File No. 33-46435
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 4
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 24, 1997) pursuant to paragraph
(b) of Rule 485.
E. Title and amount of securities being registered:
47,992,700 Units
F. Proposed maximum offering price to the public of the securities being
registered:
$70,333,301.85**
* Estimated solely for the purpose of calculating the registration fee, at
$1.47 per unit.
G. Amount of filing fee, computed at one-thirty-third 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 1996 is 47,794,828.
There have been no previous filings of post-effective amendments during
the current fiscal year 47,794,828 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"
26,000,000 Units
The investment objective of this Trust is to
preserve capital while providing for capital ap-
preciation through an investment in "zero cou-
pon" United States Treasury obligations (the
"Treasury Obligations") and equity growth stocks
having, in Sponsor's opinion on the Initial Date
of Deposit, potential for appreciation (the
"Growth Stocks"). The value of the Units will
fluctuate with the value of the portfolio of un-
derlying securities.
The minimum purchase is $1,000 except that the
minimum purchase in connection with an Individ-
ual 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 COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CON-
TRARY 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 24, 1997
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
Obligations"), and equity growth stocks (the
"Growth Stock" or "Stock") which, in the Spon-
sor's opinion on the Initial Date of Deposit,
have potential for capital appreciation
(collectively, the "Securities"). The Treasury
Obligation which matures on November 15, 2003
represents approximately 48% of the aggregate
market value of the Trust portfolio and the
Growth Stocks represent approximately 52% of the
aggregate market value of the Trust portfolio.
Because the maturity value of the Treasury Obli-
gations 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 Treasury Obligations is de-
signed to provide an approximate return of prin-
cipal invested on the Mandatory Termination Date
for purchasers on the Initial Date of Deposit
(see "Essential Information --Distributions").
Therefore, even if the Stocks are valueless upon
termination of the Trust, and if the Treasury
Obligations are held until their maturity in
proportion to the Units outstanding, purchasers
should receive, at the termination of the Trust,
$1,000 per 1,000 Units purchased. This feature
of the Trust provides that Unitholders who pur-
chased their Units at or below $1,000 per 1,000
Units and who hold their units to the Mandatory
Termination Date of the Trust on November 30,
2003 will receive the same amount as they origi-
nally invested, although they would have fore-
gone earning any interest on the amounts in-
volved and will not protect their principal on a
present value basis, assuming the stocks are
valueless. The Stock may appreciate or depreci-
ate in value (or pay dividends) depending on the
full range of economic and market influences af-
fecting corporate profitability, the financial
condition of issuers and the prices of equity
securities in general and the Stock in particu-
lar. In addition, the Treasury Obligations may
fluctuate substantially 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, therefore, the value of
Units may be expected to fluctuate.
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 distrib-
uted and will be of benefit to the Trustee. Dur-
ing the life of the Trust, Securities will not
be sold to take advantage of market fluctua-
tions. 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 outstand-
ing and then adding a sales charge which is cur-
rently 2.25% of the Public Offering Price (2.30%
of the net amount invested). (See "Public Offer-
ing of Units-Sales Charge").
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 dis-
tributed annually. Income with respect to the
original issue discount on the Treasury Obliga-
tions will not be distributed although Unithold-
ers will be subject to income tax at ordinary
income rates as if a distribution had occurred.
(See "Federal Income Taxes"). Additionally upon
termination of the Trust, the Trustee will dis-
tribute 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 ter-
mination 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 real-
ized by a Unitholder upon termination may be
less than the amount paid by such Unitholder.
Unless a Unitholder purchases Units on the Ini-
tial Date of Deposit and unless the Treasury Ob-
ligations in proportion to the Units outstanding
remain in the Trust, total distributions, in-
cluding distributions made upon termination of
the Trust, may be less than the amount paid for
a Unit.
Market for Units. The Sponsor, though not obli-
gated 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 or-
der plus the applicable sales charge (See
"Public Offering of Units-Public Offering Price"
and "Valuation"). If a secondary market is not
maintained, 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 Uni-
tholder as directed by the Sponsor. (See
"Redemption")
THE TRUST
General. The Trust is one of a series of simi-
lar but separate unit investment trusts created
by the Sponsor pursuant to a Trust Indenture and
Agreement* (the "Indenture") dated as of the
Initial Date of Deposit, between PaineWebber In-
corporated, 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 pres-
ervation 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 dur-
ing 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 Initial 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 industry. 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 prin-
cipal 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 Initial 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 securities 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".)
________________
*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.
FEDERAL INCOME TAXES
In the opinion of Carter, Ledyard &
Milburn, counsel for the Sponsor, under existing
law:
1. The Trust is not an association taxable
as a corporation for federal income tax
purposes. Under the Internal Revenue Code of
1986, as amended (the "Code"), each Unitholder
will be treated as the owner of a pro rata
portion of the Trust, and income of the Trust
will be treated as income of the 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 sells its Units
or redeems its Units for cash.
3. The Trust is not an association taxable
as a corporation for New York State income tax
purposes. Under New York State law, each
Unitholder will be treated as the owner of a pro
rata portion of the Trust and the income of the
Trust will be treated as income of the
Unitholders.
The following general discussion of the
federal income tax treatment of an investment in
Units of the Trust is based on the Code and
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. The tax treatment
of non U.S. investors is not addressed. 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. 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 initial per Unit tax cost for each
Security.
Each Unitholder must report on its federal
income tax return a pro rata share of the entire
income of the Trust, derived from dividends on
Stocks, original issue discount or interest on
Treasury Obligations, gains or losses upon sales
of Securities by the Trust and a pro rata share
of the expenses of the Trust. Unitholders
should note that their taxable income from an
investment in Units will exceed cash
distributions because taxable income will
include accretions of original issue discount on
the Treasury Obligations.
Distributions with respect to Stock, to
the extent they do not exceed current or
accumulated earnings and profits of the
distributing corporation, will be treated as
dividends to the Unitholders and will be subject
to income tax at ordinary rates. Corporate
Unitholders may be entitled to the dividends-
received deduction discussed below.
To the extent distributions with respect
to a Stock were to exceed the issuing
corporation's current and accumulated earnings
and profits, they would not constitute
dividends. Rather, they would be treated as a
tax free return of capital and would reduce a
Unitholder's tax basis for such Stock. This
reduction in basis would in effect increase any
gain, or reduce any loss, realized by the
Unitholder on any subsequent sale or other
disposition of Units. After 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
Stock.
A Unitholder who is an individual, estate
or trust may be disallowed certain itemized
deductions described in Code Section 67,
including compensation paid to the Trustee and
administrative expenses of the Trust, to the
extent these itemized deductions, in the
aggregate, do not exceed two percent of the
Unitholder's adjusted gross income. Thus, a
Unitholder's taxable income from an investment
in Units may exceed amounts distributed to the
extent amounts are used by the Trust to pay
expenses.
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 Section 246 and 246A
of the Code. The dividends-received deduction
generally equals 70 percent of the amount of the
dividend. The alternative minimum tax may have
the effect of reducing the benefit of the
deduction. Individuals, partnerships, trusts, S
corporations and certain other entities are not
eligible for the dividends-received deduction.
The Clinton Administration has proposed a
reduction in the dividends-received deduction
from 70 percent to 50 percent and there have
been, from time to time, other proposals to
reduce such deduction. The Sponsor is unable to
predict whether the Clinton Administration
proposal or any other proposal will be adopted
during the life of the Trust.
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 consist either of the right to
receive payments of interest or the right to
receive payments of principal, are treated by
each successive purchaser as originally issued
on their purchase dates at an issue price equal
to their respective purchase prices thereof.
The market value of the Trust assets 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 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 which (with respect to such
Unitholder) has original issue discount. The
amount of accrued original issue discount
included in income with respect to a
Unitholder's 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 Securities and the Unitholder's adjusted tax
bases in the Securities. In general, such
adjusted tax bases will equal the Unitholder's
aggregate cost for the Unit increased by any
accrued original issue discount. 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 generally will also recognize
taxable gain or loss when all or part of its pro
rata portion of a Security is sold or otherwise
disposed of for an amount greater or less than
its per Unit tax cost therefor.
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 may apply to certain distributions of the
Trust unless the Unitholder properly completes
and files, under penalties of perjury, IRS Form
W-9 (or its equivalent).
The foregoing discussion is a general
summary and relates only to certain aspects of
the federal income tax consequences of an
investment in the Trust. Unitholders, may also
be subject to state and local taxation. Each
Unitholder should consult its own tax advisor
regarding the federal, state and local tax
consequences to it of ownership of Units.
Investment in the Trust may be suited for
purchase by funds and accounts of individual
investors that are exempt from federal income
taxes such as Individual Retirement Accounts,
tax-qualified retirement plans including Keogh
Plans, and other tax-deferred retirement plans.
Unitholders desiring to purchase Units for tax-
deferred plans and IRA's should consult their
PaineWebber Investment Executive for details on
establishing such accounts. Units may also be
purchased by persons who already have self-
directed accounts established under tax-deferred
retirement plans.
PUBLIC OFFERING OF UNITS
Public Offering Price. The public offering
price 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. 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 on and After
March 31, 1996
Percent of
Public Percent of
Offering Net Amount
Price Invested
2.25% 2.30%
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 Exchange 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 Unitholder 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 required for the Exchange
Option. Each Exchange Trust has different
investment objectives, therefore a Unitholder
should read the prospectus for the applicable
Exchange Trust carefully prior to exercising
this option. Exchange Trusts having as their
objective the receipt of tax exempt interest
income would not be suitable for tax-deferred
investment plans such as Individual Retirement
Accounts. A Unitholder who purchased Units of a
series and paid a per Unit 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 Unitholder
desires to exchange into, will be allowed to
exercise the Exchange Option at the Unit
Offering Price plus the reduced sale charge,
provided the Unitholder has held the Units for
at least five months. Any such Unitholder who
has not held the Units to be exchanged for the
five-month period will be required to exchange
them at the Unit Offering Price plus 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 Unitholder desires to
exchange into, determined as of the date of the
exchange.
The Sponsor will permit exchanges at the
reduced sales charge provided there is 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 par-
ticular 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 Unitholder, 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 current
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 aggregate
$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 bro-
ker. 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
Units may be tendered to Investors Bank & Trust
Company (the "Trustee") for redemption at its
office at 200 Clarendon Street, Boston, MA 02116
upon payment of any transfer or similar tax
which must be paid to effect the redemption. At
the present time there are no such taxes. No
redemption fee will be charged by the Sponsor or
the Trustee. If the Units are represented by a
Certificate, it must be properly endorsed and
accompanied by a letter requesting redemption.
If held in uncertificated form, a written
instrument of redemption must be signed by the
Unitholder. Unitholders must sign exactly as
their names appear on records of the Trustee
with the signature guaranteed by an eligible
guarantor-institution, or in such other manner
as may be acceptable to the Trustee. In certain
instances the Trustee may require additional
documents such as, but not limited to, trust
instruments, certificates of death, appointments
as executor or administrator, or certificates of
corporate authority. Unitholders should contact
the Trustee to determine whether additional
documents are necessary. Units tendered to the
Trustee for redemption will be cancelled, if not
repurchased by the Sponsor.
Units will be redeemed at the Redemption Value
per Unit 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 converting 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 ex-
penses) 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 income accrued.
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION VALUE
While the Public Offering Price of Units during
the initial offering period is determined on the
basis of 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 $.0008 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 repre-
sented 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
Initial 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 P.O. Box 9130, Boston,
Massachusetts 02117-9130, 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 Carter, Ledyard & Milburn, 2
Wall Street, New York, New York, as counsel for
the Sponsor.
<TABLE>
ESSENTIAL INFORMATION REGARDING THE TRUST
<CAPTION>
As of February 28, 1997
Sponsor: PaineWebber Incorporated
Co-Trustees: Investors Bank & Trust Co. and
The First National Bank of Chicago
Initial Date of Deposit: March 30, 1993
<S> <C>
Aggregate Market Value of Securities in Trust: $35,197,253
Number of Units: 26,000,000
Minimum Purchase
250 units for Individual Retirement Accounts
1,000 units for all else
Fractional Undivided Interest in the Trust Represented by
Each Unit: 1/26,000,000th
Calculation of Public Offering Price Per Unit:
Value of Net Assets in Trust $35,223,618
Divided by 26,000,000 Units $1.3548
Plus Sales Charge of 2.25% of Public Offering Price $.0312
Public Offering Price per Unit $1.3860
Redemption Value per Unit $1.3548
Excess of Public Offering Price over Redemption Value per Unit: $.0312
Sponsor's Repurchase Price per Unit $1.3548
Excess of Public Offering over Sponsor's Repurchase Price per Unit: $.0312
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 * *: $.0025 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 28, 1997 and the related statements of
operations and changes in net assets for each of
the three years in the period then ended. 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 material
misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and
disclosures in the financial statements. Our
procedures included confirmation of the securities
owned as of February 28, 1997, 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 28, 1997 and the
results of its operations and changes in its net
assets for each of the three years in the period
then ended, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
New York, New York
June 17, 1997
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FOURTEEN
STATEMENT OF FINANCIAL CONDITION
<CAPTION>
February 28, 1997
ASSETS
<S> <C> <C>
Treasury Obligation - at market value (Cost $16,834,608)
(note A and note 1 to schedule of investments) $16,913,494
Common Stock - at market value (Cost $10,607,116)
(note 1 to schedule of investments) 18,283,759
Accrued dividends receivable 20,872
Cash 37,915
Accounts receivable-securities sold 273,248
Total Assets $35,529,288
LIABILITIES AND NET ASSETS
Accounts payable-units redeemed $273,500
Accrued expenses payable 32,170
Total Liabilities 305,670
Net Assets (26,000,000 units of fractional undivided interest outstanding):
Cost to investors (note B) 28,073,374
Less gross underwriting commissions (note C) (631,650)
27,441,724
Net unrealized market appreciation (note D) 7,755,529
Net amount applicable to unitholders 35,197,253
Undistributed investment income-net 25,179
Undistributed proceeds from securities sold 1,186
Net assets 35,223,618
Total liabilities and net assets $35,529,288
Net Asset Value per unit $1.3548
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FOURTEEN
STATEMENT OF OPERATIONS
<CAPTION>
Year Ended Year Ended Year Ended
February 28, February 29, February 28,
1997 1996 1995
<S> <C> <C> <C>
Operations:
Investment income:
Accretion on Treasury Obligation $1,190,611 $1,465,924 $1,785,821
Dividend Income 358,810 444,398 468,148
Total investment income 1,549,421 1,910,322 2,253,969
Less expenses:
Trustee's fees, evaluator's expense and other expenses 80,774 108,642 108,539
Total expenses 80,774 108,642 108,539
Investment income-net 1,468,647 1,801,680 2,145,430
Realized and unrealized gain (loss) on investments-net:
Net realized gain on securities transactions 1,559,488 1,171,212 355,448
Net change in unrealized market appreciation (depreciation) 1,567,724 6,031,200 (1,921,968)
Net gain (loss) on investments 3,127,212 7,202,412 (1,566,520)
Net increase in net assets resulting from operations $4,595,859 $9,004,092 $578,910
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>
Year Ended Year Ended Year Ended
February 28, February 29, February 28,
1997 1996 1995
<S> <C> <C> <C>
Operations:
Investment income-net $1,468,647 $1,801,680 $2,145,430
Net realized gain on securities transactions 1,559,488 1,171,212 355,448
Net change in unrealized market appreciation (depreciation) 1,567,724 6,031,200 (1,921,968)
Net increase in net assets resulting from operations 4,595,859 9,004,092 578,910
Less: Distributions to Unitholders (Note E)
Investment income-net 276,005 341,487 338,994
Principal --- --- 1,575,292
Total Distributions 276,005 341,487 1,914,286
Less: Units Redeemed by Unitholders (Note F and G)
Value of units at date of redemption 8,405,048 12,339,449 7,007,688
Accrued dividends at date of redemption 7,790 13,960 7,290
Accreted discount at date of redemption 923,282 973,671 382,602
Total Redemptions 9,336,120 13,327,130 7,397,580
Decrease in net assets (5,016,266) (4,664,525) (8,732,956)
Net Assets:
Beginning of Period 40,239,884 44,904,409 53,637,365
End of Period $35,223,618 $40,239,884 $44,904,409
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FOURTEEN
NOTES TO FINANCIAL STATEMENTS
February 28, 1997
(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 28, 1997 is
$922,751.
(B) Cost to investors represents the initial
public offering price as of the initial date of
deposit, and the value of units through
supplemental deposits computed on the basis set
forth under "Public Offering Price of Units",
adjusted for accretion on United States Treasury
Obligations and for securities sold since the date
of deposit.
(C) Sales charge of the Public Offering Price
per Unit is computed on the basis set forth under
" Public Offering of Units - Sales Charge and
Volume Discount".
(D) At February 28, 1997, the gross unrealized
market appreciation was $8,410,773 and the gross
unrealized market depreciation was ($655,244).The
net unrealized market appreciation was $7,755,529.
(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-Trustees 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) Certain 1996 amounts have been reclassified
to conform to the 1997 presentation.
(G) The following units were redeemed with
proceeds of securities sold as follows:
<CAPTION>
Year Ended Year Ended Year Ended
February 28, February 29, February 28,
1997 1996 1995
<S> <C> <C> <C>
Number of units redeemed 7,500,000 12,200,000 7,800,000
Redemption amount $9,336,120 $13,327,130 $7,397,580
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FOURTEEN
SCHEDULE OF INVESTMENTS
As of February 28, 1997
<CAPTION>
TREASURY OBLIGATIONS (48.05%)
Name of Security Coupon Maturity Value Maturity Date Market Value(1)
<C> <C> <C> <C> <C>
U.S. Treasury Interest Payments (2) 0% $26,000,000 11/15/2003 $16,913,494
<CAPTION>
COMMON STOCKS (51.95%)
Name of Issuer Number of Shares Market Value
<C> <C> <C>
Automobile Parts (1.91%)
Allen Group, Inc.* 32,130 $670,714
Automobile Manufacturing (1.89%)
Ford Motor Company 20,227 664,963
Beverages (6.72%)
The Coca-Cola Company 25,393 1,548,973
PepsiCo, Inc. 24,855 817,108
Chemicals (1.40%)
Eastman Chemical Company 2,403 132,465
Imperial Chemical Industries plc ~ 7,255 361,843
Construction Materials (1.44%)
Owens-Corning * 11,920 505,110
Electrical Equipment (3.49%)
General Electric Company 11,922 1,226,476
Entertainment (2.57%)
Walt Disney Company 12,183 904,588
Household Products (3.72%)
Procter & Gamble Company 10,885 1,307,561
Information Technology (.05%)
NCR Corporation* 567 18,699
Machinery (3.52%)
AlliedSignal, Inc. 16,086 1,162,213
TransPro, Inc. 8,032 76,304
Manufacturing (1.98%)
Mark IV Industries, Inc. 30,050 698,662
Packaging & Containers (.71%)
Continental Can, Inc.* 19,517 251,281
Photography (2.44%)
Eastman Kodak Company 9,601 860,489
Pharmaceuticals (9.84%)
Bristol-Myers Squibb Company 9,070 1,183,635
Merck & Company, Inc. 15,544 1,430,048
Zeneca Group plc~ 9,656 849,728
Publishing (1.18%)
Readers Digest Association, Inc. 11,143 416,470
Telecommunications (6.91%)
AT & T Corporation 9,066 361,507
Lucent Technologies, Inc. 2,969 159,955
Telefonos de Mexico SA~ 9,587 372,695
WorldCom, Inc.* 57,701 1,536,289
Tire and Rubber (2.18%)
Goodyear Tire & Rubber Company 14,521 765,983
TOTAL COMMON STOCKS $18,283,759
TOTAL INVESTMENTS $35,197,253
(1) Valuation of Securities was made by the Co-
Trustees 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.C1 Opinion of Counsel as to legality of securities
being registered
EX-99.C2 Opinion of Counsel as to certain tax aspects of
of the Trust
EX-27 Financial Data Schedule
EX-99.C3 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, 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 24th day of June, 1997.
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 24th day of June, 1997.
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 24, 1997
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. 4 to register for reoffering 47,992,700
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. 4 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 Initial 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 State of New York and the federal laws of the United States,
except to the extent necessary to render the opinion as to the
Depositor in paragraph (i) below with respect to Delaware law. As
you know we are not licensed to practice law in the State of
Delaware, and our opinion in paragraph (i) and (iii) as to Delaware
law is based solely on review of the official statutes of the State of
Delaware.
Based upon such examination, and having regard for legal
considerations which we deem relevant, we are of the opinion that:
(i) The Depositor is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Delaware with full
corporate power to conduct its business as described in the
Prospectus;
(ii) The Depositor is duly qualified as a foreign corporation and is in
good standing as such within the State of New York;
(iii)The terms and provisions of the Units conform in all material
respects to the description thereof contained in the Prospectus;
(iv) The consummation of the transactions contemplated under the
Indenture and Agreement and the fulfillment of the terms thereof
will not be in violation of the Depositor's Restated Certificate of
Incorporation, as amended, or By-Laws, as amended and will not
conflict with any applicable laws or regulations applicable to the
Depositor in effect on the date hereof; and
(v) The Certificates to be issued by the Trust, when duly executed by
the Depositor and the Trustee in accordance with the Indenture
and Agreement, upon delivery against payment therefor as
described in the Prospectus will constitute fractional undivided
interests in the Trust enforceable against the Trust in accordance
with their terms, will be entitled to the benefits of the Indenture
and Agreement and will be fully paid and non-assessable.
Our opinion that any document is valid, binding, or enforceable in
accordance with its terms is qualified as to:
(a) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium, or other laws
relating to or affecting the enforcement of creditors' rights
generally;
(b) rights to indemnification and contribution which may be limited by
applicable law or equitable principles; and
(c) general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
We hereby represent that the Amendment contains no disclosure
which would render it ineligible to become effective immediately
upon filing pursuant to paragraph (b) of Rule 485 of the
Commission.
We hereby consent to the filing of this opinion as an exhibit to
the Amendment and to the use of our name wherever it appears in
the Amendment and the Prospectus.
Very truly yours,
/s/ CARTER< LEDYARD & MILBURN
June 24, 1997
PaineWebber Incorporated
1200 Harbor Boulevard
Weehawken, New Jersey 07087
Dear Sirs:
As counsel for PaineWebber Incorporated (the
"Depositor"), we have examined an executed copy of the
Trust Indenture and Agreement dated the date of initial
deposit of the Trust (the "Indenture") which
incorporates the Standard Terms and Conditions of Trust
(the "Agreement"), both between the Depositor, and
Investors Bank & Trust Company and the First National
Bank of Chicago as Co-Trustees (the "Trustee"). The
Indenture established a trust called PaineWebber
Pathfinders Trust, Treasury and Growth Stock Series 14
(the "Trust") into which the Depositor deposited
certain United States Treasury obligations or evidences
thereof, and stocks (the "Securities"), and moneys to
be held by the Trustee upon the terms and conditions
set forth in the Indenture and Agreement. Under the
Indenture, certificates of ownership were issued on the
Initial Date of Deposit representing units of
fractional undivided interest in said Trust (the
"Units").
Based upon the foregoing and upon an examination of
such other documents and an investigation of such
matters of law as we have deemed necessary, we are of
the opinion that, under existing statutes and
decisions:
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 sells its Units or redeems its Units for
cash.
3. The Trust is not an association taxable as a
corporation for New York State income tax purposes.
Under New York State law, each Unitholder will be
treated as the owner of a pro rata portion of the Trust
and the income of the Trust will be treated as income
of the Unitholders.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement relating to the
Units and the Trust referred to above and to the use of
our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Very truly yours,
/s/ CARTER, LEDYARD & MILBURN
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<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-28-1997 FEB-29-1996 FEB-28-1995
<PERIOD-START> MAR-01-1996 MAR-01-1995 MAR-02-1994
<PERIOD-END> FEB-28-1997 FEB-29-1996 FEB-28-1995
<EXCHANGE-RATE> 1 1 1
<INVESTMENTS-AT-COST> 27,441,724 0 0
<INVESTMENTS-AT-VALUE> 35,197,253 0 0
<RECEIVABLES> 294,120 0 0
<ASSETS-OTHER> 37,915 0 0
<OTHER-ITEMS-ASSETS> 0 0 0
<TOTAL-ASSETS> 35,529,288 0 0
<PAYABLE-FOR-SECURITIES> 0 0 0
<SENIOR-LONG-TERM-DEBT> 0 0 0
<OTHER-ITEMS-LIABILITIES> 305,670 0 0
<TOTAL-LIABILITIES> 305,670 0 0
<SENIOR-EQUITY> 0 0 0
<PAID-IN-CAPITAL-COMMON> 0 0 0
<SHARES-COMMON-STOCK> 26,000,000 0 0
<SHARES-COMMON-PRIOR> 33,500,000 0 0
<ACCUMULATED-NII-CURRENT> 25,179 0 0
<OVERDISTRIBUTION-NII> 0 0 0
<ACCUMULATED-NET-GAINS> 1,186 0 0
<OVERDISTRIBUTION-GAINS> 0 0 0
<ACCUM-APPREC-OR-DEPREC> 7,755,529 0 0
<NET-ASSETS> 35,223,618 0 0
<DIVIDEND-INCOME> 358,810 444.398 468,148
<INTEREST-INCOME> 1,190,611 1,465,924 1,785,821
<OTHER-INCOME> 0 0 0
<EXPENSES-NET> 80,774 108,642 108,539
<NET-INVESTMENT-INCOME> 1,468,647 1,801,680 2,145,430
<REALIZED-GAINS-CURRENT> 1,559,488 1,171,212 355,448
<APPREC-INCREASE-CURRENT> 1,567,724 6,031,200 (1,921,968)
<NET-CHANGE-FROM-OPS> 4,595,859 9,004,092 578,910
<EQUALIZATION> 0 0 0
<DISTRIBUTIONS-OF-INCOME> 276,005 341,487 338,994
<DISTRIBUTIONS-OF-GAINS> 0 0 0
<DISTRIBUTIONS-OTHER> 0 0 1,575,292
<NUMBER-OF-SHARES-SOLD> 0 0 0
<NUMBER-OF-SHARES-REDEEMED> 7,500,000 12,200,000 7,800,000
<SHARES-REINVESTED> 0 0 0
<NET-CHANGE-IN-ASSETS> (5,016,266) (4,664,525) (8,732,956)
<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 June 17,
1997, 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 24, 1997
