File No. 33-46435
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 5
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 16, 1998) pursuant to paragraph
(b) of Rule 485.
E. Total and amount of securities being registered:
An indefinite number of units of Beneficial Interest pursuant to Rule
24f-2 under the Investment Company Act of 1940.
F. Proposed maximum offering price to the public of the securities being
registered:
Indefinite pursuant to Rule 24f-2
G. Amount of filing fee, computed at one-thirty-fourth of 1 percent of the
proposed maximum aggregate offering price to the public:
In accordance with Rule 24f-2, a fee in the amount of $0 was paid on
March 20, 1998 in connection with the filing of the Rule 24f-2 Notice
for the Trust's most recent fiscal year.
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT.
PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES 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"
19,700,000 Units
The investment objective of this Trust is to pre-
serve capital while providing for capital appre-
ciation through an investment in "zero coupon"
United States Treasury obligations (the "Treasury
Obligations") and equity stocks having, in Spon-
sor's opinion on the Initial Date of Deposit, po-
tential for appreciation (the "Stocks"). The value
of the Units will fluctuate with the value of the
portfolio of underlying securities.
The minimum purchase is 1,000 Units except that
the minimum purchase in connection with an Indi-
vidual Retirement Account (IRA) or other tax-
deferred retirement plan is 250 Units. Only whole
Units may be purchased.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAP-
PROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PRO-
SPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INITIAL PUBLIC OFFERING OF UNITS IN THE TRUST
HAS BEEN COMPLETED. THE UNITS OFFERED HEREBY ARE
ISSUED AND OUTSTANDING UNITS WHICH HAVE BEEN AC-
QUIRED BY THE SPONSOR EITHER BY PURCHASE FROM THE
TRUSTEE OF UNITS TENDERED FOR REDEMPTION OR IN THE
SECONDARY MARKET.
SPONSOR:
PaineWebber
Incorporated
Read and retain this prospectus for future
reference.
Prospectus dated June 16, 1998
Essential Information Regarding The Trust
The Trust. The objective of the PaineWebber Path-
finders Trust, Treasury and Growth Stock Series 14
(the "Trust") is preservation of capital and capi-
tal 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 stocks (the "Stock" or "Stocks" and, to-
gether with the Treasury Obligations the
"Securities") which, in the Sponsor's opinion on
the Initial Date of Deposit, have potential for
capital appreciation. The stripped Treasury Obli-
gations in the Trust are interest-only portions of
United States Treasury Obligations (as further
discussed under "Risk Factors and Special Consid-
erations") and which matures on November 15, 2003
represents approximately 44% of the aggregate mar-
ket value of the Trust portfolio and the Stocks
represent approximately 56% of the aggregate mar-
ket value of the Trust portfolio. The stripped
Treasury Obligations, as discussed below, make no
payment of current interest, but rather make a
single payment upon their stated maturity. Because
the maturity value of the Treasury Obligations is
backed by the full faith and credit of the United
States, the Sponsor believes that the Trust pro-
vides an attractive combination of safety and ap-
preciation 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 designed to provide an ap-
proximate return of principal invested on the Man-
datory Termination Date for purchasers on the Ini-
tial 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 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 originally
invested, although they would have foregone earn-
ing any interest on the amounts involved and will
not protect their principal on a present value ba-
sis, assuming the Stocks are valueless. The Stock
may appreciate or depreciate in value (or pay
dividends) depending on the full range of economic
and market influences affecting corporate profit-
ability, the financial condition of issuers and
the prices of equity securities in general and the
Stock in particular. In addition, the Treasury Ob-
ligations 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 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. Monies
held upon the sale of Securities will be held in
non-interest bearing accounts created by the In-
denture until distributed and will be of benefit
to the Trustee. During the life of the Trust, Se-
curities will not be sold to take advantage of
market fluctuations. The Trust will terminate
within 15 days after the Treasury Obligations ma-
ture. (See "Termination of the Trust" and "Federal
Income Taxes".)
Public Offering Price. The Public Offering Price
per Unit is computed by dividing the Trust Fund
Evaluation by the number of Units outstanding and
then adding a sales charge which is currently
2.25% of the Public Offering Price (2.30% of the
net amount invested). (See "Public Offering 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 distributed annu-
ally. Income with respect to the original issue
discount on the Treasury Obligations will not be
distributed although Unitholders will be subject
to income tax at ordinary income rates as if a
distribution had occurred. (See "Federal Income
Taxes"). Additionally upon termination of the
Trust, the Trustee will distribute to each Uni-
tholder his pro rata share of the Trust's assets,
less expenses. The sale of Stocks in the Trust in
the period prior to termination and upon termina-
tion may result in a lower amount than might oth-
erwise be realized if such sale were not required
at such time due to impending or actual termina-
tion of the Trust. For this reason, among others,
the amount realized by a Unitholder upon termina-
tion may be less than the amount paid by such Uni-
tholder. Unless a Unitholder purchases Units on
the Initial Date of Deposit and unless the Treas-
ury Obligations in proportion to the Units out-
standing remain in the Trust, total distributions,
including distributions made upon termination of
the Trust, may be less than the amount paid for a
Unit.
Market for Units. The Sponsor, though not 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 deter-
mined after receipt of a purchase order plus the
applicable sales charge (See "Public Offering of
Units-Public Offering Price" and "Valuation"). If
a secondary market is not 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 re-
deeming Unitholder as directed by the Sponsor.
(See "Redemption")
THE TRUST
General. The Trust is one of a series of similar
but separate unit investment trusts created by the
Sponsor pursuant to a Trust Indenture and Agree-
ment* (the "Indenture") dated as of the Initial
Date of Deposit, between PaineWebber Incorporated,
as Sponsor and Investors Bank & Trust Company and
The First National Bank of Chicago as Co-Trustees
(the "Co-Trustees" or the "Trustee"). The objec-
tive of the Trust is preservation of capital and
capital appreciation through an investment in
Treasury Obligations and Stocks.
The Treasury Obligations consist of U.S. Treasury
obligations which have been stripped of their un-
matured 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 in-
vestment.
The effect of owning deep discount bonds which do
not make current interest payments (such as the
Treasury Obligations) is that a fixed yield is
earned not only on the original investment but
also, in effect, on all earned discount during the
life of the discount obligation. This implicit re-
investment 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 cur-
rently.
Risk Factors and Special Considerations. The
Trust also consists of Stocks. These are equity
stocks which, in Sponsor's opinion on the Initial
Date of Deposit, have growth appreciation poten-
tial 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 mar-
ket fluctuations. The Stocks contained in the
Trust are representative of a number of different
industries and the Trust is not considered concen-
trated in the Stocks of any particular industry.
Although certain Stocks in the Trust pay divi-
dends, the Stocks were not selected on the basis
of the potential for dividend income but rather on
their growth potential. Dividends, if any, re-
ceived will be held by the Trustee in non-interest
bearing accounts until used to pay expenses or
distributed to Unitholders on the next Distribu-
tion 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 gener-
ally inferior to creditors of, or holders of debt
obligations or preferred stocks issued by, the is-
suer. Holders of common stocks have a right to re-
ceive dividends only when and if, and in the
amounts, declared by the issuer's board of direc-
tors and to participate in amounts available for
distribution by the issuer only after all other
claims against the issuer have been paid or pro-
vided 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 ba-
sis, but do not participate in other amounts
available for distribution by the issuing corpora-
tion. 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 assur-
ance of income or provide the degree of protection
of debt securities. The issuance of debt securi-
ties or even preferred stock by an issuer will
create prior claims for payment of principal, in-
terest and dividends which could adversely affect
the ability and inclination of the issuer to de-
clare 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 bank-
ruptcy. Unlike debt securities which typically
have a stated principal amount payable at matur-
ity, 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 deposi-
tary. 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 fluc-
tuate with fluctuations in the values of the par-
ticular foreign currency relative to the U.S. dol-
lar. There is no assurance that the Trust's objec-
tive will be achieved. Until distributed, divi-
dends and principal received upon the sale of
Stocks may be reinvested, until the next applica-
ble 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
________________
*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.
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 invest-
ment 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 condi-
tions to improve the Trust's net asset value, but
may dispose of Securities only under limited cir-
cumstances. (See "Administration of the Trust--
Portfolio Supervision".)
FEDERAL INCOME TAXES
In the opinion of Carter, Ledyard & Milburn,
counsel for the Sponsor, under existing law:
1. The Trust is not an association taxable as a
corporation for federal income tax purposes. Un-
der 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. The total tax cost of each Unit to
a Unitholder is allocated among each of the Secu-
rities in accordance with the proportion of the
Trust comprised by each Security to determine the
per Unit tax cost for each security.
3. The Trust is not an association taxable as a
corporation for New York State income tax pur-
poses. Under New York State law, each Unitholder
will be treated as the owner of a pro rata portion
of the Trust and the income of the Trust will be
treated as income of the Unitholders.
The following general discussion of the federal
income tax treatment of an investment in Units of
the Trust is based on the Code and United States
Treasury Regulations (established under the Code)
as in effect on the date of this Prospectus. The
federal income tax treatment applicable to a Uni-
tholder may depend upon the Unitholder's particu-
lar tax circumstances. The tax treatment applica-
ble to non-U.S. investors is not addressed. Fu-
ture 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 his or her own tax advisor concerning the ef-
fect of an investment in Units.
General. Each Unitholder must report on its fed-
eral income tax return a pro rata share of the en-
tire income of the Trust, derived from dividends
on Stocks, original issue discount or interest on
Treasury Obligations, gains or losses upon dispo-
sitions 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 in-
vestment in Units will exceed cash distributions
because taxable income will include accretions of
original issue discount on the Treasury Obliga-
tions.
Distributions with respect to Stock, to the ex-
tent they do not exceed current or accumulated
earnings and profits of the distributing corpora-
tion, will be treated as dividends to the Uni-
tholders and will be subject to income tax at or-
dinary rates. Corporate Unitholders may be enti-
tled 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 increase any
gain, or reduce any loss, realized by the Uni-
tholder on any subsequent sale or other disposi-
tion of Units. After the tax cost has been re-
duced to zero, any additional distributions in ex-
cess of current and accumulated earnings and prof-
its would be taxable as gain from sale of Stock.
A Unitholder who is an individual, estate or
trust may be disallowed certain itemized deduc-
tions described in Code Section 67, including com-
pensation paid to the Trustee and administrative
expenses of the Trust, to the extent these item-
ized deductions, in the aggregate, do not exceed
two percent of the Unitholder's adjusted gross in-
come. 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. Corpo-
rate holders of Units may be eligible for the
dividends-received deduction with respect to dis-
tributions treated as dividends, subject to the
limitations provided in Section 246 and 246A of
the Code. The dividends-received deduction gener-
ally equals 70 percent of the amount of the divi-
dend. The alternative minimum tax may have the
effect of reducing the benefit of the deduction.
As a result, the maximum effective tax rate on
dividends received generally will be reduced from
35 percent to 10.5 percent. A portion of the divi-
dends-received deduction, may however, be subject
to the alternative minimum tax. Individuals, part-
nerships, trusts, S corporations and certain other
entities are not eligible for the dividends-
received deduction.
Original Issue Discount. The Trust will contain
principal or interest portions of stripped "zero-
coupon" United States Treasury Obligations which
are treated as bonds that were originally issued
at a discount ("original issue discount"). Origi-
nal 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 Obliga-
tions, 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 dis-
count attributable to each of the Treasury Obliga-
tions. Original issue discount on Treasury Obli-
gations (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 with original issue dis-
count. The amount of accrued original issue dis-
count included in income for a Unitholder's pro
rata interest in Treasury Obligations is added to
the tax cost for such obligations.
Gain or Loss on Sale. If a Unitholder sells or
otherwise disposes of a Unit, the Unitholder gen-
erally will recognize gain or loss in an amount
equal to the difference between the amount real-
ized on the disposition allocable to the Securi-
ties 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 is-
sue discount. The 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 previ-
ously reported. Each Unitholder generally will
also recognize taxable gain or loss when all or
part of its pro rata portion of a Security is sold
or otherwise disposed of for an amount greater or
less than the Security's per Unit tax cost.
Under the Taxpayer Relief Act of 1997, capital
gains realized on the sale of property held for
more than one year but not more than eighteen
months are considered "mid-term gains." In the
case of individuals, mid-term gains are taxed at
lower rates than ordinary income, but not as fa-
vorably as capital gains on property held for more
than eighteen months. The Trustee will identify in
the annual tax information statement mailed to
Unitholders the portion of capital gain dividends
which are considered mid-term gains.
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 per-
cent "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 in-
come tax consequences of an investment in the
Trust. Unitholders, may also be subject to state
and local taxation. Each Unitholder should con-
sult its own tax advisor regarding the federal,
state and local tax consequences to it of owner-
ship of Units.
Investment in the Trust may be suited for pur-
chase by funds and accounts of individual inves-
tors 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. Uni-
tholders 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 re-
lated expenses with respect to the purchase of
Units by employees of the Sponsor and its affili-
ates, 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 ex-
change 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 Se-
ries"); 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 Eq-
uity 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 Uni-
tholder who wishes to exchange Units the cost sav-
ings resulting from such exchange Units. The cost
savings result from reductions in time and expense
related to advice, financial planning and opera-
tional expenses required for the Exchange Option.
Each Exchange Trust has different investment ob-
jectives, therefore a Unitholder should read the
prospectus for the applicable Exchange Trust care-
fully 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 Individ-
ual Retirement Accounts. A Unitholder who pur-
chased 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 se-
ries of the Exchange Trusts for which such Uni-
tholder desires to exchange into, will be allowed
to exercise the Exchange Option at the Unit Offer-
ing 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 pe-
riod 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 Uni-
tholder 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 indi-
cated that it intends to maintain a market for the
Units of the respective Trusts, there is no obli-
gation 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 Uni-
tholder. 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 na-
ture 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 exer-
cise 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 Ex-
change 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 pro-
spectus 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 af-
ter 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 pro-
ceeds 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 se-
ries of an Exchange Trust with a current price of
$890 per unit based on the bid prices of the un-
derlying securities. In this example, which does
not contemplate any rounding up to the next high-
est number of Units, the proceeds from the Uni-
tholder'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 re-
turned 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 Ex-
change Option (except that no secondary market is
required for Conversion Trust units). To exercise
this option, the owner should notify his retail
broker. He will be given a prospectus for each se-
ries in which he indicates interest and for which
units are available. The dealer must sell or re-
deem the units of the Conversion Trust. Any dealer
other than PaineWebber must certify that the pur-
chase of units of the Exchange Trust is being made
pursuant to and is eligible for the Conversion Op-
tion. 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 re-
duced 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 Ex-
change Option). For a description of the tax con-
sequences 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 is 250 Units for pur-
chases made in connection with Individual Retire-
ment Accounts or other tax-deferred retirement
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 re-
tained 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 Securi-
ties 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 in-
tend 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 secon-
dary 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 Securi-
ties, determined by the Trustee as described under
"Valuation". In maintaining a secondary market for
the Units, the Sponsor may realize profits or sus-
tain losses in the amount of any differences be-
tween 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 de-
livery may be used in the Sponsor's business sub-
ject 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 of-
fice 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 pre-
sent 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 uncerti-
ficated 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 addi-
tional documents such as, but not limited to,
trust instruments, certificates of death, appoint-
ments as executor or administrator, or certifi-
cates of corporate authority. Unitholders should
contact the Trustee to determine whether addi-
tional 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 re-
demption request in good order by the Trustee. The
Redemption Value per Unit is determined by divid-
ing 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 repre-
senting income received shall be withdrawn from
the Income Account, and, to the extent such bal-
ance 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 Spon-
sor, 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 ef-
fect 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 main-
taining 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 clos-
ings; or for any period during which the Securi-
ties and Exchange Commission determined that trad-
ing on the New York Stock Exchange, Inc. is re-
stricted or for any period during which an emer-
gency exists as a result of which disposal or
evaluation of the Securities is not reasonably
practicable; or for such other period as the Secu-
rities 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 sus-
pend or postpone when done in the Trustee's dis-
cretion.
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 Infor-
mation" (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 Obliga-
tions 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 de-
ducting therefrom the sum of (x) taxes or other
governmental charges against the Trust not previ-
ously deducted and (y) accrued fees and expenses
of the Trustee and the Sponsor (including legal
and auditing expenses) and other Trust expenses.
The per Unit Trust Fund Evaluation is calculated
by dividing the result of such computation by the
number of Units outstanding as of the date
thereof. Business days do not include Saturdays,
Sundays, New Year's Day, Martin Luther King, Jr.'s
Day, Presidents' 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 na-
tional 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 appropri-
ate 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 Secu-
rities in good faith on the bid side of the mar-
ket, or (d) by any combination thereof.
Treasury Obligations are valued on the basis of
bid prices. The aggregate bid prices of the Treas-
ury Obligations, is the price obtained from in-
vestment dealers or brokers (which may include the
Sponsor) who customarily deal in Treasury Obliga-
tions; 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 se-
curities; 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 Pub-
lic 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 in-
curred in establishment of the Trust including le-
gal 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 serv-
ices 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, an-
nually $.00145 per Unit. In addition, the regular
and recurring expenses of the Trust are estimated
to be $.0009 per Unit annually which include, but
are not limited to certain mailing, printing and
audit expenses. Expenses in excess of this esti-
mate 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 in-
creased 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 deter-
mined 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 extraor-
dinary services; (2) expenses of the Trustee
(including legal and auditing expenses) and of
counsel; (3) various governmental charges; (4) ex-
penses and costs of any action taken by the Trus-
tee to protect the trusts and the rights and in-
terests 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 Fed-
eral or state securities laws so long as the Spon-
sor 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 account-
ants 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 divi-
dends paid with respect to the Stocks are not suf-
ficient 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 ap-
preciation will be sold first.
RIGHTS OF UNITHOLDERS
Ownership of Units is evidenced by registered
Certificates executed by the Trustee and the Spon-
sor. Certificates are transferable by presentation
and surrender to the Trustee at its corporate
agency office properly endorsed and accompanied 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 ap-
proved by the Sponsor), and taxes or other govern-
mental 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 indem-
nity satisfactory to the Trustee and must pay such
expenses as the Trustee may incur. Mutilated Cer-
tificates 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 dispo-
sition 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 re-
quired 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 divi-
dends, 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 neces-
sary to pay expenses incurred by the Trust. (See
"Expenses and Charges.") In addition, the Trustee
may withdraw from the Income Account and the Capi-
tal 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 in-
come 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 re-
quired 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 ad-
dress of every Unitholder, a list of the Certifi-
cate numbers and the number of Units of each Cer-
tificate issued to Unitholders. The Trustee is
also required to keep a certified copy or dupli-
cate 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 in-
spection 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 dur-
ing 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 Uni-
tholders 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 In-
denture 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 le-
gal question or impediment affecting such Securi-
ties 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 dec-
laration 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 in-
come 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 Spon-
sor, make the retention of such Securities detri-
mental to the interest of the Unitholders;
(6) upon a public tender offer being made for a
Security, or a merger or acquisition being an-
nounced affecting a Security that in the opinion
of the Sponsor makes the sale or tender of the Se-
curity 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 eco-
nomic fundamentals of the issuer of the Security
or the industry of which it is a part.
The Trustee may dispose of Securities where nec-
essary to pay Trust expenses or to satisfy redemp-
tion 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 discre-
tion, provided however, that Treasury Obligations
will be sold so as to maintain in the Trust Treas-
ury Obligations in an amount which, upon maturity,
will equal at least $1.00 per Unit outstanding af-
ter 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 undesir-
able or infeasible and (ii) amounts not suffi-
ciently large so as to make a reinvestment eco-
nomical or feasible. Any moneys held and not rein-
vested will be held in an non-interest bearing ac-
count 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 Uni-
tholders to cure any ambiguity or to correct or
supplement any provision thereof which may be de-
fective or inconsistent or to make such other pro-
visions 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 is-
sued thereunder or to permit the deposit or acqui-
sition of securities either in addition to or in
substitution for any of the Securities initially
deposited in the Trust.
The Indenture may be amended in any respect by
the Sponsor and the Trustee with the consent of
the holders of 51% of the Units then outstanding;
provided that no such amendment shall (1) reduce
the interest in the Trust represented by a Unit or
(2) reduce the percentage of Unitholders required
to consent to any such amendment, without the con-
sent of all Unitholders.
The Trustee will promptly notify Unitholders of
the substance of any amendment affecting Unithold-
ers rights or their interest in the Trust.
TERMINATION OF THE TRUST
The Indenture provides that the Trust will termi-
nate 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 De-
posit, 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 Uni-
tholders 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 Uni-
tholders. In no event will the Trust continue be-
yond 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 ter-
mination 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, distrib-
ute to each Unitholder, upon surrender for cancel-
lation 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 Uni-
tholder.
SPONSOR
The Sponsor, PaineWebber Incorporated, is a cor-
poration 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 mem-
ber of the National Association of Securities
Dealers Inc. The Sponsor is engaged in a security
and a commodity brokerage business as well as un-
derwriting and distributing new issues. The Spon-
sor also acts as a dealer in unlisted securities
and municipal bonds and in addition to participat-
ing as a member of various selling groups or as an
agent of other investment companies, executes or-
ders on behalf of investment companies for the
purchase and sale of securities of such companies
and sells securities to such companies in its ca-
pacity 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 re-
fraining 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 du-
ties. The Sponsor will not be liable or responsi-
ble 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 du-
ties 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 liq-
uidate 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 Corpora-
tion and the Board of Governors of the Federal Re-
serve System) with its corporate trust office at
One First National Plaza, Suite 0126, Chicago, Il-
linois 60670-0126 and Investors Bank & Trust Com-
pany, a Massachusetts trust company (which is sub-
ject to supervision by the Massachusetts Commis-
sioner of Banks, the Federal Deposit Insurance
Corporation and the Board of Governors of the Fed-
eral 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 re-
quired 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 rea-
son of the sale by the Co-Trustees of any Securi-
ties 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 indem-
nified and held harmless against any loss or li-
ability accruing to it without gross negligence,
bad faith or willful misconduct on its part, aris-
ing 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, inde-
pendent auditors, have been included herein in re-
liance 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, 1998
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: $32,566,001
Number of Units: 19,700,000
Minimum Purchase
250 units for Individual Retirement Accounts
1,000 units for all else
Fractional Undivided Interest in the Trust Represented by
Each Unit: 1/19,700,000th
Calculation of Public Offering Price Per Unit:
Value of Net Assets in Trust $32,600,972
Divided by 19,700,000 Units $1.6549
Plus Sales Charge of 2.25% of Public Offering Price $.0381
Public Offering Price per Unit $1.6930
Redemption Value per Unit $1.6549
Excess of Public Offering Price over Redemption Value per Unit: $.0381
Sponsor's Repurchase Price per Unit $1.6549
Excess of Public Offering over Sponsor's Repurchase Price per Unit: $.0381
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 * *: $.0026 per Unit
* See " Distributions "
* * See " Expenses of Trust ". Estimated divi-
dends from the 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 fi-
nancial condition, including the schedule of in-
vestments, of The PaineWebber Pathfinders Trust,
Treasury and Growth Stock Series Fourteen as of
February 28, 1998 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 gener-
ally accepted auditing standards. Those standards
require that we plan and perform the audit to ob-
tain reasonable assurance about whether the finan-
cial statements are free of material misstatement.
An audit includes examining, on a test basis, evi-
dence supporting the amounts and disclosures in
the financial statements. Our procedures included
confirmation of the securities owned as of Febru-
ary 28, 1998, as shown in the statement of finan-
cial 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 state-
ment presentation. We believe that our audits pro-
vide 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 Path-
finders Trust, Treasury and Growth Stock Series
Fourteen at February 28, 1998 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 5, 1998
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FOURTEEN
STATEMENT OF FINANCIAL CONDITION
February 28, 1998
<CAPTION>
ASSETS
<S> <C> <C>
Treasury Obligation - at market value (Cost $13,606,383)
(note A and note 1 to schedule of investments) $14,320,304
Common Stock - at market value (Cost $8,032,192)
(note 1 to schedule of investments) 18,245,697
Accrued dividends receivable 16,953
Cash 30,302
Total Assets $32,613,256
LIABILITIES AND NET ASSETS
Accrued expenses payable $12,284
Total Liabilities 12,284
Net Assets (19,700,000 units of fractional undivided interest outstanding):
Cost to investors (note B) $22,136,650
Less gross underwriting commissions (note C) (498,075)
21,638,575
Net unrealized market appreciation (note D) 10,927,426
Net amount applicable to unitholders 32,566,001
Undistributed investment income-net 33,457
Undistributed proceeds from securities sold 1,514
Net Assets 32,600,972
Total Liabilities and Net Assets $32,613,256
Net Asset Value per unit $1.6549
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 28, February 29,
1998 1997 1996
<S> <C> <C> <C>
Operations:
Investment income:
Accretion on Treasury Obligation $973,000 $1,190,611 $1,465,924
Dividend Income 267,126 358,810 444,398
Total investment income 1,240,126 1,549,421 1,910,322
Less expenses:
Trustee's fees, evaluator's expense and other expenses 38,442 80,774 108,642
Total expenses 38,442 80,774 108,642
Investment income-net 1,201,684 1,468,647 1,801,680
Realized and unrealized gain on investments-net:
Net realized gain on securities transactions 2,419,830 1,559,488 1,171,212
Net change in unrealized market appreciation 3,171,897 1,567,724 6,031,200
Net gain on investments 5,591,727 3,127,212 7,202,412
Net increase in net assets resulting from operations $6,793,411 $4,595,859 $9,004,092
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 28, February 29,
1998 1997 1996
<S> <C> <C> <C>
Operations:
Investment income-net $1,201,684 $1,468,647 $1,801,680
Net realized gain on securities transactions 2,419,830 1,559,488 1,171,212
Net change in unrealized market appreciation (depreciation) 3,171,897 1,567,724 6,031,200
Net increase in net assets resulting from operations 6,793,411 4,595,859 9,004,092
Less: Distributions to Unitholders (Note E)
Investment income-net 212,287 276,005 341,487
Total Distributions 212,287 276,005 341,487
Less: Units Redeemed by Unitholders (Note F)
Value of units at date of redemption 8,174,950 8,405,048 12,339,499
Accrued dividends at date of redemption 8,120 7,790 13,960
Accreted discount at date of redemption 1,020,700 923,282 973,671
Total Redemptions 9,203,770 9,336,120 13,327,130
Decrease in net assets (2,622,646) (5,016,266) (4,664,525)
Net Assets:
Beginning of Period 35,223,618 40,239,884 44,904,409
End of Period $32,600,972 $35,223,618 $40,239,884
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FOURTEEN
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
(A) The financial statements of the Trust are
prepared on the accrual basis of accounting. Secu-
rity transactions are accounted for on the date
the securities are purchased or sold. The original
issue discount on the Treasury Obligation is ac-
creted on a level yield basis. The amount of dis-
count included in the cost of the Treasury Obliga-
tion held as of February 28, 1998 is $3,660,245.
(B) Cost to investors represents the initial pub-
lic offering price as of the initial date of de-
posit, and the value of units through supplemental
deposits computed on the basis set forth under
"Public Offering Price of Units", adjusted for ac-
cretion on United States Treasury Obligations and
for securities sold since the initial date of de-
posit.
(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, 1998, the gross unrealized
market appreciation was $11,223,648 and the gross
unrealized market depreciation was ($296,222).The
net unrealized market appreciation was
$10,927,426.
(E) Regular distributions of net income, exclud-
ing 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 re-
spect to the accretion of original issue discount
is not distributed although the unitholder is sub-
ject to tax, where applicable, as if the distribu-
tion 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 pro-
ceeds of securities sold as follows:
<CAPTION>
Year Ended Year Ended Year Ended
February 28, February 28, February 29,
1998 1997 1996
<S> <C> <C> <C>
Number of units redeemed 6,300,000 7,500,000 12,200,000
Redemption amount $9,203,770 $9,336,120 $13,327,130
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FOURTEEN
SCHEDULE OF INVESTMENTS
As of February 28, 1998
<CAPTION>
TREASURY OBLIGATIONS (43.97%)
Name of Security Coupon Maturity Value Maturity Date Market Value(1)
<C> <C> <C> <C> <C> <C> <C>
U.S. Treasury Interest Payments (2) (43.97%) 0% $19,700,000 11/15/2003 $14,320,304
COMMON STOCKS (56.03%)
Name of Issuer Number of Shares Market Value
Automobile Parts (1.30%)
Allen Telecom Inc.* (3) 24,324 $424,150
Automobile Manufacturing (2.66%)
Ford Motor Company 15,312 866,085
Beverages (6.17%)
The Coca-Cola Company 19,224 1,320,448
PepsiCo, Inc. 18,817 687,997
Chemicals (1.60%)
Eastman Chemical Company 1,816 118,948
Imperial Chemical Industries plc~ 5,492 401,603
Construction Materials (.86%)
Owens-Corning 9,026 278,678
Electrical Equipment (4.31%)
General Electric Company 18,054 1,403,699
Entertainment (3.17%)
Walt Disney Company 9,226 1,032,735
Household Products (4.30%)
Procter & Gamble Company 16,478 1,399,600
Information Technology (.04%)
NCR Corporation* 428 13,429
Machinery (3.33%)
AlliedSignal, Inc. 24,359 1,036,780
TransPro, Inc. 6,081 46,368
Manufacturing (1.71%)
Mark IV Industries, Inc. 23,886 555,350
Packaging & Containers (1.84%)
Continental Can, Inc.* 14,774 599,270
Photography (1.46%)
Eastman Kodak Company 7,268 476,962
Pharmaceuticals (11.82%)
Bristol-Myers Squibb Company 13,731 1,375,675
Merck & Company, Inc. 11,766 1,500,900
Zeneca Group plc~ 7,311 971,906
Publishing (.69%)
Readers Digest Association, Inc. 8,438 224,134
Retail-Restaurants (.16%)
Tricon Global Restaurants, Inc.* (4) 1,882 53,402
(Continued)
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FOURTEEN
SCHEDULE OF INVESTMENTS
As of February 28, 1998
<CAPTION>
COMMON STOCKS (56.03%)
Name of Issuer Number of Shares Market Value
<C> <C> <C>
Telecommunications (8.28%)
AT & T Corporation 6,863 $417,785
Lucent Technologies, Inc. 2,249 243,735
Telefonos de Mexico SA~ 7,257 367,839
WorldCom, Inc.* 43,686 1,668,259
Tire and Rubber (2.33%)
Goodyear Tire & Rubber Company 10,994 759,960
TOTAL COMMON STOCKS $18,245,697
TOTAL INVESTMENTS $32,566,001
(1) Valuation of Securities was made by the Co-
Trustees as described in "Valuation".
(2) This security does not pay current inter-
est. On the maturity date thereof, the entire ma-
turity value becomes
due and payable. Generally, a fixed yield is
earned on such security which takes into account
the semi-annual
compounding of accrued interest. (See "The
Trust" and "Federal Income Taxes" herein).
(3) Name changed from Allen Group.
(4) Spin-off from PepsiCo, Inc.
* 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-27 Financial Data Schedule
EX-99.C2 Consent of Independent Auditors
FINANCIAL STATEMENTS
1. Statement of Condition of the Trust as shown in
the current Prospectus for this series.
2. Financial Statements of the Depositor.
PaineWebber Incorporated - Financial Statements
incorporated by reference to Form 10-k and
Form 10-Q (File No. 1-7367) respectively.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, The PaineWebber Pathfinders Trust, Treasury and Growth
Stock Series 14 certifies that it meets all of the requirements for
effectiveness of this Registration Statement pursuant to Rule 485(b)
under the Securities Act of 1933 and has duly caused this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized, and its seal to be hereunto affixed and attested, all in
the City of New York, and the State of New York on the 16th day of
June, 1998.
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 16th day of June, 1998.
PAINEWEBBER INCORPORATED
Name Office
Donald B. Marron Chairman, Chief Executive Officer
and Director of PaineWebber Incorporated*
Regina A. Dolan Executive Vice President,
Chief Financial Officer and
Director of PaineWebber Incorporated*
Joseph J. Grano, Jr. President and
Director of PaineWebber Incorporated*
Steve P. Baum Executive Vice President and
Director of PaineWebber Incorporated*
Robert H. Silver Executive Vice President and
Director of PaineWebber Incorporated*
Mark B. Sutton Executive Vice President and
Director of PaineWebber Incorporated*
Margo N. Alexander Executive Vice President and
Director of PaineWebber Incorporated*
Terry L. Atkinson Managing Director and
Director of PaineWebber Incorporated*
Brian M. Barefoot Executive Vice President and
Director of PaineWebber Incorporated*
Michael Culp Managing Director and
Director of PaineWebber Incorporated*
Edward M. Kerschner Managing Director and
Director of PaineWebber Incorporated*
James P. MacGilvray Executive Vice President and
Director of PaineWebber Incorporated*
By:/s/ ROBERT E. HOLLEY
Attorney-in-fact*
* Executed copies of the powers of attorney have been previously
filed with the Securities and Exchange Commission with the Post
Effective Amendment to the Registration Statement File No. 2-61279.
June 16, 1998
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"). It is proposed that Post-Effective
Amendment No. 5 to the Trust's registration statement ("Post-Effective
Amendment No.5") will be filed with the Securities and Exchange
Commission and dated as of the date hereof in connection with the
continued issuance by the Trust of an indefinite number of units of
fractional undivided interest in the Trust (hereinafter referred
to as the "Units") pursuant to Rule 24f-2 promulgated under the
provisions of the Investment Company Act of 1940, as amended.
In this regard, we have examined executed originals or copies of the
following:
(a) The Restated Certificate of Incorporation, as amended, and the
By-Laws of the Depositor, as amended;
(b) Resolutions of the Board of Directors of the Depositor adopted on
December 3, 1971 relating to the Trust and the sale of the Units;
(c) Resolutions of the Executive Committee of the Depositor adopted
on September 24, 1984;
(d) Powers of Attorney referred to in the Amendment;
(e) Post-Effective Amendment No. 5 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
January 15, 1988, 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 (except "Blue Sky" laws) and the federal laws
of the United States, except to the extent necessary to render the
opinion as to the Depositor in paragraph (i) below with respect to
Delaware law. As you know we are not licensed to practice law in the
State of Delaware, and our opinion in paragraph (i) and (iii) as to
Delaware law is based solely on review of the official statutes of the
State of Delaware.
Based upon such examination, and having regard for legal
considerations which we deem relevant, we are of the opinion that:
(i) The Depositor is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Delaware with full
corporate power to conduct its business as described in the
Prospectus;
(ii) The Depositor is duly qualified as a foreign corporation and is in
good standing as such within the State of New York;
(iii)The terms and provisions of the Units conform in all material
respects to the description thereof contained in the Prospectus;
(iv) The consummation of the transactions contemplated under the
Indenture and Agreement and the fulfillment of the terms thereof
will not be in violation of the Depositor's Restated Certificate of
Incorporation, as amended, or By-Laws, as amended and will not
conflict with any applicable laws or regulations applicable to the
Depositor in effect on the date hereof; and
(v) The Certificates to be issued by the Trust, when duly executed by
the Depositor and the Trustee in accordance with the Indenture
and Agreement, upon delivery against payment therefor as
described in the Prospectus will constitute fractional undivided
interests in the Trust enforceable against the Trust in accordance
with their terms, will be entitled to the benefits of the Indenture
and Agreement and will be fully paid and non-assessable.
Our opinion that any document is valid, binding, or enforceable in
accordance with its terms is qualified as to:
(a) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium, or other laws
relating to or affecting the enforcement of creditors' rights
generally;
(b) rights to indemnification and contribution which may be limited by
applicable law or equitable principles; and
(c) general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
We hereby represent that the Amendment contains no disclosure
which would render it ineligible to become effective immediately
upon filing pursuant to paragraph (b) of Rule 485 of the
Commission.
We hereby consent to the filing of this opinion as an exhibit to
the Amendment and to the use of our name wherever it appears in
the Amendment and the Prospectus.
Very truly yours,
/s/ CARTER, LEDYARD & MILBURN
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<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-28-1998 FEB-28-1997 FEB-29-1996
<PERIOD-START> MAR-01-1997 MAR-01-1996 MAR-01-1995
<PERIOD-END> FEB-28-1998 FEB-28-1997 FEB-29-1996
<EXCHANGE-RATE> 1 1 1
<INVESTMENTS-AT-COST> 21,638,575 0 0
<INVESTMENTS-AT-VALUE> 32,566,001 0 0
<RECEIVABLES> 16,953 0 0
<ASSETS-OTHER> 30,302 0 0
<OTHER-ITEMS-ASSETS> 0 0 0
<TOTAL-ASSETS> 32,613,256 0 0
<PAYABLE-FOR-SECURITIES> 0 0 0
<SENIOR-LONG-TERM-DEBT> 0 0 0
<OTHER-ITEMS-LIABILITIES> 12,284 0 0
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<OVERDISTRIBUTION-GAINS> 0 0 0
<ACCUM-APPREC-OR-DEPREC> 10,927,426 0 0
<NET-ASSETS> 32,600,972 0 0
<DIVIDEND-INCOME> 267,126 358,810 444,398
<INTEREST-INCOME> 973,000 1,190,611 1,465,924
<OTHER-INCOME> 0 0 0
<EXPENSES-NET> 38,442 80,774 108,642
<NET-INVESTMENT-INCOME> 1,201,684 1,468,647 1,801,680
<REALIZED-GAINS-CURRENT> 2,419,830 1,559,488 1,171,212
<APPREC-INCREASE-CURRENT> 3,171,897 1,567,724 6,031,200
<NET-CHANGE-FROM-OPS> 6,793,411 4,595,859 9,004,092
<EQUALIZATION> 0 0 0
<DISTRIBUTIONS-OF-INCOME> 212,287 276,005 341,487
<DISTRIBUTIONS-OF-GAINS> 0 0 0
<DISTRIBUTIONS-OTHER> 0 0 0
<NUMBER-OF-SHARES-SOLD> 0 0 0
<NUMBER-OF-SHARES-REDEEMED> 6,300,000 7,500,000 12,200,000
<SHARES-REINVESTED> 0 0 0
<NET-CHANGE-IN-ASSETS> (2,622,646) (5,016,266) (4,664,525)
<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> 2 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 5, 1998, 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 16, 1998
