File No. 33-49437
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 4
TO
FORM S-6
For Registration Under the Securities Act of 1933 of Securities of
Unit Investment Trusts Registered on Form N-8B-2.
A. Exact name of Trust:
PAINEWEBBER PATHFINDERS TRUST, TREASURY AND GROWTH STOCK
SERIES 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, 1998) pursuant to paragraph
(b) of Rule 485.
E. Title and amount of securities being registered:
48,443,300 Units
F. Proposed maximum offering price to the public of the securities being
registered:
$81,578,517.20**
* Estimated solely for the purpose of calculating the registration fee, at
$1.68 per unit.
G. Amount of filing fee, computed at one-thirty-fourth 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.
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"
22,100,000 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, 1998
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
41% of the aggregate market value of the Trust
portfolio and the Growth Stocks represent
approximately 59% 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
Unitholders who hold their units to the Manda-
tory 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 principal investment,
regardless of the purchase price paid by such
purchaser. (See "Risk Factors and Special
Considerations.")
The Composition of the Portfolio. PaineWebber's
forecast for continued low inflation, low
interest rates and slow economic growth suggests
that equities will continue to generate better
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 security 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 optimi-
zation program is designed to maximize returns
as stated by the user's forecast of specific
stocks or model portfolios while minimizing the
portfolio's performance divergence as measured
against a specific benchmark, in this case the
S&P 500 Index (the "S&P 500"). The optimizer
program used in constructing the Trust's
portfolio was modeled to favor, or "tilt"
toward, growth stocks. The program produced a
portfolio of 35 stocks with a tracking error of
3.90% versus the S&P 500 (i.e.), there is a 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 currently comprised of
42* Growth Stocks, of which 13 are stocks issued
by companies related to 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 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 Approximate Percentage
Source and Name of Market Value of
of Issuer the Trust
Automotive 1.08%
Ford Motor Company
Banking and Financial Institutions 6.06
BankAmerica Corporation
Barnett Banks, Inc.
Fannie Mae
Republic New York Corporation
Beverage 5.37
The Coca-Cola Company
PepsiCo, Inc.
Chemical 1.77
DuPont (EI) De Nemours & Company
Eastman Chemical Company
PPG Industries, Inc.
Computer Software 10.01
Microsoft Corporation
Consumer Goods 1.59
Sara Lee Corporation
Consumer/Industrial Good .64
General Electric Company
Cosmetics/Household Products 1.77
Proctor and Gamble Company
Entertainment 3.47
Walt Disney Company
Fiberglass Products .72
Owens-Corning Fiberglas Corporation
Information Technology .08
NCR Corporation
(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 Approximate Percentage
Source and Name of Market Value of
of Issuer the Trust
Insurance .10%
Allstate Corporation
International Oil 1.50
Elf Aquitaine
Machinery .36
AlliedSignal, Inc.
Mining .64
Newmont Mining Corporation
Multimedia .06
U.S. West Media Group
Oil 1.84
Texaco, Inc.
Pharmaceuticals 3.14
Bristol-Myers Squibb Company
Pfizer, Inc.
Photography .59
Eastman Kodak Company
Railroad 2.35
Burlington Northern Santa Fe
Restaurants .21
Tricon Global Restaurants, Inc.
Retail 2.83
Sears, Roebuck & Company
Wal-Mart Stores, Inc.
Semi-Conductor 3.52
Intel Corporation
Motorola, Inc.
Steel .54
Carpenter Technology Corporation
Telecommunications 8.12
AT&T Corporation
Bell Atlantic Corporation
GTE Corporation
Lucent Technologies
MCI Communications Corporation
Telefonos de Mexico S.A.
U.S. West, Inc.
Tire and Rubber .54
The Goodyear Tire & Rubber Company
Waste Management .35
Waste Management, Inc.
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
4.25% of the Public Offering Price (4.44% 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 re-
ceived 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
Initial 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 Initial Date
of Deposit, have growth appreciation potential
because PaineWebber believes the Stocks will be
the beneficiaries of industrial innovation as
well as global and technological trends over the
life of the Trust. 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, cause the deposit of additional
Securities in the Trust when additional Units
are to be offered to the public, replicating 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.
____________
* 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
The Treasury Obligations consist of U.S.
Treasury obligations which have been stripped of
their unmatured interest coupons or interest
coupons stripped from the U.S. Treasury
Obligations. The obligor with respect to the
Treasury Obligations is the United States
Government. U.S. Government backed obligations
are considered the safest investment.
RISK FACTORS AND SPECIAL CONSIDERATIONS
Risk Factors. An investment in the Trust
should be made with the understanding of the
risks inherent in an investment in deep discount
or "zero-coupon" debt obligations and the risks
associated with an investment in common stocks
in general.
The Trust contains stripped Treasury Securities
described below (see "Schedule of Investments").
Stripped Treasury Securities 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 prin-
cipal amount payable at maturity common stocks
do not have a fixed principal amount or a
maturity. Additionally, the value of the Stocks,
like the Treasury Obligations, in the Trust may
be expected to fluctuate over the life of the
Trust to values higher or lower than those
prevailing on the Initial Date of Deposit. 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 42 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 mort-
gage 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.
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 Carter, Ledyard & Milburn,
counsel for the Sponsor, under existing law:
1. The Trust is not an association taxable as a
corporation for federal income tax purposes.
Under the Internal Revenue Code of 1986, as
amended (the "Code"), each Unitholder will be
treated as the owner of a pro rata portion of
the Trust, and income of the Trust will be
treated as income of the Unitholder.
2. Each Unitholder will have a taxable event
when the Trust disposes of a Security (whether
by sale, exchange, redemption, or payment at
maturity) or when the Unitholder sells its Units
or redeems its Units for cash. The total tax
cost of each Unit to a Unitholder is allocated
among each of the Securities in accordance with
the proportion of the Trust comprised by each
Security to determine the per Unit tax cost for
each Security.
3. The Trust is not an association taxable as a
corporation for New York State income tax
purposes. Under New York State law, each
Unitholder will be treated as the owner of a pro
rata portion of the Trust and the income of the
Trust will be treated as income of the
Unitholders.
The following general discussion of the federal
income tax treatment of an investment in Units
of the Trust is based on the Code and Treasury
Regulations promulgated thereunder as in effect
on the date of this Prospectus. The federal
income tax treatment applicable to a Unitholder
may depend upon the Unitholder's particular tax
circumstances. The tax treatment of non-U.S.
investors is not addressed. Future legislative,
judicial or administrative changes could modify
the statements below and could affect the tax
consequences to Unitholders. Accordingly, each
Unitholder is advised to consult its own tax
advisor concerning the effect of an investment
in Units.
General. Each Unitholder must report on its
federal income tax return a pro rata share of
the entire income of the Trust, derived from
dividends on Stocks, original issue discount or
interest on Treasury Obligations, gains or
losses upon sales of Securities by the Trust and
a pro rata share of the expenses of the Trust.
Unitholders should note that their taxable
income from an investment in Units will exceed
cash distributions because taxable income will
include accretions of original issue discount on
the Treasury Obligations, 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
basis for such Stock. This reduction in basis
would in effect increase any gain, or reduce any
loss, realized by the Unitholder on any
subsequent sale or other disposition of Units.
After the 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.
A Unitholder who is an individual, estate or
trust may be disallowed certain itemized
deductions described in Code Section 67,
including compensation paid to the Trustee and
administrative expenses of the Trust, to the
extent these itemized deductions, in the
aggregate, do not exceed two percent of the
Unitholder's adjusted gross income. Thus, a
Unitholder's taxable income from an investment
in Units may exceed amounts distributed to the
extent amounts are used by the Trust to pay
expenses.
Corporate Dividends-Received Deduction.
Corporate holders of Units may be eligible for
the dividends-received deduction with respect to
distributions treated as dividends, subject to
the limitations provided in Section 246 and 246A
of the Code. The dividends-received deduction
generally equals 70 percent of the amount of the
dividend. As a result, the maximum effective
tax rate on dividends received generally will be
reduced from 35 percent to 10.5 percent. A
portion of the dividends-received deduction may,
however, be subject to the alternative minimum
tax and be taxed at a 20 percent effective tax
rate. Individuals, partnerships, trusts, S
corporations and certain other entities are not
eligible for the dividends-received deduction.
Unitholders will be taxed in the manner
described above regardless of whether
distributions from the Trust are actually
received by the Unitholder or are reinvested
pursuant to the reinvestment plan.
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 dis-
count"). Original issue discount represents
interest for federal income tax purposes and can
generally be defined as the difference between
the price at which a bond was issued and its
stated redemption price at maturity. For
purposes of the preceding sentence, stripped
obligations, such as the Treasury Obligations,
which variously consist either of the right to
receive payments of interest or the right to
receive payments of principal, are treated by
each successive purchaser as originally issued
on their purchase dates at an issue price equal
to their respective purchase prices thereof.
The market value of the Trust assets will be
provided to a Unitholder upon request in order
to enable the Unitholder to calculate the
original issue discount attributable to each of
the Treasury Obligations. Original issue
discount on Treasury Obligations (which were
issued or treated as issued on or after July 2,
1982) is deemed earned over the life of such
obligation, taking into account the compounding
of accrued interest at least annually, resulting
in an increasing amount of income in each year.
Each Unitholder is required to include in income
each year the amount of original issue discount
which accrues on its pro rata portion of each
Treasury Obligation which (with respect to such
Unitholder) has original issue discount. The
amount of accrued original issue discount
included in income with respect to a
Unitholder's interest in Treasury Obligations
is thereupon added to the tax cost for such obli-
gations.
Gain or Loss on Sale. If a Unitholder sells or
otherwise disposes of a Unit, the Unitholder
generally will recognize gain or loss in an
amount equal to the difference between the
amount realized on the disposition allocable to
the Securities and the Unitholder's adjusted tax
bases in the Securities. In general, such
adjusted tax bases will equal the Unitholder's
aggregate cost for the Unit increased by any
accrued original issue discount. Such gain or
loss will be capital gain or loss if the Unit
and underlying Securities were held as capital
assets, except that such gain will be treated as
ordinary income to the extent of any accrued
original issue discount not previously reported.
Each Unitholder generally will also recognize
taxable gain or loss when all or part of its pro
rata portion of a Security is sold or otherwise
disposed of for an amount greater or less than
its per Unit tax cost therefor.
Long-term capital gains of individuals are
generally taxed at a maximum federal rate of
28%. Under the recently enacted Taxpayer Relief
Act of 1997, Unitholders who are individuals and
have held their Units for more than 18 months
may be entitled to a more favorable federal tax
rate (generally, 20%, but 10% for individuals
otherwise in the 15% bracket) for gains from the
sale of these Units. Prior to the issuance of
relevant regulations, it is not certain whether
or how this more favorable federal tax rate will
be available with respect to capital gain
dividends paid by the Trust. Unitholders should
consult their own tax advisers in this regard.
Withholding For Citizen or Resident Investors.
In the case of any noncorporate Unitholder that
is a citizen or resident of the United States a
31 percent "backup" withholding tax may apply to
certain distributions of the Trust unless the
Unitholder properly completes and files, under
penalties of perjury, IRS Form W-9 (or its
equivalent).
The foregoing discussion is a general summary
and relates only to certain aspects of the
federal income tax consequences of an investment
in the Trust. Unitholders, may also be subject
to state and local taxation. Each Unitholder
should consult its own tax advisor regarding the
federal, state and local tax consequences to it
of ownership of Units.
Investment in the Trust may be suited for
purchase by funds and accounts of individual
investors that are exempt from federal income
taxes such as Individual Retirement Accounts,
tax-qualified retirement plans including Keogh
Plans, and other tax-deferred retirement plans.
Unitholders desiring to purchase Units for tax-
deferred plans and IRA's should consult their
PaineWebber Investment Executive for details on
establishing such accounts. Units may also be
purchased by persons who already have self-
directed accounts established under tax-deferred
retirement plans.
PUBLIC OFFERING OF UNITS
Public Offering Price. The public offering
price 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, de-
termined 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.
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 Secondary Market on and
December 1, 2000 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 Exchange Trusts to be acquired
based on a reduced sales charge of $15 per unit
or per 1,000 units in the case of a trust whose
units cost approximately one dollar. The purpose
of such reduced sales charge is to permit the
Sponsor to pass on to the Certificateholder who
wishes to exchange Units the cost savings
resulting from such exchange Units. The cost
savings result from reductions in time and
expense related to advice, financial planning
and operational expenses required for the
Exchange Option. Each Exchange Trust has
different investment objectives, therefore a
Unitholder should read the prospectus for the
applicable Exchange Trust carefully prior to
exercising this option. Exchange Trusts having
as their objective the receipt of tax exempt
interest income would not be suitable for tax-
deferred investment plans such as Individual
Retirement Accounts. A Certificateholder who
purchased Units of a series and paid a per Unit
or per 1,000 Unit sales charge that was less
than the per Unit or per 1,000 Unit sales charge
of the series of the Exchange Trusts for which
such Certificateholder desires to exchange into,
will be allowed to exercise the Exchange Option
at the Unit Offering Price plus the reduced sale
charge, provided the Certificateholder has held
the Units for at least five months. Any such
Certificateholder who has not held the Units to
be exchanged for the five-month period will be
required to exchange them at the Unit Offering
Price plus a sales charge based on the greater
of the reduced sale charge, or an amount which,
together with the initial sales charge paid in
connection with the acquisition of the Units
being exchanged, equals the sales charge of the
series of the Exchange Trust for which such
Certificateholder desires to exchange into,
determined as of the date of the exchange.
The Sponsor will permit exchanges at the
reduced sales charge provided there is either a
primary market for Units or a secondary market
maintained by the Sponsor in both the Units of
this series and units of the applicable Exchange
Trust and there are units of the applicable
Exchange Trust available for sale. While the
Sponsor has indicated that it intends to
maintain a market for the Units of the
respective Trusts, there is no obligation on its
part to maintain such a market. Therefore, there
is no assurance that a market for Units will in
fact exist on any given date at which a
Unitholder wishes to sell his Units of this
series and thus there is no assurance that the
Exchange Option will be available to a
Unitholder. Exchanges will be effected in whole
Units only, but Unitholders will be permitted to
advance new money in order to complete an
exchange to round up to the next highest number
of Units. An exchange of Units pursuant to the
Exchange Option will normally constitute a
"taxable event," i.e., a Unitholder will
recognize a tax gain or loss which will be of a
capital or ordinary income nature depending upon
the length of time he has held his Units and
other factors. Unitholders are urged to consult
their own tax advisors as to the tax
consequences to them of exchanging Units in par-
ticular cases.
The Sponsor reserves the right to modify,
suspend or terminate this Exchange Option at any
time without further notice to Unitholders. In
the event the Exchange Option is not available
to a Unitholder at the time he wishes to
exercise it, the Unitholder will be immediately
notified and no action will be taken with
respect to his Units without further instruction
from the Unitholder.
To exercise the Exchange Option, a Unitholder
should notify the Sponsor of his desire to
exercise the Exchange Option and to use the
proceeds from the sale of his Units to the
Sponsor of this series to purchase Units of one
or more of the Exchange Trusts from the Sponsor.
If Units of the applicable outstanding series of
the Exchange Trust are at that time available
for sale, and if such Units may lawfully be sold
in the state in which the Unitholder is
resident, the Unitholder may select the series
or group of series for which he desires his
investment to be exchanged. The Unitholder will
be provided with a current prospectus or
prospectuses relating to each series in which he
indicated interest.
The exchange transaction will operate in a
manner essentially identical to any secondary
market transaction, i.e., Units will be
repurchased at a price based on the market value
of the Securities in the portfolio of the Trust
next determined after receipt by the Sponsor of
an exchange request and properly endorsed
Certificate. Units of the Exchange Trust will be
sold to the Unitholder at a price based upon the
next determined market value of the Securities
in the Exchange Trust plus the reduced sales
charge. Exchange transactions will be effected
only in whole units; thus, any proceeds not used
to acquire whole units will be paid to the
selling Unitholder.
For example, assume that a Certificateholder,
who has three thousand units of a trust with a
current price of $1.30 unit, desires to sell his
units and seeks to exchange the proceeds for
units of a series of an Exchange Trust with a
current price of $890 per unit based on the bid
prices of the underlying securities. In this
example, which does not contemplate any rounding
up to the next highest number of Units, the
proceeds from the Unitholder's units would
aggregate $3,900. Since only whole units of an
Exchange Trust may be purchased under the
Exchange Option, the Unitholder would be able to
acquire four units in the Exchange Trust for a
total cost of $3,620 ($3,560 for the units and
$60 for the sales charge). If all 3,000 units
were tendered, the remaining $280 would be
returned to the Unitholder.
Conversion Option. In addition to the Exchange
Option described in this Prospectus, owners of
units of any registered unit investment trust
sponsored by another which was initially offered
at a maximum applicable sales charge of at least
3.0% (a "Conversion Trust") may elect to apply
the cash proceeds of the sale or redemption of
those units directly to acquire available units
of any Exchange Trust at a reduced sales charge
of $15 per Unit (or per 100 Units in the case of
Exchange Trusts having a Unit price of
approximately $10, or per 1,000 Units in the
case of Exchange Trusts having a Unit price of
approximately $1), subject to the terms and
conditions applicable to the Exchange Option
(except that no secondary market is required for
Conversion Trust units). To exercise this
option, the owner should notify his retail bro-
ker. He will be given a prospectus for each
series in which he indicates interest and for
which units are available. The dealer must sell
or redeem the units of the Conversion Trust. Any
dealer other than PaineWebber must certify that
the purchase of units of the Exchange Trust is
being made pursuant to and is eligible for the
Conversion Option. The dealer will be entitled
to two thirds of the applicable reduced sales
charge. The Sponsor reserves the right to
modify, suspend or terminate the Conversion
Option at any time without further notice,
including the right to increase the reduced
sales charge applicable to this option (but not
in excess of $5 more per Unit (or per 100 Units
or per 1,000 Units, as applicable) than the
corresponding fee then being charged for the
Exchange Option). For a description of the tax
consequences of a conversion reference is made
to the Exchange Option section of the
prospectus.
Distribution of Units. The minimum purchase in
the initial public offering is 1,000 Units,
except that the minimum purchase 250 Units for
purchases made in connection with Individual
Retirement Accounts or other tax-deferred retire-
ment plans. Only whole Units may be purchased.
The Sponsor is the sole underwriter of the
Units. Sales may, however, be made to dealers
who are members of the National Association of
Securities Dealers, Inc. ("NASD") at prices
which include a concession of one-half of the
highest applicable sales charge and the dealer
concession will be retained by the Sponsor. In
event that the dealer concession is 90% or more
of the sales charge per Unit, dealers taking
advantage of such concession may be deemed to be
underwriters under the Securities Act of 1933.
The Sponsor reserves the right to reject, in
whole or in part, any order for the purchase of
Units. The Sponsor intends to qualify the Units
in all states of the United States and does not
intend to sell Units to persons who are non-
resident aliens.
Secondary Market for Units. While not obligated
to do so, the Sponsor intends to maintain a
secondary market for the Units and continuously
offer to purchase Units at the Trust Fund
Evaluation per Unit next computed after receipt
by the Sponsor of an order from a Unitholder.
The Sponsor may cease to maintain such a market
at any time, and from time to time, without
notice. In the event that a secondary market for
the Units is not maintained by the Sponsor, a
Unitholder desiring to dispose of Units may
tender such Units to the Trustee for redemption
at the price calculated in the manner set forth
under "Redemption". Redemption requests in
excess of $100,000 may be redeemed "in kind" as
described under "Redemption".
The Trust Fund Evaluation per Unit at the time
of sale or tender for redemption may be less
than the price at which the Unit was purchased.
Sponsor's Profits. In addition to the
applicable sales charge the Sponsor realizes a
profit (or sustains a loss) in the amount of any
difference between the cost of the Securities to
the Sponsor and the price at which it sells or
redeems the Units, which is based on the value
of the Securities, determined by the Trustee as
described under "Valuation". In maintaining a
secondary market for the Units, the Sponsor may
realize profits or sustain losses in the amount
of any differences between the price at which it
buys Units and the price at which it resells or
redeems such Units.
Cash, if any, received from Unitholders prior
to the settlement date for the purchase of Units
or prior to the payment for Securities upon
their delivery may be used in the Sponsor's
business subject to the limitations of Rule
15c3-3 under the Securities and Exchange Act of
1934 and may be of benefit to the Sponsor.
In selling any Units in the initial public
offering after the Initial 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 Hancock
Towers, 200 Clarendon Street, Boston, MA 02116
upon payment of any transfer or similar tax
which must be paid to effect the redemption. At
the present time there are no such taxes. No
redemption fee will be charged by the Sponsor or
Investors Bank & Trust Company. 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 Company. In certain
instances the Investors Bank & Trust Company 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 Company 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 converting the Securities
distributed into cash.
The Trustee may, in its discretion, and will,
when so directed by the Sponsor, suspend the
right of redemption, or postpone the date of
payment of the Redemption Value, for more than
seven calendar days following the day of tender
for any period during which the New York Stock
Exchange, Inc. is closed other than for weekend
and holiday closings; or for any period during
which the Securities and Exchange Commission
determined that trading on the New York Stock
Exchange, Inc. is restricted or for any period
during which an emergency exists as a result of
which disposal or evaluation of the Securities
is not reasonably practicable; or for such other
period as the Securities and Exchange Commission
may by order permit for the protection of
Unitholders. The Trustee is not liable to any
person or in any way for any loss or damages
which may result from any such suspension or
postponement, or any failure to suspend or
postpone when done in the Trustee's discretion.
VALUATION
The Trustee will calculate the Trust's value
(the "Trust Fund Evaluation") per Unit at the
Valuation Time set forth under "Summary of
Essential Information" (1) on each June 30 and
December 31 (or the last business day prior
thereto), (2) on each business day as long as
the Sponsor is maintaining a bid in the
secondary market, (3) on the business day on
which any Unit is tendered for redemption, and
(4) on any other day desired by the Sponsor or
the Trustee, by adding (a) the aggregate value
of the Securities and other assets determined by
the Trustee as set forth below and (b) cash on
hand in the Trust, income accrued on the
Treasury Obligations but not distributed or held
for distribution and dividends receivable on
Stocks trading ex-dividend (other than any cash
held in any reserve account established under
the Indenture) and deducting therefrom the sum
of (x) taxes or other governmental charges
against the Trust not previously deducted and
(y) accrued fees and expenses of the Trustee and
the Sponsor (including legal and auditing ex-
penses) and other Trust expenses. The per Unit
Trust Fund Evaluation is calculated by dividing
the result of such computation by the number of
Units outstanding as of the date thereof.
Business days do not include Saturdays, Sundays,
New Year's Day, Martin Luther King, Jr.'s Day,
Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day
and Christmas Day and other days that the New
York Stock Exchange is closed.
The value of Stocks shall be determined by the
Trustee in good faith in the following manner:
(1) if the Securities are listed on one or more
national securities exchanges, such evaluation
shall be based on the closing sale price on that
day (unless the Trustee deems such price
inappropriate as a basis for evaluation) on the
exchange which is the principal market thereof
(deemed to be the New York Stock Exchange if the
Securities are listed thereon), (2) if there is
no such appropriate closing sale price on such
exchange, at the mean between the closing bid
and asked prices on such exchange (unless the
Trustee deems such price inappropriate as a
basis for evaluation), (3) if the Securities are
not so listed or, if so listed and the principal
market therefore is other than on such exchange
or there are no such appropriate closing bid and
asked prices available, such evaluation shall be
made by the Trustee in good faith based on the
closing sale price on the over-the-counter
market (unless the Trustee deems such price
inappropriate as a basis for evaluation), or (4)
if there is no such appropriate closing price,
then (a) on the basis of current bid prices, (b)
if bid prices are not available, on the basis of
current bid prices for comparable securities,
(c) by the Trustee's appraising the value of the
Securities in good faith on the bid side of the
market, or (d) by any combination thereof.
Treasury Obligations are valued on the basis of
bid prices. The aggregate bid prices of the
Treasury Obligations, is the price obtained from
investment dealers or brokers (which may include
the Sponsor) who customarily deal in Treasury
Obligations; or, if there is no market for the
Treasury Obligations, and bid prices are not
available, on the basis of current bid prices
for comparable securities; or by appraisal; or
by any combination of the above, adjusted to
reflect income accrued.
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION VALUE
While the Public Offering Price of Units during
the initial offering period is determined on the
basis of 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
Initial 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 $.00090 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 Company at its office in
Boston, Massachusetts properly endorsed or
accompanied by a written instrument or instru-
ments of transfer. Uncertificated Units are
transferable by presentation to Investors Bank &
Trust Company at its office of a written instru-
ment 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 Company 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 Company 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 repre-
sented by a Unit or (2) reduce the percentage of
Unitholders required to consent to any such
amendment, without the consent of all
Unitholders.
The Trustee will promptly notify Unitholders of
the substance of any amendment affecting
Unitholders rights or their interest in the
Trust.
TERMINATION OF THE TRUST
The Indenture provides that the Trust will
terminate within 15 days after the maturity of
the Treasury Obligations held in the Trust. If
the value of the Trust as shown by any
evaluation is less than twenty 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 Comp-
troller 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 Hancock Towers, 200
Clarendon Street, Boston, Massachusetts 02116,
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 required 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 Carter, Ledyard & Milburn, 2
Wall Street, New York, New York, as counsel for
the Sponsor.
<TABLE>
ESSENTIAL INFORMATION REGARDING THE TRUST
As of October 31, 1997
<CAPTION>
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: $35,411,216
Number of Units: 22,100,000
Minimum Purchase
250 units for Individual Retirement Accounts
1,000 units for all else
Fractional Undivided Interest in the Trust Represented by
Each Unit: 1/22,100,000th
Calculation of Public Offering Price Per Unit:
Value of Net Assets in Trust $35,427,034
Divided by 22,100,000 Units $1.6030
Plus Sales Charge of 4.25% of Public Offering Price $.0712
Public Offering Price per Unit $1.6742
Redemption Value per Unit $1.6030
Excess of Public Offering Price over Redemption Value per Unit: $.0712
Sponsor's Repurchase Price per Unit $1.6030
Excess of Public Offering over Sponsor's Repurchase Price per Unit: $.0712
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 * *: $.0026 per Unit
* See " Distributions "
* * See " Expenses of Trust ". Estimated
dividends from the Growth Stocks, based upon last
dividends
actually paid, are expected by the Sponsor to
be sufficient to pay Estimated Expenses of the
Trust.
</TABLE>
<TABLE>
REPORT OF INDEPENDENT AUDITORS
<C> <S>
THE UNITHOLDERS, SPONSOR AND CO-TRUSTEES
THE PAINEWEBBER PATHFINDERS TRUST, TREASURY AND
GROWTH STOCK SERIES 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, 1997 and the related statements of
operations and changes in net assets for each of
the three years in the period then ended. These
financial statements are the responsibility of the
Co-Trustees. Our responsibility is to express an
opinion on these financial statements based on our
audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about whether
the financial statements are free of material mis-
statement. 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, 1997, as shown in the
statement of financial condition and schedule of
investments, by correspondence with the Co-
Trustees. An audit also includes assessing the
accounting principles used and significant
estimates made by the Co-Trustees, as well as
evaluating the overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements
referred to above present fairly, in all material
respects, the financial position of The
PaineWebber Pathfinders Trust, Treasury and Growth
Stock Series Fifteen at October 31, 1997 and the
results of its operations and changes in its net
assets for each of the three years in the period
then ended, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
New York, New York
February 2, 1998
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
STATEMENT OF FINANCIAL CONDITION
October 31, 1997
<CAPTION>
ASSETS
<S> <C> <C>
Treasury Obligation - at market value (Cost $13,695,927)
(note A and note 1 to schedule of investments) $14,429,731
Common Stock - at market value (Cost $9,973,965)
(note 1 to schedule of investments) 20,981,485
Accrued dividends receivable 21,649
Cash 13,205
Total Assets $35,446,070
LIABILITIES AND NET ASSETS
Accrued expenses payable 19,036
Total Liabilities 19,036
Net Assets (22,100,000 units of fractional undivided interest outstanding):
Cost to investors (note B) $24,720,513
Less gross underwriting commissions (note C) (1,050,621)
23,669,892
Net unrealized market appreciation (note D) 11,741,324
Net amount applicable to unitholders 35,411,216
Undistributed investment income-net 20,648
Overdistributed proceeds from securities sold (4,830)
Net assets 35,427,034
Total liabilities and net assets $35,446,070
Net Asset Value per unit $1.6030
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
STATEMENT OF OPERATIONS
<CAPTION>
Year Ended Year Ended Year Ended
October 31, October 31, October 31,
1997 1996 1995
<S> <C> <C> <C>
Operations:
Investment income:
Accretion on Treasury Obligation $1,027,425 $1,282,776 $1,885,459
Dividend Income 326,493 380,501 554,320
Total investment income 1,353,918 1,663,277 2,439,779
Less expenses:
Trustee's fees, evaluator's expense and other
expenses 55,476 86,633 135,655
Total expenses 55,476 86,633 135,655
Investment income-net 1,298,442 1,576,644 2,304,124
Realized and unrealized gain on investments-net:
Net realized gain on securities transactions 3,497,937 2,314,942 1,263,304
Net change in unrealized market appreciation 4,192,278 1,043,158 10,275,583
Net gain on investments 7,690,215 3,358,100 11,538,887
Net increase in net assets resulting from operations $8,988,657 $4,934,744 $13,843,011
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>
Year Ended Year Ended Year Ended
October 31, October 31, October 31,
1997 1996 1995
<S> <C> <C> <C>
Operations:
Investment income-net $1,298,442 $1,576,644 $2,304,124
Net realized gain on securities transactions 3,497,937 2,314,942 1,263,304
Net change in unrealized market appreciation 4,192,278 1,043,158 10,275,583
Net increase in net assets resulting from operations 8,988,657 4,934,744 13,843,011
Less: Distributions to Unitholders (Note E)
Investment income-net 252,835 298,431 407,510
Total Distributions 252,835 298,431 407,510
Less: Units Redeemed by Unitholders (Note F)
Value of units at date of redemption 11,106,881 13,697,946 23,571,322
Accrued dividends at date of redemption 10,110 10,360 22,520
Accreted discount at date of redemption 908,199 859,344 963,928
Total Redemptions 12,025,190 14,567,650 24,557,770
Decrease in net assets (3,289,368) (9,931,337) (11,122,269)
Net Assets:
Beginning of Period 38,716,402 48,647,739 59,324,424
Supplemental Deposits (Note F) --- --- 445,584
End of Period $35,427,034 $38,716,402 $48,647,739
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
NOTES TO FINANCIAL STATEMENTS
October 31, 1997
(A) The financial statements of the Trust are
prepared on the accrual basis of accounting.
Security transactions are accounted for on the
date the securities are purchased or sold. The
original issue discount on the Treasury Obligation
is accreted on a level yield basis. The amount of
discount included in the cost of the Treasury
Obligation held as of October 31, 1997 is
$2,891,952.
(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, 1997, the gross unrealized
market appreciation was $11,935,851 and the gross
unrealized market depreciation was ($194,527). The
net unrealized market appreciation was
$11,741,324.
(E) Regular distributions of net income,
excluding accretion income and principal receipts
not used for redemption of units are made semi-
annually. Special distribution may be made when
the Sponsor and Co-Trustee deem necessary. Income
with respect to the accretion of original issue
discount is not distributed although the
unitholder is subject to tax, where applicable, as
if the distribution had occurred. Accretion income
earned by the Trust increases a unitholder's cost
basis in the underlying security.
(F) The following units were redeemed with
proceeds of securities sold as follows:
<CAPTION>
Year Ended Year Ended Year Ended
October 31, October 31, October 31,
1997 1996 1995
<S> <C> <C> <C>
Number of units redeemed 8,100,000 12,100,000 23,700,000
Redemption amount $12,025,190 $14,567,650 $24,557,770
The following units were sold through supplemental deposits:
Number of units sold --- --- 500,000
Value of amount, net of sales charge --- --- $445,584
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
SCHEDULE OF INVESTMENTS
As of October 31, 1997
<CAPTION>
TREASURY OBLIGATIONS (40.75%)
Name of Security Coupon Maturity Value Maturity Date Market Value(1)
<C> <C> <C> <C> <C>
U.S. Treasury Interest Payments (2) (40.75%) 0% $22,100,000 February 15, 2005 $14,429,731
<CAPTION>
COMMON STOCKS (59.25%)
Name of Issuer Number of Shares Market Value
<C> <C> <C>
Automotive: (1.08%)
Ford Motor Company 8,794 $384,188
Banking and Financial Institutions: (6.06%)
BankAmerica Corporation 3,959 283,068
Barnett Banks, Inc. 3,523 243,087
Fannie Mae 7,042 341,097
Republic New York Corporation 12,095 1,279,802
Beverage: (5.37%)
The Coca-Cola Company 17,592 993,948
PepsiCo, Inc. 24,627 906,581
Chemical: (1.77%)
DuPont (EI) De Nemours & Company 9,678 550,436
Eastman Chemical Company 883 52,649
PPG Industries, Inc. 442 25,028
Computer Software: (10.01%)
Microsoft Corporation* 27,264 3,544,320
Consumer Goods: (1.59%)
Sara Lee Corporation 10,993 562,017
Consumer/Industrial Goods: (.64%)
General Electric Company 3,498 225,840
Cosmetics/Household Products: (1.77%)
Procter & Gamble Company 9,237 628,116
Entertainment: (3.47%)
Walt Disney Company 14,951 1,229,720
Fiberglass Products: (.72%)
Owens-Corning Fiberglas Corporation 7,469 255,813
Information Technology: (.08%)
NCR Corporation* 933 28,282
Insurance: (.10%)
Allstate Corporation 406 33,673
International Oil: (1.50%)
Elf Aquitaine ~ 8,574 529,445
Machinery: (.36%)
AlliedSignal, Inc. 3,524 126,864
Mining: (.64%)
Newmont Mining Corporation 6,465 226,275
Multimedia: (.06%)
U.S. West Media Group* 883 22,296
Oil: (1.84%)
Texaco, Inc. 11,439 651,308
Pharmaceuticals: (3.14%)
Bristol-Myers Squibb Company 1,324 116,181
Pfizer, Inc. 14,065 995,099
Photography: (.59%)
Eastman Kodak Company 3,516 210,520
Railroad: (2.35%)
Burlington Northern Santa Fe 8,774 833,530
(Continued)
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
SCHEDULE OF INVESTMENTS
As of October 31, 1997
<CAPTION>
COMMON STOCKS (59.25%)
Name of Issuer Number of Shares Market Value
<C> <C> <C>
Restaurants: (.21%)
Tricon Global Restaurants, Inc.* 2,463 $74,657
Retail: (2.83%)
Sears, Roebuck & Company 438 18,341
Wal-Mart Stores, Inc. 27,966 982,306
Semi-Conductor: (3.52%)
Intel Corporation 12,310 947,870
Motorola, Inc. 4,839 298,808
Steel: (.54%)
Carpenter Technology Corporation 3,958 191,468
Telecommunications: (8.12%)
AT&T Corporation 14,951 731,665
Bell Atlantic Corporation 5,259 420,063
GTE Corporation 8,574 363,859
Lucent Technologies 4,845 399,410
MCI Communications Corporation 18,251 647,910
Telefonos de Mexico S.A. ~ 6,373 275,632
U.S. West, Inc. 883 35,154
Tire and Rubber: (.54%)
The Goodyear Tire & Rubber Company 3,077 192,697
Waste Management: (.35%)
Waste Management, Inc. 5,239 122,462
TOTAL COMMON STOCKS $20,981,485
TOTAL INVESTMENTS $35,411,216
(1) Valuation of Securities was made by the Co-
Trustees as described in "Valuation".
(2) This security does not pay current
interest. On the maturity date thereof, the
entire maturity value
becomes due and payable. Generally, a fixed
yield is earned on such security which takes into
account the semi-annual compounding of
accrued interest. (See "The Trust" and "Federal
Income
Taxes" herein).
* Non-income producing.
~ American Depositary Receipts.
</TABLE>
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following
documents:
The facing sheet.
The Prospectus.
The signatures.
The following exhibits:
EX-99.C1 Opinion of Counsel as to legality of securities
being registered
EX-99.C2 Opinion of Counsel as to certain tax aspects of
of the Trust
EX-27 Financial Data Schedule
EX-99.C3 Consent of Independent Auditors
FINANCIAL STATEMENTS
1. Statement of Condition of the Trust as shown in
the current Prospectus for this series.
2. Financial Statements of the Depositor.
PaineWebber Incorporated - Financial Statements
incorporated by reference to Form 10-k and
Form 10-Q (File No. 1-7367) respectively.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, PaineWebber Pathfinders Trust, Treasury and Growth
Stock Series 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,
1998.
THE 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, 1998.
PAINEWEBBER INCORPORATED
Name Office
Donald B. Marron Chairman, Chief Executive Officer
and Director of PaineWebber Incorporated*
Regina A. Dolan Executive Vice President,
Chief Financial Officer and
Director of PaineWebber Incorporated*
Joseph J. Grano, Jr. President and
Director of PaineWebber Incorporated*
Steve P. Baum Executive Vice President and
Director of PaineWebber Incorporated*
Robert H. Silver Executive Vice President and
Director of PaineWebber Incorporated*
Mark B. Sutton Executive Vice President and
Director of PaineWebber Incorporated*
Margo N. Alexander Executive Vice President and
Director of PaineWebber Incorporated*
Terry L. Atkinson Managing Director and
Director of PaineWebber Incorporated*
Brian M. Barefoot Executive Vice President and
Director of PaineWebber Incorporated*
Michael Culp Managing Director and
Director of PaineWebber Incorporated*
Edward M. Kerschner Managing Director and
Director of PaineWebber Incorporated*
James P. MacGilvray Executive Vice President and
Director of PaineWebber Incorporated*
By:/s/ ROBERT E. HOLLEY
Attorney-in-fact*
* Executed copies of the powers of attorney have been previously
filed with the Securities and Exchange Commission with the Post
Effective Amendment to the Registration Statement File No. 2-61279.
February 11, 1998
PaineWebber Incorporated
1200 Harbor Blvd.
Weehawken, New Jersey 07087
Ladies and Gentlemen:
We have served as counsel for PaineWebber Incorporated as
sponsor and depositor (the "Depositor") of PaineWebber
Pathfinders Trust, Treasury and Growth Stock Series 15 (hereinafter
referred to as the "Trust"). The Depositor seeks by means of
Post-Effective Amendment No. 4 to register for reoffering 48,443,300
Units acquired by the Depositor in the secondary market (hereinafter
referred to as the "Units").
In this regard, we have examined executed originals or copies of the
following:
(a) The Restated Certificate of Incorporation, as amended, and the
By-Laws of the Depositor, as amended;
(b) Resolutions of the Board of Directors of the Depositor adopted on
December 3, 1971 relating to the Trust and the sale of the Units;
(c) Resolutions of the Executive Committee of the Depositor adopted
on September 24, 1984;
(d) Powers of Attorney referred to in the Amendment;
(e) Post-Effective Amendment No. 4 to the Registration Statement on
Form S-6 (File No. 33-49437) 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 Initial Date of Deposit, among
the Depositor, the Co-Trustees and the Evaluator (the "Trust
Indenture" and, collectively with the Standard Terms, the
"Indenture and Agreement");
(k) The form of certificate of ownership for units (the "Certificate") to
be issued under the Indenture and Agreement; and
(l) Such other pertinent records and documents as we have deemed
necessary.
With your permission, in such examination, we have assumed
the following: (a) the authenticity of original documents and the
genuineness of all signatures; (b) the conformity to the originals of
all documents submitted to us as copies; (c) the truth, accuracy,
and completeness of the information, representations, and warranties
contained in the records, documents, instruments and certificates we
have reviewed; (d) except as specifically covered in the opinions set
forth below, the due authorization, execution, and delivery on behalf
of the respective parties thereto of documents referred to herein and
the legal, valid, and binding effect thereof on such parties; and (e)
the absence of any evidence extrinsic to the provisions of the written
agreement(s) between the parties that the parties intended a
meaning contrary to that expressed by those provisions. However,
we have not examined the securities deposited pursuant to the
Indenture and Agreement (the "Securities") nor the contracts for the
Securities.
We express no opinion as to matters of law in jurisdictions other
than the State of New York (except "Blue Sky" laws) and the federal laws
of the United States, except to the extent necessary to render the
opinion as to the Depositor in paragraph (i) below with respect to
Delaware law. As you know we are not licensed to practice law in the
State of Delaware, and our opinion in paragraph (i) and (iii) as to
Delaware law is based solely on review of the official statutes of the
State of Delaware.
Based upon such examination, and having regard for legal
considerations which we deem relevant, we are of the opinion that:
(i) The Depositor is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Delaware with full
corporate power to conduct its business as described in the
Prospectus;
(ii) The Depositor is duly qualified as a foreign corporation and is in
good standing as such within the State of New York;
(iii)The terms and provisions of the Units conform in all material
respects to the description thereof contained in the Prospectus;
(iv) The consummation of the transactions contemplated under the
Indenture and Agreement and the fulfillment of the terms thereof
will not be in violation of the Depositor's Restated Certificate of
Incorporation, as amended, or By-Laws, as amended and will not
conflict with any applicable laws or regulations applicable to the
Depositor in effect on the date hereof; and
(v) The Certificates to be issued by the Trust, when duly executed by
the Depositor and the Trustee in accordance with the Indenture
and Agreement, upon delivery against payment therefor as
described in the Prospectus will constitute fractional undivided
interests in the Trust enforceable against the Trust in accordance
with their terms, will be entitled to the benefits of the Indenture
and Agreement and will be fully paid and non-assessable.
Our opinion that any document is valid, binding, or enforceable in
accordance with its terms is qualified as to:
(a) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium, or other laws
relating to or affecting the enforcement of creditors' rights
generally;
(b) rights to indemnification and contribution which may be limited by
applicable law or equitable principles; and
(c) general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
We hereby represent that the Amendment contains no disclosure
which would render it ineligible to become effective immediately
upon filing pursuant to paragraph (b) of Rule 485 of the
Commission.
We hereby consent to the filing of this opinion as an exhibit to
the Amendment and to the use of our name wherever it appears in
the Amendment and the Prospectus.
Very truly yours,
/s/ CARTER, LEDYARD & MILBURN
February 11, 1998
PaineWebber Incorporated
1200 Harbor Boulevard
Weehawken, New Jersey 07087
Dear Sirs:
As counsel for PaineWebber Incorporated (the
"Depositor"), we have examined an executed copy of the
Trust Indenture and Agreement dated the date of initial
deposit of the Trust (the "Indenture") which
incorporates the Standard Terms and Conditions of Trust
(the "Agreement"), both between the Depositor, and
Investors Bank & Trust Company and the First National
Bank of Chicago as Co-Trustees (the "Trustee"). The
Indenture established a trust called PaineWebber
Pathfinders Trust, Treasury and Growth Stock Series 15
(the "Trust") into which the Depositor deposited
certain United States Treasury obligations or evidences
thereof, and stocks (the "Securities"), and moneys to
be held by the Trustee upon the terms and conditions
set forth in the Indenture and Agreement. Under the
Indenture, certificates of ownership were issued on the
Initial Date of Deposit representing units of
fractional undivided interest in said Trust (the
"Units").
Based upon the foregoing and upon an examination of
such other documents and an investigation of such
matters of law as we have deemed necessary, we are of
the opinion that, under existing statutes and
decisions:
1. The Trust is not an association taxable as a
corporation for federal income tax purposes. Under the
Internal Revenue Code of 1986, as amended (the "Code"),
each Unitholder will be treated as the owner of a pro
rata portion of the Trust, and income of the Trust will
be treated as income of the Unitholders.
2. Each Unitholder will have a taxable event when the
Trust disposes of a Security (whether by sale,
exchange, redemption, or payment at maturity) or when
the Unitholder sells its Units or redeems its Units for
cash.
3. The Trust is not an association taxable as a
corporation for New York State income tax purposes.
Under New York State law, each Unitholder will be
treated as the owner of a pro rata portion of the Trust
and the income of the Trust will be treated as income
of the Unitholders.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement relating to the
Units and the Trust referred to above and to the use of
our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Very truly yours,
/s/ CARTER, LEDYARD & MILBURN
<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 YEAR
<FISCAL-YEAR-END> OCT-31-1997 OCT-31-1996 OCT-31-1995
<PERIOD-START> NOV-01-1996 NOV-01-1995 NOV-01-1994
<PERIOD-END> OCT-31-1997 OCT-31-1996 OCT-31-1995
<EXCHANGE-RATE> 1 1 1
<INVESTMENTS-AT-COST> 23,669,892 0 0
<INVESTMENTS-AT-VALUE> 35,411,216 0 0
<RECEIVABLES> 21,649 0 0
<ASSETS-OTHER> 13,205 0 0
<OTHER-ITEMS-ASSETS> 0 0 0
<TOTAL-ASSETS> 35,446,070 0 0
<PAYABLE-FOR-SECURITIES> 0 0 0
<SENIOR-LONG-TERM-DEBT> 0 0 0
<OTHER-ITEMS-LIABILITIES> 19,036 0 0
<TOTAL-LIABILITIES> 19,036 0 0
<SENIOR-EQUITY> 0 0 0
<PAID-IN-CAPITAL-COMMON> 0 0 0
<SHARES-COMMON-STOCK> 22,100,000 0 0
<SHARES-COMMON-PRIOR> 30,200,000 0 0
<ACCUMULATED-NII-CURRENT> 20,648 0 0
<OVERDISTRIBUTION-NII> 0 0 0
<ACCUMULATED-NET-GAINS> 0 0 0
<OVERDISTRIBUTION-GAINS> (4,830) 0 0
<ACCUM-APPREC-OR-DEPREC> 11,741,324 0 0
<NET-ASSETS> 35,427,034 0 0
<DIVIDEND-INCOME> 326,493 380,501 554,320
<INTEREST-INCOME> 0 0 0
<OTHER-INCOME> 1,027,425 1,282,776 1,885,459
<EXPENSES-NET> 55,476 86,633 135,655
<NET-INVESTMENT-INCOME> 1,298,442 1,576,644 2,304,124
<REALIZED-GAINS-CURRENT> 3,497,937 2,314,942 1,263,304
<APPREC-INCREASE-CURRENT> 4,192,278 1,043,158 10,275,583
<NET-CHANGE-FROM-OPS> 8,988,657 4,934,744 13,843,011
<EQUALIZATION> 0 0 0
<DISTRIBUTIONS-OF-INCOME> 252,835 298,431 407,510
<DISTRIBUTIONS-OF-GAINS> 0 0 0
<DISTRIBUTIONS-OTHER> 0 0 0
<NUMBER-OF-SHARES-SOLD> 0 0 0
<NUMBER-OF-SHARES-REDEEMED> 8,100,000 12,100,000 23,700,000
<SHARES-REINVESTED> 0 0 0
<NET-CHANGE-IN-ASSETS> (3,289,368) (9,931,337) (11,122,269)
<ACCUMULATED-NII-PRIOR> 0 0 0
<ACCUMULATED-GAINS-PRIOR> 0 0 0
<OVERDISTRIB-NII-PRIOR> 0 0 0
<OVERDIST-NET-GAINS-PRIOR> 0 0 0
<GROSS-ADVISORY-FEES> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<GROSS-EXPENSE> 0 0 0
<AVERAGE-NET-ASSETS> 0 0 0
<PER-SHARE-NAV-BEGIN> 0 0 0
<PER-SHARE-NII> 0 0 0
<PER-SHARE-GAIN-APPREC> 0 0 0
<PER-SHARE-DIVIDEND> 0 0 0
<PER-SHARE-DISTRIBUTIONS> 0 0 0
<RETURNS-OF-CAPITAL> 0 0 0
<PER-SHARE-NAV-END> 2 0 0
<EXPENSE-RATIO> 0 0 0
<AVG-DEBT-OUTSTANDING> 0 0 0
<AVG-DEBT-PER-SHARE> 0 0 0
</TABLE>
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to our firm under the caption
"Independent Auditors" and to the use of our report dated
February 2, 1998, 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, 1998
