File No. 33-49437
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 2
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 15
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 February 7, 1996) pursuant to paragraph
(b) of Rule 485.
E. Title and amount of securities being registered:
32,004,500 Units
F. Proposed maximum offering price to the public of the securities being
registered:
$38,971,879.65**
* Estimated solely for the purpose of calculating the registration fee, at
$1.22 per unit.
G. Amount of filing fee, computed at one-twenty-ninth of 1 percent of the
proposed maximum aggregate offering price to the public:
$100.00*
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT.
* The method of calculation is made pursuant to Rule 24e-2 under the
Investment Company Act of 1940.The total amount of units redeemed or
repurchased during the previous fiscal year ending 1994 is 31,766,394.
There
have been no previous filings of post-effective amendments during the
current fiscal year 31,766,394 redeemed or repurchased units are being
used
to reduce the filing fee for this amendment.
<PAGE>
PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES 15
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.
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(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.
<PAGE>
(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.
<PAGE>
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.
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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.
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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.
<PAGE>
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.
<PAGE>
PaineWebber Pathfinders Trust
Treasury and Growth Stock Series
Fifteen
A "Unit Investment Trust"
42,300,000 Units
The investment objective of this Trust is to preserve capital
while providing for capital appreciation through an investment in
"zero-coupon" United States Treasury obligations (the "Treasury
Obligations") and equity growth stocks having, in Sponsor's opinion
on the Date of Deposit, potential for appreciation (the "Growth
Stocks"). The value of the Units will fluctuate with the value of the
portfolio of underlying securities.
The minimum purchase is $1,000 except that the minimum
purchase in connection with an Individual Retirement Account (IRA)
or other tax-deferred retirement plan is $250. Only whole Units may
be purchased.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DIS-
APPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION NOR HAS THE COM-
MISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OF-
FENSE.
THE INITIAL PUBLIC OFFERING OF UNITS IN THE TRUST HAS
BEEN COMPLETED. THE UNITS OFFERED HEREBY ARE ISSUED
AND OUTSTANDING UNITS WHICH HAVE BEEN ACQUIRED BY THE
SPONSOR EITHER BY PURCHASE FROM THE TRUSTEE OF UNITS
TENDERED FOR REDEMPTION OR IN THE SECONDARY MARKET.
SPONSOR:
PaineWebber
Incorporated
<PAGE>
Read and retain this prospectus for future reference.
Prospectus Part A dated February 7, 1996
<PAGE>
Essential Information Regarding The Trust
The Trust. The objective of the PaineWebber Pathfinders Trust,
Treasury and Growth Stock Series 15 (the "Trust") is preservation
of capital and capital appreciation through an investment in the
principal or interest portions of stripped "zero-coupon" United
States Treasury notes or bonds as the case may be (the "Treasury
Obligations"), and equity growth stocks (the "Growth Stock" or
"Stock") which, in Sponsor's opinion on the Initial Date of Deposit,
have potential for capital appreciation (collectively, the "Securities").
The stripped Treasury Obligations in the Trust portfolio are interest-
only portions of United States Treasury Obligations (as further
discussed under "Risk Factors and Special Characteristics"), matur-
ing on February 15, 2005, represent approximately 50% of the
aggregate market value of the Trust portfolio and the Growth Stocks
represent approximately 50% of the aggregate market 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
provides an attractive combination of safety and appreciation for
purchasers who hold Units until the Trust's termination. The Trust
has been formulated so that the portion of the Trust invested in
stripped Treasury Obligations is designed to provide an approximate
return of principal invested on the Mandatory Termination Date for
purchasers on the Initial Date of Deposit. (See "Essential Informa-
tion--Distributions".) Therefore, even if the Stocks are valueless
upon termination of the Trust, and if the Treasury Obligations are
held until their maturity in proportion to the Units outstanding,
purchasers will receive, at the termination of the Trust, $1,000 per
1,000 Units purchased. This feature of the Trust provides that Unit
holders who hold their units to the Mandatory Termination Date of
the Trust on March 2, 2005, will receive the same amount as they
originally invested, although they would have foregone earning any
interest on the amounts involved and will not protect their principal
on a present value basis, assuming the Growth Stocks are value-
less. Therefore, the Trust may be an attractive investment to those
persons who buy their Units during the initial offering period and
hold such Units throughout the life of the Trust until the Trust
matures.
Summary of Risk Factors. The stripped Treasury Obligations
may appreciate or depreciate in value depending upon economic
and market conditions. (For a further discussion of stripped Trea-
sury Obligations, see "Risk Factors and Special Considerations.")
The Stock may appreciate or depreciate in value (or pay dividends)
depending on the full range of economic and market influences
affecting corporate profitability, the financial condition of issuers, the
prices of equity securities in general and the Stock in particular and
the risk inherent in an investment made in common stocks in
general. In addition, the stripped Treasury Obligations may fluctuate
1
<PAGE>
substantially in value and may be subject to greater fluctuations in
value during the life of the Trust than might be experienced by
current interest-bearing Treasury Obligations which distribute in-
come regularly. In addition, currency fluctuations are likely to affect
the value of American Depositary Receipts and the value of divi-
dends thereon actually received by the Trust. 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. Purchasers who
purchase Units subsequent to the Initial Date of Deposit will receive,
if the pro rata portion of the Treasury Obligations are held until
maturity, $1,000 per 1,000 Units as a return of such purchaser's
principal investment, regardless of the purchase price paid by such
purchaser. (See "Risk Factors and Special Considerations.")
The Composition of the Portfolio. PaineWebber's forecast for
continued low inflation, low interest rates and slow economic
growth suggests that equities will continue to generate better re-
turns than money market instruments and other fixed income
alternatives for the foreseeable future. With this forecast in mind,
PaineWebber designed a portfolio to meet the needs of investors
interested in building wealth prudently over a long-term time horizon
by pairing the security of U.S. Treasury bonds with the growth
potential of Growth Stocks.
The main objective of PaineWebber in constructing the portfolio
of Growth Stocks was to select a group of Stocks which, in
PaineWebbers' view, would be capable of outperforming the overall
market during the next twelve-month period and at the same time
moderating the riskiness of the portfolio's performance over time.
To achieve this result, a three-step selection process was utilized.
The selection criteria employed first identified all stocks currently in
the one ("buy") or two ("attractive") categories as ranked by those
PaineWebber equity analysts following such stocks. This selection
resulted in 243 candidate stocks.
A computer optimization program was then run against the 243
candidate stocks to construct the portfolio. The optimization pro-
gram is designed to maximize returns as stated by the user's
forecast of specific stocks or model portfolios while minimizing the
portfolio's performance divergence as measured against a specific
benchmark, in this case the S&P 500 Index (the "S&P 500"). The
optimizer program used in constructing the Trust's portfolio was
modeled to favor, or "tilt" toward, growth stocks. The program
produced a portfolio of 35 stocks with a tracking error of 3.90%
versus the S&P 500 (i.e.), there is a probability that the return
generated by the program-picked portfolio will differ over the course
of one year from the S&P 500's return by no more than 3.9%.
Finally, an examination of each of the 35 stocks was made to
ensure that the issue's business mix and the relative weightings of
each stock were consistent with the initial objectives of the Trust.
PaineWebber believes that the Trust's portfolio as constructed, with
excellent diversity and a tilt toward growth stocks, will outperform
2
<PAGE>
the market during the next twelve-month period and, over the long
term, closely track the performance of the market as measured by
the S&P 500.
The Trust portfolio is comprised of 38* Growth Stocks, of
which 8 are stocks issued by companies related to the "electronic
superhighway" and 7 of which are stocks issued by companies that
PaineWebber believes are well positioned to take advantage of an
industrial recovery in Europe. PaineWebber believes that AT&T
Corporation , Bell Atlantic Corporation, Intel Corporation, MCI Com-
munications, Microsoft, Motorola, Inc., Telefonos de Mexico and
Walt Disney are companies whose principal growth prospects re-
volve around the provision of electronic information. Two other
companies, GTE Corporation and U.S. West, Inc. are companies
whose principal source of revenues derive from telecommunications
and related industries. PaineWebber believes that the explosion in
the provision of electronic information occurring during the last
decade which generated strong performances for certain companies
in the semiconductor, telecommunications, cable TV, software and
entertainment industries, will continue to provide strong growth
potential to those companies centrally involved with the "electronic
superhighway". PaineWebber uses the term "electronic superhigh-
way" to describe the integration of television, telephone, radio,
computer, and other methods of disseminating, transmitting and
storing electronic information for both household and business use
on a national and global basis.
Three key dimensions of the rapid expansion in the digital
information area have been identified by PaineWebber as having
immediate or near term impact on the growth potential of com-
panies in the industries identified above. These are: (1) the contin-
ued rapid expansion of electronic information gathering and dis-
semination in the business world, (2) the accelerated development
of the 150-500 channel cable TV system and (3) the onset of CD
ROM use. PaineWebber believes that, during the life of the Trust,
electronic communication used by the business world will continue
to grow rapidly, driven both by technological change and the
globalization of business activity. In addition to facsimile transmis-
sions, the business world is expected to use video conferencing
techniques and equipment to save both travel time and costs. Hand
in hand with these developments will be the continued, rapid
expansion of cellular telecommunications and long distance tele-
communications. International telecommunication services are espe-
cially likely to experience growth in developing markets such as
those of China and Latin America, and in the European Community,
where deregulation, expected in 1998, will permit users to chose
more innovative and sophisticated services.
Further, PaineWebber also believes that during the life of the
Trust there will be an expansion in the number of cable TV
channels available to the average American household. Companies
involved in upgrading the basic cable system itself, as well as those
engaged in manufacturing or providing the cable converter box, will
stand to profit from the cable TV expansion. Similarly, companies
3
<PAGE>
involved in electronic retailing and entertainment may be positioned
to take advantage of the increased consumer exposure that 150-500
cable TV will provide.
________
* Of the original 35 stocks, Sears, Roebuck & Company,
Eastman Kodak Company and Santa Fe Pacific Corp., have restruc-
tured. Three new companies, Allstate Corp., Eastman Chemical and
Santa Fe Pacific Gold, are now included in the Trusts portfolio and
Santa Fe Pacific Corp. has become Burlington Northern Santa Fe, as
a result of such corporate actions.
4
<PAGE>
Similarly, in PaineWebber's opinion, the combination of attrac-
tive pricing and industry-wide accepted standards have made CD
ROM systems very likely to proliferate rapidly during the life of the
Trust. PaineWebber believes that CD ROM systems will follow the
pattern of CD players and VCRs, gathering sales momentum as
lower hardware prices, wider selection of titles and improvements in
the underlying CD ROM technology become available to the average
retail consumers.
Taking these three factors discussed above into account,
PaineWebber has selected certain industries which it believes will
benefit from the expansion of the "electronic superhighway". Long
distance telecommunications firms, cable TV companies, entertain-
ment software firms, semiconductor and electronics firms and cel-
lular providers, in PaineWebber's opinion, well-positioned to take
advantage of this information expansion and the new evolving
opportunities presented.
PaineWebber also believes that excellent growth opportunities
exist for companies well positioned to take advantage of an indus-
trial recovery occurring in Europe. The Trust Portfolio contains the
stocks of 8 companies, Allied-Signal, Dupont, Eastman Chemical,
Goodyear Tire & Rubber Co., Elf Aquitaine, Ford Motor Company,
Owens-Corning Fiberglas and PPG Industries who have significant
European investments or are involved in joint ventures with Eu-
ropean companies and will be able to benefit from privatization of
national industries, reduction of trade barriers, newly opened mar-
kets for consumer goods and services. Investors should note that
each of the developments supporting this trend are subject to
national and international political and economic events that could
have a negative impact on the expansion opportunities in Europe
and hence the ability of companies to benefit from the expansion.
The remainder of the Trust's portfolio, in PaineWebbers' opin-
ion, is comprised of a diversified group of companies in the
transportation, construction, and consumer related, financial related
and other fields, which have been selected to provide balance and
diversification to the investments in the Trust's portfolio. These are
common stocks issued by companies who may receive income and
derive revenues from multiple industry sources. The individual com-
mon stocks comprising each primary industry source is listed in the
table below.
Primary Industry Approximate
Source and Percentage of
Name of Issuer Aggregate Market
Value of the Trust
Automotive 1 %
Ford Motor Company
Banking and Financial Institutions 4
BankAmerica
Barnett Banks
Republic NY Corp.
Federal National Mortgage Association
5
<PAGE>
Beverage 5
Coca-Cola
PepsiCo
Chemical 1
DuPont
Eastman Chemical
PPG Industries
Computer Software 5
Microsoft
Consumer Goods 1
Sara Lee
Consumer/Industrial Goods 1
General Electric
Cosmetics/Household Products 1
Procter and Gamble
Entertainment 3
Walt Disney
6
<PAGE>
Primary Industry Approximate
Source and Percentage of
Name of Issuer Aggregate Market
Value of the Trust
Fiberglass Products 1 %
Owens-Corning
Insurance 1
Allstate
International Oil 1
Elf Aquitaine
Machinery 1
AlliedSignal
Mining 1
Santa Fe Pacific Gold
Oil 1
Texaco
Pharmaceuticals 2
Bristol-Myers Squibb
Pfizer
Photography 1
Eastman Kodak
Railroad 3
Burlington Northern Santa Fe
Retail 2
Sears, Roebuck
Wal-Mart Stores
Semi-Conductor 2
Intel
Motorola
Steel 1
Carpenter Technology
Telecommunications 9
AT&T
Bell Atlantic
GTE Corp.
MCI Communications
Telefonos de Mexico S.A.
U.S. West Inc.
Tire and Rubber 1
Goodyear
Waste Management 1
WMX Technologies
The Sponsor anticipates that, based upon last dividends ac-
tually paid, dividends from the Growth Stock will be sufficient (i) to
pay expenses of the Trust (see "Expenses of the Trust" herein),
and (ii) after such payment, to make distributions of such to
Unitholders as described below under "Distributions".
Additional Deposits. After the initial deposit on the Initial Date
of Deposit the Sponsor may, from time to time, deposit additional
7
<PAGE>
Securities in the Trust where additional Units are to be offered to
the public, maintaining, exactly, the original percentage relationship
between the maturity values of the Treasury Obligations and the
number of shares of the Stocks deposited on the Initial Date of
Deposit.
Termination. 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. In certain
circumstances, monies held upon the sale of Securities may, at the
direction of the Sponsor, be invested for the benefit of Unitholders
in United States Treasury obligations which mature on or prior to
the next distribution date, (see "Administration of the Trust--Re-
investment") otherwise monies held upon the sale or maturity of
Securities will be held in non-interest bearing accounts created by
the Indenture until distributed and will be of benefit to the Trustee.
During the life of the Trust, Securities will not be sold to take
advantage of market fluctuations. The Trust will terminate within 15
days after the Treasury Obligations mature. (See "Termination of the
Trust" and "Federal Income Taxes".)
Public Offering Price. The Public Offering Price per Unit is
computed by dividing the Trust Fund Evaluation by the number of
Units outstanding and then adding a sales charge of 4.75% of the
Public Offering Price (4.99% of the net amount invested). The sales
charge is reduced after the first year and on a graduated scale for
sales involving at least $50,000 or 50,000 Units and will be applied
on whichever basis is more favorable to the purchaser. (See "Public
Offering of Units--Sales Charge and Volume Discount".)
The public offering price on the Date of Deposit is determined
on the basis of the value of the Securities as of the close of
business on the preceding business day (i.e., by "backward pric-
ing") pursuant to an exemptive order of the Securities and Ex-
change Commission, which applies only to purchase orders re-
ceived on the Initial Date of Deposit. As a condition of that order,
however, if the public offering price based on the value of the
Securities as of the close of business on the Initial Date of Deposit
(i.e., by "forward pricing") would be less than $.97 1/2, then
purchase orders received on that day will be filled on the basis of
the lower public offering price.
Distributions. The Trustee will distribute any net income and
principal received quarterly on the Distribution Dates. 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".) Upon termination of the
Trust, the Trustee will distribute to each Unitholder his pro rata
share of the Trust's assets, less expenses. The sale of Stocks in the
Trust in the period prior to termination and upon termination may
result in a lower amount than might otherwise be realized if such
sale were not required at such time due to impending or actual
termination of the Trust. For this reason, among others, the amount
8
<PAGE>
realized by a Unitholder upon termination may be less than the
amount paid by such Unitholder. Unless a Unitholder purchases
Units on the Date of Deposit and unless the Treasury Obligations in
proportion to the Units outstanding remain in the Trust, total
distributions, including distributions made upon termination of the
Trust, may be less than the amount paid for a Unit.
Market for Units. The Sponsor, though not obligated to do so,
presently intends to maintain a secondary market for Units based
upon the bid side evaluation of the Treasury Obligations. The public
offering price in the secondary market will be based upon the value
of the Securities next determined after receipt of a purchase order
plus the applicable sales charge. (See "Public Offering of Units-
-Public Offering Price" and "Valuation".) If a secondary market is
not 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 Securities to
the redeeming Unitholder as directed by the Sponsor. (See "Re-
demption".)
THE TRUST
The Trust is one of a series of similar but separate unit
investment trusts created by the Sponsor pursuant to a Trust
Indenture and Agreement* (the "Indenture") dated as of the Initial
Date of Deposit, among PaineWebber Incorporated, as Sponsor and
the Investors Bank & Trust Company and The First National Bank of
Chicago, as Co-Trustees (the "Co-Trustees" or "Trustee"). The
objective of the Trust is preservation of capital and capital apprecia-
tion through an investment in Treasury Obligations and Growth
Stocks. These are equity stocks, which, in Sponsor's opinion on the
Date of Deposit, have growth appreciation potential because
PaineWebber believes the Stocks will be the beneficiaries of indus-
trial innovation as well as global and technological trends over the
life of the Trust. The Stocks contained in the Trust are representa-
tive of a number of different industries. Dividends, if any, received
will be held by the Trustee in non-interest bearing accounts until
used to pay expenses or distributed to Unitholders on the next
Distribution Date and to the extent that funds are held therein will
benefit the Trustee.
________
* 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 Agree-
ment.
9
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On the Initial Date of Deposit, the Sponsor deposited with the
Trustee the confirmations of contracts for the purchase of Securities
together with an irrevocable letter or letters of credit of a commer-
cial bank or banks in an amount at least equal to the purchase
price. The value of the Securities was determined on the basis
described under "Valuation". In exchange for the deposit of the
contracts to purchase Securities, the Trustee delivered to the Spon-
sor a registered certificate for Units representing the entire owner-
ship of the Trust. On the Initial Date of Deposit the fractional
undivided interest in the Trust represented by a Unit was as set
forth in "Essential Information Regarding the Trust".
With the deposit on the Initial Date of Deposit, the Sponsor
established a proportionate relationship between the maturity value
of the Treasury Obligations and the number of shares of each Stock
in the Trust. The Sponsor may, from time to time, deposit additional
Securities in the Trust when additional Units are to be offered to the
public, maintaining, exactly, the original percentage relationship
between the maturity value of the Treasury Obligations and the
number of shares of Stock deposited on the Initial Date of Deposit
and replicating any cash or cash equivalents held by the Trust (net
of expenses). The original proportionate relationship is subject to
adjustment to reflect the occurrence of a stock split or a similar
event which affects the capital structure of the issuer of a Stock but
which does not affect the Trust's percentage ownership of the
common stock equity of such issuer at the time of such event.
Stock dividends received by the Trust, if any, will be sold by the
Trustee and the proceeds therefrom shall be treated as income to
the Trust.
The Treasury Obligations consist of U.S. Treasury obligations
which have been stripped of their unmatured interest coupons or
interest coupons stripped from the U.S. Treasury Obligations. The
obligor with respect to the Treasury Obligations is the United States
Government. U.S. Government backed obligations are considered the
safest investment.
RISK FACTORS AND SPECIAL CONSIDERATIONS
Risk Factors. An investment in the Trust should be made with
the understanding of the risks inherent in an investment in deep
discount or "zero-coupon" debt obligations and the risks associated
with an investment in common stocks in general.
The Trust contains stripped Treasury Securities described below
(see "Schedule of Investments"). Stripped Treasury Securities con-
sist of "interest-only" or "principal-only" portions of Treasury
Obligations. Interest-only portions of Treasury Obligations represent
the rights only to payment of interest on a date certain, and
principal-only portions of Treasury Obligations represent the rights
only to payment of principal at a stated maturity. Interest-only and
principal-only portions of Treasury Obligations are deep discount
obligations that are economically identical to zero-coupon obliga-
tions; that is, all such instruments are debt obligations which make
no periodic payment of interest prior to maturity. The stripped
10
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Treasury Securities in the Trust were purchased at a deep discount
and do not make any periodic payments of interest. Instead, the
entire payment of proceeds will be made upon maturity of such
Treasury Obligations. The effect of owning deep discount bonds
which do not make current interest payments (such as the stripped
Treasury Obligations in the Trust Portfolio) is that a fixed yield is
earned not only on the original investment but also, in effect, on all
earned discount during the life of the discount obligation. This
implicit reinvestment of earnings at the same rate eliminates the risk
of being unable to reinvest the income on such obligations at a rate
as high as the implicit yield on the discount obligation, but at the
same time eliminates the holder's ability to reinvest at higher rates
in the future. For this reason, while the full faith and credit of the
United States government provides a high degree of protection
against credit risks, sale of Units prior to the termination date of the
Trust will involve substantially greater price fluctuations during
periods of changing market interest rates than would be experienced
in connection with sale of Units of a Trust which held Treasury
Obligations which made scheduled interest payments on a current
basis.
An investment in Units of the Trust should also be made with
an understanding of the risks inherent in an investment in common
stocks in general. The general risks are associated with the rights to
receive payments from the issuer which are generally inferior to
creditors of, or holders of debt obligations or preferred stocks
issued by, the issuer. Holders of common stocks have a right to
receive dividends only when and if, and in the amounts, declared by
the issuer's board of directors and to participate in amounts
available for distribution by the issuer only after all other claims
against the issuer have been paid or provided for. By contrast,
holders of preferred stocks have the right to receive dividends at a
fixed rate when and as declared by the issuer's board of directors,
normally on a cumulative basis, but do not participate in other
amounts available for distribution by the issuing corporation. Divi-
dends on cumulative preferred stock must be paid before any
dividends are paid on common stock. Preferred stocks are also
entitled to rights on liquidation which are senior to those of
common stocks. For these reasons, preferred stocks generally entail
less risk than common stocks.
Common stocks do not represent an obligation of the issuer.
Therefore they do not offer any assurance of income or provide the
degree of protection of debt securities. The issuance of debt
securities or even preferred stock by an issuer will create prior
claims for payment of principal, interest and dividends which could
adversely affect the ability and inclination of the issuer to declare or
pay dividends on its common stock or the rights of holders of
common stock with respect to assets of the issuer upon liquidation
or bankruptcy. Unlike debt securities which typically have a stated
principal amount payable at maturity common stocks do not have a
fixed principal amount or a maturity. Additionally, the value of the
Stocks, like the Treasury Obligations, in the Trust may be expected
11
<PAGE>
to fluctuate over the life of the Trust to values higher or lower than
those prevailing on the Date of Deposit. The Stocks may appreciate
or depreciate in value (or pay dividends) depending on the full
range of economic and market influences affecting corporate profit-
ability, the financial condition of issuers and the prices of equity
securities in general and the Stocks in particular. Certain of the
Stocks are American Depositary Receipts ("ADRs") which evidence
American Depositary Shares which, in turn, represent common stock
of foreign issuers deposited with a custodian in a depositary.
Currency fluctuations will affect the U.S. dollar equivalent of the
local currency price of the underlying domestic share and as a
result, are likely to affect the value of ADRs and the value of any
dividends actually received by the Trust. In addition, the rights of
holders of ADRs may be different than those of holders of the
underlying shares, and the market for ADRs may be less liquid than
that for the underlying shares. Therefore, investment in this Trust
should be made with an understanding that the value of the ADRs
may fluctuate with fluctuations in the values of the particular foreign
currency relative to the U.S. dollar. There is no assurance that the
Trust's objective will be achieved. Until distributed, dividends and
principal received upon the sale of Stocks may be reinvested, until
the next applicable distribution date, in current interest-bearing
United States Treasury Obligations. (See "Administration of the
Trust--Reinvestment".) (The Treasury Obligations, the current inter-
est-bearing United States Treasury Obligations if any, and the
Stocks may be collectively referred to as "Securities" herein.) The
value of the Securities and, therefore, the value of Units may be
expected to fluctuate.
Special Considerations. The 37 Growth Stocks in the Trust
Portfolio represent a combination of large well-known U.S. com-
panies and growing enterprises outside the United States. There
follows a brief description of each company as of the Initial Date of
Deposit. Allied Signal produces aerospace components, automotive
parts and engineered materials such as chemicals, polymers and
fibers. BankAmerica Corporation is a large national financial institu-
tion with a dominant position in the Western United States. Barnett
Banks, Inc. is a regional banking system with a strong market
position in the Southeastern United States. Bell Atlantic Corporation
provides local telecommunications service in the Mid-Atlantic region,
offers cellular and information services, participates in joint ventures
overseas and is the principal supplier of domestic and international
telecommunications services in New Zealand. Bristol-Myers Squibb
is the world's third largest pharmaceutical company. Carpenter
Technology produces specialty steel bars, wire rods and special
alloys. DuPont is considered the world's largest chemical company,
although approximately 40% of its assets are oil and gas and is
heavily involved in global sales. Walt Disney is a diversified global
entertainment company. Eastman Kodak is the leading domestic
photographic materials company and also makes sophisticated im-
aging equipment for professional, business and industrial use. Ford
Motor Company is the second largest automaker in the world and
12
<PAGE>
has large financial services operations as well. Federal National
Mortgage Association ("Fannie Mae") is a domestic government-
sponsored residential mortgage insurer and investor. Elf Aquitaine is
the ninth largest oil company in the world. General Electric manu-
factures major appliances, light bulbs, medical diagnostic imaging
equipment, plastics and aircraft engines and owns a financial
services unit. Goodyear Tire is the world's second largest tire
manufacturer and manufactures a variety of rubber, chemical and
plastics products. GTE Corporation is the largest local telephone
company in the United States and the country's second largest
provider of cellular services. Intel Corporation is the largest mer-
chant market supplier of semiconductors, including microcomputer
components, modules and systems. Coca-Cola Company is the
world's largest producer of soft drink syrup and concentrate. MCI
Communications is the second largest domestic provider of long
distance telecommunications. Motorola Inc. is the leading producer
of personal communications equipment and domestic manufacture
of semiconductors and maintains a leadership position in high
performance microprocessors. Owens-Corning Fiberglas is the
world's leading maker of glass fiber products. Microsoft is a major
producer of software for personal computers. PepsiCo operates
three major domestic and international businesses: soft drinks,
snack goods and restaurants. Pfizer Inc. is a major domestic and
international pharmaceutical company. Procter and Gamble is one of
the world's largest household products companies. PPG Industries
manufactures glass, coatings and resins, and chemicals. Republic
New York Corporation is a quasi-bank holding company. Sears,
Roebuck & Company is a diversified retail and financial services
company. Sara Lee Corporation is an international food and con-
sumer products company. American Telephone and Telegraph is the
largest domestic long distance telecommunications provider and a
manufacturer of telecommunications equipment and computer pro-
ducts. Telefonos de Mexico is the monopoly provider of telephone
and cellular service in Mexico. Texaco Inc. is a fully integrated
international oil company. U.S. West Inc. provides telecommunica-
tion services in 14 Western and Midwestern states and also pro-
vides directory publishing, cellular and paging services, financial
services and cable television abroad. Wal-Mart Stores is a discount
mass merchandise retailer. WMX Technologies Inc. is in the solid
waste industry. Santa Fe Pacific is in the transportation business,
holding railways, trucking and pipeline assets as well as coal and
other mineral deposits.
In the event a contract to purchase a Security fails, the
Sponsor will refund to each Unitholder the portion of the sales
charge attributable to such failed contract. Principal and income, if
any, attributable to such failed contract will be distributed to
Unitholders of record on the last business day of the month in
which the fail occurs within 20 days of such record date.
Because the Trust is organized as a unit investment trust,
rather than as a management investment company, the Trustee and
the Sponsor do not have authority to manage the Trust's assets
13
<PAGE>
fully in an attempt to take advantage of various market conditions
to improve the Trust's net asset value, but may dispose of Securi-
ties only under limited circumstances. (See "Administration of the
Trust--Portfolio Supervision".)
FEDERAL INCOME TAXES
In the opinion of Orrick, Herrington & Sutcliffe, counsel for the
Sponsor, under existing law:
1. The Trust is not an association taxable as a corporation for
Federal income tax purposes. Under the Internal Revenue Code of
1986, as amended (the "Code"), each Unitholder will be treated as
the owner of a pro rata portion of the Trust, and income of the
Trust will be treated as income of the Unitholders.
2. Each Unitholder will have a taxable event when the Trust
disposes of a Security (whether by sale, exchange, redemption, or
payment at maturity), or when the Unitholder redeems or sells its
Units. For purposes of determining gain or loss, the total tax cost of
each Unit to a Unitholder is allocated among each of the Securities
in accordance with the proportion of the Trust comprised by each
Security, to determine the Unitholder's per Unit tax cost for each
Security.
3. The Trust is not an association taxable as a corporation for
New York State income tax purposes. Under New York State law,
each Unitholder will be treated as the owner of a pro rata portion of
the Trust, and income of the Trust will be treated as income of the
Unitholders.
The following general discussion of the federal income tax
treatment of an investment in Units of the Trust is based on the
Code and Treasury regulations promulgated thereunder as in effect
on the date of this Prospectus. The federal income tax treatment
applicable to a Unitholder may depend upon the Unitholders par-
ticular tax circumstances. Future legislative, judicial or administrative
changes could modify the statements below and could affect the tax
consequences to Unitholders. Accordingly, each Unitholder is ad-
vised to consult its own tax advisor concerning the effect of an
investment in Units.
General. Each Unitholder must report on its federal income tax
return a pro rata share of the entire income tax of the Trust, derived
from dividends on Growth Stocks, original issue discount or interest
on Treasury Obligations (the "Treasury Obligations") gains or
losses upon sales of Securities by the Trust and a pro rata share of
expenses of the Trust. Unitholders should note that their taxable
income from an investment in Units will exceed cash distributions
because taxable income will include accretions of original issue
discount on the Treasury Obligations, as well as amounts that are
not distributed to Unitholders but are used by the Trust to pay
expenses.
Distributions with respect to Stock, to the extent they do not
exceed current or accumulated earnings and profits of the distribut-
ing corporation, will be treated as dividends to the Unitholders and
will be subject to income tax at ordinary rates. Corporate Unithol-
14
<PAGE>
ders may be entitled to the dividends-received deduction discussed
below.
To the extent distributions with respect to a Stock were to
exceed the issuing corporation's current and accumulated earnings
and profits, they would not constitute dividends. Rather, they would
be treated as a tax free return of capital and would reduce a
Unitholder's tax cost for such Stock. After such tax cost has been
reduced to zero, any additional distributions in excess of current
and accumulated earnings and profits would be taxable as gain
from sale of common stock. This reduction in basis would increase
any gain, or reduce any loss, realized by the Unitholder on any
subsequent sale or other disposition of Units.
A Unitholder who is an individual, estate or trust may be
disallowed certain itemized deductions described in Section 67 of
the Code, including compensation paid to the Trutee and admin-
istrative expenses of the Trust, to the extent these itemized deduc-
tions, in the aggregate, do not exceed two percent of the Unithol-
der's adjusted gross income.
Corporate Dividends Received Deduction. Corporate holders of
Units may be eligible for the dividends-received deduction with
respect to distributions treated as dividends, subject to the limita-
tions provided in Sections 246 and 246A of the Code. The divi-
dends-received deduction generally equals 70 percent of the amount
of the dividend. As a result, the maximum effective tax rate on
dividends received generally will be reduced from 34 percent, the
maximum rate on corporate ordinary income then scheduled to be
in effect, to 10.2 percent. A portion of the dividends-received
deduction may, however, be subject to the alternative minimum tax
and be taxed at a 20 percent effective tax rate. Individuals, partner-
ships, trusts, S corporations and 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"). Original issue discount repre-
sents interest for federal income tax purposes and can generally be
defined as the difference between the price at which a bond was
issued and its stated redemption price at maturity. For purposes of
the preceding sentence, stripped obligations, such as the Treasury
Obligations, which variously consists either of the right to receive
payments of interest or the right to receive payments of principal,
are treated by each successive purchaser as originally issued on
their purchase dates at an issue price equal to their respective
purchase prices thereof. The market value of the Trust assets
comprising the Trust will be provided to a Unitholder upon request
in order to enable the Unitholder to calculate the original issue
discount attributable to each of the Treasury Obligations. Original
issue discount on Treasury Obligations (which were issued or
treated as issued on or after July 2, 1982) is deemed earned in a
geometric progression over the life of such obligation, taking into
account the compounding of accrued interest at least annually,
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<PAGE>
resulting in an increasing amount of income in each year. Each
Unitholder is required to include in income each year the amount of
original issue discount which accrues on its pro rata portion of
each Treasury Obligation with original issue discount. The amount
of accrued original issue discount included in income with respect
to a Unitholder's pro rata interest in Treasury Obligations is there-
upon added to the tax cost for such obligations.
Gain or Loss on Sale. If a Unitholder sells or otherwise
disposes of a Unit, the Unitholder generally will recognize gain or
loss in an amount equal to the difference between the amount
realized on the disposition allocable to the Securities and the
Unitholder's adjusted tax bases in the Securities. In general, such
adjusted tax bases will equal the Unitholder's aggregate cost for the
Unit increased by any accrued original issue discount. Such gain or
loss will be capital gain or loss if the Unit and underlying Securities
were held as capital assets, except that such gain will be treated as
ordinary income to the extent of any accrued original issue discount
not previously reported. Each Unitholder will generally also recog-
nize taxable gain or loss when all or part of its pro rata portion of a
Security is sold or otherwise disposed of for an amount greater or
less than its per Unit tax cost therefor.
Withholding For Citizen or Resident Investors. In the case of
any noncorporate Unitholder that is a citizen or resident of the
United States a 31 percent "backup" withholding tax will apply to
certain distributions of the Trust unless the Unitholder properly
completes and files under penalties or perjury, IRS Form W-9 (or its
equivalent).
The foregoing discussion is a general summary and relates
only to certain aspects of the federal income tax consequences with
respect to distributions by the Trust. Unitholders may also be
subject to state and local taxation. Future legislative, judicial or
administrative changes could modify the conclusions expressed
above and could affect the tax consequences to Unitholders. Ac-
cordingly, Unitholders should consult their own tax advisors regard-
ing questions of federal, state and local tax consequences to them
of ownership of Units.
Investments in the Trust may be suited for purchase by funds
and accounts of individual investors that are exempt from federal
income taxes such as Individual Retirement Accounts, tax-qualified
retirement plans including Keogh Plans, and other tax-deferred
retirement plans. Unitholders desiring to purchase Units for tax-
deferred plans and IRA's should consult their PaineWebber Invest-
ment Executive for details on establishing such accounts. Units may
also be purchased by persons who already have self-directed
accounts established under tax-deferred retirement plans.
PUBLIC OFFERING OF UNITS
Public Offering Price. The public offering price per Unit on the
Initial Date of Deposit is equal to the aggregate market value of the
Securities determined on the day preceding the Initial Date of
Deposit, divided by the number of Units outstanding plus the sales
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<PAGE>
charge of 4.75%, pursuant to an exemptive order of the SEC.
However, if the price would be less than $.97 1/2 then purchase
orders received that day will be filled on the basis of the lower
public offering price. Thereafter, the public offering price during the
initial offering period will be computed by dividing the Trust Fund
Evaluation, next determined after receipt of a purchase order, and,
with respect to the Treasury Obligations, determined with reference
to the offering side evaluation, by the number of Units outstanding
plus the applicable sales charge. The initial public offering period
will not exceed thirty days unless it is extended by the Sponsor.
The Sponsor may extend such period for up to four additional
successive thirty-day periods as long as Units remain unsold. 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 and Volume Discount. Sales charges during the
initial public offering period and for secondary market sales are set
forth below. A discount in the sales charge is available to volume
purchasers of Units due to economies of scales in sales effort and
sales related expenses relating to volume purchases. The sales
charge applicable to volume purchasers of Units is reduced on a
graduated scale for sales to any person of at least $50,000 or
50,000 Units, applied on whichever basis is more favorable to the
purchaser.
Initial Public Offering Period and
Secondary Market Through November 30, 1996
Percent of
Public Percent of
Offering Net Amount
Aggregate Dollar Value of Units Price Invested
Less than $50,000 4.75% 4.99%
$50,000 to $99,999 4.50 4.71
$100,000 to $249,999 4.25 4.44
$250,000 to $499,999 3.75 3.90
$500,000 to $749,999 3.25 3.36
$750,000 to $999,999 2.75 2.83
$1,000,000 to $1,999,999 2.25 2.30
$2,000,000 or more 2.00 2.04
* The sales charge applicable to volume purchasers according
to the table above will be applied on either a dollar or Unit basis,
depending upon which basis provides a more favorable purchase
price to the purchaser.
Secondary Market From December 1, 1996 Through November 30, 2000
17
<PAGE>
Percent of
Public Percent of
Offering Net Amount
Aggregate Dollar Value of Units* Price Invested
Less than $50,000 4.25% 4.44%
$50,000 to $99,999 4.00 4.17
$100,000 to $249,999 3.75 3.90
$250,000 to $499,999 3.00 3.09
$500,000 to $749,999 2.75 2.83
$750,000 to $999,999 2.50 2.56
$1,000,000 to $1,999,999 2.00 2.04
$2,000,000 or more 1.75 1.78
* The sales charge applicable to volume purchasers according
to the table above will be applied on either a dollar or Unit basis,
depending upon which basis provides a more favorable purchase
price to the purchaser.
Secondary Market Secondary Market on
From December 1, 2000 and After
Through November 30, 2002 December 1, 2002
Percent of Percent of
Public Percent of Public Percent of
Offering Net Amount Offering Net Amount
Price Invested Price Invested
3.25% 3.36% 2.25% 2.30%
The volume discount sales charge shown above will apply to all
purchases of Units on any one day by the same person in the
amounts stated herein, and for this purpose purchases of Units of
this Trust will be aggregated with concurrent purchases of any other
trust which may be offered by the Sponsor. Units held in the name
of the purchaser's spouse or in the name of a purchaser's child
under the age of 21 are deemed for the purposes hereof be
registered in the name of the purchaser. The reduced sales charges
are also applicable to a trustee or other fiduciary purchasing Units
for a single trust estate or single fiduciary account.
Employee Discount. Due to the realization of economies of
scale in sales effort and sales related expenses with respect to the
purchase of Units by employees of the Sponsor and its affiliates,
the Sponsor intends to permit employees of the Sponsor and its
affiliates and certain of their relatives to purchase Units of the Trust
at a reduced sales charge of $5.00 per 1,000 Units.
Exchange Option. Unitholders may elect to exchange any or all
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<PAGE>
of their Units of this series for units of one or more of any series of
The PaineWebber Municipal Bond Fund (the "PaineWebber Series");
The Municipal Bond Trust (the "National Series"); The Municipal
Bond Trust, Multi-State Program (the "Multi-State Series"); The
Municipal Bond Trust, California Series (the "California Series");
The Corporate Bond Trust (the "Corporate Series"); The PaineWeb-
ber Pathfinder's Trust (the "Pathfinder's Trust"); The Municipal
Bond Trust, Insured Series (the "Insured Series") the PaineWebber
Federal Government Trust, (the "Federal Government Trust") or The
PaineWebber Equity Trust, (the "Equity Trust"), (collectively referred
to as the "Exchange Trusts"), at a Public Offering Price for the
units of the Exchange Trusts to be acquired based on a reduced
sales charge of $15 per unit or per 1,000 units in the case of a
trust whose units cost approximately one dollar. The purpose of
such reduced sales charge is to permit the Sponsor to pass on to
the Certificateholder who wishes to exchange Units the cost savings
resulting from such exchange Units. The cost savings result from
reductions in time and expense related to advice, financial planning
and operational expenses required for the Exchange Option. Each
Exchange Trust has different investment objectives, therefore a
Unitholder should read the prospectus for the applicable Exchange
Trust carefully prior to exercising this option. Exchange Trusts
having as their objective the receipt of tax exempt interest income
would not be suitable for tax-deferred investment plans such as
Individual Retirement Accounts. A Certificateholder who purchased
Units of a series and paid a per Unit or per 1,000 Unit sales charge
that was less than the per Unit or per 1,000 Unit sales charge of
the series of the Exchange Trusts for which such Certificateholder
desires to exchange into, will be allowed to exercise the Exchange
Option at the Unit Offering Price plus the reduced sale charge,
provided the Certificateholder has held the Units for at least five
months. Any such Certificateholder who has not held the Units to
be exchanged for the five-month period will be required to exchange
them at the Unit Offering Price plus a sales charge based on the
greater of the reduced sale charge, or an amount which, together
with the initial sales charge paid in connection with the acquisition
of the Units being exchanged, equals the sales charge of the series
of the Exchange Trust for which such Certificateholder desires to
exchange into, determined as of the date of the exchange.
The Sponsor will permit exchanges at the reduced sales charge
provided there is either a primary market for Units or a secondary
market maintained by the Sponsor in both the Units of this series
and units of the applicable Exchange Trust and there are units of
the applicable Exchange Trust available for sale. While the Sponsor
has indicated that it intends to maintain a market for the Units of
the respective Trusts, there is no obligation on its part to maintain
such a market. Therefore, there is no assurance that a market for
Units will in fact exist on any given date at which a Unitholder
wishes to sell his Units of this series and thus there is no
assurance that the Exchange Option will be available to a Unithol-
der. Exchanges will be effected in whole Units only, but Unitholders
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<PAGE>
will be permitted to advance new money in order to complete an
exchange to round up to the next highest number of Units. An
exchange of Units pursuant to the Exchange Option will normally
constitute a "taxable event," i.e., a Unitholder will recognize a tax
gain or loss which will be of a capital or ordinary income nature
depending upon the length of time he has held his Units and other
factors. Unitholders are urged to consult their own tax advisors as
to the tax consequences to them of exchanging Units in particular
cases.
The Sponsor reserves the right to modify, suspend or terminate
this Exchange Option at any time without further notice to Unithol-
ders. In the event the Exchange Option is not available to a
Unitholder at the time he wishes to exercise it, the Unitholder will
be immediately notified and no action will be taken with respect to
his Units without further instruction from the Unitholder.
To exercise the Exchange Option, a Unitholder should notify the
Sponsor of his desire to exercise the Exchange Option and to use
the proceeds from the sale of his Units to the Sponsor of this
series to purchase Units of one or more of the Exchange Trusts
from the Sponsor. If Units of the applicable outstanding series of
the Exchange Trust are at that time available for sale, and if such
Units may lawfully be sold in the state in which the Unitholder is
resident, the Unitholder may select the series or group of series for
which he desires his investment to be exchanged. The Unitholder
will be provided with a current prospectus or prospectuses relating
to each series in which he indicated interest.
The exchange transaction will operate in a manner essentially
identical to any secondary market transaction, i.e., Units will be
repurchased at a price based on the market value of the Securities
in the portfolio of the Trust next determined after receipt by the
Sponsor of an exchange request and properly endorsed Certificate.
Units of the Exchange Trust will be sold to the Unitholder at a price
based upon the next determined market value of the Securites in
the Exchange Trust plus the reduced sales charge. Exchange trans-
actions will be effected only in whole units; thus, any proceeds not
used to acquire whole units will be paid to the selling Unitholder.
For example, assume that a Certificateholder, who has three
thousand units of a trust with a current price of $1.30 unit, desires
to sell his units and seeks to exchange the proceeds for units of a
series of an Exchange Trust with a current price of $890 per unit
based on the bid prices of the underlying securities. In this
example, which does not contemplate any rounding up to the next
highest number of Units, the proceeds from the Unitholder's units
would aggregate $3,900. Since only whole units of an Exchange
Trust may be purchased under the Exchange Option, the Unitholder
would be able to acquire four units in the Exchange Trust for a total
cost of $3,620 ($3,560 for the units and $60 for the sales charge).
If all 3,000 units were tendered, the remaining $280 would be
returned to the Unitholder.
Conversion Option. In addition to the Exchange Option de-
scribed in this Prospectus, owners of units of any registered unit
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investment trust sponsored by another which was initially offered at
a maximum applicable sales charge of at least 3.0% (a "Conversion
Trust") may elect to apply the cash proceeds of the sale or
redemption of those units directly to acquire available units of any
Exchange Trust at a reduced sales charge of $15 per Unit (or per
100 Units in the case of Exchange Trusts having a Unit price of
approximately $10, or per 1,000 Units in the case of Exchange
Trusts having a Unit price of approximately $1), subject to the
terms and conditions applicable to the Exchange Option (except that
no secondary market is required for Conversion Trust units). To
exercise this option, the owner should notify his retail broker. He
will be given a prospectus for each series in which he indicates
interest and for which units are available. The dealer must sell or
redeem the units of the Conversion Trust. Any dealer other than
PaineWebber must certify that the purchase of units of the Ex-
change Trust is being made pursuant to and is eligible for the
Conversion Option. The dealer will be entitled to two thirds of the
applicable reduced sales charge. The Sponsor reserves the right to
modify, suspend or terminate the Conversion Option at any time
without further notice, including the right to increase the reduced
sales charge applicable to this option (but not in excess of $5 more
per Unit (or per 100 Units or per 1,000 Units, as applicable) than
the corresponding fee then being charged for the Exchange Option).
For a description of the tax consequences of a conversion reference
is made to the Exchange Option section of the prospectus.
Distribution of Units. The minimum purchase is $1,000, except
that the minimum purchase is $250 for purchases made in connec-
tion with Individual Retirement Accounts or other tax-deferred retire-
ment plans. Only whole Units may be purchased.
The Sponsor is the sole underwriter of the Units. Sales may,
however, be made to dealers who are members of the National
Association of Securities Dealers, Inc. ("NASD") at prices which
include a concession of one-half of the highest applicable sales
charge and the dealer concession will be retained by the Sponsor.
In event that the dealer concession is 90% or more of the sales
charge per Unit, dealers taking advantage of such concession may
be deemed to be underwriters under the Securities Act of 1933.
The Sponsor reserves the right to reject, in whole or in part,
any order for the purchase of Units. The Sponsor intends to qualify
the Units in all states of the United States and does not intend to
sell Units to persons who are non-resident aliens.
Secondary Market for Units. While not obligated to do so, the
Sponsor intends to maintain a secondary market for the Units and
continuously offer to purchase Units at the Trust Fund Evaluation
per Unit next computed after receipt by the Sponsor of an order
from a Unitholder. The Sponsor may cease to maintain such a
market at any time, and from time to time, without notice. In the
event that a secondary market for the Units is not maintained by
the Sponsor, a Unitholder desiring to dispose of Units may tender
such Units to the Trustee for redemption at the price calculated in
the manner set forth under "Redemption". Redemption requests in
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excess of $100,000 may be redeemed "in kind" as described under
"Redemption".
The Trust Fund Evaluation per Unit at the time of sale or tender
for redemption may be less than the price at which the Unit was
purchased.
Sponsor's Profits. In addition to the applicable sales charge the
Sponsor realizes a profit (or sustains a loss) in the amount of any
difference between the cost of the Securities to the Sponsor and the
price at which it sells or redeems the Units, which is based on the
value of the Securities, determined by the Trustee as described
under "Valuation". In maintaining a secondary market for the Units,
the Sponsor may realize profits or sustain losses in the amount of
any differences between the price at which it buys Units and the
price at which it resells or redeems such Units.
Cash, if any, received from Unitholders prior to the settlement
date for the purchase of Units or prior to the payment for Securities
upon their delivery may be used in the Sponsor's business subject
to the limitations of Rule 15c3-3 under the Securities and Exchange
Act of 1934 and may be of benefit to the Sponsor.
In selling any Units in the initial public offering after the Date of
Deposit, the Sponsor may realize profits or sustain losses resulting
from fluctuations in the net asset value of outstanding Units during
that period. In maintaining a secondary market for the Units, the
Sponsor may realize profits or sustain losses in the amount of any
differences between the price at which it buys Units and the price at
which it resells or redeems such Units.
REDEMPTION
One or more Units represented by a Certificate may be ten-
dered to Investors Bank & Trust Company for redemption at its
office, in person, or by mail at One Lincoln Plaza, 89 South Street,
Boston, MA 02111, upon payment of any transfer or similar tax
which must be paid to effect the redemption. At the present time
there are no such taxes. No redemption fee will be charged by the
Sponsor or Investors Bank & Trust. Units redeemed by Investors
Bank & Trust will be cancelled. The Certificate must be properly
endorsed and accompanied by a letter requesting transfer. Unithol-
ders must sign exactly as their names appear on the face of the
Certificate with the signature guaranteed by a national bank or trust
company, or by a member firm of the New York, Midwest, or
Pacific Coast Stock Exchange, or in such other manner as may be
acceptable to Investors Bank & Trust. In certain instances the
Investors Bank & Trust may require additional documents such as,
but not limited to, trust instruments, certificates of death, appoint-
ments as executor or administrator, or certificates of corporate
authority. Unitholders should contact Investors Bank & Trust to
determine whether additional documents are necessary.
Units will be redeemed at the Redemption Value per Unit next
determined after receipt of the redemption request in good order by
the Trustee. The Redemption Value per Unit is determined by
dividing the Trust Fund Evaluation, determined on the basis of the
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current bid prices for the Treasury Obligation plus the market value
for the Stocks by the number of Units outstanding. (See "Valu-
ation.")
A redemption request is deemed received on the business day
(see "Valuation" for a definition of business day) when such
request is received prior to 4:00 p.m. If it is received after 4:00, it is
deemed received on the next business day. The Sponsor may
purchase Units tendered to the Trustee for redemption. During the
period in which the Sponsor maintains a secondary market for
Units, the Sponsor may repurchase any Unit presented for tender to
the Trustee for redemption no later than the close of business on
the second day following such presentation and Unitholders will
receive the Redemption Value next determined after receipt by the
Trustee of the redemption request. Proceeds of a redemption will be
paid to the Unitholder on the seventh calendar day following the
date of tender (or if the seventh calendar day is not a business day
on the first business day prior thereto).
With respect to cash redemptions, amounts representing in-
come received shall be withdrawn from the Income Account, and, to
the extent such balance is insufficient, from the Capital Account.
The Trustee is empowered, to the extent necessary, to sell Securi-
ties in such manner and as directed by the sponsor which direction
shall be given as to maximize the objectives of the Trust. In the
event that no such direction is given by the Sponsor, the Trustee is
empowered to sell Securities as follows: Treasury Obligations will be
sold so as to maintain the Trust Treasury Obligations in an amount
which, upon maturity, will equal at least $1.00 per Unit outstanding
after giving effect to such redemption and Stocks having the
greatest amount of capital appreciation will be sold first. (see
"Administration of the Trust"). However, with respect to redemption
requests in excess of $100,000, the Sponsor may determine in its
discretion to direct the Trustee to redeem Units "in kind" by
distributing Securities to the redeeming Unitholder. When Stock is
distributed, a proportionate amount of Stock will be distributed,
rounded to avoid the distribution of fractional shares and using
cash or checks where rounding is not possible. The Sponsor may
direct the Trustee to redeem Units "in kind" even if it is then
maintaining a secondary market in Units of the Trust. Securities will
be valued for this purpose as set forth under "Valuation". A
Unitholder receiving a redemption "in kind" may incur brokerage or
other transaction costs in converting the Securities distributed into
cash.
The Trustee may, in its discretion, and will, when so directed
by the Sponsor, suspend the right of redemption, or postpone the
date of payment of the Redemption Value, for more than seven
calendar days following the day of tender for any period during
which the New York Stock Exchange, Inc. is closed other than for
weekend and holiday closings; or for any period during which the
Securities and Exchange Commission determined that trading on the
New York Stock Exchange, Inc. is restricted or for any period during
which an emergency exists as a result of which disposal or
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evaluation of the Securities is not reasonably practicable; or for
such other period as the Securities and Exchange Commission may
by order permit for the protection of Unitholders. The Trustee is not
liable to any person or in any way for any loss or damages which
may result from any such suspension or postponement, or any
failure to suspend or postpone when done in the Trustee's discre-
tion.
VALUATION
The Trustee will calculate the Trust's value (the "Trust Fund
Evaluation") per Unit at the Valuation Time set forth under "Sum-
mary of Essential Information" (1) on each June 30 and December
31 (or the last business day prior thereto), (2) on each business
day as long as the Sponsor is maintaining a bid in the secondary
market, (3) on the business day on which any Unit is tendered for
redemption, and (4) on any other day desired by the Sponsor or
the Trustee, by adding (a) the aggregate value of the Securities and
other assets determined by the Trustee as set forth below and (b)
cash on hand in the Trust, income accrued on the Treasury
Obligations but not distributed or held for distribution and dividends
receivable on Stocks trading ex-dividend (other than any cash held
in any reserve account established under the Indenture) and deduct-
ing therefrom the sum of (x) taxes or other governmental charges
against the Trust not previously deducted and (y) accrued fees and
expenses of the Trustee and the Sponsor (including legal and
auditing expenses) and other Trust expenses. The per Unit Trust
Fund Evaluation is calculated by dividing the result of such com-
putation by the number of Units outstanding as of the date thereof.
Business days do not include New Year's Day, Washington's Birth-
day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day and other days that the New
York Stock Exchange is closed.
The value of Stocks shall be determined by the Trustee in good
faith in the following manner: (1) if the Securities are listed on one
or more national securities exchanges, such evaluation shall be
based on the closing sale price on that day (unless the Trustee
deems such price inappropriate as a basis for evaluation) on the
exchange which is the principal market thereof (deemed to be the
New York Stock Exchange if the Securities are listed thereon), (2) if
there is no such appropriate closing sale price on such exchange,
at the mean between the closing bid and asked prices on such
exchange (unless the Trustee deems such price inappropriate as a
basis for evaluation), (3) if the Securities are not so listed or, if so
listed and the principal market therefore is other than on such
exchange or there are no such appropriate closing bid and asked
prices available, such evaluation shall be made by the Trustee in
good faith based on the closing sale price on the over-the-counter
market (unless the Trustee deems such price inappropriate as a
basis for evaluation), or (4) if there is no such appropriate closing
price, then (a) on the basis of current bid prices, (b) if bid prices
are not available, on the basis of current bid prices for comparable
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securities, (c) by the Trustee's appraising the value of the Securities
in good faith on the bid side of the market, or (d) by any
combination thereof.
Treasury Obligations are valued on the basis of bid prices. The
aggregate bid prices of the Treasury Obligations, is the price
obtained from investment dealers or brokers (which may include the
Sponsor) who customarily deal in Treasury Obligations; or, if there
is no market for the Treasury Obligations, and bid prices are not
available, on the basis of current bid prices for comparable securi-
ties; or by appraisal; or by any combination of the above, adjusted
to reflect income accrued.
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION
VALUE
While the Public Offering Price of Units during the initial
offering period is determined on the basis of the current offering
prices of the Treasury Obligations, the Public Offering Price of Units
in the secondary market and the Redemption Value is determined
on the basis of the current bid prices of the Treasury Obligations.
The Stocks are valued on the same basis for the initial and
secondary markets and for purposes of redemptions. On the busi-
ness day prior to the Date of Deposit, the Public Offering Price per
Unit (which figure includes the sales charge) exceeded the Redemp-
tion Value, (see: "Essential Information"). The bid and offering
prices of the Treasury Obligations is expected to vary. For this
reason and others, including the fact that the Public Offering Price
includes the sales charge, the amount realized by a Unitholder upon
redemption of Units may be less than the price paid by the
Unitholder for such Units.
EXPENSES OF THE TRUST
The cost of the preparation and printing of the Certificates, the
Indenture and this Prospectus, the initial fees of the Trustee and the
Trustee's counsel, advertising expenses and expenses incurred in
establishing the Trust including legal and auditing fees, are paid by
the Sponsor and not by the Trust. The Sponsor will receive no fee
from the Trust for its services as Sponsor.
The Sponsor will receive a fee, which is earned for portfolio
supervisory services, and which is based upon the largest number
of Units outstanding during the calendar year. The Sponsor's fee,
which is not to exceed $.00025 per Unit, may exceed the actual
costs of providing portfolio supervisory services for the Trust, but at
no time will the total amount it receives for portfolio supervisory
services rendered to all series of the PaineWebber Pathfinders Trust
in any calendar year exceed the aggregate cost to it of supplying
such services in such year.
For its services as Trustee and Evaluator, the Trustee will be
paid in monthly installments, annually $.00145 per Unit computed
monthly based upon the largest number of Units outstanding in the
Trust during the preceding month. In addition, the regular and
recurring expenses of the Trust are estimated to be $.00040 per
Unit annually which include, but are not limited to certain mailing,
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printing, and audit expenses. Expenses in excess of this estimate
will be borne by the Trust. The Trustee could also benefit to the
extent that it may hold funds in non-interest bearing accounts
created by the Indenture.
The Sponsor's fee and Trustee's fee may be increased without
approval of the Unitholders by an amount not exceeding a propor-
tionate increase in the category entitled "All Services Less Rent" in
the Consumer Price Index published by the United States Depart-
ment of Labor or if the Price Index is no longer published, a similar
index as determined by the Trustee and Sponsor.
In addition to the above, the following charges are or may be
incurred by each Trust and paid from the Income Account, or, to
the extent funds are not available in such Account, from the Capital
Account (see "Administration of the Trust-Accounts"): (1) fees for
the Trustee for extraordinary services; (2) expenses of the Trustee
(including legal and auditing expenses) and of counsel; (3) various
governmental charges; (4) expenses and costs of any action taken
by the Trustee to protect the trusts and the rights and interests of
the Unitholders; (5) indemnification of the Trustee for any loss,
liabilities or expenses incurred by it in the administration of the
Trust without gross negligence, bad faith or wilful misconduct on its
part; (6) brokerage commissions in connection with the sale of
Securities; and (7) expenses incurred upon termination of the Trust.
In addition, to the extent then permitted by the Securities and
Exchange Commission, the Trust may incur expenses of maintaining
registration or qualification of the Trust or the Units under Federal
or state securities laws so long as the Sponsor is maintaining a
secondary market (including, but not limited to, legal, auditing and
printing expenses).
The accounts of the Trust shall be audited not less than
annually by independent public accountants selected by the Spon-
sor. 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. Unithol-
ders 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.
Based upon the last dividend paid prior to the Initial Date of
Deposit, dividends on the Stocks are expected to be sufficient to
pay the estimated expenses of the Trust. To the extent that
dividends paid with respect to the Stocks are not sufficient to meet
the expenses of the Trust, the Trustee is authorized to sell Securi-
ties in the same manner as provided in "Redemption" herein.
RIGHTS OF UNITHOLDERS
Ownership of Units is evidenced by recordation on the books of
the Trustee. In order to avoid additional operating costs and for
investor convenience, certificates will not be issued unless a re-
quest, in writing with signature guaranteed by an eligible guarantor
institution or in such other manner as may be acceptable to the
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Trustee, is delivered by the Unitholder to the Sponsor. Issued
Certificates are transferable by presentation and surrender to Inves-
tors Bank & Trust at its office in Boston, Massachusetts properly
endorsed or accompanied by a written instrument or instruments of
transfer. Uncertificated Units are transferable by presentation to
Investors Bank & Trust at its office of a written instrument of
transfer.
Certificates may be issued in denominations of one Unit or any
integral multiple thereof as deemed appropriate by the Trustee. A
Unitholder may be required to pay $2.00 per certificate reissued or
transferred, and shall be required to pay any governmental charge
that may be imposed in connection with each such transfer or
interchange. For new certificates issued to replace destroyed, mu-
tilated, 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 certificates must be surrendered to
Investors Bank & Trust for replacement.
DISTRIBUTIONS
The Trustee will distribute any net income and principal re-
ceived quarterly on the Distribution Dates to Unitholders of record
on the preceding Record Date. Income with respect to the original
issue discount on the Treasury Obligations will not be distributed
although Unitholders will be subject to tax as if a distribution had
occurred. See "Federal Income Taxes".
Within a reasonable period after the Trust is terminated, each
Unitholder will, upon surrender of his Certificates for cancellation,
receive his pro rata share of the amounts realized upon disposition
of the Securities plus any other assets of the Trust, less expenses
of the Trust. (See "Termination.")
ADMINISTRATION OF THE TRUST
Accounts. All dividends received and interest, if any, accrued on
Securities, proceeds from the sale of Securities or other monies
received by the Trustee on behalf of the Trust shall be held in trust
in non-interest bearing accounts until required to be disbursed.
The Trustee will credit on its books to an Income Account any
dividends (except stock dividends) and interest, if any, accrued by
the Trust. All other receipts (i.e. return of principal, stock dividends,
if any, and gains) are credited on its books to a Capital Account. A
record will be kept of qualifying dividends within the Income
Account. The pro rata share of the Income Account and the pro rata
share of the Capital Account represented by each Unit will be
computed by the Trustee as set forth under "Valuation".
The Trustee will deduct from the Income Account and, to the
extent funds are not sufficient therein, from the Capital Account,
amounts necessary to pay expenses incurred by the Trust. (See
"Expenses and Charges.") In addition, the Trustee may withdraw
from the Income Account and the Capital Account such amounts as
may be necessary to cover redemption of Units by the Trustee.
(See "Redemption.")
The Trustee may establish reserves (the "Reserve Account")
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within the Trust for state and local taxes, if any, and any other
governmental charges payable out of the Trust.
Reports and Records. With the distribution of income from the
Trust, Unitholders will be furnished with a statement setting forth
the amount being distributed from each account.
Investors Bank & Trust keeps records and accounts of the
Trust at its office, including records of the names and addresses of
Unitholders, a current list of underlying Securities in the portfolio
and a copy of the Indenture. Records pertaining to a Unitholder or
to the Trust (but not to other Unitholders) are available to the
Unitholder for inspection at reasonable times during business hours.
Within a reasonable period of time after the end of each
calendar year, starting with calendar year 1994, the Trustee will
furnish each person who was a Unitholder at any time during the
calendar year an annual report containing the following information,
expressed in reasonable detail both as a dollar amount and as a
dollar amount per Unit: (1) a summary of transactions for such year
in the Income and Capital Accounts and any Reserves; (2) any
Securities sold during the year and the Securities held at the end of
such year; (3) the Trust Fund Evaluation per Unit, based upon a
computation thereof on the 31st day of December of such year (or
the last business day prior thereto); and (4) amounts distributed to
Unitholders during such year.
Portfolio Supervision. The portfolio of the Trust is not "man-
aged" by the Sponsor or the Trustee; their activities described
herein are governed solely by the provisions of the Indenture. The
Indenture provides that the Sponsor may (but need not) direct the
Trustee to dispose of a Security:
(1) upon the failure of the issuer to declare or pay antici-
pated dividends or interest;
(2) upon the institution of materially adverse action or pro-
ceeding at law or in equity seeking to restrain or enjoin the
declaration or payment of dividends or interest on any such
Securities or the existence of any other materially adverse legal
question or impediment affecting such Securities or the declara-
tion 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 contin-
gently the declaration or payment of dividends or interest on
the such Securities;
(4) upon the default in the payment of principal or par or
stated value of, premium, if any, or income on any other
outstanding securities of the issuer or the guarantor of such
securities which might materially and adversely, either imme-
diately or contingently, affect the declaration or payment of
dividends or interest on the Securities;
(5) upon the decline in price or the occurrence of any
materially adverse market or credit factors, that in the opinion
of the Sponsor, make the retention of such Securities not in the
best interest of the Unitholder;
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(6) upon a public tender offer being made for a Security, or
a merger or acquisition being announced affecting a Security
that in the opinion of the Sponsor make the sale or tender of
the Security in the best interests of the Unitholders;
(7) upon a decrease in the Sponsor's internal rating of the
Security; or
(8) upon the happening of events which, in the opinion of
the Sponsor, negatively affect the economic fundamentals of
the issuer of the Security or the industry of which it is a part.
The Trustee may dispose of Securities where necessary to pay
Trust expenses or to satisfy redemption requests as directed by the
Sponsor and in a manner necessary to maximize the objectives of
the Trust, or if not so directed in its own discretion, provided
however, that Treasury Obligations will be sold so as to maintain in
the Trust Treasury Obligations in an amount which, upon maturity,
will equal at least $1.00 per Unit outstanding after giving effect to
such redemption and Stocks having the greatest appreciation shall
be sold first.
Reinvestment. Cash received upon the sale of Stock (except for
sales to meet 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 current inter-
est-bearing 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 United States Treasury obligations undesirable or
infeasible and (ii) amounts not sufficiently large so as to make a
reinvestment economical or feasible. Any moneys held and not
reinvested will be held in a non-interest bearing account until
distribution on the next Distribution Date to Unitholders of record.
AMENDMENT OF THE INDENTURE
The Indenture may be amended by the Trustee and the Spon-
sor without the consent of any of the Unitholders to cure any
ambiguity or to correct or supplement any provision thereof which
may be defective or inconsistent or to make such other provisions
as will not materially adversely affect the interest of the Unitholders.
The Indenture may be amended in any respect by the Sponsor
and the Trustee with the consent of the holders of 51% of the Units
then outstanding; provided that no such amendment shall (1)
reduce the interest in the Trust represented by a Unit or (2) reduce
the percentage of Unitholders required to consent to any such
amendment, without the consent of all Unitholders.
The Trustee will promptly notify Unitholders of the substance of
any amendment affecting Unitholders rights or their interest in the
Trust.
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TERMINATION OF THE TRUST
The Indenture provides that the Trust will terminate within 15
days after the maturity of the Treasury Obligations held in the Trust.
If the value of the Trust as shown by any evaluation is less than
twenty percent (20%) of the market value of the Securities on the
Date of Deposit, the Trustee may in its discretion, and will when so
directed by the Sponsor, terminate such Trust. The Trust may also
be terminated at any time by the written consent of 51% of the
Unitholders or by the Trustee upon the resignation or removal of
the Sponsor if the Trustee determines termination to be in the best
interest of the Unitholders. In no event will the Trust continue
beyond the Mandatory Termination Date.
As directed by the Sponsor approximately 30 days prior to the
maturity of the Treasury Obligations the Trustee will begin to sell
the Stocks held in the Trust. Stocks having the greatest amount of
capital appreciation will be sold first. Upon termination of the Trust,
the Trustee will sell any Stocks then remaining in the Trust and will
then, after deduction of any fees and expenses of the Trust and
payment into the Reserve Account of any amount required for taxes
or other governmental charges that may be payable by the Trust,
distribute to each Unitholder, upon surrender for cancellation of his
Certificate after due notice of such termination, such Unitholder's
pro rata share in the Income and Capital Accounts. Monies held
upon the sale of Securities will be held in non-interest bearing
accounts created by the Indenture until distributed and will be of
benefit to the Trustee. The sale of Stocks in the Trust in the period
prior to termination and upon termination may result in a lower
amount than might otherwise be realized if such sale were not
required at such time due to impending or actual termination of the
Trust. For this reason, among others, the amount realized by a
Unitholder upon termination may be less than the amount paid by
such Unitholder.
SPONSOR
The Sponsor, PaineWebber Incorporated, is a corporation or-
ganized under the laws of the State of Delaware. The Sponsor is a
member firm of the New York Stock Exchange, Inc. as well as other
major securities and commodities exchanges and is a member of
the National Association of Securities Dealers, Inc. The Sponsor is
engaged in a security and commodity brokerage business as well
as underwriting and distributing new issues. The Sponsor also acts
as a dealer in unlisted securities and municipal bonds and in
addition to participating as a member of various selling groups or
as an agent of other investment companies, executes orders on
behalf of investment companies for the purchase and sale of
securities of such companies and sells securities to such com-
panies in its capacity as a broker or dealer in securities.
The Indenture provides that the Sponsor will not be liable to
the Trustee, any of the Trusts or to the Unitholders for taking any
action or for refraining from taking any action made in good faith or
for errors in judgment, but will be liable only for its own wilful
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misfeasance, bad faith, gross negligence or wilful disregard of its
duties. The Sponsor will not be liable or responsible in any way for
depreciation or loss incurred by reason of the sale of any Securities
in the Trust.
The Indenture is binding upon any successor to the business
of the Sponsor. The Sponsor may transfer all or substantially all of
its assets to a corporation or partnership which carries on the
business of the Sponsor and duly assumes all the obligations of the
Sponsor under the Indenture. In such event the Sponsor shall be
relieved of all further liability under the Indenture.
If the Sponsor fails to undertake any of its duties under the
Indenture, becomes incapable of acting, becomes bankrupt, or has
its affairs taken over by public authorities, the Trustee may either
appoint a successor Sponsor or Sponsors to serve at rates of
compensation determined as provided in the Indenture or terminate
the Indenture and liquidate the Trust.
TRUSTEE
The Co-Trustees are The First National Bank of Chicago, a
national banking association with its corporate trust office at One
First National Plaza, Suite 0126, Chicago, Illinois 60670-0126 (which
is subject to supervision by the Comptroller of the Currency, the
Federal Deposit Insurance Corporation and the Board of Governors
of the Federal Reserve System) and Investors Bank & Trust Com-
pany, a Massachusetts trust company with its office at One Lincoln
Plaza, 89 South Street, Boston, Massachusetts 02111, toll-free
number 1-800-356-2754 (which is subject to supervision by the
Massachusetts Commissioner of Banks, the Federal Deposit Insur-
ance Corporation and the Board of Governors of the Federal Re-
serve System).
The Indenture provides that the Trustee will not be liable for
any action taken in good faith in reliance on properly executed
documents or the disposition of moneys, Securities or Certificates
or in respect of any valuation which it is required to make, except
by reason of its own gross negligence, bad faith or wilful mis-
conduct, nor will the Trustee be liable or responsible in any way for
depreciation or loss incurred by reason of the sale by the Trustee
of any Securities in the Trust. In the event of the failure of the
Sponsor to act, the Trustee may act and will not be liable for any
such action taken by it in good faith. The Trustee will not be
personally liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest
thereon or upon it as Trustee or upon or in respect of the Trust
which the Trustee may be required to pay under any present or
future law of the United States of America or of any other taxing
authority having jurisdiction. In addition, the Indenture contains
other customary provisions limiting the liability of the Trustee. The
Trustee will be indemnified and held harmless against any loss or
liability accruing to it without gross negligence, bad faith or wilful
misconduct on its part, arising out of or in connection with its
31
<PAGE>
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 Invest-
ments audited by Ernst & Young LLP, independent auditors, have
been included herein in reliance upon their report given on their
authority as experts in accounting and auditing.
LEGAL OPINIONS
The legality of the Units offered hereby has been passed upon
by Orrick, Herrington & Sutcliffe, 666 Fifth Avenue, New York, New
York, as counsel for the Sponsor.
32
<PAGE>
33
<PAGE>
<TABLE>
ESSENTIAL INFORMATION REGARDING THE TRUST
<CAPTION>
As of October 31, 1995
Sponsor: PaineWebber Incorporated
Co-Trustees: Investors Bank & Trust Co. and
The First National Bank of Chicago
Date of Deposit: November 30, 1993
<S> <C>
Aggregate Market Value of Securities in Trust: $48,621,487
Number of Units: 42,300,000
Minimum Purchase:
250 units for Individual Retirement Accounts
1,000 units for all else
Fractional Undivided Interest in the Trust Represented by
Each Unit: 1/42,300,000th
Calculation of Public Offering Price Per Unit
Value of Net Assets in Trust $48,647,739
Divided by 42,300,000 Units $1.1501
Plus Sales Charge of 4.75% of Public Offering Price
(4.99% of net amount invested) .0574
Public Offering Price per Unit $1.2075
Redemption Value per Unit $1.1501
Excess of Public Offering Price per Unit over Redemption Value
per Unit $.0574
Sponsor's Repurchase Price per Unit $1.1501
Excess of Public Offering Price over Sponsor's Repurchase Price
per Unit $.0574
Evaluation Time: 4 P.M. New York Time
Distribution Dates*: Quarterly on January 20, April 20,
July 20 and October 20.
Record Dates: March 31, June 30, September 30
and December 31.
Mandatory Termination Date: March 2, 2005 (15 days after
maturity of the Treasury Obliga-
tions).
Discretionary Liquidation Amount: 20% of the value of the Securities
upon completion of the deposit of
the Securities
Estimated Expenses of the Trust**: $.0025 per Unit
*See "Distributions".
**See "Expenses of Trust". Estimated dividends from the Growth Stocks, based upon last dividends actually paid,
are expected by the Sponsor to be sufficient to pay Estimated Expenses of the Trust.
</TABLE>
<PAGE>
<TABLE>
REPORT OF INDEPENDENT AUDITORS
<C> <S>
THE UNITHOLDERS, SPONSOR AND CO-TRUSTEES
THE PAINEWEBBER PATHFINDERS TRUST, TREASURY AND GROWTH STOCK SERIES FIFTEEN:
We have audited the accompanying statement of financial condition, including the schedule of investments, of
The PaineWebber Pathfinders Trust, Treasury and Growth Stock Series Fifteen as of October 31, 1995 and the related
statements of operations and changes in net assets for the year ended October 31, 1995 and for the period from
November 30, 1993 (date of deposit) to October 31, 1994. These financial statements are the responsibility of the
Co-Trustees. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of the securities owned as of October
31, 1995 as shown in the statement of financial condition and schedule of investments by correspondence with the
Co-Trustees. An audit also includes assessing the accounting principles used and significant estimates made by the
Co-Trustees, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of The PaineWebber Pathfinders Trust, Treasury and Growth Stock Series Fifteen at October 31, 1995 and
the results of its operations and changes in its net assets for the year ended October 31, 1995 and for the period
from November 30, 1993 to October 31, 1994, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
January 19, 1996
</TABLE>
<PAGE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
STATEMENT OF FINANCIAL CONDITION
<CAPTION>
October 31, 1995
ASSETS
<S> <C>
Treasury Obligation - at market value (Cost $23,010,455)
(note A and note 1 to schedule of investments) $ 24,077,541
Common Stock - at market value (Cost $19,105,144)
(note 1 to schedule of investments) 24,543,946
Accrued dividends receivable 36,482
Cash 22,528
Total Assets $ 48,680,497
LIABILITIES AND NET ASSETS
Accrued expenses payable 32,758
Total Liabilities 32,758
Net Assets (42,300,000 units of fractional undivided interest outstanding):
Cost to investors (note B) 44,215,852
Less sales charge (note C) (2,100,253)
Net amount applicable to investors 42,115,599
Net unrealized market appreciation (note D) 6,505,888
Net amount applicable to unitholders 48,621,487
Undistributed investment income 27,496
Overdistributed proceeds from securities sold (1,244)
Net assets 48,647,739
Total liabilities and net assets $ 48,680,497
Net Asset Value per unit $ 1.1501
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
STATEMENT OF OPERATIONS
<CAPTION>
From
November 30,
1993
(date of
Year Ended deposit) to
October 31, October 31,
1995 1994
<S> <C> <C>
Operations:
Investment income:
Accretion on Treasury Obligation $1,885,459 $1,509,070
Dividend Income 554,320 429,975
Total investment income 2,439,779 1,939,045
Less expenses:
Trustee's fees, evaluator's expense and other expenses 135,655 102,763
Total expenses 135,655 102,763
Investment income-net 2,304,124 1,836,282
Realized and unrealized gain on investments-net:
Net realized gain (loss) on securities transactions 1,263,304 (165,097)
Net change in unrealized market appreciation (depreciation) 10,275,583 (3,769,695)
Net realized and unrealized gain (loss) on investments 11,538,887 (3,934,792)
Net increase (decrease) in net assets resulting from
operations $13,843,011 ($2,098,510)
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
From
November 30,
1993
(date of
Year Ended deposit) to
October 31, October 31,
1995 1994
<S> <C> <C>
Operations:
Investment income--net $ 2,304,124 $ 1,836,282
Net realized gain (loss) on securities transactions 1,263,304 (165,097)
Net change in unrealized market apprciation (depreciation) 10,275,583 (3,769,695)
Net increase (decrease) in net assets resulting from
operations 13,843,011 (2,098,510)
Less: Distributions to Unitholders (Note E)
Investment income-net 407,510 315,947
Total Distributions 407,510 315,947
Less: Units Redeemed by Unitholders (Note F)
Value of units at date of redemption 23,571,322 1,925,477
Accrued dividends at date of redemption 22,520 1,040
Accreted discount at date of redemption 963,928 48,553
Total Redemptions 24,557,770 1,975,070
Decrease in net assets (11,122,269) (4,389,527)
Net Assets:
Beginning of Period 59,324,424 23,812,500
Supplemental Deposits (Note F) 445,584 39,901,451
End of Period $48,647,739 $59,324,424
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995
(A) The financial statements of the Trust are prepared on the accrual basis of accounting. Security transactions
are accounted for on the date the securities are purchased or sold. The original issue discount on the Treasury
Obligation is accreted on a level yield basis. The amount of discount included in the cost of the Treasury Obligation
held as of October 31, 1995 is $1,885,459.
(B) Cost to investors represents the initial public offering price as of the date of deposit, and the value of units
through supplemental deposits computed on the basis set forth under "Public Offering Price of Units", adjusted for
accretion on Treasury Obligation and units redeemed.
(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 October 31, 1995, the gross unrealized market appreciation was $7,439,590 and the gross unrealized
market depreciation was ($933,702). The net unrealized market appreciation was $6,505,888.
(E) Regular distributions of net income, excluding accretion income and principal receipts not used for
redemption of units are made semi-annually. Special distribution may be made when the Sponsor and Co-Trustee
deem necessary. Income with respect to the accretion of original issue discount is not distributed although the
unitholder is subject to tax, where applicable, as if the distribution had occurred. Accretion income earned by the
Trust increases a unitholder's cost basis in the underlying security.
(F) The following units were redeemed with proceeds of securities sold as follows:
<CAPTION>
From
November 30,
1993
(date of
Year Ended deposit) to
October 31, October 31,
1995 1994
<S> <C> <C>
Number of units redeemed 23,700,000 2,200,000
Redemption amount $24,557,700 $1,975,070
The following units were sold through supplemental
deposits:
Number of units sold 500,000 42,700,000
Value of amount, net of sales charge $445,584 $39,901,451
</TABLE>
<PAGE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
SCHEDULE OF INVESTMENTS
As of October 31, 1995
<CAPTION>
TREASURY OBLIGATIONS (50%)
Name of Security Coupon Maturity Value Maturity Date Market Value(1)
<C> <C> <C> <C> <C>
U.S. Treasury Interest Payments (2)
(50%) 0% $42,300,000 2/15/2005 $24,077,541
COMMON STOCKS (50%)
Name of Issuer Number of Shares Market Value (1)
Automotive: (1%)
Ford Motor Company 16,907 $486,076
Banking and Financial Institutions: (4%)
BankAmerica Corp. 3,804 218,730
Barnett Banks, Inc. 3,383 186,911
Republic New York Corp. 23,250 1,363,031
Federal National Mortgage 3,383 354,792
Association
Beverage: (5%)
The Coca-Cola Company 16,907 1,215,191
PepsiCo, Inc. 23,672 1,248,698
Chemical: (1%)
DuPont (EI) De Nemours & Co. 9,300 580,087
Eastman Chemical Company** 1,692 100,674
PPG Industries, Inc. 846 35,955
Computer Software: (5%)
Microsoft Corp.* 26,208 2,620,800
Consumer Goods: (1%)
Sara Lee Corp. 21,135 620,841
Consumer/Industrial Goods: (1%)
General Electric Co. 3,368 213,026
Cosmetics/Household Products: (1%)
Procter & Gamble Co. 8,877 719,037
Entertainment: (3%)
Walt Disney Co. 28,742 1,656,258
Fiberglass Products: (1%)
Owens-Corning Fiberglas Corp.* 14,370 608,929
Insurance:(1%)
Allstate Corp.** 791 29,069
International Oil: (1%)
Elf Aquitaine~ 16,484 556,335
Machinery: (1%)
AlliedSignal, Inc. 3,383 143,778
Mining: (1%)
Santa Fe Pacific Gold Corp.** 24,595 242,876
Oil: (1%)
Texaco, Inc. 10,993 748,898
Pharmaceuticals: (2%)
Bristol-Myers Squibb Co. 1,269 96,761
Pfizer, Inc. 13,523 775,882
Photography: (1%)
<PAGE>
Eastman Kodak Co. 6,762 423,470
Railroad: (3%)
Burlington Northern Santa Fe** 16,869 1,414,887
Retail: (2%)
Sears, Roebuck & Co. 842 28,628
Wal-Mart Stores, Inc. 53,261 1,151,769
Semi-Conductor: (2%)
Intel Corp. 11,833 826,831
Motorola Inc. 9,300 610,312
Steel: (1%)
Carpenter Technology Corp. 7,608 288,153
(Continued)
</TABLE>
<PAGE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
SCHEDULE OF INVESTMENTS
As of October 31, 1995
<CAPTION>
COMMON STOCKS (50%)
Name of Issuer Number of Shares Market Value (1)
<C> <C> <C>
Telecommunications: (9%)
AT&T Corp. 28,742 $1,839,488
Bell Atlantic Corp. 10,108 643,122
GTE Corp. 16,484 679,965
MCI Communications Corp. 35,083 874,882
Telefonos de Mexico S.A.~ 12,258 337,095
U.S. West, Inc. 1,692 80,582
Tire and Rubber: (1%)
The Goodyear Tire & Rubber Co. 5,917 224,846
Waste Management: (1%)
WMX Technologies, Inc. 10,570 297,281
TOTAL COMMON STOCKS $24,543,946
TOTAL INVESTMENTS $48,621,487
(1) Valuation of Securities by the Co-Trustees was made as described in "Valuation".
(2) This security does not pay current interest. On the maturity date thereof, the entire maturity value becomes due
and payable. Generally, a fixed yield is earned on such security which takes into account the semi-annual
compounding of accrued interest. (See "The Trust" and "Federal Income Taxes" herein).
*Non-income producing.
** Of the original 35 stocks, Sears, Roebuck & Company, Eastman Kodak Company and Santa Fe Pacific Corp., have
restructured. Three new companies, Allstate Corp., Eastman Chemical and Santa Fe Pacific Gold, are now
included in the Trusts portfolio and Santa Fe Pacific Corp. has become Burlington Northern Santa Fe, as
a result of such corporate actions.
~ American Depositary Receipts
</TABLE>
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following
documents:
The facing sheet.
The Prospectus.
The signatures.
The following exhibits:
EX-99.2 Opinion of Counsel as to legality of securities
being registered.
EX-27 Financial Data Schedule
EX-99.C1 Consent of Independent Auditors
FINANCIAL STATEMENTS
1. Statement of Condition of the Trust as shown in
the current Prospectus for this series.
2. Financial Statements of the Depositor.
PaineWebber Incorporated - Financial Statements
incorporated by reference to Form 10-k and
Form 10-Q (File No. 1-7367) respectively.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, PaineWebber Pathfinders Trust, Treasury and Growth
Stock Series 15 certifies that it meets all
of the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this registration statement to be signed on its behalf by
the undersigned thereunto duly authorized, and its seal to be
hereunto affixed and attested, all in the City of New York, and the
State of New York on the 7th day of February, 1996.
PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES 15
(Registrant)
By: PaineWebber Incorporated
(Depositor)
/s/ ROBERT E. HOLLEY
Robert E. Holley
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on behalf of PaineWebber
Incorporated, the Depositor, by the following persons in the
following capacities and in the City of New York, and State of New
York, on this 7th day of February, 1996.
PAINEWEBBER INCORPORATED
Name Office
Donald B. Marron Chairman, Chief Executive Officer,
Director & Member of the Executive
Committee *
Regina A. Dolan Senior Vice President, Chief Financial Officer
and Director *
Joseph J. Grano, Jr. President, Retail Sales & Marketing,
Director and Member of the Executive
Committee *
By:/s/ ROBERT E. HOLLEY
Attorney-in-fact*
* Executed copies of the powers of attorney have been filed with the
Securities and Exchange Commission in connection with the Registration
Statement for File No. 33-19786.
<PAGE>
<PAGE>
February 7, 1996
PaineWebber Incorporated
1200 Harbor Blvd.
Weehawken, New Jersey 07087
Ladies and Gentlemen:
We have served as counsel for PaineWebber Incorporated as
sponsor and depositor (the "Depositor") of PaineWebber
Pathfinders Trust, Treasury and Growth Stock Series 15 (hereinafter
referred to as the "Trust"). The Depositor seeks by means of
Post-Effective Amendment No. 2 to register for reoffering 32,004,500
Units acquired by the Depositor in the secondary market (hereinafter
referred to as the "Units").
In this regard, we have examined executed originals or copies of the
following:
(a) The Restated Certificate of Incorporation, as amended, and the
By-Laws of the Depositor, as amended;
(b) Resolutions of the Board of Directors of the Depositor adopted on
December 3, 1971 relating to the Trust and the sale of the Units;
(c) Resolutions of the Executive Committee of the Depositor adopted
on September 24, 1984;
(d) Powers of Attorney referred to in the Amendment;
(e) Post-Effective Amendment No. 2 to the Registration Statement on
Form S-6 (File No. 33-49437) to be filed with the Securities and
Exchange Commission (the "Commission") in accordance with
the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder
(collectively, the "1933 Act") proposed to be filed on or about the
date hereof (the "Amendment");
(f) The Notification of Registration of the Trust filed with the
Commission under the Investment Company Act of 1940, as
amended (collectively, the "1940 Act") on Form N-8A, as
amended;
(g) The registration of the Trust filed with the Commission under the
1940 Act on Form N-8B-2 (File No. 811-4158), as amended;
(h) The prospectus included in the Amendment (the "Prospectus");
(i) The Standard Terms and Conditions of the Trust dated as of
September 1, 1990, as amended, among the Depositor, and
Investors Bank & Trust Company and The First National Bank of
Chicago (the "Trustee"), as successor Co-Trustee, (the "Standard
Terms");
(j) The Trust Indenture dated as of the Date of Deposit, among the
Depositor, the Co-Trustees and the Evaluator (the "Trust
Indenture" and, collectively with the Standard Terms, the
"Indenture and Agreement");
(k) The form of certificate of ownership for units (the "Certificate") to
be issued under the Indenture and Agreement; and
(l) Such other pertinent records and documents as we have deemed
necessary.
With your permission, in such examination, we have assumed
the following: (a) the authenticity of original documents and the
genuineness of all signatures; (b) the conformity to the originals of
all documents submitted to us as copies; (c) the truth, accuracy,
and completeness of the information, representations, and warranties
contained in the records, documents, instruments and certificates we
have reviewed; (d) except as specifically covered in the opinions set
forth below, the due authorization, execution, and delivery on behalf
of the respective parties thereto of documents referred to herein and
the legal, valid, and binding effect thereof on such parties; and (e)
the absence of any evidence extrinsic to the provisions of the written
agreement(s) between the parties that the parties intended a
meaning contrary to that expressed by those provisions. However,
we have not examined the securities deposited pursuant to the
<PAGE>
Indenture and Agreement (the "Securities") nor the contracts for the
Securities.
We express no opinion as to matters of law in jurisdictions other
than the States of New York and California and the United States,
except to the extent necessary to render the opinion as to the
Depositor in paragraph (i) below with respect to Delaware law. As
you know we are not licensed to practice law in the State of
Delaware, and our opinion in paragraph (i) and (iii) as to Delaware
law is based solely on review of the official statutes of the State of
Delaware.
Based upon such examination, and having regard for legal
considerations which we deem relevant, we are of the opinion that:
(i) The Depositor is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Delaware with full
corporate power to conduct its business as described in the
Prospectus;
(ii) The Depositor is duly qualified as a foreign corporation and is in
good standing as such within the State of New York;
(iii)The terms and provisions of the Units conform in all material
respects to the description thereof contained in the Prospectus;
(iv) The consummation of the transactions contemplated under the
Indenture and Agreement and the fulfillment of the terms thereof
will not be in violation of the Depositor's Restated Certificate of
Incorporation, as amended, or By-Laws, as amended and will not
conflict with any applicable laws or regulations applicable to the
Depositor in effect on the date hereof; and
(v) The Certificates to be issued by the Trust, when duly executed by
the Depositor and the Trustee in accordance with the Indenture
and Agreement, upon delivery against payment therefor as
described in the Prospectus will constitute fractional undivided
interests in the Trust enforceable against the Trust in accordance
with their terms, will be entitled to the benefits of the Indenture
and Agreement and will be fully paid and non-assessable.
Our opinion that any document is valid, binding, or enforceable in
accordance with its terms is qualified as to:
(a) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium, or other laws
relating to or affecting the enforcement of creditors' rights
generally;
(b) rights to indemnification and contribution which may be limited by
applicable law or equitable principles; and
(c) general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
We hereby represent that the Amendment contains no disclosure
which would render it ineligible to become effective immediately
upon filing pursuant to paragraph (b) of Rule 485 of the
Commission.
We hereby consent to the filing of this opinion as an exhibit to
the Amendment and to the use of our name wherever it appears in
the Amendment and the Prospectus.
Very truly yours,
/s/ ORRICK, HERRINGTON & SUTCLIFFE
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 15
<NAME> PATHFINDERS TRUST TREASURY AND GROWTH STOCK
<MULTIPLIER> 1
<CURRENCY> U.S.Dollars
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> OCT-31-1995 OCT-31-1994
<PERIOD-START> NOV-01-1994 NOV-01-1993
<PERIOD-END> OCT-31-1995 OCT-31-1994
<EXCHANGE-RATE> 1 1
<INVESTMENTS-AT-COST> 42,115,599 0
<INVESTMENTS-AT-VALUE> 48,621,487 0
<RECEIVABLES> 36,482 0
<ASSETS-OTHER> 22,528 0
<OTHER-ITEMS-ASSETS> 0 0
<TOTAL-ASSETS> 48,680,497 0
<PAYABLE-FOR-SECURITIES> 0 0
<SENIOR-LONG-TERM-DEBT> 0 0
<OTHER-ITEMS-LIABILITIES> 32,758 0
<TOTAL-LIABILITIES> 32,758 0
<SENIOR-EQUITY> 0 0
<PAID-IN-CAPITAL-COMMON> 0 0
<SHARES-COMMON-STOCK> 42,300,000 0
<SHARES-COMMON-PRIOR> 66,000,000 0
<ACCUMULATED-NII-CURRENT> 27,496 0
<OVERDISTRIBUTION-NII> 0 0
<ACCUMULATED-NET-GAINS> 0 0
<OVERDISTRIBUTION-GAINS> 0 0
<ACCUM-APPREC-OR-DEPREC> 6,505,888 0
<NET-ASSETS> 48,647,739 0
<DIVIDEND-INCOME> 554,320 429,975
<INTEREST-INCOME> 0 0
<OTHER-INCOME> 1,885,459 1,509,070
<EXPENSES-NET> 135,655 102,763
<NET-INVESTMENT-INCOME> 2,304,124 1,836,282
<REALIZED-GAINS-CURRENT> 1,263,304 (165,097)
<APPREC-INCREASE-CURRENT> 10,275,583 (3,769,695)
<NET-CHANGE-FROM-OPS> 13,843,011 (2,098,510)
<EQUALIZATION> 0 0
<DISTRIBUTIONS-OF-INCOME> 407,510 315,947
<DISTRIBUTIONS-OF-GAINS> 0 0
<DISTRIBUTIONS-OTHER> 0 0
<NUMBER-OF-SHARES-SOLD> 0 0
<NUMBER-OF-SHARES-REDEEMED> 23,700,000 2,200,000
<SHARES-REINVESTED> 0 0
<NET-CHANGE-IN-ASSETS> (11,122,269) (4,389,527)
<ACCUMULATED-NII-PRIOR> 0 0
<ACCUMULATED-GAINS-PRIOR> 0 0
<OVERDISTRIB-NII-PRIOR> 0 0
<OVERDIST-NET-GAINS-PRIOR> 0 0
<GROSS-ADVISORY-FEES> 0 0
<INTEREST-EXPENSE> 0 0
<GROSS-EXPENSE> 0 0
<AVERAGE-NET-ASSETS> 0 0
<PER-SHARE-NAV-BEGIN> 0 0
<PER-SHARE-NII> 0 0
<PER-SHARE-GAIN-APPREC> 0 0
<PER-SHARE-DIVIDEND> 0 0
<PER-SHARE-DISTRIBUTIONS> 0 0
<RETURNS-OF-CAPITAL> 0 0
<PER-SHARE-NAV-END> 1 0
<EXPENSE-RATIO> 0 0
<AVG-DEBT-OUTSTANDING> 0 0
<AVG-DEBT-PER-SHARE> 0 0
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to our firm under the caption
"Independent Auditors" and to the use of our report dated January 19,
1996, in the Registration Statement and related Prospectus of the
PaineWebber Pathfinders Trust, Treasury and Growth Stock Series 15.
/s/ ERNST & YOUNG LLP
New York, New York
February 7, 1996
