Exhibit 2
THE PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES 20
TRUST INDENTURE AND AGREEMENT
Dated as of January 30, 1997
Incorporating
Standard Terms and Conditions of Trust
Dated as of September 1, 1990,
Between
PAINEWEBBER INCORPORATED,
as Sponsor
and
INVESTORS BANK & TRUST COMPANY
AND
THE FIRST NATIONAL BANK OF CHICAGO,
as Co-Trustees
THIS TRUST INDENTURE AND AGREEMENT dated as of January 30,
1997 between PaineWebber Incorporated, as Sponsor 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 September 1, 1990, as amended, among the parties hereto
(hereinafter called the "Standard Terms and Conditions of Trust" or "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 and Conditions of Trust in order to
facilitate creation of 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, stripped United States Treasury
obligations, or evidence thereof, and in certain cases, United States Treasury
obligations and Restricted Securities as defined in the Standard Terms and
Conditions of Trust; and
WHEREAS, the parties now desire to create the
Twentieth of the aforesaid series;
NOW THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the Sponsor and the Trustee agree as
follows:
Section 1. Incorporation of Standard Terms and Conditions of
Trust. Subject to the provisions of Section 2 and Section 3 of this Trust
Indenture and Agreement set forth below, all of the provisions of the Standard
Terms and Conditions of Trust are herein 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, except as provided below in this Section 1. Unless otherwise
stated, section references shall refer to sections in the Standard Terms and
Conditions of Trust.
Section 2. Specific Terms of this Series. The following terms
are hereby agreed to for this series of The PaineWebber Pathfinders Trust,
which series shall be known and designated as "The PaineWebber Pathfinders
Trust, Treasury and
Growth Stock Series 20".
A. The Securities deposited pursuant to Section 2.02
are set forth in Schedule A hereto.
B. (1) The aggregate number of Units outstanding on
the Initial Date of Deposit for this Series is 1,000,000.
(2) The initial fractional undivided interest represented by
each Unit of this series shall initially be 1/1,000,000th of the Trust Fund. A
Certificate representing the total number of Units outstanding on the Initial
Date of Deposit is being delivered by the Trustee to the Sponsor pursuant to
Section 2.03.
C. The term "Record Date" shall mean June 30, 1997 and
quarterly thereafter, except 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 and except that with
respect to cash representing long-term capital gains held in the Capital
Account the Record Date shall be each December 31.
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 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.
D. The term "Distribution Date" shall mean the 20th
day following the Record Date, commencing July 20, 1997.
In the event a Special Record Date is declared, the
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.
E. The Discretionary Liquidation Amount shall be twenty per
centum (20%) of the aggregate value of (i) the Securities originally deposited
pursuant to Section 2.02 and (ii) any additional Securities deposited pursuant
to Section 2.02(c).
F. The Mandatory Termination Date shall be August 30, 2007.
The date on which the Trustee shall begin to sell equity Securities in
accordance with Section 9.01 shall be July 15, 2007.
G. The Trustee's annual compensation as referred to in
Section 8.05 shall be $.00145 per Unit computed monthly based on the largest
number of Units outstanding at any time during the preceding month.
H. The Sponsor's annual compensation pursuant to Section 7.02
shall be computed as $.00035 per Unit, based on the largest number of Units
Outstanding at any time during the calendar year.
I. The balance in the Capital Account below which no
distribution need be made, as referred to in Section 3.04, is
$.005 per Unit outstanding.
J. Section 3.06 with regard to Portfolio Supervision
shall be amended to read as follows:
1. Subparagraph (e) shall be deleted and the following
text shall be inserted in its place as the current
version of paragraph (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 be detrimental to the
interest of the ▇▇▇▇▇▇▇▇▇▇▇"
▇. In addition, there shall be added to Section 3.06 the
following subsections:
"(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."
K. In the event that the Sponsor directs the Trustee to
distribute Securities in lieu of a cash redemption pursuant to Section 5.02,
the Trustee shall distribute only stock and 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).
L. The Percentage Ratios for the Trust shall be the
percentage ratios between the number of shares of each issue of stock in the
Trust and the maturity value of the Treasury obligations deposited in the Trust
on the date hereof. 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 or (iii) sale of any
Securities from the Trust portfolio. Stock dividends received by the Trust, if
any, will be sold by the Trustee and the proceeds therefrom shall be treated as
income to the Trust.
M. Paragraph (c) of Section 2.02 is hereby amended to
read as follows:
"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 upon the purchase by
the Trustee of additional Securities in respect thereof. In
such cases, the Sponsor 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. Such additional Securities shall be held,
managed and applied by the Trustee as herein provided. In
connection with each such request to purchase additional
Securities, the Sponsor shall also deliver to the Trustee (i)
cash, a certified check or checks, other cash or equivalents
or an irrevocable letter or letters of credit issued by a
commercial bank or banks, in each case in an amount necessary
to consummate the purchase of any such additional Securities
pursuant to any contracts entered into pursuant to this
Section or (ii) instructions to purchase such Additional
Securities, along with cash, a certified check or checks, or
other cash equivalents, an irrevocable letter or letters of
credit issued by a commercial bank or banks, in each case in
the amount based upon the price of such Additional Securities
on the date each such additional deposit occurs, multiplied
by the number of Units to be issued. All such amounts will be
based upon the price of such Additional Securities at the
Valuation Time on the date such amounts are deposited. Such
purchase and deposit of Additional Securities shall be made,
in each case, pursuant to a Supplemental Indenture executed
by the Sponsor and the Trustee. The Trustee in each case
shall ensure that each deposit of Additional Securities
pursuant to this Section shall be made so as to match as
close as is 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 in the Standard Terms and the Trust Indenture."
The Securities deposited pursuant to Section 2.02 are
comprised of (1) the Securities set forth in Schedule A hereto, (2) any
Treasury Securities which may be deposited as temporary reinvestment for sale
proceeds pursuant to Section 3.02, and (3) additional deposits of Securities
pursuant to the paragraph set forth above.
N. The second paragraph of Section 3.05 is hereby
amended to add the phrase ", commencing with calendar year 1997"
following the word "year" and preceding the colon.
3. The Standard Terms shall be amended to permit the Trustee
to charge the Trust and to deduct from the accounts of the Trust certain fees
and expenses incurred in connection with the organization of this Trust Series
("Initial Costs"), all to the effect and in the amount set forth below.
a. Section 3.04(a) of the Standard Terms shall
hereby be amended as follows:
(1) the text of Section 3.04(a) shall
be deleted in its entirety and;
(2) the following text set forth below
shall be inserted in replacement
of such Section 3.04(a):
"deduct from the Income
Account or, to the extent
such funds are not
available in such account,
from the Capital Account,
and pay to itself
individually the amounts
that it is at the time
entitled to receive (i)
pursuant to Sections 8.01
and 8.05 on account of its
services theretofore
performed and expenses,
losses and liabilities
theretofore incurred, if
any, and (ii) in
reimbursement of advances
made, and other amounts
paid, by the Trustee in
connection with the
organization and
establishment of the Trust
in accordance with the
provisions of, and
procedures set forth in,
Section 10.02."
b. 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
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 Section
3.04(a).
c. 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.
d. 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) 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.
e. 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 10.2(e), 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 Certificateholders on funds received in
respect of the Securities in the Trust, as
such funds are received.
f. The Trustee shall reimburse itself for the
advances made pursuant to subsection (d)
above in 60 approximately equal installments
over a five (5) year period unless 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.
g. The Sponsor shall bear the Initial Costs, if
any, in excess of $100,000.
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 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:
_________________________________
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
:ss.:
COUNTY OF NEW YORK )
On this 30th day of January, 1997 before me personally
appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 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.
By ____________________________
Notary Public
INVESTORS BANK & TRUST COMPANY
AND THE FIRST NATIONAL
BANK OF CHICAGO
SEAL
Attest:
By _____________________________
Title:
_________________________
Title:
STATE OF NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this 30th day of January, 1997 before me personally
appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, to me known, who being by me duly sworn, said that
he is a ________ of The 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 Trustees of
said corporation, and that he signed his name thereto by like authority.
_________________________
Notary Public
SCHEDULE A
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES 20
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, JANUARY 30, 1997
TREASURY OBLIGATIONS (51.86%) (1)
COST OF
SECURITIES
NAME OF SECURITY COUPON MATURITY VALUE MATURITY DATE TO TRUST(2)
---------------- ------ -------------- ------------- -----------
U.S. Treasury Interest
Payments (3) (51.86%) 0% $1,000,000 August 15, 2007 $494,000.00
COMMON STOCKS (48.14%) (1)
COST OF
NUMBER OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)
-------------- ------ -----------
Aerospace/Defense (1.21%)
United Technologies Corporation ............. 170 $11,517.50
Automobile (2.41%)
Ford Motor Company .......................... 350 11,331.25
General Motors Corporation .................. 190 11,590.00
Beverages (2.37%)
The Coca-Cola Company ....................... 200 11,275.00
PepsiCo, Inc. ............................... 330 11,343.75
Chemical (1.24%)
DuPont (E.I.) De Nemours & Company ......... 110 11,797.50
Computer Peripheral Equipment (1.18%)
Cisco Systems, Inc.* ........................ 170 11,220.00
Computer Processing & Data Preparation
(1.21%)
First Data Corporation ...................... 300 11,512.50
Computer Software (1.23%)
Microsoft Corporation* ...................... 120 11,670.00
Electronics/Semi-Conductor (3.56%)
▇▇▇▇▇▇▇ Electric Company .................... 120 11,805.00
Hewlett-Packard Company ..................... 220 11,302.50
Intel Corporation ........................... 70 10,832.50
Entertainment (1.24%)
The ▇▇▇▇ Disney Company ..................... 160 11,800.00
Financial Institutions/Banks (6.07%)
Chase Manhattan Corporation ................. 130 11,651.25
Citicorp .................................... 100 11,137.50
▇▇▇▇▇▇ ▇▇▇ .................................. 290 11,346.25
NationsBank Corporation ..................... 110 11,825.00
▇▇▇▇▇ Fargo & Company ....................... 40 11,880.00
Household Products (1.17%)
Procter & ▇▇▇▇▇▇ Company .................... 100 11,162.50
Insurance (2.37%)
Aetna Inc. .................................. 140 10,412.50
Allstate Corporation ........................ 190 12,136.25
Manufacturing (1.24%)
Minnesota Mining & Manufacturing Company ... 140 11,795.00
Metals (1.24%)
Alcan Aluminum Ltd. ......................... 340 11,815.00
Office/Business Equipment (1.22%)
Pitney ▇▇▇▇▇, Inc. .......................... 210 11,655.00
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES 20
SCHEDULE OF INVESTMENTS (CONTINUED)
AS OF INITIAL DATE OF DEPOSIT, JANUARY 30, 1997
COST OF
NUMBER OF SECURITIES
NAME OF ISSUER SHARES TO TRUST(2)
-------------- ------ -----------
Oil/Gas (6.03%)
Amoco Corporation ............ 130 $ 11,310.00
Chevron Corporation .......... 180 11,992.50
Exxon Corporation ............ 110 11,385.00
Royal Dutch Petroleum
Company+ .................... 70 12,092.50
Texaco Inc. .................. 100 10,700.00
Pharmaceuticals (4.81%)
▇▇▇▇▇▇ Laboratories .......... 220 11,687.50
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Company 90 11,081.25
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ............ 210 11,550.00
Merck & Co., Inc. ............ 130 11,472.50
Publishing/Printing (1.19%)
Gannett Company, Inc. ........ 150 11,343.75
Restaurants (1.20%)
▇▇▇▇▇▇▇▇'▇ Corporation ...... 250 11,437.50
Retail-Variety Stores (1.21%)
Wal-Mart Stores, Inc. ........ 500 11,500.00
Telecommunications (3.54%)
AT&T Corporation ............. 300 11,625.00
▇▇▇▇ Atlantic Corporation ... 160 10,580.00
GTE Corporation .............. 260 11,505.00
Transportation (1.20%)
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ 11,423.75
TOTAL COMMON STOCKS ......... 458,500.00
-----------
TOTAL INVESTMENTS ........... $952,500.00
===========
------------
(1) All Securities are represented entirely by contracts to purchase
Securities.
(2) Valuation of Securities by the Trustee was made as described in
"Valuation" as of the close of business on the business day prior to the
Initial Date of Deposit. The bid side evaluation of the Treasury
Obligations on the business day prior to the Initial Date of Deposit was
$492,690.
(3) This security does not pay interest. On the maturity date thereof, the
entire maturity value becomes due and payable. Generally, a fixed yield
is earned on such security which takes into account the semi-annual
compounding of accrued interest. (See "The Trust" and "Federal Income
Taxes" herein.)
(4) The gain to the Sponsor on the Initial Date of Deposit is $11.25.
* Non-income producing.
+ These shares are U.S. dollar denominated and pay dividends in U.S.
dollars but are subject to investment risks generally facing common
stocks of foreign issuers. (See "Risk Factors and Special
Considerations".)
