File No. 33-46435
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 3
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 14
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 June 3, 1996) pursuant to paragraph
(b) of Rule 485.
E. Title and amount of securities being registered:
41,301,680 Units
F. Proposed maximum offering price to the public of the securities being
registered:
$50,685,421.70**
* Estimated solely for the purpose of calculating the registration fee, at
$1.23 per unit.
G. Amount of filing fee, computed at one-twenty-ninth of 1 percent of the
proposed maximum aggregate offering price to the public:
$100.00*
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT.
* The method of calculation is made pursuant to Rule 24e-2 under the
Investment Company Act of 1940.The total amount of units redeemed or
repurchased during the previous fiscal year ending 1995 is 41,065,396.
There
have been no previous filings of post-effective amendments during the
current fiscal year 41,065,396 redeemed or repurchased units are being
used
to reduce the filing fee for this amendment.
PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES 14
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 Fourteen
A "Unit Investment Trust"
33,500,000 Units
The investment objective of this Trust is to
preserve capital while providing for capital ap-
preciation through an investment in "zero coupon"
United States Treasury obligations (the "Treasury
Obligations") and equity growth stocks having, in
Sponsor's opinion on the Date of Deposit, poten-
tial for appreciation (the "Growth Stocks"). The
value of the Units will fluctuate with the value
of the portfolio of underlying securities.
The minimum purchase is $1,000 except that the
minimum purchase in connection with an Individual
Retirement Account (IRA) or other tax-deferred
retirement plan is $250. Only whole Units may be
purchased.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DIS-
APPROVED BY THE SECURITIES AND EXCHANGE COMMIS-
SION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PRO-
SPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INITIAL PUBLIC OFFERING OF UNITS IN THE
TRUST HAS BEEN COMPLETED. THE UNITS OFFERED
HEREBY ARE ISSUED AND OUTSTANDING UNITS WHICH
HAVE BEEN ACQUIRED BY THE SPONSOR EITHER BY PUR-
CHASE FROM THE TRUSTEE OF UNITS TENDERED FOR RE-
DEMPTION OR IN THE SECONDARY MARKET.
SPONSOR:
PaineWebber
Incorporated
Read and retain this prospectus for future
reference.
Prospectus dated June 3, 1996
Essential Information Regarding The Trust
The Trust. The objective of the PaineWebber
Pathfinders Trust, Treasury and Growth Stock Se-
ries 14 (the "Trust") is preservation of capital
and capital appreciation through an investment in
the principal or interest portions of stripped
"zero-coupon" United States Treasury notes or
bonds as the case may be (the "Treasury Obliga-
tions"), and equity growth stocks (the "Growth
Stock" or "Stock") which, in the Sponsor's opin-
ion on the Date of Deposit, have potential for
capital appreciation (collectively, the
"Securities"). The Treasury Obligation which ma-
tures on November 15, 2003 represents approxi-
mately 52% of the aggregate market value of the
Trust portfolio and the Growth Stocks represent
approximately 48% of the aggregate market value
of the Trust portfolio. 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 the Trust's
termination. The Trust has been formulated so
that the portion of the Trust invested in Treas-
ury Obligations is designed to provide an ap-
proximate return of principal invested on the
Mandatory Termination Date for purchasers on the
Date of Deposit (see "Essential Information--
Distributions"). For purchasers after the Date of
Deposit, the Treasury Obligations will provide a
degree of principal protection. Therefore, even
if the Stocks are valueless upon termination of
the Trust, if the Treasury Obligations are held
until their maturity, purchasers on the Date of
Deposit should receive, at the termination of the
Trust, $1,000 per 1,000 Units purchased. This
feature of the Trust provides Unitholders with
principal protection although they would have
foregone earning any interest on the amounts in-
vested. The Stock 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 Stock in particular. In addition,
the Treasury Obligations may fluctuate substan-
tially in value. There is no assurance that the
Trust's objective will be achieved at the Trust's
intended maturity or if the Trust is terminated
or Units redeemed prior to the Trust's intended
maturity. The value of the Securities and, there-
fore, the value of Units may be expected to fluc-
tuate.
As directed by the Sponsor, approximately 30
days prior to the maturity of the Treasury Obli-
gations, the Trustee will begin to sell the
Stocks held in the Trust. Stocks having the
greatest amount of capital appreciation will be
sold first. Monies held upon the sale of Securi-
ties will be held in non-interest bearing ac-
counts created by the Indenture until distributed
and will be of benefit to the Trustee. During the
life of the Trust, Securities will not be sold to
take advantage of market fluctuations. The Trust
will terminate within 15 days after the Treasury
Obligations mature. (See "Termination of the
Trust" and "Federal Income Taxes".)
Public Offering Price. The Public Offering Price
per Unit is computed by dividing the Trust Fund
Evaluation by the number of Units outstanding and
then adding a sales charge which is currently
3.25% of the Public Offering Price (3.36% of the
net amount invested). The sales charge is reduced
in later years and on a graduated scale for sales
involving at least $50,000 or 50,000 Units and
will be applied on whichever basis is more
favorable to the purchaser (See "Public Offering
of Units-Sales Charge and Volume Discount").
Distributions. The Trustee will distribute any
net income and principal received (excluding long
term capital gains, if any, on the sale of
Stocks) quarterly on the Distribution Dates. Long
term capital gains, if any, will be distributed
annually. Income with respect to the original
issue discount on the Treasury Obligations will
not be distributed although Unitholders will be
subject to income tax at ordinary income rates as
if a distribution had occurred. (See "Federal In-
come Taxes"). Additionally upon termination of
the Trust, the Trustee will distribute to each
Unitholder his pro rata share of the Trust's
assets, less expenses. 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 such sale were not
required at such time due to impending or actual
termination of the Trust. For this reason, among
others, the amount realized by a Unitholder upon
termination may be less than the amount paid by
such Unitholder. Unless a Unitholder purchases
Units on the Date of Deposit and unless the
Treasury Obligations in proportion to the Units
outstanding remain in the Trust, total
distributions, including distributions made upon
termination of the Trust, may be less than the
amount paid for a Unit.
Market for Units. The Sponsor, though not
obligated to do so, presently intends to maintain
a secondary market for Units based upon the bid
side evaluation of the Treasury Obligations. The
public offering price in the secondary market
will be based upon the value of the Securities
next determined after receipt of a purchase order
plus the applicable sales charge (See "Public
Offering of Units-Public Offering Price" and
"Valuation"). If a secondary market is not main-
tained, a Unitholder may dispose of his Units
only through redemption. With respect to
redemption requests in excess of $100,000, the
Sponsor may determine in its sole discretion to
direct the Trustee to redeem units "in kind" by
distributing only Stocks to the redeeming
Unitholder as directed by the Sponsor. (See
"Redemption")
THE TRUST
General. The Trust is one of a series of similar
but separate unit investment trusts created by
the Sponsor pursuant to a Trust Indenture and
Agreement* (the "Indenture") dated as of the Date
of Deposit, between PaineWebber
________________
*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.
Incorporated, as Sponsor and Investors Bank &
Trust Company and The First National Bank of
Chicago as Co-Trustees (the "Co-Trustees" or the
"Trustee"). The objective of the Trust is
preservation of capital and capital appreciation
through an investment in Treasury Obligations and
Growth Stocks.
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 considered the safest investment.
The effect of owning deep discount bonds which
do not make current interest payments (such as
the Treasury Obligations) 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, Treasury Obligations
are subject to substantially greater price
fluctuations during periods of changing market
interest rates than are securities of comparable
quality which pay interest currently.
The Growth Stocks. The Trust also consists of
Growth Stocks. These are equity stocks which, in
Sponsor's opinion on the Date of Deposit, have
growth appreciation potential because PaineWebber
believes the Stocks will be the beneficiaries of
industrial innovation as well as global and
technological trends over the life of the Trust.
Stocks will not be sold to take advantage of
market fluctuations. The Stocks contained in the
Trust are representative of a number of different
industries and the Trust is not considered
concentrated in the Stocks of any particular in-
dustry. Although certain Stocks in the Trust pay
dividends, the Stocks were not selected on the
basis of the potential for dividend income but
rather on their growth potential. Dividends, if
any, received will be held by the Trustee in non-
interest bearing accounts until used to pay
expenses or distributed to Unitholders on the
next Distribution Date and to the extent that
funds are held therein will benefit the Trustee.
An investment in Units of the Trust should be
made with an understanding of the risks inherent
in an investment in common stocks in general. The
general risks are associated with the rights to
receive payments from the issuer which are
generally inferior to creditors of, or holders of
debt obligations or preferred stocks issued by,
the issuer. Holders of common stocks have a right
to receive dividends only when and if, and in the
amounts, declared by the issuer's board of
directors and to participate in amounts available
for distribution by the issuer only after all
other claims against the issuer have been paid or
provided for. By contrast, holders of preferred
stocks have the right to receive dividends at a
fixed rate when and as declared by the issuer's
board of directors, normally on a cumulative
basis, but do not participate in other amounts
available for distribution by the issuing
corporation. Dividends on cumulative preferred
stock must be paid before any dividends are paid
on common stock. Preferred stocks are also
entitled to rights on liquidation which are
senior to those of common stocks. For these
reasons, preferred stocks generally entail less
risk than common stocks.
Common stocks do not represent an obligation of
the issuer. Therefore they do not offer any
assurance of income or provide the degree of
protection of debt securities. The issuance of
debt securities or even preferred stock by an is-
suer 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, like the
Treasury Obligations, in the Trust may be
expected to fluctuate over the life of the Trust
to values higher or lower than those prevailing
on the Date of Deposit. Certain of the Stocks are
American Depositary Receipts ('ADRs') which
evidence American Depositary Shares which, in
turn, represent common stock of foreign issuers
deposited with a custodian in a depositary.
Currency fluctuations will affect the U.S. dollar
equivalent of the local currency price of the
underlying domestic share and as a result, are
likely to affect the value of ADRs and the value
of any dividends actually received by the Trust.
In addition, the rights of holders of ADRs may be
different than those of holders of the underlying
shares, and the market for ADRs may be less
liquid than that for the underlying shares.
Therefore, investment in this Trust should be
made with an understanding that the value of the
ADRs may fluctuate with fluctuations in the
values of the particular foreign currency
relative to the U.S. dollar. There is no
assurance that the Trust's objective will be
achieved. Until distributed, dividends and
principal received upon the sale of Stocks may be
reinvested, until the next applicable
distribution date, in current interest-bearing
United States Treasury Obligations. (See
'Administration of the Trust-Reinvestment'.) (The
Treasury Obligations, the current interest-
bearing United States Treasury Obligations if
any, and the Stocks may be collectively referred
to as 'Securities' herein.) The value of the se-
curities and, therefore, the value of Units may
be expected to fluctuate.
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".)
FEDERAL INCOME TAXES
In the opinion of Orrick, Herrington &
Sutcliffe, 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 Unitholders.
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 redeems or
sells its Units. For purposes of determining gain
or loss, the total tax cost of each Unit to a
Unitholder is allocated among each of the
Securities in accordance with the proportion of
the Trust comprised by each Security, to
determine the Unitholder's per Unit tax cost for
each Security.
3. The Trust is not an association taxable as a
corporation for New York State income tax
purposes. Under New York State law, each
Unitholder will be treated as the owner of a pro
rata portion of the Trust, and 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 Treasury
regulations promulgated thereunder 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. 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 its 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 tax of the Trust, derived from
dividends on Growth Stocks, original issue
discount or interest on Treasury Obligations (the
"Treasury Obligations") gains or losses upon
sales of Securities by the Trust and a pro rata
share of 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, as well as amounts that are
not distributed to Unitholders but are used by
the Trust to pay expenses.
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. After such 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 sale of common
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.
A Unitholder who is an individual, estate or
trust may be disallowed certain itemized
deductions described in Section 67 of the Code,
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.
Original Issue Discount. The Trust will contain
principal or interest portions of stripped "zero-
coupon" United States 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 consists
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 thereof. The market value of the
Trust assets comprising the Trust will be
provided to a Unitholder upon request in order 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 in a geometric progression over the
life of such obligation, taking into account the
compounding of accrued interest at least
annually, resulting in an increasing amount of
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 with
respect to a Unitholder's pro rata interest in
Treasury Obligations is thereupon 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 Se-
curities 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. Such gain or loss will be capital
gain or loss if the Unit and underlying
Securities were held as capital assets, except
that such gain will be treated as ordinary income
to the extent of any accrued original issue
discount not previously reported. Each Unitholder
will generally 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 its per Unit tax
cost therefor.
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 34 percent, the maximum rate on
corporate ordinary income then scheduled to be in
effect, to 10.2 percent. A portion of the
dividends-received deduction may, however, be
subject to the alternative minimum tax and be
taxed at a 20 percent effective tax rate. In-
dividuals, partnerships, trusts, S corporations
and other entities are not eligible for the
dividends-received deduction.
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 or perjury, IRS Form W-9 (or its
equivalent).
State Taxation and Future Legislation. The
foregoing discussion is a general summary and
relates only to certain aspects of the federal
income tax consequences with respect to
distributions by the Trust. Unitholders may also
be subject to state and local taxation. Future
legislative, judicial or administrative changes
could modify the conclusions expressed above and
could affect the tax consequences to Unitholders.
Accordingly, Unitholders should consult their own
tax advisors regarding questions of federal,
state and local tax consequences to them of
ownership of Units.
Investments 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
in the secondary market will be the Trust Fund
Evaluation per Unit next determined after receipt
of a purchase order, determined with respect to
the Treasury Obligations on the bid side of the
market, plus the applicable sales charge. (See
"Valuation.")
Sales Charge. Sales charges for secondary market
sales are set forth 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. 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, as well as amounts that are
not distributed to Unitholders but are used by
the Trust to pay expenses.
Secondary Market From March 31, 1995 Secondary Market on and After
Through March 30, 1996 March 31, 1996
Percent of Percent of
Public Percent of Public Percent of
Offering Net Amount Offering Net Amount
Price Invested Price Invested
3.25% 3.36% 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 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 intends to permit
employees of the Sponsor and its affiliates and
certain of their relatives to purchase Units of
the Trust at a reduced sales charge of $5.00 per
1,000 Units.
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 The
PaineWebber Municipal Bond Fund (the "PaineWebber
Series"); The Municipal Bond Trust (the "National
Series"); The Municipal Bond Trust, Multi-State
Program (the "Multi-State Series"); The Municipal
Bond Trust, California Series (the "California
Series"); The Corporate Bond Trust (the
"Corporate Series"); The PaineWebber Pathfinder's
Trust (the "Pathfinder's Trust"); The Municipal
Bond Trust, Insured Series (the "Insured Series")
the PaineWebber Federal Government Trust, (the
"Federal Government Trust") or The PaineWebber
Equity Trust, (the "Equity Trust"), (collectively
referred to as the "Exchange Trusts"), at a
Public Offering Price for the units of the Ex-
change Trusts to be acquired based on a reduced
sales charge of $15 per unit or per 1,000 units
in the case of a trust whose units cost
approximately one dollar. The purpose of such
reduced sales charge is to permit the Sponsor to
pass on to the Certificateholder who wishes to
exchange Units the cost savings resulting from
such exchange Units. The cost savings result from
reductions in time and expense related to advice,
financial planning and operational expenses re-
quired 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 Certificateholder who
purchased Units of a series and paid a per Unit
or per 1,000 Unit sales charge that was less than
the per Unit or per 1,000 Unit sales charge of
the series of the Exchange Trusts for which such
Certificateholder desires to exchange into, will
be allowed to exercise the Exchange Option at the
Unit Offering Price plus the reduced sale charge,
provided the Certificateholder has held the Units
for at least five months. Any such
Certificateholder who has not held the Units to
be exchanged for the five-month period will be
required to exchange them at the Unit Offering
Price plus a sales charge based on the greater of
the reduced sale charge, or an amount which,
together with the initial sales charge paid in
connection with the acquisition of the Units
being exchanged, equals the sales charge of the
series of the Exchange Trust for which such
Certificateholder 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 either a primary
market for Units or 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, but Unitholders
will be permitted to advance new money in order
to complete an exchange to round up to the next
highest number of Units. An exchange of Units
pursuant to the Exchange Option will normally
constitute a "taxable event," i.e., a Unitholder
will recognize a tax gain or loss which will be
of a capital or ordinary income nature depending
upon the length of time he has held his Units and
other factors. Unitholders are urged to consult
their own tax advisors as to the tax consequences
to them of exchanging Units in particular cases.
The Sponsor reserves the right to modify,
suspend or terminate this Exchange Option 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 to the
Sponsor of this series to purchase Units of one
or more of the Exchange Trusts from the Sponsor.
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 indicated 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 market value
of the Securities in the portfolio of the Trust
next determined after receipt by the Sponsor of
an exchange request and properly endorsed
Certificate. Units of the Exchange Trust will be
sold to the Unitholder at a price based upon the
next determined market value of the Securities in
the Exchange Trust plus the reduced sales charge.
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 Certificateholder,
who has three thousand units of a trust with a
current price of $1.30 unit, desires to sell his
units and seeks to exchange the proceeds for
units of a series of an Exchange Trust with a cur-
rent price of $890 per unit based on the bid
prices of the underlying securities. In this
example, which does not contemplate any rounding
up to the next highest number of Units, the
proceeds from the Unitholder's units would aggre-
gate $3,900. Since only whole units of an
Exchange Trust may be purchased under the
Exchange Option, the Unitholder would be able to
acquire four units in the Exchange Trust for a
total cost of $3,620 ($3,560 for the units and
$60 for the sales charge). If all 3,000 units
were tendered, the remaining $280 would be
returned to the Unitholder.
Conversion Option. In addition to the Exchange
Option described in this Prospectus, owners of
units of any registered unit investment trust
sponsored by another 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 at a reduced sales charge
of $15 per Unit (or 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). 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 (or 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 of the prospectus.
Distribution of Units. The minimum purchase in
the initial public offering is 1,000 Units,
except that the minimum purchase 250 Units for
purchases made in connection with Individual
Retirement Accounts or other tax-deferred retire-
ment plans. 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 one-half of the highest
applicable sales charge and the dealer concession
will be retained by the Sponsor. In event that
the dealer concession is 90% or more of the sales
charge per Unit, dealers taking advantage of such
concession may be deemed to be underwriters under
the Securities Act of 1933.
The Sponsor reserves the right to reject, in
whole or in part, any order for the purchase of
Units. The Sponsor intends to qualify the Units
in all states of the United States and does not
intend to sell Units to persons who are non-
resident aliens.
Secondary Market for Units. While not obligated
to do so, the Sponsor intends to maintain a
secondary market for the Units and continuously
offer to purchase Units at the Trust Fund
Evaluation per Unit next computed after receipt
by the Sponsor of an order from a Unitholder. The
Sponsor may cease to maintain such a market at
any time, and from time to time, without notice.
In the event that a secondary market for the
Units is not maintained by the Sponsor, a
Unitholder desiring to dispose of Units may
tender such Units to the Trustee for redemption
at the price calculated in the manner set forth
under "Redemption". Redemption requests in excess
of $100,000 may be redeemed "in kind" as
described under "Redemption".
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.
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 at which it sells or redeems the
Units, which is based on the value of the
Securities, determined by the Trustee as
described under "Valuation". 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.
Cash, if any, received from Unitholders prior to
the settlement date for the purchase of Units or
prior to the payment for Securities upon their
delivery may be used in the Sponsor's business
subject to the limitations of Rule 15c3-3 under
the Securities and Exchange Act of 1934 and may
be of benefit to the Sponsor. In 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
One or more Units represented by a Certificate
may be tendered to Investors Bank & Trust Company
(the 'Trustee') for redemption at its office at
89 South Street, Boston, MA 02111 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. Units
redeemed by the Trustee will be cancelled. The
Certificate must be properly endorsed and
accompanied by a letter requesting transfer.
Unitholders must sign exactly as their names
appear on the face of the Certificate with the
signature guaranteed by a national bank or trust
company, or by a member firm of the New York,
Midwest, or Pacific Coast Stock Exchange, 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 will be redeemed at the Redemption Value
per Unit next determined after receipt of the
redemption request in good order by the Trustee.
The Redemption Value per Unit is determined by
dividing the Trust Fund Evaluation, determined on
the basis of the current bid prices for the
Treasury Obligation plus the market value for the
Stocks 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, it is
deemed received on the next business day. The
Sponsor may purchase Units tendered to the
Trustee for redemption. 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 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 on the seventh
calendar day following the date of tender (or if
the seventh calendar day is not a business day on
the first business day prior thereto).
With respect to cash redemptions, amounts
representing income received shall be withdrawn
from the Income Account, and, to the extent such
balance is insufficient, from the Capital
Account. The Trustee is empowered, to the extent
necessary, to sell Securities in such manner and
as directed by the sponsor which direction shall
be given as 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 so as to maintain 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 con-
verting the Securities distributed into cash.
The Trustee may, in its discretion, and will,
when so directed by the Sponsor, suspend the
right of redemption, or postpone the date of
payment of the Redemption Value, for more than
seven calendar days following the day of tender
for any period during which the New York Stock
Exchange, Inc. is closed other than for weekend
and holiday closings; or for any period during
which the Securities and Exchange Commission
determined that trading on the New York Stock
Exchange, Inc. is restricted or for any period
during which an emergency exists as a result of
which disposal or evaluation of the Securities is
not reasonably practicable; or for such other
period as the Securities and Exchange Commission
may by order permit for the protection of
Unitholders. The Trustee is not liable to any
person or in any way for any loss or damages
which may result from any such suspension or
postponement, or any failure to suspend or
postpone when done in the Trustee's discretion.
VALUATION
The Trustee will calculate the Trust's value
(the "Trust Fund Evaluation") per Unit at the
Valuation Time set forth under "Summary of
Essential Information" (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 set
forth below and (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
deducting therefrom the sum of (x) taxes or other
governmental charges against the Trust not
previously deducted and (y) accrued fees and
expenses of the Trustee and the Sponsor
(including legal and auditing expenses) and other
Trust expenses. The per Unit Trust Fund
Evaluation is calculated by dividing the result
of such computation by the number of Units
outstanding as of the date thereof. Business days
do not include New Year's 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 value of Stocks shall 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, such evaluation
shall be based on the closing sale price on that
day (unless the Trustee deems such price
inappropriate as a basis for evaluation) on the
exchange which is the principal market thereof
(deemed to be the New York Stock Exchange 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 Securities are not so
listed or, if so listed and the principal market
therefore 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 thereof.
Treasury Obligations are valued on the basis of
bid prices. The aggregate bid prices of the
Treasury Obligations, is the price 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 prices are not
available, on the basis of current bid prices for
comparable securities; or by appraisal; or by any
combination of the above, adjusted to reflect in-
come 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 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. The Public Offering Price per Unit
(which figure includes the sales charge) exceeds
the Redemption Value (see "Essential
Information"). The bid prices of the Treasury
Obligations and Stocks are expected to vary. For
this reason and others, including the fact that
the Public Offering Price includes the sales
charge, the amount realized by a Unitholder upon
redemption of Units may be less than the price
paid by the Unitholder for such Units.
EXPENSES OF THE TRUST
The cost of the preparation and printing of the
Certificates, the Indenture and this Prospectus,
the initial fees of the Trustee and the Trustee's
counsel, advertising expenses and expenses
incurred in establishment of the Trust including
legal and auditing fees, are paid by the Sponsor
and not by the Trust. The Sponsor will receive no
fee from the Trust for its services as Sponsor.
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 year. The Sponsor's fee,
which is not to exceed $.00025 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,
annually $.00145 per Unit. In addition, the
regular and recurring expenses of the Trust are
estimated to be $.0007 per Unit annually which
include, but are not limited to certain mailing,
printing and audit expenses. Expenses in excess
of this estimate will be borne by the Trust. The
Trustee could also benefit to the extent that it
may hold funds in non-interest bearing accounts
created by the Indenture.
The Sponsor's fee and Trustee's fee may be
increased without approval of the Unitholders by
an amount not exceeding a proportionate increase
in the category entitled "All Services Less Rent"
in the Consumer Price Index published by the
United States Department of Labor or if the Price
Index is no longer published, a similar index as
determined by the Trustee and Sponsor.
In addition to the above, the following charges
are or may be incurred by each Trust and paid
from the Income Account, or, to the extent funds
are not available in such Account, from the
Capital Account (see "Administration of the
Trust--Accounts"): (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 trusts 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
willful misconduct on its part; (6) brokerage
commissions in connection with the sale of
Securities; and (7) expenses incurred upon
termination of the Trust. In addition, to the
extent then permitted by the Securities and
Exchange Commission, the Trust may incur expenses
of maintaining registration or qualification of
the Trust or the Units under Federal or state
securities laws so long as the Sponsor is
maintaining a secondary market (including, but
not limited to, legal, auditing and printing
expenses).
The accounts of the Trust shall be audited not
less than annually by independent public
accountants selected by the Sponsor. The expenses
of the audit shall be an expense of the Trust. So
long as the Sponsor maintains a secondary market,
the Sponsor will bear any audit expense which
exceeds $.00050 per Unit. Unitholders covered by
the audit during the year may receive a copy of
the audited financials upon request.
The fees and expenses set forth above are
payable out of the Trust and when unpaid will be
secured by a lien on the Trust. To the extent
that dividends paid with respect to the Stocks
are not sufficient to meet the expenses of the
Trust, the Trustee is authorized to sell
Securities to meet the expenses of the Trust and
if Securities have to be sold, Stock will be sold
prior to Treasury Bonds and Stocks having the
greatest amount of appreciation will be sold
first.
RIGHTS OF UNITHOLDERS
Ownership of Units is evidenced by registered
Certificates executed by the Trustee and the
Sponsor. Certificates are transferable by
presentation and surrender to the Trustee at its
corporate agency office properly endorsed and ac-
companied by a written instrument or instruments
of transfer satisfactory to the Trustee together
with payment of $2.00 if required by the Trustee
(or such other amount as may be specified by the
Trustee and approved by the Sponsor), and taxes
or other governmental charges that may be imposed
in connection with the transaction. For new
Certificates issued to replace destroyed,
mutilated, stolen or lost Certificates, the
Unitholder must furnish indemnity satisfactory to
the Trustee and must pay such expenses as the
Trustee may incur. Mutilated Certificates must be
surrendered to the Trustee for replacement.
DISTRIBUTIONS
The Trustee will distribute any net income and
principal received 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.
(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 non-interest bearing accounts until
required to be disbursed.
The Trustee will credit on its books to an
Income Account any dividends (except stock
dividends) and interest, if any, accrued by the
Trust. All other receipts (i.e. return of
principal, stock dividends, if any, and gains)
are credited on its books to a Capital Account. A
record will be kept of qualifying dividends
within the Income Account. The pro rata share of
the Income Account and the pro rata share of the
Capital Account represented by each Unit will be
computed by the Trustee as set forth under
"Valuation".
The Trustee will deduct from the Income Account
and, to the extent funds are not sufficient
therein, from the Capital Account, amounts
necessary to pay expenses incurred by the Trust.
(See "Expenses and Charges.") In addition, the
Trustee may withdraw from the Income Account and
the Capital Account such amounts as may be
necessary to cover redemption of Units by the
Trustee. (See "Redemption.")
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.
Pursuant to the Indenture, the Trustee is
required to keep proper books of record and
account of all transactions relating to the Trust
at its office. Such records will include the name
and address of every Unitholder, a list of the
Certificate numbers and the number of Units of
each Certificate issued to Unitholders. The
Trustee is also required to keep a certified copy
or duplicate original of the Indenture and a
current list of Securities held in the Trust on
file at its Corporate Agency office which will be
open to inspection by any Unitholder at
reasonable times during usual business hours.
Within a reasonable period of time after the end
of each calendar year, the Trustee will furnish
each person who was a Unitholder at any time
during the calendar year an annual report
containing the following information, expressed
in reasonable detail both as a dollar amount and
as a dollar amount per Unit: (1) a summary of
transactions for such year in the Income and
Capital Accounts and any Reserves; (2) any
Securities sold during the year and the
Securities held at the end of such year; (3) the
Trust Fund Evaluation per Unit, based upon a
computation thereof on the 31st day of December
of such year (or the last business day prior
thereto); and (4) amount distributed to
Unitholders during such year.
Portfolio Supervision. The portfolio of the
Trust is not "managed" by the Sponsor or the
Trustee; their activities described herein are
governed solely by the provisions of the
Indenture. The Indenture provides that the
Sponsor may (but need not) direct the Trustee to
dispose of a Security:
(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 the 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 occurrence of any materially
adverse credit factors, that in the opinion of
the Sponsor, make the retention of such
Securities detrimental to the interest of the
Unitholders;
(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 makes 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 Trustee may dispose of Securities where
necessary to pay 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 so as 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
appreciation shall be sold first.
Reinvestment. Cash received upon the sale of
Stock (except for sales redemption requests) and
dividends received may, if and to the extent
there is no legal impediment, be reinvested in
United States Treasury obligations which mature
on or prior to the next scheduled Distribution
Date. The Sponsor anticipates that, where
permitted, such proceeds will be reinvested in
the United States Treasury obligations unless
factors exist such that such 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 the United
States 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 an 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 thereof which may be
defective or inconsistent or to make such other
provisions as will not adversely affect the
interest of the Unitholders; provided, however,
that after the deposit of the Securities the
Indenture may not be amended to increase the
number of Units issued thereunder or to permit
the deposit or acquisition of securities either
in addition to or in substitution for any of the
Securities initially deposited in the Trust.
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 any evaluation
is less than twenty per cent (20%) of the market
value of the Securities on the Date of Deposit,
the Trustee may in its discretion, and will when
so directed by the Sponsor, terminate such Trust.
The Trust may also be terminated at any time by
the written consent of 51% of the Unitholders or
by the Trustee upon the resignation or removal of
the Sponsor if the Trustee determines termination
to be in the best interest of the Unitholders. In
no event will the Trust continue beyond the
Mandatory Termination Date.
As directed by the Sponsor, approximately 30
days prior to the maturity of the Treasury
Obligations, 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 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 non-
interest bearing accounts created by the
Indenture until distributed and 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 such sale were not
required at such time due to the impending or
actual termination of the Trust. For this reason,
among others the amount realized by a Unitholder
upon termination may be less than the amount paid
by such Unitholder.
SPONSOR
The Sponsor, PaineWebber Incorporated, is a
corporation organized under the laws of the State
of Delaware. The Sponsor is a member firm of the
New York Stock Exchange, Inc. as well as other
major securities and commodities exchanges and is
a member of the National Association of
Securities Dealers Inc. The Sponsor is engaged in
a security and a 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 judgement, but will be
liable only for its own willful misfeasance, bad
faith, gross negligence or willful disregard of
its duties. The Sponsor will not be liable or
responsible in any way for depreciation or loss
incurred by reason of the sale of any Securities
in the Trust.
The Indenture is binding upon any successor to
the business of the Sponsor. The Sponsor may
transfer all or substantially all of its assets
to a corporation or partnership which carries on
the business of the Sponsor and duly assumes all
the obligations of the Sponsor under the
Indenture. In such event the Sponsor shall be
relieved of all further liability under the
Indenture.
If the Sponsor fails to undertake any of its
duties under the Indenture, becomes incapable of
acting, becomes bankrupt, or has its affairs
taken over by public authorities, the Trustee may
either appoint a successor Sponsor or Sponsors to
serve at rates of compensation determined as
provided in the Indenture or terminate the
Indenture and liquidate the Trust.
CO-TRUSTEES
The Co-Trustees are The First National Bank of
Chicago, a national banking association (which is
subject to supervision by the Comptroller of the
Currency, the Federal Deposit Insurance
Corporation and the Board of Governors of the
Federal Reserve System) with its corporate trust
office at One First National Plaza, Suite 0126,
Chicago, Illinois 60670-0126 and Investors Bank &
Trust Company, a Massachusetts trust company
(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) with its
office at One Lincoln Plaza, P.O. Box 1537,
Boston, Massachusetts 02205-1537, toll-free
number 1-800-356-2754.
The Indenture provides that the Co-Trustees will
not be liable for any action taken in good faith
in reliance on properly executed documents or the
disposition of moneys, Securities or Certificates
or in respect of any valuation which it is
required to make, except by reason of its own
gross negligence, bad faith or willful
misconduct, nor will the Co-Trustees be liable or
responsible in any way for depreciation or loss
incurred by reason of the sale by the Co-Trustees
of any Securities in the Trust. In the event of
the failure of the Sponsor to act, the Co-
Trustees may act and will not be liable for any
action taken by it in good faith. The Co-Trustees
will not be personally liable for any taxes or
other governmental charges imposed upon or in
respect of the Securities or upon the interest
thereon or upon it as Co-Trustees or upon or in
respect of the Trust which the Co-Trustees 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 Co-
Trustees. The Co-Trustees will be indemnified and
held harmless against any loss or liability
accruing to it without gross negligence, bad
faith or willful misconduct on its part, arising
out of or in connection with its acceptance or
administration of the Trust, including the costs
and expenses (including counsel fees) of
defending itself against any claim of liability.
INDEPENDENT AUDITORS
The Statement of Financial Condition and
Schedule of Investments audited by Ernst & Young
LLP, independent auditors, have been included
herein in reliance upon their report given on
their authority as experts in accounting and
auditing.
LEGAL OPINIONS
The legality of the Units offered hereby has
been passed upon by Orrick, Herrington &
Sutcliffe, 666 Fifth Avenue, New York, New York,
as counsel for the Sponsor.
<TABLE>
ESSENTIAL INFORMATION REGARDING THE TRUST
<CAPTION>
As of February 29, 1996
Sponsor: PaineWebber Incorporated
Co-Trustees: Investors Bank & Trust Co. and
The First National Bank of Chicago
Date of Deposit: March 30, 1993
<S> <C>
Aggregate Market Value of Securities in Trust: $40,213,033
Number of Units: 33,500,000
Minimum Purchase
250 units for Individual Retirement Accounts
1,000 units for all else
Fractional Undivided Interest in the Trust Represented by
Each Unit: 1/33,500,000th
Calculation of Public Offering Price Per Unit
Value of Net Assets in Trust $40,239,884
Divided by 33,500,000 Units $1.2012
Plus Sales Charge of 3.25% of Public Offering Price $.0404
Public Offering Price per Unit $1.2416
Redemption Value per Unit $1.2012
Excess of Public Offering Price over Redemption Value per Unit $.0404
Sponsor's Repurchase Price per Unit $1.2012
Excess of Public Offering Price over Sponsor's Repurchase Price
per Unit $.0404
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: November 30, 2003 (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 * *: $.0024 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 CO-TRUSTEES
THE PAINEWEBBER PATHFINDERS TRUST, TREASURY AND
GROWTH STOCK SERIES FOURTEEN:
We have audited the accompanying statement of
financial condition, including the schedule of
investments, of The PaineWebber Pathfinders
Trust, Treasury and Growth Stock Series Fourteen
as of February 29, 1996 and the related
statements of operations and changes in net
assets for each of the two years in the period
then ended and for the period from March 30, 1993
(date of deposit) to February 28, 1994. These
financial statements are the responsibility of
the Co-Trustees. Our responsibility is to express
an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about
whether the financial statements are free of mate-
rial 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 February 29, 1996 as shown
in the statement of financial condition and
schedule of investments by correspondence with
the Co-Trustees. An audit also includes assessing
the accounting principles used and significant
estimates made by the Co-Trustees, as well as
evaluating the overall financial statement
presentation. We believe that our audits provide
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 Fourteen at February 29, 1996
and the results of its operations and changes in
its net assets for each of the two years in the
period then ended and for the period from March
30, 1993 to February 28, 1994, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
May 24, 1996
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FOURTEEN
STATEMENT OF FINANCIAL CONDITION
<CAPTION>
February 29, 1996
ASSETS
<S> <C> <C>
Treasury Obligation - at market value (Cost $20,353,350)
(note A and note 1 to schedule of investments) $ 21,036,627
Common Stock - at market value (Cost $13,671,878)
(note 1 to schedule of investments) 19,176,406
Accrued dividends receivable 23,792
Cash 22,351
Total Assets $ 40,259,176
LIABILITIES AND NET ASSETS
Accrued expenses payable $ 19,292
Total Liabilities 19,292
Net Assets (33,500,000 units of fractional undivided interest outstanding):
Cost to investors (note B) 35,535,486
Less gross underwriting commissions (note C) (1,510,258)
34,025,228
Net unrealized market appreciation (note D) 6,187,805
Net amount applicable to uniholders 40,213,033
Undistributed investment income-net 30,938
Overdistributed proceeds from securities sold (4,087)
Net Assets 40,239,884
Total Liabilities and Net Assets $ 40,259,176
Net Asset Value per Unit $ 1.2012
See Accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FOURTEEN
STATEMENT OF OPERATIONS
<CAPTION>
From
March 30,
1993 (date
Year Ended Year Ended of deposit) to
February 29, February 28, February 28,
1996 1995 1994
<S> <C> <C> <C>
Operations:
Investment income:
Accretion on Treasury Obligation $1,465,924 $1,785,821 $1,835,721
Dividend Income 444,398 468,148 428,183
Total investment income 1,910,322 2,253,969 2,263,904
Less expenses:
Trustee's fees, evaluator's expense and other expenses 108,642 108,539 111,622
Total expenses 108,642 108,539 111,622
Investment income-net 1,801,680 2,145,430 2,152,282
Realized and unrealized gain on investments-net:
Net realized gain on securities transactions 1,171,212 355,448 1,598,415
Net change in unrealized market appreciation (depreciation) 6,031,200 (1,921,968) 2,078,563
Net gain (loss) on investments 7,202,412 (1,566,520) 3,676,978
Net increase in net assets resulting from operations $9,004,092 $578,910 $5,829,260
See accompanying notes to financial statements
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FOURTEEN
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
From
March 30,
1993 (date
Year Ended Year Ended of deposit) to
February 29, February 28, February 28,
1996 1995 1994
<S> <C> <C> <C>
Operations:
Investment income-net $1,801,680 $2,145,430 $2,152,282
Net realized gain on securities transactions 1,171,212 355,448 1,598,415
Net change in unrealized market appreciation (depreciation) 6,031,200 (1,921,968) 2,078,563
Net increase in net assets resulting from operations 9,004,092 578,910 5,829,260
Less: Distributions to Unitholders (Note E)
Investment income-net 341,487 338,994 275,688
Principal --- 1,575,292 1,698,593
Total Distributions 341,487 1,914,286 1,974,281
Less: Units Redeemed by Unitholders (Note F)
Value of units at date of redemption 13,313,170 7,007,688 14,710,601
Accrued dividends at date of redemption 13,960 7,290 10,350
Accreted discount at date of redemption --- 382,602 274,239
Total Redemptions 13,327,130 7,397,580 14,995,190
Decrease in net assets (4,664,525) (8,732,956) (11,140,211)
Net Assets:
Beginning of Period 44,904,409 53,637,365 38,100,000
Supplemental Deposits (Note F) --- --- 26,677,576
End of Period $40,239,884 $44,904,409 $53,637,365
See accompanying notes to financial statements
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FOURTEEN
NOTES TO FINANCIAL STATEMENTS
February 29, 1996
(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 February 29,
1996 is $977,958.
(B) Cost to investors represents the initial
public offering price as of the 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 ac-
cretion 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 February 29, 1996, the gross unrealized
market appreciation was $6,896,021 and the gross
unrealized market depreciation was ($708,216).
The net unrealized market appreciation was
$6,187,805.
(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 Co-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>
From
March 30,
1993 (date
Year Ended Year Ended of deposit) to
February 29, February 28, February 28,
1996 1995 1994
<S> <C> <C> <C>
Number of units redeemed 12,200,000 7,800,000 14,300,000
Redemption amount $13,327,130 $7,397,580 $14,995,190
The following units were sold through supplemental
deposits:
Number of units sold --- --- 27,800,000
Value of amount, net of sales charge --- --- $26,677,576
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FOURTEEN
SCHEDULE OF INVESTMENTS
As of February 29, 1996
<CAPTION>
TREASURY OBLIGATIONS (52.31%)
Name of Security Coupon Maturity Value Maturity Date Market Value(1)
<C> <C> <C> <C> <C>
U.S. Treasury Interest Payments (2) 0% $33,500,000 11/15/2003 $21,036,627
COMMON STOCKS (47.69%)
Name of Issuer Number of Shares Market Value
Automobile Parts (1.92%)
Allen Group, Inc. 41,438 $771,783
Automobile Manufacturing (2.03%)
Ford Motor Company 26,086 815,187
Beverages (5.81%)
The Coca-Cola Company 16,377 1,322,443
PepsiCo, Inc. 16,030 1,013,897
Chemicals (1.85%)
Eastman Chemical Company 3,102 223,344
Imperial Chemical Industries plc ~ 9,358 520,539
Construction Materials (1.55%)
Owens-Corning Fiberglas Corp.* 15,373 624,528
Electrical Equipment (2.89%)
General Electric Company 15,378 1,161,039
Entertainment (2.56%)
Walt Disney Company 15,713 1,029,201
Household Products (2.87%)
Procter & Gamble Company 14,041 1,151,362
Machinery (3.13%)
AlliedSignal, Inc. 20,747 1,154,052
TransPro, Inc. 10,360 104,898
Manufacturing (1.93%)
Mark IV Industries, Inc. 38,773 775,458
Packaging & Containers (1.04%)
Continental Can, Inc.* 25,168 418,418
Photography (2.20%)
Eastman Kodak Company 12,384 885,456
Pharmaceuticals (7.56%)
Bristol-Myers Squibb Company 11,700 995,963
Merck & Company, Inc. 20,051 1,328,379
Zeneca Group plc~ 12,454 716,105
Publishing (1.71%)
Readers Digest Association, Inc. 14,371 688,012
Telecommunications (6.43%)
AT & T Corporation 11,694 744,031
Telefonos de Mexico SA~ 12,367 377,193
WorldCom, Inc.* 37,214 1,465,301
Tire and Rubber (2.21%)
Goodyear Tire & Rubber Company 18,733 889,817
TOTAL COMMON STOCKS $19,176,406
TOTAL INVESTMENTS $40,213,033
(1) Valuation of Securities by the Co-
Trustees was made 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).
* Non-income producing.
~ American Depositary Receipts.
</TABLE>
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following
documents:
The facing sheet.
The Prospectus.
The signatures.
The following exhibits:
EX-99.2 Opinion of Counsel as to legality of securities
being registered.
EX-27 Financial Data Schedule
EX-99.C1 Consent of Independent Auditors
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 14 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 3rd day of June, 1996.
THE PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES 14
(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 3rd day of June, 1996.
PAINEWEBBER INCORPORATED
Name Office
Donald B. Marron Chairman, Chief Executive Officer,
Director & Member of the Executive
Committee *
Regina A. Dolan Senior Vice President, Chief Financial Officer
and Director *
Joseph J. Grano, Jr. President, Retail Sales & Marketing,
Director and Member of the Executive
Committee *
By:/s/ ROBERT E. HOLLEY
Attorney-in-fact*
* Executed copies of the powers of attorney have been filed with the
Securities and Exchange Commission in connection with the Registration
Statement for File No. 33-19786.
June 3, 1996
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 14 (hereinafter
referred to as the "Trust"). The Depositor seeks by means of
Post-Effective Amendment No. 3 to register for reoffering 41,301,680
Units acquired by the Depositor in the secondary market (hereinafter
referred to as the "Units").
In this regard, we have examined executed originals or copies of the
following:
(a) The Restated Certificate of Incorporation, as amended, and the
By-Laws of the 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. 3 to the Registration Statement on
Form S-6 (File No. 33-46435) 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
September 1, 1990, as amended, among the Depositor, and
Investors Bank & Trust Company and The First National Bank of
Chicago (the "Trustee"), as successor Co-Trustee, (the "Standard
Terms");
(j) The Trust Indenture dated as of the Date of Deposit, among the
Depositor, the Co-Trustees 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 States of New York and California and 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/ ORRICK, HERRINGTON & SUTCLIFFE
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 14
<NAME> PAINEWEBBER PATHFINDERS TRUST TREASURY & GROWTH STOCK
<MULTIPLIER> 1
<CURRENCY> U.S.Dollars
<S> <C> <C> <C>
<PERIOD-TYPE> YEAR YEAR YEAR
<FISCAL-YEAR-END> FEB-29-1996 FEB-28-1995 FEB-28-1994
<PERIOD-START> MAR-01-1995 MAR-01-1994 MAR-30-1993
<PERIOD-END> FEB-29-1996 FEB-28-1995 FEB-28-1994
<EXCHANGE-RATE> 1 1 1
<INVESTMENTS-AT-COST> 34,025,228 0 0
<INVESTMENTS-AT-VALUE> 40,213,033 0 0
<RECEIVABLES> 23,792 0 0
<ASSETS-OTHER> 22,351 0 0
<OTHER-ITEMS-ASSETS> 0 0 0
<TOTAL-ASSETS> 40,259,176 0 0
<PAYABLE-FOR-SECURITIES> 0 0 0
<SENIOR-LONG-TERM-DEBT> 0 0 0
<OTHER-ITEMS-LIABILITIES> 19,292 0 0
<TOTAL-LIABILITIES> 19,292 0 0
<SENIOR-EQUITY> 0 0 0
<PAID-IN-CAPITAL-COMMON> 0 0 0
<SHARES-COMMON-STOCK> 33,500,000 0 0
<SHARES-COMMON-PRIOR> 45,700,000 0 0
<ACCUMULATED-NII-CURRENT> 30,938 0 0
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<ACCUMULATED-NET-GAINS> 0 0 0
<OVERDISTRIBUTION-GAINS> (4,087) 0 0
<ACCUM-APPREC-OR-DEPREC> 6,187,805 0 0
<NET-ASSETS> 40,239,884 0 0
<DIVIDEND-INCOME> 0 0 0
<INTEREST-INCOME> 1,465,924 1,785,821 1,835,721
<OTHER-INCOME> 444,398 468,148 428,183
<EXPENSES-NET> 108,642 108,539 111,622
<NET-INVESTMENT-INCOME> 1,801,680 2,145,430 2,152,282
<REALIZED-GAINS-CURRENT> 1,171,212 355,448 1,598,415
<APPREC-INCREASE-CURRENT> 6,031,200 (1,921,968) 2,078,563
<NET-CHANGE-FROM-OPS> 9,004,092 578,910 5,829,260
<EQUALIZATION> 0 0 0
<DISTRIBUTIONS-OF-INCOME> 341,487 338,994 275,688
<DISTRIBUTIONS-OF-GAINS> 0 0 0
<DISTRIBUTIONS-OTHER> 0 1,575,292 1,698,593
<NUMBER-OF-SHARES-SOLD> 0 0 0
<NUMBER-OF-SHARES-REDEEMED> 12,200,000 7,800,000 14,300,000
<SHARES-REINVESTED> 0 0 0
<NET-CHANGE-IN-ASSETS> (4,664,525) (8,732,956) (11,140,211)
<ACCUMULATED-NII-PRIOR> 0 0 0
<ACCUMULATED-GAINS-PRIOR> 0 0 0
<OVERDISTRIB-NII-PRIOR> 0 0 0
<OVERDIST-NET-GAINS-PRIOR> 0 0 0
<GROSS-ADVISORY-FEES> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<GROSS-EXPENSE> 0 0 0
<AVERAGE-NET-ASSETS> 0 0 0
<PER-SHARE-NAV-BEGIN> 0 0 0
<PER-SHARE-NII> 0 0 0
<PER-SHARE-GAIN-APPREC> 0 0 0
<PER-SHARE-DIVIDEND> 0 0 0
<PER-SHARE-DISTRIBUTIONS> 0 0 0
<RETURNS-OF-CAPITAL> 0 0 0
<PER-SHARE-NAV-END> 1 0 0
<EXPENSE-RATIO> 0 0 0
<AVG-DEBT-OUTSTANDING> 0 0 0
<AVG-DEBT-PER-SHARE> 0 0 0
</TABLE>
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to our firm under the caption
"Independent Auditors" and to the use of our report dated May 24,
1996, in the Registration Statement and related Prospectus of the
PaineWebber Pathfinders Trust, Treasury and Growth Stock Series 14.
/s/ ERNST & YOUNG LLP
New York, New York
June 3, 1996
