File No. 33-49437
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 5
TO
FORM S-6
For Registration Under the Securities Act of 1933 of Securities of
Unit Investment Trusts Registered on Form N-8B-2.
A. Exact name of Trust:
PAINEWEBBER PATHFINDERS TRUST, TREASURY AND GROWTH STOCK
SERIES 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 March 3, 1999) pursuant to paragraph
(b) of Rule 485.
E. Total and amount of securities being registered:
An indefinite number of units of Beneficial Interest pursuant to Rule
24f-2 under the Investment Company Act of 1940.
F. Proposed maximum offering price to the public of the securities being
registered:
Indefinite pursuant to Rule 24f-2
G. Amount of filing fee, computed at one-thirty-fourth of 1 percent of the
proposed maximum aggregate offering price to the public:
In accordance with Rule 24f-2, a fee in the amount of $0 was paid on
March 20, 1998 in connection with the filing of the Rule 24f-2 Notice
for the Trust's most recent fiscal year.
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT.
PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES 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)
18,100,000 Units
Portfolio of "Zero-Coupon" U.S. Treasury
Obligations and Common Stocks
Designed for Preservation of Capital and
Potential Capital Appreciation
This Prospectus consists of two parts: Part A and
Part B. Parts A and B should both be attached for
this Prospectus to be complete.
The Securities and Exchange Commission has not
approved or disapproved these Securities or
passed upon the adequacy of this prospectus. Any
representation to the contrary is a criminal
offense.
SPONSOR:
PAINEWEBBER INCORPORATED
PROSPECTUS PART A DATED MARCH 3, 1999
No person is authorized to give any information
or make any representations about this Trust not
contained in this Prospectus, and you should not
rely on any other information. Read and keep both
parts of this prospectus for future reference.
Table of Contents
Part A Page
Brief Description of the Trust's Investment Portfolio A - 3
Is this Trust Appropriate for You? A - 5
Summary of Risks A - 5
Essential Information Regarding the Trust A - 8
Report of Independent Auditors A - 9
Statement of Financial Condition A - 10
Statement of Operations A - 11
Statement of Changes in Net Assets A - 12
Notes to Financial Statements A - 13
Schedule of Investments A - 14
Part B
The Composition of the Trust's Portfolio B - 1
About the Trust B - 1
Risk Factors and Special Considerations B - 2
Federal Income Taxes B - 4
Public Offering of Units B - 6
Public Offering Price B - 6
Sales Charge and Volume Discount B - 6
Employee Discount B - 7
Exchange Option B - 7
Conversion Option B - 8
Distribution of Units B - 9
Secondary Market for Units B - 9
Sponsor's Profits B - 9
Redemption B - 9
Valuation B - 10
Comparison of Public Offering Price and
Redemption Value B - 11
Expenses of the Trust B - 11
Rights of Unitholders B - 12
Distributions B - 12
Administration of the Trust B - 13
Accounts B - 13
Reports and Records B - 13
Portfolio Supervision B - 13
Reinvestment B - 14
Amendment of the Indenture B - 14
Termination of the Trust B - 14
Sponsor B - 15
Trustee B - 15
Independent Auditors B - 15
Legal Opinions B - 15
PAINEWEBBER PATHFINDERS TRUST, TREASURY AND
GROWTH STOCK
SERIES FIFTEEN - PART A
Brief Description of the Trust's Investment
Portfolio
1. The Trust's Objective.
The Trust seeks to provide preservation of
capital and potential capital appreciation
through an investment in a portfolio of stripped
"zero-coupon" United States Treasury obligations
maturing on February 15, 2005 and common stocks.
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 March 2, 2005, the Trust's
"Mandatory Termination Date".
As of the date of this Prospectus Part A, 38% of
the Trust's Portfolio was invested in interest-
only portions of United States Treasury
obligations and the remaining 62% was invested in
common stocks as described briefly below.
The stripped "zero-coupon" U.S. Treasury
Obligations make no payment of current interest,
but rather make a single payment upon their
stated maturity. PaineWebber chose the stocks in
the Trust's Portfolio for their capital
appreciation potential, not for their income
potential. Many of the stocks currently pay
little or no dividend income.
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 purchased their Units at or below
$1,000 per 1,000 Units and who hold their units
to the Mandatory Termination Date 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 Stocks are valueless.
2. Brief Description of the Trust's Portfolio.
The Trust is a unit investment trust which means
that, unlike a mutual fund, the Trust's Portfolio
is not managed and the Trust Portfolio's
investments are not sold because of market
changes.
Unless terminated sooner, the Trust is scheduled
to terminate on or about March 2, 2005 regardless
of market conditions at the time. The Trust plans
to hold until its termination the U.S. Treasury
obligations maturing February 15, 2005 and a
diversified group of stocks, all as shown on the
"Schedule of Investments" in this Prospectus Part
A.
The main objective of PaineWebber in constructing
the portfolio of stocks to be included in the
Trust was to select a group of stocks which, in
PaineWebber's view, would be capable of, over the
long term, closely tracking the performance of
the market as measured by the S&P 500. The S&P
500 is an unmanaged index of 500 stocks
calculated under the auspices of Standard &
Poor's, which, in PaineWebber's view, is a
broadly diversified, representative segment of
the market of all publicly traded stocks in the
United States.
On October 31, 1998, the aggregate market value
of the Trust Portfolio was $35,615,689.
When the Trust's Portfolio was constructed in
1993, a computer program was generated against
the 500 S&P stocks to identify a combination of
35 S&P 500 stocks (excluding those stocks rated
"Unattractive" or "Sell" by PaineWebber Equity
Research) which, when equally weighted, have the
highest correlation with the S&P 500 Index with
the smallest tracking error.
When the Trust was first created, a number of
stocks related to the "electronic superhighway"
were included in the Trust Portfolio.
PaineWebber used the term "electronic
superhighway" to describe the integration of
television, telephone, radio, computer and other
methods of sending, sharing and storing
electronic information. The rest of the Trust
Portfolio, in the Sponsor's opinion, held a
diversified group of companies in the
transportation, construction, financial and
consumer related fields to provide balance to the
Trust Portfolio.
As of October 31, 1998, the Trust Portfolio holds
42* stocks, 13 of which are in the electronic
superhighway.
The common stocks in the Trust's Portfolio have
been issued by companies who receive income and
derive revenues from multiple industry sources,
but whose primary industry is listed in the
"Schedule of Investments" in this Prospectus Part
A. A brief description of these issuers can be
found in Part B of this Prospectus.
Approximate
Percent
of Aggregate
Market Value
Primary Industry Source of the Trust
Automobile 1.09%
Banking and Financial Institutions 4.98%
Beverage 4.64%
Chemical 1.48%
Computer Software 13.25%
Consumer Goods 1.50%
Consumer/Industrial Goods .70%
Cosmetics/Household Products 1.88%
Entertainment 2.78%
Fiberglass Products .62%
Information Technology .07%
Insurance .08%
International Oil 1.14%
Machinery .31%
Mining .33%
Multimedia .21%
Oil 1.56%
Pharmaceuticals 3.80%
Photography .63%
Railroad 1.87%
Restaurants .25%
Retail 4.48%
Semi-Conductor 3.10%
Steel .32%
Telecommunications 9.98%
Tire and Rubber .38%
Waste Management .39%
___________
* 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.
Is this Trust Appropriate for You?
Yes, if you are a long-term investor
seeking capital protection combined with
potential capital appreciation over the life of
the Trust. You will benefit from a professionally
selected portfolio whose risk is reduced by
investing in stocks of several different issuers.
No, if you want a speculative investment
that changes to take advantage of market
movements, if you are unable or unwilling to
assume the risks involved generally with equity
investment or if you need current income.
Summary of Risks
You can lose money by investing in the
Trust. This can happen for various reasons. A
further discussion of the risks summarized below
can be found in Part B of this Prospectus.
1. Risks of Investing in the Trust
Certain risks are involved with an
investment in a unit trust which holds stripped
"zero-coupon" U.S. Treasury obligations and
common stocks. For example:
The Trust, unlike a mutual fund, is not
"managed", so neither the U.S. Treasury
Obligations nor the stocks will be sold by the
Trust to take advantage of market fluctuations.
The Trust Portfolio may not remain constant
during the life of the Trust. The Trustee may be
required to sell stocks to pay Trust expenses, to
tender stocks under certain circumstances or to
sell stocks in the event certain negative events
occur.
The sale of stocks from 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 you receive upon termination may be less
than the amount you paid.
If many investors sell their Units, the Trust
will have to sell Portfolio Securities. This
could reduce the diversification of your
investment and increase your share of Trust
expenses.
The price of your Units depends upon the full
range of economic and market influences including
the prices of bonds and equity securities,
current interest rates, the condition of the bond
and stock markets and other economic influences
that affect the global or Untied States economy.
Assuming no changes occur in the prices of the
U.S. Treasury Obligations and the stocks held by
the Trust, the price you paid for your Units will
generally be less then the price you paid because
your purchase price included a sales charge.
The stocks in the Trust's Portfolio will
generally trade on a domestic stock exchange or
in the over-the-counter market. We cannot assure
you that a liquid trading market will exist. The
value of the Trust's Portfolio, and of your
investment, may be reduced if trading in one or
more stocks is limited or absent.
Additional stocks and U.S. Treasury Obligations
may be acquired by the Trust when additional
Units are to be offered to the public. Costs
incurred in acquiring such additional stocks and
Treasury Obligations will be borne by the Trust.
Unitholders will experience a dilution of their
investment as a result of such brokerage fees and
other expenses paid by the Trust during the
additional deposits of securities purchased by
the Trustee with cash or cash equivalents.
Investing always involves risk. The risks
described below are the most significant risks
associated with investing in the U.S. Treasury
Obligations and stocks held by the Trust.
2. Risks of Investing in Stripped "Zero-Coupon"
U.S. Treasury Obligations
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.
Owners of deep discount bonds which make no
current interest payments earn a fixed yield not
only on the original investment but also on all
earned discount during the life such obligation.
This implicit reinvestment of earnings at the
same, fixed rate eliminates the owner's ability
to reinvest at higher rates in the future. For
this reason, 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.
3. Risks of Investing in Stocks
Holders of common stocks such as those held by
the Trust have rights that are generally inferior
to the holders of debt obligations or preferred
stocks.
Common stocks are not obligations of the issuer.
Therefore, they do not provide any assurance of
income or provide the degree of protection of
debt securities.
The stocks held by the Trust can be expected to
fluctuate in value depending on a wide variety of
factors, such as economic and market influences
affecting corporate profitability, financial
condition of issuers, changes in worldwide or
national economic conditions, the prices of
equity securities in general and the Trust's
stocks in particular.
Certain of the stocks in the Trust may be
American Depositary Receipts or "ADRs" which are
subject to additional risks. (See "Schedule of
Investments" herein.) ADRs are subject to
certain investment risks that are different from
those experienced by Stocks issued by domestic
issuers. These investment risks include
potential future political and economic
developments and the potential establishment of
exchange controls, new or higher levels of
taxation, or other governmental actions which
might adversely affect the payment or receipt of
payment of dividends on the common stock of
foreign issuers underlying such ADRs. ADRs may
also be subject to current foreign taxes, which
could reduce the yield on such securities.
The securities underlying the ADRs held in the
Trust are generally denominated, and pay
dividends, in foreign currency and are therefore
subject to currency exchange rate risk. Currency
exchange rate risk occurs because the U.S. dollar
value of the shares underlying the ADRs and of
their dividends will vary with the fluctuations
in the U.S. dollar foreign exchange rates for the
relevant currency in which the shares underlying
the ADRs are denominated. Exchange rate
fluctuations are dependent on a number of
economic factors including the world economy and
the economic conditions within the relevant
country, supply and demand of the relevant
currency, interest rate differentials between
currencies, the balance of imports and exports of
goods and services, monetary and fiscal policies
of the relevant country, perceived political
stability and investor psychology, especially
that of institutional investors predicting the
future relative strength or weakness of a
particular currency.
Year 2000 Problem Risk
Many computer systems were designed in such a
way that they may be unable to distinguish
between the year 2000 and the year 1900 and
therefore may not properly process and calculate
date-related information and data (commonly know
as the "Year 2000 Problem"). As with all
investment and financial companies, the Year 2000
Problem may have an adverse impact upon the
Trust. The Sponsor and the Trustee are taking
steps to address the year 2000 Problem with
respect to the computer systems they use and to
obtain reasonable assurances that similar steps
are being taken by the Trust's other service
providers. At this time, however, there can be
no assurance that these steps will be sufficient
to avoid any adverse impact to the Trust. The
year 2000 Problem is expected to have an impact
on all corporations, including those whose stocks
are contained in the Trust's Portfolio. The
Sponsor cannot predict what impact, if any, the
year 2000 Problem will have on the stocks in the
Trust.
<TABLE>
ESSENTIAL INFORMATION REGARDING THE TRUST
<CAPTION>
As of October 31, 1998
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: $35,615,689
Number of Units: 18,100,000
Minimum Purchase: $250
Fractional Undivided Interest in the Trust Represented by
Each Unit: 1/18,100,000th
Calculation of Public Offering Price Per Unit:
Value of Net Assets in Trust $35,631,925
Divided by 18,100,000 Units $1.9686
Plus Sales Charge of 4.25% of Public Offering Price $.0874
Public Offering Price per Unit $2.0560
Redemption Value per Unit $1.9686
Excess of Public Offering Price over Redemption Value per Unit: $.0874
Sponsor's Repurchase Price per Unit $1.9686
Excess of Public Offering over Sponsor's Repurchase Price per Unit: $.0874
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 * *: $.00272 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, 1998 and the related statements
of operations and changes in net assets for each
of the three years in the period then ended.
These financial statements are the responsibility
of the Co-Trustees. Our responsibility is to
express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about
whether the financial statements are free of
material misstatement. An audit includes
examining, on a test basis, evidence supporting
the amounts and disclosures in the financial
statements. Our procedures included confirmation
of the securities owned as of October 31, 1998,
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, 1998
and the results of its operations and changes in
its net assets for each of the three years in the
period then ended, in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
February 9, 1999
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
STATEMENT OF FINANCIAL CONDITION
October 31, 1998
<CAPTION>
ASSETS
<S> <C> <C>
Treasury Obligation - at market value (Cost $11,972,164)
(note A and note 1 to schedule of investments) $13,599,960
Common Stock - at market value (Cost $8,165,085)
(note 1 to schedule of investments) 22,015,729
Accrued dividends receivable 17,635
Cash 14,975
Total Assets $35,648,299
LIABILITIES AND NET ASSETS
Accrued expenses payable $16,374
Total Liabilities $16,374
Net Assets (18,100,000 units of fractional undivided interest outstanding):
Cost to investors (note B) $21,031,069
Less gross underwriting commissions (note C) (893,820)
20,137,249
Net unrealized market appreciation (note D) 15,478,440
Net amount applicable to unitholders 35,615,689
Undistributed investment income-net 13,627
Undistributed proceeds from securities sold 2,609
Net Assets 35,631,925
Total Liabilities and Net Assets $35,648,299
Net Asset Value per unit $1.9686
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,
1998 1997 1996
<S> <C> <C> <C>
Operations:
Investment income:
Accretion on Treasury Obligation $843,361 $1,027,425 $1,282,776
Dividend Income 258,970 326,493 380,501
Total investment income 1,102,331 1,353,918 1,663,277
Less expenses:
Trustee's fees, evaluator's expense and other expenses 52,330 55,476 86,633
Total expenses 52,330 55,476 86,633
Investment income-net 1,050,001 1,298,442 1,576,644
Realized and unrealized gain on investments-net:
Net realized gain on securities transactions 3,073,225 3,497,937 2,314,942
Net change in unrealized market appreciation 3,737,116 4,192,278 1,043,158
Net gain on investments 6,810,341 7,690,215 3,358,100
Net increase in net assets resulting from operations $7,860,342 $8,988,657 $4,934,744
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,
1998 1997 1996
<S> <C> <C> <C>
Operations:
Investment income-net $1,050,001 $1,298,442 $1,576,644
Net realized gain on securities transactions 3,073,225 3,497,937 2,314,942
Net change in unrealized market appreciation 3,737,116 4,192,278 1,043,158
Net increase in net assets resulting from operations 7,860,342 8,988,657 4,934,744
Less: Distributions to Unitholders (Note E)
Investment income-net 209,631 252,835 298,431
Total Distributions 209,631 252,835 298,431
Less: Units Redeemed by Unitholders (Note F)
Value of units at date of redemption 6,827,747 11,106,881 13,697,946
Accrued dividends at date of redemption 4,030 10,110 10,360
Accreted discount at date of redemption 614,043 908,199 859,344
Total Redemptions 7,445,820 12,025,190 14,567,650
Increase (decrease) in net assets 204,891 (3,289,368) (9,931,337)
Net Assets:
Beginning of Period 35,427,034 38,716,402 48,647,739
End of Period $35,631,925 $35,427,034 $38,716,402
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
NOTES TO FINANCIAL STATEMENTS
October 31, 1998
(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,
1998 is $3,119,855.
(B) Cost to investors represents the initial
public offering price as of the initial date of
deposit, and the value of units through
supplemental deposits computed on the basis set
forth under "Public Offering Price of Units",
adjusted for accretion on United States Treasury
Obligations and for securities sold since the
date of deposit.
(C) Sales charge of the Public Offering Price
per Unit is computed on the basis set forth under
"Public Offering of Units - Sales Charge and
Volume Discount".
(D) At October 31, 1998, the gross unrealized
market appreciation was $15,637,447 and the gross
unrealized market depreciation was ($159,007).The
net unrealized market appreciation was
$15,478,440.
(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,
1998 1997 1996
<S> <C> <C> <C>
Number of units redeemed 4,000,000 8,100,000 12,100,000
Redemption amount $7,445,820 $12,025,190 $14,567,650
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
SCHEDULE OF INVESTMENTS
As of October 31, 1998
<CAPTION>
TREASURY OBLIGATIONS (38.18%)
Name of Security Coupon Maturity Value Maturity Date Market Value(1)
<C> <C> <C> <C> <C>
U.S. Treasury Interest Payments (2) (38.18%) 0% $18,100,000 February 15, 2005 $13,599,960
COMMON STOCKS (61.82%)
Name of Issuer Number of Shares Market Value
Automotive: (1.09%)
Ford Motor Company 7,192 $390,166
Banking and Financial Institutions: (4.98%)
Associates First Capital Corporation 1,882 132,681
BankAmerica Corporation 7,082 406,749
Fannie Mae 5,750 407,172
Republic New York Corporation 19,775 826,842
Beverage: (4.64%)
The Coca-Cola Company 14,391 973,191
PepsiCo, Inc. 20,129 679,354
Chemical: (1.48%)
DuPont (EI) de Nemours & Company 8,079 464,542
Eastman Chemical Company 723 42,476
PPG Industries, Inc. 362 20,702
Computer Software: (13.25%)
Microsoft Corporation* 44,563 4,718,108
Consumer Goods: (1.50%)
Sara Lee Corporation 8,977 535,815
Consumer/Industrial Goods: (.70%)
General Electric Company 2,861 250,337
Cosmetics/Household Products: (1.88%)
Procter & Gamble Company 7,547 670,740
Entertainment: (2.78%)
Walt Disney Company 36,700 988,606
Fiberglass Products: (.62%)
Owens-Corning Fiberglas Corporation 6,110 221,869
Information Technology: (.07%)
NCR Corporation* 760 25,555
Insurance: (.08%)
Allstate Corporation 662 28,507
International Oil: (1.14%)
Elf Aquitaine ~ 7,002 406,116
Machinery: (.31%)
AlliedSignal, Inc. 2,881 112,179
Mining: (.33%)
Newmont Mining Corporation 5,580 118,575
Multimedia: (.21%)
MediaOne Group, Inc.* 723 30,592
US WEST, Inc. 742 42,572
Oil: (1.56%)
Texaco, Inc. 9,343 554,157
Pharmaceuticals: (3.80%)
Bristol-Myers Squibb Company 1,082 119,629
Pfizer, Inc. 11,495 1,233,557
(Continued)
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES FIFTEEN
SCHEDULE OF INVESTMENTS
As of October 31, 1998
<CAPTION>
COMMON STOCKS (61.82%)
Name of Issuer Number of Shares Market Value(1)
<C> <C> <C>
Photography: (.63%)
Eastman Kodak Company 2,878 $223,045
Railroad: (1.87%)
Burlington Northern Santa Fe 21,519 664,399
Restaurants: (.25%)
Tricon Global Restaurants, Inc.* 2,013 87,566
Retail: (4.48%)
Sears, Roebuck & Company 358 16,088
Wal-Mart Stores, Inc. 22,884 1,578,996
Semi-Conductor: (3.10%)
Intel Corporation 10,057 896,959
Motorola, Inc. 3,957 205,764
Steel: (.32%)
Carpenter Technology Corporation 3,235 113,427
Telecommunications: (9.98%)
AT&T Corporation 12,221 760,757
Bell Atlantic Corporation 8,596 456,662
GTE Corporation 6,992 410,343
Lucent Technologies 7,775 623,458
MCI WorldCom, Inc.* 18,600 1,027,650
Telefonos de Mexico S.A.~ 5,195 274,361
Tire and Rubber: (.38%)
The Goodyear Tire & Rubber Company 2,514 135,442
Waste Management: (.39%)
Waste Management, Inc. 3,103 140,023
TOTAL COMMON STOCKS $22,015,729
TOTAL INVESTMENTS $35,615,689
(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>
PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES 15
PROSPECTUS PART B
PART B OF THIS PROSPECTUS MAY NOT BE
DISTRIBUTED UNLESS ACCOMPANIED BY PART A.
Part B contains a description of the important
features of the PaineWebber Pathfinders Trust
Treasury and Growth Stock Series 15 and also
includes a more detailed discussion of the
investment risks that a Unitholder might face
while holding Trust Units.
THE COMPOSITION OF THE PORTFOLIO
PaineWebber understands the importance of long-
term financial goals such as planning for
retirement, funding a child's education, or
trying to build wealth toward some other
objective.
In PaineWebber's view, one of the most important
investment decisions an investor faces may be
determining how to best allocate his investments
to capture growth opportunities without exposing
his portfolio to undue risk. For long-term
capital growth, many investment experts recommend
stocks. As with all investments, the higher
return potential of equities is typically
associated with higher risk. With this 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 Stocks. Unitholders can
sell units at any time at the then current net
asset value with no additional sales charge. (See
Public Offering of Units--Secondary Market for
Units and Redemption.)
When the Trust Portfolio was selected on
November 30, 1993, PaineWebber designed the
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 which were then in the "buy" or
"attractive" categories as ranked by those
PaineWebber equity analysts following such
stocks. This selection resulted in 243 candidate
stocks. A computer optimization program was then
run against the 243 candidate stocks to construct
the portfolio. The optimization program was
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 was a 2/3 probability that the
return generated by the program-picked portfolio
would 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.
The Trust portfolio, in PaineWebber's opinion,
is comprised of a diversified group of large,
well-known companies representing various
industries. 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 in Part A
above. For a list of the individual common stocks
comprising each industry group listed below,
investors should consult the "Schedule of
Investments" in Part A above.
The Sponsor anticipates that, based upon last
dividends actually paid, dividends from the 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".
ABOUT 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,
_________________
* 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.
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 Stocks. These are equity stocks,
which, in Sponsor's opinion on the Initial Date
of Deposit, are capable of, over the long term,
closely tracking the performance of the market as
measured by the S&P 500. 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, maintaining,
exactly, the original percentage relationship
between the maturity value of the Treasury
Obligations and the number of shares of Stock
deposited on the Initial Date of Deposit and
replicating any cash or cash equivalents held by
the Trust (net of expenses). The original
proportionate relationship is subject to
adjustment to reflect the occurrence of a stock
split or a similar event which affects the
capital structure of the issuer of a Stock but
which does not affect the Trust's percentage
ownership of the common stock equity of such
issuer at the time of such event. Stock dividends
received by the Trust, if any, will be sold by
the Trustee and the proceeds therefrom shall be
treated as income to the Trust. (See "Risk
Factors and Special Considerations" however, for
a discussion of AT&T stock held by the Trust.)
The Treasury Obligations consist of U.S.
Treasury obligations which have been stripped of
their unmatured interest coupons or interest
coupons stripped from the U.S. Treasury
Obligations. The obligor with respect to the
Treasury Obligations is the United States
Government. U.S. Government backed obligations
are considered the safest investment.
On the Initial Date of Deposit each Unit
represented the fractional undivided interest in
the Securities and net income of the Trust set
forth under "Essential Information Regarding the
Trust". However, if additional Units are issued
by the Trust (through the deposit of additional
Securities for purposes of the sale of additional
Units), the aggregate value of Securities in the
Trust will be increased and the fractional
undivided interest represented by each Unit in
the balance will be decreased. If any Units are
redeemed, the aggregate value of Securities in
the Trust will be reduced, and the fractional
undivided interest represented by each remaining
Unit in the balance will be increased. Units will
remain outstanding until redeemed upon tender to
the Trustee by any Unitholder (which may include
the Sponsor) or until the termination of the
Trust. (See "Termination of the Trust".)
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
obligations; 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
issuer will create prior claims for payment of
principal, interest and dividends which could
adversely affect the ability and inclination of
the issuer to declare or pay dividends on its
common stock or the rights of holders of common
stock with respect to assets of the issuer upon
liquidation or bankruptcy. Unlike debt securities
which typically have a stated principal amount
payable at maturity common stocks do not have a
fixed principal amount or a maturity.
Additionally, the value of the Stocks, like the
Treasury Obligations, in the Trust may be
expected 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 Stock in the Trust may be ADRs
which are subject to additional risks. (See
"Schedule of Investments" herein.) ADRs evidence
American Depositary Shares ("ADS"), which, in
turn, represent common stock of foreign issuers
deposited with a custodian in a depositary. (For
purposes of this Prospectus, the term "ADR"
generally includes "ADS".) ADRs involve certain
investment risks that are different from those
experienced by Stocks issued by domestic issuers.
These investment risks include potential future
political and economic developments and the
potential establishment of exchange controls, new
or higher levels of taxation, or other
governmental actions which might adversely affect
the payment or receipt of payment of dividends on
the common stock of foreign issuers underlying
such ADRs. ADRs may also be subject to current
foreign taxes, which could reduce the yield on
such securities. Also, certain foreign issuers
are not subject to reporting requirements under
certain U.S. securities laws and therefore may
make less information publicly available than
that afforded by their domestic counterparts.
Further, foreign issuers are not necessarily
subject to uniform financial reporting, auditing
and accounting standards, requirements and
practices such as are applicable to domestic
issuers.
In addition, the securities underlying the ADRs
held in the Trust are generally denominated, and
pay dividends, in foreign currency. An investment
in securities denominated and principally traded
in foreign currencies involves investment risk
substantially different than an investment in
securities that are denominated and principal
traded in U.S. dollars. This is due to currency
exchange rate risk, because the U.S. dollar value
of the shares underlying the ADRs and of their
dividends will vary with the fluctuations in the
U.S. dollar foreign exchange rates for the
relevant currency in which the shares underlying
the ADRs are denominated. The Trust, however,
will compute its income in United States dollars,
and to the extent any of the Stocks in the Trust
pay income or dividends in foreign currency, the
Trust's computation of income will be made on the
date of its receipt by the Trust at the foreign
exchange rate in effect on such date. PaineWebber
observes that, in the recent past, most foreign
currencies have fluctuated widely in value
against the U.S. dollar for many reasons,
including the soundness of the world economy,
supply and demand of the relevant currency, and
the strength of the relevant regional economy as
compared to the economies of the United States
and other countries. Exchange rate fluctuations
are also dependent, in part, on a number of
economic factors including economic conditions
within the relevant country, interest rate
differentials between currencies, the balance of
imports and exports of goods and services, and
transfer of income and capital from one country
to another. These economic factors in turn are
influenced by a particular country's monetary and
fiscal policies, perceived political stability
(particularly with respect to transfer of
capital) and investor psychology, especially that
of institutional investors predicting the future
relative strength or weakness of a particular
currency. As a general rule, the currency of a
country with a low rate of inflation and a
favorable balance of trade should increase in
value relative to the currency of a country with
a high rate of inflation and deficits in the
balance of trade.
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.
Investors should note that the creation of
additional Units subsequent to the Initial Date
of Deposit may have an effect upon the value of
previously existing Units. To create additional
Units the Sponsor may deposit cash (or cash
equivalents, e.g., a bank letter of credit in
lieu of cash) with instructions to purchase
Securities in amounts sufficient to maintain, to
the extent practicable, the percentage
relationship among the Securities based on the
price of the Securities at the Evaluation Time on
the date the cash is deposited. To the extent the
price of a Security (or the relevant foreign
currency exchange rate, if applicable) increases
or decreases between the time cash is deposited
with instructions to purchase the Security and
the time the cash is used to purchase the
Security, Units will represent less or more of
that Security and more or less of the other
Securities in the Trust. Unitholders will be at
risk because of price (and currency) fluctuations
during this period since if the price of shares
of a Security increases, Unitholders will have an
interest in fewer shares of that Security, and if
the price of a Security decreases, Unitholders
will have an interest in more shares of that
Security, than if the Security had been purchased
on the date cash was deposited with instructions
to purchase the Security. In order to minimize
these effects, the Trust will attempt to purchase
Securities as close as possible to the Evaluation
Time or at prices as close as possible to the
prices used to evaluate the Trust at the
Evaluation Time. Thus price (and currency)
fluctuations during this period will affect the
value of every Unitholder's Units and the income
per Unit received by the Trust. In addition,
costs incurred in connection with the acquisition
of Securities not listed on any national
securities exchange (due to differentials between
bid and offer prices for the Securities) and
brokerage fees, stamp taxes and other costs
incurred in purchasing stocks will be at the
expense of the Trust and will affect the value of
every Unitholder's Units.
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 discount").
Original issue discount represents interest for
federal income tax purposes and can generally be
defined as the difference between the price at
which a bond was issued and its stated redemption
price at maturity. For purposes of the preceding
sentence, stripped obligations, such as the
Treasury Obligations, which variously consist
either of the right to receive payments of
interest or the right to receive payments of
principal, are treated by each successive
purchaser as originally issued on their purchase
dates at an issue price equal to their respective
purchase prices thereof. The market value of the
Trust assets will be provided to a Unitholder
upon request in order to enable the Unitholder to
calculate the original issue discount
attributable to each of the Treasury Obligations.
Original issue discount on Treasury Obligations
(which were issued or treated as issued on or
after July 2, 1982) is deemed earned over the
life of such obligation, taking into account the
compounding of accrued interest at least
annually, resulting in an increasing amount of
income in each year. Each Unitholder is required
to include in income each year the amount of
original issue discount which accrues on its pro
rata portion of each Treasury Obligation which
(with respect to such Unitholder) has original
issue discount. The amount of accrued original
issue discount included in income with respect to
a Unitholder's interest in Treasury Obligations
is thereupon added to the tax cost for such
obligations.
Gain or Loss on Sale. If a Unitholder sells or
otherwise disposes of a Unit, the Unitholder
generally will recognize gain or loss in an
amount equal to the difference between the amount
realized on the disposition allocable to the
Securities and the Unitholder's adjusted tax
bases in the Securities. In general, such
adjusted tax bases will equal the Unitholder's
aggregate cost for the Unit increased by any
accrued original issue discount. Such gain or
loss will be capital gain or loss if the Unit and
underlying Securities were held as capital
assets, except that such gain will be treated as
ordinary income to the extent of any accrued
original issue discount not previously reported.
Each Unitholder generally will also recognize
taxable gain or loss when all or part of its pro
rata portion of a Security is sold or otherwise
disposed of for an amount greater or less than
its per Unit tax cost therefor.
Capital gains realized by non corporate
taxpayers are generally taxable at a maximum rate
of 20% if the taxpayer has a holding period of
more than 12 months.
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
of Units in the secondary market will be the
Trust Fund Evaluation per Unit next determined
after receipt of a purchase order, determined
with respect to the Treasury Obligations on the
bid side of the market, plus the applicable sales
charge. (See "Valuation".)
Sales Charge and Volume Discount. Sales charges
for secondary market sales are set forth below. A
discount in the sales charge is available to
volume purchasers of Units due to economies of
scales in sales effort and sales related expenses
relating to volume purchases. The sales charge
applicable to volume purchasers of Units is
reduced on a graduated scale for sales to any
person of at least $50,000 or 50,000 Units,
applied on whichever basis is more favorable to
the purchaser.
Secondary Market From December 1, 1996 Through
November 30, 2000
Percent of
Public Percent of
Aggregate Offering Net Amount
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
December 1, 2000 on and After
Through November 30, 2002 December 1, 2002
Percent of Percent of
Public Percent of Public Percent of
Offering Net Amount Offering Net Amount
Price Invested Price Invested
3.25% 3.36% 2.25% 2.30%
The volume discount sales charge shown above
will apply to all purchases of Units on any one
day by the same person in the amounts stated
herein, and for this purpose purchases of Units
of this Trust will be aggregated with concurrent
purchases of any other trust which may be offered
by the Sponsor. Units held in the name of the
purchaser's spouse or in the name of a
purchaser's child under the age of 21 are deemed
for the purposes hereof be registered in the name
of the purchaser. The reduced sales charges are
also applicable to a trustee or other fiduciary
purchasing Units for a single trust estate or
single fiduciary account.
Employee Discount. Due to the realization of
economies of scale in sales effort and sales
related expenses with respect to the purchase of
Units by employees of the Sponsor and its
affiliates, the Sponsor does not intend to impose
a sales charge on such employee sales.
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
PaineWebber Municipal Bond Fund Series (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 Municipal
Bond Trust, Insured Series (the "Insured
Series"); The Corporate Bond Trust, (the
"Corporate Series"); The PaineWebber Pathfinders
Trust, (the "Pathfinders Series"), The
PaineWebber Federal Government Trust, (the
"Government Series") or the PaineWebber Equity
Trust, (the "Equity Series") (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. Unitholders of this
Trust are not eligible for the Exchange Option
into (1) any Exchange Trust designated as a
rollover series for the 30 day period prior to
termination of such Trust or (2) any Exchange
Trust subject to a deferred sales charge. The
purpose of such reduced sales charge is to permit
the Sponsor to pass on to the Unitholder who
wishes to exchange Units the cost savings
resulting from such exchange of Units. The cost
savings result from reductions in time and
expense related to advice, financial planning and
operational expense required for the Exchange
Option. Each Exchange Trust has different
investment objectives, therefore a Unitholder
should read the prospectus for the applicable
Exchange Trust carefully prior to exercising this
option. Exchange Trusts having as their objective
the receipt of tax-exempt interest income would
not be suitable for tax-deferred investment plans
such as Individual Retirement Accounts. A
Unitholder who purchased Units of a series and
paid a per unit sales charge that was less than
the per Unit sales charge of the series of
Exchange Trusts for which such Unitholder desires
to exchange into, will be allowed to exercise the
Exchange Option at the Unit Offering Price plus
the reduced sales charge, provided the Unitholder
has held the Units for at least five months. Any
such Unitholder who has not held the Units to be
exchanged for the five-month period will be
required to exchange them at the Unit Offering
Price plus a sales charge based on the greater of
the reduced sales charge, or an amount which,
together with the initial sales charge paid in
connection with the acquisition of the Units
being exchanged, equals the sales charge of the
series of the Exchange Trust for which such
Unitholder desires to exchange into, determined
as of the date of the exchange.
The Sponsor will permit exchanges at the reduced
sales charge provided there is either a primary
market for Units or a secondary market maintained
by the Sponsor in both the Units of this series
and units of the applicable Exchange Trust and
there are units of the applicable Exchange Trust
available for sale. While the Sponsor has
indicated that it intends to maintain a market
for the Units of the respective Trusts, there is
no obligation on its part to maintain such a
market. Therefore, there is no assurance that a
market for Units will in fact exist on any given
date at which a Unitholder wishes to sell his
Units of this series and thus there is no
assurance that the Exchange Option will be
available to a Unitholder. Exchanges will be
effected in whole Units only, but Unitholders
will be permitted to advance new money in order
to complete an exchange to round up to the next
highest number of Units. An exchange of Units
pursuant to the Exchange Option will normally
constitute a "taxable event," i.e., a Unitholder
will recognize a tax gain or loss which will be
of a capital or ordinary income nature depending
upon the length of time he has held his Units and
other factors. Unitholders are urged to consult
their own tax advisors as to the tax consequences
to them of exchanging Units in particular cases.
The Sponsor reserves the right to modify,
suspend or terminate this Exchange Option at any
time without further notice to Unitholders. In
the event the Exchange Option is not available to
a Unitholder at the time he wishes to exercise
it, the Unitholder will be immediately notified
and no action will be taken with respect to his
Units without further instruction from the
Unitholder.
To exercise the Exchange Option, a Unitholder
should notify the Sponsor of his desire to
exercise the Exchange Option and to use the
proceeds from the sale of his Units to the
Sponsor of this series to purchase Units of one
or more of the Exchange Trusts from the Sponsor.
If Units of the applicable outstanding series of
the Exchange Trust are at that time available for
sale, and if such Units may lawfully be sold in
the state in which the Unitholder is resident,
the Unitholder may select the series or group of
series for which he desires his investment to be
exchanged. The Unitholder will be provided with a
current prospectus or prospectuses relating to
each series in which he indicated interest.
The exchange transaction will operate in a
manner essentially identical to any secondary
market transaction, i.e., Units will be
repurchased at a price based on the market value
of the Securities in the portfolio of the Trust
next determined after receipt by the Sponsor of
an exchange request and properly endorsed
Certificate. Units of the Exchange Trust will be
sold to the Unitholder at a price based upon the
next determined market value of the Securities in
the Exchange Trust plus the reduced sales charge.
Exchange transactions will be effected only in
whole units; thus, any proceeds not used to
acquire whole units will be paid to the selling
Unitholder.
For example, assume that a Unitholder, who has
three thousand units of a trust with a current
price of $1.30 unit, desires to sell his units
and seeks to exchange the proceeds for units of a
series of an Exchange Trust with a current price
of $890 per unit based on the bid prices of the
underlying securities. In this example, which
does not contemplate any rounding up to the next
highest number of Units, the proceeds from the
Unitholder's units would aggregate $3,900. Since
only whole units of an Exchange Trust may be
purchased under the Exchange Option, the
Unitholder would be able to acquire four units in
the Exchange Trust for a total cost of $3,620
($3,560 for the units and $60 for the sales
charge). If all 3,000 units were tendered, the
remaining $280 would be returned to the
Unitholder.
Conversion Option. In addition to the Exchange
Option described in this Prospectus, owners of
units of any registered unit investment trust
sponsored by another which was initially offered
at a maximum applicable sales charge of at least
3.0% (a "Conversion Trust") may elect to apply
the cash proceeds of the sale or redemption of
those units directly to acquire available units
of any Exchange Trust at a reduced sales charge
of $15 per Unit (or per 100 Units in the case of
Exchange Trusts having a Unit price of
approximately $10, or per 1,000 Units in the case
of Exchange Trusts having a Unit price of
approximately $1), subject to the terms and
conditions applicable to the Exchange Option
(except that no secondary market is required for
Conversion Trust units). To exercise this option,
the owner should notify his retail broker. He
will be given a prospectus for each series in
which he indicates interest and for which units
are available. The dealer must sell or redeem the
units of the Conversion Trust. Any dealer other
than PaineWebber must certify that the purchase
of units of the Exchange Trust is being made
pursuant to and is eligible for the Conversion
Option. The dealer will be entitled to two thirds
of the applicable reduced sales charge. The
Sponsor reserves the right to modify, suspend or
terminate the Conversion Option at any time
without further notice, including the right to
increase the reduced sales charge applicable to
this option (but not in excess of $5 more per
Unit (or per 100 Units or per 1,000 Units, as
applicable) than the corresponding fee then being
charged for the Exchange Option). For a
description of the tax consequences of a
conversion reference is made to the Exchange
Option section of the prospectus.
Distribution of Units. The minimum purchase is
$250. 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 expenses) and other
Trust expenses. The per Unit Trust Fund
Evaluation is calculated by dividing the result
of such computation by the number of Units
outstanding as of the date thereof. Business days
do not include Saturdays, Sundays, New Year's
Day, Martin Luther King, Jr.'s Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day and
other days that the New York Stock Exchange is
closed.
The value of Stocks shall be determined by the
Trustee in good faith in the following manner:
(1) if the Securities are listed on one or more
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
Redemption Value is determined on the basis of
the current bid prices of the Treasury
Obligations. The Stocks are valued on the same
basis for the initial and secondary markets and
for purposes of redemptions. On the 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 $.00102 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 instruments of transfer.
Uncertificated Units are transferable by
presentation to Investors Bank & Trust Company at
its office of a written instrument of transfer.
Certificates may be issued in denominations of
one Unit or any integral multiple thereof as
deemed appropriate by the Trustee. A Unitholder
may be required to pay $2.00 per certificate
reissued or transferred, and shall be required to
pay any governmental charge that may be imposed
in connection with each such transfer or
interchange. For new certificates issued to
replace destroyed, mutilated, stolen or lost
certificates, the Unitholder must furnish
indemnity satisfactory to the Trustee and must
pay such expenses as the Trustee may incur.
Mutilated certificates must be surrendered to
Investors Bank & Trust 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 represented by a Unit
or (2) reduce the percentage of Unitholders
required to consent to any such amendment,
without the consent of all Unitholders.
The Trustee will promptly notify Unitholders of
the substance of any amendment affecting
Unitholders rights or their interest in the
Trust.
TERMINATION OF THE TRUST
The Indenture provides that the Trust will
terminate within 15 days after the maturity of
the Treasury Obligations held in the Trust. If
the value of the Trust as shown by any evaluation
is less than twenty percent (20%) of the market
value of the Securities on the Initial Date of
Deposit, the Trustee may in its discretion, and
will when so directed by the Sponsor, terminate
such Trust. The Trust may also be terminated at
any time by the written consent of 51% of the
Unitholders or by the Trustee upon the
resignation or removal of the Sponsor if the
Trustee determines termination to be in the best
interest of the Unitholders. In no event will the
Trust continue beyond the Mandatory Termination
Date.
As directed by the Sponsor approximately 30 days
prior to the maturity of the Treasury Obligations
the Trustee will begin to sell the Stocks held in
the Trust. Stocks having the greatest amount of
capital appreciation will be sold first. Upon
termination of the Trust, the Trustee will sell
any Stocks then remaining in the Trust and will
then, after deduction of any fees and expenses of
the Trust and payment into the Reserve Account of
any amount required for taxes or other
governmental charges that may be payable by the
Trust, distribute to each Unitholder, upon
surrender for cancellation of his Certificate
after due notice of such termination, such
Unitholder's pro rata share in the Income and
Capital Accounts. Monies held upon the sale of
Securities will be held in non-interest bearing
accounts created by the Indenture until
distributed and will be of benefit to the
Trustee. The sale of Stocks in the Trust in the
period prior to termination and upon termination
may result in a lower amount than might otherwise
be realized if such sale were not required at
such time due to impending or actual termination
of the Trust. For this reason, among others, the
amount realized by a Unitholder upon termination
may be less than the amount paid by such
Unitholder.
SPONSOR
The Sponsor, PaineWebber Incorporated, is a
corporation organized under the laws of the State
of Delaware. The Sponsor is a member firm of the
New York Stock Exchange, Inc. as well as other
major securities and commodities exchanges and is
a member of the National Association of
Securities Dealers, Inc. The Sponsor is engaged
in a security and commodity brokerage business as
well as underwriting and distributing new issues.
The Sponsor also acts as a dealer in unlisted
securities and municipal bonds and in addition to
participating as a member of various selling
groups or as an agent of other investment
companies, executes orders on behalf of
investment companies for the purchase and sale of
securities of such companies and sells securities
to such companies in its capacity as a broker or
dealer in securities.
The Indenture provides that the Sponsor will not
be liable to the Trustee, any of the Trusts or to
the Unitholders for taking any action or for
refraining from taking any action made in good
faith or for errors in judgment, but will be
liable only for its own wilful misfeasance, bad
faith, gross negligence or wilful disregard of
its duties. The Sponsor will not be liable or
responsible in any way for depreciation or loss
incurred by reason of the sale of any Securities
in the Trust.
The Indenture is binding upon any successor to
the business of the Sponsor. The Sponsor may
transfer all or substantially all of its assets
to a corporation or partnership which carries on
the business of the Sponsor and duly assumes all
the obligations of the Sponsor under the
Indenture. In such event the Sponsor shall be
relieved of all further liability under the
Indenture.
If the Sponsor fails to undertake any of its
duties under the Indenture, becomes incapable of
acting, becomes bankrupt, or has its affairs
taken over by public authorities, the Trustee may
either appoint a successor Sponsor or Sponsors to
serve at rates of compensation determined as
provided in the Indenture or terminate the
Indenture and liquidate the Trust.
TRUSTEE
The Co-Trustees are The First National Bank of
Chicago, a national banking association with its
corporate trust office at One First National
Plaza, Suite 0126, Chicago, Illinois 60670-0126
(which is subject to supervision by the
Comptroller of the Currency, the Federal Deposit
Insurance Corporation and the Board of Governors
of the Federal Reserve System) and Investors Bank
& Trust Company, a Massachusetts trust company
with its office at 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.
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 Consent of Independent Auditors
FINANCIAL STATEMENTS
1. Statement of Condition of the Trust as shown in
the current Prospectus for this series.
2. Financial Statements of the Depositor.
PaineWebber Incorporated - Financial Statements
incorporated by reference to Form 10-k and
Form 10-Q (File No. 1-7367) respectively.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, The PaineWebber Pathfinders Trust, Treasury and Growth
Stock Series 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 3rd day of March, 1999.
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 3rd day of March, 1999.
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.
March 3, 1999
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"). It is proposed that
Post-Effective Amendment No. 5 to the Trust's registration statement
("Post-Effective Amendment No. 5") will be filed with the Securities
and Exchange and dated as of the date hereof in connection with the
continued issuance by the Trust of an indefinite number of units of
fractional undivided interest in the Trust (hereinafter referred
to as the "Units") pursuant to Rule 24f-2 promulgated under the
provisions of the Investment Company Act of 1940, as amended.
In this regard, we have examined executed originals or copies of the
following:
(a) The Restated Certificate of Incorporation, as amended, and the
By-Laws of the Depositor, as amended;
(b) Resolutions of the Board of Directors of the Depositor adopted on
December 3, 1971 relating to the Trust and the sale of the Units;
(c) Resolutions of the Executive Committee of the Depositor adopted
on September 24, 1984;
(d) Powers of Attorney referred to in the Amendment;
(e) Post-Effective Amendment No. 5 to the Registration Statement on
Form S-6 (File No. 33-49437) 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
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 9, 1999, in the Registration Statement and related
Prospectus of the PaineWebber Pathfinders Trust, Treasury
and Growth Stock Series Fifteen
/s/ ERNST & YOUNG LLP
New York, New York
February 24, 1999
