<PAGE>
File No. 333-91103
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2
TO
FORM S-6
For Registration Under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2
A. Exact name of Trust:
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 25
B. Name of Depositor:
PAINEWEBBER INCORPORATED
C. Complete address of Depositor's principal executive office:
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
D. Name and complete address of agents for service:
PAINEWEBBER INCORPORATED
Attention: Mr. Robert E. Holley
1200 Harbor Boulevard
Weehawken, New Jersey 07087
Copy to:
CARTER, LEDYARD & MILBURN
Attention: Kathleen H. Moriarty, Esq.
2 Wall Street
New York, New York 10005
E. Total and amount of securities being registered:
<PAGE>
An indefinite number of Units pursuant to Rule 24f-2
of the Investment Company Act of 1940.
F. Proposed maximum offering price to the public of the
securities being registered:
Indefinite pursuant to Rule 24f-2.
G. Amount of filing fee, computed at one-thirty-eighth of 1
percent of the proposed maximum aggregate offering price to
the public:
None required pursuant to Rule 24f-2.
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF
THE REGISTRATION STATEMENT
/ / Check box if it is proposed that this filing will
become effective on _______, 2000 at 3:00 p.m.
pursuant to Rule 487.
<PAGE>
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 25
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items required by Instruction 1
as to Prospectus on Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
- ----------- ---------------------
I. Organization and General Information
1. (a) Name of Trust ) Front Cover
(b) Title of securities issued )
2. Name and address of Depositor ) Back Cover
3. Name and address of Trustee ) Back Cover
4. Name and address of principal ) Back Cover
Underwriter )
5. Organization of Trust ) The Trust
6. Execution and termination of ) The Trust
Trust Agreement ) Termination of the
) Trust
7. Changes of name ) *
8. Fiscal Year ) *
9. Litigation ) *
II. General Description of the Trust
and Securities of the Trust
10. General Information regarding Trust's ) Brief Description of the
Trust's Investment
Portfolio; the Composition
of the Trust Portfolio
<PAGE>
Securities and Rights of Unitholders ) Rights of Unitholders
- ----------------
* Not applicable, answer negative or not required.
(a) Type of Securities ) The Trust
(Registered or Bearer) )
(b) Type of Securities ) The Trust
(Cumulative or Distributive) )
(c) Rights of Holders as to ) Rights of Unitholders;
Withdrawal or Redemption ) Redemption;
) Public Offering of
) Units, Secondary
) Market for Units
) Exchange Option
(d) Rights of Holders as to ) Public Offering of
conversion, transfer, etc. ) Units; Administration
) of the Trust
(e) Rights of Trust issues periodic ) *
payment plan certificates )
(f) Voting rights as to Securities ) Rights of Unitholders;
under the Indenture ) Amendment of the Indenture
) and Termination of the
) Trust
(g) Notice to Holders as to )
change in )
(1) Assets of Trust )
(2) Terms and Conditions )
of Trust's Securities )
(3) Provisions of Trust ) Amendment of the Indenture;
(4) Identity of Depositor ) Administration of the Trust-
and Trustee ) Portfolio Supervision
(h) Consent of Security Holders )
required to change )
<PAGE>
(1) Composition of assets ) Amendment of the Indenture
of Trust
(2) Terms and conditions ) Amendment of the Indenture
of Trust's Securities )
(3) Provisions of Indenture ) Portfolio Supervision
(4) Identity of Depositor and ) Sponsor; Trustee
Trustee )
11. Type of securities comprising ) The Trust; Rights of Unit-
security holder's interest ) holders; Administration of
) the Trust-Portfolio
) Supervision
- -----------------
* Not applicable, answer negative or not required.
<PAGE>
12. Information concerning periodic ) *
payment certificates )
13. (a) Load, fees, expenses, etc. ) Fees and Expenses;
Essential Information
Regarding The Trust; Public
Offering Price of
) Units, Administration of
) the Trust, Expenses of the
) Trust
(b) Certain information regarding ) *
periodic payment certificates )
(c) Certain percentages ) Public Offering of Units
(d) Certain other fees, etc. )
payable by holders ) Fees and Expenses;
Essential Information
Regarding The Trust;
(e) Certain profits receivable by ) Public Offering of Units-
depositor, principal under- ) Public Offering Price;
writers, trustee or affiliated ) -Sponsor's Profit-Secondary
persons ) Market for Units
(f) Ratio of annual charges to ) *
income )
14. Issuance of trust's securities ) The Trust
) Public Offering of Units
15. Receipt and handling of payments ) Public offering of Units
from purchasers )
16. Acquisition and disposition of ) The Trust, Administration
Underlying Securities ) of the Trust, Amendment of
) the Indenture, Termination
) of the Trust
17. Withdrawal or redemption ) Public Offering of Units
) Administration of the Trust
18. (a) Receipt and disposition of ) Distributions, The Trust,
income ) Administration of the Trust
<PAGE>
(b) Reinvestment of distributions ) Reinvestment Plan
(c) Reserves or special fund ) Distributions, Redemption,
) Expenses of the Trust,
) Termination of the Trust,
) Amendment of the Indenture
- ----------------
* Not applicable, answer negative or not required.
<PAGE>
(d) Schedule of distribution ) *
19. Records, accounts and report ) Distributions, Administra-
) tion of the Trust
20. Certain miscellaneous provisions ) Trustee, Sponsor, Termina-
of trust agreement ) tion of the Trust, Amend-
) ment of the Indenture
21. Loans to security holders ) *
22. Limitations on liability ) Sponsor, Trustee, Redemp-
) tion
23. Bonding arrangements ) Included in Form N-8B-2
24. Other material provisions of ) *
trust agreement )
III. Organization Personnel and
Affiliated Persons of Depositor
25. Organization of Depositor ) Sponsor
26. Fees received by Depositor ) Public Offering of
) Units-Public Offering
) Price, Expenses of the
) Trust
27. Business of Depositor ) Sponsor
28. Certain information as to ) Sponsor
officials and affiliated )
persons of Depositor )
29. Voting securities of Depositor ) *
30. Persons controlling Depositor ) Sponsor
31. Payments by Depositor for certain ) *
other trust services )
32. Payments by Depositor for certain ) *
certain other services )
<PAGE>
rendered to trust )
33. Remuneration of employees of ) *
Depositor for certain services )
rendered to trust )
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* Not applicable, answer negative or not required.
<PAGE>
34. Remuneration of other persons ) *
for certain services rendered )
to trust )
IV. Distribution and Redemption of Securities
35. Distribution of trust's ) Public Offering of Units
securities by states )
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to ) *
distribute )
38. (a) Method of distribution ) Distributions; Public
Offering of Units
(b) Underwriting agreements ) The Trust, Administration
(c) Selling agreements ) of The Trust
39. (a) Organization of principal ) Sponsor
Underwriter )
(b) N.A.S.D. membership of ) Sponsor
principal underwriter )
40. Certain fees received by ) Public Offering of Units,
principal underwriter ) Expenses of the Trust
41. (a) Business of principal ) Sponsor
underwriter )
(b) Branch officers of principal )
underwriter )
(c) Salesman of principal ) *
underwriter )
42. Ownership of trust's securities ) *
by certain persons )
43. Certain brokerage commissions ) *
received by principal underwriter )
44. (a) Method of valuation ) Public Offering of Units;
) Valuation
<PAGE>
(b) Schedule as to offering price ) *
(c) Variation in Offering ) Public Offering of Units;
Price to certain persons ) Administration of the Trust
- ------------------
* Not applicable, answer negative or not required.
<PAGE>
45. Suspension of redemption rights ) *
46. (a) Redemption valuation ) Public Offering of Units
) -Public Offering Price
) -Secondary Market for Units
) Valuation, Redemption
(b) Schedule as to redemption ) *
price )
V. Information concerning the Trustee or Custodian
47. Maintenance of position in ) Redemption, Public Offering
underlying securities ) of Units-Public Offering
) Price
48. Organization and regulation of ) Trustee
Trustee )
49. Fees and expenses of Trustee ) Fees and Expenses; Expenses
of the Trust
50. Trustee's lien ) Expenses of the Trust
VI. Information concerning Insurance of Holders of Securities
51. (a) Name and address of Insurance ) *
Company )
(b) Type of policies ) *
(c) Type of risks insured and ) *
excluded )
(d) Coverage of policies ) *
(e) Beneficiaries of policies ) *
(f) Terms and manner of ) *
cancellation )
(g) Method of determining premiums ) *
(h) Amount of aggregate premiums ) *
paid )
(i) Who receives any part of ) *
premiums )
(j) Other material provisions of ) *
the Trust relating to insurance )
- ------------------
* Not applicable, answer negative or not required.
<PAGE>
VII. Policy of Registrant
52. (a) Method of selecting and ) Brief Description of the
eliminating securities from ) Trust Portfolio;
the Trust ) The Composition of the
) Trust Portfolio;
) The Trust, Administration
) of the Trust
(b) Elimination of securities ) *
from the Trust )
(c) Policy of Trust regarding ) The Trust, Administration
substitution and elimination ) of the Trust
of securities )
(d) Description of any funda- ) The Trust, Administration
mental policy of the Trust ) of the Trust-Portfolio
) Supervision
53. (a) Taxable status of the Trust ) Federal Income Taxes
(b) Qualification of the Trust as )
a regulated investment company ) Fedeal Income Taxes
VIII. Financial and Statistical Information
54. Information regarding the Trust's ) *
past ten fiscal years )
55. Certain information regarding ) *
periodic payment plan certificates )
56. Certain information regarding ) *
periodic payment plan certificates )
57. Certain information regarding ) *
periodic payment plan certificates )
58. Certain information regarding ) *
periodic payment plan certificates )
59. Financial statements ) Statement of Net Assets
(Instruction 1(c) to Form S-6) )
- ------------------
* Not applicable, answer negative or not required.
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the
Securities Exchange Act of 1934, the undersigned registrant hereby undertakes to
file with the Securities and Exchange Commission such supplementary and periodic
information, documents and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
<PAGE>
PAINEWEBBER EQUITY TRUST
Growth Stock Series 25
(A Unit Investment Trust)
Bulking Up -- Merger and Acquisition Activity to Remain Strong
- --------------------------------------------------------------------------------
o Portfolio of Common Stocks Chosen for Their Above-Average Potential for
Capital Appreciation Because They May Be Attractive Candidates for
Acquisitions
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 MARCH 23, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES 25 PROSPECTUS PART A PAGE
----
Brief Description of the Trust ................................... A-3
Summary of Risks ................................................. A-5
Fees and Expenses ................................................ A-7
Brief Description of the Trust's Investment Portfolio ............ A-8
Is This Trust Appropriate for You? ............................... A-9
Essential Information Regarding the Trust ........................ A-10
Report of Independent Auditors ................................... A-12
Statement of Net Assets .......................................... A-13
Schedule of Investments .......................................... A-14
PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES 25 PROSPECTUS PART B
The Composition of the Portfolio ................................. B-1
The Trust ........................................................ B-2
Risk Factors and Special Considerations .......................... B-5
Federal Income Taxes ............................................. B-7
Public Offering of Units ......................................... B-9
Public Offering Price ........................................... B-9
Sales Charge and Volume Discount ................................ B-9
Employee Discount ............................................... B-11
Exchange Option ................................................. B-11
Conversion Option ............................................... B-12
Distribution of Units ........................................... B-13
Secondary Market for Units ...................................... B-13
Sponsor's Profits ............................................... B-14
Redemption ....................................................... B-14
Valuation ........................................................ B-15
Comparison of Public Offering Price and Redemption Value ......... B-16
Expenses of the Trust ............................................ B-16
Rights of Unitholders ............................................ B-17
Distributions .................................................... B-17
Reinvestment Plan ................................................ B-18
Administration of the Trust ...................................... B-19
Accounts ........................................................ B-19
Reports and Records ............................................. B-19
Portfolio Supervision ........................................... B-19
Amendment of the Indenture ....................................... B-20
Termination of the Trust ......................................... B-21
Sponsor .......................................................... B-21
Trustee .......................................................... B-21
Independent Auditors ............................................. B-22
Legal Opinions ................................................... B-22
</TABLE>
A-2
<PAGE>
PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES 25 - 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 because the issuers of such stocks may be attractive
candidates for acquisition.
o The Trust plans to hold until its termination, a diversified portfolio of
stocks which PaineWebber selected on March 22, 2000, the day before the
first day of the Trust.
o As of the first day of the Trust, PaineWebber believes that the Trust's
portfolio of stocks has the potential for achieving above-average capital
appreciation during the life of the Trust.
o The Trust is a unit investment trust which means that, unlike a mutual
fund, the Trust's Portfolio is not managed and stocks are not sold
because of market changes.
2. THE PORTFOLIO'S INVESTMENT STRATEGY IS TO INVEST IN STOCKS OF ATTRACTIVE
ACQUISITION TARGETS.
o PaineWebber observes that today most companies find themselves in a
hyper-competitive environment where raising prices is very difficult or
impossible; competition is increasingly global rather than national; the
Internet is expanding industry capacity and lowering price points as
online players enter the market; and traditional cost-cutting is
difficult because of tight labor markets and rising costs for such things
as advertising, rent and energy. Somewhat paradoxically, however, while
competition is intense, business is strong in a setting of benign
deflation. The U.S. is booming and economic growth is robust in most
foreign economies. Corporate cash flows are strong and business
confidence remains high.
o PaineWebber believes that in this environment of hyper-competitive
prosperity, many companies will continue to expand through acquisition,
because they need to do deals in order to grow and remain competitive,
and they have the ability to finance acquisitions with cash, debt or the
issuance of new shares. Merger and acquisition activity may or may not
actually accelerate over the next year, but it should at least remain
around its current pace, which is nearly the highest in the past two
decades. The most common reason to do deals, according to a survey of
PaineWebber Equity Research Analysts, is to expand sales and increase a
firm's market dominance -- i.e., to become more like a "Gorilla," which
PaineWebber defines as a company that already has the leading market
share in an industry and is still gaining share.
o Although every deal is different, PaineWebber observes the logic behind
many acquisitions is as follows: Company A (the acquiring company), a
large, well-managed company with a strong franchise but decelerating
sales growth, buys a smaller firm, Company T (the target company), and
then:
o Achieves cost synergies by closing Company T's headquarters and
eliminating other duplicative facilities and functions.
o Takes Company T's best products and pushes them through Company A's
well-honed distribution system.
o Sells off Company T's weak businesses and other assets, thereby
raising cash that can be used to help pay for the acquisitions.
A-3
<PAGE>
o In PaineWebber's opinion, for Company A the deal delivers important
benefits, which may include:
o Faster sales growth
o New opportunities for cost-cutting o New technology
o Increased economies of scale
o Improved economies of scope -- such as being able to offer a more
complex menu of goods and services
o Greater market power: because it is now bigger, Company A is in a
better position to negotiate with suppliers, distributors and
customers
o Expansion into new geographic regions
o PaineWebber believes that such deals are both offensive and defensive:
they accelerate growth while making a company less vulnerable to the
growth of others. Of course, they are not without risk: a botched
acquisition can damage earnings growth and significantly lower a stock's
market price or value.
o The Trust plans to hold until its termination on April 30, 2003 a
portfolio of stocks of companies which PaineWebber believes are
attractive acquisition targets, and will benefit from strong merger and
acquisition activity. PaineWebber believes that the 51 companies
mentioned below could be acquired for the aforementioned reasons:
- Basic Industry -- this industry sector is generally out of favor
among investors, and the resulting depressed stock prices could spark
leveraged buy out or merger and acquisition activity.
o Chemicals (Delta and Pine Land, Sherwin Williams)
o Papers (Potlatch, Temple Inland)
- Communications -- companies in these industry sectors are likely to
be attractive acquisitions because they may offer acquiring companies
access to new geographical areas, customers and vendors.
o Broadcasting (Citadel Communications, Clear Channel
Communications)
o Cable and Satellite (Pegasus Communications)
o Telecommunications Services (Qwest Communications)
o Wireless Services (VoiceStream Wireless)
- Consumer Products -- acquiring companies in these industry sectors
will most likely try to achieve improvements in growth initiatives,
product platforms, competitive positions and distribution systems
through acquisitions or mergers.
o Beverages (Cott Corporation, Triarc Companies)
o Foods (Heinz, Quaker Oats, Ralston Purina)
o Household Products (Clorox, Gillette)
- Consumer Retailing -- the sectors in this industry have been
significantly affected by the rise of the Internet and electronic
commerce, and they should continue to consolidate due to lowered
valuations of department stores and the desire by retailers to reap
economies of scale in everything from data systems to supply chain
efficiencies.
o Specialty (Blockbuster)
o Broadlines (J.C. Penney)
o Softlines (Ross Stores)
A-4
<PAGE>
- Energy -- the energy sector is rapidly consolidating, as companies
seek cost-cutting opportunities that will drive earnings growth even
if oil prices are low, as they were in 1998.
o Exploration and Production (Ocean Energy, Triton Energy)
o International and Domestic Oils (Occidental Petroleum, Unocal)
o Natural Gas (Equitable Resources, Southwest Gas)
- Financial Services -- acquiring companies in these industry sectors
should continue to seek access to new business lines and the benefits
of strong brand recognition.
o Banks (Bank One, Chase Manhattan)
o Consumer Finance (Countrywide Credit, Household International)
o Insurance (Allstate, Chubb, Lincoln National)
- Health Care -- acquisitions in these industry sectors should offer
acquiring companies the benefits of economies of scale, established
distribution systems and cost savings from synergies which provide an
incremental source of earnings growth.
o Health Care Services/Facilities (Sunrise Assisted Living)
o Health Maintenance Organizations (Healtheon/WebMD, Oxford Health
Plans)
o Medical Devices (Becton Dickinson, C.R. Bard)
o Pharmaceuticals (Eli Lilly, Schering Plough)
- Technology -- mergers and acquisitions in these industry sectors are
primarily driven by the desire to gain market share and economies of
scale.
o Computer Services (Diamond Technology Partners)
o Electronic Imaging (Eastman Kodak)
o Hardware (Gateway, Silicon Graphics)
o Internet Infrastructure (Verio, WinStar)
o Software (Legato Systems)
- Transportation: Airlines -- although mergers of major airlines are
unlikely to occur anytime soon, certain major airlines may desire to
acquire small regional feed carriers or much smaller jet operators in
non-overlapping geographic regions. (Alaska Air Group, America West
Holdings, Atlantic Coast Airlines)
- Utilities -- deregulation has resulted in rapid consolidation of this
industry (CMS Energy, Energy East Corp.)
SUMMARY OF RISKS
YOU CAN LOSE MONEY BY INVESTING IN THE TRUST. This can happen for various
reasons. A further discussion of the risks summarized below can be found in Part
B of this Prospectus.
1. RISKS OF INVESTING IN THE TRUST
Certain risks are involved with an investment in a unit trust which holds common
stocks. For example:
THE TRUST IS NOT "MANAGED"
o The Trust, unlike a mutual fund, is not "managed" and stocks will not be
sold by the Trust to take advantage of market fluctuations.
THE TRUST MAY SELL PORTFOLIO STOCKS
o Although the Trust is not managed, the Trust Portfolio may not remain
constant during the life of the Trust. The Trustee may be required to
sell stocks to pay Trust expenses, to tender stocks under certain
circumstances or to sell stocks in the event certain negative events
occur.
A-5
<PAGE>
o The sale of stocks from the Trust in the period prior to termination and
upon termination may result in a lower amount than might otherwise be
realized if such sale were not required at such time due to impending or
actual termination of the Trust. For this reason, among others, the
amount you receive upon termination may be less than the amount you paid.
o If many investors sell their Units, the Trust will have to sell stocks.
These sales could result in losses for the Trust and increase your share
of Trust expenses.
o Due to merger and acquisition activity, as well as the reasons described
above, the Trust may have to tender or sell stocks in the Trust
Portfolio. If the Trust must tender or sell stocks for any of these
reasons, such tenders or sales may reduce the diversification of your
investment.
THE PRICE AND VALUE OF UNITS WILL FLUCTUATE DURING THE TRUST'S TERM.
o The price of your Units depends upon the full range of economic and
market influences including the prices of equity securities, the
condition of the stock markets and other economic influences that affect
the global or United States economy.
o Assuming no changes occur in the prices of the stocks held by the Trust,
the price you paid for your Units will generally be less than the price
you paid because your purchase price included a sales charge.
o The stocks in the Trust's Portfolio will generally trade on a domestic
stock exchange or in the over-the-counter market. PaineWebber cannot
assure you that a liquid trading market will exist. The value of the
Trust's Portfolio, and of your investment, may be reduced if trading in
one or more stocks is limited or absent.
o Additional stocks may be purchased by the Trust when additional Units are
offered to the public or for the Reinvestment Plan. Costs, such as
brokerage fees, incurred in purchasing such additional stocks will be
borne by the Trust. Your Units will be worth less as a result of the
Trust's payment of these brokerage fees and other expenses.
THE INVESTMENT STRATEGY MAY NOT PRODUCE THE ANTICIPATED RESULTS.
2. RISKS OF INVESTING IN STOCKS
INVESTING ALWAYS INVOLVES RISKS. The risks described below are the most
significant risks associated with investing in the stocks held by the Trust.
o Holders of common stocks such as those held by the Trust have rights that
are generally inferior to the holders of debt obligations or preferred
stocks.
o Common stocks are not obligations of the issuer of the stocks. Therefore,
they do not provide any guaranteed income or provide the degree of
protection of debt securities.
o The stocks held by the Trust can be expected to fluctuate in value
depending on a wide variety of factors, such as economic and market
influences affecting corporate profitability, the financial condition of
the issuers of stocks, changes in worldwide or national economic
conditions, the prices of equity securities in general and the Trust's
stocks in particular.
A-6
<PAGE>
FEES AND EXPENSES
This table shows the fees and expenses a Unitholder may pay, either
directly or indirectly, when investing in Units of the Trust.
ESTIMATED ANNUAL OPERATING EXPENSES OF THE TRUST
<TABLE>
<CAPTION>
AMOUNT AS A AMOUNT PER
% OF NET ASSETS $1,000 INVESTED
(AS OF THE (AS OF THE
FIRST DAY OF FIRST DAY OF
THE TRUST) THE TRUST)
----------------- ----------------
<S> <C> <C>
Trustee's Fee .172% $ 1.70
Portfolio, Bookkeeping and Administrative Expenses .079% $ 0.78
Other Operating Expenses .024% $ 0.24
---- ------
Total .275% $ 2.72
==== ======
ESTIMATED INITIAL ORGANIZATIONAL COSTS OF THE TRUST(1) .202% $ 2.00
---- ------
SALES CHARGES(2)
Maximum 1% Initial Sales Charge
Total Deferred Sales Charges of $25.00 per 100 Units(3)
</TABLE>
- ----------
(1) Applicable only to purchasers of Units during the initial offering period.
(2) Unitholders pay a combination of Initial and Deferred Sales Charges. The
Initial Sales Charge is reduced for purchasers of Units worth $50,000 or
more. Also, certain classes of investors are entitled to reduced sales
charges. For futher details, see "Public Offering of Units -- Sales Charge
and Volume Discount" and "-- Employee Discount" in Part B of this
Prospectus.
(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
(October) through month 12 (February) in both years one (1) and two (2) of
the Trust's 3-year life, aggregating $25.00 per 100 Units during such
period. See "Public Offering Price -- Sales Charge and Volume Discount"
and "Administration of the Trust" in Part B of this Prospectus for further
details.
A-7
<PAGE>
EXAMPLE
This example may help you compare the cost of investing in the Trust to the
cost of investing in other funds.
The example below assumes that you invest $10,000 in the Trust for the
periods indicated and then either redeem or do not redeem your Units at the end
of those periods. The example also assumes a 5% return on your investment each
year and that the Trust's annual operating expenses stay the same. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
1 YEAR 2 YEARS 3 YEARS
-------- --------- --------
$ 272 $424 $452
See "Expenses of the Trust" in Part B of this Prospectus for additional
information regarding expenses.
BRIEF DESCRIPTION OF THE TRUST'S INVESTMENT PORTFOLIO.
o The common stocks in the Trust's Portfolio have been issued by companies who
receive income and derive revenues from multiple industry sources, but whose
primary industry is listed in the "Schedule of Investments" in Part A of this
Prospectus.
o The "Schedule of Investments" in Part A of this Prospectus also identifies
how each stock was selected in light of the Investment Strategy for the
Trust.
<TABLE>
<CAPTION>
APPROXIMATE PERCENT OF AGGREGATE
PRIMARY INDUSTRY SOURCE MARKET VALUE OF THE TRUST
----------------------- -------------------------
<S> <C>
Agricultural Operations .................. 1.97%
Airlines ................................. 5.87%
Beverages ................................ 3.92%
Broadcast Services ....................... 2.00%
Computers--Hardware/Software ............. 5.90%
Consulting Services ...................... 1.94%
Consumer Products--Miscellaneous ......... 1.97%
Cosmetics & Toiletries ................... 1.95%
Electric ................................. 3.93%
Financial Institutions/Banks ............. 7.80%
Foods--Miscellaneous/Diversified ......... 5.86%
Insurance--Multi-Line .................... 7.87%
Internet Software ........................ 1.95%
Medical Information Systems .............. 1.97%
Medical Products ......................... 3.93%
Oil/Gas .................................. 9.86%
Paint & Related Products ................. 1.96%
Paper & Related Products ................. 3.90%
Pharmaceutical ........................... 3.95%
</TABLE>
A-8
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE PERCENT OF AGGREGATE
PRIMARY INDUSTRY SOURCE MARKET VALUE OF THE TRUST
----------------------- -------------------------
<S> <C>
Photo Equipment & Supplies ............. 1.98%
Pipelines .............................. 1.96%
Radio .................................. 1.94%
Retail--Apparel/Shoe ................... 1.96%
Retail--Major Department Store ......... 1.96%
Retail--Video Rental ................... 1.96%
Retirement/Aged Care ................... 1.96%
Satellite Broadcasting ................. 1.95%
Telecommunications ..................... 5.83%
</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 benefit from a professionally selected
portfolio whose risk is reduced by investing in stocks of several different
issuers.
No, if you want a speculative investment that changes to take advantage of
market movements, if you are unable or unwilling to assume the risks involved
generally with equity investments or if you need current income.
A-9
<PAGE>
ESSENTIAL INFORMATION REGARDING THE TRUST
AS OF MARCH 22, 20001
SPONSOR: PaineWebb Incorporated
TRUSTEE: Investors Bank & Trust Company
INITIAL DATE OF DEPOSIT: March 23, 2000
<TABLE>
<CAPTION>
<S> <C>
TOTAL VALUE OF SECURITIES HELD BY THE TRUST: ............................. $990,020
TOTAL NUMBER OF UNITS2: .................................................. 100,000
FRACTIONAL UNDIVIDED INTEREST IN THE TRUST REPRESENTED BY EACH UNIT: ..... 1/100,000th
CALCULATION OF PUBLIC OFFERING PRICE PER UNIT2, 3
Public Offering Price per Unit .......................................... $10.00
Less Reimbursement to Sponsor for Initial Organizational Costs6 ......... $0.02
Less Initial Sales Charge4* of 1% of Offering Price
(1.00% of net amount invested per 100 Units) ........................... $0.10
Net Asset Value per Unit ................................................ $9.88
Net Asset Value for 100,000 Units ....................................... $988,020
Divided by 100,000 Units2 ............................................... $9.88
REDEMPTION VALUE**: ......................................................... $9.775
EVALUATION TIME: ............................................................ Closing time of the regular
trading session on the New
York Stock Exchange, Inc.
(ordinarily 4:00 pm New
York time).
INCOME ACCOUNT DISTRIBUTION DATES5: ......................................... June 25, 2000 and quarterly
thereafter and the
Mandatory Termination
Date.
CAPITAL ACCOUNT DISTRIBUTION DATES5: ........................................ June 25, 2000 and quarterly
thereafter and on the
Mandatory Termination
Date. No distributions of
less than $.05 per Unit
need be made from the
Capital Account on any
Distribution Date.
RECORD DATES: ............................................................... June 10, 2000 and quarterly
thereafter.
MANDATORY TERMINATION DATE: ................................................. April 30, 2003
DISCRETIONARY LIQUIDATION AMOUNT: ........................................... 50% of the value of Securities
upon completion of the
deposit of the Securities.
ESTIMATED INITIAL ORGANIZATIONAL COSTS OF THE TRUST6: ....................... $0.02 per Unit.
Continued on page A-11
</TABLE>
A-10
<PAGE>
<TABLE>
<S> <C>
ESSENTIAL INFORMATION REGARDING THE TRUST (CONTINUED)
ESTIMATED ANNUAL OPERATING EXPENSES OF THE TRUST7 ........... $0.0272 per Unit.
Trustee's Fee .............................................. $0.0170 per Unit.
Portfolio, Bookkeeping and Administrative Expenses ......... $0.0078 per Unit.
Other Operating Expenses ................................... $0.0024 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 March 23, 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, twelve (12)
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 (October) through month 12 (February)
in both years one (1) and two (2) of the Trust's three year life. The
Initial Sales Charge is reduced on purchases of Units worth $50,000 or
more. See "Public Offering of Units--Sales Charge and Volume Discount" in
Part B of this Prospectus.
5 See "Distributions" in Part B of this Prospectus.
6 Investors purchasing Units during the initial offering period will
reimburse the Sponsor for all or a portion of the costs incurred by the
Sponsor in connection with organizing the Trust and offering the Units for
sale described more fully in "Public Offering Price" in Part B of this
Prospectus (collectively, the "Initial Organizational Costs"). These costs
have been estimated at $0.02 per Unit based upon the expected number of
Units to be created during the initial offering period. Certain Stocks
purchased with the proceeds of the Public Offering Price will be sold by
the Trustee at the completion of the initial public offering period to
reimburse the Sponsor for Initial Organizational Costs actually incurred.
If the actual Initial Organizational Costs are less than the estimated
amount, only the actual Initial Organizational Costs will be deducted from
the assets of the Trust. If, however, the amount of the actual Initial
Organizational Costs are greater than the estimated amount, only the
estimated amount of the Initial Organizational Costs will be deducted from
the assets of the Trust.
7 See "Expenses of the Trust" in Part B of this Prospectus. Estimated
dividends from the stocks purchased, based upon last dividends actually
paid, are expected by the Sponsor to be sufficient to pay estimated annual
expenses of the Trust. If such dividends and income paid are insufficient
to pay expenses, the Trustee is authorized to sell stocks in an amount
sufficient to pay such expenses. (See "Administration of the Trust" and
"Expenses of the Trust" in Part B of this Prospectus.)
* The sales charge will not be assessed on stocks sold to reimburse the
Sponsor for the Initial Organizational Costs.
** This figure reflects deduction of the Initial Sales Charge of 1.00% and the
Deferred Sales Charges for the first year of $0.125 per Unit. As of the
close of the initial offering period, the Redemption Value will be reduced
to reflect the payment of Initial Organizational Costs (see "Summary of
Risk Factors" and "Comparison of Public Offering Price and Redemption
Value" in Part B of this Prospectus).
A-11
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE UNITHOLDERS, SPONSOR AND TRUSTEE
THE PAINEWEBBER EQUITY TRUST, GROWTH STOCK SERIES 25
We have audited the accompanying Statement of Net Assets of The
PaineWebber Equity Trust, Growth Stock Series 25, including the Schedule
of Investments, as of March 23, 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 auditing standards generally
accepted in the United States. 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 March 23, 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 25 at March 23, 2000, in
conformity with accounting principles generally accepted in the United
States.
ERNST & YOUNG LLP
New York, New York
March 23, 2000
A-12
<PAGE>
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 25
STATEMENT OF NET ASSETS
AS OF INITIAL DATE OF DEPOSIT, MARCH 23, 2000
<TABLE>
<CAPTION>
<S> <C>
NET ASSETS
----------
Sponsor's Contracts to Purchase underlying Securities backed by
irrevocable letter of credit (a) ................................. $ 990,020
Reimbursement to Sponsor for Initial Organizational Costs (b) ..... (2,000)
----------
Total ......................................................... $ 988,020
==========
Units outstanding (c) ............................................. 100,000
ANALYSIS OF NET ASSETS
----------------------
Cost to investors (d) ............................................ $1,000,000
Less: Gross underwriting commissions (e) ......................... (9,980)
Reimbursement to Sponsor for Initial Organizational Costs (2,000)
----------
Net Assets .................................................... $ 988,020
==========
</TABLE>
- ----------
(a) The aggregate cost to the Trust of the securities listed under
"Schedule of Investments" in this Prospectus Part A is determined by the Trustee
on the basis set forth under "Public Offering of Units--Public Offering Price"
in Part B of this Prospectus. See also the column headed "Cost of Securities to
Trust" under "Schedule of Investments" in this Prospectus Part A. Pursuant to
contracts to purchase securities, an irrevocable letter of credit drawn on Bank
of America in the amount of $1,250,000 has been deposited with the Trustee,
Investors Bank & Trust Company, for the purchase of $990,020 aggregate value of
Securities in the initial deposit and for the purchase of Securities in
subsequent deposits.
(b) Investors purchasing Units during the initial offering period will
reimburse the Sponsor for all or a portion of the costs incurred by the Sponsor
in connection with organizing the Trust and offering the Units for sale as
described more fully in "Public Offering Price" in Part B of this Prospectus
(collectively, the "Initial Organizational Costs"). These costs have been
estimated at $0.02 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 (October)
through month 12 (February) in both years (1) and (2) of the Trust's three 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 March 31, 2001,
only the balance of the Deferred Sales Charges remaining for the first year of
the Trust will be deducted. If Units are sold, redeemed or exchanged after March
31, 2001, the remaining balance of the Deferred Sales Charges for the second
year of the Trust will be deducted. The sales charges are computed on the basis
set forth under "Public Offering of Units--Sales Charge and Volume Discount" in
Part B of this Prospectus. Based on the projected total assets of $50,000,000,
the estimated aggregate maximum Deferred Sales Charge in the aggregate would be
$1,250,000.
A-13
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 25
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, MARCH 23, 2000
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)(3)
-------------- ------ --------------
<S> <C> <C>
Agricultural Operations (1.97%)
Delta and Pine Land Company (Basic Industry--Chemicals) 990 $ 19,490.63
Airlines (5.87%)
Alaska Air Group, Inc.* (Transportation--Airlines) 670 19,388.19
America West Holdings Corporation* (Transportation--Airlines) 1,300 19,581.25
Atlantic Coast Airlines Holdings, Inc.* (Transportation--Airlines) 890 19,190.63
Beverages (3.92%)
Cott Corporation* (Consumer Products--Beverages) 3,250 19,398.60
Triarc Companies Inc.* (Consumer Products--Beverages) 960 19,380.00
Broadcast Services (2.00%)
Clear Channel Communications, Inc.* (Communications--
Broadcasting) 270 19,760.63
Computers--Hardware/Software (5.90%)
Gateway Inc.* (Technology--Hardware) 310 19,433.13
Legato Systems, Inc.* (Technology--Software) 520 19,597.50
Silicon Graphics, Inc.* (Technology--Hardware) 1,610 19,420.63
Consulting Services (1.94%)
Diamond Technology Partners Incorporated*
(Technology--Computer Services) 240 19,200.00
Consumer Products--Miscellaneous (1.97%)
The Clorox Company (Consumer Products--Household Products) 560 19,460.00
Cosmetics & Toiletries (1.95%)
The Gillette Company (Consumer Products--Household Products) 550 19,353.13
Electric (3.93%)
CMS Energy Corporation (Utilities) 1,030 19,441.25
Energy East Corporation (Utilities) 970 19,460.63
Financial Institutions/Banks (7.80%)
Bank One Corporation (Financial Services--Banks) 710 19,170.00
Countrywide Credit Industries, Inc. (Financial Services--Consumer
Finance) 670 19,430.00
Household International, Inc. (Financial Services--Consumer
Finance) 510 19,252.50
The Chase Manhattan Corporation (Financial Services--Banks) 210 19,320.00
Foods--Miscellaneous/Diversified (5.86%)
H.J. Heinz Company (Consumer Products--Foods) 580 19,321.25
Ralston-Ralston Purina Group+ (Consumer Products--Foods) 730 19,390.63
The Quaker Oats Company (Consumer Products--Foods) 370 19,332.50
Insurance--Multi-Line (7.87%)
Lincoln National Corporation (Financial Services--Insurance) 670 19,513.75
</TABLE>
A-14
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 25
SCHEDULE OF INVESTMENTS (CONTINUED)
AS OF INITIAL DATE OF DEPOSIT, MARCH 23, 2000
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)(3)
-------------- ------ --------------
<S> <C> <C>
Oxford Health Plans, Inc.* (Health Care--Health Maintenance
Organizations) 1,310 $ 19,486.25
The Allstate Corporation (Financial Services--Insurance) 910 19,508.13
The Chubb Corporation (Financial Services--Insurance) 350 19,446.88
Internet Software (1.95%)
Verio Inc.* (Technology--Internet Infrastructure) 350 19,337.50
Medical Information Systems (1.97%)
Healtheon/WebMD Corporation* (Health Care--Health
Maintenance Organizations) 610 19,481.88
Medical Products (3.93%)
Becton, Dickinson and Company (Health Care--Medical Devices) 630 19,490.63
C.R. Bard, Inc. (Health Care--Medical Devices) 480 19,440.00
Oil/Gas (9.86%)
Occidental Petroleum Corporation (Energy--International and
Domestic Oils) 1,040 19,435.00
Ocean Energy Inc.* (Energy--Exploration and Production) 1,550 19,375.00
Southwest Gas Corporation (Energy--Natural Gas) 990 19,428.75
Triton Energy Limited* (Energy--Exploration and Production) 550 19,525.00
Unocal Corporation (Energy--International and Domestic Oils) 710 19,746.88
Paint & Related Products (1.96%)
The Sherwin-Williams Company (Basic Industry--Chemicals) 910 19,451.25
Paper & Related Products (3.90%)
Potlatch Corporation (Basic Industry--Papers) 480 19,290.00
Temple-Inland Inc. (Basic Industry--Papers) 400 19,325.00
Pharmaceutical (3.95%)
Eli Lilly and Company (Health Care--Pharmaceuticals) 310 19,704.38
Schering-Plough Corporation (Health Care--Pharmaceuticals) 510 19,380.00
Photo Equipment & Supplies (1.98%)
Eastman Kodak Company (Technology--Electronic Imaging) 350 19,621.88
Pipelines (1.96%)
Equitable Resources, Inc. (Energy--Natural Gas) 480 19,440.00
Radio (1.94%)
Citadel Communications Corporation* (Communications--
Broadcasting) 460 19,205.00
Retail--Apparel/Shoe (1.96%)
Ross Stores, Inc. (Consumer Retailing--Softlines) 950 19,415.63
Retail--Major Department Store (1.96%)
J.C. Penney Company, Inc. (Consumer Retailing--Broadlines) 1,270 19,367.50
</TABLE>
A-15
<PAGE>
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 25
SCHEDULE OF INVESTMENTS (CONTINUED)
AS OF INITIAL DATE OF DEPOSIT, MARCH 23, 2000
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)(3)
-------------- ------ --------------
<S> <C> <C>
Retail--Video Rental (1.96%)
Blockbuster Inc. (Consumer Retailing--Specialty) 1,850 $ 19,425.00
Retirement/Aged Care (1.96%)
Sunrise Assisted Living, Inc.* (Health Care--Health Care
Services/Facilities) 1,530 19,411.88
Satellite Broadcasting (1.95%)
Pegasus Communications Corporation* (Communications--Cable
and Satellite) 150 19,312.50
Telecommunications (5.83%)
Qwest Communications International Inc.* (Communications--
Telecommunication Services) 410 19,475.00
VoiceStream Wireless Corporation* (Communications--Wireless
Services) 140 18,996.25
WinStar Communications, Inc.* (Technology--Internet
Infrastructure) 340 19,210.00
------------
TOTAL INVESTMENTS $ 990,020.00
============
</TABLE>
- ----------
(1) All stocks are represented entirely by contracts to purchase such stocks.
(2) Valuation of the stocks by the Trustee was made as described in "Valuation"
in Part B of this Prospectus as of the close of business on the business
day prior to the Initial Date of Deposit.
(3) There was no gain or loss to the Sponsor on the Initial Date of Deposit.
* Non-income producing security.
+ On March 16, 2000 Ralston-Ralston Purina Group announced that it will spin
off Energizer Holdings Inc. All shares of Energizer Holdings Inc. received
by the Trust will be sold, and a Special Distribution will be made on April
20, 2000 to holders of record on April 6, 2000.
PLEASE NOTE THAT IF THIS PROSPECTUS IS USED AS A PRELIMINARY PROSPECTUS
FOR A FUTURE TRUST IN THIS SERIES, THE PORTFOLIO WILL CONTAIN
DIFFERENT STOCKS FROM THOSE DESCRIBED ABOVE.
A-16
<PAGE>
PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 25
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 25 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 MARCH 23, 2000.
<PAGE>
PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 25
PROSPECTUS PART B
- --------------------------------------------------------------------------------
THE COMPOSITION OF THE TRUST PORTFOLIO
The objective of the PaineWebber Equity Trust, Growth Stock Series 25 (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 may be attractive candidates for acquisition. PaineWebber believes that
many companies present attractive opportunities to acquirors and on the Initial
Date of Deposit has identified issuers of stocks contained in the Trust as
potential candidates for acquisition. The Trust will seek to achieve its
objective of capital appreciation through an investment in a diversified
portfolio of such stocks. (Such stocks are referred to herein as the "Stocks" or
the "Securities".) OF COURSE, THERE CAN BE NO ASSURANCE THAT THE OBJECTIVE OF
THE TRUST WILL BE ACHIEVED.
Additional Deposits. After the first deposit on the Initial Date of Deposit
the Sponsor may, from time to time, cause the deposit of additional Securities
("Additional Securities") in the Trust where additional Units are to be offered
to the public. (See "The Trust" in Part B of this Prospectus). Costs incurred in
acquiring such Additional Securities will be borne by the Trust. Unitholders
will experience a dilution of their investment as a result of such brokerage
fees and other expenses paid by the Trust during such deposits of Additional
Securities purchased by the Trustee with cash or cash equivalents pursuant to
instructions to purchase such Additional Securities. (See "The Trust" and "Risk
Factors and Special Considerations" in Part B of this Prospectus.)
Public Offering Price. Units will be charged a combination of an Initial
Sales Charge on the date of purchase of 1.00% of the Public Offering Price, plus
Deferred Sales Charges which will aggregate $25.00 per 100 Units over the first
(1st) and second (2nd) years of the Trust's life. For example, on the Initial
Date of Deposit, on a $1,000 investment, $990.00 is invested in the Trust and a
$10.00 Initial Sales Charge is collected. In addition, a Deferred Sales Charge
of $2.50 per 100 Units will be deducted from the Trust's net asset value on the
tenth (10th) day of each month from month 8 (October) through month 12
(February) in both years one (1) and two (2) of the Trust's three 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
B-1
<PAGE>
"Distributions" and "Administration of the Trust" in Part B of this Prospectus.)
Unitholders may elect to have their Income Account and Capital Account
distributions automatically reinvested into additional Units of the Trust at no
Initial Sales Charge (see "Reinvestment Plan" in Part B of this Prospectus).
(Such 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 fifteen 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 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
- ----------
*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>
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. During the 90-day period following the
Initial Date of Deposit, deposits of Additional Securities or cash in connection
with the issuance and sale of additional Units will maintain, to the extent
practicable, the original proportionate relationship among the number of shares
of each Security. The original proportionate relationship is subject to
adjustment to reflect the occurrence of a stock split or a similar event which
affects the capital structure of the issuer of a Security 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 merger or reorganization, to
reflect the acquisition of Securities or to reflect a sale or other disposition
of a Security. It may not be possible to maintain the exact original
proportionate relationship among the Securities deposited on the Initial Date of
Deposit because of, among other reasons, purchase requirements, changes in
prices, brokerage commissions or unavailability of Securities (see
"Administration of the Trust--Portfolio Supervision" in this Prospectus Part B).
Units may be continuously offered to the public by means of this Prospectus (see
"Public Offering Of Units--Public Offering Price" in this Prospectus Part B)
resulting in a potential increase in the number of Units outstanding. Deposits
of Additional Securities subsequent to the 90-day period following the Initial
Date of Deposit must replicate exactly the proportionate relationship among the
number of shares of each of the Securities comprising the Portfolio immediately
prior to such deposit of Additional Securities. 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.)
The Stocks have been selected for their capital appreciation potential in
light of the Sponsor's opinion, on the Initial Date of Deposit, that the issuers
of such Stocks may be attractive acquisition candidates pursuant to mergers,
acquisitions and tender offers. In general, tender offers involve a bid by an
issuer or other acquiror to acquire a stock pursuant to the terms of its offer.
Payment generally takes the form of cash, securities (typically bonds or notes),
or cash and securities. Pursuant to federal law a tender offer must remain open
for at least 20 days and withdrawal rights apply during the entire offering
period. Frequently offers are conditioned upon a specified number of shares
being tendered and upon the obtaining of financing. There may be other
conditions to the tender offer as well. Additionally, an offeror may only be
willing to accept a specified number of shares. In the event a greater number of
shares is tendered, the offeror must take up and pay for a pro rata portion of
the shares deposited by each depositor during the period the offer remains open.
Because the Stocks have been selected with a view to potential acquisition,
the Indenture sets forth criteria to be applied in the event of a tender offer,
merger or reorganization. The Trust is not managed and has been structured with
certain automatic provisions contained in the Indenture. The foregoing may
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interfere with the Trust's ability to maximize its objectives and, consequently,
a Unitholder's value. In such case, Unitholders shall have no rights against the
Trust, the Sponsor, the Trustee or any other party associated with the Trust.
The foregoing is not a disclaimer of responsibilities under Section 36 of the
Investment Company Act of 1940.
In the event the Trustee is notified of any vote to be taken or proposed to
be taken by holders of the Securities held by the Trust Fund in connection with
any proposed merger, reorganization, spin-off split-off or split-up by the
issuer of Securities held in the Trust Fund, the Trustee shall use its best
efforts to vote the Securities as closely as practicable in the same manner and
in the same general proportion as the Securities held by owners other than the
Trust Fund are voted. In the event that an offer shall be made by any person to
exchange stock or securities for any Securities (including but not limited to a
tender offer), the Trustee shall reject such offer.
If stock or other securities are received by the Trustee, with or without
cash, as a result of any merger, reorganization, tender offer, spin-off,
split-off, or split-up by the issuer of Securities held in the Trust Fund or in
exchange for Securities (including any stock or securities received
notwithstanding the Trustee's rejection of an offer or received without an
initial offer), the Trustee, at the direction of the Sponsor, may retain or sell
such stock or securities in the Trust Fund. Any stock or securities so retained
shall be subject to the terms and conditions of the Indenture to the same extent
as the Securities originally deposited hereunder. The Trustee shall give notice
to the Unitholders of the retention of stock or securities acquired in exchange
for Securities within five Business Days after such acquisition.
Additional shares of Securities received as a distribution on Securities
(other than shares received in a non-taxable distribution which shall be
retained by the Trust Fund) shall be sold and the proceeds credited to the
Income Account.
There is no guarantee that there will be a tender offer for any of the
Stocks, or merger or acquisition of any of the issuers whose stock is contained
in the Trust. In addition, it is possible that legislation or regulations
affecting merger and acquisition activity in the future may be passed and, if
passed, the Sponsor cannot predict the impact upon the Trust. There is also no
guarantee that the price received upon sale or pursuant to an acquisition will
be the best price which could be received by the Trust at any time. For example,
after stock is sold, the value may increase due to general market factors or due
to subsequent tender offers. Additionally, the price of a Stock may decline for
Stocks not taken up pursuant to a tender offer or in the event a merger or
acquisition is not completed.
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
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selected through this process. This may be the case even though the evaluation
of the attractiveness of such Securities may have changed and, if the evaluation
were performed again at that time, the Securities would not be selected for the
Trust. In addition, the Sponsor may continue to sell Trust Units even if
PaineWebber changes a recommendation relating to one or more Securities in the
Trust.
RISK FACTORS AND SPECIAL CONSIDERATIONS
An investment in Units of the Trust should be made with an understanding of
the risks inherent in an investment in common stocks in general. The general
risks are associated with the rights to receive payments from the issuer which
are generally inferior to creditors of, or holders of debt obligations or
preferred stocks issued by, the issuer. Holders of common stocks have a right to
receive dividends only when and if, and in the amounts, declared by the issuer's
board of directors and to participate in amounts available for distribution by
the issuer only after all other claims against the issuer have been paid or
provided for. By contrast, holders of preferred stocks have the right to receive
dividends at a fixed rate when and as declared by the issuer's board of
directors, normally on a cumulative basis, but do not participate in other
amounts available for distribution by the issuing corporation. Dividends on
cumulative preferred stock must be paid before any dividends are paid on common
stock. Preferred stocks are also entitled to rights on liquidation which are
senior to those of common stocks. For these reasons, preferred stocks generally
entail less risk than common stocks.
The Trust is not appropriate for investors who require high current income
or seek conservation of capital.
Common stocks do not represent an obligation of the issuer. Therefore they
do not offer any assurance of income or provide the degree of protection of debt
securities. The issuance of debt securities or even preferred stock by an issuer
will create prior claims for payment of principal, interest and dividends which
could adversely affect the ability and inclination of the issuer to declare or
pay dividends on its common stock or the rights of holders of common stock with
respect to assets of the issuer upon liquidation or bankruptcy. Unlike debt
securities which typically have a stated principal amount payable at maturity,
common stocks do not have a fixed principal amount or a maturity. Additionally,
the value of the Stocks in the Trust may be expected to fluctuate over the life
of the Trust.
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.
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Further, foreign issuers are not necessarily subject to uniform financial
reporting, auditing and accounting standards and practices which are applicable
to publicly traded domestic issuers.
In addition, the securities underlying the ADRs held in the Trust are
generally denominated, and pay dividends, in foreign currency. An investment in
securities denominated and principally traded in foreign currencies involves
investment risk substantially different than an investment in securities that
are denominated and principally traded in U.S. dollars. This is due to currency
exchange rate risk, because the U.S. dollar value of the shares underlying the
ADRs and of their dividends will vary with the fluctuations in the U.S. dollar
foreign exchange rates for the relevant currency in which the shares underlying
the ADRs are denominated. The Trust, however, will compute its income in United
States dollars, and to the extent any of the Stocks in the Trust pay income or
dividends in foreign currency, the Trust's computation of income will be made on
the date of its receipt by the Trust at the foreign exchange rate then in
effect. PaineWebber observes that, in the recent past, most foreign currencies
have fluctuated widely in value against the U.S. dollar for many reasons,
including the soundness of the world economy, supply and demand of the relevant
currency, and the strength of the relevant regional economy as compared to the
economies of the United States and other countries. Exchange rate fluctuations
are also dependent, in part, on a number of economic factors including economic
conditions within the relevant country, interest rate differentials between
currencies, the balance of imports and exports of goods and services, and the
transfer of income and capital from one country to another. These economic
factors in turn are influenced by a particular country's monetary and fiscal
policies, perceived political stability (particularly with respect to transfer
of capital) and investor psychology, especially that of institutional investors,
who make assessments of the future relative strength or weakness of a particular
currency. As a general rule, the currency of a country with a low rate of
inflation and a favorable balance of trade should increase in value relative to
the currency of a country with a high rate of inflation and deficits in the
balance of trade.
Investors should note that the creation of additional Units subsequent to
the Initial Date of Deposit may have an effect upon the value of previously
existing Units. To create additional Units the Sponsor may deposit cash (or cash
equivalents, e.g., a bank letter of credit in lieu of cash) with instructions to
purchase Additional Securities in amounts and in percentage relationships
described above under "The 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,
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<PAGE>
distributed to Unitholders of record on the last day of the month in which the
failure occurred. The distribution will be made fifteen 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.)
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.
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.
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).
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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.
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
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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 100 Units
which is a combination of the Initial and Deferred Sales Charges. The Initial
Sales Charge will be 1.00% of the Public Offering Price. In the first year,
assuming a purchase on the Initial Date of Deposit of 100 Units, the Initial
Sales Charge will be $10.00. Commencing in the eighth (8th) month of the Trust's
first year (October) and continuing through the the twelfth (12th) month of the
Trust's first year (February) and then commencing again in the eighth (8th)
month of the Trust's second year (October) and continuing through the twelfth
(12th) month of the Trust's second year (February), the Deferred Sales Charge
per 100 Units will be $12.50 per year, approximately 1.25% of the Public
Offering Price. Because the Deferred Sales Charge per 100 Units is $12.50 per
year for the first two years of the Trust, regardless of the price paid for
Units, the Total Sales Charges expressed as a percentage of the Public Offering
Price will vary with the price you pay to purchase Units. So, for example, if
you buy 100 Units for $1,000 (including the Initial Sales Charge of $10.00 and
hold the Units until the Trust terminates, you will pay a Total Sales Charge of
$35.00 or 3.50% of the acquisition price for such Units. If, however, you buy
100 Units for $950.00 (including the Initial Sales Charge of $9.50), you will
pay a Total Sales Charge of $34.50 or 3.63% of the acquisition price for such
Units. Conversely, if an investor bought 100 Units for $1,100 (including the
Initial Sales Charge of $11.00), such investor would pay a total of $36.00 or
3.30% 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 first (1st)
and second (2nd) full years of the three year term
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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 March 31, 2001, 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 March 31, 2001,
the remaining balance of the Deferred Sales Charges for the second year of the
Trust will be deducted.
The Deferred Sales Charge will be accrued on the books of the Trust and
will be paid to the Sponsor upon the Sponsor's request. The Trustee is directed
to sell Securities to make this payment. It is anticipated that the Securities
will not be sold to pay the Deferred Sales Charges until after the date of the
final installment in the first and second years of the Trust. Investors will be
at risk for market price fluctuations in the Securities from the several
installment accrual dates to the dates of actual sales of Securities to satisfy
this liability.
A discount in the sales charge is available to volume purchasers of Units
due to economies of scale in sales effort and sales related expenses relating to
volume purchases. The sales charge applicable to volume purchasers of Units is
reduced on a graduated scale as set forth below for sales made on a single day
to any person of at least $50,000 or 5,000 Units, applied on whichever basis is
more favorable to the purchaser.
SALES CHARGES ON THE INITIAL DATE OF DEPOSIT THROUGH FEBRUARY 6, 2002
<TABLE>
<CAPTION>
INITIAL SALES CHARGE TOTAL SALES CHARGE
---------------------------------- ----------------------------------
MAXIMUM DOLLAR
AMOUNT OF
DEFERRED SALES
AGGREGATE DOLLAR AS % OF PUBLIC AS % OF NET AS % OF PUBLIC AS % OF NET CHARGE PER
VALUE OF UNITS* OFFERING PRICE AMOUNT INVESTED OFFERING PRICE AMOUNT INVESTED 100 UNITS
- ------------------------------- ---------------- ----------------- ---------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
Less than $50,000 ............ 1.00% 1.01% 3.50% 3.63% $ 25.00
$50,000 to $99,999 ........... .75 .76 3.25 3.36 $ 25.00
$100,000 to $249,999.......... .50 .50 3.00 3.09 $ 25.00
$250,000 to $499,999 ......... .25 .25 2.75 2.83 $ 25.00
$500,000 to $999,999.......... .00 .00 2.50 2.56 $ 25.00
$1,000,000 or more............ negotiable
</TABLE>
- ----------
* The Initial Sales Charge applicable to volume purchasers according to the
table above will be applied either on a dollar or Unit basis, depending upon
which basis provides a more favorable purchase price to the purchaser.
The volume discount on the Initial Sales Charge shown above will apply to
all purchases of Units on any one day by the same person in the amounts stated
herein, and for this purpose purchases of Units of this Trust will NOT be
aggregated with concurrent purchases of any other trust which may be offered by
the Sponsor. Units held in the name of the purchaser's spouse or in the name of
a purchaser's child under the age of 21 are deemed for the purposes hereof to be
registered in the name of the purchaser. The reduced Initial Sales Charges are
also applicable to a trustee or other fiduciary purchasing Units for a single
trust estate or single fiduciary account.
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No Initial Sales Charge will be imposed on Units of the Trust acquired by
Unitholders in connection with participation in the Reinvestment Plan (see
"Reinvestment Plan" in Part B of this Prospectus).
Employee Discount. Due to the realization of economies of scale in sales
effort and sales related expenses with respect to the purchase of Units by
employees of the Sponsor and its affiliates, the Sponsor intends to permit
employees of the Sponsor and its affiliates and certain of their relatives to
purchase units of the Trust at a reduced sales charge.
Exchange Option. Unitholders may elect to exchange any or all of their
Units of this Growth Stock Series of the PaineWebber Equity Trust for units of
one or more of any series of PaineWebber Municipal Bond Fund (the "PaineWebber
Series"); The Municipal Bond Trust (the "National Series"); The Municipal Bond
Trust, Multi-State Program (the "Multi-State Series"); The Municipal Bond Trust,
California Series (the "California Series"); The Corporate Bond Trust (the
"Corporate Series"); PaineWebber Pathfinder's Trust (the "Pathfinder's Trust");
the PaineWebber Federal Government Trust (the "Government Series"); The
Municipal Bond Trust, Insured Sales (the "Insured Series"); or the PaineWebber
Equity Trust (the "Equity Series") (collectively referred to as the "Exchange
Trusts"), at a Public Offering Price for the Units of the Exchange Trusts to be
acquired based on a reduced sales charge as discussed below. Unitholders of this
Trust are not eligible for the Exchange Option into any Exchange Trust
designated as a rollover series for the 30 day period prior to termination of
such Exchange Trust. The purpose of such reduced sales charge is to permit the
Sponsor to pass on the Unitholder who wishes to exchange Units the cost savings
resulting from such exchange of Units. The cost savings result from reductions
in time and expense related to advice, financial planning and operational
expenses required for the Exchange Option.
Each Exchange Trust has different investment objectives, therefore a
Unitholder should read the prospectus for the applicable exchange trust
carefully prior to exercising this option. Exchange Trusts having as their
objective the receipt of tax-exempt interest income would not be suitable for
tax-deferred investment plans such as Individual Retirement Accounts. A
Unitholder who purchased Units of this Growth Stock Series and paid the Initial
Sales Charge and any Deferred Sales Charges that, in total, was an amount less
than the per Unit, per 100 Unit or per 1,000 Unit sales charge of the series of
the Exchange Trusts for which such Unitholder desires to exchange into, will be
allowed to exercise the Exchange Option at the Unit Offering Price plus the
reduced sales charge, provided the Unitholder has held the Units for at least
five months. Any such Unitholder who has not held the Units to be exchanged for
the five-month period will be required to exchange them at the Unit Offering
Price plus a sales charge based on the greater of the reduced sales charge, or
an amount which, together with the initial sales charge paid in connection with
the acquisition of the Units being exchanged, equals the sales charge of the
series of the Exchange Trust for which such Unitholder desires to exchange into,
determined as of the date of the exchange. Owners of Units of this Growth Stock
Series electing to use the Exchange Option in connection with units of other
Exchange Trusts subject to a deferred sales charge ("Deferred Sales Charge
Units") will be permitted to acquire Deferred Sales Charge Units, at their
then-current net asset value, with no Initial Sales Charge imposed. Deferred
Sales Charge Units acquired through the Exchange Option will continue to be
subject to the deferred sales charge installments remaining on those Deferred
Sales Charge Units so acquired.
The Sponsor will permit exchanges at the reduced sales charge provided
there is either a primary market for Units or a secondary market maintained by
the Sponsor in both the Units of this Growth Stock Series and units of the
applicable Exchange Trust and there are units of the applicable Exchange Trust
available for sale. While the Sponsor has indicated that it intends to maintain
a market for the Units of the respective Trusts, there is no obligation on its
part to maintain such a market. Therefore, there is no
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<PAGE>
assurance that a market for Units will in fact exist on any given date at which
a Unitholder wishes to sell his Units of this series and thus there is no
assurance that the Exchange Option will be available to a Unitholder. Exchanges
will be effected in whole Units only. Any excess proceeds from Unitholders'
Units being surrendered will be returned. Unitholders will be permitted to
advance new money in order to complete an exchange to round up to the next
highest number of Units.
An exchange of units pursuant to the Exchange Option will normally
constitute a "taxable event" under the Code, i.e., a Unitholder will recognize a
tax gain or loss. Unitholders are advised to consult their own tax advisors as
to the tax consequences of exchanging units in their particular case.
The Sponsor reserves the right to modify, suspend or terminate this plan at
any time without further notice to Unitholders. In the event the Exchange Option
is not available to a Unitholder at the time he wishes to exercise it, the
Unitholder will be immediately notified and no action will be taken with respect
to his Units without further instruction from the Unitholder.
To exercise the Exchange Option, a Unitholder should notify the Sponsor of
his desire to exercise the Exchange Option and to use the proceeds from the sale
of his Units of this series to purchase units of one or more of the Exchange
Trusts. If units of the applicable outstanding series of the Exchange Trust are
at that time available for sale, and if such units may lawfully be sold in the
state in which the Unitholder is resident, the Unitholder may select the series
or group of series for which he desires his investment to be exchanged. The
Unitholder will be provided with a current prospectus or prospectuses relating
to each series in which he indicates interest.
The exchange transaction will operate in a manner essentially identical to
any secondary market transaction, i.e., Units will be repurchased at a price
based on the aggregate bid price per Unit of the securities in the portfolio of
the Trust. Units of the Exchange Trust, however, will be sold to the Unitholder
at a reduced sales charge as discussed above. Exchange transactions will be
effected only in whole units; thus, any proceeds not used to acquire whole units
will be paid to the selling Unitholder.
Conversion Option. Owners of units of any registered unit investment trust
sponsored by others which was initially offered at a maximum applicable sales
charge of at least 3.0% (a "Conversion Trust") may elect to apply the cash
proceeds of the sale or redemption of those units ("Conversion Trust Units")
directly to acquire available units of any Exchange Trust having an up-front
sales load at a reduced sales charge of $15 per Unit, per 100 Units in the case
of Exchange Trusts having a Unit price of approximately $10, or per 1,000 Units
in the case of Exchange Trusts having a Unit price of approximately $1, subject
to the terms and conditions applicable to the Exchange Option (except that no
secondary market is required for Conversion Trust Units). Owners of Conversion
Trust Units will be permitted to use the cash proceeds received from the sale or
redemption of those units to acquire units of this Growth Stock Series, or any
other Deferred Sales Charge Units, at their then-current net asset value, with
no Initial Sales Charge imposed. Deferred Sales Charge Units acquired through
the Conversion Option will continue to be subject to the deferred sales charge
installments remaining on those Deferred Sales Charge Units so acquired. To
exercise this option, the owner should notify his retail broker. He will be
given a prospectus for each series in which he indicates interest and for which
units are available. The dealer must sell or redeem the units of the Conversion
Trust. Any dealer other than PaineWebber must certify that the purchase of the
units of the Exchange Trust is being made pursuant to and is eligible for the
Conversion Option. The dealer will be entitled to two-thirds of the applicable
reduced sales charge. The Sponsor reserves the right to modify, suspend or
terminate the Conversion Option at any time with notice, including the right to
increase the reduced sales charge applicable to this option (but not in excess
of $5 more per Unit, per 100 Units or per 1,000 Units, as applicable than the
corresponding fee then being charged for the Exchange Option). For a description
of the tax consequences of a conversion reference is made to the Exchange Option
section herein.
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<PAGE>
Distribution of Units. The minimum purchase in the initial public offering
is $250. Only whole Units may be purchased.
The Sponsor is the sole underwriter of the Units. Sales may, however, be
made to dealers who are members of the National Association of Securities
Dealers, Inc. ("NASD") at prices which include a concession of $18 per 100 Units
in the first year, and $10 per 100 Units in the second year, of the Trust, (a
concession of 80% of the Total Sales Charge during the first and second years of
the Trust) subject to change from time to time. Volume incentives can be earned
as a marketing allowance by "Eligible Dealer Firms" who reach cumulative firm
sales or sales arrangement levels of a specified dollar amount of the
PaineWebber Equity Trust Growth Stock Series 25 sold in the primary market (the
"Incentive Period"), as set forth in the table below. Eligible Dealer Firms are
dealers that are providing marketing support for PaineWebber unit trusts in the
form of distributing or permitting the distribution of marketing materials and
other product information. Eligible Dealer Firms will not include firms that
solely provide clearing services to broker/dealer firms. For firms that meet the
necessary volume level, volume incentives may be given on all trades involving
Growth Stock Series 25 originated from client accounts only, during the
Incentive Period.
<TABLE>
<CAPTION>
TOTAL DOLLAR AMOUNT SOLD OVER
INCENTIVE PERIOD VOLUME INCENTIVE DURING THE INCENTIVE PERIOD
- --------------------------------- ---------------------------------------------------------
<S> <C>
$1,000,000 to $2,999,999......... Additional 2% on sales between $1,000,000 and $2,999,999
$3,000,000 to $4,999,999......... Additional 4% on sales between $3,000,000 and $4,999,999
$5,000,000 or more............... Additional 7% on sales above/over $5,000,000
</TABLE>
Only sales through the Sponsor qualify for volume incentives and for
meeting minimum requirements. The Sponsor reserves the right to modify or change
the volume incentive schedule at any time and make the determination as to which
firms qualify for the marketing allowance and the amount paid. 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.
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<PAGE>
A Unitholder who wishes to dispose of his Units should inquire of his bank
or broker as to current market prices in order to determine if over-the-counter
prices exist in excess of the redemption price and the repurchase price (see
"Redemption" in Part B of this Prospectus).
Sponsor's Profits. In addition to the applicable sales charge, the Sponsor
realizes a profit (or sustains a loss) in the amount of any difference between
the cost of the Stocks to the Sponsor and the price at which it deposits the
Stocks in the Trust in exchange for Units, which is the value of the Stocks,
determined by the Trustee as described under "Valuation" in Part B of this
Prospectus. The cost of Stock to the Sponsor includes the amount paid by the
Sponsor for brokerage commissions.
Cash, if any, received from Unitholders prior to the settlement date for
the purchase of Units or prior to the payment for Securities upon their delivery
may be used in the Sponsor's business subject to the limitations of Rule 15c3-3
under the Securities and Exchange Act of 1934 and may be of benefit to the
Sponsor.
In selling any Units in the initial public offering after the Initial Date
of Deposit, the Sponsor may realize profits or sustain losses resulting from
fluctuations in the net asset value of outstanding Units 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
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<PAGE>
tender to the Trustee for redemption no later than the close of business on the
second business day following such presentation and Unitholders will receive the
Redemption Value next determined after receipt by the Trustee of the redemption
request. Proceeds of a redemption will be paid to the Unitholder no later than
the seventh calendar day following the date of tender (or if the seventh
calendar day is not a business day on the first business day prior thereto).
With respect to cash redemptions, amounts representing income received
shall be withdrawn from the Income Account, and, to the extent such balance is
insufficient and for remaining amounts, from the Capital Account. The Trustee is
empowered, to the extent necessary, to sell Securities to meet redemptions. The
Trustee will sell Securities in such manner as is directed by the Sponsor. In
the event no such direction is given. Stocks will be sold pro rata, to the
extent possible, and if not possible, the Trustee may designate Securities to be
sold. (See "Administration of the Trust" in Part B of this Prospectus.) However,
with respect to redemption requests in excess of $500,000, the Sponsor may
determine in its sole discretion to direct the Trustee to redeem Units "in kind"
by distributing Stocks to the redeeming Unitholder. When Stocks are so
distributed, a proportionate amount of each Stock will be distributed, rounded
to avoid the distribution of fractional shares and using cash or checks where
rounding is not possible. The Sponsor may direct the Trustee to redeem Units "in
kind" even if it is then 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
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<PAGE>
by the Trustee as set forth below, (b) cash on hand in the Trust, including
dividends receivable on Stock trading ex-dividend and income accrued held but
not yet distributed (other than any cash held in any reserve account established
under the Indenture or cash held for the purchase of Contract Securities) and
(c) accounts receivable for Securities sold and any other assets of the Trust
not included in (a) and (b) above, and deducting therefrom the sum of (v) taxes
or other governmental charges against the Trust not previously deducted, (w)
accrued fees and expenses of the Trustee and the Sponsor (including legal and
auditing expenses), other Trust expenses and any accrued Deferred Sales Charge
installment not yet paid to the Sponsor (x) cash allocated for distributions to
Unitholders and amounts owed to the Sponsor in reimbursement of Initial
Organizational Costs and (y) accounts payable for Units tendered for redemption
and any other liabilities of the Trust Fund not included in (v), (w), (x) and
(y) above. The per Unit Trust Fund Evaluation is calculated by dividing the
result of such computation by the number of Units outstanding as of the date
thereof. Business days do not include Saturdays, Sundays, New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day and other days that the New
York Stock Exchange is closed.
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 NASDAQ
Stock Market, 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
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<PAGE>
to exceed $0.0035 per Unit per calendar year, may exceed the actual costs of
providing portfolio supervisory services for the Trust, but at no time will the
total amount it receives for portfolio supervisory services rendered to all
series of the PaineWebber Equity Trust in any calendar year exceed the aggregate
cost to it of supplying such services in such year.
For its services as Trustee and Evaluator, the Trustee will be paid in
monthly installments, annually $.0170 per Unit, based on the largest number of
Units outstanding during the previous month. In addition, the regular and
recurring expenses of the Trust are estimated to be $0.0067 which include, but
are not limited to certain mailing, printing, and audit expenses. Expenses in
excess of this estimate will be borne by the Trust. The Trustee could also
benefit to the extent that it may hold funds in non-interest bearing accounts
created by the Indenture.
The Sponsor's fee and Trustee's fee may be increased without approval of
the Unitholders by an amount not exceeding a proportionate increase in the
category entitled "All Services Less Rent" in the Consumer Price Index published
by the United States Department of Labor or, if the Price Index is no longer
published, a similar index as determined by the Trustee and Sponsor.
In addition to the above, the following charges are or may be incurred by
the Trust and paid from the Income Account, or, to the extent funds are not
available in such Account, from the Capital Account (see "Administration of the
Trust--Accounts" in Part B of this Prospectus): (1) fees for the Trustee for
extraordinary services; (2) expenses of the Trustee (including legal and
auditing expenses) and of counsel; (3) various governmental charges; (4)
expenses and costs of any action taken by the Trustee to protect the Trust and
the rights and interests of the Unitholders; (5) indemnification of the Trustee
for any loss, liabilities or expenses incurred by it in the administration of
the Trust without gross negligence, bad faith or wilful misconduct on its part;
(6) brokerage commissions and other expenses incurred in connection with the
purchase and sale of Securities; and (7) expenses incurred upon termination of
the Trust. In addition, to the extent then permitted by the Securities and
Exchange Commission, the Trust may incur expenses of maintaining registration or
qualification of the Trust or the Units under Federal or state securities laws
so long as the Sponsor is maintaining a secondary market (including, but not
limited to, legal, auditing and printing expenses).
The accounts of the Trust shall be audited not less than annually by
independent public accountants selected by the Sponsor. The expenses of the
audit shall be an expense of the Trust. So long as the Sponsor maintains a
secondary market, the Sponsor will bear any annual audit expense which exceeds
$.0050 per Unit. Unitholders covered by the audit during the year may receive a
copy of the audited financial statements upon request.
The fees and expenses set forth above are payable out of the Trust and when
unpaid will be secured by a lien on the Trust. Based upon the last dividend paid
prior to the Initial Date of Deposit, dividends on the Stocks are expected to be
sufficient to pay the entire amount of estimated expenses of the Trust. To the
extent that dividends paid with respect to the Stocks are not sufficient to meet
the expenses of the Trust, the Trustee is authorized to sell Securities to meet
the expenses of the Trust. Securities will be selected in the same manner as is
set forth under "Redemption" in Part B of this Prospectus.
RIGHTS OF UNITHOLDERS
Ownership of Units is evidenced by recordation on the books of the Trustee.
In order to avoid additional operating costs and for investor convenience,
certificates will not be issued.
DISTRIBUTIONS
The Trustee will distribute net dividends and interest, if any, from the
Income Account on the quarterly Distribution Dates to Unitholders of record on
the preceding Record Date. Distributions from
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<PAGE>
the Capital Account will be made on annual Distribution Dates to Unitholders of
record on the preceding Record Date. Distributions of less than $.0500 per Unit
need not be made from the Capital Account on any Distribution Date. See
"Essential Information Regarding the Trust" in Part A of this Prospectus.
Whenever required for regulatory or tax purposes, the Trustee will make special
distributions of any dividends or capital on special Distribution Dates to
Unitholders of record on special Record Dates declared by the Trustee.
If and to the extent that the Sponsor, on behalf of the Trust, receives a
favorable response to a no-action letter request which it intends to submit to
the Division of Investment Management of the SEC with respect to reinvesting
cash proceeds received by the Trust, the Trustee may reinvest such cash proceeds
in Additional Securities held in the Trust Fund at such time. Such reinvestment
shall be made so that each deposit of Additional Securities shall be made so as
to match as closely as practicable the percentage relationships of shares of
Stocks and such reinvestment shall be made in accordance with the parameters set
forth in the no-action letter response. If the Sponsor and the Trustee determine
that it shall be necessary to amend the Indenture to comply with the parameters
set forth in the no-action letter response, such documents may be amended
without the consent of Unitholders. There can be no assurance that the Sponsor
will receive a favorable no-action letter response.
Unitholders may elect to have their Income Account and Capital Account
distributions automatically reinvested into additional Units of the Trust at no
Initial Sales Charge. (See "Reinvestment Plan" in Part B of this Prospectus).
Upon termination of the Trust, each Unitholder of record on such date will
receive his pro rata share of the amounts realized upon disposition of the
Securities plus any other assets of the Trust, less expenses of the Trust. (See
"Termination of the Trust" in Part B of this Prospectus.)
REINVESTMENT PLAN
Income Account and Capital Account distributions on Units may be reinvested
by participating in the Trust's Reinvestment Plan (the "Reinvestment Plan"). 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.
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<PAGE>
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, if any, on Securities in the Trust. All other receipts
(i.e., return of principal and gains) are credited on its books to a Capital
Account. A record will be kept of qualifying dividends within the Income
Account. The pro rata share of the Income Account and the pro rata share of the
Capital Account represented by each Unit will be computed by the Trustee as set
forth under "Valuation" in Part B of this Prospectus.
The Trustee will deduct from the Income Account and, to the extent funds
are not sufficient therein, from the Capital Account, amounts necessary to pay
expenses incurred by the Trust. (See "Expenses and Charges.") In addition, the
Trustee may withdraw from the Income Account and the Capital Account such
amounts as may be necessary to cover redemption of Units by the Trustee. (See
"Redemption" in Part B of this Prospectus)
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 February 10, 2001 and February
10, 2002.
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:
B-19
<PAGE>
(1) upon the failure of the issuer to declare or pay anticipated
dividends or interest;
(2) upon the institution of a materially adverse action or proceeding
at law or in equity seeking to restrain or enjoin the declaration or
payment of dividends or interest on any such Securities or the existence of
any other materially adverse legal question or impediment affecting such
Securities or the declaration or payment of dividends or interest on the
same;
(3) upon the breach of covenant or warranty in any trust indenture or
other document relating to the issuer which might materially and adversely
affect either immediately or contingently the declaration or payment of
dividends on such Securities;
(4) upon the default in the payment of principal or par or stated value
of, premium, if any, or income on any other outstanding securities of the
issuer or the guarantor of such Securities which might materially and
adversely, either immediately or contingently, affect the declaration or
payment of dividends on the Securities;
(5) upon the decline in price or the occurrence of any materially
adverse credit factors, that in the opinion of the Sponsor, make the
retention of such Securities not in the best interest of the Unitholder;
(6) upon a decrease in the Sponsor's internal rating of the Security;
or
(7) 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 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.
B-20
<PAGE>
TERMINATION OF THE TRUST
The Indenture provides that the Trust will terminate on the Mandatory
Termination Date. If the value of the Trust as shown by any evaluation is less
than fifty per cent (50%) of the market value of the Stocks upon completion of
the deposit of Stocks, the Trustee may in its discretion, and will when so
directed by the Sponsor, terminate such Trust. The Trust may also be terminated
at any time by the written consent of 51% of the Unitholders or by the Trustee
upon the resignation or removal of the Sponsor if the Trustee determines
termination to be in the best interest of the Unitholders. In no event will the
Trust continue beyond the Mandatory Termination Date.
Unless advised to the contrary by the Sponsor, approximately 15 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
B-21
<PAGE>
800-356-2754, which is subject to supervision by the Massachusetts Commissioner
of Banks, the Federal Deposit Insurance Corporation and the Board of Governors
of the Federal Reserve System.
The Indenture provides that the Trustee will not be liable for any action
taken in good faith in reliance on properly executed documents or the
disposition of moneys, Securities or Certificates or in respect of any valuation
which it is required to make, except by reason of its own gross negligence, bad
faith or willful misconduct, nor will the Trustee be liable or responsible in
any way for depreciation or loss incurred by reason of the sale by the Trustee
of any Securities in the Trust. In the event of the failure of the Sponsor to
act, the Trustee may act and will not be liable for any such action taken by it
in good faith. The Trustee will not be personally liable for any taxes or other
governmental charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee or upon or in respect of the Trust which
the Trustee may be required to pay under any present or future law of the United
States of America or of any other taxing authority having jurisdiction. In
addition, the Indenture contains other customary provisions limiting the
liability of the Trustee. The Trustee will be indemnified and held harmless
against any loss or liability accruing to it without gross negligence, bad faith
or willful misconduct on its part, arising out of or in connection with its
acceptance or administration of the Trust, including the costs and expenses
(including counsel fees) of defending itself against any claim of liability.
INDEPENDENT AUDITORS
The Statement of 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-22
<PAGE>
PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 25
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 25 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. 333-91103) 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, DC 20549-0102
CALL: 1-202-942-8090
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 MARCH 23, 2000
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following documents:
The facing sheet.
The Prospectus.
The Undertaking to file reports.
The signatures.
Written consents of the following persons:
Ernst & Young LLP
(included in Exhibit 99.C2)
Carter, Ledyard & Milburn
(included in Exhibits 99.2 and 99.C1)
The following exhibits:
Certain of the following exhibits, as indicated
parenthetically, were previously filed as exhibits to other reports or
registration statements filed by PaineWebber Incorporated under the Securities
Act of 1933 or the Securities Exchange Act of 1934, respectively, and are
incorporated herein by reference to such reports.
1. Ex.-99.A1 - Standard Terms and Conditions of
Trust dated as of July 1, 1998 between
PaineWebber Incorporated, Depositor and
Investors Bank & Trust Company, as Trustee
(incorporated by reference to Exhibit 2 in
File No. 333-55697 and filed on July 29,
1998).
2. Ex.-99.A2 - Copy of Trust Indenture and
Agreement between PaineWebber Incorporated,
Depositor, and Investors Bank & Trust
Company, as Trustee (incorporating by
reference Standard Terms and Conditions of
Trust dated as of July 1, 1998 and filed on
July 29, 1998).
3. Ex.-99.A5 - Form of Certificate of Ownership
(included in Standard Terms and Conditions of
Trust referenced above).
4. Ex. -99.A6 - Restated Certificate of
Incorpoaration of PaineWebber Incorporated,
dated June 11, 1991 (incorporated by
reference to Exhibit 1.7 to the Registration
Statement on Form S-6 for the Municipal
Investment Trust Fund, Monthly Payment Series
573 Defined Assets Funds (Reg. No.
333-08241), filed on July 7, 1996).
<PAGE>
5. Ex.-99.A6 - By-Laws of PaineWebber
Incorporated, as amended, dated June 10, 1991
(incorporated by reference to Exhibit 1.8 to
the Registration Statement on Form S-6 for
the Municipal Investment Trust Fund, Monthly
Payment Series 573 Defined Assets Funds (Reg.
No. 333-08241), filed on July 7, 1996).
6. Ex.-99.2 - Opinion of Counsel as to legality
of securities being registered and consent of
Counsel.
7. Ex.-99.C1 - Opinion of Counsel as to income
tax status of securities being registered.
8. Ex.-99.C2 - Consent of Ernst & Young LLP,
Independent Auditors.
<PAGE>
FINANCIAL STATEMENTS
1. Statement of Condition of the Trust as shown in the current Prospectus for
this series.
2. Financial Statements of the Depositor.
PaineWebber Incorporated - Financial Statements incorporated by reference to
Form 10-K and Form 10-Q (File No. 1-7367), respectively.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York, and State of New York, on the 23rd day of March , 2000.
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 25
(Registrant)
By: PaineWebber Incorporated
(Depositor)
/s/ Robert E. Holley
---------------------------------
Robert E. Holley
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed on behalf of PaineWebber
Incorporated the Depositor by the following persons who constitute a majority of
the Executive Committee of its Board of Directors in the following capacities
and in the City of New York, and State of New York, on this 23rd day of March,
2000.
PAINEWEBBER INCORPORATED
<TABLE>
<CAPTION>
Name Office
---- ------
<S> <C>
Donald B. Marron Chairman, Chief Executive
Officer, Director & Member of
the Executive Committee*
Regina A. Dolan Executive Vice President, Chief
Administrative Officer, Director & Member of
the Executive Committee*
Joseph J. Grano, Jr. President, Director & Member of
the Executive Committee*
Steve P. Baum Executive Vice President, Director & Member of
the Executive Committee*
Robert H. Silver Executive Vice President, Director & Member of
the Executive Committee*
Mark B. Sutton Executive Vice President, Director & Member of
the Executive Committee*
Margo N. Alexander Executive Vice President, Director & Member of
the Executive Committee*
Terry L. Atkinson Managing Director, Director of PaineWebber Incorporated*
Brian M. Barefoot Executive Vice President, Director of PaineWebber Incorporated*
Michael Culp Managing Director, Director of PaineWebber Incorporated*
Edward M. Kerschner Managing Director, Director of PaineWebber Incorporated*
James P. MacGilvray Executive Vice President, Director of PaineWebber Incorporated*
</TABLE>
By
/s/ Robert E. Holley
--------------------------------------
Robert E. Holley
Attorney-in-fact*
- --------------
* Executed copies of the powers of attorney have been filed with the
Securities and Exchange Commission in connection with Post Effective
Amendment No.19 to the Registration Statement File No. 2-61279.
<PAGE>
EXHIBIT INDEX
1. Ex.-99.A1 - Standard Terms and Conditions of Trust dated as of July 1,
1998 between PaineWebber Incorporated, Depositor and Investors Bank &
Trust Company, as Trustee (incorporated by reference to Exhibit 2 in
File No. 333-55697 and filed on July 29, 1998).
2. Ex.-99.A2 - Copy of Trust Indenture and Agreement between PaineWebber
Incorporated, Depositor, and Investors Bank & Trust Company, as Trustee
(incorporating by reference Standard Terms and Conditions of Trust
dated as of July 1, 1998 and filed on July 29, 1998).
3. Ex.-99.A5 - Form of Certificate of Ownership (included in Standard
Terms and Conditions of Trust referenced above).
4. Ex. -99.A6 - Restated Certificate of Incorpoaration of PaineWebber
Incorporated, dated June 11, 1991 (incorporated by reference to Exhibit
1.7 to the Registration Statement on Form S-6 for the Municipal
Investment Trust Fund, Monthly Payment Series 573 Defined Assets Funds
(Reg. No. 333-08241), filed on July 7, 1996).
5. Ex.-99.A6 - By-Laws of PaineWebber Incorporated, as amended, dated June
10, 1991 (incorporated by reference to Exhibit 1.8 to the Registration
Statement on Form S-6 for the Municipal Investment Trust Fund, Monthly
Payment Series 573 Defined Assets Funds (Reg. No. 333-08241), filed on
July 7, 1996).
6. Ex.-99.2 - Opinion of Counsel as to legality of securities being
registered and consent of Counsel.
7. Ex.-99.C1 - Opinion of Counsel as to income tax status of securities
being registered.
8. Ex.-99.C2 - Consent of Ernst & Young LLP, Independent Auditors.
<PAGE>
Exhibit 99.A2
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 25
TRUST INDENTURE AND AGREEMENT
Dated as of March 23, 2000
Incorporating
Standard Terms and Conditions of Trust
Dated as of July 1, 1998,
Between
PAINEWEBBER INCORPORATED,
as Depositor
and
INVESTORS BANK & TRUST COMPANY
as Trustee
<PAGE>
THIS TRUST INDENTURE AND AGREEMENT dated as of March 23, 2000
between PaineWebber Incorporated, as Depositor and Investors Bank & Trust
Company, as Trustee, which sets forth certain of its provisions in full and
incorporates other of its provisions by reference to a document entitled
"Standard Terms and Conditions of Trust" dated as of July 1, 1998, among the
parties hereto (hereinafter called the "Standard Terms"), such provisions as are
set forth in full and such provisions as are incorporated by reference
constituting a single instrument.
W I T N E S S E T H T H A T:
WHEREAS, the parties hereto have heretofore or concurrently
herewith entered into the Standard Terms in order to facilitate creation of a
series of securities issued under a unit investment trust pursuant to the
provisions of the Investment Company Act of 1940, as amended, and the laws of
the State of New York, each of which series will be composed of redeemable
securities representing undivided interests in a trust fund composed of publicly
traded common or preferred stocks issued by domestic or foreign companies, and,
in certain cases, interest-bearing United States Treasury Obligations ("Treasury
Obligations"); and
WHEREAS, the parties now desire to create the Twenty-fifth
Growth Stock Trust of the aforesaid series;
NOW THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the Depositor and the Trustee agree as
follows:
Section 1. Incorporation of Standard Terms and Conditions of
Trust. Subject to the provisions of Section 2 of this Trust Indenture and
Agreement set forth below, all of the provisions of the Standard Terms are
incorporated by reference in their entirety and shall be deemed to be a part of
this instrument as fully to all intents and purposes as though said provisions
had been set forth in full in this instrument. Unless otherwise stated, section
references shall refer to sections in the Standard Terms.
Section 2. Specific Terms of this Series. The following terms
are hereby agreed to for this series of The PaineWebber Equity Trust, which
series shall be known and designated as "The PaineWebber Equity Trust, Growth
Stock Series 25".
A. (1) The aggregate number of Units outstanding on the date
hereof for this Series is 100,000.
(2) The initial fractional undivided interest represented
by each Unit of this series shall be 1/100,000th of the Trust Fund. A receipt
evidencing the ownership of this total number of Units outstanding on the date
hereof is being delivered by the Trustee to the Depositor.
(3) The Securities deposited into the Trust on the Initial
Date of Deposit are set forth on Schedule A hereto.
B. The term "Record Date" shall mean June 10, 2000 and
quarterly thereafter; provided, however, that with respect to a distribution
required by Section 2.02(b), the Record Date shall be the last business day of
the month during which the contract to purchase the Security fails.
Record Date shall also include such date or dates determined
by the Sponsor and the Trustee as necessary or desirable and in the best
interest of the Unitholders for federal or state tax purposes, or for other
purposes (hereinafter a "Special Record Date"), which date may replace a
regularly scheduled Record Date if such regularly scheduled Record Date is
within 30 days of a Special Record Date.
C. The term "Distribution Date" shall mean the 15th day
following each Record Date, commencing June 25, 2000 and quarterly thereafter
with respect to Income Account Distributions (the "Income Account Distribution
Dates") and shall mean June 25, 2000 and quarterly thereafter with respect to
Capital Account Distributions (the "Capital Account Distribution Dates"), except
that the Trustee may declare a Record Date of December 31 in any year for a
Distribution Date of January 25 of the following year, if required for
compliance with the rules and regulations governing regulated investment
companies. With respect to a distribution required by Section 2.02(b), the
Distribution Date shall be the fifteenth (15) day after the Record Date with
respect thereto.
In the event a Special Record Date is declared, "Distribution
Date" shall also include such date as is determined by the Sponsor and the
Trustee to be the Distribution Date in respect of such Special Record Date.
D. The Discretionary Liquidation Amount shall be fifty per
centum (50%) of the aggregate value of the Securities originally deposited on
the date hereof and subsequently deposited pursuant to any Supplemental
Indenture pursuant to Section 2.02.
E. The Mandatory Termination Date shall be April 30, 2003.
Unless advised to the contrary by the Sponsor, the date on which the Trustee
shall begin to sell equity Securities in accordance with Section 9.01 shall be
April 15, 2003.
F. The Trustee's annual compensation as referred to in Section
8.05 shall be $.0170 per Unit computed monthly based on the largest number of
Units outstanding during the preceding month.
G. The Sponsor's annual compensation pursuant to Section 7.02
shall be computed as $.0035 per Unit, based on the largest number of Units
outstanding in a calendar year.
H. The balance in the Capital Account below which no
distribution need be made, as referred to in Section 3.04, is $0.05 per Unit
outstanding.
I. The calendar year to be specified pursuant to Section 3.05
shall be calendar year 2000, so that the Trustee's first annual report will be
furnished to Unitholders within a reasonable period of time following calendar
year 2000.
J. The Trust hereby elects to qualify as a "grantor trust"
under the Internal Revenue Code of 1986, as amended. The taxable year for this
Trust shall end on December 31.
K. The Sponsor's Initial Costs are estimated to be $0.020 per
Unit.
L. The Trust hereby elects to make available a Reinvestment
Plan for this Series.
M. Units of this Trust shall not be held in certificated form.
N. The Trust may receive Supplemental Deposits and issue
Additional Units in accordance with Section 2.02(c).
O. The Units of this Trust shall be subject to a Deferred
Sales Charge in an amount, and that shall be paid in the manner, as set forth
below and in the Prospectus. Commencing in the eighth (8th) month of the Trust's
first year (October) and continuing through the twelfth (12th) month of the
Trust's first year (February) and then commencing again in the eighth (8th)
month of the Trust's second year (October) and continuing through the twelfth
(12th) month of the Trust's second year (February), the Deferred Sales Charge
per 100 Units shall be $12.50 per year for such two year period.
P. For purposes of this Trust, the In-Kind Distribution Amount
shall be $500,000, and the Sponsor shall direct whether an In-Kind Distribution
shall be made.
Q. The Trustee's address for notices under Section 10.06 is:
Hancock Towers
200 Clarendon Street
Boston, MA 02116
<PAGE>
IN WITNESS WHEREOF, PaineWebber Incorporated has caused this
Trust Indenture and Agreement to be executed by one of its Senior Vice
Presidents and its corporate seal to be hereto affixed and attested by one of
its Assistant Secretaries, and Investors Bank & Trust Company has caused this
Trust Indenture to be executed by one of its Authorized Signatories and its
corporate seals to be hereto affixed and attested by one of its Authorized
Signatories, all as of the date first above written.
PAINEWEBBER INCORPORATED
as Depositor and Sponsor
SEAL By
---------------------------------------
Senior Vice President
Attest:
- --------------------------
Secretary
<PAGE>
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this 23rd day of March, 2000 before me personally appeared
Robert E. Holley, to me known, who being by me duly sworn, said that he is a
Senior Vice President of PaineWebber Incorporated, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
-----------------------------
Notary Public
<PAGE>
SCHEDULE A TO TRUST INDENTURE
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 25
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, MARCH 23, 2000
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)(3)
-------------- ------ --------------
<S> <C> <C>
Agricultural Operations (1.97%)
Delta and Pine Land Company (Basic Industry--Chemicals) 990 $ 19,490.63
Airlines (5.87%)
Alaska Air Group, Inc.* (Transportation--Airlines) 670 19,388.19
America West Holdings Corporation* (Transportation--Airlines) 1,300 19,581.25
Atlantic Coast Airlines Holdings, Inc.* (Transportation--Airlines) 890 19,190.63
Beverages (3.92%)
Cott Corporation* (Consumer Products--Beverages) 3,250 19,398.60
Triarc Companies Inc.* (Consumer Products--Beverages) 960 19,380.00
Broadcast Services (2.00%)
Clear Channel Communications, Inc.* (Communications--
Broadcasting) 270 19,760.63
Computers--Hardware/Software (5.90%)
Gateway Inc.* (Technology--Hardware) 310 19,433.13
Legato Systems, Inc.* (Technology--Software) 520 19,597.50
Silicon Graphics, Inc.* (Technology--Hardware) 1,610 19,420.63
Consulting Services (1.94%)
Diamond Technology Partners Incorporated*
(Technology--Computer Services) 240 19,200.00
Consumer Products--Miscellaneous (1.97%)
The Clorox Company (Consumer Products--Household Products) 560 19,460.00
Cosmetics & Toiletries (1.95%)
The Gillette Company (Consumer Products--Household Products) 550 19,353.13
Electric (3.93%)
CMS Energy Corporation (Utilities) 1,030 19,441.25
Energy East Corporation (Utilities) 970 19,460.63
Financial Institutions/Banks (7.80%)
Bank One Corporation (Financial Services--Banks) 710 19,170.00
Countrywide Credit Industries, Inc. (Financial Services--Consumer
Finance) 670 19,430.00
Household International, Inc. (Financial Services--Consumer
Finance) 510 19,252.50
The Chase Manhattan Corporation (Financial Services--Banks) 210 19,320.00
Foods--Miscellaneous/Diversified (5.86%)
H.J. Heinz Company (Consumer Products--Foods) 580 19,321.25
Ralston-Ralston Purina Group+ (Consumer Products--Foods) 730 19,390.63
The Quaker Oats Company (Consumer Products--Foods) 370 19,332.50
Insurance--Multi-Line (7.87%)
Lincoln National Corporation (Financial Services--Insurance) 670 19,513.75
</TABLE>
<PAGE>
SCHEDULE A TO TRUST INDENTURE - Continued
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 25
SCHEDULE OF INVESTMENTS (CONTINUED)
AS OF INITIAL DATE OF DEPOSIT, MARCH 23, 2000
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)(3)
-------------- ------ --------------
<S> <C> <C>
Oxford Health Plans, Inc.* (Health Care--Health Maintenance
Organizations) 1,310 $ 19,486.25
The Allstate Corporation (Financial Services--Insurance) 910 19,508.13
The Chubb Corporation (Financial Services--Insurance) 350 19,446.88
Internet Software (1.95%)
Verio Inc.* (Technology--Internet Infrastructure) 350 19,337.50
Medical Information Systems (1.97%)
Healtheon/WebMD Corporation* (Health Care--Health
Maintenance Organizations) 610 19,481.88
Medical Products (3.93%)
Becton, Dickinson and Company (Health Care--Medical Devices) 630 19,490.63
C.R. Bard, Inc. (Health Care--Medical Devices) 480 19,440.00
Oil/Gas (9.86%)
Occidental Petroleum Corporation (Energy--International and
Domestic Oils) 1,040 19,435.00
Ocean Energy Inc.* (Energy--Exploration and Production) 1,550 19,375.00
Southwest Gas Corporation (Energy--Natural Gas) 990 19,428.75
Triton Energy Limited* (Energy--Exploration and Production) 550 19,525.00
Unocal Corporation (Energy--International and Domestic Oils) 710 19,746.88
Paint & Related Products (1.96%)
The Sherwin-Williams Company (Basic Industry--Chemicals) 910 19,451.25
Paper & Related Products (3.90%)
Potlatch Corporation (Basic Industry--Papers) 480 19,290.00
Temple-Inland Inc. (Basic Industry--Papers) 400 19,325.00
Pharmaceutical (3.95%)
Eli Lilly and Company (Health Care--Pharmaceuticals) 310 19,704.38
Schering-Plough Corporation (Health Care--Pharmaceuticals) 510 19,380.00
Photo Equipment & Supplies (1.98%)
Eastman Kodak Company (Technology--Electronic Imaging) 350 19,621.88
Pipelines (1.96%)
Equitable Resources, Inc. (Energy--Natural Gas) 480 19,440.00
Radio (1.94%)
Citadel Communications Corporation* (Communications--
Broadcasting) 460 19,205.00
Retail--Apparel/Shoe (1.96%)
Ross Stores, Inc. (Consumer Retailing--Softlines) 950 19,415.63
Retail--Major Department Store (1.96%)
J.C. Penney Company, Inc. (Consumer Retailing--Broadlines) 1,270 19,367.50
</TABLE>
<PAGE>
SCHEDULE A TO TRUST INDENTURE - Continued
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 25
SCHEDULE OF INVESTMENTS (CONTINUED)
AS OF INITIAL DATE OF DEPOSIT, MARCH 23, 2000
COMMON STOCKS (1)
<TABLE>
<CAPTION>
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)(3)
-------------- ------ --------------
<S> <C> <C>
Retail--Video Rental (1.96%)
Blockbuster Inc. (Consumer Retailing--Specialty) 1,850 $ 19,425.00
Retirement/Aged Care (1.96%)
Sunrise Assisted Living, Inc.* (Health Care--Health Care
Services/Facilities) 1,530 19,411.88
Satellite Broadcasting (1.95%)
Pegasus Communications Corporation* (Communications--Cable
and Satellite) 150 19,312.50
Telecommunications (5.83%)
Qwest Communications International Inc.* (Communications--
Telecommunication Services) 410 19,475.00
VoiceStream Wireless Corporation* (Communications--Wireless
Services) 140 18,996.25
WinStar Communications, Inc.* (Technology--Internet
Infrastructure) 340 19,210.00
------------
TOTAL INVESTMENTS $ 990,020.00
============
</TABLE>
- ----------
(1) All stocks are represented entirely by contracts to purchase such stocks.
(2) Valuation of the stocks by the Trustee was made as described in "Valuation"
in Part B of this Prospectus as of the close of business on the business
day prior to the Initial Date of Deposit.
(3) There was no gain or loss to the Sponsor on the Initial Date of Deposit.
* Non-income producing security.
+ On March 16, 2000 Ralston-Ralston Purina Group announced that it will spin
off Energizer Holdings Inc. All shares of Energizer Holdings Inc. received
by the Trust will be sold, and a Special Distribution will be made on April
20, 2000 to holders of record on April 6, 2000.
PLEASE NOTE THAT IF THIS PROSPECTUS IS USED AS A PRELIMINARY PROSPECTUS
FOR A FUTURE TRUST IN THIS SERIES, THE PORTFOLIO WILL CONTAIN
DIFFERENT STOCKS FROM THOSE DESCRIBED ABOVE.
<PAGE>
Exhibit 99.2
PaineWebber Inc.
1200 Harbor Boulevard
Weehawken, New Jersey 07087 March 23, 2000
Investors Bank & Trust Company
Hancock Towers
200 Clarendon Street
Boston, Massachusetts 02116
Re: PaineWebber Equity Trust,
Growth Stock Series 25
Ladies and Gentlemen:
We have served as counsel for PaineWebber Incorporated as
sponsor and depositor (the "Sponsor") of PaineWebber Equity Trust, Growth Stock
Series 25 (hereinafter referred to as the "Trust") in connection with the
issuance by the Trust of an initial 100,000 units of fractional undivided
interest in the Trust (hereinafter referred to as the "Units").
In this regard, we have examined executed originals or copies
of the following:
(a) The Restated Certificate of Incorporation, as
amended, and the By-Laws of the Sponsor, as amended, certified
by the Secretary of the Sponsor on the date hereof;
<PAGE>
(b) Resolutions of the Board of Directors of the
Sponsor adopted on December 3, 1971 relating to the Trust and
the sale of the Units, certified by the Secretary of the
Sponsor on the date hereof;
(c) Resolutions of the Executive Committee of the
Sponsor adopted on September 24, 1984, certified by the
Secretary of the Sponsor on the date hereof;
(d) Powers of Attorney as set forth in the
certificate of the Secretary of the Sponsor dated the date
hereof;
(e) The Registration Statement on Form S-6 (File No.
333-91103) filed with the Securities and Exchange Commission
(the "Commission") in accordance with the Securities Act of
1933, as amended, and the rules and regulations of the
Commission promulgated thereunder (collectively, the "1933
Act") and amendments thereto including Amendment No. 2
("Amendment No. 2") proposed to be filed on March 23, 2000
(the "Registration Statement");
(f) The Notification of Registration of the Trust
filed with the Commission under the Investment Company Act of
1940, as amended (collectively, the "1940 Act") on Form N-8A,
as amended, (the "1940 Act Notification");
(g) The registration of the Trust filed with the
Commission under the 1940 Act on Form N-8B-2 (File No.
811-3722), as amended (the "1940 Act Registration);
(h) The prospectus included in Amendment No. 2 (the
"Prospectus");
(i) The Standard Terms and Conditions of the Trust
dated as of July 1, 1998, between the Sponsor and Investors
Bank & Trust Company, (the "Trustee") (the "Standard Terms");
(j) The Trust Indenture dated as of March 23, 2000
between the Sponsor and the Trustee (the "Trust Indenture"
and, collectively with the Standard Terms, the "Indenture and
Agreement");
(k) The Closing Memorandum dated March 23, 2000,
between the Sponsor and the Trustee (the "Closing
Memorandum");
(l) Officers Certificates required by the Closing
Memorandum; and
(m) Such other pertinent records and documents as we
have deemed necessary.
<PAGE>
With your permission, in such examination, we have assumed the
following: (a) the authenticity of original documents and the genuineness of all
signatures; (b) the conformity to the originals of all documents submitted to us
as copies; (c) the truth, accuracy, and completeness of the information,
representations, and warranties contained in the records, documents, instruments
and certificates we have reviewed; (d) except as specifically covered in the
opinions set forth below, the due authorization, execution, and delivery on
behalf of the respective parties thereto of documents referred to herein and the
legal, valid, and binding effect thereof on such parties; and (e) the absence of
any evidence extrinsic to the provisions of the written agreement(s) between the
parties that the parties intended a meaning contrary to that expressed by those
provisions. However, we have not examined the securities deposited pursuant to
the Indenture and Agreement (the "Securities") nor the contracts for the
Securities.
We express no opinion as to matters of law in jurisdictions
other than the laws of the State of New York (except "Blue Sky" laws) and the
federal laws of the United States, except to the extent necessary to render the
opinion as to the Sponsor and the Indenture and Agreement in paragraphs (i) and
(iii) below with respect to Delaware law. As you know we are not licensed to
practice law in the State of Delaware, and our opinion in paragraph (i) and
(iii) as to Delaware law is based solely on review of the official statutes of
the State of Delaware.
Based upon such examination, and having regard for legal
considerations which we deem relevant, we are of the opinion that:
(i) The Sponsor is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware with full
corporate power to conduct its business as described in the Prospectus;
(ii) The Sponsor is duly qualified as a foreign corporation
and is in good standing as such within the State of New York;
(iii) The Indenture and Agreement has been duly authorized,
executed and delivered by the Sponsor and, assuming the due authorization,
execution and delivery by the Trustee, is a valid and binding agreement of the
Sponsor, enforceable against the Sponsor in accordance with its terms;
(iv) The Trust has been duly formed and is validly existing as
an investment trust under the laws of the State of New York and has been duly
registered under the Investment Company Act of 1940;
(v) The terms and provisions of the Units conform in all
material respects to the description thereof contained in the Prospectus;
(vi) The consummation of the transactions contemplated under
the Indenture and Agreement and the fulfillment of the terms thereof will not be
in violation of the Sponsor's Restated
<PAGE>
Certificate of Incorporation, as amended, or By-Laws, as amended and will not
conflict with any applicable laws or regulations applicable to the Sponsor in
effect on the date hereof;
(vii) The Units to be issued by the Trust, and recorded on its
registration books in accordance with the Indenture and Agreement against
payment therefor, as described in the Registration Statement and Prospectus will
constitute fractional undivided interests in the Trust enforceable against the
Trust in accordance with their terms, will be entitled to the benefits of the
Indenture and Agreement and will be fully paid and non-assessable; and
(viii) While the Registration Statement has not yet become
effective we have no reason to believe that such Registration Statement will not
become effective within 30 days after the date hereof.
In addition, we have participated in conferences with
representatives of the Sponsor, the Trustee, the Trust's accountants and others
concerning the Registration Statement and the Prospectus and have considered the
matters required to be stated therein and the statements contained therein,
although we have not independently verified the accuracy, completeness or
fairness of such statements. Based upon and subject to the foregoing, nothing
has come to our attention to cause us to believe that the Registration
Statement, as of the date hereof, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or that the Prospectus, as of the date
hereof, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that we have not been requested to and do
not make any comment in this paragraph with respect to the financial statements,
schedules and other financial and statistical information contained in the
Registration Statement or the Prospectus).
Our opinion that any document is valid, binding, or
enforceable in accordance with its terms is qualified as to:
(a) limitations imposed by bankruptcy, insolvency,
reorganization, arrangement, fraudulent conveyance, moratorium, or other laws
relating to or affecting the enforcement of creditors' rights generally;
(b) rights to indemnification and contribution which may be
limited by applicable law or equitable principles; and
(c) general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the use of our name wherever it appears in
the Registration Statement and the Prospectus.
Very truly yours,
CARTER, LEDYARD & MILBURN
KHM:cd
<PAGE>
Exhibit 99.C1
PaineWebber Incorporated
1200 Harbor Boulevard March 23, 2000
Weehawken, New Jersey 07087
Investors Bank & Trust Company
Hancock Towers
200 Clarendon Street
Boston, Massachusetts 02116
Ladies & Gentlemen:
As counsel for PaineWebber Incorporated (the "Depositor"), we
have examined an executed copy of the Trust Indenture and Agreement dated as of
March 23, 2000 (the "Indenture") and Standard Terms and Conditions of Trust,
dated as of July 1, 1998 (the "Agreement"), both between the Depositor, and
Investors Bank & Trust Company, as Trustee. The Indenture established a trust
called The PaineWebber Equity Trust, Growth Stock Series 25 (the "Trust") into
which the Depositor deposited certain stocks (the "Securities"), and moneys to
be held by the Trustee upon the terms and conditions set forth in the Indenture
and Agreement. Under the Indenture, units were issued on the Initial Date of
Deposit representing 100,000 units of fractional undivided interest in the Trust
(the "Units").
Based upon the foregoing and upon an examination of such other
documents and an investigation of such other pertinent records and documents and
matters of law as we have deemed necessary, we are of the opinion that, under
existing statutes and decisions:
<PAGE>
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.
2. Each Unitholder will have a taxable event when the Trust
disposes of a Security (whether by sale, exchange or payment at maturity) or
when the Unitholder redeems or sells its Unit or redeems its Unit for cash. For
purposes of determining gain or loss, 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
Unitholder's 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.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement (File No. 333-91103) relating to the Units
referred to above and to the use of our name and to the reference to our firm in
said Registration Statement and in the related Prospectus.
Very truly yours,
CARTER, LEDYARD & MILBURN
KHM:cd
<PAGE>
Exhibit 99.C2
CONSENT OF INDEPENDENT AUDITORS
We consent to the use in this Amendment to the Registration Statement of our
report dated March 23, 2000 relating to the Statement of Net Assets of The
PaineWebber Equity Trust, Growth Stock Series 25, including the Schedule of
Investments, included herein, and to the reference made to us under the caption
"Independent Auditors" in the Prospectus.
ERNST & YOUNG LLP
March 23, 2000
New York, New York
