<PAGE>
File No. 333-82367
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-6
For Registration Under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2
A. Exact name of Trust:
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 23
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:
<PAGE>
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 December __, 1999 at 3:00 p.m. pursuant to Rule 487.
<PAGE>
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 23
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 ) Brief Description of the
Trust's Investment
Portfolio; the Composition
of the Trust Portfolio
Securities and Rights of Unitholders ) Rights of Unitholders
<PAGE>
- --------------
* Not applicable, answer negative or not required.
(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
) Indenture and 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
and Trustee ) Trust-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
<PAGE>
of Trust's Securities )
(3) Provisions of Indenture ) Portfolio Supervision
(4) Identity of Depositor and ) Sponsor; Trustee
Trustee )
11. Type of securities comprising ) The Trust; Rights of Unit-
security holder's interest ) holders; Administration of
) the Trust-Portfolio
) Supervision
- --------------
* Not applicable, answer negative or not required.
<PAGE>
12. Information concerning periodic ) *
payment certificates )
13. (a) Load, fees, expenses, etc. ) Fees and Expenses;
Essential Information
Regarding The Trust;
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 ) Fees and Expenses;
Essential Information
Regarding The Trust;
(e) Certain profits receivable by ) Public Offering of Units-
depositor, principal under- ) Public Offering Price;
writers, trustee or affiliated ) -Sponsor's Profit-
persons ) Secondary 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 ) Administration of the
Trust
(b) Reinvestment of distributions ) Reinvestment Plan
<PAGE>
(c) Reserves or special fund ) Distributions, Redemption,
) Expenses of the Trust,
) Termination of the Trust,
) Amendment of the Indenture
- --------------
* Not applicable, answer negative or not required.
<PAGE>
(d) Schedule of distribution ) *
19. Records, accounts and report ) Distributions, Administra-
) tion of the Trust
20. Certain miscellaneous provisions ) Trustee, Sponsor, Termina-
of trust agreement ) tion of the Trust, Amend-
) ment of the Indenture
21. Loans to security holders ) *
22. Limitations on liability ) Sponsor, Trustee, Redemp-
) tion
23. Bonding arrangements ) Included in Form N-8B-2
24. Other material provisions of ) *
trust agreement )
III. Organization Personnel and
Affiliated Persons of Depositor
25. Organization of Depositor ) Sponsor
26. Fees received by Depositor ) Public Offering of
) Units-Public Offering
) Price, Expenses of the
) Trust
27. Business of Depositor ) Sponsor
28. Certain information as to ) Sponsor
officials and affiliated )
persons of Depositor )
29. Voting securities of Depositor ) *
30. Persons controlling Depositor ) Sponsor
31. Payments by Depositor for certain ) *
other trust services )
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 )
- --------------
* Not applicable, answer negative or not required.
<PAGE>
34. Remuneration of other persons ) *
for certain services rendered )
to trust )
IV. Distribution and Redemption of Securities
35. Distribution of trust's ) Public Offering of Units
securities by states )
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to ) *
distribute )
38. (a) Method of distribution ) Distributions; 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
- --------------
* Not applicable, answer negative or not required.
<PAGE>
45. Suspension of redemption rights ) *
46. (a) Redemption valuation ) Public Offering of Units
) -Public Offering Price
) -Secondary Market for
) Units Valuation,
) Redemption
(b) Schedule as to redemption ) *
price )
V. Information concerning the Trustee or Custodian
47. Maintenance of position in ) Redemption, Public
underlying securities ) Offering of Units-Public
) Offering Price
48. Organization and regulation of ) Trustee
Trustee )
49. Fees and expenses of Trustee ) Fees and Expenses;
Expenses of the Trust
50. Trustee's lien ) Expenses of the Trust
VI. Information concerning Insurance of Holders of Securities
51. (a) Name and address of Insurance ) *
Company )
(b) Type of policies ) *
(c) Type of risks insured and ) *
excluded )
(d) Coverage of policies ) *
(e) Beneficiaries of policies ) *
(f) Terms and manner of ) *
cancellation )
(g) Method of determining premiums ) *
(h) Amount of aggregate premiums ) *
paid )
(i) Who receives any part of ) *
premiums )
(j) Other material provisions of ) *
the Trust relating to insurance )
<PAGE>
- --------------
* Not applicable, answer negative or not required.
<PAGE>
VII. Policy of Registrant
52. (a) Method of selecting and ) Brief Description of the
eliminating securities from ) Trust Portfolio; The
the Trust ) Composition of the Trust
) Portfolio; The Trust,
) Administration of 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 ) Fedeal Income Taxes
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 Net Assets
(Instruction 1(c) to Form S-6) )
- --------------
* 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 23
(A Unit Investment Trust)
The American
............................
Age of Affluence
- --------------------------------------------------------------------------------
o Portfolio of Common Stocks Chosen for Their Above-Average Potential for
Capital Appreciation
o Professional Selection
o Annual Capital Distributions
- --------------------------------------------------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
SPONSOR:
PAINEWEBBER INCORPORATED
THIS PROSPECTUS CONSISTS OF TWO PARTS: PART A AND PART B.
PROSPECTUS PART A DATED DECEMBER 7, 1999
<PAGE>
TABLE OF CONTENTS
PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES 23 PROSPECTUS PART A PAGE
----
Brief Description of the Trust ................................... A-3
Summary of Risks ................................................. A-4
Fees and Expenses ................................................ A-6
Brief Description of the Trust's Investment Portfolio ............ A-7
Is This Trust Appropriate for You? ............................... A-8
Essential Information Regarding the Trust ........................ A-9
Report of Independent Auditors ................................... A-11
Statement of Net Assets .......................................... A-12
Schedule of Investments .......................................... A-13
PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES 23 PROSPECTUS PART B
The Composition of the Portfolio ................................. B-1
The Trust ........................................................ B-2
Risk Factors and Special Considerations .......................... B-3
Federal Income Taxes ............................................. B-7
Public Offering of Units ......................................... B-8
Public Offering Price ........................................... B-8
Sales Charge and Volume Discount ................................ B-8
Employee Discount ............................................... B-10
Exchange Option ................................................. B-10
Conversion Option ............................................... B-11
Distribution of Units ........................................... B-12
Secondary Market for Units ...................................... B-12
Sponsor's Profits ............................................... B-12
Redemption ....................................................... B-13
Valuation ........................................................ B-14
Comparison of Public Offering Price and Redemption Value ......... B-15
Expenses of the Trust ............................................ B-15
Rights of Unitholders ............................................ B-16
Distributions .................................................... B-16
Reinvestment Plan ................................................ B-17
Administration of the Trust ...................................... B-17
Accounts ........................................................ B-17
Reports and Records ............................................. B-18
Portfolio Supervision ........................................... B-18
Amendment of the Indenture ....................................... B-19
Termination of the Trust ......................................... B-19
Sponsor .......................................................... B-20
Trustee .......................................................... B-20
Independent Auditors ............................................. B-21
Legal Opinions ................................................... B-21
A-2
<PAGE>
PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES 23 - PROSPECTUS PART A
BRIEF DESCRIPTION OF THE TRUST
1. THE TRUST'S OBJECTIVES.
o The Trust invests in a fixed portfolio of domestic stocks which have, in
PaineWebber's opinion, an above-average potential for capital
appreciation.
o The Trust plans to hold until its termination or January 20, 2003 a
diversified portfolio of stocks which PaineWebber selected on December 7,
1999, the first day of the Trust.
o As of the first day of the Trust, PaineWebber believes that the Trust's
portfolio of stocks have the potential for achieving above-average capital
appreciation during the life of the Trust.
o The Trust is a unit investment trust which means that, unlike a mutual
fund, the Trust's Portfolio is not managed and stocks are not sold because
of market changes.
2. WHAT IS THE PORTFOLIO'S INVESTMENT STRATEGY?
PaineWebber believes that baby boomers, the largest, fastest-growing and
wealthiest segment of the American population, are more affluent than ever and
will continue spending. Now that many of their material needs are satisfied,
they will choose to spend on experiences that relieve stress and make the best
use of their time.
In addition, PaineWebber believes that, although baby boomers are not
enthusiastic savers and the U.S. savings rate has trended down in recent years,
Americans are nevertheless dedicated and increasingly effective investors.
Boomers will invest large amounts in the next few years even though their
ingrained generational values will lead them to keep spending.
PaineWebber selected the stocks in the Trust because it believes that they
will benefit from baby boomers:
o investment activity
o living and working longer (the Gray Wave) and
o their spending on:
-- comforts of home
-- first class leisure
-- need for speed (getting things faster and speed toys like cars,
airplanes and boats)
-- saving time (time efficient activities)
-- buying time (employing others to gain more time)
-- quality time (better service and high quality)
3. WHY DOES PAINEWEBBER BELIEVE IN THIS INVESTMENT STRATEGY?
PaineWebber believes that three key economic forces have contributed to
Americans' increased affluence.
o A muted business cycle -- fewer booms and busts (only one recession in the
past 17 years) due to low inflation, a growing service economy and low
inventory levels made possible by networked computers.
A-3
<PAGE>
o Benign deflation -- falling prices supported by technological innovation,
accompanied by economic growth, which is likely to continue.
o Consumer comeback -- real wages are rising due to a rising demand for
labor and a slowly growing supply of labor.
Despite this increased affluence, many experts are warning baby boomers
(individuals born between 1946 and 1964) that they should increase their
savings rate to prepare for retirement. PaineWebber believes that their savings
rate will not surge because boomers do not want to save more, nor do they need
to save more.
PaineWebber also believes that, although the savings rate won't surge, the
amount of savings will soar.
Boomers do not want to increase their rate of savings because:
o They learned in the 1970's that it was prudent to borrow and spend.
o Savings rates tend to be low when consumer confidence is high.
o Saving is stressful and boomers are already overstressed.
Boomers do not need to increase their savings rate because:
o The savings rate is higher than people think (some estimates understate
savings).
o The rate of return on baby boomers' savings has been high.
o Older Americans do have adequate financial resources, in large part due to
private pensions.
o Large government budget surpluses are a new form of savings since the
surplus will be deployed in ways that help boomers.
o Boomers will live longer and retire later than their parents, reducing the
need to save for retirement.
o Inheritances are an important source of funds.
For these reasons, PaineWebber believes that baby boomers will have an adequate
source of retirement income from many sources and continue spending. In
addition, PaineWebber believes that baby boomers will continue to invest large
amounts, even though their rate of savings may not increase.
SUMMARY OF RISKS
YOU CAN LOSE MONEY BY INVESTING IN THE TRUST. This can happen for various
reasons. A further discussion of the risks summarized below can be found in
Part B of this Prospectus.
1. RISKS OF INVESTING IN THE TRUST
Certain risks are involved with an investment in a unit trust which holds
common stocks. For example:
THE TRUST IS NOT "MANAGED"
o The Trust, unlike a mutual fund, is not "managed" and stocks will not be
sold by the Trust to take advantage of market fluctuations.
A-4
<PAGE>
THE TRUST MAY SELL PORTFOLIO STOCKS
o Although the Trust is not managed, the Trust Portfolio may not remain
constant during the life of the Trust. The Trustee may be required to sell
stocks to pay Trust expenses, to tender stocks under certain circumstances
or to sell stocks in the event certain negative events occur.
o The sale of stocks from 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
you receive upon termination may be less than the amount you paid.
o If many investors sell their Units, the Trust will have to sell stocks.
These sales could result in losses for the Trust and increase your share
of Trust expenses.
o If the Trust must sell stocks for any of these reasons, such sales may
reduce the diversification of your investment.
THE PRICE AND VALUE OF UNITS WILL FLUCTUATE DURING THE TRUST'S TERM.
o The price of your Units depends upon the full range of economic and market
influences including the prices of equity securities, the condition of the
stock markets and other economic influences that affect the global or
United States economy.
o Assuming no changes occur in the prices of the stocks held by the Trust,
the price you paid for your Units will generally be less than the price
you paid because your purchase price included a sales charge.
o The stocks in the Trust's Portfolio will generally trade on a domestic
stock exchange or in the over-the-counter market. PaineWebber cannot
assure you that a liquid trading market will exist. The value of the
Trust's Portfolio, and of your investment, may be reduced if trading in
one or more stocks is limited or absent.
o Additional stocks may be purchased by the Trust when additional Units are
offered to the public or for the Reinvestment Plan. Costs, such as
brokerage fees, incurred in purchasing such additional stocks will be
borne by the Trust. Your Units will be worth less as a result of the
Trust's payment of these brokerage fees and other expenses.
THE INVESTMENT STRATEGY MAY NOT PRODUCE THE ANTICIPATED RESULTS.
2. RISKS OF INVESTING IN STOCKS
INVESTING ALWAYS INVOLVES RISKS. The risks described below are the most
significant risks associated with investing in the stocks held by the Trust.
o Holders of common stocks such as those held by the Trust have rights that
are generally inferior to the holders of debt obligations or preferred
stocks.
o Common stocks are not obligations of the issuer of the stocks. Therefore,
they do not provide any guaranteed income or provide the degree of
protection of debt securities.
o The stocks held by the Trust can be expected to fluctuate in value
depending on a wide variety of factors, such as economic and market
influences affecting corporate profitability, the financial condition of
the issuers of stocks, changes in worldwide or national economic
conditions, the prices of equity securities in general and the Trust's
stocks in particular.
A-5
<PAGE>
3. YEAR 2000 PROBLEM RISKS
o Many computer systems were designed in such a way that they may be unable
to distinguish between the year 2000 and the year 1900 and therefore may
not properly process and calculate date-related information and data
(commonly known as the "Year 2000 Problem").
o As with all investment and financial companies, the Year 2000 Problem may
have an adverse impact upon the Trust. The Sponsor and the Trustee are
taking reasonable steps to address the Year 2000 Problem with respect to
the computer systems they use and to obtain reasonable assurances that
similar steps are being taken by the Trust's other service providers. At
this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact on the Trust.
o The Year 2000 Problem is expected to have an impact on all corporations,
including those whose stocks are contained in the Trust's Portfolio. The
Sponsor cannot predict what impact, if any, the Year 2000 Problem will
have on the stocks in the Trust.
FEES AND EXPENSES
This table shows the fees and expenses a Unitholder may pay, either directly
or indirectly, when investing in Units of the Trust.
ESTIMATED ANNUAL OPERATING EXPENSES OF THE TRUST
<TABLE>
<CAPTION>
AMOUNT
AS A % OF AMOUNT PER
NET ASSETS $1,000 INVESTED
(AS OF THE (AS OF THE
FIRST DAY OF FIRST DAY OF
THE TRUST) THE TRUST)
-------------- ----------------
<S> <C> <C>
Trustee's Fee .172% $ 1.70
Portfolio, Bookkeeping and Administrative Expenses .101% $ 1.00
Other Operating Expenses .025% $ 0.25
---- ------
Total .298% $ 2.95
==== ======
ESTIMATED INITIAL ORGANIZATIONAL COSTS OF THE TRUST(1) .202% $ 2.00
---- ------
SALES CHARGES(2)
Maximum 1% Initial Sales Charge
Total Deferred Sales Charges of $25.00 per 100
Units(3)
</TABLE>
- ----------
(1) Applicable only to purchasers of Units during the initial offering
period.
(2) Unitholders pay a combination of Initial and Deferred Sales Charges. The
Initial Sales Charge is reduced for purchasers of Units worth $50,000 or
more. Also, certain classes of investors are entitled to reduced sales
charges. For futher details, see "Public Offering of Units -- Sales
Charge and Volume Discount" and "-- Employee Discount" in Part B of this
Prospectus.
A-6
<PAGE>
(3) The 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 8 (July) through month 12 (November) in both years one (1) and two
(2) of the Trust's 3-year life, aggregating $25.00 per 100 Units during
such period. See "Public Offering Price -- Sales Charge and Volume
Discount" and "Administration of the Trust" in Part B of this Prospectus
for further details.
EXAMPLE
This example may help you compare the cost of investing in the Trust to
the cost of investing in other funds.
The example below assumes that you invest $10,000 in the Trust for the
periods indicated and then either redeem or do not redeem your Units at the end
of those periods. The example also assumes a 5% return on your investment each
year and that the Trust's annual operating expenses stay the same. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
1 YEAR 2 YEARS 3 YEARS
- -------- --------- --------
$ 275 $429 $459
See "Expenses of the Trust" in Part B of this Prospectus for additional
information regarding expenses.
BRIEF DESCRIPTION OF THE TRUST'S INVESTMENT PORTFOLIO.
o The common stocks in the Trust's Portfolio have been issued by companies who
receive income and derive revenues from multiple industry sources, but whose
primary industry is listed in the "Schedule of Investments" in Part A of this
Prospectus.
<TABLE>
<CAPTION>
APPROXIMATE PERCENT OF AGGREGATE
PRIMARY INDUSTRY SOURCE MARKET VALUE OF THE TRUST
<S> <C>
Aerospace/Defense .......................... 1.79%
Airlines ................................... 3.55%
Automobile ................................. 1.81%
Beverages--Wine/Spirits .................... 1.76%
Broadcast Services ......................... 1.90%
Building & Construction Products ........... 1.79%
Commercial Services ........................ 1.79%
Computers--Hardware/Software ............... 5.39%
Cruise Lines ............................... 3.52%
Diversified Manufacture Operations ......... 1.75%
Financial Institutions/Banks ............... 10.73%
Home Furnishings ........................... 3.52%
Hotels & Motels ............................ 3.57%
Insurance--Multi-Line ...................... 3.65%
Internet Content ........................... 5.31%
Leisure & Recreation Products .............. 1.78%
</TABLE>
A-7
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE PERCENT OF AGGREGATE
PRIMARY INDUSTRY SOURCE MARKET VALUE OF THE TRUST
<S> <C>
Medical Instruments ................ 1.77%
Motorcycle ......................... 1.79%
Multimedia ......................... 3.57%
Networking Products ................ 1.79%
Pharmaceutical ..................... 1.79%
Radio .............................. 1.80%
Recreational Vehicles .............. 1.80%
Retail--Apparel/Shoe ............... 3.60%
Retail--Bedding .................... 1.80%
Retail--Building Products .......... 3.53%
Retail--Consumer Electronics ....... 1.82%
Retail--Discount ................... 3.57%
Retail--Internet ................... 7.04%
Retail--Jewelry .................... 1.77%
Retail--Leisure Products ........... 1.78%
Telecommunications ................. 7.17%
</TABLE>
o The "Schedule of Investments" in Part A of this Prospectus identifies how
each stock was selected in light of the Investment Strategy for the Trust.
IS THIS TRUST APPROPRIATE FOR YOU?
Yes, if you are seeking capital appreciation over the life of the Trust by
investing in common stocks issued by companies which PaineWebber selected for
their growth potential. You will receive an interest in a professionally
selected portfolio whose risk is reduced by investing in stocks of several
different issuers.
No, if you want an investment that changes to take advantage of market
movements, if you are unable or unwilling to assume the risks involved
generally with equity investments or if you need current income.
A-8
<PAGE>
ESSENTIAL INFORMATION REGARDING THE TRUST
AS OF DECEMBER 6, 1999(1)
<TABLE>
<CAPTION>
<S> <C>
SPONSOR: PaineWebber Incorporated
TRUSTEE: Investors Bank & Trust Company
INITIAL DATE OF DEPOSIT: December 7, 1999
TOTAL VALUE OF SECURITIES HELD BY THE TRUST: ............................. $990,020
TOTAL NUMBER OF UNITS(2):................................................. 100,000
FRACTIONAL UNDIVIDED INTEREST IN THE TRUST REPRESENTED BY EACH UNIT: ..... 1/100,000th
CALCULATION OF PUBLIC OFFERING PRICE PER UNIT(2),(3)
Public Offering Price per Unit .......................................... $ 10.00
Less Reimbursement to Sponsor for Initial Organizational Costs(6)........ $ 0.020
Less Initial Sales Charge(4)* of 1% of Offering Price
(1.00% of net amount invested per 100 Units) ........................... $ 0.100
Net Asset Value per Unit ................................................ $ 9.880
Net Asset Value for 100,000 Units ....................................... $988,020
Divided by 100,000 Units(2).............................................. $ 9.880
REDEMPTION VALUE**: ......................................................... $ 9.775
EVALUATION TIME: ............................................................ 4:00 P.M. New York time.
INCOME ACCOUNT DISTRIBUTION DATES(5):........................................ March 25, 2000 and quarterly
thereafter and the Mandatory
Termination Date.
CAPITAL ACCOUNT DISTRIBUTION DATES5: ........................................ December 31, 2000, annually
thereafter and 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: ............................................................... March 10, 2000 and quarterly
thereafter.
MANDATORY TERMINATION DATE: ................................................. January 20, 2003
DISCRETIONARY LIQUIDATION AMOUNT: ........................................... 50% of the value of Securities
upon completion of the
deposit of the Securities.
ESTIMATED INITIAL ORGANIZATIONAL COSTS OF THE TRUST(6):...................... $0.020 per Unit.
</TABLE>
Continued on page A-10
A-9
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ESSENTIAL INFORMATION REGARDING THE TRUST (CONTINUED)
ESTIMATED ANNUAL OPERATING EXPENSES OF THE TRUST(7)...................... $0.0295 per Unit.
Trustee's Fee .......................................................... $0.0170 per Unit.
Portfolio Supervision, Bookkeeping and Administrative Expenses ......... $0.0100 per Unit.
Other Operating Expenses ............................................... $0.0025 per Unit.
</TABLE>
- ----------
(1) The date prior to the Initial Date of Deposit.
(2) As of the close of business on the Initial Date of Deposit, the number of
Units may be adjusted so that the Public Offering Price Per Unit will equal
approximately $10.00, based on the 4:00 p.m. Eastern time valuation of the
Stocks in the Portfolio on such date. Subsequently, to the extent of any
such adjustment in the number of Units, the fractional undivided interest
per Unit will increase or decrease accordingly, from the amounts indicated
above.
(3) The Public Offering Price will be based upon the value of the stocks next
computed following any purchase orders received plus the applicable sales
charges and will vary on any date after December 7, 1999 from the Public
Offering Price per Unit shown above. Following the Initial Date of Deposit,
costs incurred in purchasing additional securities will be at the expense of
the Trust. Any investor purchasing Units after the Initial Date of Deposit
will also pay a proportionate share of any accumulated dividends in the
Income Account. (See "Essential Information Regarding the Trust--Additional
Deposits," "Risk Factors and Special Considerations" and "Valuation" in Part
B of this Prospectus).
(4) The Initial Sales Charge is 1% per 100 Units. In addition, ten (10) monthly
Deferred Sales Charges of $2.50 per 100 Units (totalling $25.00 per 100
Units) will be deducted from the Trust's net asset value on the tenth (10th)
day of each month from month 8 (July) through month 12 (November) in both
years one (1) and two (2) of the Trust's three year life. The Initial Sales
Charge is reduced on purchases of Units worth $50,000 or more. See "Public
Offering of Units--Sales Charge and Volume Discount" in Part B of this
Prospectus.
(5) See "Distributions" in Part B of this Prospectus.
(6) Investors purchasing Units during the initial offering period will reimburse
the Sponsor for all or a portion of the costs incurred by the Sponsor in
connection with organizing the Trust and offering the Units for sale
described more fully in "Public Offering Price" in Part B of this Prospectus
(collectively, the "Initial Organizational Costs"). These costs have been
estimated at $0.020 per Unit based upon the expected number of Units to be
created during the initial offering period. Certain Stocks purchased with
the proceeds of the Public Offering Price will be sold by the Trustee at the
completion of the initial public offering period to reimburse the Sponsor
for Initial Organizational Costs actually incurred. If the actual Initial
Organizational Costs are less than the estimated amount, only the actual
Initial Organizational Costs will be deducted from the assets of the Trust.
If, however, the amount of the actual Initial Organizational Costs are
greater than the estimated amount, only the estimated amount of the Initial
Organizational Costs will be deducted from the assets of the Trust.
(7) See "Expenses of the Trust" in Part B of this Prospectus. Estimated
dividends from the stocks purchased, based upon last dividends actually
paid, are expected by the Sponsor to be sufficient to pay estimated annual
expenses of the Trust. If such dividends and income paid are insufficient to
pay expenses, the Trustee is authorized to sell stocks in an amount
sufficient to pay such expenses. (See "Administration of the Trust" and
"Expenses of the Trust" in Part B of this Prospectus.)
* The sales charge will not be assessed on stocks 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 $0.125 per Unit. As of the
close of the initial offering period, the Redemption Value will be reduced
to reflect the payment of Initial Organizational Costs (see "Summary of Risk
Factors" and "Comparison of Public Offering Price and Redemption Value" in
Part B of this Prospectus).
A-10
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE UNITHOLDERS, SPONSOR AND TRUSTEE
THE PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES 23
We have audited the accompanying Statement of Net Assets of The
PaineWebber Equity Trust, Growth Stock Series 23, including the
Schedule of Investments, as of December 7, 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 December 7, 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 23 at December 7, 1999,
in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
December 7, 1999
A-11
<PAGE>
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 23
STATEMENT OF NET ASSETS
AS OF INITIAL DATE OF DEPOSIT, DECEMBER 7, 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" in this Prospectus Part A is determined by the
Trustee on the basis set forth under "Public Offering of Units--Public Offering
Price" in Part B of this Prospectus. See also the column headed "Cost of
Securities to Trust" under "Schedule of Investments" in this Prospectus Part A.
Pursuant to contracts to purchase securities, an irrevocable letter of credit
drawn on Credit Lyonnais in the amount of $3,000,000 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" in Part B of this Prospectus
(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 stocks purchased with the
proceeds of the Public Offering Price will be sold by the Trustee at the
completion of the initial public offering period to reimburse the Sponsor for
Initial Organizational Costs actually incurred. If the actual Initial
Organizational Costs are less than the estimated amount, only the actual
Initial Organizational Costs will be deducted from the assets of the Trust. If,
however, the amount of the actual Initial Organizational Costs are greater than
the estimated amount, only the estimated amount of the Initial Organizational
Costs will be deducted from the assets of the Trust.
(c) Because the value of stocks at the Evaluation Time on the Initial Date
of Deposit may differ from the amounts shown in this Statement of Net Assets,
the number of Units offered on the Initial Date of Deposit will be adjusted
from the initial number of Units shown to maintain the $10 per Unit offering
price only for that day. The Public Offering Price on any subsequent day will
vary.
(d) The aggregate public offering price is computed on the basis set forth
under "Public Offering of Units--Public Offering Price" in Part B of this
Prospectus.
(e) Assumes the maximum Initial Sales Charge of 1.00% of the Public
Offering Price. Additionally, ten (10) monthly Deferred Sales Charges of $2.50
per 100 Units (totalling $25.00 per 100 Units) will be deducted from the
Trust's net asset value on the tenth (10th) day of each month from month 8
(July) through month 12 (November) in both years (1) and (2) of the Trust's
3-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 December
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 December 1, 2000, the remaining balance of the Deferred Sales Charges
for the second year of the Trust will be deducted. The sales charges are
computed on the basis set forth under "Public Offering of Units--Sales Charge
and Volume Discount" in Part B of this Prospectus. Based on the projected total
assets of $50,000,000, the estimated aggregate maximum Deferred Sales Charge in
the aggregate would be $1,250,000.
A-12
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 23
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, DECEMBER 7, 1999
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)(3)
-------------- ------ --------------
<S> <C> <C>
Aerospace/Defense (1.79%)
Raytheon Company* (The Need for Speed) 610 $ 17,766.25
Airlines (3.55%)
AMR Corporation (First-Class Leisure) 290 17,671.88
Delta Air Lines, Inc. (First-Class Leisure) 340 17,446.25
Automobile (1.81%)
DaimlerChrysler AG (The Need for Speed) 260 17,875.00
Beverages--Wine/Spirits (1.76%)
LVMH (Louis Vuitton Moet Hennessy)+ (First-Class Leisure) 250 17,468.75
Broadcast Services (1.90%)
Clear Channel Communications, Inc.* (Saving Time) 220 18,810.00
Building & Construction Products (1.79%)
Masco Corporation (Comforts of Home) 730 17,702.50
Commercial Services (1.79%)
The ServiceMaster Company (Buying Time) 1,390 17,722.50
Computers--Hardware/Software (5.39%)
Gateway Inc.* (The Gray Wave) 250 17,781.25
International Business Machines Corporation (IBM) (The Gray Wave) 150 17,400.00
Microsoft Corporation* (The Gray Wave) 190 18,133.13
Cruise Lines (3.52%)
Carnival Corporation (First-Class Leisure) 340 17,170.00
Royal Caribbean Cruises Ltd. (First-Class Leisure) 340 17,680.00
Diversified Manufacture Operations (1.75%)
Textron, Inc. (The Need for Speed) 240 17,340.00
Financial Institutions/Banks (10.73%)
American Express Company (Investing) 110 17,462.50
Citigroup Inc. (Investing) 310 17,456.88
H&R Block, Inc. (Investing) 380 17,503.75
Merrill Lynch & Co., Inc. (Investing) 220 17,668.75
The Bank of New York Company, Inc. (Investing) 460 17,652.50
The Goldman Sachs Group, Inc. (Investing) 240 18,480.00
Home Furnishings (3.52%)
American Woodmark Corporation (Comforts of Home) 800 17,600.00
Ethan Allen Interiors Inc. (Comforts of Home) 540 17,280.00
</TABLE>
A-13
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 23
SCHEDULE OF INVESTMENTS (CONTINUED)
AS OF INITIAL DATE OF DEPOSIT, DECEMBER 7, 1999
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)(3)
-------------- ------ --------------
<S> <C> <C>
Hotels & Motels (3.57%)
Four Seasons Hotels Inc. (First-Class Leisure) 330 $ 17,551.88
Marriott International, Inc. (First-Class Leisure) 540 17,820.00
Insurance--Multi-Line (3.65%)
AXA Financial, Inc. (Investing) 520 17,810.00
Berkshire Hathaway Inc.* (The Need for Speed) 10 18,360.00
Internet Content (5.31%)
America Online, Inc.* (Saving Time) 220 17,792.50
SportsLine.com, Inc.* (Saving Time) 360 17,910.00
Yahoo! Inc.* (Saving Time) 60 16,848.75
Leisure & Recreation Products (1.78%)
Brunswick Corporation (The Need for Speed) 821 17,598.75
Medical Instruments (1.77%)
Medtronic, Inc. (The Gray Wave) 450 17,550.00
Motorcycle (1.79%)
Harley-Davidson, Inc. (The Need for Speed) 290 17,690.00
Multimedia (3.57%)
The Walt Disney Company (First-Classs Leisure) 630 17,600.63
Time Warner Inc. (The Need for Speed) 280 17,745.00
Networking Products (1.79%)
Cisco Systems, Inc.* (The Need for Speed) 180 17,685.00
Pharmaceutical (1.79%)
Schering-Plough Corporation (The Gray Wave) 370 17,713.75
Radio (1.80%)
Infinity Broadcasting Corporation* (Saving Time) 450 17,803.13
Recreational Vehicles (1.80%)
Polaris Industries Inc. (The Need for Speed) 460 17,796.25
Retail--Apparel/Shoe (3.60%)
Abercrombie & Fitch Co.* (Quality Time) 590 17,810.58
The Gap, Inc. (Quality Time) 410 17,809.38
Retail--Bedding (1.80%)
Bed Bath & Beyond Inc.* (Comforts of Home) 520 17,777.50
Retail--Building Products (3.53%)
Lowe's Companies, Inc. (Comforts of Home) 320 17,500.00
The Home Depot, Inc. (Comforts of Home) 210 17,469.38
</TABLE>
A-14
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 23
SCHEDULE OF INVESTMENTS (CONTINUED)
AS OF INITIAL DATE OF DEPOSIT, DECEMBER 7, 1999
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)(3)
-------------- ------ --------------
<S> <C> <C>
Retail--Consumer Electronics (1.82%)
Tandy Corporation (The Need for Speed) 230 $ 18,055.00
Retail--Discount (3.57%)
Costco Wholesale Corporation (Saving Time) 180 17,640.00
Wal-Mart Stores, Inc. (Saving Time) 300 17,737.50
Retail--Internet (7.04%)
Amazon.com, Inc.* (Saving Time) 190 16,672.50
eBay, Inc.* (Saving Time) 100 17,650.00
Peapod, Inc.* (Saving Time) 1,960 17,640.00
Priceline.com Incorporated* (Saving Time) 290 17,708.13
Retail--Jewelry (1.77%)
Tiffany & Co. (Quality Time) 220 17,545.00
Retail--Leisure Products (1.78%)
West Marine, Inc.* (The Need for Speed) 2,140 17,655.00
Telecommunications (7.17%)
Lucent Technologies Inc. (The Need for Speed) 220 17,668.75
MCI WorldCom, Inc.* (The Need for Speed) 220 17,366.25
Motorola, Inc. (The Need for Speed) 140 18,707.50
Nextel Communications, Inc.* (The Gray Wave) 160 17,260.00
TOTAL INVESTMENTS $ 990,020.00
============
</TABLE>
- ----------
(1) All stocks are represented entirely by contracts to purchase such stocks.
(2) Valuation of the stocks by the Trustee was made as described in
"Valuation" in Part B of this Prospectus as of the close of business on
the business day prior to the Initial Date of Deposit.
(3) The loss to the Sponsor on the Initial Date of Deposit is $215.
* 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" in Part B.)
A-15
<PAGE>
PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 23
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES NOR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SPONSOR:
PAINEWEBBER INCORPORATED
Prospectus Part B may not be distributed unless accompanied by
Prospectus Part A.
This Prospectus Part B contains a description of the important features of
the PaineWebber Equity Trust, Growth Stock Series 23 and also includes a more
detailed discussion of the investment risks that a Unitholder might face while
holding Trust Units.
THIS PROSPECTUS CONSISTS OF TWO PARTS: PART A AND PART B.
PROSPECTUS PART B DATED DECEMBER 7, 1999.
<PAGE>
PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 23
PROSPECTUS PART B
- --------------------------------------------------------------------------------
THE COMPOSITION OF THE TRUST PORTFOLIO
The objective of the PaineWebber Equity Trust, Growth Stock Series 23 (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 from the age of affluence as described in Part A.
(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.
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 ("Additional Securities") in the Trust where additional Units are to
be offered to the public. (See "The Trust" in Part B of this Prospectus). Costs
incurred in acquiring such Additional Securities will be borne by the Trust.
Unitholders will experience a dilution of their investment as a result of such
brokerage fees and other expenses paid by the Trust during 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" in Part B of this
Prospectus.)
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 $25.00 per 100 Units over the
first (1st) and second (2nd) years of the Trust's life. 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 8 (July) through month
12 (November) in both years one (1) and two (2) of the Trust's 3-year term, for
a total of $25.00. 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 under "Essential Information Regarding the Trust" in Part A of this
Prospectus. 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 Part B of this Prospectus.) 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
Organizational Costs described more fully in "Public Offering Price" in Part B
of this Prospectus.
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" in Part B of this Prospectus.) Unitholders may
elect to have their Income Account and Capital Account distributions
automatically reinvested into additional Units of the Trust at no Initial Sales
Charge (see "Reinvestment Plan" in Part B of this Prospectus). (Such
B-1
<PAGE>
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" in Part B
of this Prospectus). 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 three (3) years after the Initial Date of Deposit
regardless of market conditions at the time. (See "Termination of the Trust"
and "Federal Income Taxes" in Part B of this Prospectus.)
Market for Units. The Sponsor, though not obligated to do so, presently
intends to maintain a secondary market for Units. The public offering price in
the secondary market will be based upon the value of the Securities next
determined after receipt of a purchase order, plus the applicable sales charge.
(See "Public Offering of Units--Public Offering Price" and "Valuation" in Part
B of this Prospectus.) If a secondary market is not maintained, a Unitholder
may dispose of his Units only through redemption. With respect to redemption
requests in excess of $500,000, the Sponsor may determine in its sole
discretion to direct the Trustee to redeem units "in kind" by distributing
Securities to the redeeming Unitholder. (See "Redemption" in Part B of this
Prospectus.)
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
- ----------
* Reference is hereby made to such Trust Indenture and Agreement and any
statements contained in both Parts A and B of this Prospectus are qualified in
their entirety by the provisions of such Trust Indenture and Agreement.
B-2
<PAGE>
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" in Part B of this Prospectus).
On the Initial Date of Deposit each Unit represented the fractional
undivided interest in the Securities and net income of the Trust set forth
under "Essential Information Regarding the Trust" in Part A of this Prospectus.
However, if additional Units are issued by the Trust (through the deposit of
Additional Securities for purposes of the sale of additional Units or pursuant
to the Reinvestment Plan), the aggregate value of Securities in the Trust will
be increased and the fractional undivided interest represented by each Unit in
the balance will be decreased. If any Units are redeemed, the aggregate value
of Securities in the Trust will be reduced, and the fractional undivided
interest represented by each remaining Unit in the balance will be increased.
Units will remain outstanding until redeemed upon tender to the Trustee by any
Unitholder (which may include the Sponsor) or until the termination of the
Trust. (See "Termination of the Trust" in Part B of this Prospectus.)
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
PART B OF THIS PROSPECTUS). 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
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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.
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" in Part A of this Prospectus.)
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
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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 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" IN PART B OF THIS
PROSPECTUS.)
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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.
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" in Part B of this Prospectus).
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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.
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
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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" in Part B of this Prospectus.) 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 under "Essential Information Regarding the Trust" in Part
A of this Prospectus) due to fluctuations in the value of the Stocks among
other factors. In addition, during the initial public offering period, a
portion of the Public Offering Price also consists of an amount sufficient to
reimburse the Sponsor for the payment of all or a portion of the Initial
Organizational Costs in the amount shown as a per Unit amount under "Essential
Information Regarding the Trust" in Part A of this Prospectus. The Initial
Organizational Costs include the cost of preparing the registration statement,
trust documents and closing documents for the Trust, registering with the
Securities and Exchange Commission (the "SEC") and the 50 States, the initial
fees of the Trustee's and Sponsor's counsel, and the initial audit of the
Trust's portfolio. The sales charge will not be assessed on those Securities
held in the Trust and sold by the Trustee at the end of the public offering
period to reimburse the Sponsor for the Initial Organizational Costs. See
"Administration of the Trust--Accounts" in Part B of this Prospectus 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 approximately 3.50% 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 eighth (8th) month of the
Trust's first year (July) and continuing through the the twelfth (12th) month
of the Trust's first year (November) and then commencing again in the eighth
(8th) month of the Trust's second year (July) and continuing through the
twelfth (12th) month of the Trust's second year (November), the Deferred Sales
Charge per 100 Units will be $12.50 per year, approximately 1.25% of the Public
Offering Price. Because the Deferred Sales Charge per 100 Units is $12.50 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
$35.00 or 3.50% 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 $34.50 or 3.63% of the acquisition price for such
Units. Conversely, if an investor bought 100 Units for $1,100 (including the
Initial Sales Charge of $11.00), such investor would pay a total of $36.00 or
3.3% of the acquisition price for such Units.
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The monthly Deferred Sales Charge is a charge of $2.50 per 100 Units and
is accrued in five (5) installments each year of the Trust during the first
(1st) and second (2nd) full years of the three (3) year term of the Trust
($12.50 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 December 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 December 1,
2000, the remaining balance of the Deferred Sales Charges for the second year
of the Trust will be deducted.
The Deferred Sales Charge will be accrued on the books of the Trust and
will be paid to the Sponsor upon the Sponsor's request. The Trustee is directed
to sell Securities to make this payment. It is anticipated that the Securities
will not be sold to pay the Deferred Sales Charges until after the date of the
final installment 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.
SALES CHARGES ON THE INITIAL DATE OF DEPOSIT THROUGH NOVEMBER 7, 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% 3.50% 3.63% $ 25.00
$50,000 to $99,999 ........... .75 .76 3.25 3.36 $ 25.00
$100,000 to $249,999.......... .50 .50 3.00 3.09 $ 25.00
$250,000 to $499,999 ......... .25 .25 2.75 2.83 $ 25.00
$500,000 to $999,999.......... .00 .00 2.50 2.56 $ 25.00
$1,000,000 or more............ negotiable
</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 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.
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No Initial Sales Charge will be imposed on Units of the Trust acquired by
Unitholders in connection with participation in the Reinvestment Plan (see
"Reinvestment Plan" in Part B of this Prospectus).
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 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 Sales (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 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 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 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 Series and units of the
applicable Exchange Trust and there are units of the applicable Exchange Trust
available for sale. While the Sponsor has indicated that it intends to maintain
a market for the Units of the respective Trusts, there is no obligation on its
part to maintain such a market. Therefore, there is no
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assurance that a market for Units will in fact exist on any given date at which
a Unitholder wishes to sell his Units of this series and thus there is no
assurance that the Exchange Option will be available to a Unitholder. Exchanges
will be effected in whole Units only. Any excess proceeds from Unitholders'
Units being surrendered will be returned. Unitholders will be permitted to
advance new money in order to complete an exchange to round up to the next
highest number of Units.
An exchange of units pursuant to the Exchange Option will normally
constitute a "taxable event" under the Code, i.e., a Unitholder will recognize
a tax gain or loss. Unitholders are advised to consult their own tax advisors
as to the tax consequences of exchanging units in their particular case.
The Sponsor reserves the right to modify, suspend or terminate this plan
at any time without further 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 of this series to purchase units of one or more of the
Exchange Trusts. 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 aggregate bid price per Unit of the securities in the portfolio of
the Trust. Units of the Exchange Trust, however, will be sold to the Unitholder
at a reduced sales charge as discussed above. 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 having an up-front
sales load 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, 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 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.
B-11
<PAGE>
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 $18 per 100
Units in the first year, and $10 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" in Part B of this Prospectus. 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" in Part B of this Prospectus).
Sponsor's Profits. In addition to the applicable sales charge, the Sponsor
realizes a profit (or sustains a loss) in the amount of any difference between
the cost of the Stocks to the Sponsor and the price at which it deposits the
Stocks in the Trust in exchange for Units, which is the value of the Stocks,
determined by the Trustee as described under "Valuation" in Part B of this
Prospectus. The cost of Stock to the Sponsor includes the amount paid by the
Sponsor for brokerage commissions.
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
B-12
<PAGE>
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" in Part B of this
Prospectus). 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" in Part B
of this Prospectus).
A redemption request is deemed received on the business day (see
"Valuation" in Part B of this Prospectus for a definition of business day) when
such request is received prior to 4:00 p.m. If it is received after 4:00 p.m.,
it is deemed received on the next business day. During the period in which the
Sponsor maintains a secondary market for Units, the Sponsor may repurchase any
Unit presented for tender to the Trustee for redemption no later than the close
of business on the second business day following such presentation and
Unitholders will receive the Redemption Value next determined after receipt by
the Trustee of the redemption request. Proceeds of a redemption will be paid to
the Unitholder no later than the seventh calendar day following the date of
tender (or if the seventh calendar day is not a business day on the first
business day prior thereto).
With respect to cash redemptions, amounts representing income received
shall be withdrawn from the Income Account, and, to the extent such balance is
insufficient and for remaining amounts, from the Capital Account. The Trustee
is empowered, to the extent necessary, to sell Securities to meet redemptions.
The Trustee will sell Securities in such manner as is directed by the Sponsor.
In the event no such direction is given. Stocks will be sold pro rata, to the
extent possible, and if not possible, the Trustee may designate Securities to
be sold. (See "Administration of the Trust" in Part B of this Prospectus.)
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
B-13
<PAGE>
maintaining a secondary market in Units of the Trust. Securities will be valued
for this purpose as set forth under "Valuation" in Part B of this Prospectus. 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.
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 "Essential Information
Regarding the Trust" in Part A of this Prospectus (1) on each business day as
long as the Sponsor is maintaining a bid in the secondary market, (2) on the
business day on which any Unit is tendered for redemption, (3) on any other day
desired by the Sponsor or the Trustee and (4) upon termination, by adding (a)
the aggregate value of the Securities and other assets determined by the
Trustee as set forth below, (b) cash on hand in the Trust, including dividends
receivable on Stock trading ex-dividend and income accrued held but not yet
distributed (other than any cash held in any reserve account established under
the Indenture or cash held for the purchase of Contract Securities) and (c)
accounts receivable for Securities sold and any other assets of the Trust not
included in (a) and (b) above, and deducting therefrom the sum of (v) taxes or
other governmental charges against the Trust not previously deducted, (w)
accrued fees and expenses of the Trustee and the Sponsor (including legal and
auditing expenses), other Trust expenses and any accrued Deferred Sales Charge
installment not yet paid to the Sponsor (x) cash allocated for distributions to
Unitholders and amounts owed to the Sponsor in reimbursement of Initial
Organizational Costs and (y) accounts payable for Units tendered for redemption
and any other liabilities of the Trust Fund not included in (v), (w), (x) and
(y) above. The per Unit Trust Fund Evaluation is calculated by dividing the
result of such computation by the number of Units outstanding as of the date
thereof. Business days do not include Saturdays, Sundays, New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day and other days
that the New York Stock Exchange is closed.
B-14
<PAGE>
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 Regarding the Trust" in Part A of this Prospectus). The
prices of Stocks are expected to vary. For this reason and others, including
the fact that the Public Offering Price includes the sales charge, the amount
realized by a Unitholder upon redemption of Units may be less than the price
paid by the Unitholder for such Units. Also, as of the close of the initial
public offering period, the Redemption Value per Unit will be reduced to
reflect the sale of Securities made to reimburse the Sponsor for the Initial
Organizational Costs.
EXPENSES OF THE TRUST
The Sponsor will receive a fee, which is earned for portfolio supervisory
services, and which is based upon the largest number of Units outstanding
during the calendar year. The Sponsor's fee, which is not to exceed $0.0035 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 $0.009 which include, but
are not limited to certain mailing, printing, and audit expenses. Expenses in
excess of this estimate will be borne by the Trust. The Trustee could also
benefit to the extent that it may hold funds in non-interest bearing accounts
created by the Indenture.
The Sponsor's fee and Trustee's fee may be increased without approval of
the Unitholders by an amount not exceeding a proportionate increase in the
category entitled "All Services Less Rent" in the Consumer Price Index
published by the United States Department of Labor or, if the Price Index is no
longer published, a similar index as determined by the Trustee and Sponsor.
B-15
<PAGE>
In addition to the above, the following charges are or may be incurred by
the Trust and paid from the Income Account, or, to the extent funds are not
available in such Account, from the Capital Account (see "Administration of the
Trust--Accounts" in Part B of this Prospectus): (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" in Part B of this
Prospectus.
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 Regarding
the Trust" in Part A of this Prospectus. Whenever required for regulatory or
tax purposes, the Trustee will make special distributions of any dividends or
capital on special Distribution Dates to Unitholders of record on special
Record Dates declared by the Trustee.
If and to the extent that the Sponsor, on behalf of the Trust, receives a
favorable response to a no-action letter request which it intends to submit to
the Division of Investment Management of the SEC with respect to reinvesting
cash proceeds received by the Trust, the Trustee may reinvest such cash
proceeds in Additional Securities held in the Trust Fund at such time. Such
reinvestment shall be made so that each deposit of Additional Securities shall
be made so as to match as closely as practicable the percentage relationships
of shares of Stocks and such reinvestment shall be made in accordance with the
parameters set forth in the no-action letter response. If the Sponsor and the
Trustee determine that it shall be necessary to amend the Indenture to comply
with the parameters set forth in the no-action letter
B-16
<PAGE>
response, such documents may be amended without the consent of Unitholders.
There can be no assurance that the Sponsor will receive a favorable no-action
letter response.
Unitholders may elect to have their Income Account and Capital Account
distributions automatically reinvested into additional Units of the Trust at no
Initial Sales Charge. (See "Reinvestment Plan" in Part B of this Prospectus).
Upon termination of the Trust, each Unitholder of record on such date will
receive his pro rata share of the amounts realized upon disposition of the
Securities plus any other assets of the Trust, less expenses of the Trust. (See
"Termination of the Trust" in Part B of this Prospectus.)
REINVESTMENT PLAN
Income Account and Capital Account distributions on Units may be
reinvested by participating in the Trust's Reinvestment Plan (the "Reinvestment
Plan" in Part B of this Prospectus). To participate in the Reinvestment Plan, a
Unitholder must contact his broker, dealer or financial institution to
determine whether he may participate in the Reinvestment Plan. Under the
Reinvestment Plan, the Units acquired for current Unitholders will be either
Units already held in inventory by the Sponsor or new Units created by the
Sponsor's deposit of Additional Securities, contracts to purchase Additional
Securities or cash (or a bank letter of credit in lieu of cash) with
instructions to purchase Additional Securities. Deposits or purchases of
additional Securities will be made so as to maintain the percentage
relationships of shares of Stocks, except as discussed under "The Trust" in
Part B of this Prospectus. 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 purchased. 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" in Part B of this Prospectus.
The Trustee will deduct from the Income Account and, to the extent funds
are not sufficient therein, from the Capital Account, amounts necessary to pay
expenses incurred by the Trust. (See "Expenses and Charges.") In addition, the
Trustee may withdraw from the Income Account and the Capital Account such
amounts as may be necessary to cover redemption of Units by the Trustee. (See
"Redemption" in Part B of this Prospectus)
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<PAGE>
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 November 7, 2000 and
November 7, 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 2000, 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;
B-18
<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" in Part B of
this Prospectus. 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 materially adversely affect the interest
of the Unitholders.
The Indenture may also be amended by the Trustee and the Sponsor without
the consent of any of the Unitholders to implement a program to reinvest cash
proceeds received by the Trust in connection with corporate actions and in
other situations, when and if the Sponsor receives a favorable response to the
no-action letter request which it intends to submit to the Division of
Investment Management at the SEC discussed above (see "Distributions" in Part B
of this Prospectus). 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
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<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
B-20
<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.
B-21
<PAGE>
PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 23
TRUSTEE: SPONSOR:
INVESTORS BANK & TRUST COMPANY PAINEWEBBER INCORPORATED
Hancock Towers, 1200 Harbor Boulevard,
200 Clarendon Street Weehawken, N.J. 07087
Boston, Mass. 02116 (201) 352-3000
(800) 356-2754
- --------------------------------------------------------------------------------
This Prospectus does not include all of the information with respect to The
PaineWebber Equity Trust, Growth Stock Series 23 set forth in its Registration
Statement filed with the Securities and Exchange Commission (the "Commission")
in Washington, D.C. under the:
o Securities Act of 1933 (File No. 333-82367) and
o Investment Company Act of 1940 (File No. 811-3722)
TO OBTAIN COPIES FROM THE COMMISSION AT PRESCRIBED RATES--
WRITE: Public Reference Section of the Commission
450 Fifth Street, N.W., Washington, D.C. 20549
CALL: 1-800-SEC-0330
VISIT: http://www.sec.gov
- --------------------------------------------------------------------------------
No person is authorized to give any information or make any representation
about this Trust not contained in this Prospectus, and you should not rely on
any other information. Read and keep both parts of the Prospectus for future
reference.
- --------------------------------------------------------------------------------
PROSPECTUS DATED DECEMBER 7, 1999
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following documents:
The facing sheet.
The Prospectus.
The Undertaking to file reports.
The signatures.
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 7th day of December, 1999.
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 23
(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 7th day of December,
1999.
PAINEWEBBER INCORPORATED
Name Office
---- ------
Donald B. Marron Chairman, Chief Executive
Officer, Director & Member of
the Executive Committee*
Regina A. Dolan Executive Vice President, Chief
Financial Officer & Director of PaineWebber
Incorporated*
Joseph J. Grano, Jr. President, Retail Sales & Marketing,
Director & Member of the Executive
Committee*
Steve P. Baum Executive Vice President, Director of
PaineWebber Incorporated*
Robert H. Silver Executive Vice President Director of
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*
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 1
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 23
TRUST INDENTURE AND AGREEMENT
Dated as of December 7, 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 December 7, 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-third 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 23".
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 March 10, 2000 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 March 25, 2000 and quarterly thereafter with respect to
Income Account Distributions (the "Income Account Distribution Dates") and shall
mean December 31, 2000 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 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 January 20, 2003. 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
January 1, 2003.
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 2000, so that the Trustee's first annual report will be furnished
to Unitholders within a reasonable period of time following calendar year 2000.
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 eighth (8th) month of the Trust's first year
(July, 2000) and continuing through the twelfth (12th) month of the Trust's
first year (November, 2000) and then commencing again in the eighth (8th) month
of the Trust's second year (July, 2001) and continuing through the twelfth
(12th) month of the Trust's second year (November, 2001), the Deferred Sales
Charge per 100 Units shall be $12.50 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 7th day of December, 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 23
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, DECEMBER 7, 1999
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)(3)
-------------- ------ --------------
<S> <C> <C>
Aerospace/Defense (1.79%)
Raytheon Company* (The Need for Speed) 610 $ 17,766.25
Airlines (3.55%)
AMR Corporation (First-Class Leisure) 290 17,671.88
Delta Air Lines, Inc. (First-Class Leisure) 340 17,446.25
Automobile (1.81%)
DaimlerChrysler AG (The Need for Speed) 260 17,875.00
Beverages--Wine/Spirits (1.76%)
LVMH (Louis Vuitton Moet Hennessy)+ (First-Class Leisure) 250 17,468.75
Broadcast Services (1.90%)
Clear Channel Communications, Inc.* (Saving Time) 220 18,810.00
Building & Construction Products (1.79%)
Masco Corporation (Comforts of Home) 730 17,702.50
Commercial Services (1.79%)
The ServiceMaster Company (Buying Time) 1,390 17,722.50
Computers--Hardware/Software (5.39%)
Gateway Inc.* (The Gray Wave) 250 17,781.25
International Business Machines Corporation (IBM) (The Gray Wave) 150 17,400.00
Microsoft Corporation* (The Gray Wave) 190 18,133.13
Cruise Lines (3.52%)
Carnival Corporation (First-Class Leisure) 340 17,170.00
Royal Caribbean Cruises Ltd. (First-Class Leisure) 340 17,680.00
Diversified Manufacture Operations (1.75%)
Textron, Inc. (The Need for Speed) 240 17,340.00
Financial Institutions/Banks (10.73%)
American Express Company (Investing) 110 17,462.50
Citigroup Inc. (Investing) 310 17,456.88
H&R Block, Inc. (Investing) 380 17,503.75
Merrill Lynch & Co., Inc. (Investing) 220 17,668.75
The Bank of New York Company, Inc. (Investing) 460 17,652.50
The Goldman Sachs Group, Inc. (Investing) 240 18,480.00
Home Furnishings (3.52%)
American Woodmark Corporation (Comforts of Home) 800 17,600.00
Ethan Allen Interiors Inc. (Comforts of Home) 540 17,280.00
</TABLE>
A-13
<PAGE>
SCHEDULE A TO TRUST INDENTURE -- (CONTINUED)
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 23
SCHEDULE OF INVESTMENTS (CONTINUED)
AS OF INITIAL DATE OF DEPOSIT, DECEMBER 7, 1999
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)(3)
-------------- ------ --------------
<S> <C> <C>
Hotels & Motels (3.57%)
Four Seasons Hotels Inc. (First-Class Leisure) 330 $ 17,551.88
Marriott International, Inc. (First-Class Leisure) 540 17,820.00
Insurance--Multi-Line (3.65%)
AXA Financial, Inc. (Investing) 520 17,810.00
Berkshire Hathaway Inc.* (The Need for Speed) 10 18,360.00
Internet Content (5.31%)
America Online, Inc.* (Saving Time) 220 17,792.50
SportsLine.com, Inc.* (Saving Time) 360 17,910.00
Yahoo! Inc.* (Saving Time) 60 16,848.75
Leisure & Recreation Products (1.78%)
Brunswick Corporation (The Need for Speed) 821 17,598.75
Medical Instruments (1.77%)
Medtronic, Inc. (The Gray Wave) 450 17,550.00
Motorcycle (1.79%)
Harley-Davidson, Inc. (The Need for Speed) 290 17,690.00
Multimedia (3.57%)
The Walt Disney Company (First-Classs Leisure) 630 17,600.63
Time Warner Inc. (The Need for Speed) 280 17,745.00
Networking Products (1.79%)
Cisco Systems, Inc.* (The Need for Speed) 180 17,685.00
Pharmaceutical (1.79%)
Schering-Plough Corporation (The Gray Wave) 370 17,713.75
Radio (1.80%)
Infinity Broadcasting Corporation* (Saving Time) 450 17,803.13
Recreational Vehicles (1.80%)
Polaris Industries Inc. (The Need for Speed) 460 17,796.25
Retail--Apparel/Shoe (3.60%)
Abercrombie & Fitch Co.* (Quality Time) 590 17,810.58
The Gap, Inc. (Quality Time) 410 17,809.38
Retail--Bedding (1.80%)
Bed Bath & Beyond Inc.* (Comforts of Home) 520 17,777.50
Retail--Building Products (3.53%)
Lowe's Companies, Inc. (Comforts of Home) 320 17,500.00
The Home Depot, Inc. (Comforts of Home) 210 17,469.38
</TABLE>
A-14
<PAGE>
SCHEDULE A TO TRUST INDENTURE -- (CONTINUED)
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 23
SCHEDULE OF INVESTMENTS (CONTINUED)
AS OF INITIAL DATE OF DEPOSIT, DECEMBER 7, 1999
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)(3)
-------------- ------ --------------
<S> <C> <C>
Retail--Consumer Electronics (1.82%)
Tandy Corporation (The Need for Speed) 230 $ 18,055.00
Retail--Discount (3.57%)
Costco Wholesale Corporation (Saving Time) 180 17,640.00
Wal-Mart Stores, Inc. (Saving Time) 300 17,737.50
Retail--Internet (7.04%)
Amazon.com, Inc.* (Saving Time) 190 16,672.50
eBay, Inc.* (Saving Time) 100 17,650.00
Peapod, Inc.* (Saving Time) 1,960 17,640.00
Priceline.com Incorporated* (Saving Time) 290 17,708.13
Retail--Jewelry (1.77%)
Tiffany & Co. (Quality Time) 220 17,545.00
Retail--Leisure Products (1.78%)
West Marine, Inc.* (The Need for Speed) 2,140 17,655.00
Telecommunications (7.17%)
Lucent Technologies Inc. (The Need for Speed) 220 17,668.75
MCI WorldCom, Inc.* (The Need for Speed) 220 17,366.25
Motorola, Inc. (The Need for Speed) 140 18,707.50
Nextel Communications, Inc.* (The Gray Wave) 160 17,260.00
TOTAL INVESTMENTS $ 990,020.00
============
</TABLE>
- ----------
(1) All stocks are represented entirely by contracts to purchase such stocks.
(2) Valuation of the stocks by the Trustee was made as described in
"Valuation" in Part B of this Prospectus as of the close of business on
the business day prior to the Initial Date of Deposit.
(3) The loss to the Sponsor on the Initial Date of Deposit is $215.
* 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" in Part B.)
A-15
<PAGE>
Exhibit 99.2
PaineWebber Inc.
1200 Harbor Boulevard
Weehawken, New Jersey 07087 December 7, 1999
Investors Bank & Trust Company
Hancock Towers
200 Clarendon Street
Boston, Massachusetts 02116
Re: PaineWebber Equity Trust,
Growth Stock Series 23
----------------------
Ladies and Gentlemen:
We have served as counsel for PaineWebber Incorporated as sponsor and
depositor (the "Sponsor") of PaineWebber Equity Trust, Growth Stock Series 23
(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. 333-82367) filed
with the Securities and Exchange Commission (the "Commission") in
accordance with the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder (collectively, the
"1933 Act") and amendments thereto including Amendment No. 1 ("Amendment
No. 1") proposed to be filed on December 7, 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. 1 (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 December 7, 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 December 7, 1999, between the Sponsor
and the Trustee (the "Closing Memorandum");
(l) Officers Certificates required by the Closing Memorandum; and
(m) Such other pertinent records and documents as we have deemed
necessary.
<PAGE>
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;
(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
<PAGE>
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 Units to be issued by the Trust, and recorded on its registration
books in accordance with the Indenture and Agreement 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
(c) general principles of equity, regardless of whether such enforceability
is considered in a proceeding in equity or at law.
<PAGE>
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
1200 Harbor Boulevard December 7, 1999
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 December 7,
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 23 (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:
<PAGE>
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 or 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. 333-82367) 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
<PAGE>
Exhibit 99.C2
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in this Amendment to the Registration Statement of our
report dated December 7, 1999 relating to the Statement of Net Assets of The
PaineWebber Equity Trust, Growth Stock Series 23, 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
December 7, 1999
New York, New York
