File No. 333-02813
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 2
TO
FORM S-6
For Registration Under the Securities Act of 1933 of Securities of
Unit Investment Trusts Registered on Form N-8B-2.
A. Exact name of Trust:
PAINEWEBBER PATHFINDERS TRUST, TREASURY AND GROWTH STOCK
SERIES 19
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] It is proposed that this filing will become effective 60 days after
filing pursuant to paragraph (a)(1) 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.
[ ] Check box if it is proposed that this filing will become effective on
[date], at [time] pursuant to paragraph (b) of Rule 485.
PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES 19
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 NINETEEN
(A Unit Investment Trust)
18,600,000 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 ap-
proved or disapproved these Securities or passed
upon the adequacy of this prospectus. Any repre-
sentation to the contrary is a criminal offense.
SPONSOR:
PAINEWEBBER INCORPORATED
PROSPECTUS PART A DATED JANUARY 27, 1999
No person is authorized to give any information or
make any representations about this Trust not con-
tained 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 - 4
Summary of Risks........................A - 5
Essential Information Regarding
the Trust.............................A - 7
Report of Independent Auditors..........A - 8
Statement of Financial Condition........A - 9
Statement of Operations.................A - 10
Statement of Changes in Net Assets......A - 11
Notes to Financial Statements...........A - 12
Schedule of Investments.................A - 13
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 - 5
Public Offering of Units................B - 7
Public Offering Price................B - 7
Sales Charge and Volume Discount.....B - 7
Employee Discount....................B - 7
Exchange Option......................B - 7
Conversion Option....................B - 9
Distribution of Units................B - 9
Secondary Market for Units...........B - 9
Sponsor's Profits....................B - 10
Redemption..............................B - 10
Valuation...............................B - 11
Comparison of Public Offering Price and
Redemption Value.................. B - 12
Expenses of the Trust...................B - 12
Rights of Unitholders...................B - 13
Distributions...........................B - 13
Administration of the Trust.............B - 13
Accounts........................... B - 13
Reports and Records..................B - 14
Portfolio Supervision................B - 14
Reinvestment.........................B - 15
Amendment of the Indenture..............B - 15
Termination of the Trust................B - 15
Sponsor.................................B - 15
Trustee.................................B - 16
Independent Auditors....................B - 16
Legal Opinions..........................B - 16
PAINEWEBBER PATHFINDERS TRUST, TREASURY AND GROWTH
STOCK
SERIES NINETEEN - PART A
Brief Description of the Trust's Investment Port-
folio
1. The Trust's Objective.
The Trust seeks to provide preservation of capital
and potential capital appreciation through an in-
vestment in a portfolio of stripped "zero-coupon"
United States Treasury obligations maturing on May
15, 2007 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 at-
tractive combination of safety and appreciation
for purchasers who hold Units until May 30, 2007,
the Trust's "Mandatory Termination Date".
As of the date of this Prospectus Part A, 50% of
the Trust's Portfolio was invested in interest-
only portions of United States Treasury obliga-
tions and the remaining 50% was invested in common
stocks as described briefly below.
The stripped "zero-coupon" U.S. Treasury Obliga-
tions make no payment of current interest, but
rather make a single payment upon their stated ma-
turity. 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 in-
come.
The Trust has been formulated so that the portion
of the Trust invested in stripped Treasury Obliga-
tions is designed to provide an approximate return
of principal invested on the Mandatory Termination
Date for purchasers on the Initial Date of De-
posit. (See "Essential Information- Distribu-
tions".) Therefore, even if the Stocks are value-
less 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 origi-
nally 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 invest-
ments are not sold because of market changes.
Unless terminated sooner, the Trust is scheduled
to terminate on or about May 30, 2007 regardless
of market conditions at the time. The Trust plans
to hold until its termination the U.S. Treasury
obligations maturing May 15, 2007 and a diversi-
fied group of stocks, all as shown on the "Sched-
ule 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, rep-
resentative segment of the market of all publicly
traded stocks in the United States.
On September 30, 1998, the aggregate market value
of the Trust Portfolio was $25,057,503.
In constructing the Trust's portfolio, a computer
program was generated against the 500 S&P stocks
to identify a combination of 40 S&P 500 stocks
(excluding General Electric and those stocks rated
"Unattractive" or "Sell" by PaineWebber Equity Re-
search) which, when equally weighted, have the
highest correlation with the S&P 500 Index with
the smallest tracking error.
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
Aerospace/Defense .94%
Automobile 1.25%
Beverages 1.79%
Chemicals 1.90%
Computer Peripheral Equipment 2.01%
Computer Processing & Data Preparation .48%
Computer Software 2.69%
Electronics/Semi-Conductor 2.36%
Entertainment .96%
Financial/Banks 4.50%
Forestry .67%
Household Products 1.20%
Information Technology .04%
Insurance 3.11%
Manufacturing .80%
Metals .98%
Office/Business Equipment 1.54%
Oil/Gas 4.44%
Pharmaceuticals 8.06%
Restaurants 1.23%
Retail-Grocery Stores 1.30%
Retail-Variety Stores 1.67%
Telecommunications 5.46%
Transportation .64%
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 move-
ments, if you are unable or unwilling to assume
the risks involved generally with equity invest-
ment 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 invest-
ment 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 re-
quired 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 re-
sult in a lower amount than might otherwise be re-
alized 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 re-
duce 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. Unithold-
ers will experience a dilution of their investment
as a result of such brokerage fees and other ex-
penses paid by the Trust during the additional de-
posits of securities purchased by the Trustee with
cash or cash equivalents.
Investing always involves risk. The risks
described below are the most significant risks as-
sociated with investing in the U.S. Treasury Obli-
gations 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 origi-
nal 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 in-
terest rates than would be experienced in connec-
tion 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 con-
dition of issuers, changes in worldwide or na-
tional economic conditions, the prices of equity
securities in general and the Trust's stocks in
particular.
Certain of the Stock in the Trust may be American
Depositary Receipts or "ADRs" which are subject to
additional risks. (See "Schedule of Investments"
herein) to certain investment risks that are dif-
ferent from those experienced by Stocks issued by
domestic issuers. These investment risks include
potential future political and economic develop-
ments 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 divi-
dends on the common stock of foreign issuers un-
derlying 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 divi-
dends, in foreign currency and are therefore sub-
ject to currency exchange rate risk. Currency ex-
change 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 fluctua-
tions are dependent on a number of economic fac-
tors 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, mone-
tary and fiscal policies of the relevant country,
perceived political stability and investor psy-
chology, especially that of institutional inves-
tors 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 infor-
mation and data (commonly know as the "Year 2000
Problem"). As with all investment and financial
companies, the Year 2000 Problem may have an ad-
verse 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 simi-
lar 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 suf-
ficient to avoid any adverse impact to the Trust.
The year 2000 Problem is expected to have an im-
pact 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 September 30, 1998
Sponsor: PaineWebber Incorporated
Co-Trustees: Investors Bank & Trust Co. and
The First National Bank of Chicago
Initial Date of Deposit: October 30, 1996
<S> <C>
Aggregate Market Value of Securities in Trust: $25,057,503
Number of Units: 18,600,000
Minimum Purchase: 250 Units
Fractional Undivided Interest in the Trust Represented by
Each Unit: 1/18,600,000th
Calculation of Public Offering Price Per Unit*
Aggregate Value of Net Assets in Trust $25,061,128
Divided by 18,600,000 Units $1.3473
Plus Sales Charge of 4.75% of Public Offering Price $ .0673
Public Offering Price per Unit $1.4146
Redemption Value per Unit: $1.3473
Excess of Public Offering Price over Redemption Value per Unit: $.0673
Sponsor's Repurchase Price Per Unit: $1.3473
Excess of Public Offering over Sponsor's Repurchase Price per Unit: $.0673
Evaluation Time: 4 P.M. New York Time
Distribution Dates* Quarterly on April 20, July 20,
October 20 and January 20.
Record Dates: March 30, June 30, September 30,
and December 31
Mandatory Termination Date: May 30, 2007 (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 Annual Expenses of the Trust* * $.0027 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 NINETEEN:
We have audited the accompanying statement of fi-
nancial condition, including the schedule of in-
vestments, of The PaineWebber Pathfinders Trust,
Treasury and Growth Stock Series Nineteen as of
September 30, 1998 and the related statements of
operations and changes in net assets for the year
ended September 30, 1998 and for the period from
October 30, 1996 (initial date of deposit) to Sep-
tember 30, 1997. These financial statements are
the responsibility of the Co-Trustees. Our respon-
sibility is to express an opinion on these finan-
cial statements based on our audit.
We conducted our audits in accordance with gener-
ally accepted auditing standards. Those standards
require that we plan and perform the audit to ob-
tain reasonable assurance about whether the finan-
cial statements are free of material misstatement.
An audit includes examining, on a test basis, evi-
dence supporting the amounts and disclosures in
the financial statements. Our procedures included
confirmation of the securities owned as of Septem-
ber 30, 1998, as shown in the statement of finan-
cial condition and schedule of investments, by
correspondence with the Co-Trustees. An audit also
includes assessing the accounting principles used
and significant estimates made by the Co-Trustees,
as well as evaluating the overall financial state-
ment presentation. We believe that our audits pro-
vide a reasonable basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects,
the financial position of The PaineWebber Path-
finders Trust, Treasury and Growth Stock Series
Nineteen at September 30, 1998 and the results of
its operations and changes in its net assets for
the year ended September 30, 1998 and for the pe-
riod from October 30, 1996 to September 30, 1997,
in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
New York, New York
January 14, 1999
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES NINETEEN
STATEMENT OF FINANCIAL CONDITION
September 30, 1998
<CAPTION>
ASSETS
<S> <C> <C>
Treasury Obligation - at market value (Cost $10,340,880)
(note A and note 1 to schedule of investments) $12,524,124
Common Stock - at market value (Cost $8,530,275)
(note 1 to schedule of investments) 12,533,379
Accrued dividends receivable 21,381
Prepaid organizational expense 61,613
Total Assets $25,140,497
LIABILITIES AND NET ASSETS
Accounts payable-units redeemed $36,270
Accrued expenses payable 28,743
Advance from Trustee 14,356
Total Liabilities $79,369
Net Assets (18,600,000 units of fractional undivided interest outstanding):
Cost to investors (note B) $19,812,236
Less gross underwriting commissions (note C) (941,081)
18,871,155
Net unrealized market appreciation (note D) 6,186,348
Net amount applicable to unitholders 25,057,503
Undistributed investment income-net 5,045
Overdistributed proceeds from securities sold (1,420)
Net Assets 25,061,128
Total Liabilities and Net Assets $25,140,497
Net Asset Value per unit $1.3473
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES NINETEEN
STATEMENT OF OPERATIONS
<CAPTION>
For the Period
From October 30,
1996 (Initial Date
Year Ended Of Deposit) to
September 30, September 30,
1998 1997
<S> <C> <C>
Operations:
Investment income:
Accretion on Treasury Obligation $798,298 $1,025,483
Dividend Income 247,693 323,273
Total investment income 1,045,991 1,348,756
Less expenses:
Trustee's fees, evaluator's expense and other expenses 77,502 110,592
Total expenses 77,502 110,592
Investment income-net 968,489 1,238,164
Realized and unrealized gain on investments-net:
Net realized gain on securities transactions 1,803,215 1,186,640
Net change in unrealized market appreciation 2,029,121 4,060,255
Net gain on investments 3,832,336 5,246,895
Net increase in net assets resulting from operations $4,800,825 $6,485,059
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES NINETEEN
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
For the Period
From October 30,
1996 (Initial Date
Year Ended Of Deposit) to
September 30, September 30,
1998 1997
<S> <C> <C>
Operations:
Investment income-net $968,489 $1,238,164
Net realized gain on securities transactions 1,803,215 1,186,640
Net change in unrealized market appreciation 2,029,121 4,060,255
Net increase in net assets resulting from operations 4,800,825 6,485,059
Less: Distributions to Unitholders (Note E)
Investment income-net 161,370 208,136
Total Distributions 161,370 208,136
Less: Units Redeemed by Unitholders (Note F)
Value of units at date of redemption 10,861,287 11,573,696
Accrued dividends at date of redemption 9,160 12,680
Accreted discount at date of redemption 400,473 200,534
Total Redemptions 11,270,920 11,786,910
Increase (decrease) in net assets (6,631,465) (5,509,987)
Net Assets:
Beginning of Period 31,692,593 ---
Supplemental Deposits (Note F) --- 37,202,580
End of Period $25,061,128 $31,692,593
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES NINETEEN
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
(A) The financial statements of the Trust are
prepared on the accrual basis of accounting. Secu-
rity transactions are accounted for on the date
the securities are purchased or sold. The original
issue discount on the Treasury Obligation is ac-
creted on a level yield basis. The amount of dis-
count included in the cost of the Treasury Obliga-
tion held as of September 30, 1998 is $1,216,105.
(B) Cost to investors represents the initial pub-
lic offering price as of the initial date of de-
posit, and the value of units through supplemental
deposits computed on the basis set forth under
"Public Offering Price of Units", adjusted for ac-
cretion on United States Treasury Obligations and
for securities sold since the initial date of de-
posit.
(C) Sales charge of the Public Offering Price per
Unit is computed on the basis set forth under "
Public Offering of Units - Sales Charge and Volume
Discount ".
(D) At September 30, 1998, the gross unrealized
market appreciation was $6,395,149 and the gross
unrealized market depreciation was ($208,801). The
net unrealized market appreciation was $6,186,348.
(E) Regular distributions of net income, exclud-
ing 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 uni-
tholder 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 pro-
ceeds of securities sold as follows:
<CAPTION>
For the Period
From October 30,
1996 (Initial Date
Year Ended Of Deposit) to
September 30, September 30,
1998 1997
<S> <C> <C>
Number of units redeemed 9,000,000 10,900,000
Redemption amount $11,270,920 $11,786,910
The following units were sold through supplemental
deposits:
Number of units sold --- 18,500,000
Value of amount, net of sales charge --- $18,152,590
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES NINETEEN
SCHEDULE OF INVESTMENTS
<CAPTION>
As of September 30, 1998
TREASURY OBLIGATIONS (49.98%)
Name of Security Coupon Maturity Value Maturity Date Market Value(1)
<C> <C> <C> <C> <C>
U.S. Treasury Interest Payments (2) (49.98%) 0% $18,600,000 May 15, 2007 $12,524,124
COMMON STOCKS (50.02%)
Name of Issuer Number of Shares Market Value
Aerospace/Defense (.94%)
Lockheed Martin Corporation 2,336 $235,498
Automobile (1.25%)
Ford Motor Company 6,676 313,355
Beverages (1.79%)
The Coca-Cola Company 4,187 241,276
PepsiCo, Inc. 7,037 207,152
Chemicals (1.90%)
Dow Chemical Company 2,654 226,751
DuPont (E.I.) De Nemours & Company 4,419 248,016
Computer Peripheral Equipment (2.01%)
Cisco Systems, Inc.* 8,127 502,319
Computer Processing & Data Preparation (.48%)
First Data Corporation 5,074 119,239
Computer Software (2.69%)
Microsoft Corporation* 6,127 674,353
Electronics/Semi-Conductor (2.36%)
Hewlett-Packard Company 4,704 249,018
Intel Corporation 3,995 342,571
Entertainment (.96%)
Walt Disney Company 9,531 241,254
Financial/Banks (4.50%)
Associates First Capital Corporation(3) 1,749 114,122
Citicorp 2,139 198,793
First Union Corporation 5,812 297,502
NationsBank Corporation* 4,510 241,285
Wells Fargo & Company 776 275,480
Forestry (.67%)
Potlatch Corporation 4,959 168,916
Household Products (1.20%)
Procter & Gamble Company 4,254 301,768
Information Technology (.04%)
NCR Corporation* 365 10,494
Insurance (3.11%)
Allstate Corporation 7,490 312,239
American General Corporation 7,313 467,118
Manufacturing (.80%)
Minnesota Mining & Manufacturing Co. 2,721 200,504
Metals (.98%)
Aluminum Company of America (ALCOA) 3,463 245,873
Office/Business Equipment (1.54%)
Xerox Corporation 4,540 384,765
Oil/Gas (4.44%)
Amoco Corporation 5,459 294,104
Chevron Corporation 3,101 260,678
Exxon Corporation 4,640 325,670
Royal Dutch Petroleum Company ~ 4,875 232,172
(Continued)
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES NINETEEN
SCHEDULE OF INVESTMENTS
<CAPTION>
As of September 30, 1998
COMMON STOCKS (50.02%)
Name of Issuer Number of Shares Market Value(1)
<C> <C> <C>
Pharmaceuticals (8.06%)
Abbott Laboratories 8,297 $360,401
Bristol-Myers Squibb Company 3,917 406,879
Johnson & Johnson 4,316 337,727
Merck & Company, Inc. 2,822 365,625
Pfizer, Inc. 5,179 548,650
Restaurants (1.23%)
McDonald's Corporation 4,697 280,352
Tricon Global Restaurants, Inc.*(4) 706 27,534
Retail-Grocery Stores (1.30%)
Albertson's, Inc. 6,027 326,211
Retail-Variety Stores (1.67%)
Wal Mart Stores, Inc. 7,650 417,881
Telecommunications (5.46%)
AT & T Corporation 5,859 342,385
GTE Corporation 4,883 268,565
SBC Communications, Inc. 8,447 375,364
Sprint Corporation 5,317 382,824
Transportation (.64%)
Union Pacific Corporation 3,770 160,696
TOTAL COMMON STOCKS $12,533,379
TOTAL INVESTMENTS $25,057,503
(1) Valuation of Securities was made by the Co-
Trustees as described in "Valuation".
(2) This security does not pay current inter-
est. On the maturity date thereof, the entire ma-
turity value becomes
due and payable. Generally, a fixed yield is
earned on such security which takes into account
the semi-annual
compounding of accrued interest. (See "The
Trust" and "Federal Income Taxes" herein).
(3) Ford Motor Company spin-off.
(4) PepsiCo Inc. spin-off.
* Non-income producing.
~ American Depositary Receipts.
</TABLE>
PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES 19
PROSPECTUS PART B
PART B OF THIS PROSPECTUS MAY NOT BE DIS-
TRIBUTED
UNLESS ACCOMPANIED BY PART A.
Part B contains a description of the important
features of the PaineWebber Pathfinders Trust
Treasury and Growth Stock Series 19 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 retire-
ment, 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 de-
termining 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 poten-
tial of equities is typically associated with
higher risk. With this in mind, PaineWebber de-
signed 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. The Trust is a balanced portfolio with ap-
proximately equal portions in U.S. Treasury bonds
and Stocks. Therefore, should interest rates de-
cline significantly prior to maturity, there is a
potential for achieving greater returns by liqui-
dating the portfolio before the final maturity
date. Unitholders can sell units at any time at
the then current net asset value with no addi-
tional sales charge. (See Public Offering of
Units--Secondary Market for Units and Redemption.)
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, rep-
resentative segment of the market of all publicly
traded stocks in the United States.
In constructing the Trust's portfolio, a computer
program was generated against the 500 S&P stocks
to identify a combination of 40 S&P 500 stocks
(excluding General Electric and those stocks rated
"Unattractive" or "Sell" by PaineWebber Equity Re-
search) which, when equally weighted, have the
highest correlation with the S&P 500 Index with
the smallest tracking error.
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 multi-
ple 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 in-
dustry group listed below, investors should con-
sult the "Schedule of Investments".
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 "Dis-
tributions".
ABOUT THE TRUST
The Trust is one of a series of similar but sepa-
rate unit investment trusts created by the Sponsor
pursuant to a Trust Indenture and Agreement* (the
"Indenture") dated as of the Initial Date of De-
posit, 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 Ob-
ligations and Stocks.
_________________
* Reference is hereby made to said Trust Inden-
ture and Agreement and any statements contained
herein are qualified in their entirety by the pro-
visions of said Trust Indenture and Agreement.
These are equity stocks, which, in Sponsor's opin-
ion on the Initial Date of Deposit, are capable
of, over the long term, closely tracking the per-
formance of the market as measured by the S&P 500.
The Stocks contained in the Trust are representa-
tive of a number of different industries. Divi-
dends, if any, received will be held by the Trus-
tee 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 de-
posited with the Trustee the confirmations of con-
tracts 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 Se-
curities was determined on the basis described un-
der "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 frac-
tional undivided interest in the Trust represented
by a Unit was as set forth in "Essential Informa-
tion Regarding the Trust".
With the deposit on the Initial Date of Deposit,
the Sponsor established a proportionate relation-
ship 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 equiva-
lents 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 pro-
ceeds therefrom shall be treated as income to the
Trust. (See "Risk Factors and Special Considera-
tions" 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 un-
matured interest coupons or interest coupons
stripped from the U.S. Treasury Obligations. The
obligor with respect to the Treasury Obligations
is the United States Government. U.S. Government
backed obligations are considered the safest in-
vestment.
On the Initial Date of Deposit each Unit repre-
sented 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 Securi-
ties for purposes of the sale of additional
Units), the aggregate value of Securities in the
Trust will be increased and the fractional undi-
vided interest represented by each Unit in the
balance will be decreased. If any Units are re-
deemed, the aggregate value of Securities in the
Trust will be reduced, and the fractional undi-
vided interest represented by each remaining Unit
in the balance will be increased. Units will re-
main 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 in-
vestment in deep discount or "zero-coupon" debt
obligations and the risks associated with an in-
vestment 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 Ob-
ligations. Interest-only portions of Treasury Ob-
ligations 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 por-
tions of Treasury Obligations are deep discount
obligations that are economically identical to
zero-coupon obligations; that is, all such instru-
ments 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 in-
terest payments (such as the stripped Treasury Ob-
ligations in the Trust Portfolio) is that a fixed
yield is earned not only on the original invest-
ment 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 abil-
ity 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 de-
gree of protection against credit risks, sale of
Units prior to the termination date of the Trust
will involve substantially greater price fluctua-
tions during periods of changing market interest
rates than would be experienced in connection with
sale of Units of a Trust which held Treasury Obli-
gations 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 inher-
ent in an investment in common stocks in general.
The general risks are associated with the rights
to receive payments from the issuer which are gen-
erally 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 direc-
tors and to participate in amounts available for
distribution by the issuer only after all other
claims against the issuer have been paid or pro-
vided for. By contrast, holders of preferred
stocks have the right to receive dividends at a
fixed rate when and as declared by the issuer's
board of directors, normally on a cumulative ba-
sis, but do not participate in other amounts
available for distribution by the issuing corpora-
tion. Dividends on cumulative preferred stock must
be paid before any dividends are paid on common
stock. Preferred stocks are also entitled to
rights on liquidation which are senior to those of
common stocks. For these reasons, preferred stocks
generally entail less risk than common stocks.
Common stocks do not represent an obligation of
the issuer. Therefore they do not offer any assur-
ance of income or provide the degree of protection
of debt securities. The issuance of debt securi-
ties or even preferred stock by an issuer will
create prior claims for payment of principal, in-
terest and dividends which could adversely affect
the ability and inclination of the issuer to de-
clare or pay dividends on its common stock or the
rights of holders of common stock with respect to
assets of the issuer upon liquidation or bank-
ruptcy. Unlike debt securities which typically
have a stated principal amount payable at 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 eco-
nomic 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" gener-
ally includes "ADS".) ADRs involve certain invest-
ment risks that are different from those experi-
enced by Stocks issued by domestic issuers. These
investment risks include potential future politi-
cal 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 re-
ceipt 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 report-
ing requirements under certain U.S. securities
laws and therefore may make less information pub-
licly available than that afforded by their domes-
tic counterparts. Further, foreign issuers are not
necessarily subject to uniform financial report-
ing, auditing and accounting standards, require-
ments and practices such as are applicable to do-
mestic 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 se-
curities 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 de-
nominated. 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 divi-
dends 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 ef-
fect 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 re-
gional 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 con-
ditions 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 influ-
enced by a particular country's monetary and fis-
cal policies, perceived political stability (par-
ticularly with respect to transfer of capital) and
investor psychology, especially that of institu-
tional 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 infla-
tion 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 Treas-
ury Obligations if any, and the Stocks may be col-
lectively 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 addi-
tional Units subsequent to the Initial Date of De-
posit may have an effect upon the value of previ-
ously 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 depos-
ited. 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 pur-
chase 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 Se-
curity, 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 in-
structions 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) fluc-
tuations during this period will affect the value
of every Unitholder's Units and the income per
Unit received by the Trust. In addition, costs in-
curred in connection with the acquisition of Secu-
rities not listed on any national securities ex-
change (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.
Special Considerations
The 43 Stocks in the Portfolio represent large,
well-known companies. (See "Schedule of Invest-
ments" herein.) Investors should note that the
Trust contains stock issued by AT&T Corporation
("AT&T"). As of the date of this Prospectus, the
company has restructured by dividing AT&T Corpora-
tion into three separate companies under different
management. As of December 31, 1996, the company
spun off NCR Corporation. The Trust has received
shares of the newly created company. It is the
current intention of the Trust to retain such
shares in the Trust Portfolio. Pursuant to the
terms of the Trust Indenture and Agreement, the
Trustee is instructed to retain such shares of the
newly created companies in the Trust Portfolio
following their receipt and to hold such shares in
the Portfolio.
In the event a contract to purchase a Security
fails, the Sponsor will refund to each Unitholder
the portion of the sales charge attributable to
such failed contract. Principal and income, if
any, attributable to such failed contract will be
distributed to Unitholders of record on the last
business day of the month in which the fail occurs
within 20 days of such record date.
Because the Trust is organized as a unit invest-
ment trust, rather than as a management investment
company, the Trustee and the Sponsor do not have
authority to manage the Trust's assets fully in an
attempt to take advantage of various market condi-
tions to improve the Trust's net asset value, but
may dispose of Securities only under limited cir-
cumstances. (See "Administration of the Trust--
Portfolio Supervision".)
Certain of the Stocks may be attractive acquisi-
tion candidates pursuant to mergers, acquisitions
and tender offers. In general, tender offers in-
volve a bid by an issuer or other acquiror to ac-
quire a stock pursuant to the terms of its offer.
Payment generally takes the form of cash, securi-
ties (typically bonds or notes), or cash and secu-
rities. Pursuant to federal law a tender offer
must remain open for at least 20 days and with-
drawal rights apply during the entire offering pe-
riod. Frequently offers are conditioned upon a
specified number of shares being tendered and upon
the obtaining of financing. There may be other
conditions to the tender offer as well. Addition-
ally, an offeror may only be willing to accept a
specified number of shares. In the event a greater
number of shares is tendered, the offeror must
take up and pay for a pro rata portion of the
shares deposited by each depositor during the pe-
riod the offer remains open. The Agreement con-
tains provisions permitting Stocks to be either
held or sold in the event of a tender offer,
merger or reorganization involving one or more of
the Stocks in the Trust (see "Administration of
the Trust-Portfolio Supervision" herein).
FEDERAL INCOME TAXES
In the opinion of Carter, Ledyard & Milburn,
counsel for the Sponsor, under existing law:
1. The Trust is not an association taxable as a
corporation for federal income tax purposes. Un-
der the Internal Revenue Code of 1986, as amended
(the "Code"), each Unitholder will be treated as
the owner of a pro rata portion of the Trust, and
income of the Trust will be treated as income of
the 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 Secu-
rities in accordance with the proportion of the
Trust comprised by each Security to determine the
per Unit tax cost for each Security.
3. The Trust is not an association taxable as a
corporation for New York State income tax pur-
poses. Under New York State law, each Unitholder
will be treated as the owner of a pro rata portion
of the Trust and the income of the Trust will be
treated as income of the Unitholders.
The following general discussion of the federal
income tax treatment of an investment in Units of
the Trust is based on the Code and Treasury Regu-
lations 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 circum-
stances. 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 ad-
vised to consult its own tax advisor concerning
the effect of an investment in Units.
General. Each Unitholder must report on its fed-
eral income tax return a pro rata share of the en-
tire income of the Trust, derived from dividends
on Stocks, original issue discount or interest on
Treasury Obligations, gains or losses upon 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 Uni-
tholders but are used by the Trust to pay ex-
penses.
Distributions with respect to Stock, to the ex-
tent they do not exceed current or accumulated
earnings and profits of the distributing corpora-
tion, will be treated as dividends to the Uni-
tholders and will be subject to income tax at or-
dinary rates. Corporate Unitholders may be enti-
tled to the dividends-received deduction discussed
below.
To the extent distributions with respect to a
Stock were to exceed the issuing corporation's
current and accumulated earnings and profits, they
would not constitute dividends. Rather, they
would be treated as a tax free return of capital
and would reduce a Unitholder's tax basis for such
Stock. This reduction in basis would 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
Stock.
A Unitholder who is an individual, estate or
trust may be disallowed certain itemized deduc-
tions described in Code Section 67, including com-
pensation paid to the Trustee and administrative
expenses of the Trust, to the extent these item-
ized deductions, in the aggregate, do not exceed
two percent of the Unitholder's adjusted gross in-
come. Thus, a Unitholder's taxable income from an
investment in Units may exceed amounts distributed
to the extent amounts are used by the Trust to pay
expenses.
Corporate Dividends-Received Deduction. Corpo-
rate holders of Units may be eligible for the
dividends-received deduction with respect to dis-
tributions treated as dividends, subject to the
limitations provided in Section 246 and 246A of
the Code. The dividends-received deduction gener-
ally equals 70 percent of the amount of the divi-
dend. The alternative minimum tax may have the
effect of reducing the benefit of the deduction.
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"). Origi-
nal issue discount represents interest for federal
income tax purposes and can generally be defined
as the difference between the price at which a
bond was issued and its stated redemption price at
maturity. For purposes of the preceding sentence,
stripped obligations, such as the Treasury Obliga-
tions, which variously consist either of the right
to receive payments of interest or the right to
receive payments of principal, are treated by each
successive purchaser as originally issued on their
purchase dates at an issue price equal to their
respective purchase prices thereof. The market
value of the Trust assets will be provided to a
Unitholder upon request in order to enable the
Unitholder to calculate the original issue dis-
count attributable to each of the Treasury Obliga-
tions. Original issue discount on Treasury Obli-
gations (which were issued or treated as issued on
or after July 2, 1982) is deemed earned over the
life of such obligation, taking into account the
compounding of accrued interest at least annually,
resulting in an increasing amount of income in
each year. Each Unitholder is required to include
in income each year the amount of original issue
discount which accrues on its pro rata portion of
each Treasury Obligation 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 gen-
erally will recognize gain or loss in an amount
equal to the difference between the amount real-
ized on the disposition allocable to the Securi-
ties and the Unitholder's adjusted tax bases in
the Securities. In general, such adjusted tax
bases will equal the Unitholder's aggregate cost
for the Unit increased by any accrued original is-
sue discount. 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 previ-
ously reported. Each Unitholder generally will
also recognize taxable gain or loss when all or
part of its pro rata portion of a Security is sold
or otherwise disposed of for an amount greater or
less than its per Unit tax cost therefor.
Long-term capital gains of individuals are gener-
ally taxed at a maximum federal rate of 28%. Under
the recently enacted Taxpayer Relief Act of 1997,
Unitholders who are individuals and have held
their Units for more than 18 months may be enti-
tled to a more favorable federal tax rate (gener-
ally, 20%, but 10% for individuals otherwise in
the 15% bracket) for gains from the sale of these
Units. Prior to the issuance of relevant regula-
tions, it is not certain whether or how this more
favorable federal tax rate will be available with
respect to capital gain dividends paid by the
Trust. Unitholders should consult their own tax
advisers in this regard.
Withholding For Citizen or Resident Investors. In
the case of any noncorporate Unitholder that is a
citizen or resident of the United States a 31 per-
cent "backup" withholding tax may apply to certain
distributions of the Trust unless the Unitholder
properly completes and files, under penalties of
perjury, IRS Form W-9 (or its equivalent).
The foregoing discussion is a general summary and
relates only to certain aspects of the federal in-
come tax consequences of an investment in the
Trust. Unitholders, may also be subject to state
and local taxation. Each Unitholder should con-
sult its own tax advisor regarding the federal,
state and local tax consequences to it of owner-
ship of Units.
Investment in the Trust may be suited for pur-
chase by funds and accounts of individual inves-
tors that are exempt from federal income taxes
such as Individual Retirement Accounts, tax-
qualified retirement plans including Keogh Plans,
and other tax-deferred retirement plans. Uni-
tholders desiring to purchase Units for tax-
deferred plans and IRA's should consult their
PaineWebber Investment Executive for details on
establishing such accounts. Units may also be
purchased by persons who already have self-
directed accounts established under tax-deferred
retirement plans.
PUBLIC OFFERING OF UNITS
Public Offering Price. The initial public offer-
ing period will terminate when the Sponsor chooses
to discontinue offering Units in the initial mar-
ket. Thereafter, the Sponsor may offer Units in
the secondary market. The public offering price in
the secondary market will be the Trust Fund
Evaluation per Unit next determined after receipt
of a purchase order, determined with respect to
the Treasury Obligations on the bid side of the
market, plus the applicable sales charge. (See
"Valuation".) The public offering price on any
date subsequent to the Initial Date of Deposit
will vary from the public offering price calcu-
lated on the business day prior to the Initial
Date of Deposit due to fluctuations in the value
of Stocks and the Treasury Obligations, and the
foreign currency exchange rates (if applicable),
among other factors.
Sales Charge and Volume Discount. Sales charges
during the initial public offering period and for
secondary market sales are set forth below. A dis-
count 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 which-
ever basis is more favorable to the purchaser.
Secondary Market From October 31, 1998 Through October 30,
2000
Percent of Percent of
Public Offering Net Amount
Aggregate Dollar Value of Units Price Invested
Less than $50,000 4.25% 4.44%
$50,000 to $99,999 4.00 4.17
$100,000 to $199,999 3.50 3.63
$200,000 to $399,999 3.00 3.09
$400,000 to $499,999 2.50 2.56
$500,000 to $999,999 2.00 2.04
$1,000,000 or more 1.75 1.78
_____________
* The sales charge applicable to volume pur-
chasers according to the table above will be ap-
plied on either a dollar or Unit basis, depending
upon which basis provides a more favorable pur-
chase price to the purchaser.
Secondary Market From October 31, 2000
Through October 31, 2002
Percent of
Public Percent of
Offering Net Amount
Price Invested
3.25% 3.36%
Secondary Market on and After
October 31, 2002
Percent of
Public Percent of
Offering Net Amount
Price Invested
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 Spon-
sor. 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
to 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 re-
lated expenses with respect to the purchase of
Units by employees of the Sponsor and its affili-
ates, the Sponsor does not intend to impose a
sales charge on such employee sales.
Exchange Option. Unitholders may elect to ex-
change any or all of their Units of this series
for units of one or more of any series of
PaineWebber Municipal Bond Fund (the "PaineWebber
Series"); The Municipal Bond Trust (the "National
Series"); The Municipal Bond Trust, Multi-State
Program (the "Multi-State Series"); The Municipal
Bond Trust, California Series (the "California Se-
ries"); The Corporate Bond Trust (the "Corporate
Series"); PaineWebber Pathfinder's Trust (the
"Pathfinder's Trust"); the PaineWebber Federal
Government Trust (the "Government Series"); The
Municipal Bond Trust, Insured Series (the "Insured
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,
per 100 Units in the case of a trust whose Units
cost approximately $10 or per 1,000 units in the
case of a trust whose Units cost approximately one
dollar. Unitholders of this Trust are not eligible
for the Exchange Option into an Equity Trust,
Growth Stock Series designated as a rollover se-
ries for the 30 day period prior to termination of
the Trust. 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 expenses required for the Exchange Op-
tion. Each Exchange Trust has different investment
objectives, therefore a Unitholder should read the
prospectus for the applicable exchange trust care-
fully prior to exercising this option. Exchange
Trusts having as their objective the receipt of
tax-exempt interest income would not be suitable
for tax-deferred investment plans such as Individ-
ual Retirement Accounts. A Unitholder who pur-
chased Units of a series and paid a per Unit, per
100 Unit or per 1,000 Unit sales charge that was
less than the per Unit, per 100 Unit or per 1,000
Unit sales charge of the series of the Exchange
Trusts for which such Unitholder desires to ex-
change into, will be allowed to exercise the Ex-
change 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 ex-
changed 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 Ex-
change 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 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 avail-
able 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 Uni-
tholder wishes to sell his Units of this series
and thus there is no assurance that the Exchange
Option will be available to a Unitholder. Ex-
changes will be effected in whole Units only. Any
excess proceeds from Unitholders' Units being sur-
rendered will be returned. Unitholders will be
permitted to advance new money in order to com-
plete 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" under the Code and a Unitholder
will generally recognize a tax gain or loss at the
time of exchange in the same manner as upon a sale
of Units. 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 exer-
cise the Exchange Option and to use the proceeds
from the sale of his Units to the Sponsor of this
series to purchase Units of one or more of the Ex-
change Trusts from the Sponsor. If Units of the
applicable outstanding series of the Exchange
Trust are at that time available for sale, and if
such Units may lawfully be sold in the state in
which the Unitholder is resident, the Unitholder
may select the series or group of series for which
he desires his investment to be exchanged. The
Unitholder will be provided with a current pro-
spectus or prospectuses relating to each series in
which he indicates interest.
The exchange transaction will operate in a manner
essentially identical to any secondary market
transaction, i.e., Units will be repurchased at a
price based on the market value of the Securities
in the portfolio of the Trust next determined af-
ter receipt by the Sponsor of an exchange request
and properly endorsed Certificate. Units of the
Exchange Trust will be sold to the Unitholder at a
price based upon the next determined market value
of the Securities in the Exchange Trust plus the
reduced sales charge. Exchange transactions will
be effected only in whole units; thus, any pro-
ceeds not used to acquire whole units will be paid
to the selling Unitholder.
For example, assume that a Unitholder, who has
three thousand units of a trust with a current
price of $1.30 per 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 high-
est number of Units, the proceeds from the Uni-
tholder's units would aggregate $3,900. Since only
whole units of an Exchange Trust may be purchased
under the Exchange Option, the Unitholder would be
able to acquire four units in the Exchange Trust
for a total cost of $3,620 ($3,560 for the units
and $60 for the sales charge). If all 3,000 units
were tendered, the remaining $280 would be re-
turned to the Unitholder.
Conversion Option. Owners of units of any regis-
tered unit investment trust sponsored by another
sponsor which was initially offered at a maximum
applicable sales charge of at least 3.0% (a "Con-
version Trust") may elect to apply the cash pro-
ceeds of the sale or redemption of those units di-
rectly 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 re-
quired for Conversion Trust units). To exercise
this option, the owner should notify his retail
broker. He will be given a prospectus for each se-
ries in which he indicates interest and for which
units are available. The dealer must sell or re-
deem the units of the Conversion Trust. Any dealer
other than PaineWebber must certify that the pur-
chase of units of the Exchange Trust is being made
pursuant to and is eligible for the Conversion Op-
tion. The dealer will be entitled to two thirds of
the applicable reduced sales charge. The Sponsor
reserves the right to modify, suspend or terminate
the Conversion Option at any time without further
notice, including the right to increase the re-
duced sales charge applicable to this option (but
not in excess of $5 more per Unit (or per 100
Units or per 1,000 Units, as applicable) than the
corresponding fee then being charged for the Ex-
change Option). For a description of the tax con-
sequences of a conversion reference is made to the
Exchange Option section of the prospectus.
Distribution of Units. The minimum purchase dur-
ing the initial public offering 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 $.03 per Unit, during the initial
offering period and one-half of the highest appli-
cable sales charge during the secondary market,
subject to change from time to time. The differ-
ence between the sales charge and the dealer con-
cession will be retained by the Sponsor. In the
event that the dealer concession is 90% or more of
the sales charge per Unit, dealers taking advan-
tage of such concession may be deemed to be under-
writers 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, the District of
Columbia and the Commonwealth of Puerto Rico.
Secondary Market for Units. While not obligated
to do so, the Sponsor intends to maintain a secon-
dary market for the Units and continuously offer
to purchase Units at the Trust Fund Evaluation per
Unit next computed after receipt by the Sponsor of
an order from a Unitholder. The Sponsor may cease
to maintain such a market at any time, and from
time to time, without notice. In the event that a
secondary market for the Units is not maintained
by the Sponsor, a Unitholder desiring to dispose
of Units may tender such Units to the Trustee for
redemption at the price calculated in the manner
set forth under "Redemption". Redemption requests
in excess of $100,000 may be redeemed "in kind" as
described under "Redemption." The Sponsor does not
in any way guarantee the enforceability, market-
ability, value or price of any stocks in the
Trust, nor that of the Units.
Investors should note the Trust Fund Evaluation
per Unit at the time of sale or tender for redemp-
tion may be less than the price at which the Unit
was purchased.
The Sponsor may redeem any Units it has purchased
in the secondary market if it determines for any
reason that it is undesirable to continue to hold
these Units in its inventory. Factors which the
Sponsor may consider in making this determination
will include the number of units of all series of
all trusts which it holds in its inventory, the
saleability of the Units and its estimate of the
time required to sell the Units and general market
conditions.
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 (including foreign currency rates,
if any) at which it deposits the Securities in the
Trust, which is the value of the Securities, de-
termined by the Trustee as described under "Valua-
tion," at the close of business on the business
day prior to the Initial Date of Deposit. The cost
of Securities to the Sponsor includes the amount
paid by the Sponsor for brokerage commissions.
These amounts are an expense of the Trust. 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 Securi-
ties and Exchange Act of 1934 and may be of bene-
fit to the Sponsor.
In selling any Units in the initial public offer-
ing after the Initial Date of Deposit, the Sponsor
may realize profits or sustain losses resulting
from fluctuations in the net asset value of out-
standing 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
Units may be tendered to Investors Bank & Trust
Company for redemption at its office in person, or
by mail at Hancock Towers, 200 Clarendon Street,
Boston, MA 02116 upon payment of any transfer or
similar tax which must be paid to effect the re-
demption. At the present time there are no such
taxes. No redemption fee will be charged by the
Sponsor or the Trustee. If Units are represented
by a certificate, it must be properly endorsed ac-
companied by a letter requesting redemption. If
held in uncertificated form, a written instrument
of redemption must be signed by the Unitholder.
Unitholders must sign exactly as their names ap-
pear on the records of the Trustee with signatures
guaranteed by an eligible guarantor institution or
in such other manner as may be acceptable to the
Trustee. In certain instances the Trustee may re-
quire additional documents such as, but not lim-
ited to, trust instruments, certificates of death,
appointments as executor or administrator, or cer-
tificates of corporate authority. Unitholders
should contact the Trustee to determine whether
additional documents are necessary. Units tendered
to the Trustee for redemption will be cancelled,
if not repurchased by the Sponsor.
Units will be redeemed at the Redemption Value
per Unit next determined after receipt of the re-
demption request in good order by the Trustee. The
Redemption Value per Unit is determined by divid-
ing the Trust Fund Evaluation 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 p.m., it
is deemed received on the next business day. Dur-
ing the period in which the Sponsor maintains a
secondary market for Units, the Sponsor may repur-
chase any Unit presented for tender to Investors
Bank & Trust Company for redemption no later than
the close of business on the second business 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 Uni-
tholder on the seventh calendar day following the
date of tender (or if the seventh calendar day is
not a business day on the first business day prior
thereto).
With respect to cash redemptions, amounts repre-
senting income received shall be withdrawn from
the Income Account, and, to the extent such bal-
ance is insufficient, from the Capital Account.
The Trustee is empowered, to the extent necessary,
to sell Securities in such manner as is directed
by the Sponsor, which direction shall be given so
as to maximize the objectives of the Trust. In the
event that no such direction is given by the Spon-
sor, the Trustee is empowered to sell Securities
as follows: Treasury Obligations will be sold so
as to maintain in the Trust Treasury Obligations
in an amount which, upon maturity, will equal at
least $1.00 per Unit outstanding after giving ef-
fect to such redemption and Stocks having the
greatest amount of capital appreciation will be
sold first. (See "Administration of the Trust".)
However, with respect to redemption requests in
excess of $100,000, the Sponsor may determine in
its discretion to direct the Trustee to redeem
Units "in kind" by distributing Securities to the
redeeming Unitholder. When Stock is distributed, a
proportionate amount of Stock will be distributed,
rounded to avoid the distribution of fractional
shares and using cash or checks where rounding is
not possible. The Sponsor may direct the Trustee
to redeem Units "in kind" even if it is then main-
taining a secondary market in Units of the Trust.
Securities will be valued for this purpose as set
forth under "Valuation". A Unitholder receiving a
redemption "in kind" may incur brokerage or other
transaction costs in converting the Securities
distributed into cash. The availability of redemp-
tion "in-kind" is subject to compliance with all
applicable laws and regulations, including the Se-
curities Act of 1933, as amended.
To the extent that Securities are redeemed in
kind or sold, the size and diversity of the Trust
will be reduced. Sales will usually be required at
a time when Securities would not otherwise be sold
and may result in lower prices than might other-
wise be realized. The price received upon redemp-
tion may be more or less than the amount paid by
the Unitholder depending on the value of the Secu-
rities in the portfolio at the time of redemption.
In addition, because of the minimum amounts in
which Securities are required to be sold, the pro-
ceeds of sale may exceed the amount required at
the time to redeem Units; these excess proceeds
will be distributed to Unitholders on the Distri-
bution Dates.
The Trustee may, in its discretion, and will,
when so directed by the Sponsor, suspend the right
of redemption, or postpone the date of payment of
the Redemption Value, for more than seven calendar
days following the day of tender for any period
during which the New York Stock Exchange, Inc. is
closed other than for weekend and holiday clos-
ings; or for any period during which the Securi-
ties and Exchange Commission determined that trad-
ing on the New York Stock Exchange, Inc. is re-
stricted or for any period during which an emer-
gency exists as a result of which disposal or
evaluation of the Securities is not reasonably
practicable; or for such other period as the Secu-
rities and Exchange Commission may by order permit
for the protection of Unitholders. The Trustee is
not liable to any person or in any way for any
loss or damages which may result from any such
suspension or postponement, or any failure to sus-
pend or postpone when done in the Trustee's dis-
cretion.
VALUATION
The Trustee will calculate the Trust's value (the
"Trust Fund Evaluation") per Unit at the Evalua-
tion Time set forth under "Essential Information
Regarding the Trust" (1) on each June 30 and De-
cember 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 mar-
ket, (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, (b) cash on hand in the Trust, income
accrued on the Treasury Obligations but not dis-
tributed or held for distribution and dividends
receivable on Stocks trading ex-dividend (other
than any cash held in any reserve account estab-
lished under the Indenture) and (c) accounts re-
ceivable for securities sold and any other assets
of the Trust Fund not included in (a) and (b)
above and deducting therefrom the sum of (v) taxes
or other governmental charges against the Trust
not previously deducted, (w) accrued fees and ex-
penses of the Trustee and the Sponsor (including
legal and auditing expenses) and other Trust ex-
penses, (x) cash allocated for distribution to
Unitholders, and (y) accounts payable for units
tendered for redemption and any other liabilities
of the Trust Fund not included in (v), (w) , (x)
and (y) above. The per Unit Trust Fund Evaluation
is calculated by dividing the result of such com-
putation by the number of Units outstanding as of
the date thereof. Business days do not include New
Year's Day, President's 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 U.S. dollar value of
Stock denominated in foreign currency, if any,
contained in the Trust, will be based on the ap-
plicable foreign currency exchange rate calculated
at the Evaluation Time.
The value of Stocks shall be determined by the
Trustee in good faith in the following manner: (1)
if the Securities are listed on one or more na-
tional securities exchanges, such evaluation shall
be based on the closing sale price on that day
(unless the Trustee deems such price inappropriate
as a basis for evaluation) on the exchange which
is the principal market thereof (deemed to be the
New York Stock Exchange if the Securities are
listed thereon) (2) if there is no such appropri-
ate closing sale price on such exchange, at the
mean between the closing bid and asked prices on
such exchange (unless the Trustee deems such price
inappropriate as a basis for evaluation), (3) if
the Securities are not so listed or, if so listed
and the principal market therefor is other than on
such exchange or there are no such appropriate
closing bid and asked prices available, such
evaluation shall be made by the Trustee in good
faith based on the closing sale price on the over-
the-counter market (unless the Trustee deems such
price inappropriate as a basis for evaluation) or
(4) if there is no such appropriate closing price,
then (a) on the basis of current bid prices, (b)
if bid prices are not available, on the basis of
current bid prices for comparable securities, (c)
by the Trustee's appraising the value of the Secu-
rities in good faith on the bid side of the market
or (d) by any combination thereof.
During the initial offering period the Treasury
Obligations are valued on the basis of offering
prices; thereafter and for purposes of determining
Redemption Value they are valued on the basis of
bid prices. The aggregate offering and bid prices
of the Treasury Obligations, is the price obtained
from investment dealers or brokers (which may in-
clude the Sponsor) who customarily deal in Treas-
ury Obligations; or, if there is no market for the
Treasury Obligations, and bid or offering prices
are not available, on the basis of current bid or
offering prices for comparable securities; or by
appraisal; or by any combination of the above, ad-
justed 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 Treas-
ury 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 Re-
demption Value, (see: "Essential Information").
The bid and offering prices of the Treasury Obli-
gations is expected to vary. For this reason and
others, including the fact that the Public Offer-
ing 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, and expenses incurred in establishing the
Trust including legal and auditing fees and ini-
tial SEC and state registration fees (the "Organ-
izational Expenses"), will be paid by the Trust,
as is common for mutual funds. Historically, the
Sponsors of Unit Investment Trusts have paid all
organizational expenses. The Sponsor will receive
no fee from the Trust for its services in estab-
lishing the Trust.
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 initially $.00035 per Unit, may exceed the ac-
tual 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, an-
nually $.00145 per Unit computed monthly based
upon the largest number of Units outstanding in
the Trust during the preceding month. In addition,
the regular and recurring expenses of the Trust
are estimated to be $.00090 per Unit annually
which include, but are not limited to Organiza-
tional Expenses of $.00080 per Unit and 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 ex-
tent that it may hold funds in non-interest bear-
ing accounts created by the Indenture.
The Sponsor's fee and Trustee's fee may be in-
creased without approval of the Unitholders by an
amount not exceeding a proportionate increase in
the category entitled "All Services Less Rent" in
the Consumer Price Index published by the United
States Department of Labor or if the Price Index
is no longer published, a similar index as deter-
mined by the Trustee and Sponsor.
In addition to the above, the following charges
are or may be incurred by each Trust and paid from
the Income Account, or, to the extent funds are
not available in such Account, from the Capital
Account (see "Administration of the Trust-
Accounts"): (1) fees for the Trustee for extraor-
dinary services; (2) expenses of the Trustee (in-
cluding legal and auditing expenses) and of coun-
sel; (3) various governmental charges; (4) ex-
penses and costs of any action taken by the Trus-
tee to protect the trusts and the rights and in-
terests of the Unitholders; (5) indemnification of
the Trustee for any loss, liabilities or expenses
incurred by it in the administration of the Trust
without gross negligence, bad faith or wilful mis-
conduct on its part; (6) brokerage commissions and
other expenses incurred in connection with the
purchase and sale of Securities; and (7) expenses
incurred upon termination of the Trust. In addi-
tion, to the extent then permitted by the Securi-
ties and Exchange Commission, the Trust may incur
expenses of maintaining registration or qualifica-
tion 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 ex-
penses).
The accounts of the Trust shall be audited not
less than annually by independent auditors se-
lected 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 finan-
cial statements 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 divi-
dend paid prior to the Initial Date of Deposit,
dividends on the Stocks are expected to be suffi-
cient 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 "Re-
demption" herein.
RIGHTS OF UNITHOLDERS
Ownership of Units is evidenced by recordation on
the books of the Trustee. In order to avoid addi-
tional operating costs and for investor conven-
ience, 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 de-
livered by the Unitholder to the Sponsor. Issued
Certificates are transferable by presentation and
surrender to the Trustee at its office in Boston,
Massachusetts properly endorsed or accompanied by
a written instrument or instruments of transfer.
Uncertificated Units are transferable by presenta-
tion to the Trustee at its office of a written in-
strument 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 reis-
sued 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 Uni-
tholder must furnish indemnity satisfactory to the
Trustee and must pay such expenses as the Trustee
may incur. Mutilated certificates must be surren-
dered to Investors Bank & Trust Company for re-
placement.
DISTRIBUTIONS
The Trustee will distribute any net income re-
ceived , if any, from the Income Account, quar-
terly 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 al-
though Unitholders will be subject to tax as if a
distribution had occurred. Distributions from the
Capital Account will be made on quarterly Distri-
bution Dates to Unitholders of record on the pre-
ceding Record Date, provided however, that distri-
butions of less than $.00500 per Unit need not be
made from the Capital Account on any Distribution
Date. See "Federal Income Taxes".
Within a reasonable period after the Trust is
terminated, each Unitholder will, upon surrender
of his Certificates for cancellation, receive his
pro rata share of the amounts realized upon dispo-
sition of the Securities plus any other assets of
the Trust, less expenses of the Trust. (See "Ter-
mination.")
ADMINISTRATION OF THE TRUST
Accounts. All dividends received and interest, if
any, accrued on Securities, proceeds from the sale
of Securities or other monies received by the
Trustee on behalf of the Trust shall be held in
trust in non-interest bearing accounts until re-
quired to be disbursed.
The Trustee will credit on its books to an Income
Account any dividends (including stock dividends
which were sold) and interest, if any, accrued by
the Trust. All other receipts (i.e. return of
principal, and gains) are credited on its books to
a Capital Account. Stock dividends received by the
Trust, if any, will be sold by the Trustee and the
proceeds therefrom be treated as income to the
Trust. A record will be kept of qualifying divi-
dends within the Income Account. The pro rata
share of the Income Account and the pro rata share
of the Capital Account represented by each Unit
will be computed by the Trustee as set forth under
"Valuation".
The Trustee will deduct from the Income Account
and, to the extent funds are not sufficient
therein, from the Capital Account, amounts neces-
sary to pay expenses incurred by the Trust. (See
"Expenses and Charges.") In addition, the Trustee
may withdraw from the Income Account and the Capi-
tal Account such amounts as may be necessary to
cover redemption of Units by the Trustee. (See
"Redemption.")
The Trustee may establish reserves (the "Reserve
Account") within the Trust for state and local
taxes, if any, and any other governmental charges
payable out of the Trust.
Reports and Records. With the distribution of in-
come from the Trust, Unitholders will be furnished
with a statement setting forth the amount being
distributed from each account.
The Trustee keeps records and accounts of the
Trust at its office in Boston, including records
of the names and addresses of Unitholders, a cur-
rent list of underlying Securities in the portfo-
lio and a copy of the Indenture. Records pertain-
ing 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
1997, the Trustee will furnish each person who was
a Unitholder at any time during the calendar year
an annual report containing the following informa-
tion, 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 In-
come and Capital Accounts and any Reserves; (2)
any Securities sold during the year and the Secu-
rities 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 In-
denture provides that the Sponsor may (but need
not) direct the Trustee to dispose of a Security:
(1) upon the failure of the issuer to declare or
pay anticipated dividends or interest;
(2) upon the institution of materially adverse
action or proceeding at law or in equity seeking
to restrain or enjoin the declaration or payment
of dividends or interest on any such Securities or
the existence of any other materially adverse le-
gal question or impediment affecting such Securi-
ties or the declaration or payment of dividends or
interest on the same;
(3) upon the breach of covenant or warranty in
any trust indenture or other document relating to
the issuer which might materially and adversely
affect either immediately or contingently the dec-
laration or payment of dividends or interest on
such Securities;
(4) upon the default in the payment of principal
or par or stated value of, premium, if any, or in-
come on any other outstanding securities of the
issuer or the guarantor of such securities which
might materially and adversely, either immediately
or contingently, affect the declaration or payment
of dividends or interest on the Securities;
(5) upon the decline in price or the occurrence
of any materially adverse market or credit fac-
tors, that in the opinion of the Sponsor, make the
retention of such Securities not in the best in-
terest of the Unitholder;
(6) upon a public tender offer being made for a
Security, or a merger or acquisition being an-
nounced affecting a Security that in the opinion
of the Sponsor make the sale or tender of the Se-
curity in the best interests of the Unitholders;
(7) upon a decrease in the Sponsor's internal
rating of the Security; or
(8) upon the happening of events which, in the
opinion of the Sponsor, negatively affect the eco-
nomic fundamentals of the issuer of the Security
or the industry of which it is a part.
The Trustee may dispose of Securities where nec-
essary to pay Trust expenses or to satisfy redemp-
tion requests as directed by the Sponsor and in a
manner necessary to maximize the objectives of the
Trust, or if not so directed in its own discre-
tion, provided however, that Treasury Obligations
will be sold so as to maintain in the Trust Treas-
ury Obligations in an amount which, upon maturity,
will equal at least $1.00 per Unit outstanding af-
ter giving effect to such redemption and Stocks
having the greatest appreciation shall be sold
first.
Reinvestment. Cash received upon the sale of
Stock (except for sales to meet redemption re-
quests) and dividends received may, if and to the
extent there is no legal or regulatory impediment,
be reinvested in United States Treasury obliga-
tions which mature on or prior to the next sched-
uled Distribution Date. The Sponsor anticipates
that, where permitted, such proceeds will be rein-
vested 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 Uni-
tholders of record.
AMENDMENT OF THE INDENTURE
The Indenture may be amended by the Trustee and
the Sponsor without the consent of any of the Uni-
tholders to cure any ambiguity or to correct or
supplement any provision thereof which may be de-
fective or inconsistent or to make such other pro-
visions as will not 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 con-
sent of all Unitholders.
The Trustee will promptly notify Unitholders of
the substance of any amendment affecting Unithold-
ers rights or their interest in the Trust.
TERMINATION OF THE TRUST
The Indenture provides that the Trust will termi-
nate within 15 days after the maturity of the
Treasury Obligations held n 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 Manda-
tory Termination Date.
As directed by the Sponsor approximately 30 days
prior to the maturity of the Treasury Obligations
the Trustee will begin to sell the Stocks held in
the Trust. Stocks having the greatest amount of
capital appreciation will be sold first. Upon ter-
mination of the Trust, the Trustee will sell any
Stocks then remaining in the Trust and will then,
after deduction of any fees and expenses of the
Trust and payment into the Reserve Account of any
amount required for taxes or other governmental
charges that may be payable by the Trust, distrib-
ute to each Unitholder, upon surrender for cancel-
lation of his Certificate after due notice of such
termination, such Unitholder's pro rata share in
the Income and Capital Accounts. Monies held upon
the sale of Securities will be held in non-
interest bearing accounts created by the Indenture
until distributed and will be of benefit to the
Trustee. The sale of Stocks in the Trust in the
period prior to termination and upon termination
may result in a lower amount than might otherwise
be realized if such sale were not required at such
time due to 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 cor-
poration organized under the laws of the State of
Delaware. The Sponsor is a member firm of the New
York Stock Exchange, Inc. as well as other major
securities and commodities exchanges and is a mem-
ber of the National Association of Securities
Dealers, Inc. The Sponsor is engaged in a security
and commodity brokerage business as well as under-
writing 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 or-
ders on behalf of investment companies for the
purchase and sale of securities of such companies
and sells securities to such companies in its ca-
pacity as a broker or dealer in securities.
The Indenture provides that the Sponsor will not
be liable to the Trustee, any of the Trusts or to
the Unitholders for taking any action or for re-
fraining from taking any action made in good faith
or for errors in 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 du-
ties under the Indenture, becomes incapable of
acting, becomes bankrupt, or has its affairs taken
over by public authorities, the Trustee may either
appoint a successor Sponsor or Sponsors to serve
at rates of compensation determined as provided in
the Indenture or terminate the Indenture and liq-
uidate the Trust.
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 Comptrol-
ler of the Currency, the Federal Deposit Insurance
Corporation and the Board of Governors of the Fed-
eral 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 Fed-
eral Deposit Insurance Corporation and the Board
of Governors of the Federal Reserve System).
The Indenture provides that the Trustee will not
be liable for any action taken in good faith in
reliance on properly executed documents or the
disposition of moneys, Securities or Certificates
or in respect of any valuation which it is re-
quired to make, except by reason of its own gross
negligence, bad faith or wilful misconduct, nor
will the Trustee be liable or responsible in any
way for depreciation or loss incurred by reason of
the sale by the Trustee of any Securities in the
Trust. In the event of the failure of the Sponsor
to act, the Trustee may act and will not be liable
for any such action taken by it in good faith. The
Trustee will not be personally liable for any
taxes or other governmental charges imposed upon
or in respect of the Securities or upon the inter-
est thereon or upon it as Trustee or upon or in
respect of the Trust which the Trustee may be re-
quired to pay under any present or future law of
the United States of America or of any other tax-
ing 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 ac-
ceptance or administration of the Trust, including
the costs and expenses (including counsel fees) of
defending itself against any claim of liability.
INDEPENDENT AUDITORS
The statement of financial condition and schedule
of investments audited by Ernst & Young LLP, inde-
pendent auditors, have been included herein in re-
liance upon their report given on their authority
as experts in accounting and auditing.
LEGAL OPINIONS
The legality of the Units offered hereby has been
passed upon by Carter, Ledyard & Milburn, 2 Wall
Street, New York, New York, as counsel for the
Sponsor.
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 19 certifies that it meets all of the
requirements for effectiveness of this Registration Statement
pursuant to Rule 485(a) 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 27th day of January, 1999.
PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES 19
(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 27th day of January, 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.
January 27, 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 19
(hereinafter referred to as the "Trust"). It is proposed that
Post-Effective Amendment No. 2 to the Trust's registration statement
("Post-Effective Amendment No. 2") 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. 2 to the Registration Statement on
Form S-6 (File No. 333-02813) 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 (a) 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
January 14, 1999, in the Registration Statement and related
Prospectus of the PaineWebber Pathfinders Trust, Treasury
and Growth Stock Series 19
/s/ ERNST & YOUNG LLP
New York, New York
January 26, 1999
