File No. 33-49437
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 3
TO
FORM S-6
For Registration Under the Securities Act of 1933 of Securities of
Unit Investment Trusts Registered on Form N-8B-2.
A. Exact name of Trust:
PAINEWEBBER PATHFINDERS TRUST, TREASURY AND GROWTH STOCK
SERIES 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 11, 1997) pursuant to paragraph
(b) of Rule 485.
E. Title and amount of securities being registered:
41,123,900 Units
F. Proposed maximum offering price to the public of the securities being
registered:
$57,988,811.39**
* Estimated solely for the purpose of calculating the registration fee, at
$1.41 per unit.
G. Amount of filing fee, computed at one-thirty-third of 1 percent of the
proposed maximum aggregate offering price to the public:
$100.00*
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT.
* The method of calculation is made pursuant to Rule 24e-2 under the
Investment Company Act of 1940.The total amount of units redeemed or
repurchased during the previous fiscal year ending 1995 is 40,889,903.
There
have been no previous filings of post-effective amendments during the
current fiscal year 40,889,903 redeemed or repurchased units are being
used
to reduce the filing fee for this amendment.
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.
(c) Rights of Holders as to ) Rights of Unit
Withdrawal or ) holders
Redemption
) Redemption;
) Public Offering of Units-
) Secondary Market for Units
(d) Rights of Holders as to ) Secondary Market for
conversion, transfer, etc. ) Units Exchange Option
(e) Rights of Trust issues )
periodic payment plan ) *
certificates )
(f) Voting rights as to ) Rights of Unit
Securi-
ties, under the Indenture ) holders
(g) Notice to Holders as to )
change in )
(1)Assets of Trust ) Amendment of the
Indenture
(2)Terms and Conditions ) Administration of the
Trust-Portfolio Supervision
of Trust's Securities ) Investments
(3)Provisions of Trust ) Amendment of the
Indenture
(4)Identity of Depositor and ) Administration of the Trust
Trustee
(h) Consent of Security )
Holders
required to change )
(1)Composition of assets ) Amendment of the
Indenture
of Trust )
(2)Terms and conditions ) Amendment of the
Indenture
of Trust's Securities )
(3)Provisions of Indenture ) Amendment of the
Indenture
(4)Identity of Depositor ) Administration of the Trust
and Trustee )
11. Type of Securities ) The Trust
Comprising Units
12. Type of securities ) *
comprising
periodic payment )
certificates
13. (a)Load, fees, expenses, etc. ) Public Offering of
) Units; Expenses of the
) Trust
* Not applicable, answer
negative or not required.
(b)Certain information ) *
regarding periodic payment ) *
certificates )
(c)Certain percentages ) *
(d)Certain other fees, etc. ) Expenses of the Trust
payable by holders ) Rights of Unitholders
(e)Certain profits receivable ) Public Offering of
by depositor, principal ) Units
underwriters, trustee or ) Public Offering of Units
affiliated persons ) Market for Units
(f)Ratio of annual charges to ) *
income )
14. Issuance of Trust's ) The Trust
securities
) Public Offering of Units
15. Receipt and handling of ) *
payments from )
purchasers
16. Acquisition and ) The Trust; Administration
disposition of
underlying securities ) of the Trust; Termination
) of Trust
17. Withdrawal or ) Redemption
redemption
) Public offering of Units
) -Secondary Market for
) -Exchange Option
) -Conversion Option
18. (a)Receipt and disposition of ) Distributions of
income ) Unitholders
(b)Reinvestment of ) *
distributions
(c)Reserves or special fund ) Distributions to
) Unitholders; Expenses of
Trust
(d)Schedule of distribution ) *
19. Records, accounts and ) Distributions
report
) Administration
) of the Trust
20. Certain miscellaneous ) Administration of the Trust
pro-
visions of Trust )
agreement
21. Loans to security ) *
holders
22. Limitations on liability ) Sponsor, Trustee
23. Bonding arrangements ) Included in Form N-8B-2
24. Other material ) *
provisions of
trust agreement )
* Not applicable, answer
negative or not required.
III. Organization
Personnel and Affiliated
Persons of Depositor
25. Organization of ) Sponsor
Depositor
26. Fees received by ) Public Offering of
Depositor
) Units Expenses of the Trust
27. Business of Depositor ) Sponsor
28. Certain information as to ) Sponsor
officials and affiliated )
persons of Depositor )
29. Voting securities of ) *
Depositor
30. Persons controlling ) Sponsor
Depositor
31. Payments by Depositor ) *
for
certain other services )
rendered to Trust )
32. Payments by Depositor ) *
for
certain other services )
rendered to Trust )
33. Remuneration of ) *
employees of
Depositor for certain )
services
rendered to Trust )
34. Remuneration of other ) *
persons
for certain services )
rendered
to Trust )
IV. Distribution and Redemption of Securities
35. Distribution of Trust's ) Public Offering of Units
securities by states )
36. Suspension of sales of ) *
Trust's
securities )
37. Revocation of authority ) *
to
distribute )
38. (a)Method of distribution ) Public Offering of Units
(b)Underwriting agreements )
(c)Selling agreements ) Sponsor
* Not applicable, answer
negative or not required.
39. (a)Organization of principal ) Sponsor
underwriter )
(b)N.A.S.D. membership of ) Sponsor
principal underwriter )
40. Certain fees received by ) Public Offering Price of
principal underwriter ) Units
41. (a)Business of principal ) Sponsor
underwriter )
(b)Branch officers of ) *
principal underwriter )
(c)Salesman of principal ) *
underwriter )
42. Ownership of Trust's ) *
securities
by certain persons )
43. Certain brokerage ) *
commissions
received by principal )
underwriter )
44. (a)Method of valuation ) Public Offering Price of
) Units
(b)Schedule as to offering ) *
price )
(c)Variation in Offering ) Public Offering Price of
price to certain persons ) Units
45. Suspension of ) *
redemption rights
46. (a)Redemption valuation ) Public Offering of Units
) -Secondary Market for Units
) -Valuation
(b)Schedule as to redemption )
price )
V. Information concerning the Trustee or Custodian
47. Maintenance of position ) Public Offering of Units
in
underlying securities ) Redemption
) Trustee
) Evaluation of the Trust
48. Organization and )
regulation of
Trustee ) Trustee
49. Fees and expenses of ) Expenses of the Trust
Trustee
50. Trustee's lien ) Expenses of the Trust
* Not applicable, answer
negative or not required.
VI. Information
concerning Insurance of
Holders of Securities
51. (a)Name and address of ) *
Insurance Company )
(b)Type of policies ) *
(c)Type of risks insured and ) *
excluded )
(d)Coverage of policies ) *
(e)Beneficiaries of policies ) *
(f)Terms and manner of ) *
cancellation )
(g)Method of determining ) *
premiums )
(h)Amount of aggregate ) *
premiums paid )
(i)Who receives any part of ) *
premiums )
(j)Other material provisions ) *
of the Trust relating to )
insurance )
VII. Policy of Registrant
52. (a)Method of selecting and ) The Trust;
eliminating securities ) Administration of the Trust
from the Trust )
(b)Elimination of securities ) *
from the Trust )
(c)Policy of Trust regarding ) Portfolio Supervision
) Administration of Trust
substitution and
elimination of securities )
(d)Description of any funda- ) Administration of
mental policy of the Trust ) Trust
) Portfolio Supervision
53. (a)Taxable status of the ) Tax status of the Trust
Trust )
(b)Qualification of the Trust ) Tax status of the Trust
as a mutual investment )
company )
* Not applicable, answer
negative or not required.
VIII. Financial and
Statistical Information
54. Information regarding ) *
the
Trust's past ten fiscal )
years
55. Certain information ) *
regarding
periodic payment plan )
certificates )
56. Certain information ) *
regarding
periodic payment plan )
certificates )
57. Certain information ) *
regarding
periodic payment plan )
certificates )
58. Certain information ) *
regarding
periodic payment plan )
certi-
ficates )
59. Financial statements ) Statement of Financial
(Instruction 1(c) to ) Condition
Form S-6)
* Not applicable, answer
negative or not required.
PaineWebber Pathfinders Trust
Treasury and Growth Stock Series Fifteen
A "Unit Investment Trust"
30,200,000 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 Initial 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
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE INITIAL PUBLIC OFFERING OF UNITS IN THE
TRUST HAS BEEN COMPLETED. THE UNITS OFFERED
HEREBY ARE ISSUED AND OUTSTANDING UNITS WHICH
HAVE BEEN ACQUIRED BY THE SPONSOR EITHER BY
PURCHASE FROM THE TRUSTEE OF UNITS TENDERED FOR
REDEMPTION OR IN THE SECONDARY MARKET.
SPONSOR:
PaineWebber
Incorporated
Read and retain this prospectus for future reference.
Prospectus dated February 11, 1997
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"), maturing
on February 15, 2005, represent approximately 46%
of the aggregate market value of the Trust
portfolio and the Growth Stocks represent
approximately 54% 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 Information--
Distributions".) Therefore, even if the Stocks
are valueless upon termination of the Trust, and
if the Treasury Obligations are held until their
maturity in proportion to the Units outstanding,
purchasers will receive, at the termination of
the Trust, $1,000 per 1,000 Units purchased. This
feature of the Trust provides that 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 valueless.
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 Treasury
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
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 income regularly. In addition,
currency fluctuations are likely to affect the
value of American Depositary Receipts and the
value of dividends 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 prin-
cipal 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
returns 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 se-
curity of U.S. Treasury bonds with the growth
potential of Growth Stocks.
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 program is
designed to maximize returns as stated by the
user's forecast of specific stocks or model port-
folios 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 2/3 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
over the long term, closely track the performance
of the market as measured by the S&P 500.
The Trust portfolio is comprised of 40* Growth
Stocks, of which 9 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, Lucent
Technologies, MCI Communications, Microsoft,
Motorola, Inc., Telefonos de Mexico and Walt
Disney are companies whose principal growth
prospects revolve 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 superhighway" 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.
PaineWebber also believes that excellent growth
opportunities exist for companies well positioned
to take advantage of an industrial 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 European companies and will be able
to benefit from privatization of national
industries, reduction of trade barriers, newly
opened markets 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' opinion, 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 but whose
primary source is listed in the table below.
Primary Industry Source Approximate Percentage of
and Name of Issuer Market Value of the Trust
Automotive .97%
Ford Motor Company
Banking and Financial Institutions 5.36
BankAmerica
Barnett Banks
Republic NY Bank
Fannie Mae
Beverage 5.73
Coca-Cola
PepsiCo
Chemical 1.84
DuPont
Eastman Chemical
PPG Industries
Computer Software
Microsoft
Consumer Goods 1.38
Sara Lee
Consumer/Industrial Good .60
General Electric
Cosmetics/Household Products 1.62
Proctor and Gamble
Entertainment 3.49
Walt Disney
Fiberglass Products 1.02
Owens-Corning
Insurance .08
Allstate
(Continued)
_______________
* Of the original 35 stocks, AT&T Corp., Eastman
Kodak Company, Santa Fe Pacific Corp., Sears,
Roebuck & Company and U.S. West Inc., have
restructured. Five new companies, Lucent
Technologies, Eastman Chemical, Santa Fe Pacific
Gold, Allstate Corp., and U.S. West Media Group,
are now included in the Trust's portfolio and
Santa Fe Pacific Corp. has become Burlington
Northern Santa Fe, as a result of such corporate
actions.
Primary Industry Source Approximate Percentage of
and Name of Issuer Market Value of the Trust
International Oil 1.22%
Elf Aquitaine
Machinery .41
AlliedSignal
Mining .54
Santa Fe Pacific Gold
Multimedia .05
U.S. West Media Group
Oil 2.06
Texaco
Pharmaceuticals 2.31
Bristol-Myers Squibb
Pfizer
Photography .99
Eastman Kodak
Railroad 2.56
Burlington Northern Santa Fe
Retail 2.69
Sears, Roebuck
Wal-Mart Stores
Semi-Conductor 3.18
Intel
Motorola
Steel .46
Carpenter Technology
Telecommunications 7.46
AT&T
Bell Atlantic
GTE Corp.
Lucent Technologies
MCI Communications
Telefonos de Mexico S.A.
U.S. West Inc.
Tire and Rubber .50
Goodyear
Waste Management .67
WMX Technologies
The Sponsor anticipates that, based upon last
dividends actually 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 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--Reinvestment")
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 Initial 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
pricing") pursuant to an exemptive order of the
Securities and Exchange Commission, which applies
only to purchase orders received 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 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
"Redemption".)
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 appreciation
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
industrial innovation as well as global and
technological trends over the life of the Trust.
The Stocks contained in the Trust are
representative 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.
On the Initial Date of Deposit, the Sponsor
deposited with the Trustee the confirmations of
contracts for the purchase of Securities together
with an irrevocable letter or letters of credit
of a commercial bank or banks in an amount at
least equal to the purchase price. The value of
the Securities was determined on the basis
described under "Valuation". In exchange for the
deposit of the contracts to purchase Securities,
the Trustee delivered to the Sponsor a registered
certificate for Units representing the entire
ownership of the Trust. On the Initial Date of
Deposit the fractional undivided interest in the
Trust represented by a Unit was as 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.
____________
* Reference is hereby made to said Trust
Indenture and Agreement and any statements
contained herein are qualified in their entirety
by the provisions of said Trust Indenture and
Agreement
RISK FACTORS AND SPECIAL CONSIDERATIONS
Risk Factors. An investment in the Trust should
be made with the understanding of the risks
inherent in an investment in deep discount or
"zero-coupon" debt obligations and the risks
associated with an investment in common stocks in
general.
The Trust contains stripped Treasury Securities
described below (see "Schedule of Investments").
Stripped Treasury Securities consist of
"interest-only" or "principal-only" portions of
Treasury Obligations. Interest-only portions of
Treasury Obligations represent the rights only to
payment of interest on a date certain, and
principal-only portions of Treasury Obligations
represent the rights only to payment of principal
at a stated maturity. Interest-only and
principal-only portions of Treasury Obligations
are deep discount obligations that are
economically identical to zero-coupon obli-
gations; that is, all such instruments are debt
obligations which make no periodic payment of
interest prior to maturity. The stripped Treasury
Securities in the Trust were purchased at a deep
discount and do not make any periodic payments of
interest. Instead, the entire payment of proceeds
will be made upon maturity of such Treasury
Obligations. The effect of owning deep discount
bonds which do not make current interest payments
(such as the stripped Treasury Obligations in the
Trust Portfolio) is that a fixed yield is earned
not only on the original investment but also, in
effect, on all earned discount during the life of
the discount obligation. This implicit
reinvestment of earnings at the same rate
eliminates the risk of being unable to reinvest
the income on such obligations at a rate as high
as the implicit yield on the discount obligation,
but at the same time eliminates the holder's
ability to reinvest at higher rates in the
future. For this reason, while the full faith and
credit of the United States government provides a
high degree of protection against credit risks,
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. Dividends on cumulative preferred
stock must be paid before any dividends are paid
on common stock. Preferred stocks are also
entitled to rights on liquidation which are
senior to those of common stocks. For these
reasons, preferred stocks generally entail less
risk than common stocks.
Common stocks do not represent an obligation of
the issuer. Therefore they do not offer any
assurance of income or provide the degree of
protection of debt securities. The issuance of
debt securities or even preferred stock by an is-
suer will create prior claims for payment of
principal, interest and dividends which could
adversely affect the ability and inclination of
the issuer to declare or pay dividends on its
common stock or the rights of holders of common
stock with respect to assets of the issuer upon
liquidation or bankruptcy. Unlike debt securities
which typically have a stated principal amount
payable at maturity common stocks do not have a
fixed principal amount or a maturity.
Additionally, the value of the Stocks, like the
Treasury Obligations, in the Trust may be
expected to fluctuate over the life of the Trust
to values higher or lower than those prevailing
on the Initial Date of Deposit. The Stocks may
appreciate or depreciate in value (or pay
dividends) depending on the full range of
economic and market influences affecting
corporate profitability, the financial condition
of issuers and the prices of equity securities in
general and the Stocks in particular. Certain of
the Stocks are American Depositary Receipts
("ADRs") which evidence American Depositary
Shares which, in turn, represent common stock of
foreign issuers deposited with a custodian in a
depositary. Currency fluctuations will affect the
U.S. dollar equivalent of the local currency
price of the underlying domestic share and as a
result, are likely to affect the value of ADRs
and the value of any dividends actually received
by the Trust. In addition, the rights of holders
of ADRs may be different than those of holders of
the underlying shares, and the market for ADRs
may be less liquid than that for the underlying
shares. Therefore, investment in this Trust
should be made with an understanding that the
value of the ADRs may fluctuate with fluctuations
in the values of the particular foreign currency
relative to the U.S. dollar. There is no
assurance that the Trust's objective will be
achieved. Until distributed, dividends and
principal received upon the sale of Stocks may be
reinvested, until the next applicable
distribution date, in current interest-bearing
United States Treasury Obligations. (See
"Administration of the Trust--Reinvestment".)
(The Treasury Obligations, the current interest-
bearing United States Treasury Obligations if
any, and the Stocks may be collectively referred
to as "Securities" herein.) The value of the
Securities and, therefore, the value of Units may
be expected to fluctuate.
Special Considerations. The 40 Growth Stocks in
the Trust Portfolio represent a combination of
large well-known U.S. companies and growing
enterprises outside the United States. There
follows a brief description of each company as of
the Initial Date of Deposit. AlliedSignal
produces aerospace components, automotive parts
and engineered materials such as chemicals,
polymers and fibers. BankAmerica Corporation is a
large national financial institution 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 imaging equipment for professional,
business and industrial use. Eastman Chemical
Company is an international chemical producer
spun-off from Eastman Kodak in 1993. Ford Motor
Company is the second largest automaker in the
world and has large financial services operations
as well. 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
manufactures 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
merchant 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
services company. Allstate Corporation, a
property-liability and life insurer, was spun-off
from Sears in 1995. Sara Lee Corporation is an
international food and consumer products company.
American Telephone and Telegraph is the largest
domestic long distance telecommunications and
services provider. Lucent Technologies, Inc.
develops and delivers communications networks,
systems and software worldwide. 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 telecommunication services in
14 Western and Midwestern states. U.S. West Media
Group, a U.S. West spin-off, provides multi-media
services, directory publishing, cellular and
paging services, and cable television. Wal-Mart
Stores is a discount mass merchandise retailer.
WMX Technologies Inc. is in the solid waste
industry. Burlington Northern Santa Fe acquired
Santa Fe Pacific in 1995 and operates a large
railroad system serving the U.S. and Canada.
In the event a contract to purchase a Security
fails, the Sponsor will refund to each Unitholder
the portion of the sales charge attributable to
such failed contract. Principal and income, if
any, attributable to such failed contract will be
distributed to Unitholders of record on the last
business day of the month in which the fail
occurs within 20 days of such record date.
Because the Trust is organized as a unit
investment trust, rather than as a management
investment company, the Trustee and the Sponsor
do not have authority to manage the Trust's
assets fully in an attempt to take advantage of
various market conditions to improve the Trust's
net asset value, but may dispose of Securities
only under limited circumstances. (See
"Administration of the Trust--Portfolio
Supervision".)
FEDERAL INCOME TAXES
In the opinion of Orrick, Herrington & Sutcliffe
LLP, counsel for the Sponsor, under existing law:
1. The Trust is not an association taxable as a
corporation for Federal income tax purposes.
Under the Internal Revenue Code of 1986, as
amended (the "Code"), each Unitholder will be
treated as the owner of a pro rata portion of the
Trust, and income of the Trust will be treated as
income of the Unitholders.
2. Each Unitholder will have a taxable event
when the Trust disposes of a Security (whether by
sale, exchange, redemption, or payment at
maturity), or when the Unitholder redeems or
sells its Units. For purposes of determining gain
or loss, the total tax cost of each Unit to a
Unitholder is allocated among each of the
Securities in accordance with the proportion of
the Trust comprised by each Security, to
determine the Unitholder's per Unit tax cost for
each Security.
3. The Trust is not an association taxable as a
corporation for New York State income tax
purposes. Under New York State law, each
Unitholder will be treated as the owner of a pro
rata portion of the Trust, and income of the
Trust will be treated as income of the
Unitholders.
The following general discussion of the federal
income tax treatment of an investment in Units of
the Trust is based on the Code and Treasury
regulations promulgated thereunder as in effect
on the date of this Prospectus. The federal
income tax treatment applicable to a Unitholder
may depend upon the Unitholder's particular tax
circumstances. Future legislative, judicial or
administrative changes could modify the
statements below and could affect the tax
consequences to Unitholders. Accordingly, each
Unitholder is advised to consult its own tax
advisor concerning the effect of an investment in
Units.
General. Each Unitholder must report on its
federal income tax return a pro rata share of the
entire income tax of the Trust, derived from
dividends on Stocks, original issue discount or
interest on Treasury Obligations (the "Treasury
Obligations") gains or losses upon dispositions
of Securities by the Trust and a pro rata share
of the expenses of the Trust. Unitholders should
note that their taxable income from an investment
in Units will exceed cash distributions because
taxable income will include accretions of
original issue discount on the Treasury
Obligations, as well as amounts that are not
distributed to Unitholders but are used by the
Trust to pay expenses.
Distributions with respect to Stock, to the
extent they do not exceed current or accumulated
earnings and profits of the distributing
corporation, will be treated as dividends to the
Unitholders and will be subject to income tax at
ordinary rates. Corporate Unitholders may be
entitled to the dividends-received deduction
discussed below.
To the extent distributions with respect to a
Stock were to exceed the issuing corporation's
current and accumulated earnings and profits,
they would not constitute dividends. Rather, they
would be treated as a tax free return of capital
and would reduce a Unitholder's tax cost for such
Stock. After such tax cost has been reduced to
zero, any additional distributions in excess of
current and accumulated earnings and profits
would be taxable as gain from sale of common
stock. This reduction in basis would increase any
gain, or reduce any loss, realized by the
Unitholder on any subsequent sale or other
disposition of Units.
A Unitholder who is an individual, estate or
trust may be disallowed certain itemized
deductions described in Section 67 of the Code,
including compensation paid to the Trustee and
administrative expenses of the Trust, to the
extent these itemized deductions, in the
aggregate, do not exceed two percent of the
Unitholder's adjusted gross income. Thus, a
Unitholder's taxable income from an investment in
Units will exceed amounts distributed because
taxable income would include amounts that are not
distributed to Unitholders but are used by the
Trust to pay expenses.
Corporate Dividends Received Deduction.
Corporate holders of Units may be eligible for
the dividends-received deduction with respect to
distributions treated as dividends, subject to
the limitations provided in Sections 246 and 246A
of the Code. The dividends-received deduction
generally equals 70 percent of the amount of the
dividend. As a result, the maximum effective tax
rate on dividends received generally will be
reduced from 35 percent, the maximum rate on
corporate ordinary income then scheduled to be in
effect, to 10.5 percent. A portion of the
dividends-received deduction may, however, be
subject to the alternative minimum tax and be
taxed at a 20 percent effective tax rate. In-
dividuals, partnerships, trusts, S corporations
and other entities are not eligible for the
dividends-received deduction. The Clinton
Administration has proposed a reduction in the
dividends-received deduction from 70 percent to
50 percent and there have been, from time to
time, other proposals to reduce such deduction.
The Sponsor is unable to predict whether the
Clinton administration proposal or any other
proposal will be adopted during the life of the
Trust.
Original Issue Discount. The Trust will contain
principal or interest portions of stripped "zero-
coupon" United States Treasury Obligations which
are treated as bonds that were originally issued
at a discount ("original issue discount").
Original issue discount represents interest for
federal income tax purposes and can generally be
defined as the difference between the price at
which a bond was issued and its stated redemption
price at maturity. For purposes of the preceding
sentence, stripped obligations, such as the
Treasury Obligations, which variously 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 based on a compounded, constant
yield to maturity over the life of such
obligation, taking into account the compounding
of accrued interest at least annually, resulting
in an increasing amount of original issue
discount includible in income in each year. Each
Unitholder is required to include in income each
year the amount of original issue discount which
accrues on its pro rata portion of each Treasury
Obligation with original issue discount. The
amount of accrued original issue discount
included in income with respect to a Unitholder's
pro rata interest in Treasury Obligations is
thereupon added to the tax cost for such
obligations.
Gain or Loss on Sale. If a Unitholder sells or
otherwise disposes of a Unit, the Unitholder
generally will recognize gain or loss in an
amount equal to the difference between the amount
realized on the disposition allocable to the Se-
curities and the Unitholder's adjusted tax bases
in the Securities. In general, such adjusted tax
bases will equal the Unitholder's aggregate cost
for the Unit increased by any accrued original
issue discount. Such gain or loss will be capital
gain or loss if the Unit and underlying
Securities were held as capital assets, except
that such gain will be treated as ordinary income
to the extent of any accrued original issue
discount not previously reported. Each Unitholder
will generally also recognize taxable gain or
loss when all or part of its pro rata portion of
a Security is sold or otherwise disposed of for
an amount greater or less than its per Unit tax
cost therefor.
Withholding For Citizen or Resident Investors.
In the case of any non-corporate 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 of an investment
in the Trust. Unitholders may also be subject to
state and local taxation. Each Unitholder should
consult its own tax advisor regarding federal,
state and local tax consequences to it of owner-
ship of Units.
Investment in the Trust may be suited for
purchase by funds and accounts of individual
investors that are exempt from federal income
taxes such as Individual Retirement Accounts,
tax-qualified retirement plans including Keogh
Plans, and other tax-deferred retirement plans.
Unitholders desiring to purchase Units for tax-
deferred plans and IRA's should consult their
PaineWebber Investment Executive for details on
establishing such accounts. Units may also be
purchased by persons who already have self-
directed accounts established under tax-deferred
retirement plans.
PUBLIC OFFERING OF UNITS
Public Offering Price. The public offering price
per Unit on the Initial Date of Deposit is equal
to the aggregate market value of the Securities
determined on the day preceding the Initial Date
of Deposit, divided by the number of Units
outstanding plus the sales charge of 4.75%,
pursuant to an exemptive order of the SEC.
However, if the price would be less than $.975
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
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
Secondary Market From December 1, 1996 Through
November 30, 2000
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 From December 1, 2000 Secondary Market on 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 of their Units of this series
for units of one or more of any series of The
PaineWebber Municipal Bond Fund (the "PaineWebber
Series"); The Municipal Bond Trust (the "National
Series"); The Municipal Bond Trust, Multi-State
Program (the "Multi-State Series"); The Municipal
Bond Trust, California Series (the "California
Series"); The Corporate Bond Trust (the
"Corporate Series"); The PaineWebber Pathfinder's
Trust (the "Pathfinder's Trust"); The Municipal
Bond Trust, Insured Series (the "Insured Series")
the PaineWebber Federal Government Trust, (the
"Federal Government Trust") or The PaineWebber
Equity Trust, (the "Equity Trust"), (collectively
referred to as the "Exchange Trusts"), at a
Public Offering Price for the units of the Ex-
change Trusts to be acquired based on a reduced
sales charge of $15 per unit or per 1,000 units
in the case of a trust whose units cost
approximately one dollar. The purpose of such
reduced sales charge is to permit the Sponsor to
pass on to the Certificateholder who wishes to
exchange Units the cost savings resulting from
such exchange Units. The cost savings result from
reductions in time and expense related to advice,
financial planning and operational expenses re-
quired for the Exchange Option. Each Exchange
Trust has different investment objectives,
therefore a Unitholder should read the prospectus
for the applicable Exchange Trust carefully prior
to exercising this option. Exchange Trusts having
as their objective the receipt of tax exempt
interest income would not be suitable for tax-
deferred investment plans such as Individual
Retirement Accounts. A Certificateholder who
purchased Units of a series and paid a per Unit
or per 1,000 Unit sales charge that was less than
the per Unit or per 1,000 Unit sales charge of
the series of the Exchange Trusts for which such
Certificateholder desires to exchange into, will
be allowed to exercise the Exchange Option at the
Unit Offering Price plus the reduced sale charge,
provided the Certificateholder has held the Units
for at least five months. Any such
Certificateholder who has not held the Units to
be exchanged for the five-month period will be
required to exchange them at the Unit Offering
Price plus a sales charge based on the greater of
the reduced sale charge, or an amount which,
together with the initial sales charge paid in
connection with the acquisition of the Units
being exchanged, equals the sales charge of the
series of the Exchange Trust for which such
Certificateholder desires to exchange into,
determined as of the date of the exchange.
The Sponsor will permit exchanges at the reduced
sales charge provided there is either a primary
market for Units or a secondary market maintained
by the Sponsor in both the Units of this series
and units of the applicable Exchange Trust and
there are units of the applicable Exchange Trust
available for sale. While the Sponsor has
indicated that it intends to maintain a market
for the Units of the respective Trusts, there is
no obligation on its part to maintain such a
market. Therefore, there is no assurance that a
market for Units will in fact exist on any given
date at which a Unitholder wishes to sell his
Units of this series and thus there is no
assurance that the Exchange Option will be
available to a Unitholder. Exchanges will be
effected in whole Units only, but Unitholders
will be permitted to advance new money in order
to complete an exchange to round up to the next
highest number of Units. An exchange of Units
pursuant to the Exchange Option will normally
constitute a "taxable event," i.e., a Unitholder
will recognize a tax gain or loss which will be
of a capital or ordinary income nature depending
upon the length of time he has held his Units and
other factors. Unitholders are urged to consult
their own tax advisors as to the tax consequences
to them of exchanging Units in particular cases.
The Sponsor reserves the right to modify,
suspend or terminate this Exchange Option at any
time without further notice to Unitholders. In
the event the Exchange Option is not available to
a Unitholder at the time he wishes to exercise
it, the Unitholder will be immediately notified
and no action will be taken with respect to his
Units without further instruction from the
Unitholder.
To exercise the Exchange Option, a Unitholder
should notify the Sponsor of his desire to
exercise the Exchange Option and to use the
proceeds from the sale of his Units to the
Sponsor of this series to purchase Units of one
or more of the Exchange Trusts from the Sponsor.
If Units of the applicable outstanding series of
the Exchange Trust are at that time available for
sale, and if such Units may lawfully be sold in
the state in which the Unitholder is resident,
the Unitholder may select the series or group of
series for which he desires his investment to be
exchanged. The Unitholder will be provided with a
current prospectus or prospectuses relating to
each series in which he indicated interest.
The exchange transaction will operate in a
manner essentially identical to any secondary
market transaction, i.e., Units will be
repurchased at a price based on the market value
of the Securities in the portfolio of the Trust
next determined after receipt by the Sponsor of
an exchange request and properly endorsed
Certificate. Units of the Exchange Trust will be
sold to the Unitholder at a price based upon the
next determined market value of the Securities in
the Exchange Trust plus the reduced sales charge.
Exchange transactions will be effected only in
whole units; thus, any proceeds not used to
acquire whole units will be paid to the selling
Unitholder.
For example, assume that a Certificateholder,
who has three thousand units of a trust with a
current price of $1.30 unit, desires to sell his
units and seeks to exchange the proceeds for
units of a series of an Exchange Trust with a cur-
rent price of $890 per unit based on the bid
prices of the underlying securities. In this
example, which does not contemplate any rounding
up to the next highest number of Units, the
proceeds from the Unitholder's units would aggre-
gate $3,900. Since only whole units of an
Exchange Trust may be purchased under the
Exchange Option, the Unitholder would be able to
acquire four units in the Exchange Trust for a
total cost of $3,620 ($3,560 for the units and
$60 for the sales charge). If all 3,000 units
were tendered, the remaining $280 would be
returned to the Unitholder.
Conversion Option. In addition to the Exchange
Option described in this Prospectus, owners of
units of any registered unit investment trust
sponsored by another which was initially offered
at a maximum applicable sales charge of at least
3.0% (a "Conversion Trust") may elect to apply
the cash proceeds of the sale or redemption of
those units directly to acquire available units
of any Exchange Trust at a reduced sales charge
of $15 per Unit (or per 100 Units in the case of
Exchange Trusts having a Unit price of
approximately $10, or per 1,000 Units in the case
of Exchange Trusts having a Unit price of
approximately $1), subject to the terms and
conditions applicable to the Exchange Option
(except that no secondary market is required for
Conversion Trust units). To exercise this option,
the owner should notify his retail broker. He
will be given a prospectus for each series in
which he indicates interest and for which units
are available. The dealer must sell or redeem the
units of the Conversion Trust. Any dealer other
than PaineWebber must certify that the purchase
of units of the Exchange Trust is being made
pursuant to and is eligible for the Conversion
Option. The dealer will be entitled to two thirds
of the applicable reduced sales charge. The
Sponsor reserves the right to modify, suspend or
terminate the Conversion Option at any time
without further notice, including the right to
increase the reduced sales charge applicable to
this option (but not in excess of $5 more per
Unit (or per 100 Units or per 1,000 Units, as
applicable) than the corresponding fee then being
charged for the Exchange Option). For a
description of the tax consequences of a
conversion reference is made to the Exchange
Option section of the prospectus.
Distribution of Units. The minimum purchase in
the initial public offering is 1,000 Units,
except that the minimum purchase 250 Units for
purchases made in connection with Individual
Retirement Accounts or other tax-deferred retire-
ment plans. Only whole Units may be purchased.
The Sponsor is the sole underwriter of the
Units. Sales may, however, be made to dealers who
are members of the National Association of
Securities Dealers, Inc. ("NASD") at prices which
include a concession of one-half of the highest
applicable sales charge and the dealer concession
will be retained by the Sponsor. In event that
the dealer concession is 90% or more of the sales
charge per Unit, dealers taking advantage of such
concession may be deemed to be underwriters under
the Securities Act of 1933.
The Sponsor reserves the right to reject, in
whole or in part, any order for the purchase of
Units. The Sponsor intends to qualify the Units
in all states of the United States and does not
intend to sell Units to persons who are non-
resident aliens.
Secondary Market for Units. While not obligated
to do so, the Sponsor intends to maintain a
secondary market for the Units and continuously
offer to purchase Units at the Trust Fund
Evaluation per Unit next computed after receipt
by the Sponsor of an order from a Unitholder. The
Sponsor may cease to maintain such a market at
any time, and from time to time, without notice.
In the event that a secondary market for the
Units is not maintained by the Sponsor, a
Unitholder desiring to dispose of Units may
tender such Units to the Trustee for redemption
at the price calculated in the manner set forth
under "Redemption". Redemption requests in excess
of $100,000 may be redeemed "in kind" as
described under "Redemption".
The Trust Fund Evaluation per Unit at the time
of sale or tender for redemption may be less than
the price at which the Unit was purchased.
Sponsor's Profits. In addition to the applicable
sales charge the Sponsor realizes a profit (or
sustains a loss) in the amount of any difference
between the cost of the Securities to the Sponsor
and the price at which it sells or redeems the
Units, which is based on the value of the
Securities, determined by the Trustee as
described under "Valuation". In maintaining a
secondary market for the Units, the Sponsor may
realize profits or sustain losses in the amount
of any differences between the price at which it
buys Units and the price at which it resells or
redeems such Units.
Cash, if any, received from Unitholders prior to
the settlement date for the purchase of Units or
prior to the payment for Securities upon their
delivery may be used in the Sponsor's business
subject to the limitations of Rule 15c3-3 under
the Securities and Exchange Act of 1934 and may
be of benefit to the Sponsor.
In 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 tendered to Investors Bank & Trust Company
for redemption at its office 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 canceled. The Certificate must be
properly endorsed and accompanied by a letter
requesting transfer. Unitholders must sign
exactly as their names appear on the face of the
Certificate with the signature guaranteed by a
national bank or trust company, or by a member
firm of the New York, Midwest, or Pacific Coast
Stock Exchange, or in such other manner as may be
acceptable to 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,
appointments 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 current bid prices for the
Treasury Obligation plus the market value for the
Stocks by the number of Units outstanding. (See
"Valuation.")
A redemption request is deemed received on the
business day (see "Valuation" for a definition of
business day) when such request is received prior
to 4:00 p.m. If it is received after 4:00, it is
deemed received on the next business day. The
Sponsor may purchase Units tendered to the
Trustee for redemption. During the period in
which the Sponsor maintains a secondary market
for Units, the Sponsor may repurchase any Unit
presented for tender to the Trustee for
redemption no later than the close of business on
the second day following such presentation and
Unitholders will receive the Redemption Value
next determined after receipt by the Trustee of
the redemption request. Proceeds of a redemption
will be paid to the Unitholder on the seventh
calendar day following the date of tender (or if
the seventh calendar day is not a business day on
the first business day prior thereto).
With respect to cash redemptions, amounts
representing income received shall be withdrawn
from the Income Account, and, to the extent such
balance is insufficient, from the Capital
Account. The Trustee is empowered, to the extent
necessary, to sell Securities in such manner and
as directed by the sponsor which direction shall
be given as to maximize the objectives of the
Trust. In the event that no such direction is
given by the Sponsor, the Trustee is empowered to
sell Securities as follows: Treasury Obligations
will be sold so as to maintain the Trust Treasury
Obligations in an amount which, upon maturity,
will equal at least $1.00 per Unit outstanding
after giving effect to such redemption and Stocks
having the greatest amount of capital
appreciation will be sold first. (see
"Administration of the Trust"). However, with
respect to redemption requests in excess of
$100,000, the Sponsor may determine in its
discretion to direct the Trustee to redeem Units
"in kind" by distributing Securities to the
redeeming Unitholder. When Stock is distributed,
a proportionate amount of Stock will be
distributed, rounded to avoid the distribution of
fractional shares and using cash or checks where
rounding is not possible. The Sponsor may direct
the Trustee to redeem Units "in kind" even if it
is then maintaining a secondary market in Units
of the Trust. Securities will be valued for this
purpose as set forth under "Valuation". A
Unitholder receiving a redemption "in kind" may
incur brokerage or other transaction costs in con-
verting the Securities distributed into cash.
The Trustee may, in its discretion, and will,
when so directed by the Sponsor, suspend the
right of redemption, or postpone the date of
payment of the Redemption Value, for more than
seven calendar days following the day of tender
for any period during which the New York Stock
Exchange, Inc. is closed other than for weekend
and holiday closings; or for any period during
which the Securities and Exchange Commission
determined that trading on the New York Stock
Exchange, Inc. is restricted or for any period
during which an emergency exists as a result of
which disposal or evaluation of the Securities is
not reasonably practicable; or for such other
period as the Securities and Exchange Commission
may by order permit for the protection of
Unitholders. The Trustee is not liable to any
person or in any way for any loss or damages
which may result from any such suspension or
postponement, or any failure to suspend or
postpone when done in the Trustee's discretion.
VALUATION
The Trustee will calculate the Trust's value
(the "Trust Fund Evaluation") per Unit at the
Valuation Time set forth under "Summary of
Essential Information" (1) on each June 30 and
December 31 (or the last business day prior
thereto), (2) on each business day as long as the
Sponsor is maintaining a bid in the secondary
market, (3) on the business day on which any Unit
is tendered for redemption, and (4) on any other
day desired by the Sponsor or the Trustee, by
adding (a) the aggregate value of the Securities
and other assets determined by the Trustee as set
forth below and (b) cash on hand in the Trust,
income accrued on the Treasury Obligations but
not distributed or held for distribution and
dividends receivable on Stocks trading ex-
dividend (other than any cash held in any reserve
account established under the Indenture) and
deducting therefrom the sum of (x) taxes or other
governmental charges against the Trust not
previously deducted and (y) accrued fees and
expenses of the Trustee and the Sponsor
(including legal and auditing expenses) and other
Trust expenses. The per Unit Trust Fund
Evaluation is calculated by dividing the result
of such computation by the number of Units
outstanding as of the date thereof. Business days
do not include New Year's Day, Washington's
Birthday, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas
Day and other days that the New York Stock
Exchange is closed.
The value of Stocks shall be determined by the
Trustee in good faith in the following manner:
(1) if the Securities are listed on one or more
national securities exchanges, such evaluation
shall be based on the closing sale price on that
day (unless the Trustee deems such price
inappropriate as a basis for evaluation) on the
exchange which is the principal market thereof
(deemed to be the New York Stock Exchange if the
Securities are listed thereon), (2) if there is
no such appropriate closing sale price on such
exchange, at the mean between the closing bid and
asked prices on such exchange (unless the Trustee
deems such price inappropriate as a basis for
evaluation), (3) if the Securities are not so
listed or, if so listed and the principal market
therefore is other than on such exchange or there
are no such appropriate closing bid and asked
prices available, such evaluation shall be made
by the Trustee in good faith based on the closing
sale price on the over-the-counter market (unless
the Trustee deems such price inappropriate as a
basis for evaluation), or (4) if there is no such
appropriate closing price, then (a) on the basis
of current bid prices, (b) if bid prices are not
available, on the basis of current bid prices for
comparable securities, (c) by the Trustee's
appraising the value of the Securities in good
faith on the bid side of the market, or (d) by
any combination thereof.
Treasury Obligations are valued on the basis of
bid prices. The aggregate bid prices of the
Treasury Obligations, is the price obtained from
investment dealers or brokers (which may include
the Sponsor) who customarily deal in Treasury
Obligations; or, if there is no market for the
Treasury Obligations, and bid prices are not
available, on the basis of current bid prices for
comparable securities; or by appraisal; or by any
combination of the above, adjusted to reflect in-
come accrued.
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION VALUE
While the Public Offering Price of Units during
the initial offering period is determined on the
basis of the current offering prices of the
Treasury Obligations, the Public Offering Price
of Units in the secondary market and the Redemp-
tion Value is determined on the basis of the
current bid prices of the Treasury Obligations.
The Stocks are valued on the same basis for the
initial and secondary markets and for purposes of
redemptions. On the business day prior to the
Date of Deposit, the Public Offering Price per
Unit (which figure includes the sales charge)
exceeded the Redemption Value, (see: "Essential
Information"). The bid and offering prices of the
Treasury Obligations 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 $.00080 per Unit
annually which include, but are not limited to
certain mailing, printing, and audit expenses.
Expenses in excess of this estimate will be borne
by the Trust. The Trustee could also benefit to
the extent that it may hold funds in non-interest
bearing accounts created by the Indenture.
The Sponsor's fee and Trustee's fee may be
increased without approval of the Unitholders by
an amount not exceeding a proportionate increase
in the category entitled "All Services Less Rent"
in the Consumer Price Index published by the
United States Department of Labor or if the Price
Index is no longer published, a similar index as
determined by the Trustee and Sponsor.
In addition to the above, the following charges
are or may be incurred by each Trust and paid
from the Income Account, or, to the extent funds
are not available in such Account, from the
Capital Account (see "Administration of the
Trust-Accounts"): (1) fees for the Trustee for
extraordinary services; (2) expenses of the
Trustee (including legal and auditing expenses)
and of counsel; (3) various governmental charges;
(4) expenses and costs of any action taken by the
Trustee to protect the trusts and the rights and
interests of the Unitholders; (5) indemnification
of the Trustee for any loss, liabilities or
expenses incurred by it in the administration of
the Trust without gross negligence, bad faith or
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 Sponsor. The expenses
of the audit shall be an expense of the Trust. So
long as the Sponsor maintains a secondary market,
the Sponsor will bear any audit expense which
exceeds $.00050 per Unit. Unitholders covered by
the audit during the year may receive a copy of
the audited financials upon request.
The fees and expenses set forth above are
payable out of the Trust and when unpaid will be
secured by a lien on the Trust. 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 Securities in the same manner
as provided in "Redemption" herein.
RIGHTS OF UNITHOLDERS
Ownership of Units is evidenced by recordation
on the books of the Trustee. In order to avoid
additional operating costs and for investor
convenience, certificates will not be issued
unless a request, in writing with signature
guaranteed by an eligible guarantor institution
or in such other manner as may be acceptable to
the Trustee, is delivered by the Unitholder to
the Sponsor. Issued Certificates are transferable
by presentation and surrender to Investors 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, mutilated, stolen or lost
certificates, the Unitholder must furnish
indemnity satisfactory to the Trustee and must
pay such expenses as the Trustee may incur.
Mutilated certificates must be surrendered to
Investors Bank & Trust for replacement.
DISTRIBUTIONS
The Trustee will distribute any net income and
principal received quarterly on the Distribution
Dates to Unitholders of record on the preceding
Record Date. Income with respect to the original
issue discount on the Treasury Obligations will
not be distributed although Unitholders will be
subject to tax as if a distribution had occurred.
See "Federal Income Taxes".
Within a reasonable period after the Trust is
terminated, each Unitholder will, upon surrender
of his Certificates for cancellation, receive his
pro rata share of the amounts realized upon
disposition of the Securities plus any other
assets of the Trust, less expenses of the Trust.
(See "Termination.")
ADMINISTRATION OF THE TRUST
Accounts. All dividends received and interest,
if any, accrued on Securities, proceeds from the
sale of Securities or other monies received by
the Trustee on behalf of the Trust shall be held
in trust in non-interest bearing accounts until
required to be disbursed.
The Trustee will credit on its books to an
Income Account any dividends (except stock
dividends) and interest, if any, accrued by the
Trust. All other receipts (i.e. return of
principal, stock dividends, if any, and gains)
are credited on its books to a Capital Account. A
record will be kept of qualifying dividends
within the Income Account. The pro rata share of
the Income Account and the pro rata share of the
Capital Account represented by each Unit will be
computed by the Trustee as set forth under
"Valuation".
The Trustee will deduct from the Income Account
and, to the extent funds are not sufficient
therein, from the Capital Account, amounts
necessary to pay expenses incurred by the Trust.
(See "Expenses and Charges.") In addition, the
Trustee may withdraw from the Income Account and
the Capital Account such amounts as may be
necessary to cover redemption of Units by the
Trustee. (See "Redemption.")
The Trustee may establish reserves (the "Reserve
Account") within the Trust for state and local
taxes, if any, and any other governmental charges
payable out of the Trust.
Reports and Records. With the distribution of
income from the Trust, Unitholders will be
furnished with a statement setting forth the
amount being distributed from each account.
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 "managed" by the Sponsor or the
Trustee; their activities described herein are
governed solely by the provisions of the
Indenture. The Indenture provides that the
Sponsor may (but need not) direct the Trustee to
dispose of a Security:
(1) upon the failure of the issuer to declare or
pay anticipated dividends or interest;
(2) upon the institution of materially adverse
action or proceeding at law or in equity seeking
to restrain or enjoin the declaration or payment
of dividends or interest on any such Securities
or the existence of any other materially adverse
legal question or impediment affecting such
Securities or the declaration or payment of
dividends or interest on the same;
(3) upon the breach of covenant or warranty in
any trust indenture or other document relating to
the issuer which might materially and adversely
affect either immediately or contingently the
declaration or payment of dividends or interest
on the such Securities;
(4) upon the default in the payment of principal
or par or stated value of, premium, if any, or
income on any other outstanding securities of the
issuer or the guarantor of such securities which
might materially and adversely, either
immediately or contingently, affect the
declaration or payment of dividends or interest
on the Securities;
(5) upon the decline in price or the occurrence
of any materially adverse market or credit
factors, that in the opinion of the Sponsor, make
the retention of such Securities not in the best
interest of the Unitholder;
(6) upon a public tender offer being made for a
Security, or a merger or acquisition being
announced affecting a Security that in the
opinion of the Sponsor make the sale or tender of
the Security in the best interests of the
Unitholders;
(7) upon a decrease in the Sponsor's internal
rating of the Security; or
(8) upon the happening of events which, in the
opinion of the Sponsor, negatively affect the
economic fundamentals of the issuer of the
Security or the industry of which it is a part.
The 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 interest-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 Sponsor without the consent of any of the
Unitholders to cure any ambiguity or to correct
or supplement any provision thereof which may be
defective or inconsistent or to make such other
provisions as will not materially adversely
affect the interest of the Unitholders.
The Indenture may be amended in any respect by
the Sponsor and the Trustee with the consent of
the holders of 51% of the Units then outstanding;
provided that no such amendment shall (1) reduce
the interest in the Trust represented by a Unit
or (2) reduce the percentage of Unitholders
required to consent to any such amendment,
without the consent of all Unitholders.
The Trustee will promptly notify Unitholders of
the substance of any amendment affecting
Unitholders rights or their interest in the
Trust.
TERMINATION OF THE TRUST
The Indenture provides that the Trust will
terminate within 15 days after the maturity of
the Treasury Obligations held in the Trust. If
the value of the Trust as shown by any evaluation
is less than twenty percent (20%) of the market
value of the Securities on the Initial Date of
Deposit, the Trustee may in its discretion, and
will when so directed by the Sponsor, terminate
such Trust. The Trust may also be terminated at
any time by the written consent of 51% of the
Unitholders or by the Trustee upon the
resignation or removal of the Sponsor if the
Trustee determines termination to be in the best
interest of the Unitholders. In no event will the
Trust continue beyond the Mandatory Termination
Date.
As directed by the Sponsor approximately 30 days
prior to the maturity of the Treasury Obligations
the Trustee will begin to sell the Stocks held in
the Trust. Stocks having the greatest amount of
capital appreciation will be sold first. Upon
termination of the Trust, the Trustee will sell
any Stocks then remaining in the Trust and will
then, after deduction of any fees and expenses of
the Trust and payment into the Reserve Account of
any amount required for taxes or other
governmental charges that may be payable by the
Trust, distribute to each Unitholder, upon
surrender for cancellation of his Certificate
after due notice of such termination, such
Unitholder's pro rata share in the Income and
Capital Accounts. Monies held upon the sale of
Securities will be held in non-interest bearing
accounts created by the Indenture until
distributed and will be of benefit to the
Trustee. The sale of Stocks in the Trust in the
period prior to termination and upon termination
may result in a lower amount than might otherwise
be realized if such sale were not required at
such time due to impending or actual termination
of the Trust. For this reason, among others, the
amount realized by a Unitholder upon termination
may be less than the amount paid by such
Unitholder.
SPONSOR
The Sponsor, PaineWebber Incorporated, is a
corporation organized under the laws of the State
of Delaware. The Sponsor is a member firm of the
New York Stock Exchange, Inc. as well as other
major securities and commodities exchanges and is
a member of the National Association of
Securities Dealers, Inc. The Sponsor is engaged
in a security and commodity brokerage business as
well as underwriting and distributing new issues.
The Sponsor also acts as a dealer in unlisted
securities and municipal bonds and in addition to
participating as a member of various selling
groups or as an agent of other investment
companies, executes orders on behalf of
investment companies for the purchase and sale of
securities of such companies and sells securities
to such companies in its capacity as a broker or
dealer in securities.
The Indenture provides that the Sponsor will not
be liable to the Trustee, any of the Trusts or to
the Unitholders for taking any action or for
refraining from taking any action made in good
faith or for errors in judgment, but will be
liable only for its own wilful misfeasance, bad
faith, gross negligence or wilful disregard of
its duties. The Sponsor will not be liable or
responsible in any way for depreciation or loss
incurred by reason of the sale of any Securities
in the Trust.
The Indenture is binding upon any successor to
the business of the Sponsor. The Sponsor may
transfer all or substantially all of its assets
to a corporation or partnership which carries on
the business of the Sponsor and duly assumes all
the obligations of the Sponsor under the
Indenture. In such event the Sponsor shall be
relieved of all further liability under the
Indenture.
If the Sponsor fails to undertake any of its
duties under the Indenture, becomes incapable of
acting, becomes bankrupt, or has its affairs
taken over by public authorities, the Trustee may
either appoint a successor Sponsor or Sponsors to
serve at rates of compensation determined as
provided in the Indenture or terminate the
Indenture and liquidate the Trust.
TRUSTEE
The 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 Company, 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 Insurance Corporation
and the Board of Governors of the Federal Reserve
System).
The Indenture provides that the Trustee will not
be liable for any action taken in good faith in
reliance on properly executed documents or the
disposition of moneys, Securities or Certificates
or in respect of any valuation which it is re-
quired to make, except by reason of its own gross
negligence, bad faith or wilful misconduct, nor
will the Trustee be liable or responsible in any
way for depreciation or loss incurred by reason
of the sale by the Trustee of any Securities in
the Trust. In the event of the failure of the
Sponsor to act, the Trustee may act and will not
be liable for any 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 acceptance or
administration of the Trust, including the costs
and expenses (including counsel fees) of
defending itself against any claim of liability.
INDEPENDENT AUDITORS
The Statement of Financial Condition and
Schedule of Investments audited by Ernst & Young
LLP, independent auditors, have been included
herein in reliance upon their report given on
their authority as experts in accounting and
auditing.
LEGAL OPINIONS
The legality of the Units offered hereby has
been passed upon by Orrick, Herrington &
Sutcliffe LLP, 666 Fifth Avenue, New York, New
York, as counsel for the Sponsor.
<TABLE>
ESSENTIAL INFORMATION REGARDING THE TRUST
<CAPTION>
As of October 31, 1996
Sponsor: PaineWebber Incorporated
Co-Trustees: Investors Bank & Trust Co. and
The First National Bank of Chicago
Initial Date of Deposit: November 30, 1993
<S> <C>
Aggregate Market Value of Securities in Trust: $38,703,240
Number of Units: 30,200,000
Minimum Purchase:
250 units for Individual Retirement Accounts
1,000 units for all else
Fractional Undivided Interest in the Trust Represented by
Each Unit: 1/30,200,000th
Calculation of Public Offering Price Per Unit:
Value of Net Assets in Trust $38,716,402
Divided by 30,200,000 Units $1.2820
Plus Sales Charge of 4.75% of Public Offering Price $.0639
Public Offering Price per Unit $1.3459
Redemption Value per Unit $1.2820
Excess of Public Offering Price over Redemption Value per Unit: $.0639
Sponsor's Repurchase Price per Unit $1.2820
Excess of Public Offering over Sponsor's Repurchase Price per Unit: $.0639
Evaluation Time: 4 P.M. New York Time
Distribution Dates*: Quarterly on January 20, April 20,
July 20 and October 20.
Record Date: March 31, June 30, September 30
and December 31.
Mandatory Termination Date: March 2, 2005 (15 days after
maturity of the Treasury Obligations)
Discretionary Liquidation Amount: 20% of the value of the Securities
upon completion of the deposit of
the Securities
Estimated Expenses of the Trust * *: $.0025 per Unit
* See " Distributions "
* * See " Expenses of Trust ". Estimated
dividends from the Stocks, based upon last
dividends actually paid, are
expected by the Sponsor to be sufficient to
pay Estimated Expenses of the Trust.
</TABLE>
<TABLE>
REPORT OF INDEPENDENT AUDITORS
<C> <S>
THE UNITHOLDERS, SPONSOR AND CO-TRUSTEES
THE PAINEWEBBER PATHFINDERS TRUST, TREASURY AND
GROWTH STOCK SERIES 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, 1996 and the related statements
of operations and changes in net assets for the
years ended October 31, 1996, 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 mate-
rial misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our
procedures included confirmation of the
securities owned as of October 31, 1996, as shown
in the statement of financial condition and
schedule of investments, by correspondence with
the Co-Trustees. An audit also includes assessing
the accounting principles used and significant
estimates made by the Co-Trustees, as well as
evaluating the overall financial statement
presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements
referred to above present fairly, in all material
respects, the financial position of The
PaineWebber Pathfinders Trust, Treasury and
Growth Stock Series Fifteen at October 31, 1996
and the results of its operations and changes in
its net assets for the years ended October 31,
1996, 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
February 4, 1997
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
STATEMENT OF FINANCIAL CONDITION
October 31, 1996
<CAPTION>
ASSETS
<S> <C> <C>
Treasury Obligation - at market value (Cost $17,532,278)
(note A and note 1 to schedule of investments) $17,873,236
Common Stock - at market value (Cost $13,621,916)
(note 1 to schedule of investments) 20,830,004
Accrued dividends receivable 27,550
Cash 14,735
Total Assets $38,745,525
LIABILITIES AND NET ASSETS
Accrued expenses payable 29,123
Total Liabilities 29,123
Net Assets (30,200,000 units of fractional undivided interest outstanding):
Cost to investors (note B) 32,707,815
Less gross underwriting commissions (note C) (1,553,621)
31,154,194
Net unrealized market appreciation (note D) 7,549,046
Net amount applicable to unitholders 38,703,240
Undistributed investment income-net 12,572
Undistributed proceeds from securities sold 590
Net Assets 38,716,402
Total liabilities and net assets $38,745,525
Net Asset Value per unit $1.2820
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
STATEMENT OF OPERATIONS
<CAPTION>
Period from
November 30,
1993(date of
Year Ended Year Ended deposit) to
October 31, October 31, October 31,
1996 1995 1994
<S> <C> <C> <C>
Operations:
Investment income:
Accretion on Treasury Obligation $1,282,776 $1,885,459 $1,509,070
Dividend Income 380,501 554,320 429,975
Total investment income 1,663,277 2,439,779 1,939,045
Less expenses:
Trustee's fees, evaluator's expense and other expenses 86,633 135,655 102,763
Total expenses 86,633 135,655 102,763
Investment income-net 1,576,644 2,304,124 1,836,282
Realized and unrealized gain on investments-net:
Net realized gain (loss) on securities transactions 2,314,942 1,263,304 (165,097)
Net change in unrealized market appreciation (depreciation) 1,043,158 10,275,583 (3,769,695)
Net gain (loss) on investments 3,358,100 11,538,887 (3,934,792)
Net increase (decrease) in net assets resulting from operations $4,934,744 $13,843,011 ($2,098,510)
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
Period from
November 30,
1993 (date of
Year Ended Year Ended deposit) to
October 31, October 31, October 31,
1996 1995 1994
<S> <C> <C> <C>
Operations:
Investment income-net $1,576,644 $2,304,124 $1,836,282
Net realized gain (loss) on securities transactions 2,314,942 1,263,304 (165,097)
Net change in unrealized market appreciation (depreciation) 1,043,158 10,275,583 (3,769,695)
Net increase (decrease) in net assets resulting from operations 4,934,744 13,843,011 (2,098,510)
Less: Distributions to Unitholders (Note E)
Investment income-net 298,431 407,510 315,947
Total Distributions 298,431 407,510 315,947
Less: Units Redeemed by Unitholders (Note F)
Value of units at date of redemption 13,697,946 23,571,322 1,925,477
Accrued dividends at date of redemption 10,360 22,520 1,040
Accreted discount at date of redemption 859,344 963,928 48,553
Total Redemptions 14,567,650 24,557,770 1,975,070
Decrease in net assets (9,931,337) (11,122,269) (4,389,527)
Net Assets:
Beginning of Period 48,647,739 59,324,424 23,812,500
Supplemental Deposits (Note F) --- 445,584 39,901,451
End of Period $38,716,402 $48,647,739 $59,324,424
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
NOTES TO FINANCIAL STATEMENTS
October 31, 1996
(A) The financial statements of the Trust are
prepared on the accrual basis of accounting.
Security transactions are accounted for on the
date the securities are purchased or sold. The
original issue discount on the Treasury
Obligation is accreted on a level yield basis.
The amount of discount included in the cost of
the Treasury Obligation held as of October 31,
1996 is $1,282,776.
(B) Cost to investors represents the initial
public offering price as of the initial date of
deposit, and the value of units through
supplemental deposits computed on the basis set
forth under "Public Offering Price of Units",
adjusted for accretion on United States Treasury
Obligations and for securities sold since the
initial date of deposit.
(C) Sales charge of the Public Offering Price
per Unit is computed on the basis set forth under
" Public Offering of Units - Sales Charge and
Volume Discount ".
(D) At October 31, 1996, the gross unrealized
market appreciation was $8,335,117 and the gross
unrealized market depreciation was ($786,071).
The net unrealized market appreciation was
$7,549,046.
(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 uni-
tholder's cost basis in the underlying security.
(F) The following units were redeemed with
proceeds of securities sold as follows:
<CAPTION>
Period from
November 30,
1993 (date of
Year Ended Year Ended deposit) to
October 31, October 31, October 31,
1996 1995 1994
<S> <C> <C> <C>
Number of units redeemed 12,100,000 23,700,000 2,200,000
Redemption amount $14,567,650 $24,557,770 $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>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
SCHEDULE OF INVESTMENTS
As of October 31, 1996
<CAPTION>
TREASURY OBLIGATIONS (46.18%)
Name of Security Coupon Maturity Value Maturity Date Market Value(1)
<C> <C> <C> <C> <C> <C> <C>
U.S. Treasury Interest Payments
(2) (46.18%) 0% $30,200,000 February 15, 2005 $17,873,236
COMMON STOCKS (53.82%)
Name of Issuer Number of Shares Market Value
Automotive: (.97%)
Ford Motor Company 12,055 $376,719
Banking and Financial Institutions: (5.36%)
BankAmerica Corporation 2,713 248,239
Barnett Banks, Inc. 4,827 184,029
Fannie Mae 9,652 377,635
Republic New York Corporation 16,576 1,263,920
Beverage: (5.73%)
The Coca-Cola Company 24,111 1,217,605
PepsiCo, Inc. 33,754 999,962
Chemical: (1.84%)
DuPont (EI) De Nemours & Company 6,632 615,118
Eastman Chemical Company 1,208 63,722
PPG Industries, Inc. 604 34,428
Computer Software: (6.63%)
Microsoft Corporation* 18,687 2,564,791
Consumer Goods: (1.38%)
Sara Lee Corporation 15,068 534,914
Consumer/Industrial Goods: (.60%)
General Electric Company 2,401 232,297
Cosmetics/Household Products: (1.62%)
Procter & Gamble Company 6,330 626,670
Entertainment: (3.49%)
Walt Disney Company 20,494 1,350,042
Fiberglass Products: (1.02%)
Owens-Corning Fiberglas Corporation 10,238 396,723
Insurance: (.08%)
Allstate Corporation 561 31,486
International Oil: (1.22%)
Elf Aquitaine ~ 11,753 471,589
Machinery: (.41%)
AlliedSignal, Inc. 2,414 158,117
Mining: (.54%)
Santa Fe Pacific Gold Corporation 17,535 208,228
Multimedia: (.05%)
U.S. West Media Group* 1,208 18,875
Oil: (2.06%)
Texaco, Inc. 7,839 796,638
Pharmaceuticals: (2.31%)
Bristol-Myers Squibb Company 906 95,809
Pfizer, Inc. 9,639 797,627
Photography: (.99%)
Eastman Kodak Company 4,820 384,395
Railroad: (2.56%)
Burlington Northern Santa Fe 12,026 990,642
(Continued)
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
SCHEDULE OF INVESTMENTS
As of October 31, 1996
<CAPTION>
COMMON STOCKS (53.82%)
Name of Issuer Number of Shares Market Value
<C> <C> <C>
Retail: (2.69%)
Sears, Roebuck & Company 600 $29,025
Wal-Mart Stores, Inc. 37,977 1,011,138
Semi-Conductor: (3.18%)
Intel Corporation 8,437 927,015
Motorola, Inc. 6,632 305,072
Steel: (.46%)
Carpenter Technology Corporation 5,424 176,958
Telecommunications: (7.46%)
AT&T Corporation 20,494 714,728
Bell Atlantic Corporation 7,207 434,222
GTE Corporation 11,753 495,095
Lucent Technologies 6,642 312,161
MCI Communications Corporation 25,015 628,502
Telefonos de Mexico S.A. ~ 8,738 266,509
U.S. West, Inc. 1,208 36,693
Tire and Rubber: (.50%)
The Goodyear Tire & Rubber Company 4,219 193,547
Waste Management: (.67%)
WMX Technologies, Inc. 7,538 259,119
TOTAL COMMON STOCKS $20,830,004
TOTAL INVESTMENTS $38,703,240
(1) Valuation of Securities was made by the
Co-Trustees as described in "Valuation".
(2) This security does not pay current
interest. On the maturity date thereof, the
entire maturity value becomes
due and payable. Generally, a fixed yield is
earned on such security which takes into account
the semi-annual
compounding of accrued interest. (See "The
Trust" and "Federal Income Taxes" herein).
* Non-income producing.
~ American Depositary Receipts.
</TABLE>
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following
documents:
The facing sheet.
The Prospectus.
The signatures.
The following exhibits:
EX-99.2 Opinion of Counsel as to legality of securities
being registered.
EX-27 Financial Data Schedule
EX-99.C1 Consent of Independent Auditors
FINANCIAL STATEMENTS
1. Statement of Condition of the Trust as shown in
the current Prospectus for this series.
2. Financial Statements of the Depositor.
PaineWebber Incorporated - Financial Statements
incorporated by reference to Form 10-k and
Form 10-Q (File No. 1-7367) respectively.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, 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 11th day of February, 1997.
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 11th day of February, 1997.
PAINEWEBBER INCORPORATED
Name Office
Donald B. Marron Chairman, Chief Executive Officer,
Director & Member of the Executive
Committee *
Regina A. Dolan Senior Vice President, Chief Financial Officer
and Director *
Joseph J. Grano, Jr. President, Retail Sales & Marketing,
Director and Member of the Executive
Committee *
By:/s/ ROBERT E. HOLLEY
Attorney-in-fact*
* Executed copies of the powers of attorney have been filed with the
Securities and Exchange Commission in connection with the Registration
Statement for File No. 33-19786.
February 11, 1997
PaineWebber Incorporated
1200 Harbor Blvd.
Weehawken, New Jersey 07087
Ladies and Gentlemen:
We have served as counsel for PaineWebber Incorporated as
sponsor and depositor (the "Depositor") of PaineWebber
Pathfinders Trust, Treasury and Growth Stock Series 15 (hereinafter
referred to as the "Trust"). The Depositor seeks by means of
Post-Effective Amendment No. 3 to register for reoffering 41,123,900
Units acquired by the Depositor in the secondary market (hereinafter
referred to as the "Units").
In this regard, we have examined executed originals or copies of the
following:
(a) The Restated Certificate of Incorporation, as amended, and the
By-Laws of the Depositor, as amended;
(b) Resolutions of the Board of Directors of the Depositor adopted on
December 3, 1971 relating to the Trust and the sale of the Units;
(c) Resolutions of the Executive Committee of the Depositor adopted
on September 24, 1984;
(d) Powers of Attorney referred to in the Amendment;
(e) Post-Effective Amendment No. 3 to the Registration Statement on
Form S-6 (File No. 33-49437) 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
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 LLP
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 15
<NAME> PAINEWEBBER PATHFINDERS TRUST TREASURY & GROWTH STOCK
<MULTIPLIER> 1
<CURRENCY> U.S.Dollars
<S> <C> <C> <C>
<PERIOD-TYPE> YEAR YEAR OTHER
<FISCAL-YEAR-END> OCT-31-1996 OCT-31-1995 OCT-31-1994
<PERIOD-START> NOV-01-1995 NOV-01-1994 NOV-30-1993
<PERIOD-END> OCT-31-1996 OCT-31-1995 OCT-31-1994
<EXCHANGE-RATE> 1 1 1
<INVESTMENTS-AT-COST> 31,154,194 0 0
<INVESTMENTS-AT-VALUE> 38,703,240 0 0
<RECEIVABLES> 27,550 0 0
<ASSETS-OTHER> 14,735 0 0
<OTHER-ITEMS-ASSETS> 0 0 0
<TOTAL-ASSETS> 38,745,525 0 0
<PAYABLE-FOR-SECURITIES> 0 0 0
<SENIOR-LONG-TERM-DEBT> 0 0 0
<OTHER-ITEMS-LIABILITIES> 29,123 0 0
<TOTAL-LIABILITIES> 29,123 0 0
<SENIOR-EQUITY> 0 0 0
<PAID-IN-CAPITAL-COMMON> 0 0 0
<SHARES-COMMON-STOCK> 30,200,000 0 0
<SHARES-COMMON-PRIOR> 42,300,000 0 0
<ACCUMULATED-NII-CURRENT> 12,572 0 0
<OVERDISTRIBUTION-NII> 0 0 0
<ACCUMULATED-NET-GAINS> 590 0 0
<OVERDISTRIBUTION-GAINS> 0 0 0
<ACCUM-APPREC-OR-DEPREC> 7,549,046 0 0
<NET-ASSETS> 38,716,402 0 0
<DIVIDEND-INCOME> 380,501 554,320 429,975
<INTEREST-INCOME> 0 0 0
<OTHER-INCOME> 1,282,776 1,885,459 1,509,070
<EXPENSES-NET> 86,633 135,655 102,763
<NET-INVESTMENT-INCOME> 1,576,644 2,304,124 1,836,282
<REALIZED-GAINS-CURRENT> 2,314,942 1,263,304 (165,097)
<APPREC-INCREASE-CURRENT> 1,043,158 10,275,583 (3,769,695)
<NET-CHANGE-FROM-OPS> 4,934,744 13,843,011 (2,098,510)
<EQUALIZATION> 0 0 0
<DISTRIBUTIONS-OF-INCOME> 298,431 407,510 315,947
<DISTRIBUTIONS-OF-GAINS> 0 0 0
<DISTRIBUTIONS-OTHER> 0 0 0
<NUMBER-OF-SHARES-SOLD> 0 0 0
<NUMBER-OF-SHARES-REDEEMED> 12,100,000 23,700,000 2,200,000
<SHARES-REINVESTED> 0 0 0
<NET-CHANGE-IN-ASSETS> (9,931,337) (11,122,269) (4,389,527)
<ACCUMULATED-NII-PRIOR> 0 0 0
<ACCUMULATED-GAINS-PRIOR> 0 0 0
<OVERDISTRIB-NII-PRIOR> 0 0 0
<OVERDIST-NET-GAINS-PRIOR> 0 0 0
<GROSS-ADVISORY-FEES> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<GROSS-EXPENSE> 0 0 0
<AVERAGE-NET-ASSETS> 0 0 0
<PER-SHARE-NAV-BEGIN> 0 0 0
<PER-SHARE-NII> 0 0 0
<PER-SHARE-GAIN-APPREC> 0 0 0
<PER-SHARE-DIVIDEND> 0 0 0
<PER-SHARE-DISTRIBUTIONS> 0 0 0
<RETURNS-OF-CAPITAL> 0 0 0
<PER-SHARE-NAV-END> 1 0 0
<EXPENSE-RATIO> 0 0 0
<AVG-DEBT-OUTSTANDING> 0 0 0
<AVG-DEBT-PER-SHARE> 0 0 0
</TABLE>
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to our firm under the caption
"Independent Auditors" and to the use of our report dated February 4,
1997, 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 11, 1997
