File No. 333-49107
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 1
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:
PAINEWEBBER PATHFINDERS TRUST, TREASURY AND GROWTH STOCK
SERIES 24
B. Name of Depositor:
PAINEWEBBER INCORPORATED
C. Complete address of Depositor's principal executive office:
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
D. Name and complete address of agents for service:
PAINEWEBBER INCORPORATED
Attention: Mr. Robert E. Holley
1200 Harbor Blvd.
Weehawken, New Jersey 07087
(x) Check if it is proposed that this filing should become effective
(immediately upon filing or on April 7, 2000) pursuant to paragraph
(b) of Rule 485.
E. Total and amount of securities being registered:
An indefinite number of units of Beneficial Interest pursuant to Rule
24f-2 under 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:
In accordance with Rule 24f-2, a fee in the amount of $14,562.33 was
paid on March 29, 2000 in connection with the filing of the Rule 24f-2
Notice for the Trust's most recent fiscal year.
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT.
PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES 24
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C under the Securities Act of
1933
(Form N-8B-2 Items required by Instruction 1 as to Prospectus on
Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. Organization and General Information
1. (a)Name of Trust ) Front Cover
(b)Title of securities issued )
2. Name and address of ) Back Cover
Depositor
3. Name and address of ) Back Cover
Trustee
4. Name and address of ) Back Cover
Principal
Underwriter )
5. Organization of Trust ) The Trust
6. Execution and ) The Trust
termination of
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 ) The Trust;
regarding
Trust's Securities and ) Rights of Unit
Rights
of Holders ) holders
(a) Type of Securities ) The Trust
(Registered or Bearer) )
(b) Type of Securities ) The Trust
(Registered or Bearer) )
* Not applicable, answer
negative or not required.
(c) Rights of Holders as to ) Rights of Unit
Withdrawal or ) holders
Redemption
) Redemption;
) Public Offering of Units-
) Secondary Market for Units
(d) Rights of Holders as to ) Secondary Market for
conversion, transfer, etc. ) Units Exchange Option
(e) Rights of Trust issues )
periodic payment plan ) *
certificates )
(f) Voting rights as to ) Rights of Unit
Securi-
ties, under the Indenture ) holders
(g) Notice to Holders as to )
change in )
(1)Assets of Trust ) Amendment of the
Indenture
(2)Terms and Conditions ) Administration of the
Trust-Portfolio Supervision
of Trust's Securities ) Investments
(3)Provisions of Trust ) Amendment of the
Indenture
(4)Identity of Depositor and ) Administration of the Trust
Trustee
(h) Consent of Security )
Holders
required to change )
(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 ) Amendment of the
Indenture
(4)Identity of Depositor ) Administration of the Trust
and Trustee )
11. Type of Securities ) The Trust
Comprising Units
12. Type of securities ) *
comprising
periodic payment )
certificates
13. (a)Load, fees, expenses, etc. ) Public Offering of
) Units; Expenses of the
) Trust
* Not applicable, answer
negative or not required.
(b)Certain information ) *
regarding periodic payment ) *
certificates )
(c)Certain percentages ) *
(d)Certain other fees, etc. ) Expenses of the Trust
payable by holders ) Rights of Unitholders
(e)Certain profits receivable ) Public Offering of
by depositor, principal ) Units
underwriters, trustee or ) Public Offering of Units
affiliated persons ) Market for Units
(f)Ratio of annual charges to ) *
income )
14. Issuance of Trust's ) The Trust
securities
) Public Offering of Units
15. Receipt and handling of ) *
payments from )
purchasers
16. Acquisition and ) The Trust; Administration
disposition of
underlying securities ) of the Trust; Termination
) of Trust
17. Withdrawal or ) Redemption
redemption
) Public offering of Units
) -Secondary Market for
) -Exchange Option
) -Conversion Option
18. (a)Receipt and disposition of ) Distributions of
income ) Unitholders
(b)Reinvestment of ) *
distributions
(c)Reserves or special fund ) Distributions to
) Unitholders; Expenses of
Trust
(d)Schedule of distribution ) *
19. Records, accounts and ) Distributions
report
) Administration
) of the Trust
20. Certain miscellaneous ) Administration of the Trust
pro-
visions of Trust )
agreement
21. Loans to security ) *
holders
22. Limitations on liability ) Sponsor, Trustee
23. Bonding arrangements ) Included in Form N-8B-2
24. Other material ) *
provisions of
trust agreement )
* Not applicable, answer
negative or not required.
III. Organization
Personnel and Affiliated
Persons of Depositor
25. Organization of ) Sponsor
Depositor
26. Fees received by ) Public Offering of
Depositor
) Units 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 ) Sponsor
Depositor
31. Payments by Depositor ) *
for
certain other services )
rendered to Trust )
32. Payments by Depositor ) *
for
certain other services )
rendered to Trust )
33. Remuneration of ) *
employees of
Depositor for certain )
services
rendered to Trust )
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 ) Public Offering of Units
(b)Underwriting agreements )
(c)Selling agreements ) Sponsor
* Not applicable, answer
negative or not required.
39. (a)Organization of principal ) Sponsor
underwriter )
(b)N.A.S.D. membership of ) Sponsor
principal underwriter )
40. Certain fees received by ) Public Offering Price of
principal underwriter ) Units
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 Price of
) Units
(b)Schedule as to offering ) *
price )
(c)Variation in Offering ) Public Offering Price of
price to certain persons ) Units
45. Suspension of ) *
redemption rights
46. (a)Redemption valuation ) Public Offering of Units
) -Secondary Market for Units
) -Valuation
(b)Schedule as to redemption )
price )
V. Information concerning the Trustee or Custodian
47. Maintenance of position ) Public Offering of Units
in
underlying securities ) Redemption
) Trustee
) Evaluation of the Trust
48. Organization and )
regulation of
Trustee ) Trustee
49. Fees and expenses of ) Expenses of the Trust
Trustee
50. Trustee's lien ) Expenses of the Trust
* Not applicable, answer
negative or not required.
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 )
VII. Policy of Registrant
52. (a)Method of selecting and ) The Trust;
eliminating securities ) Administration of the Trust
from the Trust )
(b)Elimination of securities ) *
from the Trust )
(c)Policy of Trust regarding ) Portfolio Supervision
) Administration of Trust
substitution and
elimination of securities )
(d)Description of any funda- ) Administration of
mental policy of the Trust ) Trust
) Portfolio Supervision
53. (a)Taxable status of the ) Tax status of the Trust
Trust )
(b)Qualification of the Trust ) Tax status of the Trust
as a mutual investment )
company )
* Not applicable, answer
negative or not required.
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 )
certi-
ficates )
59. Financial statements ) Statement of Financial
(Instruction 1(c) to ) Condition
Form S-6)
* Not applicable, answer
negative or not required.
PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES TWENTY FOUR
(A Unit Investment Trust)
51,800,000 Units
Portfolio of "Zero-Coupon" U.S. Treasury
Obligations and Common Stocks
Designed for Preservation of Capital and
Potential Capital Appreciation
This Prospectus consists of two parts: Part A and
Part B. Parts A and B should both be attached for
this Prospectus to be complete.
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
PROSPECTUS PART A DATED APRIL 7, 2000
No person is authorized to give any information
or make any representations about this Trust not
contained in this Prospectus, and you should not
rely on any other information. Read and keep both
parts of this prospectus for future reference.
Table of Contents
Part A Page
Brief Description of the Trust's Investment Portfolio A - 3
Is this Trust Appropriate for You? A - 4
Summary of Risks A - 4
Essential Information Regarding the Trust A - 7
Report of Independent Auditors A - 8
Statement of Financial Condition A - 9
Statement of Operations A - 10
Statement of Changes in Net Assets A - 11
Notes to Financial Statements A - 12
Schedule of Investments A - 13
Part B
The Composition of the Trust's Portfolio B - 1
About the Trust B - 1
Risk Factors and Special Considerations B - 2
Federal Income Taxes B - 5
Public Offering of Units B - 7
Public Offering Price B - 7
Sales Charge and Volume Discount B - 8
Employee Discount B - 8
Exchange Option B - 8
Conversion Option B - 10
Distribution of Units B - 10
Secondary Market for Units B - 10
Sponsor's Profits B - 11
Redemption B - 11
Valuation B - 12
Comparison of Public Offering Price and
Redemption Value B - 13
Expenses of the Trust B - 13
Rights of Unitholders B - 14
Distributions B - 14
Administration of the Trust B - 15
Accounts B - 15
Reports and Records B - 15
Portfolio Supervision B - 15
Reinvestment B - 16
Amendment of the Indenture B - 16
Termination of the Trust B - 17
Sponsor B - 17
Trustee B - 18
Independent Auditors B - 18
Legal Opinions B - 18
PAINEWEBBER PATHFINDERS TRUST, TREASURY AND
GROWTH STOCK
SERIES TWENTY FOUR - PART A
Brief Description of the Trust's Investment
Portfolio
1. The Trust's Objective.
The Trust seeks to provide preservation of
capital and potential capital appreciation
through an investment in a portfolio of stripped
"zero-coupon" United States Treasury Obligations
maturing on May 15, 2012 and common stocks.
Because the maturity value of the Treasury
Obligations is backed by the full faith and
credit of the United States, the Sponsor believes
that the Trust provides an attractive combination
of safety and appreciation for purchasers who
hold Units until May 30, 2012, the Trust's
"Mandatory Termination Date".
As of the date of this Prospectus Part A, 46% of
the Trust's Portfolio was invested in interest-
only portions of United States Treasury
Obligations and the remaining 54% was invested in
common stocks as described briefly below.
The stripped "zero-coupon" U.S. Treasury
Obligations make no payment of current interest,
but rather make a single payment upon their
stated maturity. PaineWebber chose the stocks in
the Trust's Portfolio for their capital
appreciation potential, not for their income
potential. Many of the stocks currently pay
little or no dividend income.
The Trust has been formulated so that the portion
of the Trust invested in stripped Treasury
Obligations is designed to provide an approximate
return of principal invested on the Mandatory
Termination Date for purchasers on the Initial
Date of Deposit. (See "Essential Information-
Distributions".) Therefore, even if the Stocks
are valueless upon termination of the Trust, and
if the Treasury Obligations are held until their
maturity in proportion to the Units outstanding,
purchasers will receive, at the termination of
the Trust, $1,000 per 1,000 Units purchased.
This feature of the Trust provides that
Unitholders who purchased their Units at or below
$1,000 per 1,000 Units and who hold their units
to the Mandatory Termination Date will receive
the same amount as they originally invested,
although they would have foregone earning any
interest on the amounts involved and will not
protect their principal on a present value basis,
assuming the Stocks are valueless.
2. Brief Description of the Trust's Portfolio.
The Trust is a unit investment trust which means
that, unlike a mutual fund, the Trust's Portfolio
is not managed and the Trust Portfolio's
investments are not sold because of market
changes.
Unless terminated sooner, the Trust is scheduled
to terminate on or about May 30, 2012 regardless
of market conditions at the time. The Trust plans
to hold until its termination the U.S. Treasury
Obligations maturing May 15, 2012 and a
diversified group of stocks, all as shown on the
"Schedule of Investments" in this Prospectus Part
A.
The main objective of PaineWebber in constructing
the portfolio of stocks to be included in the
Trust was to select a group of stocks which, in
PaineWebber's view, would be capable of, over the
long term, closely tracking the performance of
the market as measured by the S&P 500. The S&P
500 is an unmanaged index of 500 stocks
calculated under the auspices of Standard &
Poor's, which, in PaineWebber's view, is a
broadly diversified, representative segment of
the market of all publicly traded stocks in the
United States.
On December 31, 1999, the aggregate market value
of the Trust Portfolio was $49,175,615.
In constructing the Trust's portfolio, a computer
program was generated against the 500 S&P stocks
to identify a combination of S&P 500 stocks
(excluding General Electric and those stocks
rated "Unattractive" or "Sell" by PaineWebber
Equity Research) which, when equally weighted,
have the highest correlation with the S&P 500
Index with the smallest tracking error.
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 this Prospectus Part
A.
Approximate Percent
of Aggregate
Market Value
Primary Industry Source of the Trust
Aerospace/Defense 1.35%
Automobile 1.00%
Beverages 1.09%
Chemicals 1.44%
Computers-Hardware/Software 8.80%
Cosmetics & Toiletries 1.59%
Diversified Manufacturing 1.29%
Electric 2.13%
Electronics 1.54%
Financial Institutions/Banks 5.09%
Foods 1.83%
Insurance 2.60%
Medical Products & Instruments 1.19%
Multimedia 2.36%
Networking Products 2.45%
Oil 4.68%
Pharmaceuticals 4.63%
Retail-Building Products 1.30%
Retail-Discount 2.01%
Telecommunications 5.36%
Tobacco .58%
Is this Trust Appropriate for You?
Yes, if you are a long-term investor
seeking capital protection combined with
potential capital appreciation over the life of
the Trust. 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
investment or if you need current income.
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 stripped
"zero-coupon" U.S. Treasury obligations and
common stocks. For example:
The Trust, unlike a mutual fund, is not
"managed", so neither the U.S. Treasury
Obligations nor the stocks will be sold by the
Trust to take advantage of market fluctuations.
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.
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.
If many investors sell their Units, the Trust
will have to sell Portfolio Securities. This
could reduce the diversification of your
investment and increase your share of Trust
expenses.
The price of your Units depends upon the full
range of economic and market influences including
the prices of bonds and equity securities,
current interest rates, the condition of the bond
and stock markets and other economic influences
that affect the global or Untied States economy.
Assuming no changes occur in the prices of the
U.S. Treasury Obligations and the stocks held by
the Trust, the price you receive for your Units
will generally be less than the price you paid
because your purchase price included a sales
charge.
The stocks in the Trust's Portfolio will
generally trade on a domestic stock exchange or
in the over-the-counter market. We 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.
Additional stocks and U.S. Treasury Obligations
may be acquired by the Trust when additional
Units are to be offered to the public. Costs
incurred in acquiring such additional stocks and
Treasury Obligations 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 the
additional deposits of securities purchased by
the Trustee with cash or cash equivalents.
Investing always involves risk. The risks
described below are the most significant risks
associated with investing in the U.S. Treasury
Obligations and stocks held by the Trust.
2. Risks of Investing in Stripped "Zero-Coupon"
U.S. Treasury Obligations
The stripped Treasury Securities in the
Trust were purchased at a deep discount and do
not make any periodic payments of interest.
Instead, the entire payment of proceeds will be
made upon maturity of such Treasury Obligations.
Owners of deep discount bonds which make no
current interest payments earn a fixed yield not
only on the original investment but also on all
earned discount during the life such obligation.
This implicit reinvestment of earnings at the
same, fixed rate eliminates the owner's ability
to reinvest at higher rates in the future. For
this reason, sale of Units prior to the
termination date of the Trust will involve
substantially greater price fluctuations during
periods of changing market interest rates than
would be experienced in connection with sale of
Units of a Trust which held Treasury Obligations
which made scheduled interest payments on a
current basis.
3. Risks of Investing in Stocks
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.
Common stocks are not obligations of the issuer.
Therefore, they do not provide any assurance of
income or provide the degree of protection of
debt securities.
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, financial
condition of issuers, changes in worldwide or
national economic conditions, the prices of
equity securities in general and the Trust's
stocks in particular.
Certain of the Stock in the Trust may be American
Depositary Receipts or "ADRs" which are subject
to additional risks. (See "Schedule of
Investments" herein). ADRs are subject to certain
investment risks that are different from those
experienced by Stocks issued by domestic issuers.
These investment risks include potential future
political and economic developments and the
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.
The securities underlying the ADRs held in the
Trust are generally denominated, and pay
dividends, in foreign currency and are therefore
subject to currency exchange rate risk. Currency
exchange rate risk occurs 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. Exchange rate
fluctuations are dependent on a number of
economic factors including the world economy and
the economic conditions within the relevant
country, supply and demand of the relevant
currency, interest rate differentials between
currencies, the balance of imports and exports of
goods and services, monetary and fiscal policies
of the relevant country, perceived political
stability and investor psychology, especially
that of institutional investors predicting the
future relative strength or weakness of a
particular currency.
Code of Ethics
The Trust and the Sponsor have each adopted
a code of ethics effective March 1, 2000
regarding personal securities transactions by the
Sponsor's employees. The Code permits employee
investments in securities, including securities
that may be purchased or held by the Trust. The
Code is designed to prevent fraud, deception and
misconduct against the Trust and to provide for
reporting of personal securities transactions by
certain employees. The Code is on file with the
Commission and can be reviewed and copied at the
Commission's Public Reference Room in Washington,
DC. For information on operations of the Public
Reference room, call the Commission at (202) 942-
8090. The Code is available on the EDGAR
Database on the Commission's Internet site at
http:/www.sec.gov. A copy may be obtained, after
paying a duplicating fee, by electronic request
at [email protected], or by writing the
Commission's Public Reference Section,
Washington, DC 20549-0102.
<TABLE>
ESSENTIAL INFORMATION REGARDING THE TRUST
<CAPTION>
As of December 31, 1999
Sponsor: PaineWebber Incorporated
Trustee: Investors Bank & Trust Co.
Initial Date of Deposit: January 26, 1999
<S> <C>
Aggregate Market Value of Securities in Trust: $49,175,615
Number of Units: 51,800,000
Minimum Purchase: $250
Fractional Undivided Interest in the Trust Represented by
Each Unit: 1/51,800,000th
Calculation of Public Offering Price Per Unit:
Value of Net Assets in Trust $49,174,970
Divided by 51,800,000 Units $.9493
Plus Sales Charge of 4.75% of Public Offering Price $.0473
Public Offering Price per Unit $.9966
Redemption Value per Unit $.9493
Excess of Public Offering Price over Redemption Value per Unit: $.0473
Sponsor's Repurchase Price per Unit $.9493
Excess of Public Offering over Sponsor's Repurchase Price per Unit: $.0473
Evaluation Time: 4 P.M. New York Time
Distribution Dates*: Quarterly on January 20, April 20,
July 20 and October 20.
Record Date: March 31, June 30, September 30
and December 31.
Mandatory Termination Date: May 30, 2012 (15 days after
maturity of the Treasury
Obligations).
Discretionary Liquidation Amount: 20% of the value of the Securities
upon completion of the deposit of
the Securities
Estimated Expenses of the Trust * *: $.0023 per Unit
* See " Distributions "
* * See " Expenses of Trust ". Estimated
dividends from the Growth Stocks, based upon last
dividends
actually paid, are expected by the Sponsor to
be sufficient to pay Estimated Expenses of the
Trust.
</TABLE>
<TABLE>
REPORT OF INDEPENDENT AUDITORS
<C> <S>
THE UNITHOLDERS, SPONSOR AND TRUSTEE
THE PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES TWENTY FOUR:
We have audited the accompanying statement of
financial condition, including the schedule of
investments, of The PaineWebber Pathfinders Trust,
Treasury and Growth Stock Series Twenty Four as of
December 31, 1999 and the related statements of
operations and changes in net assets for the
period from January 26, 1999 (initial date of
deposit) to December 31, 1999. These financial
statements are the responsibility of the Trustee.
Our responsibility is to express an opinion on
these financial statements 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 statements
are free of material misstatement. An audit
includes examining, on a test basis, evidence
supporting the amounts and disclosures in the
financial statements. Our procedures included
confirmation of the securities owned as of
December 31, 1999, as shown in the statement of
financial condition and schedule of investments,
by correspondence with the Trustee. 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 statements referred
to above present fairly, in all material respects,
the financial position of The PaineWebber
Pathfinders Trust, Treasury and Growth Stock
Series Twenty Four at December 31, 1999 and the
results of its operations and changes in its net
assets for the period from January 26, 1999 to
December 31, 1999, in conformity with accounting
principles generally accepted in the United
States.
ERNST & YOUNG LLP
New York, New York
March 24, 2000
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES TWENTY FOUR
STATEMENT OF FINANCIAL CONDITION
<CAPTION>
December 31, 1999
ASSETS
<S> <C> <C>
Treasury Obligation - at market value (Cost $25,560,037)
(note A and note 1 to schedule of investments) $22,469,545
Common Stock - at market value (Cost $23,774,299)
(note 1 to schedule of investments) 26,706,070
Prepaid organizational expenses 100,000
Accrued dividends receivable 16,921
Cash 340
Total Assets $49,292,876
LIABILITIES AND NET ASSETS
Accounts payable-units redeemed $46,102
Accrued expenses payable 44,660
Advance from Trustee 27,144
Total Liabilities $117,906
Net Assets (51,800,000 units of fractional undivided interest outstanding):
Cost to investors (note B) $51,794,579
Less gross underwriting commissions (note C) (2,460,243)
49,334,336
Net unrealized market depreciation (note D) (158,721)
Net amount applicable to unitholders 49,175,615
Overdistributed investment income-net (985)
Undistributed proceeds from securities sold 340
Net Assets 49,174,970
Total Liabilities and Net Assets $49,292,876
Net Asset Value per unit $.9493
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES TWENTY FOUR
STATEMENT OF OPERATIONS
<CAPTION>
For the
Period from
January 26,
1999 (initial date
of deposit) to
December 31,
1999
<S> <C>
Operations:
Investment income:
Accretion on Treasury Obligation $1,181,426
Dividend Income 278,942
Total investment income 1,460,368
Less expenses:
Trustee's fees, evaluator's expense and other expenses 117,252
Total expenses 117,252
Investment income-net 1,343,116
Realized and unrealized gain on investments-net:
Net realized loss on securities transactions (393,755)
Net change in unrealized market depreciation (158,721)
Net loss on investments (552,476)
Net increase in net assets resulting from operations $790,640
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES TWENTY FOUR
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
For the
Period from
January 26,
1999 (initial date
of deposit) to
December 31,
1999
<S> <C>
Operations:
Investment income-net $1,343,116
Net realized loss on securities transactions (393,755)
Net change in unrealized market depreciation (158,721)
Net increase in net assets resulting from operations 790,640
Less: Distributions to Unitholders (Note E)
Investment income-net 177,864
Principal 513,456
Total Distributions 691,320
Less: Units Redeemed by Unitholders (Note F)
Value of units at date of redemption 6,043,630
Accreted discount at date of redemption 117,270
Total Redemptions 6,160,900
Decrease in net assets (6,061,580)
Net Assets:
Beginning of Period ---
Supplemental Deposits (Note F) 55,236,550
End of Period $49,174,970
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES TWENTY FOUR
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
(A) The financial statements of the Trust are
prepared on the accrual basis of accounting.
Security transactions are accounted for on the
date the securities are purchased or sold. The
original issue discount on the Treasury Obligation
is accreted on a level yield basis. The amount of
discount included in the cost of the Treasury
Obligation held as of December 31, 1999 is
$1,061,196.
(B) Cost to investors represents the initial
public offering price as of the initial date of
deposit, and the value of units through
supplemental deposits computed on the basis set
forth under "Public Offering Price of Units",
adjusted for accretion on United States Treasury
Obligations and for securities sold since the date
of deposit.
(C) Sales charge of the Public Offering Price per
Unit is computed on the basis set forth under "
Public Offering of Units - Sales Charge and Volume
Discount ".
(D) At December 31, 1999, the gross unrealized
market appreciation was $0 and the gross
unrealized market depreciation was ($158,721). The
net unrealized market depreciation was ($158,721).
(E) Regular distributions of net income,
excluding accretion income and principal receipts
not used for redemption of units are made
quarterly. Special distribution may be made when
the Sponsor and Trustee deem necessary. Income
with respect to the accretion of original issue
discount is not distributed although the
unitholder is subject to tax, where applicable, as
if the distribution had occurred. Accretion income
earned by the Trust increases a unitholder's cost
basis in the underlying security.
(F) The following units were redeemed with
proceeds of securities sold as follows:
<CAPTION>
For the
Period from
January 26,
1999 (initial date
of deposit) to
December 31,
1999
<S> <C>
Number of units redeemed 6,600,000
Redemption amount $6,160,900
The following units were sold through supplemental
deposits:
Number of units sold 57,400,000
Value of amount, net of sales charge $54,283,870
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES TWENTY FOUR
SCHEDULE OF INVESTMENTS
<CAPTION>
As of December 31, 1999
TREASURY OBLIGATIONS (45.69%)
Name of Security Coupon Maturity Value Maturity Date Market Value(1)
<C> <C><C> <C> <C> <C>
U.S. Treasury Interest Payments (2) (45.69%) 0% $51,800,000 May 15, 2012 $22,469,545
COMMON STOCKS (54.31%)
Name of Issuer Number of Shares Market Value(1)
Aerospace/Defense: (1.35%)
United Technologies Corporation 10,214 $663,910
Automobile: (1.00%)
Ford Motor Company 9,194 491,304
Beverages: (1.09%)
The Coca-Cola Company 9,194 535,550
Chemicals: (1.44%)
E.I. du Pont de Nemours and Company 10,729 706,773
Computers-Hardware/Software: (8.80%)
Hewlett-Packard Company 8,173 931,211
International Business Machines Corporation 6,236 673,488
Microsoft Corporation* 7,148 834,529
Oracle Corporation* 16,856 1,888,926
Cosmetics & Toiletries: (1.59%)
The Procter & Gamble Company 7,151 783,481
Diversified Manufacturing: (1.29%)
Tyco International Ltd. 16,345 635,412
Electric: (2.13%)
Duke Energy Corporation 9,194 460,849
Emerson Electric Co. 10,219 586,315
Electronics: (1.54%)
Intel Corporation 9,193 756,699
Financial Institutions/Banks: (5.09%)
Bank Of America Corporation (3) 8,683 435,778
Citigroup Inc. 16,093 894,167
Fannie Mae 8,173 510,302
Wells Fargo Company 16,347 661,032
Foods: (1.83%)
Safeway Inc.* 10,729 381,550
Sara Lee Corporation 23,498 518,425
Insurance: (2.60%)
American International Group, Inc. 8,207 887,382
The Allstate Corporation 16,347 392,328
Medical Products & Instruments: (1.19%)
Medtronic, Inc. 16,116 587,227
Multimedia: (2.36%)
The Walt Disney Company 16,858 493,097
Time Warner Inc. 9,194 665,990
Networking Products: (2.45%)
Cisco Systems, Inc.* 11,239 1,203,978
Oil: (4.68%)
Atlantic Richfield Company 9,707 839,655
Exxon Mobil Corporation (4) 8,173 658,437
Royal Dutch Petroleum Company ~ 13,281 802,670
(Continued)
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES TWENTY FOUR
SCHEDULE OF INVESTMENTS
<CAPTION>
As of December 31, 1999
COMMON STOCKS (54.31%)
Name of Issuer Number of Shares Market Value(1)
<C> <C> <C>
Pharmaceuticals: (4.63%)
Abbott Laboratories 13,281 $482,266
Merck & Co., Inc. 8,173 548,102
Pfizer Inc. 15,223 493,796
Warner-Lambert Company 9,194 753,333
Retail-Building Products: (1.30%)
Lowe's Companies, Inc. 10,729 641,058
Retail-Discount: (2.01%)
Wal-Mart Stores, Inc. 14,300 988,488
Telecommunications: (5.36%)
Bell Atlantic Corporation 10,729 660,504
Lucent Technologies Inc. 11,240 840,893
MCI WorldCom, Inc.* 11,493 609,847
SBC Communications Inc. 10,729 523,039
Tobacco: (.58%)
Philip Morris Companies Inc. 12,260 284,279
TOTAL COMMON STOCKS $26,706,070
TOTAL INVESTMENTS $49,175,615
(1) Valuation of Securities was made by the
Trustee as described in "Valuation".
(2) This security does not pay current
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).
(3) Name changed with merger of NationsBank
Corporation and BankAmerica Corporation.
(4) Name changed with Exxon's acquisition of
Mobil Corporation.
* Non-income producing.
~ American Depositary Receipts.
</TABLE>
PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES 24
PROSPECTUS PART B
PART B OF THIS PROSPECTUS MAY NOT BE
DISTRIBUTED
UNLESS ACCOMPANIED BY PART A.
Part B contains a description of the important
features of the PaineWebber Pathfinders Trust
Treasury and Growth Stock Series 24 and also
includes a more detailed discussion of the
investment risks that a Unitholder might face
while holding Trust Units.
THE COMPOSITION OF THE PORTFOLIO
PaineWebber understands the importance of
long-term financial goals such as planning for
retirement, funding a child's education, or trying
to build wealth toward some other objective.
In PaineWebber's view, one of the most important
investment decisions an investor faces may be
determining how to best allocate his investments
to capture growth opportunities without exposing
his portfolio to undue risk. For long-term capital
growth, many investment experts recommend stocks.
As with all investments, the higher return
potential of equities is typically associated with
higher risk. With this in mind, PaineWebber
designed a portfolio to meet the needs of
investors interested in building wealth prudently
over a long-term time horizon by pairing the
security of U.S. Treasury bonds with the growth
potential of equity securities. The Trust is a
balanced portfolio with approximately equal
portions in U.S. Treasury bonds and equity
securities. Therefore, should interest rates
decline significantly prior to maturity, there is
a potential for achieving greater returns by
liquidating the portfolio before the final
maturity date. Unitholders can sell units at any
time at the then current net asset value with no
additional sales charge. (See "Public Offering of
Units-Secondary Market for Units and Redemption".)
PaineWebber's main objective in constructing the
portfolio of Stocks to be included in the Trust
was to select a group of stocks which, in
PaineWebber's view, would be capable of, over the
long term, closely tracking the performance of the
market as measured by the "S&P 500 Index". The S&P
500 Index is an unmanaged index of 500 stocks the
value of which is calculated by Standard & Poor's
Corporation, which index, in PaineWebber's view,
is a broadly diversified, representative segment
of the market of all publicly traded stocks in the
United States.
In constructing the Trust's portfolio, a computer
program was generated against the 500 S&P Index
stocks to identify a combination of S&P 500 Index
stocks (excluding General Electric and those
stocks rated "Unattractive" or "Sell" by
PaineWebber Equity Research) which, when equally
weighted, are highly correlated (97%) with the S&P
500 Index within a 3% tracking error.
The Trust portfolio, in PaineWebber's opinion, is
comprised of a diversified group of large,
well-known companies representing various
industries. These are common stocks issued by
companies who may receive income and derive
revenues from multiple industry sources but whose
primary source is listed in the table below. For a
list of the individual common stocks comprising
each industry group listed below, investors should
consult the "Schedule of Investments" herein.
The Sponsor anticipates that, based upon last
dividends actually paid, dividends from the Stock
will be sufficient (i) to pay expenses of the
Trust (see "Expenses of the Trust"), and (ii)
after such payment, to make distributions of such
dividends to Unitholders as described below under
"Distributions".
ABOUT THE TRUST
The Trust is one of a series of similar but
separate unit investment trusts created by the
Sponsor under a Trust Indenture and Agreement*
(the "Indenture") dated as of the Initial Date of
Deposit, among
_________________
* Reference is hereby made to said Trust
Indenture and Agreement and any statements
contained herein are qualified in their entirety
by the provisions of said Trust Indenture and
Agreement.
PaineWebber Incorporated, as Sponsor, and the
Investors Bank & Trust Company, as Trustee (the
"Trustee"). The objective of the Trust is
preservation of capital and capital appreciation
through an investment in Treasury Obligations and
Stocks. These Stocks are equity securities which,
in the Sponsor's opinion on the Initial Date of
Deposit, are capable, over the long term, of
closely tracking the performance of the public
market for equity securities as measured by the
S&P 500 Index. The Stocks contained in the Trust
are representative of a number of different
industries. Dividends received by the Trust, if
any, may be invested in Short-Term Treasury
Obligations (if there is no regulatory
impediment). Otherwise, such dividends will be
held by the Trustee in non-interest bearing
accounts until used to pay annual expenses or
distributed to Unitholders on the next
Distribution Date and to the extent that funds are
held in such accounts such funds will benefit the
Trustee.
On the Initial Date of Deposit, the Sponsor
deposited with the Trustee the confirmations of
contracts for the purchase of Securities 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 of the Securities. 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
registered certificate for Units representing the
entire ownership of the Trust. On the Initial Date
of Deposit the fractional undivided interest in
the Trust represented by a Unit was as described
in "Essential Information Regarding the Trust".
With the deposit on the Initial Date of Deposit,
the Sponsor established a proportionate
relationship between the maturity value of the
Treasury Obligations and the number of shares of
each Stock in the Trust. 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, replicating the
original percentage relationship between the
maturity value of the Treasury Obligations and the
number of shares of Stock deposited on the Initial
Date of Deposit and replicating any cash or cash
equivalents held by the Trust (net of expenses).
The original proportionate relationship is subject
to adjustment to reflect the occurrence of a stock
split or other corporate action 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 the issuer
at the time of such event. Taxable stock dividends
received by the Trust, if any, will be sold by the
Trustee and the proceeds received will be treated
as income to the Trust.
The Treasury Obligations consist of U.S. Treasury
obligations which have been stripped of their
unmatured interest coupons or interest coupons
stripped from the U.S. Treasury Obligations. The
obligor with respect to the Treasury Obligations
is the United States Government. U.S. Government
backed obligations are generally considered the
safest investment.
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". However, if additional Units are issued by
the Trust (through either the deposit of (i)
additional Securities or (ii) cash for the
purchase of additional Securities for purposes of
the sale of additional Units), 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".)
RISK FACTORS AND SPECIAL CONSIDERATIONS
Risk Factors
An investment in the Trust should be made with
the understanding of the risks inherent in an
investment in deep discount or "zero-coupon" debt
obligations and the risks associated with an
investment in common stocks in general.
The Trust contains stripped Treasury securities
described below. (See "Schedule of Investments.")
Stripped Treasury securities consist of
"interest-only" or "principal-only" portions of
Treasury Obligations. Interest-only portions of
Treasury Obligations represent the rights only to
payment of interest on a date certain, and
principal-only portions of Treasury Obligations
represent the rights only to payment of principal
at a stated maturity. Interest-only and
principal-only portions of Treasury Obligations
are deep discount obligations that are
economically identical to zero-coupon obligations;
that is, all such instruments are debt obligations
which make no periodic payment of interest prior
to maturity. The stripped Treasury Securities in
the Trust were purchased at a deep discount and do
not make any periodic payments of interest.
Instead, the entire payment of proceeds will be
made upon maturity of such Treasury Obligations.
The effect of owning deep discount bonds which do
not make current interest payments (such as the
stripped Treasury Obligations in the Trust
Portfolio) is that a fixed yield is earned not
only on the original investment but also, in
effect, on all earned discount during the life of
the discount obligation. This implicit
reinvestment of earnings at the same rate
eliminates the risk of being unable to reinvest
the income on such obligations at a rate as high
as the implicit yield on the discount obligation,
but at the same time eliminates the holder's
ability to reinvest at higher rates in the future.
For this reason, while the full faith and credit
of the United States Government provides a high
degree of protection against credit risks, the
sale of Units prior to the termination date of the
Trust will involve substantially greater price
fluctuations during periods of changing market
interest rates than would be experienced in
connection with sale of Units of a Trust which
held Treasury Obligations and which made scheduled
interest payments on a current basis.
An investment in Units of the Trust should also
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 of the
Stocks, which rights 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 issuer. Dividends on
cumulative preferred stock typically 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.
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 offered by debt securities. The
issuance of debt securities or 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, like the Treasury Obligations, may be
expected to fluctuate over the life of the Trust
to values higher or lower than those prevailing on
the Initial Date of Deposit. The Stocks may
appreciate or depreciate in value (or pay
dividends) depending on the full range of economic
and market influences affecting corporate
profitability, the financial condition of issuers
and the prices of equity securities in general and
the Stocks in particular.
Certain of the Stocks in the Trust may be ADRs
which are subject to additional risks. (See
"Schedule of Investments".) ADRs evidence American
Depositary Shares ("ADS"), which, in turn,
represent common stock of foreign issuers
deposited with a custodian in a depositary. (For
purposes of this Prospectus, the term "ADR"
generally includes "ADS".) ADRs involve certain
investment risks that are different from those
found in stocks issued by domestic issuers. These
investment risks include potential political and
economic developments, potential establishment of
exchange controls, new or higher levels of
taxation, or other governmental actions which
might adversely affect the payment or receipt of
payment of dividends on the common stock of
foreign issuers underlying such ADRs. ADRs may
also be subject to current foreign taxes, which
could reduce the yield on such securities. Also,
certain foreign issuers are not subject to
reporting requirements under U.S. securities laws
and therefore may make less information publicly
available than that provided by domestic issuers.
Further, foreign issuers are not necessarily
subject to uniform financial reporting, auditing
and accounting standards and practices which are
applicable to publicly traded domestic issuers.
In addition, the securities underlying the ADRs
held in the Trust are generally denominated, and
pay dividends, in foreign currency. An investment
in securities denominated and principally traded
in foreign currencies involves investment risk
substantially different than an investment in
securities that are denominated and principally
traded in U.S. dollars. This is due to currency
exchange rate risk, because the U.S. dollar value
of the shares underlying the ADRs and of their
dividends will vary with the fluctuations in the
U.S. dollar foreign exchange rates for the
relevant currency in which the shares underlying
the ADRs are denominated. The Trust, however, will
compute its income in United States dollars, and
to the extent any of the Stocks in the Trust pay
income or dividends in foreign currency, the
Trust's computation of income will be made on the
date of its receipt by the Trust at the foreign
exchange 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.
There is no assurance that the Trust's objectives
will be achieved. Under ordinary circumstances,
dividends and principal received upon the sale of
Stocks may not be reinvested, and such money will
be held in a non-interest bearing account until
the next distribution made on the Distribution
Date. Under certain limited circumstances and if
there is no regulatory impediment, such dividends
and principal may be reinvested in Short-Term
Treasury Obligations maturing on or before the
next Distribution Date. (See "Administration of
the Trust-Reinvestment".) The value of the
Securities and, therefore, the value of Units may
be expected to fluctuate.
Investors should note that the creation of
additional Units subsequent to the Initial Date of
Deposit may have an effect upon the value of Units
held by Unitholders. 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 Securities in
amounts sufficient to replicate the original
percentage relationship among the Securities based
on the price of the Securities (at the Evaluation
Time) on the date the cash is deposited. To the
extent the price of a Security (or the relevant
foreign currency exchange rate, if applicable)
increases or decreases between the time cash is
deposited with instructions to purchase the
Security and the time the cash is used to purchase
the 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 (and currency) 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
Securities as closely as possible to the
Evaluation Time or at prices as close as possible
to the prices used to evaluate the Trust at the
Evaluation Time. Thus price (and currency)
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
Securities not listed on any national securities
exchange (due to differentials between bid and
offer prices for the Securities) and brokerage
fees, stamp taxes and other costs incurred in
purchasing stocks will be at the expense of the
Trust and will affect the value of every
Unitholder's Units.
Special Considerations
In the event a contract to purchase a Security
fails, the Sponsor will refund to each Unitholder
the portion of the sales charge attributable to
such failed contract. Principal and income, if
any, attributable to such failed contract will be
distributed to Unitholders of record on the last
business day of the month in which the fail occurs
within 20 days of such record date.
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 only under
limited circumstances. (See "Administration of the
Trust-Portfolio Supervision".)
Many computer systems were designed in such a way
that they may be unable to distinguish between the
Year 2000 and the Year 1900 and, therefore, may
not properly process and calculate date-related
information (commonly known as the "Year 2000
Problem"). The Sponsor and Trustee are taking
steps that they believe are reasonably designed to
address the Year 2000 Problem with respect to
computer systems that they use and to obtain
reasonable assurances that comparable steps are
being taken by the Trust's other service
providers. At this time, however, there can be no
assurance that these steps will be sufficient to
avoid any adverse impact to the Trust. The Year
2000 Problem is expected to impact corporations,
which may include issuers of Securities contained
in the Trust, to varying degrees based upon
various factors, including, but not limited to,
their industry sector and degree of technological
sophistication. The Sponsor is unable to predict
what impact, if any, the Year 2000 Problem will
have on issuers of the Securities contained in 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.
Certain of the Stocks may be attractive
acquisition candidates pursuant to mergers,
acquisitions and tender offers. In general, tender
offers involve a bid by an issuer or other
acquiror to acquire a stock based on the terms of
its offer. Payment generally takes the form of
cash, securities (typically bonds or notes), or
cash and securities. The Indenture contains
provisions requiring the Trustee to follow certain
procedures regarding mergers, acquisitions, tender
offers and other corporate actions. Under certain
circumstances, the Trustee, at the direction of
the Sponsor, may hold or sell any stock or
securities received in connection with such
corporate actions (see "Administration of the
Trust-Portfolio Supervision").
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.
2. Each Unitholder will have a taxable event when
the Trust disposes of a Security (whether by sale,
exchange, redemption, or payment at maturity) 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, original issue discount or interest on
Treasury Obligations and Short-Term Treasury
Obligations (if any), gains or losses upon
dispositions of Securities by the Trust and a pro
rata share of the expenses of the Trust.
Unitholders should note that their taxable income
from an investment in Units will exceed cash
distributions because taxable income will include
accretions of original issue discount on the
Treasury Obligations.
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 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.
Corporate Dividends-Received Deduction.
Corporate holders of Units may be eligible for the
dividends-received deduction with respect to
distributions treated as dividends, subject to the
limitations provided in Sections 246 and 246A of
the Code. The dividends-received deduction
generally equals 70 percent of the amount of the
dividend. As a result, the maximum effective tax
rate on dividends received generally will be
reduced from 35 percent to 10.5 percent. A portion
of the dividends-received deduction may, however,
be subject to the alternative minimum tax.
Individuals, partnerships, trusts, S corporations
and certain other entities are not eligible for
the dividends-received deduction.
Original Issue Discount. The Trust will contain
principal or interest portions of stripped
"zero-coupon" Treasury Obligations which are
treated as bonds that were originally issued at a
discount ("original issue discount"). Original
issue discount represents interest for federal
income tax purposes and can generally be defined
as the difference between the price at which a
bond was issued and its stated redemption price at
maturity. For purposes of the preceding sentence,
stripped obligations, such as the Treasury
Obligations, which variously consist either of the
right to receive payments of interest or the right
to receive payments of principal, are treated by
each successive purchaser as originally issued on
their purchase dates at an issue price equal to
their respective purchase prices. The market value
of the assets comprising the Trust will be
provided to a Unitholder upon request to enable
the Unitholder to calculate the original issue
discount attributable to each of the Treasury
Obligations. Original issue discount on Treasury
Obligations (which were issued or treated as
issued on or after July 2, 1982) is deemed earned
based on a compounded, constant yield to maturity
over the life of such obligation, taking into
account the compounding of accrued interest at
least annually, resulting in an increasing amount
of original issue discount includible in income in
each year. Each Unitholder is required to include
in income each year the amount of original issue
discount which accrues on its pro rata portion of
each Treasury Obligation with original issue
discount. The amount of accrued original issue
discount included in income for a Unitholder's pro
rata interest in Treasury Obligations is added to
the tax cost for such obligations.
Gain or Loss on Sale. If a Unitholder sells or
otherwise disposes of a Unit, the Unitholder
generally will recognize gain or loss in an amount
equal to the difference between the amount
realized on the disposition allocable to the
Securities and the Unitholder's adjusted tax bases
in the Securities. In general, such adjusted tax
bases will equal the Unitholder's aggregate cost
for the Unit increased by any accrued original
issue discount. The gain or loss will be capital
gain or loss if the Unit and underlying Securities
were held as capital assets, except that the gain
will be treated as ordinary income to the extent
of any accrued original issue discount not
previously reported. Each Unitholder generally
will also recognize taxable gain or loss when all
or part of its pro rata portion of a Security is
sold or otherwise disposed of for an amount
greater or less than the Security's per Unit tax
cost.
Withholding For Citizen or Resident Investors.
In the case of any noncorporate Unitholder that is
a citizen or resident of the United States a 31
percent "backup" withholding tax will apply to
certain distributions of the Trust unless the
Unitholder properly completes and files, under
penalties of perjury, IRS Form W-9 (or its
equivalent).
The foregoing discussion is a general summary and
relates only to certain aspects of the federal
income tax consequences of an investment in the
Trust. Unitholders may also be subject to state
and local taxation. Each Unitholder should consult
its own tax advisor regarding the federal, state
and local tax consequences of ownership of Units.
Investment in the Trust may be suited for
purchase by funds and accounts of individual
investors that are exempt from federal income
taxes such as Individual Retirement Accounts,
tax-qualified retirement plans including Keogh
Plans, and other tax-deferred retirement plans.
Unitholders desiring to purchase Units for
tax-deferred plans and IRA's should consult their
PaineWebber Investment Executive for details on
establishing such accounts. Units may also be
purchased by persons who already have
self-directed accounts established under
tax-deferred retirement plans.
PUBLIC OFFERING OF UNITS
Public Offering Price. The public offering price
per Unit on the Initial Date of Deposit is equal
to the aggregate market value of the Securities
determined on the day preceding the Initial Date
of Deposit, divided by the number of Units
outstanding plus the sales charge of 4.75%,
pursuant to an exemptive order of the SEC.
However, if the public offering price would be
less than $.975 per Unit, then purchase orders
received that day will be filled on the basis of
the lower public offering price. Thereafter, the
public offering price during the initial offering
period will be computed by dividing the Trust's
value (the "Trust Fund Evaluation"), next
determined after receipt of a purchase order, and,
with respect to the Treasury Obligations,
determined with reference to the offering side
evaluation, by the number of Units outstanding
plus the applicable sales charge. The initial
public offering period will terminate when the
Sponsor chooses to discontinue offering Units in
the initial market. Thereafter, the Sponsor may
offer Units in the secondary market. The public
offering price in the secondary market will be the
Trust Fund Evaluation per Unit next determined
after receipt of a purchase order, determined for
the Treasury Obligations on the bid side of the
market, plus the applicable sales charge. (See
"Valuation".) The public offering price on any
date subsequent to the Initial Date of Deposit
will vary from the public offering price
calculated on the business day prior to the
Initial Date of Deposit (as described on page 2)
due to fluctuations in the value of Stocks and the
Treasury Obligations, and the foreign currency
exchange rates (if applicable), 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 in "Essential
Information Regarding the Trust". The Initial
Organizational Costs include the cost of preparing
the registration statement, trust documents and
closing documents for the Trust, registering with
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" for a
description of the method by which the Trustee
will sell such Securities.
Sales Charge and Volume Discount. The Public
Offering Price of Units of the Trust includes a
sales charge which varies based upon the number of
Units purchased by a single purchaser. (See the
sales charge schedule below.) Sales charges during
the initial public offering period and for
secondary market sales are described below. A
discount in the sales charge is available to
volume purchasers of Units due to economies of
scales 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 for sales to any
person of at least $50,000 or 50,000 Units,
applied on whichever basis is more favorable to
the purchaser.
Initial Public Offering Period and Secondary Market
Through January 26, 2001
Percent of Percent of
Aggregate Dollar Public Offering Net Amount
Value of Units* Price Invested
Less than $50,000 4.75% 4.99%
$50,000 to $99,999 4.50 4.71
$100,000 to $199,999 4.00 4.17
$200,000 to $399,999 3.50 3.63
$400,000 to $499,999 3.00 3.09
$500,000 to $999,999 2.50 2.56
$1,000,000 or more 2.00 2.04
_____________
* The sales charge applicable to volume
purchasers according to the table above will be
applied on either a dollar or Unit basis,
depending upon which basis provides a more
favorable purchase price to the purchaser.
Secondary Market From January 27, 2001
Through January 26, 2003
Percent of Percent of
Aggregate Dollar Public Offering Net Amount
Value of Units* Price Invested
Less than $50,000 4.25% 4.44%
$50,000 to $99,999 4.00 4.17
$100,000 to $199,999 3.50 3.63
$200,000 to $399,999 3.00 3.09
$400,000 to $499,999 2.50 2.56
$500,000 to $999,999 2.00 2.04
$1,000,000 or more 1.75 1.78
_____________
* The sales charge applicable to volume
purchasers according to the table above will be
applied on either a dollar or Unit basis,
depending upon which basis provides a more
favorable purchase price to the purchaser.
Secondary Market From January 27, 2003
Through January 26, 2005
Percent of
Public Percent of
Offering Net Amount
Price Invested
3.25% 3.36%
Secondary Market on and After
January 27, 2005
Percent of
Public Percent of
Offering Net Amount
Price Invested
2.25% 2.30%
The volume discount 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 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 sales charges
are also applicable to a trustee or other
fiduciary purchasing Units for a single trust
estate or single fiduciary account.
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 does not intend to impose
a sales charge on such employee sales.
Exchange Option. Unitholders may elect to
exchange any or all of their Units of this series
for units of one or more of any series of
PaineWebber Municipal Bond Fund Series (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 Municipal
Bond Trust, Insured Series (the "Insured
Series"); The Corporate Bond Trust, (the
"Corporate Series"); The PaineWebber Pathfinders
Trust, (the "Pathfinders Series"), The
PaineWebber Federal Government Trust, (the
"Government Series") or the PaineWebber Equity
Trust, (the "Equity Series") (collectively
referred to as the "Exchange Trusts"). Exchanges
made for Units of any Exchange Trust which has an
"up-front" salesload will be made at a Public
Offering Price for the units of the Exchange
Trusts to be acquired based on a reduced sales
charge of $15 per unit. Unitholders may elect to
exchange any or all of their Units for Units of
The PaineWebber Equity Trust, Growth Stock Series
22, or any other PaineWebber Exchange Trust
subject to a deferred sales charge (the "Deferred
Sales Charge Units"). The Exchange Option will
permit the exchange of Units for any Deferred
Sales Charge Units at their then-current net
asset value, with no Initial Sales Charge
imposed. Units acquired through the Exchange
Option will continue to be subject to the
deferred sales charge installments remaining on
the Deferred Sales Charge Units so acquired.
Unitholders interested in exercising the Exchange
Option should read the current prospectus or
prospectuses relating to the Deferred Sales
Charge Units to ascertain what, if any, deferred
sales charge installments remain on such Units.
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 Trust.
The purpose of such reduced sales charge is to
permit the Sponsor to pass on to 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 expense 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 a series and
paid a per unit "up-front" sales charge that was
less than the per Unit "up-front" sales charge of
the series of 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 "up-front"
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 "up-front" sales charge based on the
greater of the reduced "up-front" sales charge, or
an amount which, together with the initial "up-
front" sales charge paid in connection with the
acquisition of the Units being exchanged, equals
the "up-front" 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.
The Sponsor will permit exchanges at the reduced
sales charge provided there is a secondary market
maintained by the Sponsor in both the Units of
this series and units of the applicable Exchange
Trust and there are units of the applicable
Exchange Trust available for sale. While the
Sponsor has indicated that it intends to maintain
a market for the units of the respective Trusts,
there is no obligation on its part to maintain
such a market. Therefore, there is no assurance
that a market for units will in fact exist on any
given date at which a Unitholder wishes to sell
his Units of this series and thus there is no
assurance that the Exchange Option will be
available to a Unitholder. Exchanges will be
effected in whole units only. Any excess proceeds
from Unitholders' units being surrendered will be
returned. Unitholders will be permitted to advance
new money in order to complete an exchange.
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.
For example, assume that a Unitholder, who has
three units of a trust with a current price of
$1,030 per unit based on the bid prices of the
underlying securities, desires to sell his units
and seeks to exchange the proceeds for units of a
series of an Exchange Trust with a current price
of $890 per unit based on the bid prices of the
underlying securities. In this example, which
does not contemplate rounding up to the next
highest number of units, the proceeds from the
Unitholder's units will aggregate $3,090. Since
only whole units of an Exchange Trust may be
purchased under the Exchange Option, the
Unitholder would be able to acquire three units
in the Exchange Trust for a total cost of $2,715
($2,670 for the units and $45 for the sales
charge). The remaining $375 would be returned to
the Unitholder in cash.
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
directly to acquire available units of any
Exchange Trust having an "up-front" salesload 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 Units will be permitted to use the
cash proceeds received from the sale or
redemption of those Units 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 Conversion Option will continue to be
subject to the deferred sales charge installments
remaining on those 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 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 without further
notice, including the right to increase the
reduced sales charge applicable to this option
(but not in excess of $5 more per Unit, per 100
Units or per 1,000 Units, as applicable than the
corresponding fee then being charged for the
Exchange Option). For a description of the tax
consequences of a conversion reference is made to
the Exchange Option section herein.
Distribution of Units. The minimum purchase
during 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 $.03 per Unit, during the initial
offering period and one-half of the highest
applicable sales charge during the secondary
market, subject to change from time to time. The
difference between the sales charge and the dealer
concession will be retained by the Sponsor. In the
event that the dealer concession is 90% or more of
the sales charge per Unit, dealers taking
advantage of such concession may be deemed to be
underwriters under the Securities Act of 1933, as
amended (the "Securities Act").
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 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 Units to
the Trustee for redemption, at the price
calculated in the manner described under
"Redemption". Redemption requests in excess of
$100,000 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 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, its estimate of the time
required to sell the Units and general market
conditions.
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 Securities to the Sponsor
and the price (including foreign currency rates,
if any) at which it deposits the Securities in the
Trust, which is the value of the Securities,
determined by the Trustee as described under
"Valuation" at the close of business on the
business day prior to the Initial Date of Deposit.
The cost of Securities to the Sponsor includes the
amount paid by the Sponsor for brokerage
commissions. These amounts are an expense of the
Trust.
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 Exchange Act of 1934, as amended
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 that 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 the Trustee, Investors
Bank & Trust Company, for redemption at its office
in person, or by mail at Hancock Towers, P.O. Box
9130, Boston, MA 02117-9130 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 the Trustee. If Units
are represented by a certificate, it must be
properly endorsed accompanied by a letter
requesting redemption. If held in uncertificated
form, 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 (the "Redemption Value") 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.")
A redemption request is deemed received on the
business day (See "Valuation" for a definition of
business day) when such request is received prior
to 4:00 p.m. If it is received after 4:00 p.m., it
is deemed received on the next business day.
During the period in which the Sponsor maintains a
secondary market for Units, the Sponsor may
repurchase any Unit presented for tender to the
Trustee for redemption no later than the close of
business on the second business day following such
presentation and Unitholders will receive the
Redemption Value next determined after receipt by
the Trustee of the redemption request. Proceeds of
a redemption will be paid to the Unitholder by 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 to the seventh
calendar day).
With respect to cash redemptions, amounts
representing income received shall be withdrawn
from the Income Account, and, to the extent such
balance is insufficient, from the Capital Account.
The Trustee is empowered, to the extent necessary,
to sell Securities in the manner as is directed by
the Sponsor, which direction will be given to
maximize the objectives of the Trust. In the event
that no such direction is given by the Sponsor,
the Trustee is empowered to sell Securities as
follows: Treasury Obligations will be sold to
maintain in the Trust Treasury Obligations in an
amount which, upon maturity, will equal at least
$1.00 per Unit outstanding after giving effect to
such redemption and Stocks having the greatest
amount of capital appreciation will be sold first.
(See "Administration of the Trust".) However, with
respect to redemption requests in excess of
$100,000, the Sponsor may determine in its
discretion to direct the Trustee to redeem Units
"in kind" by distributing Securities to the
redeeming Unitholder. When Stock is distributed, a
proportionate amount of 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". A Unitholder
receiving a redemption "in kind" may incur
brokerage or other transaction costs in converting
the Securities distributed into cash. The
availability of redemption "in-kind" is subject to
compliance with all applicable laws and
regulations, including the Securities Act.
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 for
Units 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 SEC
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 SEC 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 suspension or
postponement, or any failure to suspend or
postpone when done in the Trustee's discretion.
VALUATION
The Trustee will calculate the Trust Fund
Evaluation per Unit at the Evaluation Time
described under "Essential Information Regarding
the Trust" (1) on each June 30 and December 31 (or
the last business day prior thereto), (2) on each
business day as long as the Sponsor is maintaining
a bid in the secondary market, (3) on the business
day on which any Unit is tendered for redemption
and (4) on any other day desired by the Sponsor or
the Trustee, by adding (a) the aggregate value of
the Securities and other assets determined by the
Trustee as described below, (b) cash on hand in
the Trust, income accrued on the Treasury
Obligations but not distributed or held for
distribution and dividends receivable on Stocks
trading ex-dividend (other than any cash held in
any reserve account established under the
Indenture) and (c) accounts receivable for
Securities sold and any other assets of the Trust
Fund 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) and other Trust expenses,
(x) cash allocated for distribution 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 Trust Fund
Evaluation per Unit is calculated by dividing the
result of the above computation by the number of
Units outstanding as of the date of the Trust Fund
Evaluation. Business days do not include
Saturdays, Sundays, New Year's Day, Martin Luther
King, Jr. Day, President's 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
U.S. dollar value of Stock denominated in foreign
currency, if any, contained in the Trust, will be
based on the applicable foreign currency exchange
rate calculated at the Evaluation Time.
The value of Stocks will be determined by the
Trustee in good faith in the following manner: (1)
if the Securities are listed on one or more
national securities exchanges, the evaluation will
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 for the Stock (deemed to
be the New York Stock Exchange if the Securities
are listed thereon) (2) if there is no such
appropriate closing sale price on such exchange,
at the mean between the closing bid and asked
prices on such exchange (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 for the
Stock 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 on 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 Securities in good
faith on the bid side of the market or (d) by any
combination of the above.
During the initial offering period, the Treasury
Obligations are valued on the basis of offering
prices; thereafter and for purposes of determining
the Redemption Value they are valued on the basis
of bid prices. The aggregate offering and bid
prices of the Treasury Obligations are the prices
obtained from investment dealers or brokers (which
may include the Sponsor) who customarily deal in
Treasury Obligations; or, if there is no market
for the Treasury Obligations, and bid or offering
prices are not available, on the basis of current
bid or offering prices for comparable securities;
or by appraisal; or by any combination of the
above, adjusted to reflect income accrued.
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION VALUE
While the Public Offering Price of Units during
the initial offering period is determined on the
basis of the current offering prices of the
Treasury Obligations, the Public Offering Price of
Units in the secondary market and the Redemption
Value is determined on the basis of the current
bid prices of the Treasury Obligations. 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 Date of Deposit,
the Public Offering Price per Unit (which figure
includes the sales charge) exceeded the Redemption
Value, (See "Essential Information"). The bid and
offering prices of the Treasury Obligations 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 the
Units. Also, as of the close of the initial
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 Initial Organizational Costs will be paid by
the Trust, as is common for mutual funds.
Historically, the Sponsors of unit investment
trusts have paid all organizational expenses. The
Sponsor will receive no fee from the Trust for its
services in establishing 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 initially $.00035 per Unit, 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
Pathfinders 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, at
an annual rate of $.00145 per Unit computed
monthly based upon the largest number of Units
outstanding in the Trust during the preceding
month. In addition, the regular and recurring
expenses of the Trust are estimated to be $.0005
per Unit, which include, but are not limited to
certain mailing, printing, and auditing 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 under 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
Consumer 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 the Income Account, from the
Capital Account (see "Administration of the
Trust-Accounts"): (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 SEC, 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 auditors
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 audit expense which exceeds $.00050
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 described 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 estimated annual expenses
of the Trust. To the extent that dividends paid
with respect to the Stocks are not sufficient to
meet such expenses of the Trust, the Trustee is
authorized to sell Securities in the same manner
as provided in "Redemption" herein.
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
unless a request, in writing with signature
guaranteed by an eligible guarantor institution or
in such other manner as may be acceptable to the
Trustee, is delivered by the Unitholder to the
Sponsor. Issued certificates are transferable by
presentation and surrender to the Trustee at its
office in Boston, Massachusetts properly endorsed
or accompanied by a written instrument or
instruments of transfer. Uncertificated Units are
transferable by presentation to the Trustee at its
office of a written instrument of transfer.
Certificates may be issued in denominations of
one Unit or any integral multiple of one Unit as
deemed appropriate by the Trustee. A Unitholder
may be required to pay $2.00 per certificate
reissued or transferred, and shall be required to
pay any governmental charge that may be imposed in
connection with each transfer or interchange. For
new certificates issued to replace destroyed,
mutilated, stolen or lost certificates, the
Unitholder must furnish indemnity satisfactory to
the Trustee and must pay any expenses that the
Trustee may incur. Mutilated certificates must be
surrendered to the Trustee for replacement.
DISTRIBUTIONS
The Trustee will distribute any net income
received, if any, from the Income Account,
quarterly on the Distribution Dates to Unitholders
of record on the preceding Record Date. Income
with respect to the original issue discount on the
Treasury Obligations will not be distributed
although Unitholders will be subject to tax as if
a distribution had occurred. Distributions from
the Capital Account will be made on quarterly
Distribution Dates to Unitholders of record on the
preceding Record Date, provided however, that
distributions of less than $.00500 per Unit need
not be made from the Capital Account on any
Distribution Date. (See "Federal Income Taxes".)
Within a reasonable period after the Trust is
terminated, each Unitholder will, upon surrender
of his Certificates for cancellation, 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".)
ADMINISTRATION OF THE TRUST
Accounts. All dividends received and interest,
if any, accrued on Securities, proceeds from the
sale of Securities or other monies received by the
Trustee on behalf of the Trust shall be held in
trust in Short-Term Treasury Obligations (if
permissible) or in non-interest bearing accounts
until required to be disbursed.
The Trustee will credit on its books to the
Income Account any dividends (including stock
dividends which were sold) and interest, if any,
accrued by the Trust. All other receipts (i.e.
return of principal, and gains) are credited on
its books to a Capital Account. Stock dividends
received by the Trust, if any, will be sold by the
Trustee and the proceeds therefrom be treated as
income to the Trust. 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".
The Trustee will deduct from the Income Account
and, to the extent funds are not sufficient in the
Income Account, from the Capital Account, amounts
necessary to pay annual expenses incurred by the
Trust. (See "Expenses of the Trust.") In addition,
the Trustee may withdraw from the Income Account
and the Capital Account any amounts that may be
necessary to cover redemption of Units by the
Trustee. (See "Redemption.") In addition,
distributions of amounts necessary to pay the
Initial Organizational Costs will be made from the
Capital Account to special accounts maintained by
the Trustee for purpose of reimbursing the
Sponsor. 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.
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 the distribution of
income 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, starting with calendar year
1999, 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 the year
in the Income, Capital and Reserve Accounts; (2)
any Securities sold during the year and the
Securities held at the end of the year; (3) the
Trust Fund Evaluation per Unit, computed as of 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 in this
Prospectus 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 (or tender a Security for
cash in the case of paragraph (6) below):
(1) upon the failure of the issuer to declare or
pay anticipated dividends or interest;
(2) upon the institution of 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 or interest 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 or interest on the Securities;
(5) upon the decline in price or the occurrence
of any materially adverse market or 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 public tender offer being made for a
Security, or a merger or acquisition being
announced affecting a Security that in the opinion
of the Sponsor make the sale or tender of the
Security in the best interests of the Unitholders;
(7) upon a decrease in the Sponsor's internal
rating of the Security; or
(8) upon the happening of events which, in the
opinion of the Sponsor, negatively affect the
economic fundamentals of the issuer of the
Security or the industry of which it is a part.
The Indenture contains certain instructions to
the Trustee regarding corporate actions that
affect Securities held in the Trust. In most
cases, the Trustee is required to use its best
efforts to vote the Securities as closely as
practicable in the same manner and in the same
proportion as are all other securities held by
owners other than the Trust. In cases of offers to
exchange Securities for other stock or securities
(including but not limited to a tender offer), the
Trustee is required to reject such offers. If,
after complying with such procedures, the Trustee
nevertheless receives stock or securities, with or
without cash, as a result of the corporate action,
the Trustee, at the direction of the Sponsor, may
retain or sell the stock or securities. Any stock
or securities so retained will be subject to the
terms and conditions of the Indenture to the same
extent as the Securities originally deposited in
the Trust.
The Trustee may dispose of Securities where
necessary to pay annual Trust expenses 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, provided however, that
Treasury Obligations will be sold to maintain in
the Trust Treasury Obligations in an amount which,
upon maturity, will equal at least $1.00 per Unit
outstanding after giving effect to the redemption
and Stocks having the greatest appreciation shall
be sold first.
Reinvestment. Cash received upon the sale of
Stock (except for sales to meet redemption
requests) and dividends received may, if and to
the extent there is no legal or regulatory
impediment, be reinvested in Short-Term Treasury
Obligations. The Sponsor anticipates that, where
permitted, such proceeds will be reinvested in
interest bearing Short-Term Treasury Obligations
unless factors exist such that reinvestment would
not be in the best interest of Unitholders or
would be impractical. Such factors may include,
among others, (i) short reinvestment periods which
would make reinvestment in Short-Term Treasury
Obligations undesirable or infeasible and (ii)
amounts not sufficiently large so as to make a
reinvestment economical or feasible. Any moneys
held and not reinvested will be held in a
non-interest bearing account until distribution on
the next Distribution Date to Unitholders of
record.
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 of the Indenture which
may be defective or inconsistent or to make other
provisions that will not materially adversely
affect the interest of the Unitholders.
The Indenture may be amended in any respect by
the Sponsor and the Trustee with the consent of
the holders of 51% of the Units then outstanding;
provided that no such amendment shall (1) reduce
the interest in the Trust represented by a Unit or
(2) reduce the percentage of Unitholders required
to consent to any such amendment, without the
consent of all Unitholders.
The Trustee will promptly notify Unitholders of
the substance of any amendment affecting
Unitholders' rights or their interest in the
Trust.
TERMINATION OF THE TRUST
The Indenture provides that the Trust will
terminate within 15 days after the maturity of the
Treasury Obligations held in the Trust. If the
value of the Trust as shown by the Trust Fund
Evaluation is less than twenty percent (20%) of
the market value of the Securities upon completion
of the deposit of Securities, the Trustee may in
its discretion, and will when so directed by the
Sponsor, terminate the 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 as stated in "Essential Information Regarding
the Trust."
As directed by the Sponsor approximately 30 days
prior to the Mandatory Termination Date the
Trustee will begin to sell the Stocks held in the
Trust. Stocks having the greatest amount of
capital appreciation will be sold first. Upon
termination of the Trust, the Trustee will sell
any Stocks then remaining 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, upon
surrender for cancellation of his Certificate (if
applicable) after due notice of such termination,
such Unitholder's pro rata share in the Income and
Capital Accounts. Monies held upon the sale of
Securities will be held in Short-Term Treasury
Obligations (if permissible) or in non-interest
bearing accounts created under the Indenture until
distributed and, if not re-invested, will be of
benefit to the Trustee. The sale of Stocks in the
Trust in the period prior to termination and upon
termination may result in a lower amount than
might otherwise be realized if the 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
the 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, any of the Trusts 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 wilful misfeasance, bad
faith, gross negligence or wilful 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 office at
Hancock Towers, 200 Clarendon Street, Boston,
Massachusetts 02116, toll-free number
1-800-356-2754 (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 for any valuation which it is required to make,
except by reason of its own gross negligence, bad
faith or wilful 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 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 on the Securities 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 wilful
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 have been audited by Ernst & Young
LLP, independent auditors and have been included
in this Prospectus in reliance upon their report
given on their authority as experts in accounting
and auditing.
LEGAL OPINIONS
The legality of the Units offered by this
Prospectus has been passed upon by Carter, Ledyard
& Milburn, 2 Wall Street, New York, New York, as
counsel for the Sponsor.
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following
documents:
The facing sheet.
The Prospectus.
The signatures.
The following exhibits:
EX-99.C1 Opinion of Counsel as to legality of securities
being registered
EX-99.C2 Consent of Independent Auditors
EX-99.A1 Code of Ethics of PaineWebber Unit Trust
Department effective as of March 1, 2000
(incorporated by reference to Exhibit 99.A1
to Post Effective Amendment Number 9 to Form
S-6 for the Municipal Bond Trust, Series 229,
(Reg. No. 33-34397), filed with the Commission
on April 7, 2000).
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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, The PaineWebber Pathfinders Trust, Treasury and Growth
Stock Series 24 certifies that it meets all of the
requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this registration statement to be signed on its behalf
by the undersigned thereunto duly authorized, and its seal to be
hereunto affixed and attested, all in the City of New York, and the
State of New York on the 7th day of April, 2000.
PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES 24
(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
Registration Statement has been signed on behalf of PaineWebber
Incorporated, the Depositor, by the following persons in the
following capacities and in the City of New York, and State of New
York, on this 7th day of April, 2000.
PAINEWEBBER INCORPORATED
Name Office
Donald B. Marron Chairman, Chief Executive Officer
and Director of PaineWebber Incorporated*
Regina A. Dolan Executive Vice President,
Chief Financial Officer and
Director of PaineWebber Incorporated*
Joseph J. Grano, Jr. President and
Director of PaineWebber Incorporated*
Steve P. Baum Executive Vice President and
Director of PaineWebber Incorporated*
Robert H. Silver Executive Vice President and
Director of PaineWebber Incorporated*
Mark B. Sutton Executive Vice President and
Director of PaineWebber Incorporated*
Margo N. Alexander Executive Vice President and
Director of PaineWebber Incorporated*
Terry L. Atkinson Managing Director and
Director of PaineWebber Incorporated*
Brian M. Barefoot Executive Vice President and
Director of PaineWebber Incorporated*
Michael Culp Managing Director and
Director of PaineWebber Incorporated*
Edward M. Kerschner Managing Director and
Director of PaineWebber Incorporated*
James P. MacGilvray Executive Vice President and
Director of PaineWebber Incorporated*
By:/s/ ROBERT E. HOLLEY
Attorney-in-fact*
* Executed copies of the powers of attorney have been previously
filed with the Securities and Exchange Commission with the Post
Effective Amendment to the Registration Statement File No. 2-61279.
April 7, 2000
PaineWebber Incorporated
1200 Harbor Blvd.
Weehawken, New Jersey 07087
Ladies and Gentlemen:
We have served as counsel for PaineWebber Incorporated as
sponsor and depositor (the "Depositor") of PaineWebber
Pathfinders Trust, Treasury and Growth Stock Series 24
(hereinafter referred to as the "Trust"). It is proposed that
Post-Effective Amendment No. 1 to the Trust's registration statement
("Post-Effective Amendment No. 1") will be filed with the Securities
and Exchange Commission and dated as of the date hereof in connection
with the continued issuance by the Trust of an indefinite number of
units of fractional undivided interest in the Trust (hereinafter referred
to as the "Units") pursuant to Rule 24f-2 promulgated under the
provisions of the Investment Company Act of 1940, as amended.
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 Depositor, as amended;
(b) Resolutions of the Board of Directors of the Depositor adopted on
December 3, 1971 relating to the Trust and the sale of the Units;
(c) Resolutions of the Executive Committee of the Depositor adopted
on September 24, 1984;
(d) Powers of Attorney referred to in the Amendment;
(e) Post-Effective Amendment No. 1 to the Registration Statement on
Form S-6 (File No. 333-49107) to be 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") proposed to be filed on or about the
date hereof (the "Amendment");
(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;
(g) The registration of the Trust filed with the Commission under the
1940 Act on Form N-8B-2 (File No. 811-4158), as amended;
(h) The prospectus included in the Amendment (the "Prospectus");
(i) The Standard Terms and Conditions of the Trust dated as of
July 1, 1997, as amended, among the Depositor, and
Investors Bank & Trust Company
(the "Trustee"), (the "Standard Terms");
(j) The Trust Indenture dated as of the Initial Date of Deposit, among
the Depositor, the Trustee and the Evaluator (the "Trust
Indenture" and, collectively with the Standard Terms, the
"Indenture and Agreement");
(k) The form of certificate of ownership for units (the "Certificate") to
be issued under the Indenture and Agreement; and
(l) Such other pertinent records and documents as we have deemed
necessary.
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 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 Depositor in paragraph (i) 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 Depositor 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 Depositor is duly qualified as a foreign corporation and is in
good standing as such within the State of New York;
(iii)The terms and provisions of the Units conform in all material
respects to the description thereof contained in the Prospectus;
(iv) 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 Depositor's Restated Certificate of
Incorporation, as amended, or By-Laws, as amended and will not
conflict with any applicable laws or regulations applicable to the
Depositor in effect on the date hereof; and
(v) The Certificates to be issued by the Trust, when duly executed by
the Depositor and the Trustee in accordance with the Indenture
and Agreement, upon delivery against payment therefor as
described in the 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.
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.
We hereby represent that the Amendment contains no disclosure
which would render it ineligible to become effective immediately
upon filing pursuant to paragraph (b) of Rule 485 of the
Commission.
We hereby consent to the filing of this opinion as an exhibit to
the Amendment and to the use of our name wherever it appears in
the Amendment and the Prospectus.
Very truly yours,
/s/ CARTER, LEDYARD & MILBURN
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to our firm under the caption
"Independent Auditors" and to the use of our report dated
March 24, 2000, in the Registration Statement and related
Prospectus of the PaineWebber Pathfinders Trust, Treasury
and Growth Stock Series 24
/s/ ERNST & YOUNG LLP
New York, New York
April 6, 2000
