File No. 333-49105
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 1
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 23
B. Name of Depositor:
PAINEWEBBER INCORPORATED
C. Complete address of Depositor's principal executive office:
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
D. Name and complete address of agents for service:
PAINEWEBBER INCORPORATED
Attention: Mr. Robert E. Holley
1200 Harbor Blvd.
Weehawken, New Jersey 07087
(x) Check if it is proposed that this filing should become effective
(immediately upon filing or on July 23, 1999) pursuant to paragraph
(b) of Rule 485.
E. Total and amount of securities being registered:
An indefinite number of units of Beneficial Interest pursuant to Rule
24f-2 under the Investment Company Act of 1940.
F. Proposed maximum offering price to the public of the securities being
registered:
Indefinite pursuant to Rule 24f-2
G. Amount of filing fee, computed at one-thirty-fourth of 1 percent of the
proposed maximum aggregate offering price to the public:
In accordance with Rule 24f-2, a fee in the amount of $11,800.39 was paid
on March 29, 1999 in connection with the filing of the Rule 24f-2 Notice
for the Trust's most recent fiscal year.
H. Approximate date of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT.
PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES 23
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 TWENTY THREE
(A Unit Investment Trust)
40,000,000 Units
Portfolio of "Zero-Coupon" U.S. Treasury
Obligations and Common Stocks
Designed for Preservation of Capital and
Potential Capital Appreciation
This Prospectus consists of two parts: Part A and
Part B. Parts A and B should both be attached for
this Prospectus to be complete.
The Securities and Exchange Commission has not
approved or disapproved these Securities or
passed upon the adequacy of this Prospectus. Any
representation to the contrary is a criminal
offense.
SPONSOR:
PAINEWEBBER INCORPORATED
PROSPECTUS PART A DATED JULY 23, 1999
No person is authorized to give any information
or make any representations about this Trust not
contained in this Prospectus, and you should not
rely on any other information. Read and keep both
parts of this prospectus for future reference.
Table of Contents
Part A Page
Brief Description of the Trust's Investment Portfolio A - 3
Is this Trust Appropriate for You? A - 4
Summary of Risks A - 4
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 - 4
Public Offering of Units B - 6
Public Offering Price B - 6
Sales Charge and Volume Discount B - 6
Employee Discount B - 7
Exchange Option B - 7
Conversion Option B - 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 - 16
Trustee B - 16
Independent Auditors B - 17
Legal Opinions B - 17
PAINEWEBBER PATHFINDERS TRUST, TREASURY AND
GROWTH STOCK
SERIES TWENTY THREE - PART A
Brief Description of the Trust's Investment
Portfolio
1. The Trust's Objective.
The Trust seeks to provide preservation of
capital and potential capital appreciation
through an investment in a portfolio of stripped
"zero-coupon" United States Treasury obligations
maturing on May 15, 2010 and common stocks.
Because the maturity value of the Treasury
Obligations is backed by the full faith and
credit of the United States, the Sponsor believes
that the Trust provides an attractive combination
of safety and appreciation for purchasers who
hold Units until May 30, 2010, 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
obligations and the remaining 50% was invested in
common stocks as described briefly below.
The stripped "zero-coupon" U.S. Treasury
Obligations make no payment of current interest,
but rather make a single payment upon their
stated maturity. PaineWebber chose the stocks in
the Trust's Portfolio for their capital
appreciation potential, not for their income
potential. Many of the stocks currently pay
little or no dividend income.
The Trust has been formulated so that the portion
of the Trust invested in stripped Treasury
Obligations is designed to provide an approximate
return of principal invested on the Mandatory
Termination Date for purchasers on the Initial
Date of Deposit. (See "Essential Information-
Distributions".) Therefore, even if the Stocks
are valueless upon termination of the Trust, and
if the Treasury Obligations are held until their
maturity in proportion to the Units outstanding,
purchasers will receive, at the termination of
the Trust, $1,000 per 1,000 Units purchased.
This feature of the Trust provides that
Unitholders who purchased their Units at or below
$1,000 per 1,000 Units and who hold their units
to the Mandatory Termination Date will receive
the same amount as they originally invested,
although they would have foregone earning any
interest on the amounts involved and will not
protect their principal on a present value basis,
assuming the Stocks are valueless.
2. Brief Description of the Trust's Portfolio.
The Trust is a unit investment trust which means
that, unlike a mutual fund, the Trust's Portfolio
is not managed and the Trust Portfolio's
investments are not sold because of market
changes.
Unless terminated sooner, the Trust is scheduled
to terminate on May 30, 2010 regardless of market
conditions at the time. The Trust plans to hold
until its termination the U.S. Treasury
obligations maturing May 15, 2010 and a
diversified group of stocks, all as shown on the
"Schedule of Investments" in this Prospectus Part
A.
The main objective of PaineWebber in constructing
the portfolio of stocks to be included in the
Trust was to select a group of stocks which, in
PaineWebber's view, would be capable of, over the
long term, closely tracking the performance of
the market as measured by the S&P 500. The S&P
500 is an unmanaged index of 500 stocks
calculated under the auspices of Standard &
Poor's, which, in PaineWebber's view, is a
broadly diversified, representative segment of
the market of all publicly traded stocks in the
United States.
On March 31, 1999, the aggregate market value of
the Trust Portfolio was $42,165,944.
When the Trust's Portfolio was constructed in
1998, 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 Research) which, when equally
weighted, have the highest correlation with the
S&P 500 Index with the smallest tracking error.
As of March 31, 1999, the Trust Portfolio holds
40 stocks.
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 1.86%
Automobile 1.25%
Beverages 2.00%
Chemicals .65%
Commercial Services .47%
Computers - Hardware/Software 5.54%
Cosmetics & Toiletries 1.32%
Electronics 1.71%
Financial Institutions/Banks 6.43%
Foods .86%
Insurance 1.32%
Medical Products & Instruments 2.96%
Multimedia 2.72%
Networking Products 2.68%
Oil 4.22%
Pharmaceuticals 4.09%
Retail - Building Products 1.98%
Retail - Discount 1.95%
Telecommunications 4.65%
Tobacco .95%
Is this Trust Appropriate for You?
Yes, if you are a long-term investor
seeking capital protection combined with
potential capital appreciation over the life of
the Trust. You will benefit from a professionally
selected portfolio whose risk is reduced by
investing in stocks of several different issuers.
No, if you want a speculative investment
that changes to take advantage of market
movements, if you are unable or unwilling to
assume the risks involved generally with equity
investment or if you need current income.
Summary of Risks
You can lose money by investing in the
Trust. This can happen for various reasons. A
further discussion of the risks summarized below
can be found in Part B of this Prospectus.
1. Risks of Investing in the Trust
Certain risks are involved with an
investment in a unit trust which holds stripped
"zero-coupon" U.S. Treasury Obligations and
common stocks. For example:
The Trust, unlike a mutual fund, is not
"managed", so neither the U.S. Treasury
Obligations nor the stocks will be sold by the
Trust to take advantage of market fluctuations.
The Trust Portfolio may not remain constant
during the life of the Trust. The Trustee may be
required to sell stocks to pay Trust expenses, to
tender stocks under certain circumstances or to
sell stocks in the event certain negative events
occur.
The sale of stocks from the Trust in the period
prior to termination and upon termination may
result in a lower amount than might otherwise be
realized if such sale were not required at such
time due to impending or actual termination of
the Trust. For this reason, among others, the
amount you receive upon termination may be less
than the amount you paid.
If many investors sell their Units, the Trust
will have to sell Portfolio Securities. This
could reduce the diversification of your
investment and increase your share of Trust
expenses.
The price of your Units depends upon the full
range of economic and market influences including
the prices of bonds and equity securities,
current interest rates, the condition of the bond
and stock markets and other economic influences
that affect the global or Untied States economy.
Assuming no changes occur in the prices of the
U.S. Treasury Obligations and the stocks held by
the Trust, the price you paid for your Units will
generally be less then the price you paid because
your purchase price included a sales charge.
The stocks in the Trust's Portfolio will
generally trade on a domestic stock exchange or
in the over-the-counter market. We cannot assure
you that a liquid trading market will exist. The
value of the Trust's Portfolio, and of your
investment, may be reduced if trading in one or
more stocks is limited or absent.
Additional stocks and U.S. Treasury Obligations
may be acquired by the Trust when additional
Units are to be offered to the public. Costs
incurred in acquiring such additional stocks and
Treasury Obligations will be borne by the Trust.
Unitholders will experience a dilution of their
investment as a result of such brokerage fees and
other expenses paid by the Trust during the
additional deposits of securities purchased by
the Trustee with cash or cash equivalents.
Investing always involves risk. The risks
described below are the most significant risks
associated with investing in the U.S. Treasury
Obligations and stocks held by the Trust.
2. Risks of Investing in Stripped "Zero-Coupon"
U.S. Treasury Obligations
The stripped Treasury Securities in the
Trust were purchased at a deep discount and do
not make any periodic payments of interest.
Instead, the entire payment of proceeds will be
made upon maturity of such Treasury Obligations.
Owners of deep discount bonds which make no
current interest payments earn a fixed yield not
only on the original investment but also on all
earned discount during the life such obligation.
This implicit reinvestment of earnings at the
same, fixed rate eliminates the owner's ability
to reinvest at higher rates in the future. For
this reason, sale of Units prior to the
termination date of the Trust will involve
substantially greater price fluctuations during
periods of changing market interest rates than
would be experienced in connection with sale of
Units of a Trust which held Treasury Obligations
which made scheduled interest payments on a
current basis.
3. Risks of Investing in Stocks
Holders of common stocks such as those held by
the Trust have rights that are generally inferior
to the holders of debt obligations or preferred
stocks.
Common stocks are not obligations of the issuer.
Therefore, they do not provide any assurance of
income or provide the degree of protection of
debt securities.
The stocks held by the Trust can be expected to
fluctuate in value depending on a wide variety of
factors, such as economic and market influences
affecting corporate profitability, financial
condition of issuers, changes in worldwide or
national economic conditions, the prices of
equity securities in general and the Trust's
stocks in particular.
Certain of the stocks in the Trust may be
American Depositary Receipts or "ADRs" which are
subject to additional risks. (See "Schedule of
Investments" herein.) ADRs are subject to
certain investment risks that are different from
those experienced by Stocks issued by domestic
issuers. These investment risks include
potential future political and economic
developments and the potential establishment of
exchange controls, new or higher levels of
taxation, or other governmental actions which
might adversely affect the payment or receipt of
payment of dividends on the common stock of
foreign issuers underlying such ADRs. ADRs may
also be subject to current foreign taxes, which
could reduce the yield on such securities.
The securities underlying the ADRs held in the
Trust are generally denominated, and pay
dividends, in foreign currency and are therefore
subject to currency exchange rate risk. Currency
exchange rate risk occurs because the U.S. dollar
value of the shares underlying the ADRs and of
their dividends will vary with the fluctuations
in the U.S. dollar foreign exchange rates for the
relevant currency in which the shares underlying
the ADRs are denominated. Exchange rate
fluctuations are dependent on a number of
economic factors including the world economy and
the economic conditions within the relevant
country, supply and demand of the relevant
currency, interest rate differentials between
currencies, the balance of imports and exports of
goods and services, monetary and fiscal policies
of the relevant country, perceived political
stability and investor psychology, especially
that of institutional investors predicting the
future relative strength or weakness of a
particular currency.
Year 2000 Problem Risk
Many computer systems were designed in such a
way that they may be unable to distinguish
between the year 2000 and the year 1900 and
therefore may not properly process and calculate
date-related information and data (commonly know
as the "Year 2000 Problem"). As with all
investment and financial companies, the Year 2000
Problem may have an adverse impact upon the
Trust. The Sponsor and the Trustee are taking
steps to address the year 2000 Problem with
respect to the computer systems they use and to
obtain reasonable assurances that similar steps
are being taken by the Trust's other service
providers. At this time, however, there can be
no assurance that these steps will be sufficient
to avoid any adverse impact to the Trust. The
year 2000 Problem is expected to have an impact
on all corporations, including those whose stocks
are contained in the Trust's Portfolio. The
Sponsor cannot predict what impact, if any, the
year 2000 Problem will have on the stocks in the
Trust.
<TABLE>
ESSENTIAL INFORMATION REGARDING THE TRUST
<CAPTION>
As of March 31, 1999
Sponsor: PaineWebber Incorporated
Trustee: Investors Bank & Trust Co.
Initial Date of Deposit: April 15, 1998
<S> <C>
Aggregate Market Value of Securities in Trust: $42,165,944
Number of Units: 40,000,000
Minimum Purchase: $250
Fractional Undivided Interest in the Trust Represented by
Each Unit: 1/40,000,000th
Calculation of Public Offering Price Per Unit:
Value of Net Assets in Trust $42,170,718
Divided by 40,000,000 Units $1.0543
Plus Sales Charge of 4.75% of Public Offering Price $.0526
Public Offering Price per Unit $1.1069
Redemption Value per Unit $1.0543
Excess of Public Offering Price over Redemption Value per Unit: $.0526
Sponsor's Repurchase Price per Unit $1.0543
Excess of Public Offering over Sponsor's Repurchase Price per Unit: $.0526
Evaluation Time: 4 P.M. New York Time
Distribution Dates*: Quarterly on January 20, April 20,
July 20 and October 20.
Record Date: March 31, June 30, September 30
and December 31.
Mandatory Termination Date: March 30, 2010 (15 days after
Maturity of the Treasury
Obligations).
Discretionary Liquidation Amount: 20% of the value of the Securities
upon completion of the deposit of
the Securities
Estimated Expenses of the Trust * *: $.0028 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 TRUSTEE
THE PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES TWENTY THREE:
We have audited the accompanying statement of
financial condition, including the schedule of
investments, of The PaineWebber Pathfinders
Trust, Treasury and Growth Stock Series Twenty
Three as of March 31, 1999 and the related
statements of operations and changes in net
assets for the period from April 15, 1998
(initial date of deposit) to March 31, 1999.
These financial statements are the responsibility
of the Trustee. Our responsibility is to express
an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about
whether the financial statements are free of
material misstatement. An audit includes
examining, on a test basis, evidence supporting
the amounts and disclosures in the financial
statements. Our procedures included confirmation
of the securities owned as of March 31, 1999, as
shown in the statement of financial condition and
schedule of investments, by correspondence with
the Trustee. An audit also includes assessing the
accounting principles used and significant
estimates made by the Trustee, as well as
evaluating the overall financial statement
presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion, the financial statements
referred to above present fairly, in all material
respects, the financial position of The
PaineWebber Pathfinders Trust, Treasury and
Growth Stock Series Twenty Three at March 31,
1999 and the results of its operations and
changes in its net assets for the period from
April 15, 1998 to March 31, 1999, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
New York, New York
July 12, 1999
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES TWENTY THREE
STATEMENT OF FINANCIAL CONDITION
March 31, 1999
<CAPTION>
ASSETS
<S> <C> <C>
Treasury Obligation - at market value (Cost $21,634,771)
(note A and note 1 to schedule of investments) $21,247,560
Common Stock - at market value (Cost $17,916,306)
(note 1 to schedule of investments) 20,918,384
Accounts receivable-securities sold 213,609
Accrued dividends receivable 28,352
Prepaid expenses 78,425
Cash 647
Total Assets $42,486,977
LIABILITIES AND NET ASSETS
Accounts payable-units redeemed $212,900
Advance from Trustee 26,224
Accrued expenses payable 47,387
Distributions payable 29,748
Total Liabilities $316,259
Net Assets (40,000,000 units of fractional undivided interest outstanding):
Cost to investors (note B) $41,523,440
Less gross underwriting commissions (note C) (1,972,363)
39,551,077
Net unrealized market appreciation (note D) 2,614,867
Net amount applicable to unitholders 42,165,944
Undistributed investment income-net 3,398
Undistributed proceeds from securities sold 1,376
Net Assets 42,170,718
Total Liabilities and Net Assets $42,486,977
Net Asset Value per unit $1.0543
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES TWENTY THREE
STATEMENT OF OPERATIONS
<CAPTION>
For the
Period from
April 15,
1998 (initial date
of deposit) to
March 31,
1999
<S> <C>
Operations:
Investment income:
Accretion on Treasury Obligation $925,068
Dividend Income 209,242
Total investment income 1,134,310
Less expenses:
Trustee's fees, evaluator's expense and other expenses 122,331
Total expenses 122,331
Investment income-net 1,011,979
Realized and unrealized gain on investments-net:
Net realized gain on securities transactions 297,255
Net change in unrealized market appreciation 2,614,867
Net gain on investments 2,912,122
Net increase in net assets resulting from operations $3,924,101
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES TWENTY THREE
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
For the
Period from
April 15,
1998 (initial date
of deposit) to
March 31,
1999
<S> <C>
Operations:
Investment income-net $1,011,979
Net realized gain on securities transactions 297,255
Net change in unrealized market appreciation 2,614,867
Net increase in net assets resulting from operations 3,924,101
Less: Distributions to Unitholders (Note E)
Investment income-net 91,533
Total Distributions 91,533
Less: Units Redeemed by Unitholders (Note F)
Value of units at date of redemption 5,274,886
Accrued dividends at date of redemption 1,780
Accreted discount at date of redemption 80,034
Total Redemptions 5,356,700
Decrease in net assets (1,524,132)
Net Assets:
Beginning of Period ---
Supplemental Deposits (Note F) 43,694,850
End of Period $42,170,718
See accompanying notes to financial statements.
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES TWENTY THREE
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
(A) The financial statements of the Trust are
prepared on the accrual basis of accounting.
Security transactions are accounted for on the
date the securities are purchased or sold. The
original issue discount on the Treasury
Obligation is accreted on a level yield basis.
The amount of discount included in the cost of
the Treasury Obligation held as of March 31, 1999
is $843,268.
(B) Cost to investors represents the initial
public offering price as of the initial date of
deposit, and the value of units through
supplemental deposits computed on the basis set
forth under "Public Offering Price of Units",
adjusted for accretion on United States Treasury
Obligations and for securities sold since the
date of deposit.
(C) Sales charge of the Public Offering Price
per Unit is computed on the basis set forth under
" Public Offering of Units - Sales Charge and
Volume Discount ".
(D) At March 31, 1999, the gross unrealized
market appreciation was $3,640,619 and the gross
unrealized market depreciation was ($1,025,752).
The net unrealized market appreciation was
$2,614,867.
(E) Regular distributions of net income,
excluding accretion income and principal receipts
not used for redemption of units are made
quarterly. Special distribution may be made when
the Sponsor and Trustee deem necessary. Income
with respect to the accretion of original issue
discount is not distributed although the
unitholder is subject to tax, where applicable,
as if the distribution had occurred. Accretion
income earned by the Trust increases a
unitholder's cost basis in the underlying
security.
(F) The following units were redeemed with
proceeds of securities sold as follows:
<CAPTION>
For the
Period from
April 15,
1998 (initial date
of deposit) to
March 31,
1999
<S> <C>
Number of units redeemed 5,000,000
Redemption amount $5,356,700
The following units were sold through supplemental
deposits:
Number of units sold 44,000,000
Value of amount, net of sales charge $42,742,350
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES TWENTY THREE
SCHEDULE OF INVESTMENTS
<CAPTION>
As of March 31, 1999
TREASURY OBLIGATIONS (50.39%)
Name of Security Coupon Maturity Value Maturity Date Market Value(1)
<C> <C> <C> <C> <C>
U.S. Treasury Interest Payments (2) (50.39%) 0% $40,000,000 5/15/2010 $21,247,560
COMMON STOCKS (49.61%)
Name of Issuer Number of Shares Market Value(1)
Aerospace/Defense: (1.86%)
AlliedSignal Inc. 9,730 $478,594
The Boeing Company 8,923 304,497
Automobile: (1.25%)
Ford Motor Company 9,323 529,080
Beverages: (2.00%)
The Coca-Cola Company 6,486 398,078
PepsiCo, Inc. 11,350 444,778
Chemicals: (.65%)
Eastman Chemical Company 6,486 272,817
Commercial Services: (.47%)
Cendant Corporation* 12,565 197,899
Computers-Hardware/Software: (5.54%)
Compaq Computer Corporation 17,834 565,115
Computer Associates International, Inc. 8,517 302,886
Hewlett-Packard Company 7,706 522,563
Microsoft Corporation* 10,539 944,558
Cosmetics & Toiletries: (1.32%)
The Procter & Gamble Company 5,675 555,795
Electronics: (1.71%)
Intel Corporation 6,080 722,760
Financial Institutions/Banks: (6.43%)
Bank of America Corporation (3) 5,675 400,797
The Chase Manhattan Corporation 6,479 526,824
Citigroup Inc. (4) 6,892 440,226
Fannie Mae 7,706 533,641
First Union Corporation 7,706 411,789
J.P. Morgan & Company Incorporated 3,243 400,105
Foods: (.86%)
Sara Lee Corporation 14,604 361,449
Insurance: (1.32%)
American International Group, Inc. 4,609 555,961
Medical Products & Instruments: (2.96%)
Johnson & Johnson 6,486 607,657
Medtronic, Inc. 8,923 640,225
Multimedia: (2.72%)
Time Warner Inc. 11,352 806,702
The Walt Disney Company 10,933 340,290
Networking Products: (2.68%)
Cisco Systems, Inc.* 10,339 1,132,767
Oil: (4.22%)
Exxon Corporation 6,892 486,317
Royal Dutch Petroleum Company~ 8,113 421,876
Texaco, Inc. 7,706 437,316
Unocal Corporation 11,755 432,731
(Continued)
</TABLE>
<TABLE>
THE PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES TWENTY THREE
SCHEDULE OF INVESTMENTS
<CAPTION>
As of March 31, 1999
COMMON STOCKS (49.61%)
Name of Issuer Number of Shares Market Value(1)
<C> <C> <C>
Pharmaceuticals: (4.09%)
Abbott Laboratories 12,159 $569,193
Bristol-Myers Squibb Company 8,910 573,024
Merck & Co., Inc. 7,291 584,647
Retail-Building Products: (1.98%)
Lowe's Companies, Inc. 13,789 834,235
Retail-Discount: (1.95%)
Wal-Mart Stores, Inc. 8,923 822,589
Telecommunications: (4.65%)
AT&T Corp. 7,706 615,035
Bell Atlantic Corporation 7,111 367,550
GTE Corporation 7,302 441,771
SBC Communications Inc. 11,350 534,869
Tobacco: (.95%)
Philip Morris Companies, Inc. 11,350 399,378
TOTAL COMMON STOCKS $20,918,384
TOTAL INVESTMENTS $42,165,944
(1) Valuation of Securities was made by the
Trustee as described in "Valuation".
(2) This security does not pay current
interest. On the maturity date thereof, the
entire maturity value becomes
due and payable. Generally, a fixed yield is
earned on such security which takes into account
the semi-annual
compounding of accrued interest. (See "The
Trust" and "Federal Income Taxes" herein).
(3) Nationsbank merged with Bank of America
Corporation.
(4) Travelers Group Inc. merged with Citigroup
Inc.
* Non-income producing.
~ American Depositary Receipts.
</TABLE>
PAINEWEBBER PATHFINDERS TRUST
TREASURY AND GROWTH STOCK SERIES 23
PROSPECTUS PART B
PART B OF THIS PROSPECTUS MAY NOT BE DISTRIBUTED
UNLESS ACCOMPANIED BY PART A.
Part B contains a description of the important
features of the PaineWebber Pathfinders Trust
Treasury and Growth Stock Series 23 and also
includes a more detailed discussion of the
investment risks that a Unitholder might face
while holding Trust Units.
THE COMPOSITION OF THE PORTFOLIO
PaineWebber understands the importance of
long-term financial goals such as planning for
retirement, funding a child's education, or
trying to build wealth toward some other
objective.
In PaineWebber's view, one of the most important
investment decisions an investor faces may be
determining how to best allocate his investments
to capture growth opportunities without exposing
his portfolio to undue risk. For long-term
capital growth, many investment experts recommend
stocks. As with all investments, the higher
return potential of equities is typically
associated with higher risk. With this in mind,
PaineWebber designed a portfolio to meet the
needs of investors interested in building wealth
prudently over a long-term time horizon by
pairing the security of U.S. Treasury bonds with
the growth potential of equity securities. The
Trust is a balanced portfolio with approximately
equal portions in U.S. Treasury bonds and equity
securities. Therefore, should interest rates
decline significantly prior to maturity, there is
a potential for achieving greater returns by
liquidating the portfolio before the final
maturity date. Unitholders can sell units at any
time at the then current net asset value with no
additional sales charge. (See "Public Offering of
Units-Secondary Market for Units and
Redemption".)
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 Index". The S&P 500 Index is an
unmanaged index of 500 stocks the value of which
is calculated by Standard & Poor's Corporation,
which index, in PaineWebber's view, is a broadly
diversified, representative 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 Index stocks to identify a combination of 40
S&P 500 Index stocks (excluding General Electric
and those stocks rated "Unattractive" or "Sell"
by PaineWebber Equity Research) which, when
equally weighted, are highly correlated (97%)
with the S&P 500 Index within a 3% 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 multiple industry sources but whose
primary source is listed in Part A above. For a
list of the individual common stocks comprising
each industry group listed below, investors
should consult the "Schedule of Investments"
herein.
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"), and (ii)
after such payment, to make distributions of such
to Unitholders as described below under
"Distributions".
ABOUT THE TRUST
The Trust is one of a series of similar but
separate unit investment trusts created by the
Sponsor under a Trust Indenture and Agreement*
(the "Indenture") dated as of the Initial Date of
Deposit, among PaineWebber Incorporated, as
Sponsor and the Investors Bank & Trust Company as
Trustee (the "Trustee"). The objective of the
Trust is preservation of capital and capital
appreciation through an investment in Treasury
Obligations and Stocks. These Stocks are equity
securities which, in the Sponsor's
*Reference is hereby made to said Trust Indenture
and Agreement and any statements contained herein
are qualified in their entirety by the provisions
of said Trust Indenture and Agreement.
opinion on the Initial Date of Deposit, are
capable, over the long term, of closely tracking
the performance of the public market for equity
securities as measured by the S&P 500 Index. The
Stocks contained in the Trust are representative
of a number of different industries. Dividends
received by the Trust, if any, may be invested in
Short-Term Treasury Obligations (if there is no
regulatory impediment). Otherwise, such dividends
will be held by the Trustee in non-interest
bearing accounts until used to pay expenses or
distributed to Unitholders on the next
Distribution Date and to the extent that funds
are held therein will benefit the Trustee.
On the Initial Date of Deposit, the Sponsor
deposited with the Trustee the confirmations of
contracts for the purchase of Securities together
with an irrevocable letter or letters of credit
of a commercial bank or banks in an amount at
least equal to the purchase price of the
Securities. The value of the Securities was
determined on the basis described under
"Valuation". In exchange for the deposit of the
contracts to purchase Securities, the Trustee
delivered to the Sponsor a registered certificate
for Units representing the entire ownership of
the Trust. On the Initial Date of Deposit the
fractional undivided interest in the Trust
represented by a Unit was as described in
"Essential Information Regarding the Trust".
With the deposit on the Initial Date of Deposit,
the Sponsor established a proportionate
relationship between the maturity value of the
Treasury Obligations and the number of shares of
each Stock in the Trust. The Sponsor may, from
time to time, cause the deposit of additional
Securities in the Trust when additional Units are
to be offered to the public, replicating the
original percentage relationship between the
maturity value of the Treasury Obligations and
the number of shares of Stock deposited on the
Initial Date of Deposit and replicating any cash
or cash equivalents held by the Trust (net of
expenses). The original proportionate
relationship is subject to adjustment to reflect
the occurrence of a stock split or other
corporate action 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 the issuer at the time
of such event. Taxable stock dividends received
by the Trust, if any, will be sold by the Trustee
and the proceeds received will be treated as
income to the Trust.
The Treasury Obligations consist of U.S.
Treasury obligations which have been stripped of
their unmatured interest coupons or interest
coupons stripped from the U.S. Treasury
obligations. The obligor with respect to the
Treasury Obligations is the United States
Government. U.S. Government backed obligations
are generally considered the safest investment.
On the Initial Date of Deposit each Unit
represented the fractional undivided interest in
the Securities and net income of the Trust set
forth under "Essential Information Regarding the
Trust". However, if additional Units are issued
by the Trust (through either the deposit of (i)
additional Securities or (ii) cash for the
purchase of additional Securities for purposes of
the sale of additional Units), the aggregate
value of Securities in the Trust will be
increased and the fractional undivided interest
represented by each Unit in the balance will be
decreased. If any Units are redeemed, the
aggregate value of Securities in the Trust will
be reduced, and the fractional undivided interest
represented by each remaining Unit in the balance
will be increased. Units will remain outstanding
until redeemed upon tender to the Trustee by any
Unitholder (which may include the Sponsor) or
until the termination of the Trust. (See
"Termination of the Trust".)
RISK FACTORS AND SPECIAL CONSIDERATIONS
Risk Factors
An investment in the Trust should be made with
the understanding of the risks inherent in an
investment in deep discount or "zero-coupon" debt
obligations and the risks associated with an
investment in common stocks in general.
The Trust contains stripped Treasury securities
described below (see "Schedule of Investments").
Stripped Treasury securities consist of
"interest-only" or "principal-only" portions of
Treasury Obligations. Interest-only portions of
Treasury Obligations represent the rights only to
payment of interest on a date certain, and
principal-only portions of Treasury Obligations
represent the rights only to payment of principal
at a stated maturity. Interest-only and
principal-only portions of Treasury Obligations
are deep discount obligations that are
economically identical to zero-coupon
obligations; that is, all such instruments are
debt obligations which make no periodic payment
of interest prior to maturity. The stripped
Treasury Securities in the Trust were purchased
at a deep discount and do not make any periodic
payments of interest. Instead, the entire payment
of proceeds will be made upon maturity of such
Treasury Obligations. The effect of owning deep
discount bonds which do not make current interest
payments (such as the stripped Treasury
Obligations in the Trust Portfolio) is that a
fixed yield is earned not only on the original
investment but also, in effect, on all earned
discount during the life of the discount
obligation. This implicit reinvestment of
earnings at the same rate eliminates the risk of
being unable to reinvest the income on such
obligations at a rate as high as the implicit
yield on the discount obligation, but at the same
time eliminates the holder's ability to reinvest
at higher rates in the future. For this reason,
while the full faith and credit of the United
States Government provides a high degree of
protection against credit risks, the sale of
Units prior to the termination date of the Trust
will involve substantially greater price
fluctuations during periods of changing market
interest rates than would be experienced in
connection with sale of Units of a Trust which
held Treasury Obligations and which made
scheduled interest payments on a current basis.
An investment in Units of the Trust should also
be made with an understanding of the risks
inherent in an investment in common stocks in
general. The general risks are associated with
the rights to receive payments from the issuer of
the Stocks, which rights are generally inferior
to creditors of, or holders of debt obligations
or preferred stocks issued by, the issuer.
Holders of common stocks have a right to receive
dividends only when and if, and in the amounts,
declared by the issuer's board of directors, and
to participate in amounts available for
distribution by the issuer only after all other
claims against the issuer have been paid or
provided for. By contrast, holders of preferred
stocks have the right to receive dividends at a
fixed rate when and as declared by the issuer's
board of directors, normally on a cumulative
basis, but do not participate in other amounts
available for distribution by the issuer.
Dividends on cumulative preferred stock typically
must be paid before any dividends are paid on
common stock. Preferred stocks are also entitled
to rights on liquidation which are senior to
those of common stocks. For these reasons,
preferred stocks generally entail less risk than
common stocks.
Common stocks do not represent an obligation of
the issuer. Therefore they do not offer any
assurance of income or provide the degree of
protection offered by debt securities. The
issuance of debt securities or preferred stock by
an issuer will create prior claims for payment of
principal, interest and dividends which could
adversely affect the ability and inclination of
the issuer to declare or pay dividends on its
common stock or the rights of holders of common
stock with respect to assets of the issuer upon
liquidation or bankruptcy. Unlike debt securities
which typically have a stated principal amount
payable at maturity, common stocks do not have a
fixed principal amount or a maturity.
Additionally, the value of the Stocks in the
Trust, like the Treasury Obligations, may be
expected to fluctuate over the life of the Trust
to values higher or lower than those prevailing
on the Initial Date of Deposit. The Stocks may
appreciate or depreciate in value (or pay
dividends) depending on the full range of
economic and market influences affecting
corporate profitability, the financial condition
of issuers and the prices of equity securities in
general and the Stocks in particular.
Certain of the Stocks in the Trust may be ADRs
which are subject to additional risks. (See
"Schedule of Investments".) ADRs evidence
American Depositary Shares ("ADS"), which, in
turn, represent common stock of foreign issuers
deposited with a custodian in a depositary. (For
purposes of this Prospectus, the term "ADR"
generally includes "ADS".) ADRs involve certain
investment risks that are different from those
found in stocks issued by domestic issuers. These
investment risks include potential political and
economic developments, potential establishment of
exchange controls, new or higher levels of
taxation, or other governmental actions which
might adversely affect the payment or receipt of
payment of dividends on the common stock of
foreign issuers underlying such ADRs. ADRs may
also be subject to current foreign taxes, which
could reduce the yield on such securities. Also,
certain foreign issuers are not subject to
reporting requirements under U.S. securities laws
and therefore may make less information publicly
available than that provided by domestic issuers.
Further, foreign issuers are not necessarily
subject to uniform financial reporting, auditing
and accounting standards and practices which are
applicable to publicly traded domestic issuers.
In addition, the securities underlying the ADRs
held in the Trust are generally denominated, and
pay dividends, in foreign currency. An investment
in securities denominated and principally traded
in foreign currencies involves investment risk
substantially different than an investment in
securities that are denominated and principally
traded in U.S. dollars. This is due to currency
exchange rate risk, because the U.S. dollar value
of the shares underlying the ADRs and of their
dividends will vary with the fluctuations in the
U.S. dollar foreign exchange rates for the
relevant currency in which the shares underlying
the ADRs are denominated. The Trust, however,
will compute its income in United States dollars,
and to the extent any of the Stocks in the Trust
pay income or dividends in foreign currency, the
Trust's computation of income will be made on the
date of its receipt by the Trust at the foreign
exchange rate then in effect. PaineWebber
observes that, in the recent past, most foreign
currencies have fluctuated widely in value
against the U.S. dollar for many reasons,
including the soundness of the world economy,
supply and demand of the relevant currency, and
the strength of the relevant regional economy as
compared to the economies of the United States
and other countries. Exchange rate fluctuations
are also dependent, in part, on a number of
economic factors including economic conditions
within the relevant country, interest rate
differentials between currencies, the balance of
imports and exports of goods and services, and
the transfer of income and capital from one
country to another. These economic factors in
turn are influenced by a particular country's
monetary and fiscal policies, perceived political
stability (particularly with respect to transfer
of capital) and investor psychology, especially
that of institutional investors, who make
assessments of the future relative strength or
weakness of a particular currency. As a general
rule, the currency of a country with a low rate
of inflation and a favorable balance of trade
should increase in value relative to the currency
of a country with a high rate of inflation and
deficits in the balance of trade.
There is no assurance that the Trust's
objectives will be achieved. Under ordinary
circumstances, dividends and principal received
upon the sale of Stocks may not be reinvested,
and such money will be held in a non-interest
bearing account until the next distribution made
on the Distribution Date. Under certain limited
circumstances and if there is no regulatory
impediment, such dividends and principal may be
reinvested in Short-Term Treasury Obligations
maturing on or before the next Distribution Date.
(See "Administration of the Trust--
Reinvestment".) The value of the Securities and,
therefore, the value of Units may be expected to
fluctuate.
Investors should note that the creation of
additional Units subsequent to the Initial Date
of Deposit may have an effect upon the value of
Units held by Unitholders. 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 replicate the
original percentage relationship among the
Securities based on the price of the Securities
(at the Evaluation Time) on the date the cash is
deposited. To the extent the price of a Security
(or the relevant foreign currency exchange rate,
if applicable) increases or decreases between the
time cash is deposited with instructions to
purchase the Security and the time the cash is
used to purchase the Security, Units will
represent less or more of that Security and more
or less of the other Securities in the Trust.
Unitholders will be at risk because of price (and
currency) fluctuations during this period since
if the price of shares of a Security increases,
Unitholders will have an interest in fewer shares
of that Security, and if the price of a Security
decreases, Unitholders will have an interest in
more shares of that Security, than if the
Security had been purchased on the date cash was
deposited with instructions to purchase the
Security. In order to minimize these effects, the
Trust will attempt to purchase Securities as
closely as possible to the Evaluation Time or at
prices as close as possible to the prices used to
evaluate the Trust at the Evaluation Time. Thus
price (and currency) fluctuations during this
period will affect the value of every
Unitholder's Units and the income per Unit
received by the Trust. In addition, costs
incurred in connection with the acquisition of
Securities not listed on any national securities
exchange (due to differentials between bid and
offer prices for the Securities) and brokerage
fees, stamp taxes and other costs incurred in
purchasing stocks will be at the expense of the
Trust and will affect the value of every
Unitholder's Units.
Because the Trust is organized as a unit
investment trust, rather than as a management
investment company, the Trustee and the Sponsor
do not have authority to manage the Trust's
assets fully in an attempt to take advantage of
various market conditions to improve the Trust's
net asset value, but may dispose of Securities
only under limited circumstances. (See
"Administration of the Trust--Portfolio
Supervision".)
Certain of the Stocks may be attractive
acquisition candidates pursuant to mergers,
acquisitions and tender offers. In general,
tender offers involve a bid by an issuer or other
acquiror to acquire a stock based on the terms of
its offer. Payment generally takes the form of
cash, securities (typically bonds or notes), or
cash and securities. The Indenture contains
provisions requiring the Trustee to follow
certain procedures regarding mergers,
acquisitions, tender offers and other corporate
actions. Under certain circumstances, the
Trustee, at the direction of the Sponsor, may
hold or sell any stock or securities received in
connection with such corporate actions (see
"Administration of the Trust--Portfolio
Supervision").
FEDERAL INCOME TAXES
In the opinion of Carter, Ledyard & Milburn,
counsel for the Sponsor, under existing law:
1. The Trust is not an association taxable as a
corporation for federal income tax purposes.
Under the Internal Revenue Code of 1986, as
amended (the "Code"), each Unitholder will be
treated as the owner of a pro rata portion of the
Trust, and income of the Trust will be treated as
income of the Unitholder.
2. Each Unitholder will have a taxable event
when the Trust disposes of a Security (whether by
sale, exchange, redemption, or payment at
maturity) or when the Unitholder sells its Units
or redeems its Units for cash. The total tax cost
of each Unit to a Unitholder is allocated among
each of the Securities in accordance with the
proportion of the Trust comprised by each
Security to determine the per Unit tax cost for
each Security.
3. The Trust is not an association taxable as a
corporation for New York State income tax
purposes. Under New York State law, each
Unitholder will be treated as the owner of a pro
rata portion of the Trust and the income of the
Trust will be treated as income of the
Unitholders.
The following general discussion of the federal
income tax treatment of an investment in Units of
the Trust is based on the Code and United States
Treasury Regulations (established under the Code)
as in effect on the date of this Prospectus. The
federal income tax treatment applicable to a
Unitholder may depend upon the Unitholder's
particular tax circumstances. The tax-treatment
applicable to non-U.S. investors is not addressed
in this Prospectus. Future legislative, judicial
or administrative changes could modify the
statements below and could affect the tax
consequences to Unitholders. Accordingly, each
Unitholder is advised to consult his or her own
tax advisor concerning the effect of an
investment in Units.
General. Each Unitholder must report on its
federal income tax return a pro rata share of the
entire income of the Trust, derived from
dividends on Stocks, original issue discount or
interest on Treasury Obligations and Short-Term
Treasury Obligations (if any), gains or losses
upon dispositions of Securities by the Trust and
a pro rata share of the expenses of the Trust.
Unitholders should note that their taxable income
from an investment in Units will exceed cash
distributions because taxable income will include
accretions of original issue discount on the
Treasury Obligations.
Distributions with respect to Stock, to the
extent they do not exceed current or accumulated
earnings and profits of the distributing
corporation, will be treated as dividends to the
Unitholders and will be subject to income tax at
ordinary rates. Corporate Unitholders may be
entitled to the dividends-received deduction
discussed below.
To the extent distributions with respect to a
Stock were to exceed the issuing corporation's
current and accumulated earnings and profits,
they would not constitute dividends. Rather, they
would be treated as a tax free return of capital
and would reduce a Unitholder's tax cost for such
Stock. This reduction in basis would increase any
gain, or reduce any loss, realized by the
Unitholder on any subsequent sale or other
disposition of Units. 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 the sale of
Stock.
A Unitholder who is an individual, estate or
trust may be disallowed certain itemized
deductions described in Code Section 67,
including compensation paid to the Trustee and
administrative expenses of the Trust, to the
extent these itemized deductions, in the
aggregate, do not exceed two percent of the
Unitholder's adjusted gross income. Thus, a
Unitholder's taxable income from an investment in
Units may further exceed amounts distributed to
the extent amounts are used by the Trust to pay
expenses.
Corporate Dividends-Received Deduction.
Corporate holders of Units may be eligible for
the dividends-received deduction with respect to
distributions treated as dividends, subject to
the limitations provided in Sections 246 and 246A
of the Code. The dividends-received deduction
generally equals 70 percent of the amount of the
dividend. As a result, the maximum effective tax
rate on dividends received generally will be
reduced from 35 percent to 10.5 percent. A
portion of the dividends-received deduction may,
however, be subject to the alternative minimum
tax. 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" Treasury Obligations which are treated as
bonds that were originally issued at a discount
("original issue discount"). Original issue
discount represents interest for federal income
tax purposes and can generally be defined as the
difference between the price at which a bond was
issued and its stated redemption price at
maturity. For purposes of the preceding sentence,
stripped obligations, such as the Treasury
Obligations, which variously consist either of
the right to receive payments of interest or the
right to receive payments of principal, are
treated by each successive purchaser as
originally issued on their purchase dates at an
issue price equal to their respective purchase
prices. The market value of the assets comprising
the Trust will be provided to a Unitholder upon
request to enable the Unitholder to calculate the
original issue discount attributable to each of
the Treasury Obligations. Original issue discount
on Treasury Obligations (which were issued or
treated as issued on or after July 2, 1982) is
deemed earned based on a compounded, constant
yield to maturity over the life of such
obligation, taking into account the compounding
of accrued interest at least annually, resulting
in an increasing amount of original issue
discount includible in income in each year. Each
Unitholder is required to include in income each
year the amount of original issue discount which
accrues on its pro rata portion of each Treasury
Obligation with original issue discount. The
amount of accrued original issue discount
included in income for a Unitholder's pro rata
interest in Treasury Obligations is added to the
tax cost for such obligations.
Gain or Loss on Sale. If a Unitholder sells or
otherwise disposes of a Unit, the Unitholder
generally will recognize gain or loss in an
amount equal to the difference between the amount
realized on the disposition allocable to the
Securities and the Unitholder's adjusted tax
bases in the Securities. In general, such
adjusted tax bases will equal the Unitholder's
aggregate cost for the Unit increased by any
accrued original issue discount. The gain or loss
will be capital gain or loss if the Unit and
underlying Securities were held as capital
assets, except that the gain will be treated as
ordinary income to the extent of any accrued
original issue discount not previously reported.
Each Unitholder generally will also recognize
taxable gain or loss when all or part of its pro
rata portion of a Security is sold or otherwise
disposed of for an amount greater or less than
the Security's per Unit tax cost.
Capital gains realized by non-corporate
taxpayers are generally taxable at a maximum rate
of 20% if the taxpayer has a holding period of
more than 12 months.
Withholding For Citizen or Resident Investors.
In the case of any noncorporate Unitholder that
is a citizen or resident of the United States a
31 percent "backup" withholding tax will apply to
certain distributions of the Trust unless the
Unitholder properly completes and files, under
penalties of perjury, IRS Form W-9 (or its
equivalent).
The foregoing discussion is a general summary
and relates only to certain aspects of the
federal income tax consequences of an investment
in the Trust. Unitholders may also be subject to
state and local taxation. Each Unitholder should
consult its own tax advisor regarding the
federal, state and local tax consequences of
ownership of Units.
Investment in the Trust may be suited for
purchase by funds and accounts of individual
investors that are exempt from federal income
taxes such as Individual Retirement Accounts,
tax-qualified retirement plans including Keogh
Plans, and other tax-deferred retirement plans.
Unitholders desiring to purchase Units for tax-
deferred plans and IRA's should consult their
PaineWebber Investment Executive for details on
establishing such accounts. Units may also be
purchased by persons who already have self-
directed accounts established under tax-deferred
retirement plans.
PUBLIC OFFERING OF UNITS
Public Offering Price. The public offering price
in the secondary market will be the Trust Fund
Evaluation per Unit next determined after receipt
of a purchase order, determined for the Treasury
Obligations on the bid side of the market, plus
the applicable sales charge. (See "Valuation".)
Sales Charge and Volume Discount. Sales charges
for secondary market sales are described below. A
discount in the sales charge is available to
volume purchasers of Units due to economies of
scales in sales effort and sales-related expenses
relating to volume purchases. The sales charge
applicable to volume purchasers of Units is
reduced on a graduated scale for sales to any
person of at least $50,000 or 50,000 Units,
applied on whichever basis is more favorable to
the purchaser.
Secondary Market Through
April 15, 2000
Percent of Percent of
Aggregate Dollar Public Offering Net Amount
Value of Units* Price Invested
Less than $50,000 4.75% 4.99%
$50,000 to $99,999 4.50 4.71
$100,000 to $199,999 4.00 4.17
$200,000 to $399,999 3.50 3.63
$400,000 to $499,999 3.00 3.09
$500,000 to $999,999 2.50 2.56
$1,000,000 or more 2.00 2.04
Secondary Market From April 16, 2000 Through
April 15, 2002
Percent of Percent of
Aggregate Dollar Public Offering Net Amount
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
purchasers according to the table above will be
applied on either a dollar or Unit basis,
depending upon which basis provides a more
favorable purchase price to the purchaser.
Secondary Market From April 16, 2002
Through April 15, 2004
Percent of
Public Percent of
Offering Net Amount
Price Invested
3.25% 3.36%
Secondary Market on and After
April 16, 2004
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
above, and for this purpose purchases of Units of
this Trust will be aggregated with concurrent
purchases of any other trust which may be offered
by the Sponsor. Units held in the name of the
purchaser's spouse or in the name of a
purchaser's child under the age of 21 are deemed
for the purposes of calculating the reduced sales
charge 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
related expenses with respect to the purchase of
Units by employees of the Sponsor and its
affiliates, the Sponsor does not intend to impose
a sales charge on such employee sales.
Exchange Option. Unitholders may elect to
exchange any or all of their Units of this series
for units of one or more of any series of
PaineWebber Municipal Bond Fund Series (the
"PaineWebber Series"); The Municipal Bond Trust,
(the "National Series"); The Municipal Bond
Trust, Multi-State Program (the "Multi-State
Series); The Municipal Bond Trust, California
Series (the "California Series"); The Municipal
Bond Trust, Insured Series (the "Insured
Series"); The Corporate Bond Trust, (the
"Corporate Series"); The PaineWebber Pathfinders
Trust, (the "Pathfinders Series"), The
PaineWebber Federal Government Trust, (the
"Government Series") or the PaineWebber Equity
Trust, (the "Equity Series") (collectively
referred to as the "Exchange Trusts"). Exchanges
made for Units of any Exchange Trust which has an
"up-front" salesload will be made at a Public
Offering Price for the units of the Exchange
Trusts to be acquired based on a reduced sales
charge of $15 per unit. Unitholders may elect to
exchange any or all of their Units for Units of
The PaineWebber Equity Trust, Growth Stock Series
22, or any other PaineWebber Exchange Trust
subject to a deferred sales charge (the "Deferred
Sales Charge Units"). The Exchange Option will
permit the exchange of Units for any Deferred
Sales Charge Units at their then-current net
asset value, with no Initial Sales Charge
imposed. Units acquired through the Exchange
Option will continue to be subject to the
deferred sales charge installments remaining on
the Deferred Sales Charge Units so acquired.
Unitholders interested in exercising the Exchange
Option should read the current prospectus or
prospectuses relating to the Deferred Sales
Charge Units to ascertain what, if any, deferred
sales charge installments remain on such Units.
Unitholders of this Trust are not eligible for
the Exchange Option into any Exchange Trust
designated as a rollover series for the 30 day
period prior to termination of such 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 expense required for the Exchange
Option. Each Exchange Trust has different
investment objectives, therefore a Unitholder
should read the prospectus for the applicable
Exchange Trust carefully prior to exercising this
option. Exchange Trusts having as their objective
the receipt of tax-exempt interest income would
not be suitable for tax-deferred investment plans
such as Individual Retirement Accounts. A
Unitholder who purchased Units of a series and
paid a per unit "up-front" sales charge that was
less than the per Unit "up-front" sales charge of
the series of Exchange Trusts for which such
Unitholder desires to exchange into, will be
allowed to exercise the Exchange Option at the
Unit Offering Price plus the reduced "up-front"
sales charge, provided the Unitholder has held
the Units for at least five months. Any such
Unitholder who has not held the Units to be
exchanged for the five-month period will be
required to exchange them at the Unit Offering
Price plus "up-front" sales charge based on the
greater of the reduced "up-front" sales charge,
or an amount which, together with the initial
"up-front" sales charge paid in connection with
the acquisition of the Units being exchanged,
equals the "up-front" sales charge of the series
of the Exchange Trust for which such Unitholder
desires to exchange into, determined as of the
date of the exchange.
The Sponsor will permit exchanges at the reduced
sales charge provided there is a secondary market
maintained by the Sponsor in both the Units of
this series and units of the applicable Exchange
Trust and there are units of the applicable
Exchange Trust available for sale. While the
Sponsor has indicated that it intends to maintain
a market for the units of the respective Trusts,
there is no obligation on its part to maintain
such a market. Therefore, there is no assurance
that a market for units will in fact exist on any
given date at which a Unitholder wishes to sell
his Units of this series and thus there is no
assurance that the Exchange Option will be
available to a Unitholder. Exchanges will be
effected in whole units only. Any excess proceeds
from Unitholders' units being surrendered will be
returned. Unitholders will be permitted to
advance new money in order to complete an
exchange.
An exchange of units pursuant to the Exchange
Option will normally constitute a "taxable event"
under the Code, i.e., a Unitholder will recognize
a tax gain or loss. Unitholders are advised to
consult their own tax advisors as to the tax
consequences of exchanging units in their
particular case.
The Sponsor reserves the right to modify,
suspend or terminate this plan at any time
without further notice to Unitholders. In the
event the Exchange Option is not available to a
Unitholder at the time he wishes to exercise it,
the Unitholder will be immediately notified and
no action will be taken with respect to his Units
without further instruction from the Unitholder.
To exercise the Exchange Option, a Unitholder
should notify the Sponsor of his desire to
exercise the Exchange Option and to use the
proceeds from the sale of his Units of this
series to purchase units of one or more of the
Exchange Trusts. If units of the applicable
outstanding series of the Exchange Trust are at
that time available for sale, and if such units
may lawfully be sold in the state in which the
Unitholder is resident, the Unitholder may select
the series or group of series for which he
desires his investment to be exchanged. The
Unitholder will be provided with a current
prospectus or prospectuses relating to each
series in which he 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 aggregate bid
price per Unit of the securities in the portfolio
of the Trust. Units of the Exchange Trust,
however, will be sold to the Unitholder at a
reduced sales charge as discussed above. Exchange
transactions will be effected only in whole
units; thus, any proceeds not used to acquire
whole units will be paid to the selling
Unitholder.
For example, assume that a Unitholder, who has
three units of a trust with a current price of
$1,030 per unit based on the bid prices of the
underlying securities, 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 rounding up to the next
highest number of units, the proceeds from the
Unitholder's units will aggregate $3,090. Since
only whole units of an Exchange Trust may be
purchased under the Exchange Option, the
Unitholder would be able to acquire three units
in the Exchange Trust for a total cost of $2,715
($2,670 for the units and $45 for the sales
charge). The remaining $375 would be returned to
the Unitholder in cash.
Conversion Option. Owners of units of any
registered unit investment trust sponsored by
others which was initially offered at a maximum
applicable sales charge of at least 3.0% (a
`Conversion Trust') may elect to apply the cash
proceeds of the sale or redemption of those units
directly to acquire available units of any
Exchange Trust having an "up-front" salesload at
a reduced sales charge of $15 per Unit, per 100
Units in the case of Exchange Trusts having a
Unit price of approximately $10, or per 1,000
Units in the case of Exchange Trusts having a
Unit price of approximately $1, subject to the
terms and conditions applicable to the Exchange
Option (except that no secondary market is
required for Conversion Trust units). Owners of
Conversion Units will be permitted to use the
cash proceeds received from the sale or
redemption of those Units to acquire Deferred
Sales Charge Units at their then-current net
asset value, with no Initial Sales Charge
imposed. Deferred Sales Charge Units acquired
through the Conversion Option will continue to be
subject to the deferred sales charge installments
remaining on those Units so acquired.
To exercise this option, the owner should notify
his retail broker. He will be given a prospectus
for each series in which he indicates interest
and for which units are available. The dealer
must sell or redeem the units of the Conversion
Trust. Any dealer other than PaineWebber must
certify that the purchase of units of the
Exchange Trust is being made pursuant to and is
eligible for the Conversion Option. The dealer
will be entitled to two-thirds of the applicable
reduced sales charge. The Sponsor reserves the
right to modify, suspend or terminate the
Conversion Option at any time without further
notice, including the right to increase the
reduced sales charge applicable to this option
(but not in excess of $5 more per Unit, per 100
Units or per 1,000 Units, as applicable than the
corresponding fee then being charged for the
Exchange Option). For a description of the tax
consequences of a conversion reference is made to
the Exchange Option section herein.
Distribution of Units. The minimum purchase
during 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 applicable sales charge during the
secondary market, subject to change from time to
time. The difference between the sales charge and
the dealer concession 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 advantage of such concession may
be deemed to be underwriters under the Securities
Act of 1933, as amended (the "Securities Act").
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
secondary market for the Units and continuously
offer to purchase Units at the Trust Fund
Evaluation per Unit next computed after receipt
by the Sponsor of an order from a Unitholder. The
Sponsor may cease to maintain 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 Units to
the Trustee for redemption, at the price
calculated in the manner described 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, marketability,
value or price of any Stocks in the Trust, nor
that of the Units.
The Trust Fund Evaluation per Unit at the time
of sale or tender for redemption may be less than
the price at which the Unit was purchased.
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,
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,
determined by the Trustee as described under
"Valuation" 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 Securities Exchange Act of 1934, as amended
and may be of benefit to the Sponsor.
In selling any Units in the initial public
offering after the Initial Date of Deposit, the
Sponsor may realize profits or sustain losses
resulting from fluctuations in the net asset
value of outstanding Units during that period. In
maintaining a secondary market for the Units, the
Sponsor may realize profits or sustain losses in
the amount of any differences between the price
at which it buys Units and the price at which it
resells or redeems such Units.
REDEMPTION
Units may be tendered to the Trustee, Investors
Bank & Trust Company, for redemption at its
office in person, or by mail at Hancock Towers,
P.O. Box 9130, Boston, MA 02117-9130 upon payment
of any transfer or similar tax which must be paid
to effect the redemption. At the present time
there are no such taxes. No redemption fee will
be charged by the Sponsor or the Trustee. If
Units are represented by a certificate, it must
be properly endorsed accompanied 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 appear 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 require
additional documents such as, but not limited to,
trust instruments, certificates of death,
appointments as executor or administrator, or
certificates of corporate authority. Unitholders
should contact 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 (the "Redemption Value") next determined
after receipt of the redemption request in good
order by the Trustee. The Redemption Value per
Unit is determined by dividing the Trust Fund
Evaluation 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.
During the period in which the Sponsor maintains
a secondary market for Units, the Sponsor may
repurchase any Unit presented for tender to the
Trustee for redemption no later than the close of
business on the second 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
Unitholder by 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 to the seventh calendar day).
With respect to cash redemptions, amounts
representing income received shall be withdrawn
from the Income Account, and, to the extent such
balance is insufficient, from the Capital
Account. The Trustee is empowered, to the extent
necessary, to sell Securities in the manner as is
directed by the Sponsor, which direction will be
given to maximize the objectives of the Trust. In
the event that no such direction is given by the
Sponsor, the Trustee is empowered to sell
Securities as follows: Treasury Obligations will
be sold to maintain in the Trust Treasury
Obligations in an amount which, upon maturity,
will equal at least $1.00 per Unit outstanding
after giving effect to such redemption and Stocks
having the greatest amount of capital
appreciation will be sold first. (See
"Administration of the Trust".) However, with
respect to redemption requests in excess of
$100,000, the Sponsor may determine in its
discretion to direct the Trustee to redeem Units
"in kind" by distributing Securities to the
redeeming Unitholder. When Stock is distributed,
a proportionate amount of Stock will be
distributed, rounded to avoid the distribution of
fractional shares and using cash or checks where
rounding is not possible. The Sponsor may direct
the Trustee to redeem Units "in kind" even if it
is then maintaining a secondary market in Units
of the Trust. Securities will be valued for this
purpose as set forth under "Valuation". A
Unitholder receiving a redemption "in kind" may
incur brokerage or other transaction costs in
converting the Securities distributed into cash.
The availability of redemption "in-kind" is
subject to compliance with all applicable laws
and regulations, including the Securities Act.
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
otherwise be realized. The price received for
Units upon redemption may be more or less than
the amount paid by the Unitholder depending on
the value of the Securities in the portfolio at
the time of redemption. In addition, because of
the minimum amounts in which Securities are
required to be sold, the proceeds of sale may
exceed the amount required at the time to redeem
Units; these excess proceeds will be distributed
to Unitholders on the Distribution 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 closings; or for any period during
which the SEC determined that trading on the New
York Stock Exchange, Inc. is restricted or for
any period during which an emergency exists as a
result of which disposal or evaluation of the
Securities is not reasonably practicable; or for
such other period as the SEC 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
suspension or postponement, or any failure to
suspend or postpone when done in the Trustee's
discretion.
VALUATION
The Trustee will calculate the Trust Fund
Evaluation per Unit at the Evaluation Time
described under "Essential Information Regarding
the Trust" (1) on each June 30 and December 31
(or the last business day prior thereto), (2) on
each business day as long as the Sponsor is
maintaining a bid in the secondary market, (3) on
the business day on which any Unit is tendered
for redemption and (4) on any other day desired
by the Sponsor or the Trustee, by adding (a) the
aggregate value of the Securities and other
assets determined by the Trustee as described
below, (b) cash on hand in the Trust, income
accrued on the Treasury Obligations but not
distributed or held for distribution and
dividends receivable on Stocks trading ex-
dividend (other than any cash held in any reserve
account established under the Indenture) and (c)
accounts receivable 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 expenses of the Trustee and the
Sponsor (including legal and auditing expenses)
and other Trust expenses, (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 Trust Fund
Evaluation per Unit is calculated by dividing the
result of the above computation by the number of
Units outstanding as of the date of the Trust
Fund Evaluation. Business days do not include
Saturdays, Sundays, New Year's Day, Martin Luther
King, Jr. 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 applicable foreign currency exchange
rate calculated at the Evaluation Time.
The value of Stocks will be determined by the
Trustee in good faith in the following manner:
(1) if the Securities are listed on one or more
national securities exchanges, the evaluation
will 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 for the
Stock (deemed to be the New York Stock Exchange
if the Securities are listed thereon) (2) if
there is no such appropriate closing sale price
on such exchange, at the mean between the closing
bid and asked prices on such exchange (unless the
Trustee deems such price inappropriate as a basis
for evaluation), (3) if the Stocks are not so
listed or, if so listed and the principal market
for the Stock is other than on such exchange or
there are no such appropriate closing bid and
asked prices available, such evaluation shall be
made by the Trustee in good faith based on the
closing sale price on the over-the-counter market
(unless the Trustee deems such price
inappropriate as a basis for evaluation) or (4)
if there is no such appropriate closing price,
then (a) on the basis of current bid prices, (b)
if bid prices are not available, on the basis of
current bid prices for comparable securities, (c)
by the Trustee's appraising the value of the
Securities in good faith on the bid side of the
market or (d) by any combination of the above.
Treasury Obligations are valued on the basis of
offering prices. The aggregate bid prices of the
Treasury Obligations are the prices obtained from
investment dealers or brokers (which may include
the Sponsor) who customarily deal in Treasury
Obligations; or, if there is no market for the
Treasury Obligations, and bid prices are not
available, on the basis of current bid prices for
comparable securities; or by appraisal; or by any
combination of the above, adjusted to reflect
income accrued.
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION VALUE
While the Public Offering Price of Units during
the initial offering period is determined on the
basis of the current offering prices of the
Treasury Obligations, the Public Offering Price
of Units in the secondary market and the
Redemption Value is determined on the basis of
the current bid prices of the Treasury
Obligations. The Stocks are valued on the same
basis for the initial and secondary markets and
for purposes of redemptions. On the business day
prior to the Date of Deposit, the Public Offering
Price per Unit (which figure includes the sales
charge) exceeded the Redemption Value, (See
"Essential Information"). The bid and offering
prices of the Treasury Obligations is expected to
vary. For this reason and others, including the
fact that the Public Offering Price includes the
sales charge, the amount realized by a Unitholder
upon redemption of Units may be less than the
price paid by the Unitholder for the Units.
EXPENSES OF THE TRUST
The cost of the preparation of the Certificates,
the Indenture and this Prospectus, the initial
fees of the Trustee and the Trustee's counsel,
and certain expenses incurred in establishing the
Trust including legal and auditing fees and
initial SEC and state registration fees (the
"Organizational 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 establishing 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 actual costs of providing
portfolio supervisory services for the Trust, but
at no time will the total amount it receives for
portfolio supervisory services rendered to all
series of the PaineWebber Pathfinders Trust in
any calendar year exceed the aggregate cost to it
of supplying such services in such year.
For its services as Trustee and Evaluator, the
Trustee will be paid in monthly installments, at
an annual rate of $.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 $.0010
per Unit annually which include, but are not
limited to Organizational Expenses of $.00080 per
Unit and certain mailing, printing, and auditing
expenses. Expenses in excess of this estimate
will be borne by the Trust. The Trustee could
also benefit to the extent that it may hold funds
in non-interest bearing accounts created under
the Indenture.
The Sponsor's fee and Trustee's fee may be
increased without approval of the Unitholders by
an amount not exceeding a proportionate increase
in the category entitled "All Services Less Rent"
in the Consumer Price Index published by the
United States Department of Labor or if the
Consumer Price Index is no longer published, a
similar index as determined by the Trustee and
Sponsor.
In addition to the above, the following charges
are or may be incurred by the Trust and paid from
the Income Account, or, to the extent funds are
not available in the Income Account, from the
Capital Account (see "Administration of the
Trust-Accounts"): (1) fees for the Trustee for
extraordinary services; (2) expenses of the
Trustee (including legal and auditing expenses)
and of counsel; (3) various governmental charges;
(4) expenses and costs of any action taken by the
Trustee to protect the Trust and the rights and
interests of the Unitholders; (5) indemnification
of the Trustee for any loss, liabilities or
expenses incurred by it in the administration of
the Trust without gross negligence, bad faith or
wilful misconduct on its part; (6) brokerage
commissions and other expenses incurred in
connection with the purchase and sale of
Securities; and (7) expenses incurred upon
termination of the Trust. In addition, to the
extent then permitted by the SEC, the Trust may
incur expenses of maintaining registration or
qualification of the Trust or the Units under
Federal or state securities laws so long as the
Sponsor is maintaining a secondary market
(including, but not limited to, legal, auditing
and printing expenses).
The accounts of the Trust shall be audited not
less than annually by independent auditors
selected by the Sponsor. The expenses of the
audit shall be an expense of the Trust. So long
as the Sponsor maintains a secondary market, the
Sponsor will bear any audit expense which exceeds
$.00050 per Unit. Unitholders covered by the
audit during the year may receive a copy of the
audited financial statements upon request.
The fees and expenses described above are
payable out of the Trust and when unpaid will be
secured by a lien on the Trust. Based upon the
last dividend paid prior to the Initial Date of
Deposit, dividends on the Stocks are expected to
be sufficient to pay the estimated expenses of
the Trust. To the extent that dividends paid with
respect to the Stocks are not sufficient to meet
the expenses of the Trust, the Trustee is
authorized to sell Securities in the same manner
as provided in "Redemption" herein.
RIGHTS OF UNITHOLDERS
Ownership of Units is evidenced by recordation
on the books of the Trustee. In order to avoid
additional operating costs and for investor
convenience, certificates will not be issued
unless a request, in writing with signature
guaranteed by an eligible guarantor institution
or in such other manner as may be acceptable to
the Trustee, is delivered by the Unitholder to
the Sponsor. Issued certificates are transferable
by presentation and surrender to 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 presentation to the Trustee
at its office of a written instrument of
transfer.
Certificates may be issued in denominations of
one Unit or any integral multiple of one Unit as
deemed appropriate by the Trustee. A Unitholder
may be required to pay $2.00 per certificate
reissued or transferred, and shall be required to
pay any governmental charge that may be imposed
in connection with each transfer or interchange.
For new certificates issued to replace destroyed,
mutilated, stolen or lost certificates, the
Unitholder must furnish indemnity satisfactory to
the Trustee and must pay any expenses that the
Trustee may incur. Mutilated certificates must be
surrendered to the Trustee for replacement.
DISTRIBUTIONS
The Trustee will distribute any net income
received, if any, from the Income Account,
quarterly on the Distribution Dates to
Unitholders of record on the preceding Record
Date. Income with respect to the original issue
discount on the Treasury Obligations will not be
distributed although Unitholders will be subject
to tax as if a distribution had occurred.
Distributions from the Capital Account will be
made on quarterly Distribution Dates to
Unitholders of record on the preceding Record
Date, provided however, that distributions 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
disposition of the Securities plus any other
assets of the Trust, less expenses of the Trust.
(See "Termination.")
ADMINISTRATION OF THE TRUST
Accounts. All dividends received and interest,
if any, accrued on Securities, proceeds from the
sale of Securities or other monies received by
the Trustee on behalf of the Trust shall be held
in trust in Short-Term Treasury Obligations (if
permissible) or in non-interest bearing accounts
until required to be disbursed.
The Trustee will credit on its books to the
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 dividends within the Income Account.
The pro rata share of the Income Account and the
pro rata share of the Capital Account represented
by each Unit will be computed by the Trustee as
set forth under "Valuation".
The Trustee will deduct from the Income Account
and, to the extent funds are not sufficient in
the Income Account, from the Capital Account,
amounts necessary to pay expenses incurred by the
Trust. (See "Expenses and Charges.") In addition,
the Trustee may withdraw from the Income Account
and the Capital Account any amounts that may be
necessary to cover redemption of Units by the
Trustee. (See "Redemption.")
The Trustee may establish reserves (the "Reserve
Account") within the Trust for state and local
taxes, if any, and any other governmental charges
payable out of the Trust.
Reports and Records. With the distribution of
income from the Trust, Unitholders will be
furnished with a statement setting forth the
amount being distributed from each account.
The Trustee keeps records and accounts of the
Trust at its office in Boston, including records
of the names and addresses of Unitholders, a
current list of underlying Securities in the
portfolio and a copy of the Indenture. Records
pertaining to a Unitholder or to the Trust (but
not to other Unitholders) are available to the
Unitholder for inspection at reasonable times
during business hours.
Within a reasonable period of time after the end
of each calendar year, the Trustee will furnish
each person who was a Unitholder at any time
during the calendar year an annual report
containing the following information, expressed
in reasonable detail both as a dollar amount and
as a dollar amount per Unit: (1) a summary of
transactions for the year in the Income, Capital
and Reserve Accounts; (2) any Securities sold
during the year and the Securities held at the
end of the year; (3) the Trust Fund Evaluation
per Unit, computed as of 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 in this
Prospectus are governed solely by the provisions
of the Indenture. The Indenture provides that the
Sponsor may (but need not) direct the Trustee to
dispose of a Security (or tender a Security for
cash in the case of paragraph (6) below):
(1) upon the failure of the issuer to declare or
pay anticipated dividends or interest;
(2) upon the institution of materially adverse
action or proceeding at law or in equity seeking
to restrain or enjoin the declaration or payment
of dividends or interest on any such Securities
or the existence of any other materially adverse
legal question or impediment affecting such
Securities or the declaration or payment of
dividends or interest on the same;
(3) upon the breach of covenant or warranty in
any trust indenture or other document relating to
the issuer which might materially and adversely
affect either immediately or contingently the
declaration or payment of dividends or interest
on such Securities;
(4) upon the default in the payment of principal
or par or stated value of, premium, if any, or
income on any other outstanding securities of the
issuer or the guarantor of such securities which
might materially and adversely, either
immediately or contingently, affect the
declaration or payment of dividends or interest
on the Securities;
(5) upon the decline in price or the occurrence
of any materially adverse market or credit
factors, that in the opinion of the Sponsor, make
the retention of such Securities not in the best
interest of the Unitholder;
(6) upon a public tender offer being made for a
Security, or a merger or acquisition being
announced affecting a Security that in the
opinion of the Sponsor make the sale or tender of
the Security in the best interests of the
Unitholders;
(7) upon a decrease in the Sponsor's internal
rating of the Security; or
(8) upon the happening of events which, in the
opinion of the Sponsor, negatively affect the
economic fundamentals of the issuer of the
Security or the industry of which it is a part.
The Indenture contains certain instructions to
the Trustee regarding corporate actions that
affect Securities held in the Trust. In most
cases, the Trustee is required to use its best
efforts to vote the Securities as closely as
practicable in the same manner and in the same
proportion as are all other securities held by
owners other than the Trust. In cases of offers
to exchange Securities for other stock or
securities (including but not limited to a tender
offer), the Trustee is required to reject such
offers. If, after complying with such procedures,
the Trustee nevertheless receives stock or
securities, with or without cash, as a result of
the corporate action, the Trustee, at the
direction of the Sponsor, may retain or sell the
stock or securities. Any stock or securities so
retained will be subject to the terms and
conditions of the Indenture to the same extent as
the Securities originally deposited in the Trust.
The Trustee may dispose of Securities where
necessary to pay Trust expenses or to satisfy
redemption requests as directed by the Sponsor
and in a manner necessary to maximize the
objectives of the Trust, or if not so directed,
in its own discretion, provided however, that
Treasury Obligations will be sold to maintain in
the Trust Treasury Obligations in an amount
which, upon maturity, will equal at least $1.00
per Unit outstanding after giving effect to the
redemption and Stocks having the greatest
appreciation shall be sold first.
Reinvestment. Cash received upon the sale of
Stock (except for sales to meet redemption
requests) and dividends received may, if and to
the extent there is no legal or regulatory
impediment, be reinvested in Short-Term Treasury
Obligations. The Sponsor anticipates that, where
permitted, such proceeds will be reinvested in
interest bearing Short-Term Treasury Obligations
unless factors exist such that 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 Short-Term
Treasury Obligations undesirable or infeasible
and (ii) amounts not sufficiently large so as to
make a reinvestment economical or feasible. Any
moneys held and not reinvested will be held in a
non-interest bearing account until distribution
on the next Distribution Date to Unitholders of
record.
AMENDMENT OF THE INDENTURE
The Indenture may be amended by the Trustee and
the Sponsor without the consent of any of the
Unitholders to cure any ambiguity or to correct
or supplement any provision of the Indenture
which may be defective or inconsistent or to make
other provisions that will not materially
adversely affect the interest of the Unitholders.
The Indenture may be amended in any respect by
the Sponsor and the Trustee with the consent of
the holders of 51% of the Units then outstanding;
provided that no such amendment shall (1) reduce
the interest in the Trust represented by a Unit
or (2) reduce the percentage of Unitholders
required to consent to any such amendment,
without the consent of all Unitholders.
The Trustee will promptly notify Unitholders of
the substance of any amendment affecting
Unitholders' rights or their interest in the
Trust.
TERMINATION OF THE TRUST
The Indenture provides that the Trust will
terminate within 15 days after the maturity of
the Treasury Obligations held in the Trust. If
the value of the Trust as shown by the Trust Fund
Evaluation is less than twenty percent (20%) of
the market value of the Securities upon
completion of the deposit of Securities, the
Trustee may in its discretion, and will when so
directed by the Sponsor, terminate the Trust. The
Trust may also be terminated at any time by the
written consent of 51% of the Unitholders or by
the Trustee upon the resignation or removal of
the Sponsor if the Trustee determines termination
to be in the best interest of the Unitholders. In
no event will the Trust continue beyond the
Mandatory Termination Date as stated in
"Essential Information Regarding the Trust."
As directed by the Sponsor approximately 30
days prior to the Mandatory Termination Date the
Trustee will begin to sell the Stocks held in the
Trust. Stocks having the greatest amount of
capital appreciation will be sold first. Upon
termination of the Trust, the Trustee will sell
any Stocks then remaining in the Trust and will
then, after deduction of any fees and expenses of
the Trust and payment into the Reserve Account of
any amount required for taxes or other
governmental charges that may be payable by the
Trust, distribute to each Unitholder, upon
surrender for cancellation of his Certificate (if
applicable) 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 Short-Term Treasury
Obligations (if permissible) or in non-interest
bearing accounts created under the Indenture
until distributed and, if not re-invested, 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 the 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 the Unitholder.
SPONSOR
The Sponsor, PaineWebber Incorporated, is a
corporation organized under the laws of the State
of Delaware. The Sponsor is a member firm of the
New York Stock Exchange, Inc. as well as other
major securities and commodities exchanges and is
a member of the National Association of
Securities Dealers, Inc. The Sponsor is engaged
in a security and commodity brokerage business as
well as underwriting and distributing new issues.
The Sponsor also acts as a dealer in unlisted
securities and municipal bonds and in addition to
participating as a member of various selling
groups or as an agent of other investment
companies, executes orders on behalf of
investment companies for the purchase and sale of
securities of such companies and sells securities
to such companies in its capacity as a broker or
dealer in securities.
The Indenture provides that the Sponsor will
not be liable to the Trustee, any of the Trusts
or to the Unitholders for taking any action or
for refraining from taking any action made in
good faith or for errors in judgment, but will be
liable only for its own wilful misfeasance, bad
faith, gross negligence or wilful disregard of
its duties. The Sponsor will not be liable or
responsible in any way for depreciation or loss
incurred by reason of the sale of any Securities
in the Trust.
The Indenture is binding upon any successor to
the business of the Sponsor. The Sponsor may
transfer all or substantially all of its assets
to a corporation or partnership which carries on
the business of the Sponsor and duly assumes all
the obligations of the Sponsor under the
Indenture. In such event the Sponsor shall be
relieved of all further liability under the
Indenture.
If the Sponsor fails to undertake any of its
duties under the Indenture, becomes incapable of
acting, becomes bankrupt, or has its affairs
taken over by public authorities, the Trustee may
either appoint a successor Sponsor or Sponsors to
serve at rates of compensation determined as
provided in the Indenture or terminate the
Indenture and liquidate the Trust.
TRUSTEE
The Trustee is Investors Bank & Trust Company,
a Massachusetts trust company with its office at
Hancock Towers, 200 Clarendon Street, Boston,
Massachusetts 02116, toll-free number 1-800-356-
2754 (which is subject to supervision by the
Massachusetts Commissioner of Banks, the Federal
Deposit Insurance Corporation and the Board of
Governors of the Federal Reserve System).
The Indenture provides that the Trustee will
not be liable for any action taken in good faith
in reliance on properly executed documents or the
disposition of moneys, Securities or certificates
or for any valuation which it is required to
make, except by reason of its own gross
negligence, bad faith or wilful misconduct, nor
will the Trustee be liable or responsible in any
way for depreciation or loss incurred by reason
of the sale by the Trustee of any Securities in
the Trust. In the event of the failure of the
Sponsor to act, the Trustee may act and will not
be liable for any action taken by it in good
faith. The Trustee will not be personally liable
for any taxes or other governmental charges
imposed upon or in respect of the Securities or
upon the interest on the Securities or upon it as
Trustee or upon or in respect of the Trust which
the Trustee may be required to pay under any
present or future law of the United States of
America or of any other taxing authority having
jurisdiction. In addition, the Indenture contains
other customary provisions limiting the liability
of the Trustee. The Trustee will be indemnified
and held harmless against any loss or liability
accruing to it without gross negligence, bad
faith or wilful misconduct on its part, arising
out of or in connection with its acceptance or
administration of the Trust, including the costs
and expenses (including counsel fees) of
defending itself against any claim of liability.
INDEPENDENT AUDITORS
The Statement of Financial Condition and
Schedule of Investments have been audited by
Ernst & Young LLP, independent auditors and have
been included in this Prospectus in reliance upon
their report given on their authority as experts
in accounting and auditing.
LEGAL OPINIONS
The legality of the Units offered by this
Prospectus 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 23 certifies that it meets all of the
requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this registration statement to be signed on its behalf
by the undersigned thereunto duly authorized, and its seal to be
hereunto affixed and attested, all in the City of New York, and the
State of New York on the 23rd day of July, 1999.
PAINEWEBBER PATHFINDERS TRUST,
TREASURY AND GROWTH STOCK SERIES 23
(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 23rd day of July, 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.
July 23, 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 23
(hereinafter referred to as the "Trust"). It is proposed that
Post-Effective Amendment No. 1 to the Trust's registration statement
("Post-Effective Amendment No. 1") will be filed with the Securities
and Exchange Commission 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. 1 to the Registration Statement on
Form S-6 (File No. 333-49105) 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
July 1, 1997, among the Depositor, and
Investors Bank & Trust Company (the "Trustee"), (the "Standard
Terms");
(j) The Trust Indenture dated as of the Initial Date of Deposit, among
the Depositor, the Trustee and the Evaluator (the "Trust
Indenture" and, collectively with the Standard Terms, the
"Indenture and Agreement");
(k) The form of certificate of ownership for units (the "Certificate") to
be issued under the Indenture and Agreement; and
(l) Such other pertinent records and documents as we have deemed
necessary.
With your permission, in such examination, we have assumed
the following: (a) the authenticity of original documents and the
genuineness of all signatures; (b) the conformity to the originals of
all documents submitted to us as copies; (c) the truth, accuracy,
and completeness of the information, representations, and warranties
contained in the records, documents, instruments and certificates we
have reviewed; (d) except as specifically covered in the opinions set
forth below, the due authorization, execution, and delivery on behalf
of the respective parties thereto of documents referred to herein and
the legal, valid, and binding effect thereof on such parties; and (e)
the absence of any evidence extrinsic to the provisions of the written
agreement(s) between the parties that the parties intended a
meaning contrary to that expressed by those provisions. However,
we have not examined the securities deposited pursuant to the
Indenture and Agreement (the "Securities") nor the contracts for the
Securities.
We express no opinion as to matters of law in jurisdictions other
than the State of New York (except "Blue Sky" laws) and the federal laws
of the United States, except to the extent necessary to render the
opinion as to the Depositor in paragraph (i) below with respect to
Delaware law. As you know we are not licensed to practice law in the
State of Delaware, and our opinion in paragraph (i) and (iii) as to
Delaware law is based solely on review of the official statutes of the
State of Delaware.
Based upon such examination, and having regard for legal
considerations which we deem relevant, we are of the opinion that:
(i) The Depositor is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Delaware with full
corporate power to conduct its business as described in the
Prospectus;
(ii) The Depositor is duly qualified as a foreign corporation and is in
good standing as such within the State of New York;
(iii)The terms and provisions of the Units conform in all material
respects to the description thereof contained in the Prospectus;
(iv) The consummation of the transactions contemplated under the
Indenture and Agreement and the fulfillment of the terms thereof
will not be in violation of the Depositor's Restated Certificate of
Incorporation, as amended, or By-Laws, as amended and will not
conflict with any applicable laws or regulations applicable to the
Depositor in effect on the date hereof; and
(v) The Certificates to be issued by the Trust, when duly executed by
the Depositor and the Trustee in accordance with the Indenture
and Agreement, upon delivery against payment therefor as
described in the Prospectus will constitute fractional undivided
interests in the Trust enforceable against the Trust in accordance
with their terms, will be entitled to the benefits of the Indenture
and Agreement and will be fully paid and non-assessable.
Our opinion that any document is valid, binding, or enforceable in
accordance with its terms is qualified as to:
(a) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium, or other laws
relating to or affecting the enforcement of creditors' rights
generally;
(b) rights to indemnification and contribution which may be limited by
applicable law or equitable principles; and
(c) general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
We hereby represent that the Amendment contains no disclosure
which would render it ineligible to become effective immediately
upon filing pursuant to paragraph (b) of Rule 485 of the
Commission.
We hereby consent to the filing of this opinion as an exhibit to
the Amendment and to the use of our name wherever it appears in
the Amendment and the Prospectus.
Very truly yours,
/s/ CARTER, LEDYARD & MILBURN
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to our firm under the caption
"Independent Auditors" and to the use of our report dated
July 12, 1999, in the Registration Statement and related
Prospectus of the PaineWebber Pathfinders Trust, Treasury
and Growth Stock Series Twenty Three
/s/ ERNST & YOUNG LLP
New York, New York
July 22, 1999
