<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FILE NO. 333-90837
AMENDMENT NO. 2
TO
FORM S-6
For Registration Under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on Form N-8B-2
A. Exact name of Trust:
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK, SERIES 24
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, N.J. 07087
copy to:
CARTER LEDYARD & MILBURN
Attention: Kathleen H. Moriarty, Esq.
2 Wall Street,
New York, NY 10005
E. Title and amount of securities being registered:
An indefinite number of Units pursuant to Rule 24f-2
under the Investment Company Act of 1940.
F. Proposed maximum aggregate 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
The registrant hereby amends this Registration
Statement on such date or dates as may be necessary
to delay its effective date until the registrant
shall file a further amendment which specifically
states that this Registration Statement shall
thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until
the Registration Statement shall become effective on
such date as the Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE>
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK, SERIES 24
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 ) Nature of Trust
6. Execution and termination of ) Nature of 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 ) Summary of Portfolio
Trust's Securities and Rights ) Rights of Certificate-
of Holders ) holders
- ----------
* Not applicable, answer negative or not required.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO THE REGISTRATION STATEMENT OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH JURISDICTION.
SUBJECT TO COMPLETION, DATED FEBRUARY 25, 2000
PAINEWEBBER EQUITY TRUST
Growth Stock Series 24
(A Unit Investment Trust)
Building the Info Utility Industry
- --------------------------------------------------------------------------------
o Technology Companies That Are Significantly Involved in Building a
Corporate Presence on the Web and Telecommunications Companies that Connect
Consumers to the Web Are Participating in the Building of the Emerging
"Info Utility Industry"
o Portfolio of Common Stocks Chosen for Their Above-Average Potential for
Capital Appreciation
o Professional Selection
- --------------------------------------------------------------------------------
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 , 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES 24 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-8
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 24 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
</TABLE>
A-2
<PAGE>
PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES 24 - 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.
PaineWebber believes that such stocks are likely to benefit from the
emergence of a new industry: the "Info Utility Industry".
o The stocks in the Trust are issued by technology and telecommunications
companies that are participating in the building of the Info Utility
Industry. These companies include: Advisors, Operators of Server Farms,
Software Providers, Hardware Providers, Personal Computer Manufacturers,
Internet Service Providers, Providers of Electronic Connections to the Web,
Bandwidth (the Transmission Capacity of a Communications Network) Providers
and Domain Name (the Unique Name That Identifies an Internet Site)
Registration Service Providers.
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. THE PORTFOLIO'S INVESTMENT STRATEGY IS TO INVEST IN INFO UTILITY INDUSTRY
STOCKS.
o PaineWebber observes that, just as, in the early 20th century, electric
utilities permitted firms and households to "outsource" the age-old
function of power generation, so is the Internet making it possible to
outsource another age-old function: information management. We are
witnessing the rise of a new industry -- the Info Utility Industry -- which
feeds data to the rest of the economy, much as the electric utility
industry provides energy. As most individual households now depend on
electric utility companies for their energy needs, PaineWebber believes
that most individual businesses will depend on the Info Utility companies
for their information management needs.
o Instead of running Web sites on their own computers, companies are
outsourcing this function to "server farms," or data centers, run by other
companies. These "server farms" are giant warehouses where hundreds of
computers operate Web sites and run other applications for corporate
customers. As corporate operations shift to the Web, PaineWebber believes
that other data-processing functions will be outsourced to Info Utilities.
So the emergence of this industry is part and parcel of the shift to
Web-based computing.
o PaineWebber believes that there are seven forces driving the emergence of
Info Utilities:
- The collapsing cost of bandwidth makes it feasible to store data in
offsite computers and to access it as needed.
- Information management is becoming more important and complex, and
therefore best left in the hands of sophisticated specialists.
- Info Utilities' costs are low because they possess economies of scale
-- an important consideration for customers as managing information
becomes a larger share of their total costs.
- Info Utilities allow customers to tap expertise they cannot hire in a
tight high-tech labor market.
- The computer virus factor: Info Utilities are expert at guarding
against computer viruses and hackers.
A-3
<PAGE>
- Minimizing "total cost of ownership" of computers: it is cheaper to
maintain and upgrade systems if they are centralized in a data center,
rather than dispersed among many local area networks.
- "Digital Democratization:" Info Utilities enable small and mid-sized
businesses, which could not install the most sophisticated software
packages in-house, to use such software.
o The Trust plans to hold until its termination on March 31, 2003 a portfolio
of stocks of technology and telecommunication companies which PaineWebber
believes are involved in the building of the emerging Info Utility
Industry. These companies include:
- Technology Companies that build a corporate presence on the Web:
o Advisors (Electronic Data Systems, Proxicom, Scient)
o Operators of Server Farms (Verio, Digex, Exodus)
o Bandwidth Providers (MCI WorldCom, Qwest Communications)
o Software (Oracle, Infospace.com, Microsoft, Citrix)
o Hardware -- Enterprise Hardware (Sun Microsystems, IBM, Intel);
Printers (Hewlett-Packard); Telecom Equipment (Cisco, Lucent,
Nortel Networks)
o Domain Names (Network Solutions)
- Telecommunications Companies that connect consumers to the Web:
o Personal Computers (Gateway)
o Internet Service Providers (America Online)
o Electronic connections to the Web -- Cable (AT&T, Comcast);
Satellite (Hughes Electronics); Retailers (Tandy)
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 is
"concentrated" in a particular industry, industry sector or industry segment.
o Because the Portfolio is concentrated in the technology and
telecommunications sectors of the economy, many of the risks faced by other
other companies in the technology and telecommunication sectors may also
apply to the portfolio securities, and adverse developments in either
sector may affect the value of your units. When stocks in a particular
sector make up 25% or more of the Portfolio, it is said to be
"concentrated" in that sector, which makes the Portfolio less diversified.
o Stock prices can be volatile generally, and technology stock prices can be
extremely volatile. Technology stocks have experienced extreme price and
volume fluctuations that are often unrelated to their operating
performance, and many have exceptionally high price-to-earnings ratios or
have little or no earnings histories.
A-4
<PAGE>
o Many technology and telecommunications companies are rapidly developing and
highly competitive, both domestically and internationally. They often
experience intense competition from large established companies and
potential competition from small start-up companies. Many technology and
telecommunications companies may be smaller and less seasoned companies
with limited product lines, markets or financial resources and limited
management or marketing personnel. Such companies may be adversely affected
by worldwide scientific and technological development and rapid product
obsolescence, the need for a continued substantial investment in research
and development and increased government regulation.
o Many technology and telecommunications companies will require substantial
capital to acquire and maintain sophisticated technology. Such companies
are generally subject to short product life cycles, aggressive pricing and
reduced profit margins, the loss of patent, copyright and trademark
protections, cyclical market patterns, evolving industry standards and
frequent new product introductions.
o Technology and telecommunications companies are also dependent to a
substantial degree upon skilled professional and technical personnel and
there is considerable competition for the services of qualified personnel
in the industry.
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. The Trust may
continue to purchase or hold stocks during the life of the Trust even
though their market value may have changed.
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
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.
THE TRUST WILL SELL PORTFOLIO STOCKS TO PAY TRUST EXPENSES AND MEET
REDEMPTIONS
o Because most of the stocks in the Trust do not pay any dividend income, the
Trustee will be required to sell stocks to pay Trust expenses and meet
redemptions.
THE PRICE AND VALUE OF UNITS WILL FLUCTUATE DURING THE TRUST'S TERM.
o Stock prices may decline during the life of the Trust. 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 receive for your Units will generally be less than the price
you paid because your purchase price included a sales charge.
A-5
<PAGE>
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.
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"). As with all investment and
financial entities, 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 the Trustee have
taken steps to address the Year 2000 Problem with respect to the computer
systems they use and to obtain reasonable assurances that similar steps
have been taken by the Trust's other service providers. Operations ran
smoothly from the last week in December through the first few weeks of
February, but the Year 2000 Problem may yet have an adverse impact on
financial market participants and other entities, including the companies
whose stocks are contained in the Trust's Portfolio.
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.
A-6
<PAGE>
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 % $
Portfolio, Bookkeeping and Administrative Expenses % $
Other Operating Expenses % $
----- -------
Total % $
===== =======
ESTIMATED INITIAL ORGANIZATIONAL COSTS OF THE TRUST(1) % $
----- -------
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.
(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 ( ) through month 12 ( ) in both years two (2) and three
(3) 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:
<TABLE>
<CAPTION>
1 YEAR 2 YEARS 3 YEARS
- ------ ------- -------
<S> <C> <C>
$ $ $
</TABLE>
See "Expenses of the Trust" in Part B of this Prospectus for additional
information regarding expenses.
A-7
<PAGE>
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 primarily from the technology and
telecommunications sectors participating in the building of the Info
Utility industry listed in the "Schedule of Investments" in Part A of this
Prospectus.
<TABLE>
<CAPTION>
TECHNOLOGY SECTOR APPROXIMATE PERCENT OF AGGREGATE
----------------- MARKET VALUE OF THE TRUST
<S> <C>
Advisors ..................................
Operators of Server Farms .................
Bandwidth Providers .......................
Software ..................................
Hardware ..................................
Domain Names ..............................
TELECOMMUNICATIONS SECTOR
-------------------------
Personal Computers ........................
Internet Service Providers ................
Electronic Connections to the Web .........
</TABLE>
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. Because this portfolio focuses on one industry, it should be
considered as a vehicle for investing a portion of your assets and not as a
complete equity investment program.
No, if you are not comfortable with the portfolio, if you want a more
diversified portfolio, 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 the increased risks involved with
an aggressive growth equity investment, or if you need current income or if you
are seeking preservation of capital.
A-8
<PAGE>
ESSENTIAL INFORMATION REGARDING THE TRUST
AS OF , 2000(1)
SPONSOR: PaineWebber Incorporated
TRUSTEE: Investors Bank & Trust Company
INITIAL DATE OF DEPOSIT: , 2000
<TABLE>
<S> <C>
TOTAL VALUE OF SECURITIES HELD BY THE TRUST: ............................. $
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 .......................................... $
Less Reimbursement to Sponsor for Initial Organizational Costs(6) ....... $
Less Initial Sales Charge(4)* of 1% of Offering Price
(1.00% of net amount invested per 100 Units) ........................... $
Net Asset Value per Unit ................................................ $
Net Asset Value for 100,000 Units ....................................... $
Divided by 100,000 Units(2) ............................................. $
REDEMPTION VALUE**: ......................................................... $
EVALUATION TIME: ............................................................ Closing time of the regular
trading session on the New
York Stock Exchange, Inc.
(ordinarily 4:00 P.M. New
York time).
INCOME ACCOUNT DISTRIBUTION DATES(5): ....................................... , 2000 and
annually thereafter and on
the Mandatory
Termination Date.
CAPITAL ACCOUNT DISTRIBUTION DATES(5): ...................................... , 2000, and
annually thereafter and on
the Mandatory
Termination Date. No
distributions of less than
$.05 per Unit need be
made from the Capital
Account on any
Distribution Date.
RECORD DATES: ............................................................... , 2000 and
annually thereafter.
MANDATORY TERMINATION DATE: ................................................. March 31, 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): ..................... $ per Unit.
Continued on page A-9
</TABLE>
A-9
<PAGE>
<TABLE>
<S> <C>
ESSENTIAL INFORMATION REGARDING THE TRUST (CONTINUED)
ESTIMATED ANNUAL OPERATING EXPENSES OF THE TRUST(7) ..................... $ per Unit.
Trustee's Fee .......................................................... $ per Unit.
Portfolio Supervision, Bookkeeping and Administrative Expenses ......... $ per Unit.
Other Operating Expenses ............................................... $ 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 , 2000 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 ( ) through month 12 ( ) in both
years two (2) and three (3) 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 $ 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 insufficient 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 24
We have audited the accompanying Statement of Net Assets of The PaineWebber
Equity Trust, Growth Stock Series 24, including the Schedule of Investments, as
of , 2000. 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 , 2000. 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 24 at , 2000, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
New York, New York
, 2000
A-11
<PAGE>
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 24
STATEMENT OF NET ASSETS
AS OF INITIAL DATE OF DEPOSIT, , 2000
<TABLE>
<S> <C>
NET ASSETS
----------
Sponsor's Contracts to Purchase underlying Securities backed by
irrevocable letter of credit (a) ................................. $
Reimbursement to Sponsor for Initial Organizational Costs (b) .....
Total ......................................................... $
=========
Units outstanding (c) ............................................. 100,000
ANALYSIS OF NET ASSETS
----------------------
Cost to investors (d) ............................................ $1,000,000
Less: Gross underwriting commissions (e) .........................
Reimbursement to Sponsor for Initial Organizational Costs
Net Assets .................................................... $
==========
</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 in the amount of $ has been deposited with the Trustee,
Investors Bank & Trust Company, for the purchase of $ 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 $ 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
( ) through month 12 ( ) in both years (2) and (3) 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 , 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 ,
the remaining balance of the Deferred Sales Charges for the second and third
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 $ , the
estimated aggregate maximum Deferred Sales Charge in the aggregate would be
$ .
A-12
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 24
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, , 2000
COMMON STOCKS (1)
<TABLE>
<CAPTION>
INFO UTILITY INDUSTRY SECTOR AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)(3)
-------------- ------ --------------
<S> <C> <C>
Advisors
Electronic Data Systems
Proxicom
Scient
Operators of Server Farms
Verio
Digex
Exodus
Bandwidth Providers
MCI WorldCom
Qwest Communications
Software
Oracle
Infospace.com
Microsoft
Citrix
Hardware
Enterprise Hardware
Sun Microsystems
IBM
Intel
Printers
Hewlett-Packard
Telecom equipment
Cisco
Lucent
Nortel Networks
Domain names
Network Solutions
Personal Computers
Gateway
Internet Service Providers (ISPs)
America Online
</TABLE>
A-13
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 24
SCHEDULE OF INVESTMENTS (CONTINUED)
AS OF INITIAL DATE OF DEPOSIT, , 2000
COMMON STOCKS (1)
<TABLE>
<CAPTION>
INFO UTILITY INDUSTRY SECTOR AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)(3)
-------------- ------ --------------
<S> <C> <C>
Electronic connections to the Web
Cable
AT&T
Comcast
Satellite
Hughes Electronics
Retailers
Tandy
TOTAL INVESTMENTS $
============
</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 [gain] loss to the Sponsor on the Initial Date of Deposit is $ .
* 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-14
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 24
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 24 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 , 2000.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 24
PROSPECTUS PART B
- --------------------------------------------------------------------------------
THE COMPOSITION OF THE TRUST PORTFOLIO
The objective of the PaineWebber Equity Trust, Growth Stock Series 24 (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 emergence of and rise in the Info Utility
industry 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
second (2nd) and third (3rd) 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 ( ) through month
12 ( ) in both years two (2) and three (3) 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, if any,
automatically reinvested into additional Units of the Trust at no Initial Sales
Charge (see "Reinvestment Plan" in Part B of this
B-1
<PAGE>
Prospectus). (Such Units will be subject to the Deferred Sales Charges.) Upon
termination of the Trust, the Trustee will distribute to each Unitholder of
record on such date his pro rata share of the Trust's assets, less expenses.
The sale of Securities in the Trust in the period prior to termination and upon
termination may result in a lower amount than might otherwise be realized if
such sale were not required at such time due to impending or actual termination
of the Trust. For this reason, among others, the amount realized by a
Unitholder upon termination may be less than the amount paid by such
Unitholder.
Termination. Unitholders may receive their termination proceeds in cash
(or, at the Sponsor's election, in kind for distributions in excess of
$500,000) after the Trust terminates (see "Termination of the Trust" 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
B-3
<PAGE>
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
B-4
<PAGE>
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.)
B-5
<PAGE>
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
entities, 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 the Trustee have taken steps to address
the Year 2000 Problem with respect to the computer systems they use and to
obtain reasonable assurances that similar steps have been taken by the Trust's
other service providers. Operations ran smoothly from the last week in December
through the first few weeks of February, but the Year 2000 Problem may yet have
an adverse impact on financial market participants and other entities,
including the companies whose stocks are contained in the Trust's Portfolio.
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).
B-6
<PAGE>
FEDERAL INCOME TAXES
In the opinion of Carter, Ledyard & Milburn, counsel for the Sponsor,
under existing law:
1. The Trust is not an association taxable as a corporation for
federal income tax purposes. Under the Internal Revenue Code of 1986, as
amended (the "Code"), each Unitholder will be treated as the owner of a pro
rata portion of the Trust, and income of the Trust will be treated as
income of the Unitholder. Each Unitholder will be considered to have
received all of the dividends paid on such Unitholder's pro rata portion of
each Security when such dividends are received by the Trust, whether or not
such dividends are used to pay a portion of Trust expenses or whether they
are automatically reinvested in additional Trust Units (see "Reinvestment
Plan" in this Prospectus Part B).
2. Each Unitholder will have a taxable event when the Trust disposes
of a Security (whether by sale, exchange, or other disposition) or when the
Unitholder sells its Units or redeems its Units for cash. The total tax
cost of each Unit to a Unitholder is allocated among each of the Securities
in accordance with the proportion of the Trust comprised by each Security
to determine the per Unit tax cost for each Security.
3. The Trust is not an association taxable as a corporation for New
York State income tax purposes. Under New York State law, each Unitholder
will be treated as the owner of a pro rata portion of the Trust and the
income of the Trust will be treated as income of the Unitholders.
The following general discussion of the federal income tax treatment of an
investment in Units of the Trust is based on the Code and United States
Treasury Regulations (established under the Code) as in effect on the date of
this Prospectus. The federal income tax treatment applicable to a Unitholder
may depend upon the Unitholder's particular tax circumstances. The tax
treatment applicable to non-U.S. investors is not addressed in this Prospectus.
Future legislative, judicial or administrative changes could modify the
statements below and could affect the tax consequences to Unitholders.
Accordingly, each Unitholder is advised to consult his or her own tax advisor
concerning the effect of an investment in Units.
General. Each Unitholder must report on its federal income tax return a
pro rata share of the entire income of the Trust, derived from dividends on
Stocks gains or losses upon dispositions of Securities by the Trust and a pro
rata share of the expenses of the Trust.
Distributions with respect to Stock, to the extent they do not exceed
current or accumulated earnings and profits of the distributing corporation,
will be treated as dividends to the Unitholders and will be subject to income
tax at ordinary rates. Corporate Unitholders may be entitled to the
dividends-received deduction discussed below.
To the extent distributions with respect to a Stock were to exceed the
issuing corporation's current and accumulated earnings and profits, they would
not constitute dividends. Rather, they would be treated as a tax free return of
capital and would reduce a Unitholder's tax cost for such Stock. This reduction
in basis would increase any gain, or reduce any loss, realized by the
Unitholder on any subsequent sale or other disposition of such stock or of
Units. After the tax cost has been reduced to zero, any additional
distributions in excess of current and accumulated earnings and profits would
be taxable as gain from the sale of Stock.
A Unitholder who is an individual, estate or trust may be disallowed
certain itemized deductions described in Code Section 67, including
compensation paid to the Trustee and administrative expenses of the Trust, to
the extent these itemized deductions, in the aggregate, do not exceed two
percent of the Unitholder's adjusted gross income. Thus, a Unitholder's taxable
income from an investment in Units may further exceed amounts distributed to
the extent amounts are used by the Trust to pay expenses.
B-7
<PAGE>
Capital gains realized by noncorporate taxpayers are generally taxable at
a maximum rate of 20% if the taxpayer has a holding period of more than 12
months.
Unitholders will be taxed in the manner discussed above regardless of
whether distributions from the Trust are actually received by the Unitholder in
cash or are reinvested pursuant to the "Reinvestment Plan" described later in
this Prospectus Part B. Unitholders exercising the Exchange Option may also
experience certain adverse tax consequences as described in the "Exchange
Option" described later in this Prospectus Part B.
Corporate Dividends-Received Deduction. Corporate holders of Units may be
eligible for the dividends-received deduction with respect to distributions
treated as dividends, subject to the limitations provided in Sections 246 and
246A of the Code. The dividends-received deduction generally equals 70 percent
of the amount of the dividend. As a result, the maximum effective tax rate on
dividends received generally will be reduced from 35 percent to 10.5 percent. A
portion of the dividends-received deduction may, however, be subject to the
alternative minimum tax. Individuals, partnerships, trusts, S corporations and
certain other entities are not eligible for the dividends-received deduction.
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 second year ( ) and continuing through the twelfth (12th) month of
the Trust's second year ( ) and then commencing again in the eighth (8th)
month of the Trust's third year ( ) and continuing through the twelfth
(12th) month of the Trust's third year ( ), 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 three years of the Trust, regardless of the price paid for Units, the Total
Sales Charges expressed
B-8
<PAGE>
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.
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 second
(2nd) and third (3rd) 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 , 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 , the
remaining balance of the Deferred Sales Charges for the second and third years
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 second and third 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
<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.
B-9
<PAGE>
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.
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.
B-10
<PAGE>
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 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
B-11
<PAGE>
purchase of the units of the Exchange Trust is being made pursuant to and is
eligible for the Conversion Option. The dealer will be entitled to two-thirds
of the applicable reduced sales charge. The Sponsor reserves the right to
modify, suspend or terminate the Conversion Option at any time with notice,
including the right to increase the reduced sales charge applicable to this
option (but not in excess of $5 more per Unit, per 100 Units or per 1,000
Units, as applicable than the corresponding fee then being charged for the
Exchange Option). For a description of the tax consequences of a conversion
reference is made to the Exchange Option section herein.
Distribution of Units. The minimum purchase in the initial public offering
is $250. Only whole Units may be purchased.
The Sponsor is the sole underwriter of the Units. Sales may, however, be
made to dealers who are members of the National Association of Securities
Dealers, Inc. ("NASD") at prices which include a concession of $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.
B-12
<PAGE>
Cash, if any, received from Unitholders prior to the settlement date for
the purchase of Units or prior to the payment for Securities upon their
delivery may be used in the Sponsor's business subject to the limitations of
Rule 15c3-3 under the Securities and Exchange Act of 1934 and may be of benefit
to the Sponsor.
In selling any Units in the initial public offering after the Initial Date
of Deposit, the Sponsor may realize profits or sustain losses resulting from
fluctuations in the net asset value of outstanding Units during the period. In
maintaining a secondary market for the Units, the Sponsor may realize profits
or sustain losses in the amount of any differences between the price at which
it buys Units and the price at which it resells or redeems such Units.
REDEMPTION
Units may be tendered to Investors Bank & Trust Company for redemption at
its office in person, or by mail at Hancock Towers, 200 Clarendon Street,
Boston, MA 02116 upon payment of any transfer or similar tax which must be paid
to effect the redemption. At the present time, there are no such taxes. No
redemption fee will be charged by the Sponsor or Trustee, but any remaining
Deferred Sales Charge installments will be deducted at that time. A written
instrument of redemption must be signed by the Unitholder. Unitholders must
sign exactly as their names appear on the records of the Trustee with
signatures guaranteed by an eligible guarantor institution or in such other
manner as may be acceptable to the Trustee. In certain instances the Trustee
may require additional documents such as, but not limited to, trust
instruments, certificates of death, appointments as executor or administrator,
or certificates of corporate authority. Unitholders should contact the Trustee
to determine whether additional documents are necessary. Units tendered to the
Trustee for redemption will be cancelled, if not repurchased by the Sponsor.
Units will be redeemed at the Redemption Value per Unit next determined
after receipt of the redemption request in good order by the Trustee. The
Redemption Value per Unit is determined by dividing the Trust Fund Evaluation
by the number of Units outstanding. (See "Valuation" 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 the closing time of the regular trading
session on the New York Stock Exchange, Inc. (ordinarily 4:00 p.m. New York
time). If it is received after that time, 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.
It is expected that the Trustee will be required to sell Securities to meet
redemptions
B-13
<PAGE>
because most of the stocks in the Trust do not pay any dividend income. 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 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
B-14
<PAGE>
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.
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 $ 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 $ 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 $ which include, but
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<PAGE>
are not limited to certain mailing, printing, and audit expenses. Expenses in
excess of this estimate will be borne by the Trust. The Trustee could also
benefit to the extent that it may hold funds in non-interest bearing accounts
created by the Indenture.
The Sponsor's fee and Trustee's fee may be increased without approval of
the Unitholders by an amount not exceeding a proportionate increase in the
category entitled "All Services Less Rent" in the Consumer Price Index
published by the United States Department of Labor or, if the Price Index is no
longer published, a similar index as determined by the Trustee and Sponsor.
In addition to the above, the following charges are or may be incurred by
the Trust and paid from the Income Account, or, to the extent funds are not
available in such Account which is expected, 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 insufficient to pay the estimated expenses of the Trust. Most of
the stocks in the Trust do not pay any dividend income, and to the extent that
dividends paid with respect to the Stocks are not sufficient to meet the
expenses of the Trust, the Trustee will be required 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 annual 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.
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If and to the extent that the Sponsor, on behalf of the Trust, receives a
favorable response to a no-action letter request which it intends to submit to
the Division of Investment Management of the 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 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, if any, 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, if any, 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
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<PAGE>
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). Because most of the stocks in the
Trust do not pay any dividend income, the Trustee will be required to sell
stocks to pay Trust expenses and cover redemptions.
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 and .
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;
B-18
<PAGE>
(3) upon the breach of covenant or warranty in any trust indenture or
other document relating to the issuer which might materially and adversely
affect either immediately or contingently the declaration or payment of
dividends on such Securities;
(4) upon the default in the payment of principal or par or stated
value of, premium, if any, or income on any other outstanding securities of
the issuer or the guarantor of such securities which might materially and
adversely, either immediately or contingently, affect the declaration or
payment of dividends on the Securities;
(5) upon the decline in price or the occurrence of any materially
adverse credit factors, that in the opinion of the Sponsor, make the
retention of such Securities not in the best interest of the Unitholder;
(6) upon a 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
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<PAGE>
Stocks upon completion of the deposit of Stocks, the Trustee may in its
discretion, and will when so directed by the Sponsor, terminate such Trust. The
Trust may also be terminated at any time by the written consent of 51% of the
Unitholders or by the Trustee upon the resignation or removal of the Sponsor if
the Trustee determines termination to be in the best interest of the
Unitholders. In no event will the Trust continue beyond the Mandatory
Termination Date.
Unless advised to the contrary by the Sponsor, approximately 20 days prior
to the termination of the Trust the Trustee will begin to sell the Securities
held in the Trust and will then, after deduction of any fees and expenses of
the Trust and payment into the Reserve Account of any amount required for taxes
or other governmental charges that may be payable by the Trust, distribute to
each Unitholder, after due notice of such termination, such Unitholder's pro
rata share in the Income and Capital Accounts. Moneys held upon the sale of
Securities may be held in non-interest bearing accounts created by the
Indenture until distributed and will be of benefit to the Trustee. The sale of
Securities in the Trust in the period prior to termination may result in a
lower amount than might otherwise be realized if such sale were not required at
such time due to impending or actual termination of the Trust. For this reason,
among others, the amount realized by a Unitholder upon termination may be less
than the amount paid by such Unitholder.
SPONSOR
The Sponsor, PaineWebber Incorporated, is a corporation organized under
the laws of the State of Delaware. The Sponsor is a member firm of the New York
Stock Exchange, Inc. as well as other major securities and commodities
exchanges and is a member of the National Association of Securities Dealers,
Inc. The Sponsor is engaged in a security and commodity brokerage business as
well as underwriting and distributing new issues. The Sponsor also acts as a
dealer in unlisted securities and municipal bonds and in addition to
participating as a member of various selling groups or as an agent of other
investment companies, executes orders on behalf of investment companies for the
purchase and sale of securities of such companies and sells securities to such
companies in its capacity as a broker or dealer in securities.
The Indenture provides that the Sponsor will not be liable to the Trustee,
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.
B-20
<PAGE>
The Indenture provides that the Trustee will not be liable for any action
taken in good faith in reliance on properly executed documents or the
disposition of moneys, Securities or Certificates or in respect of any
valuation which it is required to make, except by reason of its own gross
negligence, bad faith or willful misconduct, nor will the Trustee be liable or
responsible in any way for depreciation or loss incurred by reason of the sale
by the Trustee of any Securities in the Trust. In the event of the failure of
the Sponsor to act, the Trustee may act and will not be liable for any such
action taken by it in good faith. The Trustee will not be personally liable for
any taxes or other governmental charges imposed upon or in respect of the
Securities or upon the interest thereon or upon it as Trustee or upon or in
respect of the Trust which the Trustee may be required to pay under any present
or future law of the United States of America or of any other taxing authority
having jurisdiction. In addition, the Indenture contains other customary
provisions limiting the liability of the Trustee. The Trustee will be
indemnified and held harmless against any loss or liability accruing to it
without gross negligence, bad faith or willful misconduct on its part, arising
out of or in connection with its acceptance or administration of the Trust,
including the costs and expenses (including counsel fees) of defending itself
against any claim of liability.
INDEPENDENT AUDITORS
The Statement of 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 24
TRUSTEE: SPONSOR:
INVESTORS BANK & TRUST COMPANY PAINEWEBBER INCORPORATED
Hancock Towers, 1200 Harbor Boulevard,
200 Clarendon Street Weehawken, NJ 07087
Boston, MA 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 24 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. 333-90837) 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 , 2000
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York, and State of New York, on the 28th day of February, 2000.
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 24
(Registrant)
By: PaineWebber Incorporated
(Depositor)
/s/ Robert E. Holley
-----------------------------------
Robert Holley
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on behalf of PaineWebber Incorporated the
Depositor by the following persons who constitute a majority of the Executive
Committee of its Board of Directors in the following capacities and in the City
of New York, and State of New York, on this 28th of February, 2000.
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
Paine Webber 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 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.
