Exhibit 3
THE PAINEWEBBER EQUITY TRUST,
GROWTH STOCK SERIES 20
TRUST INDENTURE AND AGREEMENT
Dated as of September 4, 1997
Incorporating
Standard Terms and Conditions of Trust
Dated as of July 10, 1990,
Between
PAINEWEBBER INCORPORATED,
as Depositor
and
INVESTORS BANK & TRUST COMPANY
and
THE FIRST NATIONAL BANK OF CHICAGO
as Co-Trustees
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THIS TRUST INDENTURE AND AGREEMENT dated as of September 4, 1997
between PaineWebber Incorporated, as Depositor and Investors Bank & Trust
Company and The First National Bank of Chicago, as Co-Trustees, which sets
forth certain of its provisions in full and incorporates other of its
provisions by reference to a document entitled "Standard Terms and Conditions
of Trust" dated as of July 10, 1990, among the parties hereto (hereinafter
called the "Standard Terms"), such provisions as are set forth in full and such
provisions as are incorporated by reference constituting a single instrument.
W I T N E S S E T H T H A T :
WHEREAS, the parties hereto have heretofore or concurrently herewith
entered into the Standard Terms in order to facilitate creation of a series of
securities issued under a unit investment trust pursuant to the provisions of
the Investment Company Act of 1940 and the laws of the State of New York, each
of which series will be composed of redeemable securities representing
undivided interests in a trust fund composed of publicly traded common or
preferred stocks issued by domestic companies, and, in certain cases,
interest-bearing United States Treasury Obligations ("Treasury Obligations");
and
WHEREAS, the parties now desire to create the Twentieth Growth Stock
trust of the aforesaid series;
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the Depositor and the Trustee agree as follows:
Section 1. Incorporation of Standard Terms and Conditions of Trust.
Subject to the provisions of Sections 2, 3 and 4 of this Trust Indenture and
Agreement set forth below, all of the provisions of the Standard Terms
incorporated by reference in their entirety and shall be deemed to be a part of
this instrument as fully to all intents and purposes as though said provisions
had been set forth in full in this instrument. Unless otherwise stated, section
references shall refer to sections in the Standard Terms.
Section 2. Specific Terms of this Series. The following terms are
hereby agreed to for this series of The PaineWebber Equity Trust, which series
shall be known and designated as "The PaineWebber Equity Trust, Growth Stock
Series 20".
A. (1) The aggregate number of Units outstanding on the date hereof
for this Series is 100,000.
(2) The initial fractional undivided interest represented by each
Unit of this series shall be 1/100,000th of the Trust Fund. A receipt
evidencing the ownership of this total number of Units outstanding on the date
hereof is being delivered by the Trustee to the Depositor.
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B. The term "Record Date" shall mean December 31, 1997 and
quarterly thereafter; provided, however, that with respect to a distribution
required by Section 2.02(b), the Record Date shall be the last business day of
the month during which the contract to purchase the Security fails.
Record Date shall also include such date or dates determined by the
Sponsor and the Trustee as necessary or desirable and in the best interest of
the Unitholders for federal or state tax purposes, or for other purposes
(hereinafter a "Special Record Date") which date may replace a regularly
scheduled Record Date if such regularly scheduled Record Date is within 30 days
of a Special Record Date.
C. The term "Distribution Date" shall mean the 20th day following
each Record Date, commencing January 20, 1998, and quarterly thereafter with
respect to Income Account Distributions and shall mean January 20, 1998 and
annually thereafter with respect to Capital Account Distributions, except that
the Trustee may declare a Record Date of December 31 in any year for a
Distribution Date of January 20 of the following year, if required for
compliance with the rules and regulations governing regulated investment
companies. With respect to a distribution required by Section 2.02(b), the
Distribution Date shall be twenty days after the Record Date with respect
thereto.
In the event a Special Record Date is declared, Distribution Date
shall also include such Date as is determined by the Sponsor and the Trustee to
be the Distribution Date in respect of such Special Record Date.
D. The Discretionary Liquidation Amount shall be fifty per centum
(50%) of the aggregate value of the Securities originally deposited on the date
hereof and subsequently deposited pursuant to any Supplemental Indenture
pursuant to Section 2.02.
E. The Mandatory Termination Date shall be September 30, 2002. Unless
advised to the contrary by the Sponsor, the date on which the Trustee shall
begin to sell equity Securities in accordance with Section 9.01 shall be
September 10, 2002.
F. The Trustee's annual compensation as referred to in Section 8.05
shall be $.0170 per Unit computed monthly based on the largest number of Units
outstanding during the preceding month.
G. The Sponsor's annual compensation pursuant to Section 7.02 shall be
computed as $.0035 per Unit, based on the largest number of Units outstanding
in a calendar year.
H. The balance in the Capital Account below which no distribution need
be made, as referred to in Section 3.04, is $.05 per Unit Outstanding.
I. Article I shall be amended as follows:
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1. The definition of "Securities" shall be deleted in its entirety and
the following text shall be inserted in replacement thereof:
"Shall mean the Securities, including Contract Securities, (a) which
are listed or referred to as Securities in Schedule A to the Trust
Indenture or any Supplemental Indenture, (b) which have been received
by the Trust in exchange or substitution pursuant to Section 3.07
hereof as may from time to time continue to be held as part of a Trust
and (c) which are additional deposits of Securities made pursuant to
Section 2.02, 3.02 and 3.15."
2. The definition of "Supplemental Indenture" shall be deleted in its
entirety and the following text shall be inserted in replacement thereof:
"Shall mean a written direction from the Sponsor to the Trustee
instructing the Trustee to create additional Units pursuant to and in
accordance with 2.02(c) hereof".
3. The definition of "Percentage Ratios" shall be deleted in its
entirety and the following text shall be inserted in replacement thereof:
"Shall have the meaning assigned to it in Section 2.02."
J. Section 2.02 shall be deleted in its entirety and the following
text shall be inserted in its place:
"Section 2.02. Deposit of Securities. (a) The Sponsor concurrently
with the execution and delivery hereof, hereby grants and conveys all
of its right, title and interest in and to and hereby conveys to and
deposits with the Trustee in an irrevocable Trust, the Securities
(together with accrued and unpaid income thereon) and Contract
Securities, listed in Schedule A to the Indenture, duly endorsed in
blank or accompanied by all necessary instruments of assignment and
transfer in proper form, to be held, managed and applied by the
Trustee as herein provided for the benefit of each Unitholder to the
extent of such Unitholder's interest in the Trust Fund. The Sponsor
hereby also delivers to the Trustee a certified check or checks, cash
or cash equivalents or an irrevocable letter or letters of credit
issued by a commercial bank or banks in an amount necessary to
consummate the purchase of any Contract Securities. The Percentage
Ratios for the Trust Fund shall be the percentage ratios between the
number of shares of each issue of stock and the face amount of the
Treasury Obligations in such Trust
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deposited in such Trust Fund on the initial date of deposit thereof
(the "Initial Date of Deposit") and determined by reference to
Schedule A to the Indenture for such Trust Fund. Such Percentage
Ratios are subject to adjustment to reflect the occurrence of (i) a
stock split or a similar event which affects the capital structure of
the issuer of a stock but which does not affect the Trust's percentage
ownership of the common stock equity of such issuer at the time of
such event, (ii) a merger or reorganization, (iii) sale of any
Securities from the Trust portfolio, or (iv) Securities deposited
pursuant to Section 2.02(b). Stock dividends received by the Trust,
if any, pursuant to Section 3.07(d) will be sold by the Trustee and
the proceeds therefrom shall be treated as income to the Trust.
(b) In the event that the purchase of Contract Securities pursuant to
any contract shall not be consummated in accordance with said
contracts, moneys held for the purchase of such Contract Securities
shall be credited to the Capital Account and the Trustee, as directed
by the Sponsor, shall either (1) use the cash held or available under
a letter or letters of credit to purchase other stock or stocks having
characteristics sufficiently similar to the stocks originally
deposited or (2) distribute such moneys pursuant to Section 3.04 to
Unitholders of record as of the Record Date next following the failure
of consummation of such purchase. The Sponsor shall cause to be
refunded to each Unitholder his pro rata portion of the sales charge
levied on the sale of Units to such Unitholder attributable to such
Contract Security.
(c) From time to time, following the Initial Date of Deposit, the
Sponsor is hereby authorized, in its discretion to cause the Trustee
to issue additional Units pursuant to a Supplemental Indenture
directing such additional Units to be created based upon the
following:
(1) the deposit of additional Securities in respect of such
additional Units and/or contracts for the purchase of such
additional Securities; and/or
(2) the deposit of cash in an amount to purchase such additional
Securities based upon the price of such additional Securities at
the Valuation Time on such date of deposit.
To accomplish the issuance of additional Units by means of a deposit
of additional Securities, the Sponsor is authorized to assign, convey
to and deposit with the Trustee (i) additional Securities, duly
endorsed in blank or accompanied by all necessary instruments of
assignment, and/or (ii) contracts for the purchase of such additional
Securities, and the Sponsor shall transfer and deliver such necessary
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instruments of assignment and/or contracts for the purchase of such
additional Securities to the Trustee along with a certified check or
checks, cash, cash equivalents or an irrevocable letter or letters of
credit issued by a commercial bank in an amount necessary to
consummate the purchase of any such additional Securities represented
by contracts for the purchase of additional Securities.
To accomplish the issuance of additional Units by means of depositing
sufficient cash amounts with the Trustee to enable the Trustee to
purchase and deposit the additional Securities, the Sponsor is hereby
authorized to, and shall, instruct the Trustee to create a specified
number of additional Units whereupon the Trustee shall purchase and
deposit the additional Securities in respect thereof.
Brokerage commissions with respect to the Trustee's purchase of
additional Securities, if any, shall be an expense borne by the Trust.
In all cases of creating additional Units, the Sponsor shall also pay
to the Trustee for deposit into the Income Account an amount equal to
the Cash Component per Unit (as defined below), multiplied by the
number of new Units created in respect of the additional Securities
deposited into the Trust Fund pursuant to this Section 2.02(c). For
purposes of this paragraph, Cash Component means cash on hand in the
Trust Fund (excluding cash held for the purchase of Contract
Securities) and/or cash receivable by the Trust as of the date of the
deposit of additional Securities, reduced by payables and accrued
expenses and amounts allocated for redemption of Units or for
distribution to holders of record as of a preceding Record Date. Such
purchase and deposit of additional Securities shall be made, in each
case, pursuant to a Supplemental Indenture. The Sponsor, if depositing
additional Securities with the Trustee pursuant to this Section
2.02(c), and the Trustee, if purchasing additional Securities with
amounts provided to it by the Sponsor pursuant to this Section
2.02(c), in each case shall ensure that each deposit of additional
Securities pursuant to this Section shall be made so as to maintain as
closely as practicable the Percentage Ratios for such Securities
determined by reference to Schedule A of the Trust Indenture for each
Trust Fund and subject to adjustment as provided herein.
The Securities deposited pursuant to this Section 2.02 are comprised
of (1) the Securities set forth in Schedule A of the Trust Indenture,
(2) any additional deposits of Securities made in connection with the
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reinvestment of cash proceeds in accordance with Section 3.02 and
pursuant to the provisions of Section 3.15, (3) any Treasury
Securities which may be deposited as temporary reinvestment for sale
proceeds pursuant to Section 3.02, and (4) additional deposits of
Securities pursuant to Section 2.02(b) and this Section 2.02(c). Such
additional Securities shall be held, managed and applied by the
Trustee as herein provided and as provided in the applicable Trust
Indenture.
(d) The Trustee is hereby irrevocably authorized to effect
registration or transfer of the Securities in fully registered form to
the name of the Trustee or to the name of its nominee or the nominee
of its agent."
K. Section 3.01 shall be deleted in its entirety and the following
text shall be inserted in its place:
"Section 3.01. Certain Moneys to Be Credited to Income Account. The
Trustee shall collect the Income on the Securities as it becomes
payable and credit all income to a separate non-interest bearing
account to be known as the "Income Account", on the date on which the
Trust Fund receives such Income, or on the date it accrues with
respect to Securities issued at an original issue discount (including
all moneys realized by the Trustee from the sale of options, warrants
or other similar rights received in respect of the Securities and
including any stock dividends sold pursuant to Section 3.07)."
L. The text of Section 3.02 shall be deleted and the following text
shall be inserted in its place:
"Section 3.02. Certain Moneys to Be Credited to Capital Account. All
moneys other than amounts credited to the Income Account received by
the Trustee in respect of the Securities under this Indenture shall be
credited to a separate non-interest bearing account to be known as the
"Capital Account". If Securities in a Trust are to be sold pursuant to
Section 3.06 or 3.07, the proceeds of such sale, or moneys received as
a distribution of capital as the result of any corporate or other
business action of the issuer of a Security in the Trust, may be
reinvested, upon the instruction of the Sponsor, (x) in additional
Securities held at such time in the Trust Fund on a pro rata basis in
the manner set forth in, and to the extent permitted by, Section 3.15
or (y) if not so permitted by Section 3.15, if (1) at the time there
is no legal or regulatory impediment and (2) in the opinion of the
Sponsor it is in the best interests of the Unitholders to
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do so, in U.S. Treasury Obligations which mature on or prior to the
next scheduled Distribution Date (the "Short-Term Treasury
Obligations"). Any Short-Term Treasury Obligations purchased pursuant
to this Section 3.02 shall be deposited into the applicable Trust and
shall be subject to the terms of such Trust Indenture and Agreement to
the same extent as any Security deposited into such Trust on the
Initial Date of Deposit and the terms "Trust Fund" and "Securities"
shall thereafter be defined as including such Short-term Treasury
Obligations. Brokerage commissions with respect to the purchase of
such Securities or Short-Term Treasury Obligations, if any, shall be
an expense borne by the Trust. Anything in this Section 3.02 to the
contrary notwithstanding, moneys which are required to cover the
purchase of Contract Securities shall be held specially by the Trustee
for such purchase and shall not be deemed to be part of the Capital
Account until the Sponsor shall have notified the Trustee that such
contracts have failed, whereupon such moneys shall be credited to the
Capital Account and, unless reinvested pursuant to Section 2.02(b),
shall be held specially for distribution in the manner provided in
Section 2.02(b)."
M. The text of Section 3.04 shall be deleted and the following text
shall be inserted in its place:
"Section 3.04. Certain Deductions and Distributions. Each month the
Trustee shall satisfy itself as to the adequacy of the Reserve
Account, making any further credits thereto as may appear appropriate
in accordance with Section 3.03 and shall then:
(a) deduct from the Income Account or, to the extent such funds are
not available in such Account, from the Capital Account, or to the
extent such funds are not available in such Account, sell Securities
in accordance with Section 5.02, and pay to itself individually the
amounts that it is at the time entitled to receive pursuant to
Sections 8.01 and 8.05 on account of its services theretofore
performed and expenses, losses and liabilities theretofore incurred,
if any;
(b) deduct from the Income Account or, to the extent funds are not
available in such Account, from the Capital Account, and pay to itself
individually an amount equal to the portion of the advance for Initial
Costs specified in 10.02(b) for which it is then entitled to
reimbursement pursuant to such section;
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(c) deduct from the Income Account or, to the extent funds are not
available in such Account, from the Capital Account, and pay to the
Sponsor or successor Sponsor the amount that it is entitled to receive
pursuant to Sections 7.02 and 8.01(f); and
(d) to the extent that the Trustee has been advised that costs
incurred in keeping the registration of Units and the Trust on a
current basis are permitted to be deducted at that time by the
Securities and Exchange Commission, deduct from the Income Account, or
to the extent funds are not available in such Account, from the
Capital Account, an amount equal to the unpaid fees and expenses
incurred in keeping the registration statement current as provided in
Section 10.03.
Any amounts that the Trustee has paid pursuant to (c) above in excess
of the amount to which the Sponsor is entitled pursuant to Section
7.02, shall be returned to the Trust and distributed on the next
Distribution Date to Unitholders of record on the preceding Record
Date.
On each Distribution Date, or within a reasonable period of time
thereafter, the Trustee shall distribute by mail to each Unitholder of
record at the close of business on the preceding Record Date at his
address appearing on such Record Date on the registration books of the
Trustee or by such other means as may be mutually agreed upon by the
Trustee and the Unitholder, such Unitholder's pro rata share of the
balance of the Income and Capital Accounts, computed as of such Record
Date in the manner set forth below (the "Income Distribution")
provided, however that the Trustee, if so directed with respect to
distributions from the Income Account and the Capital Account in a
writing signed by the Sponsor on behalf of Unitholders electing the
Reinvestment Plan offered in the Prospectus and received by the
Trustee on or before the Record Date for the first distribution to
which such notice is to apply, use such distributions to purchase
Units from the Sponsor, which may be Units held by the Sponsor or
additional Units created pursuant to the provisions of Section 2.02,
for the accounts of such Unitholders under the terms and conditions
set forth in the Prospectus. Only whole Units shall be purchased
pursuant to this Section.
The Trustee shall on or before each Distribution Date compute the
amount of the distribution per Unit for such Distribution Date (i) by
deducting from the cash on hand in the Capital and Income
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Accounts as of the Record Date immediately preceding such Distribution
Date the total of (X) cash required for the redemption of unredeemed
tendered Units and (Y) the sum of the amounts to be deducted from such
Accounts on or before such Distribution Date pursuant to the foregoing
provisions of this Section 3.04 and (ii) dividing the amount so
obtained by the number of Units outstanding on the Record Date
immediately preceding such Distribution Date.
No distribution need be made from the Capital Account if the balance
therein is less than an amount set forth in the Indenture.
The amount to be so distributed to each Unitholder shall be that pro
rata share of the cash balance of the Income and Capital Accounts,
computed as set forth herein, as shall be represented by the number of
Units evidenced by the number of Units held of record by such
Unitholder. In making the computation of such holder's pro rata share
of the balance of the Income and Capital Accounts, fractions of less
than one cent shall be omitted.
In the event a Unitholder of a particular series of any Trust fund is
also a Unitholder of one or more other series of a trust for which the
Trustee is the trustee and for which the Sponsor is the sole
depositor, and such Unitholder has not elected to participate in the
Reinvestment Plan, then the Trustee shall consolidate in one check the
distribution required to be made to a Unitholder hereunder with all
other distributions required to be made on such Distribution Date to
such Unitholder pursuant to the indenture governing such other series;
provided that an appropriate statement of distribution be furnished
therewith as required by the applicable Trust Indenture."
N. The second paragraph of Section 3.05 shall be amended as follows:
the phrase "Within a reasonable period of time after the last day of
each calendar year. . ." shall be deleted and the following phrase
shall be substituted therefor: "Within 60 days following the last day
of each calendar year commencing with calendar year 1997.
O. The text of Section 3.06 shall be deleted in its entirety and the
following text shall be inserted in its place:
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"Section 3.06. Sale of Securities and of Certain Rights. The Sponsor
by written notice may direct the Trustee to sell, or tender for cash,
in the event of an event under subparagraph (g) below, Securities at
such price and time and in such manner as shall be deemed appropriate
by the Sponsor if the Sponsor shall have determined that any one or
more of the following conditions exist:
(a) that there has been a failure to declare or pay anticipated
dividends or interest;
(b) that any materially adverse action or proceeding has been
instituted at law or in equity seeking to restrain or enjoin the
declaration or payment of dividends or interest on any such Securities
or that there exists any other materially adverse legal question or
impediment affecting such Securities or the declaration or payment of
dividends or interest on the same;
(c) that there has occurred any breach of covenant or warranty in any
trust indenture or other document relating to the issuer or obligor or
guarantor which might materially and adversely affect either
immediately or contingently the declaration or payment of dividends or
interest on such Securities;
(d) that there has been a default in the payment of the principal or
par or stated value of, premium, if any, or income on any other
outstanding securities of the issuer or the guarantor of such
securities which might materially and adversely, either immediately or
contingently, affect the declaration or payment of dividends on the
Securities;
(e) that a decline in price has occurred or such materially adverse
market or credit factors have occurred, that in the opinion of the
Sponsor the retention of such Securities would not be in the best
interest of the Unitholders;
(f) that the sale of such Securities is desirable in order to maintain
the qualification of the Trust Fund as a "Regulated Investment
Company" in the case of a trust which has elected to qualify as such;
(g) that a public tender offer has been made for a Security, or a
merger or acquisition has been announced affecting a Security, that
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in the opinion of the Sponsor, the sale or tender of such Security is
in the best interests of the Unitholders;
(h) that there has been a decrease in the Sponsor's internal rating of
the Security; or
(i) that there has been a happening of events which, in the opinion of
the Sponsor, negatively affects the economic fundamentals of the
issuer of the Security or the industry of which it is a part.
Upon receipt of such direction from the Sponsor with respect to any
Securities, or in the case of options, warrants or other rights to
purchase securities distributed to the Trust in respect of Securities
as soon as is practicable after receipt of such options, warrants or
other rights, the Trustee shall proceed to sell the specified
Securities or any such rights. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by reason of
any sale made pursuant to any such direction or by reason of the
failure of the Sponsor to give any such direction, and in the absence
of such direction the Trustee shall have no duty to sell any
Securities under this Section 3.06 except to the extent otherwise
required by Section 3.10. The Sponsor shall not be liable for errors
of judgment in directing or failing to direct the Trustee pursuant to
this Section 3.06. This provision, however, shall not protect the
Trustee or Sponsor against any liability for which they would
otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of their obligations and duties
hereunder."
P. The text of Section 3.07 shall be deleted in its entirety and the
following text shall be inserted in its place:
"Section 3.07. Refunding Securities, Reorganizations and Similar
Events, Stock Dividends.
(a) In the event the Trustee is notified of any vote to be taken or
proposed to be taken by holders of the Securities held by the Trust
Fund in connection with any proposed merger, reorganization, spin-off,
split-off or split-up by the issuer of Securities held in the Trust
Fund, the Trustee shall take such action with respect thereto as the
Sponsor shall direct.
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(b) In the event that an offer shall be made by any person to exchange
stock or securities for any Securities (including but not limited to a
tender offer), the Trustee shall take such action with respect thereto
as the Sponsor shall direct.
(c) If, stock or securities are received by the Trustee, with or
without cash, as a result of any merger, reorganization, tender offer,
spin-off, split-off, or split-up by the issuer of Securities held in
the Trust Fund or in exchange for Securities (including any stock or
securities received notwithstanding the Trustee's rejection of an
offer or received without an initial offer), the Trustee at the
direction of the Sponsor may retain or sell such stock or securities
in the Trust Fund. Any stock or securities so retained shall be
subject to the terms and conditions of the Indenture to the same
extent as the Securities originally deposited hereunder. The Trustee
shall give notice to the Unitholders of the retention of stock or
securities acquired in exchange for Securities within five days after
such acquisition.
(d) Additional shares of Securities received as a distribution on
Securities (other than shares received in a non-taxable distribution
which shall be retained by the Trust Fund) shall be sold and the
proceeds credited to the Income Account."
Q. The first paragraph of Section 3.10 shall be amended by deleting
the first word of the paragraph, "In", and inserting the following text in its
place:
"Except as otherwise provided for in Section 3.07, in".
R. In the event that the Sponsor directs the Trustee to distribute
Securities in lieu of a cash redemption pursuant to Section 5.02 of the
Standard Terms, the Trustee shall so distribute the stocks and distribute only
stocks in a proportionate amount, rounding to avoid the delivery of fractional
shares and where such rounding is not possible by delivering stocks and an
amount equal to the difference between the Redemption Value and the value of
such stocks delivered (determined in accordance with Section 4.01 on the date
of tender).
S. The text of Section 3.13 shall be deleted and the following text
shall be inserted in its place:
"Section 3.13. Election to Qualify as Regulated Investment Company;
Diversification Tests. (a) The Trust intends to elect to be treated
and to qualify as a Regulated Investment Company as
29
defined in the Internal Revenue Code and the Trustee is directed to
make such elections, including any appropriate election to be taxed as
a corporation, as shall be necessary to effect such qualification.
(b) The Trustee shall furnish to independent certified public
accountants designated by the Sponsor pursuant to Section 8.01(e) the
value of the Securities in the Trust Fund as of (1) the Friday (or the
immediately preceding Business Day if such Friday is not a Business
Day) before the last Business Day of the first quarter of the Trust
Fund's first taxable year (2) the last Business Day of the first
quarter of the Trust Fund's first taxable year, and (3) the last
Business Day of any subsequent quarter during which any Securities are
acquired by the Trust Fund. For purposes of this Section 3.13 each
said day shall, except as the context may otherwise require, be
hereinafter referred to as the "Diversification Test Date".
On each Diversification Test Date upon written request from the
Trustee no later than five Business Days prior thereto, which date
shall be specified by the Trustee in such request, such accountants
shall send a written report, in form and substance satisfactory to the
Trustee and its counsel, to the Trustee and to the Sponsor stating
whether or not the aggregate value of all Securities (other than U.S.
Government Securities) of each issuer, Securities issued by which are
valued at greater than 5% of the total assets of the Trust Fund,
exceeds 50% of the value of the total assets of the Trust Fund on such
Diversification Test Date. In making the necessary computations, such
accountants shall compute the value of the Securities by taking the
value of the Securities in the Trust Fund, as so furnished by the
Trustee, including the amount of any accrued interest thereon, by
treating as Securities of the same issuer only those Securities whose
name so indicates; by treating contracts to purchase Securities as if
the Securities subject to such contracts had been acquired by the
Trust Fund; and by the settlement of contracts to purchase Securities
as the acquisition of Securities on their respective settlement dates.
In the event the foregoing certification by such accountants states
that the aggregate value of Securities (other than U.S. Government
Securities) of each issuer, Securities issued by which are valued at
more than 5% of the total assets of the Trust Fund, on the Friday (or
the immediately prior Business Day if such Friday is not a Business
Day) before the last Business Day in the first quarter of the first
taxable year of the Trust Fund exceeds 50% of the total assets of the
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Trust Fund on such date, as provided in Section 3.06, the Sponsor
shall direct the Trustee to sell all or any portion of the Securities
whose value is greater than 5% of total assets of the Trust Fund or
take such other action as is necessary so that the aggregate value of
Securities (other than U.S. Government Securities) of each issuer,
Securities issued by which have values greater than 5% of the total
assets of the Trust Fund, does not exceed 50% of the value of the
total assets of the Trust Fund on the last Business Day of the first
quarter of the first taxable year of the Trust Fund. On the last day
of the first quarter of the first taxable year of the Trust Fund the
Sponsor shall provide a certificate satisfactory in form and substance
to the Trustee and its counsel to the effect that the aggregate value
of all Securities (other than U.S. Government Securities) of each
issuer, Securities issued by which are valued at greater than 5% of
the total assets of the Trust Fund does not exceed 50% of the value of
the Fund's total assets on the last day of the quarter.
In order to ensure the continued qualification as a Regulated
Investment Company of a trust which has elected to so qualify, the
Trustee shall cause a review of the Trust to be performed by such
accountants prior to the end of the calendar year. The purpose of such
review shall be to determine whether the Trust is deriving at least
90% of its gross income from dividends, interest and gains from the
sale or other disposition of the Securities. The Trustee shall submit
the written results of such review to the Sponsor.
In the event that the foregoing audit states that less than 90% of the
gross income of the Trust is derived from dividends, interest and
gains from the sale or other disposition of the Securities, the
Sponsor shall direct the Trustee to sell certain of the Securities
pursuant to Section 3.06 in an amount deemed necessary by the Sponsor
to maintain the status of the Trust as a Regulated Investment
Company."
In performing the duties set forth in this Section 3.13, the Trustee
may seek the advice of the independent certified public accountants designated
by the Sponsor pursuant to Section 8.01 hereof and may rely upon the advice of
such accountants."
S. The Trustee will calculate the Trust's value, as provided in
Section 5.01 on the dates set forth in said Section 5.01 and additionally upon
termination (or the last business day prior thereto).
31
T. In the event that any issuer of a Security in the Trust issues a
stock dividend in lieu of a cash dividend, such dividend shall be sold by the
Trustee, and the proceeds thereof shall be Income, as defined in the Standard
Terms, and shall be deposited into the Income Account and distributed as of the
next succeeding Income Account Distribution Date.
U. All Units will be held in book-entry form, except that upon request
a Unitholder may receive a certificate representing beneficial ownership of its
Units.
V. Section 10.02 of the Standard Terms shall hereby be amended as
follows:
1. the text of Section 10.02 shall be deleted in its entirety and;
2. the following text set forth below shall be inserted in replacement
of such Section 10.02: "Section 10.02. Initial Costs (a) The
Initial Costs incurred by the Sponsor and the Trustee in connection
with the organization and establishment of the Trust (the "Initial
Costs") shall be paid by the Trust, or if paid for by the Trustee
initially, shall be reimbursed by the Trust to the Trustee in
accordance with Sections 3.04(b) and 8.05.
(b) Initial Costs to be charged to the Trust include, but are not
limited to
(1) the costs of the initial preparation, typesetting and
execution of the registration statement, prospectuses
(including preliminary prospectuses), the trust indenture
and other legal documents relating to the establishment of
the Trust, and the costs of submitting such documents in
electronic format to the SEC,
(2) SEC and state blue sky registration fees for the initial
registration of Trust Units,
(3) the cost of the initial audit of the Trust,
(4) the legal costs incurred by the Sponsor and the Trustee
related to any and all of the foregoing, and
(5) other out-of-pocket expenses related to any and all of the
foregoing.
(c) Costs and expenses incurred in the marketing and selling of
Trust Units, shall not be borne by the Trust but shall be paid
for by the Sponsor. Such costs and expenses include but are not
limited to (1)
32
any expenses incurred in the printing of prospectuses
(including preliminary prospectuses), (2) the preparation and
printing of brochures and other advertising or marketing
materials, including any legal costs incurred in the review
thereof, and (3) any other selling or promotional costs or
expenses.
(d) Promptly after the Initial Date of Deposit, upon written
certification to the Trustee, the Sponsor shall receive
reimbursement for any of the Initial Costs set forth in
subsection (b) above which are payable from the Trust but which
were paid for by the Sponsor, without profit. The Trustee shall
advance out of its own funds such reimbursement, provided,
however that the Trustee shall be entitled to be reimbursed
without interest out of the Trust Fund for any and all amounts
advanced by it pursuant to this Section 10.02(d), in the manner
set forth in Section 3.04(a). Such advances shall be considered
a lien on the Trust Fund, and the Trustee shall have a priority
over Unitholders on funds received in respect of the Securities
in the Trust, as such funds are received.
(e) The Trustee shall reimburse itself for the advances made
pursuant to subsection (d) above in 60 months approximately
equal installments over a five (5) year period unless (i) the
Trust is sooner terminated, in which case all amounts still due
and owing shall be payable to the Trustee from the assets of
the Trust or (ii) by law or regulation the Trust is required to
amortize costs set forth in subsection (b) over a period of
time shorter than 60 months, in which case the Trustee shall
follow the requisite time period for such reimbursement.
(f) The Sponsor shall bear the Initial Costs, if any, in excess of
$100,000."
W. For the purpose of this Trust, Section 10.03(e) shall be amended so
that the text below shall be added to the paragraph following the last sentence
thereof:
"So long as the Sponsor is maintaining a secondary market for Units,
the Sponsor shall bear any audit expense which exceeds $.0050 per
Unit".
Section 3. The Trust hereby elects to qualify as a Regulated
Investment Company under the Internal Revenue Code of 1986, as amended.
Section 4. The Standard Terms shall be amended to add new Section 3.15
as follows:
33
Section 3.15. Reinvestment of Cash Proceeds. If and to the extent that
the Sponsor, on behalf of the Trust, receives a favorable response to
its no-action letter request submitted to the Securities and Exchange
Commission with respect to reinvesting cash proceeds received by the
Trust, the Trustee shall, upon receipt of instructions from the
Sponsor, reinvest such cash proceeds in additional Securities held in
the Trust Fund at such time. Such reinvestment shall be made so that
each deposit of additional Securities shall be made so as to match as
closely as practicable the Percentage Ratios, and such reinvestment
shall be made in accordance with the parameters set forth in the
no-action letter response. If the Sponsor and the Trustee determine
that it shall be necessary to amend the Standard Terms and Agreement
and/or the Indenture to comply with the parameters set forth in the
no-action letter response, such documents may be so amended without
the consent of Unitholders.
34
SCHEDULE A
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 20
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, SEPTEMBER 4, 1997
COMMON STOCKS (1)
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)
--------------------------------------------- ------------ ------------------
Commercial Services (3.64%)
CUC International, Inc....................... 1,400 $35,000.00
Computer Software (7.49%)
Cognos, Inc. ................................ 1,070 35,176.25
Microsoft Corporation........................ 270 36,871.88
Computers -Memory Devices (14.56%)
XXX Xxxxxxxxxxx.............................. 660 35,145.00
Quantum Corporation.......................... 1,010 35,160.63
Seagate Technology, Inc...................... 960 34,980.00
Western Digital Corporation.................. 760 34,865.00
Computers -Micro (7.24%)
Compaq Computer Corporation.................. 520 34,742.50
Sun Microsystems, Inc........................ 690 34,931.25
Computers -Mini (3.65%)
Hewlett-Packard Company*..................... 550 35,131.25
Data Processing/Management (3.64%)
Oracle Corporation........................... 910 35,035.00
Electronics/Semi-Conductor (14.44%)
Applied Materials, Inc....................... 340 34,127.50
Intel Corporation*........................... 370 34,710.63
KLA-Tencor Corporation....................... 490 35,126.88
Teradyne, Inc................................ 620 35,030.00
Internet Software (7.28%)
America Online, Inc. ........................ 510 35,062.50
Open Market, Inc. ........................... 3,110 34,987.50
Multimedia/Entertainment (10.89%)
The Xxxx Disney Company*..................... 440 35,007.50
Gannett Company, Inc.*....................... 350 34,693.75
Time Warner, Inc.*........................... 680 35,105.00
Networking Products (10.92%)
Cisco Systems, Inc........................... 450 35,015.63
FORE Systems, Inc............................ 1,750 35,000.00
3Com Corporation............................. 720 35,055.00
Publishing -Newspapers (3.63%)
New York Times Company*...................... 720 34,965.00
Retail -Office Supplies (3.64%)
Staples, Inc................................. 1,450 35,071.88
Telecommunications (3.62%)
WorldCom, Inc................................ 1,100 34,856.25
THE PAINEWEBBER EQUITY TRUST
GROWTH STOCK SERIES 20
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, SEPTEMBER 4, 1997 (CONTINUED)
COMMON STOCKS (1)
PRIMARY INDUSTRY SOURCE AND NUMBER OF COST OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)
--------------------------------------------- ------------ ------------------
Telecommunications Equipment (3.58%)
Northern Telecom Limited*.......................... 340 $ 34,510.00
TREASURY SECURITIES (1)
$15,000 U.S. Treasury Note 7 7/8% due 2/15/2021
(1.78%) ........................................... 17,136.22
TOTAL INVESTMENTS ................................ $962,500.00
------------
(1) All Securities are represented entirely by contracts to purchase
Securities.
(2) Valuation of the Securities by the Co-Trustees was made as described
in "Valuation" as of the close of business on the business day prior
to the Date of Deposit.
(3) The loss to the Sponsor on the date of deposit is $224.
* Income producing security.
IN WITNESS WHEREOF, PaineWebber Incorporated has caused this Trust
Indenture and Agreement to be executed by one of its Vice Presidents and its
corporate seal to be hereto affixed and attested by one of its Assistant
Secretaries, and Investors Bank & Trust Company and The First National Bank of
Chicago have caused this Trust Indenture to be executed by one of their
Authorized Signatories and their corporate seals to be hereto affixed and
attested by one of their Authorized Signatories, all as of the date first above
written.
PAINEWEBBER INCORPORATED
as Depositor and Sponsor
SEAL By
----------------------------
Senior Vice President
Attest:
-----------------------------
Secretary
00
XXXXX XX XXX XXXX )
:ss.:
COUNTY OF NEW YORK )
On this 4th day of September, 1997 before me personally appeared
Xxxxxx X. Xxxxxx, to me known, who being by me duly sworn, said that he is a
Senior Vice President of PaineWebber Incorporated, one of the corporations
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors
of said corporation, and that he signed his name thereto by like authority.
-------------------------
Notary Public
36
FIRST NATIONAL BANK OF CHICAGO
By
----------------------------
Title
SEAL
Attest:
----------------------------------
Title
00
XXXXX XX XXX XXXX )
:ss.:
COUNTY OF NEW YORK )
On this 4th day of September, 1997 before me personally appeared , to
me known, who being by me duly sworn, said that he is a of First National Bank
of Chicago, one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that he signed his
name thereto by like authority.
-------------------------
Notary Public
38
