution of Units ...................... 18
Secondary Market for Units ................. 18
Sponsor's Profits .......................... 18
Redemption ................................... 19
Valuation .................................... 20
Comparison of Public Offering Price and
Redemption Value ............................ 21
Expenses of the Trust ........................ 21
Rights of Unitholders ........................ 22
Distributions ................................ 22
Reinvestment Plan ............................ 23
Administration of the Trust .................. 23
Accounts ................................... 23
Reports and Records ........................ 24
Portfolio Supervision ...................... 24
Amendment of the Indenture ................... 25
Termination of the Trust ..................... 25
Sponsor ...................................... 26
Trustee ...................................... 26
Independent Auditors ......................... 27
Legal Opinions ............................... 27
Report of Independent Auditors ............... 28
Statement of Net Assets ...................... 29
Schedule of Investments ...................... 30
</TABLE>
- --------------------------------------------------------------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS PROSPECTUS; AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED HEREIN MUST NOT BE RELIED ON AS HAVING BEEN AUTHORIZED BY THE TRUST,
THE TRUSTEE OR THE SPONSOR. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN ANY STATE TO ANY PERSON
TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
- --------------------------------------------------------------------------------
THIS PROSPECTUS CONTAINS INFORMATION CONCERNING THE TRUST AND THE SPONSOR, BUT
DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE TRUST'S REGISTRATION
STATEMENTS, AMENDMENTS AND EXHIBITS RELATING THERETO, WHICH HAVE BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C. UNDER THE
SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940, AND TO WHICH
REFERENCE IS HEREBY MADE.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following documents:
The facing sheet.
The Prospectus.
The Undertaking to file reports.
The signatures.
Written consents of the following persons:
Ernst & Young LLP (included in Exhibit
99.C2) Carter, Ledyard & Milburn (included
in Exhibits 99.2 and 99.C1)
The following exhibits:
1. Ex.-99.A1 - Standard Terms and Conditions of
Trust dated as of July 1, 1998 between
PaineWebber Incorporated, Depositor and
Investors Bank & Trust Company, as Trustee
(incorporated by reference to Exhibit 2 in
File No. 333-55697).
2. Ex.-99.A2 - Copy of Trust Indenture and
Agreement between PaineWebber Incorporated,
Depositor, and Investors Bank & Trust
Company, as Trustee, incorporating by
reference Standard Terms and Conditions of
Trust dated as of July 1, 1998.
3. Ex.-99.A5 - Form of Certificate of Ownership
(included in Standard Terms and Conditions
of Trust).
4. Ex.-99.A6 - Certificate of Incorporation of
PaineWebber Incorporated, as amended
(incorporated by reference to Exhibit 8 in
File No. 2-88344).
5. Ex.-99.A6 - By-Laws of PaineWebber
Incorporated, as amended (incorporated by
reference to Exhibit A(6)(a) in File No.
811-3722).
6. Ex.-99.2 - Opinion of Counsel as to legality
of securities being registered.
7. Ex.-99.C1 - Opinion of Counsel as to income
tax status of securities being registered.
8. Ex.-99.C2 - Consent of Ernst & Young LLP,
Independent Auditors.
<PAGE>
FINANCIAL STATEMENTS
1. Statement of Condition of the Trust as shown in the current Prospectus for
this series.
2. Financial Statements of the Depositor.
PaineWebber Incorporated-Financial Statements incorporated by reference to Form
10-K and Form 10-Q (File No. 1-7367), respectively.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this 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 19th day of May, 1999.
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 22
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 19th of May, 1999.
PAINEWEBBER INCORPORATED
<TABLE>
<S> <C> <C>
Name
Office
Donald B. Marron Chairman, Chief Executive
Officer, Director & Member of
the Executive Committee*
Regina A. Dolan Executive Vice President, Chief
Financial Officer & Director of PaineWebber
Incorporated*
Joseph J. Grano, Jr. President, Retail Sales & Marketing,
Director & Member of the Executive
Committee*
Steve P. Baum Executive Vice President, Director of
PaineWebber Incorporated*
Robert H. Silver Executive Vice President Director of
PaineWebber Incorporated*
Mark B. Sutton Executive Vice President, Director of
PaineWebber Incorporated*
Margo N. Alexander Executive Vice President, Director of
PaineWebber Incorporated*
Terry L. Atkinson Managing Director, Director of PaineWebber Incorporated*
Brian M. Barefoot Executive Vice President, Director of PaineWebber
Incorporated*
Michael Culp Managing Director, Director of PaineWebber Incorporated*
Edward M. Kerschner Managing Director, Director of PaineWebber Incorporated*
James P. MacGilvray Executive Vice President, Director of PaineWebber
Incorporated*
</TABLE>
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 Post Effective Amendment No.19 to the
Registration Statement File No. 2-61279.
<PAGE>
EXHIBIT INDEX
1. Ex.-99.A1 - Standard Terms and Conditions of Trust dated as of July 1,
1998 between PaineWebber Incorporated, Depositor and Investors Bank &
Trust Company, as Trustee (incorporated by reference to Exhibit 2 in
File No. 333-55697).
2. Ex.-99.A2 - Copy of Trust Indenture and Agreement between PaineWebber
Incorporated, Depositor, and Investors Bank & Trust Company, as
Trustee, incorporating by reference Standard Terms and Conditions of
Trust dated as of July 1, 1998.
3. Ex.-99.A5 - Form of Certificate of Ownership (included in Standard
Terms and Conditions of Trust).
4. Ex.-99.A6 - Certificate of Incorporation of PaineWebber Incorporated,
as amended (incorporated by reference to Exhibit 8 in File No.
2-88344).
5. Ex.-99.A6 - By-Laws of PaineWebber Incorporated, as amended
(incorporated by reference to Exhibit A(6)(a) in File No. 811-3722).
6. Ex.-99.2 - Opinion of Counsel as to legality of securities being
registered.
7. Ex.-99.C1 - Opinion of Counsel as to income tax status of securities
being registered.
8. Ex.-99.C2 - Consent of Ernst & Young LLP, Independent Auditors.
<PAGE>
Exhibit 99.A2
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 22
TRUST INDENTURE AND AGREEMENT
Dated as of May 19, 1999
Incorporating
Standard Terms and Conditions of Trust
Dated as of July 1, 1998,
Between
PAINEWEBBER INCORPORATED,
as Depositor
and
INVESTORS BANK & TRUST COMPANY
as Trustee
<PAGE>
THIS TRUST INDENTURE AND AGREEMENT dated as of May 19, 1999 between
PaineWebber Incorporated, as Depositor and Investors Bank & Trust Company, as
Trustee, 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 1, 1998, 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, as amended, 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 or foreign companies, and, in
certain cases, interest-bearing United States Treasury Obligations ("Treasury
Obligations"); and
WHEREAS, the parties now desire to create the Twenty-second Growth
Stock Trust of the aforesaid series;
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the Depositor and the Trustee agree as follows:
Section 1. Incorporation of Standard Terms and Conditions of Trust.
Subject to the provisions of Section 2 of this Trust Indenture and Agreement set
forth below, all of the provisions of the Standard Terms are 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 22".
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.
<PAGE>
(3) The Securities deposited into the Trust on the Initial
Date of Deposit are set forth on Schedule A hereto.
B. The term "Record Date" shall mean September 10, 1999 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 15th day
following each Record Date, commencing September 25, 1999, and quarterly
thereafter with respect to Income Account Distributions (the "Income Account
Distribution Dates") and shall mean December 31, 1999 and annually thereafter
with respect to Capital Account Distributions (the "Capital Account Distribution
Dates"), except that the Trustee may declare a Record Date of December 31 in any
year for a Distribution Date of January 25 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 the fifteenth (15) day after the Record Date with
respect thereto.
In the event a Special Record Date is declared,
"Distribution Date" shall also include such Special Record 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 June 1,
2004. 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 May 11, 2004.
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.
<PAGE>
H. The balance in the Capital Account below which no
distribution need be made, as referred to in Section 3.04, is $0.05 per Unit
outstanding.
I. The calendar year to be specified pursuant to Section
3.05 shall be calendar year 1999, so that the Trustee's first annual report will
be furnished to Unitholders within a reasonable period of time following
calendar year 1999.
J. The Sponsor's Initial Costs are estimated to be $0.020
per Unit.
K. The Trust hereby elects to qualify as a Regulated
Investment Company under the Internal Revenue Code of 1986, as amended. The
taxable year for this Trust shall end on December 31.
L. The Trust hereby elects to make available a Reinvestment
Plan for this Series.
M. Units of this Trust shall not be held in certificated
form.
N. The Trust may receive Supplemental Deposits and issue
Additional Units in accordance with Section 2.02(c).
O. The Units of this Trust shall be subject to a Deferred
Sales Charge in an amount, and that shall be paid in the manner, as set forth
below and in the Prospectus. Commencing in the seventh (7th) month of the
Trust's first year (November, 1999) and continuing through the twelfth (12th)
month of the Trust's first year (April, 2000) and then commencing again in the
seventh (7th) month of the Trust's second year (November, 2000) and continuing
through the twelfth (12th) month of the Trust's second year (April, 2001), the
Deferred Sales Charge per 100 Units will be $15.00 per year for such two year
period.
P. For purposes of this Trust, the In-Kind Distribution
Amount shall be $500,000, and the Sponsor shall direct whether an In-Kind
Distribution shall be made.
Q. The Trustee's address for notices under Section 10.06 is:
Hancock Towers
200 Clarendon Street
Boston, MA 02116
<PAGE>
IN WITNESS WHEREOF, PaineWebber Incorporated has caused this
Trust Indenture and Agreement to be executed by one of its Senior Vice
Presidents and its corporate seal to be hereto affixed and attested by one of
its Assistant Secretaries, and Investors Bank & Trust Company has caused this
Trust Indenture to be executed by one of its Authorized Signatories and its
corporate seals to be hereto affixed and attested by one of its Authorized
Signatories, all as of the date first above written.
PAINEWEBBER INCORPORATED
as Depositor and Sponsor
SEAL By
-----------------------------
Senior Vice President
Attest:
- --------------------------
Secretary
<PAGE>
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this 19th day of May, 1999 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
<PAGE>
SCHEDULE A TO TRUST INDENTURE
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 22
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, MAY 19, 1999
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)
- -------------------------------------------------------------- ----------- -------------------
<S> <C> <C>
Air Freight Transportation (1.57%)
FDX Corporation* .......................................... 260 $ 15,567.50
Airlines (1.51%)
AMR Corporation ........................................... 210 14,975.63
Apparel Manufacturers (3.14%)
Gucci Group ............................................... 210 15,408.75
Tommy Hilfiger Corporation* ............................... 200 15,725.00
Auction House/Art Dealer (1.58%)
Sotheby's Holdings, Inc. .................................. 400 15,675.00
Beverages (1.60%)
LVMH (Louis Vuitton Moet Hennessy)+ ....................... 280 15,820.00
Broadcast Services (1.54%)
Clear Channel Communications, Inc.* ....................... 220 15,290.00
Computers--Hardware/Software (6.14%)
Dell Computer Corporation* ................................ 350 15,421.88
International Business Machines Corporation (IBM) ......... 60 14,295.00
Microsoft Corporation* .................................... 200 15,737.50
Sun Microsystems, Inc.* ................................... 240 15,315.00
Cosmetics & Toiletries (1.60%)
The Estee Lauder Companies Inc. ........................... 170 15,810.00
Cruise Lines (1.59%)
Carnival Corporation ...................................... 360 15,750.00
Financial Institutions/Banks (12.84%)
Bank One Corporation ...................................... 260 15,892.50
Citigroup Inc. ............................................ 240 16,575.00
Donaldson, Lufkin & Jenrette, Inc. ........................ 210 15,540.00
Merrill Lynch & Co., Inc. ................................. 200 15,562.50
Morgan Stanley Dean Witter & Co. .......................... 160 15,830.00
State Street Corporation .................................. 200 15,987.50
The Bank of New York Company, Inc. ........................ 430 15,453.13
Wells Fargo Company ....................................... 400 16,150.00
Insurance--Multi-Line (7.91%)
Berkshire Hathaway Inc.* .................................. 7 16,618.00
Hartford Life, Inc. ....................................... 310 15,500.00
Nationwide Financial Services, Inc. ....................... 340 15,406.25
The Allstate Corporation .................................. 420 15,435.00
The Progressive Corporation ............................... 110 15,372.50
</TABLE>
30
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 22
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, MAY 19, 1999 (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>
Internet Software (3.09%)
America Online, Inc.* ...................... 110 $ 14,863.75
Yahoo! Inc.* ............................... 100 15,681.25
Multimedia (3.18%)
The Walt Disney Company .................... 530 15,668.13
Time Warner Inc. ........................... 220 15,812.50
Networking Products (1.53%)
Cisco Systems, Inc.* ....................... 130 15,104.38
Office Automation & Equipment (1.59%)
Xerox Corporation .......................... 260 15,778.75
Printers & Related Products (1.60%)
Lexmark International Group, Inc.* ......... 120 15,877.50
Radio (1.57%)
Infinity Broadcasting Corporation* ......... 550 15,537.50
REITS--Warehouse/Industrial (3.16%)
AMB Property Corporation ................... 700 15,662.50
EastGroup Properties, Inc. ................. 790 15,602.50
Retail--Apparel/Shoe (7.95%)
Abercrombie & Fitch Co.* ................... 190 15,805.63
AnnTaylor Stores Corporation* .............. 350 16,187.50
Intimate Brands, Inc. ...................... 320 15,720.00
The Gap, Inc. .............................. 250 15,328.13
The Talbots, Inc. .......................... 490 15,649.38
Retail--Building Products (3.10%)
Lowe's Companies, Inc. ..................... 290 15,351.88
The Home Depot, Inc. ....................... 260 15,372.50
Retail--Catalog Shopping/Mail Order (3.95%)
Lands' End, Inc.* .......................... 360 15,660.00
Lillian Vernon Corporation ................. 580 7,830.00
Spiegel, Inc.* ............................. 1,880 15,627.50
Retail--Discount (3.16%)
Costco Companies, Inc.* .................... 200 15,512.50
Wal-Mart Stores, Inc. ...................... 340 15,767.50
Retail--Internet (4.65%)
Amazon.com, Inc.* .......................... 120 15,915.00
eBay, Inc.* ................................ 80 15,165.00
Priceline.com Incorporated* ................ 110 14,973.75
</TABLE>
31
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 22
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, MAY 19, 1999 (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>
Retail--Jewelry (3.20%)
Tiffany & Co. .................................... 190 $ 15,983.75
Zale Corporation* ................................ 400 15,700.00
Retail--Office Supplies (3.14%)
Office Depot, Inc.* .............................. 751 15,582.50
Staples, Inc.* ................................... 570 15,532.50
Retail--Restaurants (1.56%)
Starbucks Corporation* ........................... 420 15,408.75
Telecommunications (9.39%)
AT&T Corp. ....................................... 260 15,323.82
Level 3 Communications, Inc.* .................... 180 15,480.00
Lucent Technologies Inc. ......................... 260 15,340.00
MCI WorldCom, Inc.* .............................. 180 15,997.50
Nextel Communications, Inc.* ..................... 410 15,503.13
Qwest Communications International Inc.* ......... 170 15,268.13
Toys (1.58%)
Mattel, Inc. ..................................... 600 15,675.00
Travel Services (1.58%)
The SABRE Group Holdings, Inc.* .................. 250 15,656.25
------------
TOTAL INVESTMENTS ................................. $ 990,020.00
============
</TABLE>
- ----------
(1) All Securities are represented entirely by contracts to purchase
Securities.
(2) Valuation of the Securities by the Trustee was made as described in
"Valuation" as of the close of business on the business day prior to the
Initial Date of Deposit.
(3) The loss to the Sponsor on the Initial Date of Deposit is $59.
* Non-income producing security.
+ These shares are U.S. dollar denominated and pay dividends in U.S. dollars
but are subject to investment risks generally facing common stocks of
foreign issuers. (See "Risk Factors and Special Considerations.")
32
<PAGE>
Exhibit 99.2
PaineWebber Inc.
1200 Harbor Boulevard
Weehawken, New Jersey 07087 May 19, 1999
Investors Bank & Trust Company
Hancock Towers
200 Clarendon Street
Boston, Massachusetts 02116
Re: PaineWebber Equity Trust,
Growth Stock Series 22
Ladies and Gentlemen:
We have served as counsel for PaineWebber Incorporated as
sponsor and depositor (the "Sponsor") of PaineWebber Equity Trust, Growth Stock
Series 22 (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, certified
by the Secretary of the Sponsor on the date hereof;
<PAGE>
(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.
333-45757) 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. 2
("Amendment No. 2") proposed to be filed on May 19, 1999 (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. 2 (the
"Prospectus");
(i) The Standard Terms and Conditions of the Trust
dated as of July 1, 1998, as amended, between the Sponsor and
Investors Bank & Trust Company, (the "Trustee") (the "Standard
Terms");
(j) The Trust Indenture dated as of May 19, 1999
between the Sponsor and the Trustee (the "Trust Indenture"
and, collectively with the Standard Terms, the "Indenture and
Agreement");
(k) The Closing Memorandum dated May 19, 1999,
between the Sponsor and the Trustee (the "Closing
Memorandum");
(l) Officers Certificates required by the Closing
Memorandum;
(m) The form of certificate of ownership for units
(the "Certificate") to be issued under the Indenture and
Agreement; and
<PAGE>
(n) Such other pertinent records and documents as we
have deemed necessary.
With your permission, in such examination, we have assumed the
following: (a) the authenticity of original documents and the genuineness of all
signatures; (b) the conformity to the originals of all documents submitted to us
as copies; (c) the truth, accuracy, and completeness of the information,
representations, and warranties contained in the records, documents, instruments
and certificates we have reviewed; (d) except as specifically covered in the
opinions set forth below, the due authorization, execution, and delivery on
behalf of the respective parties thereto of documents referred to herein and the
legal, valid, and binding effect thereof on such parties; and (e) the absence of
any evidence extrinsic to the provisions of the written agreement(s) between the
parties that the parties intended a meaning contrary to that expressed by those
provisions. However, we have not examined the securities deposited pursuant to
the Indenture and Agreement (the "Securities") nor the contracts for the
Securities.
We express no opinion as to matters of law in jurisdictions
other than the 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;
(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;
<PAGE>
(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 Trustee 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 Trustee, the Trust's accountants and others
concerning the Registration Statement and the Prospectus and have considered the
matters required to be stated therein and the statements contained therein,
although we have not independently verified the accuracy, completeness or
fairness of such statements. Based upon and subject to the foregoing, nothing
has come to our attention to cause us to believe that the Registration
Statement, as of the date hereof, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or that the Prospectus, as of the date
hereof, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that we have not been requested to and do
not make any comment in this paragraph with respect to the financial statements,
schedules and other financial and statistical information contained in the
Registration Statement or the Prospectus).
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
<PAGE>
(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:cd
<PAGE>
Exhibit 99.C1
PaineWebber Incorporated May 19, 1999
1200 Harbor Boulevard
Weehawken, New Jersey 07087
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
May 19, 1999 (the "Indenture") and Standard Terms and Conditions of Trust, dated
as of July 1, 1998 (the "Agreement"), both between the Depositor, and Investors
Bank & Trust Company, as Trustee. The Indenture established a trust called The
PaineWebber Equity Trust, Growth Stock Series 22 (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. 333-45757) 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:cd
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Exhibit 99.C2
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Registration Statement of our report dated May 19,
1999 relating to the Statement of Net Assets of The PaineWebber Equity Trust,
Growth Stock Series 22, 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
May 19, 1999
New York, New York
