Exhibit 2
THE PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES 19
TRUST INDENTURE AND AGREEMENT
Dated as of October 30, 1996
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 October 30, 1996
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 Nineteenth 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 19".
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 Date of
Deposit for this Series is 20,000,000.
(2) The initial fractional undivided interest represented by each Unit
of this series shall initially be 1/20,000,000th 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 March 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 April, 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 May 30, 2007. The date on
which the Trustee shall begin to sell equity Securities in accordance with
Section 9.01 shall be May 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 Xxxxxxxxxxx"
0. 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 provided, however, that if, as a result of the
restructuring of AT&T, the Trust is provided with the shares of the newly
created companies resulting from such restructuring in addition to and/or in
exchange for the AT&T shares initially deposited in the Trust, the Trust shall
hold such shares in the Portfolio in accordance with the provisions of Section
2.02.
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", which phrase shall follow the
word "year" and precede 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
2
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:
--------------------------
Secretary
STATE 0F NEW YORK )
:ss.:
COUNTY OF NEW YORK )
On this 30th day of October 30, 1996 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.
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 October, 1996 before me personally appeared Xxxxxx
X. Xxxxxx, 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 19
SCHEDULE OF INVESTMENTS
AS OF INITIAL DATE OF DEPOSIT, OCTOBER 30, 1996
TREASURY OBLIGATIONS (52.93%) (1)
COST OF
SECURITIES TO
NAME OF SECURITY COUPON MATURITY VALUE MATURITY DATE TRUST(2)
---------------------- -------- -------------- --------------- ---------------
U.S. Treasury Interest
Payments (3) (52.93%) 0% $20,000,000 May 15, 2007 $10,083,189.75
COMMON STOCKS (47.07%) (1)
COST OF
NUMBER OF SECURITIES TO
NAME OF ISSUER SHARES TRUST(2)
--------------------------------------------- ----------- -------------
Aerospace/Defense (1.18%)
Lockheed Xxxxxx Corporation ................. 2,520 $224,280.00
Automobile (1.18%)
Ford Motor Company .......................... 7,190 224,687.50
Beverages (2.36%)
The Coca-Cola Company ....................... 4,510 224,372.50
PepsiCo, Inc. ............................... 7,580 224,557.50
Chemicals (2.35%)
Dow Chemical Company ........................ 2,860 223,795.00
DuPont (E.I.) De Nemours & Company ......... 2,380 223,422.50
Computer Peripheral Equipment (1.18%)
Cisco Systems, Inc.* ........................ 3,890 224,161.25
Computer Processing & Data Preparation
(1.17%)
First Data Corporation ...................... 2,750 223,781.25
Computer Software (1.17%)
Microsoft Corporation* ...................... 1,650 223,368.75
Electronics/Semi-Conductor (2.35%)
Hewlett-Packard Company ..................... 5,070 224,347.50
Intel Corporation ........................... 2,150 224,406.25
Entertainment (1.18%)
Xxxx Disney Company ......................... 3,420 224,865.00
Financial/Banks (4.69%)
Citicorp .................................... 2,300 223,387.50
First Union Corporation ..................... 3,130 223,795.00
NationsBank Corporation ..................... 2,430 224,775.00
Xxxxx Fargo & Company ....................... 840 221,865.00
Forestry (1.18%)
Potlatch Corporation ........................ 5,340 224,280.00
Household Products (1.18%)
Procter & Xxxxxx Company .................... 2,290 224,133.75
Insurance (2.36%)
Allstate Corporation ........................ 4,030 224,672.50
USLIFE Corporation .......................... 7,130 224,595.00
Manufacturing (1.18%)
Minnesota Mining & Manufacturing Company ... 2,930 224,145.00
Metals (1.18%)
Aluminum Company of America (ALCOA) ........ 3,730 225,198.75
Office/Business Equipment (1.18%)
Xerox Corporation ........................... 4,890 224,328.75
27
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES 19
SCHEDULE OF INVESTMENTS (CONTINUED)
AS OF INITIAL DATE OF DEPOSIT, OCTOBER 30, 1996
COST OF
NUMBER OF SECURITIES TO
NAME OF ISSUER SHARES TRUST(2)
---------------------------- ----------- --------------
Oil/Gas (4.69%)
Amoco Corporation .......... 2940 $ 224,175.00
Chevron Corporation ........ 3340 223,362.50
Exxon Corporation .......... 2500 224,062.50
Royal Dutch Petroleum
Company+ .................. 1310 222,700.00
Pharmaceuticals (5.88%)
Xxxxxx Laboratories ........ 4470 224,952.75
Xxxxxxx-Xxxxx Squibb
Company ................... 2110 223,396.25
Xxxxxxx & Xxxxxxx .......... 4650 224,362.50
Merck & Company, Inc. ..... 3040 224,580.00
Pfizer, Inc. ............... 2790 223,897.50
Restaurants (1.18%)
XxXxxxxx'x Corporation .... 5060 224,537.50
Retail-Grocery Stores
(1.18%)
Xxxxxxxxx'x, Inc. .......... 6490 224,716.25
Retail-Variety Stores
(1.18%)
Wal-Mart Stores, Inc. ..... 8240 224,540.00
Telecommunications (4.71%)
AT&T Corporation ........... 6310 224,793.75
GTE Corporation ............ 5260 224,207.50
SBC Communications, Inc. .. 4550 224,087.50
Sprint Corporation ......... 5730 224,902.50
Transportation (1.18%)
Union Pacific Corporation . 4060 224,315.00
TOTAL COMMON STOCKS ....... 8,966,810.25
--------------
TOTAL INVESTMENTS ......... $19,050,000.00
==============
------------
(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 $10,068,400.
(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 $2,172.50.
* 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".)
28
