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Exhibit 4.10
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AMENDED AND RESTATED DECLARATION OF TRUST
OF
PWG Capital Trust II
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Dated as of March 14, 1997
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TABLE OF CONTENTS*
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PARTIES.............................................................. 1
RECITALS............................................................. 1
ARTICLE I
Definitions
SECTION 1.01 Certain terms defined; other terms
defined in the Trust Indenture Act of
1939, as amended, or by reference
therein in the Securities Act of
1933, as amended, to have the
meanings assigned therein..................... 2
Affiliate......................................... 2
Book Entry Interest............................... 3
Business Day...................................... 3
Business Trust Act................................ 3
Certificate....................................... 3
Certificate of Trust.............................. 3
Clearing Agency................................... 3
Clearing Agency Participant....................... 3
Closing Date...................................... 3
Code.............................................. 3
Commission........................................ 4
Common Securities................................. 4
Common Security Certificate....................... 4
Covered Person.................................... 4
Debenture Trustee................................. 4
Debentures........................................ 4
Definitive Preferred Security
Certificates.................................. 4
Delaware Trustee.................................. 4
Depositary Agreement.............................. 4
Distribution...................................... 4
DTC............................................... 4
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* This Table of Contents does not constitute part of the Amended and
Restated Declaration of Trust and should not have any bearing upon the
interpretation of any of its terms or provisions.
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Event of Default.................................. 4
Exchange Act...................................... 5
Fiscal Year....................................... 5
Global Certificate................................ 5
Holder............................................ 5
Indemnified Person................................ 5
Indenture......................................... 5
Indenture Event of Default........................ 5
Investment Company................................ 5
Investment Company Act............................ 5
Legal Action...................................... 5
Liquidation Distribution.......................... 5
Majority in liquidation amount of the
Securities.................................... 6
Ministerial Action................................ 6
Option Closing Date............................... 6
Original Declaration.............................. 6
Paying Agent...................................... 6
Person............................................ 6
Preferred Guarantee............................... 6
Preferred Securities.............................. 6
Preferred Security Beneficial Owner............... 6
Preferred Security Certificate.................... 7
Property Trustee.................................. 7
Property Account.................................. 7
Quorum............................................ 7
Regular Trustee................................... 7
Related Party..................................... 7
Resignation Request............................... 7
Responsible Officer............................... 7
Rule 3a-7......................................... 7
Securities........................................ 7
Securities Act.................................... 7
66-2/3% in liquidation amount of the
Securities.................................... 8
Special Event..................................... 8
Sponsor or PWG.................................... 8
Successor Delaware Trustee........................ 8
Successor Property Trustee........................ 8
10% in liquidation amount of the
Securities.................................... 8
Treasury Regulations.............................. 8
Trustee or Trustees............................... 9
Trust Indenture Act............................... 9
Underwriting Agreement............................ 9
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ARTICLE II
Trust Indenture Act
SECTION 2.01 Trust Indenture Act; Application.................. 9
SECTION 2.02 List of Holders of Preferred
Securities........................................ 9
SECTION 2.03 Reports by the Property Trustee................... 10
SECTION 2.04 Periodic Reports to Property Trustee.............. 10
SECTION 2.05 Evidence of Compliance with Conditions
Precedent..................................... 10
SECTION 2.06 Events of Default; Waiver......................... 10
SECTION 2.07 Disclosure of Information......................... 13
ARTICLE III
Organization
SECTION 3.01 Name.............................................. 13
SECTION 3.02 Office............................................ 13
SECTION 3.03 Issuance of the Trust Securities.................. 14
SECTION 3.04 Purchase of Debentures............................ 14
SECTION 3.05 Purpose........................................... 15
SECTION 3.06 Authority......................................... 16
SECTION 3.07 Title to Property of the Trust.................... 16
SECTION 3.08 Powers and Duties of the Regular
Trustees ...................................... 16
SECTION 3.09 Prohibition of Actions by Trust and
Trustees...................................... 19
SECTION 3.10 Powers and Duties of the Property
Trustee....................................... 20
SECTION 3.11 Delaware Trustee.................................. 24
SECTION 3.12 Certain Rights and Duties of the
Property Trustee.............................. 24
SECTION 3.13 Registration Statement and Related
Matters....................................... 27
SECTION 3.14 Filing of Amendments to Certificate of
Trust......................................... 29
SECTION 3.15 Execution of Documents by Regular
Trustees...................................... 29
SECTION 3.16 Trustees Not Responsible for Recitals or
Issuance of Securities........................ 29
SECTION 3.17 Duration of Trust................................. 29
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ARTICLE IV
Sponsor
SECTION 4.01 Purchase of Common Securities by
Sponsor........................................... 30
SECTION 4.02 Expenses.......................................... 30
ARTICLE V
Trustees
SECTION 5.01 Number of Trustees; Qualifications................ 31
SECTION 5.02 Appointment, Removal and Resignation of
Trustees...................................... 33
SECTION 5.03 Vacancies Among Trustees.......................... 35
SECTION 5.04 Effect of Vacancies............................... 35
SECTION 5.05 Meetings.......................................... 36
SECTION 5.06 Delegation of Power............................... 36
ARTICLE VI
Distributions
SECTION 6.01 Distributions..................................... 37
ARTICLE VII
Issuance of Securities
SECTION 7.01 General Provisions Regarding
Securities........................................ 37
ARTICLE VIII
Termination of Trust
SECTION 8.01 Termination of Trust.............................. 39
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ARTICLE IX
Transfer of Interests
SECTION 9.01 Transfer of Securities............................ 40
SECTION 9.02 Transfer of Certificates.......................... 41
SECTION 9.03 Deemed Security Holders........................... 41
SECTION 9.04 Book Entry Interests.............................. 42
SECTION 9.05 Notices to Holders of Certificates................ 42
SECTION 9.06 Appointment of Successor Clearing
Agency............................................ 43
SECTION 9.07 Definitive Preferred Securities
Certificates.................................. 43
SECTION 9.08 Mutilated, Destroyed, Lost or Stolen
Certificates.................................. 43
ARTICLE X
Limitation of Liability, Indemnification
SECTION 10.01 Exculpation....................................... 44
SECTION 10.02 Indemnification and Compensation.................. 45
SECTION 10.03 Outside Businesses................................ 46
ARTICLE XI
Accounting
SECTION 11.01 Fiscal Year....................................... 46
SECTION 11.02 Certain Accounting Matters........................ 46
SECTION 11.03 Banking........................................... 48
SECTION 11.04 Withholding....................................... 48
ARTICLE XII
Amendments and Meetings
SECTION 12.01 Amendments........................................ 48
SECTION 12.02 Meetings of the Holders of Securities;
Action by Written Consent..................... 50
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ARTICLE XIII
Representations of Property Trustee
and Delaware Trustee
SECTION 13.01 Representations and Warranties of
Property Trustee.............................. 52
ARTICLE XIV
Miscellaneous
SECTION 14.01 Notices........................................... 53
SECTION 14.02 Undertaking for Costs............................. 55
SECTION 14.03 Governing Law..................................... 55
SECTION 14.04 Headings.......................................... 55
SECTION 14.05 Partial Enforceability............................ 55
SECTION 14.06 Counterparts...................................... 56
SECTION 14.07 Intention of the Parties.......................... 56
SECTION 14.08 Successors and Assigns............................ 56
SIGNATURES AND SEALS................................................. 57
EXHIBIT A CERTIFICATE OF TRUST
EXHIBIT B TERMS OF THE PREFERRED SECURITIES
EXHIBIT C TERMS OF THE COMMON SECURITIES
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
PWG Capital Trust II
March 14, 1997
AMENDED AND RESTATED DECLARATION OF TRUST
("Declaration"), dated and effective as of March 14, 1997, by
the undersigned trustees (together with all other Persons from
time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the
"Trustees"), Paine Webber Group Inc., a Delaware corporation,
as trust sponsor ("PWG" or the "Sponsor"), and the holders,
from time to time, of undivided beneficial interests in the
assets of the PWG Capital Trust II to be issued pursuant to
this Declaration.
WHEREAS the Sponsor and the original trustees entered into a
Declaration of Trust dated as of October 7, 1996 (the "Original Declaration") in
order to establish PWG Capital Trust II, a business trust (the "Trust") under
the Business Trust Act (as defined herein);
WHEREAS the Certificate of Trust (the "Certificate of Trust") of the
Trust was filed with the office of the Secretary of State of the State of
Delaware on October 7, 1996;
WHEREAS the Trustees and the Sponsor desire to continue the Trust
pursuant to the Business Trust Act for the purpose of, as described more fully
in Sections 3.03, 3.04 and 3.05 hereof, (i) issuing and selling Preferred
Securities (as defined herein) representing preferred undivided beneficial
interests in the assets of the Trust for cash and investing the proceeds thereof
in Debentures (as defined herein) of PWG issued under the Indenture (as defined
herein) to be held as assets of the Trust, (ii) issuing and selling Common
Securities (as defined herein) representing common undivided beneficial
interests in the assets of the Trust to PWG for cash and investing the
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proceeds thereof in additional Debentures issued under the Indenture to be held
as assets of the Trust and (iii) engaging in such other activities as are
necessary, convenient or incidental thereto; and
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute a business trust under the Business Trust Act, that the
Original Declaration be amended and restated in its entirety as provided herein
and that this Declaration constitute the governing instrument of such business
trust, the Trustees declare that all assets referred to in clauses (i) and (ii)
of the previous Whereas clause purchased by the Trust will be held in trust for
the benefit of the Holders (as defined herein) from time to time of the
Certificates (as defined herein) representing undivided beneficial interests in
the assets of the Trust issued hereunder, subject to the provisions of this
Declaration.
ARTICLE I
Definitions
SECTION 1.01. Definitions. (a) Capitalized terms used in this
Declaration but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.01; (b) a term defined anywhere in this
Declaration has the same meaning throughout; (c) all references to "the
Declaration" or "this Declaration" are to this Amended and Restated Declaration
of Trust (including Exhibits A, B and C hereto (the "Exhibits")) as modified,
supplemented or amended from time to time; (d) all references in this
Declaration to Articles and Sections and Exhibits are to Articles and Sections
of and Exhibits to this Declaration unless otherwise specified; (e) a term
defined in the Trust Indenture Act has the same meaning when used in this
Declaration unless otherwise defined in this Declaration or unless the context
otherwise requires; and (f) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
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"Book Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Clearing Agency as described in Section 9.04.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in New York, New York are authorized or
required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Certificate of Trust" has the meaning set forth in the second
Whereas clause above.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act that is acting as depository
for the Preferred Securities and in whose name, or in the name of a nominee of
that organization, shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the Closing Date as specified in the
Underwriting Agreement, which date is also the date of execution and delivery of
this Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation. A reference to a specific section of the
Code refers not only to such specific section but also to any corresponding
provision of any Federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
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application of the provisions of this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.01(b).
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Annex I to Exhibit C.
"Covered Person" means (i) any officer, director, shareholder,
partner, member, representative, employee or agent of the Trust or its
Affiliates, (ii) any officer, director, shareholder, employee, representative or
agent of PWG or any of its Affiliates and (iii) the Holders from time to time of
the Securities.
"Debenture Trustee" means The Chase Manhattan Bank, as trustee under
the Indenture, until a successor, if any, is appointed thereunder and thereafter
means such successor trustee.
"Debentures" means the series of Junior Subordinated Debentures
issued by PWG under the Indenture to the Property Trustee and entitled the
"8.08% Junior Subordinated Debentures due 2037".
"Definitive Preferred Security Certificates" has the meaning set
forth in Section 9.04.
"Delaware Trustee" has the meaning set forth in Section 5.01(a)(3).
"Depositary Agreement" means the agreement among the Trust, the
Property Trustee and DTC dated as of the Closing Date, as the same may be
amended or supplemented from time to time.
"Distribution" means a distribution payable to Holders of Securities
in accordance with Section 6.01.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
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"Event of Default" in respect of the Securities means an Indenture
Event of Default has occurred and is continuing in respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiscal Year" has the meaning specified in Section 11.01.
"Global Certificate" has the meaning set forth in Section 9.04.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means any Trustee, any Affiliate of any
Trustee, any officer, director, shareholder, member, partner, employee,
representative or agent of any Trustee, or any employee or agent of the Trust or
any of its Affiliates.
"Indenture" means the Indenture dated as of December 9, 1996,
between PWG and the Debenture Trustee, as supplemented by the Second
Supplemental Indenture thereto dated as of March 14, 1997, pursuant to which the
Debentures are to be issued, as each may be amended or supplemented from time to
time.
"Indenture Event of Default" means an event or condition defined as
an "Event of Default" with respect to the Debentures under Section 6.01(a) of
the Indenture has occurred and is continuing.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Legal Action" has the meaning specified in Section 3.08(g).
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"Liquidation Distribution" has the meaning set forth in the terms of
the Securities as set forth in Exhibits B and C hereto.
"Majority in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
represents more than 50% of the liquidation amount of all outstanding Securities
of such class.
"Ministerial Action" has the meaning set forth in Section 4(c) of
the terms of the Securities as set forth in Exhibits B and C hereto.
"Option Closing Date" means the Option Closing Date as specified in
the Underwriting Agreement.
"Original Declaration" has the meaning set forth in the first
Whereas clause above.
"Paying Agent" has the meaning specified in Section 3.10(i).
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Guarantee" means the Guarantee Agreement dated as of
March 14, 1997, of PWG in respect of the Preferred Securities.
"Preferred Securities" has the meaning specified in Section 7.01(b).
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"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Preferred Security Certificate" means a definitive certificate in
fully registered form representing a Preferred Security substantially in the
form of Annex I to Exhibit B.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.01(c) and having the duties set forth for
the Property Trustee herein.
"Property Account" has the meaning specified in Section 3.10(c)(i).
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both such Regular Trustees.
"Regular Trustee" means any Trustee other than the Property Trustee
or the Delaware Trustee.
"Related Party" means any direct or indirect wholly owned subsidiary
of PWG or any Person which owns, directly or indirectly, 100% of the outstanding
voting securities of PWG.
"Resignation Request" has the meaning specified in Section 5.02(d).
"Responsible Officer" means, with respect to the Property Trustee,
any officer of the Property Trustee with responsibility for the administration
of this Declaration and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of, and familiarity with, the particular subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or any
successor rule thereunder.
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"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"66-2/3% in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities,
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
represents 66-2/3% or more of the liquidation amount of all outstanding
Securities of such class.
"Special Event" has the meaning set forth in Section 4(c) of the
terms of the Securities as set forth in Exhibits B and C hereto.
"Sponsor" or "PWG" means Paine Webber Group Inc., a Delaware
corporation, or any successor entity in a merger, consolidation or other
business combination transaction in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning specified in Section
5.02(b)(ii).
"Successor Property Trustee" means a successor Trustee possessing
the qualifications to act as Property Trustee under Section 5.01(c).
"10% in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities,
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or
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otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) represents 10% or more of the liquidation
amount of all outstanding Securities of such class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as a Trustee in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement dated
March 11, 1997, among the Trust, the Sponsor and PaineWebber Incorporated, as
representative of the several underwriters named therein.
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This Declaration
is subject to the provisions of the Trust Indenture Act that are required to be
part of this Declaration and shall, to the extent applicable, be governed by
such provisions; (b) if and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310 to
317, inclusive, of the Trust Indenture Act, such imposed duties shall control;
(c) the Property Trustee, to the extent permitted by applicable law and/or the
rules and regulations of the Commission, shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act; and (d) the application of
the Trust Indenture Act to this Declaration
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shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.02. Lists of Holders of Preferred Securities. (a) Each of
the Sponsor and the Regular Trustees on behalf of the Trust shall provide the
Property Trustee with such information as is required under Section 312(a) of
the Trust Indenture Act at the times and in the manner provided in Section
312(a); and (b) the Property Trustee shall comply with its obligations under
Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Property Trustee. Within 60 days after
May 15 of each year, the Property Trustee shall provide to the Holders of the
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form, in the manner and at the times provided by Section 313
of the Trust Indenture Act. The Property Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Property Trustee. Each of the
Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Property Trustee, the Commission and the Holders of the Securities, as
applicable, such documents, reports and information as required by Section
314(a)(1)-(3) (if any) of the Trust Indenture Act and the compliance
certificates required by Section 314(a)(4) and (c) of the Trust Indenture Act,
any such certificates to be provided in the form, in the manner and at the times
required by Section 314(a)(4) and (c) of the Trust Indenture Act (provided that
any certificate to be provided pursuant to Section 314(a)(4) of the Trust
Indenture Act shall be provided within 120 days of the end of each Fiscal Year).
SECTION 2.05. Evidence of Compliance with Conditions Precedent. Each
of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to
the Property Trustee such evidence of compliance with any conditions precedent,
if any, provided for in this Declaration which relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given pursuant to Section 314(c) of the Trust Indenture Act shall
comply with Section 314(e) of the Trust Indenture Act.
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SECTION 2.06. Events of Default; Waiver. (a) Subject to Section
2.06(c), Holders of Preferred Securities may, by vote of at least a Majority in
liquidation amount of the Preferred Securities, (A) in accordance with the terms
of the Preferred Securities, direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee, or (B) on behalf of the
Holders of all Preferred Securities, waive any past Event of Default in respect
of the Preferred Securities and its consequences; provided that, if the Event of
Default arises out of an Indenture Event of Default:
(i) which is not waivable under the Indenture, the Event of Default
under this Declaration shall also be not waivable; or
(ii) which requires the consent or vote of (1) holders of Debentures
representing a specified percentage greater than a majority in principal
amount of the Debentures affected thereby, or (2) each holder of
Debentures, the Event of Default under this Declaration may only be waived
by, in the case of clause (1) above, the vote of Holders of Preferred
Securities representing such specified percentage of the aggregate
liquidation amount of the Preferred Securities or, in the case of clause
(2) above, each Holder of Preferred Securities affected thereby.
Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Preferred Securities or impair any right consequent thereto.
(b) Subject to Section 2.06(c), Holders of Common Securities may, by
vote of at least a Majority in liquidation amount of the Common Securities, (A)
in accordance with the terms of the Common Securities, direct the time, method
and place of conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property Trustee,
or (B) on behalf of the Holders of all of the Common Securities, waive any past
Event of Default with respect to
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the Common Securities and its consequences; provided that if the Event of
Default arises out of an Indenture Event of Default:
(i) which is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event of
Default under the Declaration as provided below, the Event of Default
under this Declaration shall also not be waivable; or
(ii) which requires the consent or vote of (1) holders of Debentures
representing a specified percentage greater than a majority in principal
amount of the Debentures or (2) each holder of Debentures affected
thereby, except where the holders of the Common Securities are deemed to
have waived such Event of Default under this Declaration as provided
below, the Event of Default under this Declaration may only be waived by,
in the case of clause (1) above, the vote of Holders of Common Securities
representing such specified percentage of the aggregate liquidation amount
of the Common Securities or, in the case of clause (2) above, each holder
of Common Securities affected thereby; and
provided further that each Holder of Common Securities will be deemed to have
waived any Event of Default with respect to the Common Securities and its
consequences until all Events of Default with respect to the Preferred
Securities have been cured or waived by the Holders of Preferred Securities as
provided in this Declaration or otherwise eliminated and until all Events of
Default with respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of this Declaration or the Securities. In the event
that an Event of Default with respect to the Preferred Securities is waived by
the Holders of Preferred Securities as provided in this Declaration, the Holders
of Common Securities agree that such waiver shall also constitute the waiver of
such Event of Default with respect to the Common Securities for all purposes
under this Declaration without any further act, vote or consent of the Holders
of the Common Securities. Subject to the foregoing provisions of this Section
2.06(b), upon such waiver, any
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such default shall cease to exist and any Event of Default with respect to the
Common Securities arising therefrom shall be deemed to have been cured for every
purpose of this Declaration, but no such waiver shall extend to any subsequent
or other default or Event of Default with respect to the Common Securities or
impair any right consequent thereon.
(c) The right of any Holder of Securities to receive payment of
Distributions on the Securities in accordance with this Declaration and the
terms of the Securities set forth in Exhibits B and C on or after the respective
payment dates therefor, or to institute suit for the enforcement of any such
payment on or after such payment dates, shall not be impaired without the
consent of such Holder.
(d) As provided in the terms of the Securities set forth in Exhibits
B and C hereto, a waiver of an Indenture Event of Default by the Property
Trustee at the written direction of the Holders of the Preferred Securities
constitutes a waiver of the corresponding Event of Default under this
Declaration in respect of the Securities.
SECTION 2.07. Disclosure of Information. The disclosure of
information as to the names and addresses of the Holders of the Securities in
accordance with Section 312 of the Trust Indenture Act, regardless of the source
from which such information was derived, shall not be deemed to be a violation
of any existing law or any law hereafter enacted which does not specifically
refer to Section 312 of the Trust Indenture Act, nor shall the Property Trustee
be held accountable by reason of mailing any material pursuant to a request made
under Section 312(b) of the Trust Indenture Act.
ARTICLE III
Organization
SECTION 3.01. Name. The Trust continued by this Declaration is named
"PWG Capital Trust II" as such name may be modified from time to time by the
Regular Trustees following written notice to the Holders of Securities. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Regular Trustees.
<PAGE> 21
14
SECTION 3.02. Office. The address of the principal office of the
Trust is c/o Paine Webber Group Inc., 1285 Avenue of the Americas, New York, New
York 10019. Upon ten days' written notice to the Holders (a copy of such notice
to be sent to the Property Trustee and the Delaware Trustee), the Regular
Trustees may change the location of the Trust's principal office. The name of
the registered agent and office of the Trust in the State of Delaware is The
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801. At
any time, the Regular Trustees may designate another registered agent and/or
registered office.
SECTION 3.03. Issuance of the Trust Securities. On March 11, 1997,
the Sponsor, on behalf of the Trust and pursuant to the Original Declaration,
executed and delivered the Underwriting Agreement. On the Closing Date and
contemporaneously with the execution and delivery of this Declaration, the
Regular Trustees, on behalf of the Trust, shall execute and deliver (i) to the
underwriters named in the Underwriting Agreement, a Global Certificate,
registered in the name of the nominee of the initial Clearing Agency as
specified in Section 9.04, in an aggregate amount of 7,950,000 Preferred
Securities having an aggregate liquidation amount of $198,750,000, against
receipt of the aggregate purchase price of such Preferred Securities of
$198,750,000, and (ii) to the Sponsor, Common Securities Certificates,
registered in the name of the Sponsor, in an aggregate amount of 245,877 Common
Securities having an aggregate liquidation amount of $6,146,925, against receipt
of the aggregate purchase price of such Common Securities of $6,146,925.
SECTION 3.04. Purchase of Debentures. On the Closing Date and
contemporaneously with the execution and delivery of this Declaration, the
Regular Trustees, on behalf of the Trust, shall purchase from the Sponsor with
the proceeds received by the Trust from the sale of the Securities on such date
pursuant to Section 3.03, at a purchase price of 100% of the principal amount
thereof, Debentures, registered in the name of the Property Trustee and having
an aggregate principal amount equal to $204,896,925, and, in satisfaction of the
purchase price for such Debentures, the Regular Trustee, on behalf of the Trust,
shall deliver or cause to be delivered to the Sponsor the sum of $204,896,925.
<PAGE> 22
15
SECTION 3.05. Purpose. The exclusive purposes and functions of the
Trust are: (a)(i) to issue and sell Preferred Securities for cash and use the
proceeds of such sales to purchase as trust assets Debentures issued under the
Indenture having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities so issued and sold; (ii) to enter
into such agreements and arrangements as may be necessary in connection with the
sale of Preferred Securities to the initial purchasers thereof (including the
Underwriting Agreement) and to take all actions and exercise such discretion as
may be necessary or desirable in connection therewith and to file such
registration statements or make such other filings under the Securities Act, the
Exchange Act or state securities or "Blue Sky" laws as may be necessary or
desirable in connection therewith and the issuance of the Preferred Securities;
and (iii) to issue and sell Common Securities to PWG for cash and use the
proceeds of such sale to purchase as trust assets an equal aggregate principal
amount of Debentures issued under the Indenture; and (b) except as otherwise
limited herein, to engage in such other activities as are necessary, convenient
or incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, pledge any of its assets or, at any time
while the Securities are outstanding, otherwise undertake (or permit to be
undertaken) an activity that would result in or cause the Trust to be treated as
anything other than a grantor trust for United States federal income tax
purposes.
SECTION 3.06. Authority. Subject to the limitations provided in this
Declaration and to the specific duties of the Property Trustee, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust and an action
taken by the Property Trustee in accordance with its powers shall constitute the
act of and serve to bind the Trust. In dealing with the Trustees acting on
behalf of the Trust, no Person shall be required to inquire into the authority
of the Trustees to bind the Trust. Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Trustees as set forth in
this Declaration.
SECTION 3.07. Title to Property of the Trust. Except as provided in
Section 3.10 with respect to the
<PAGE> 23
16
Debentures and the Property Account or unless otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an individual undivided beneficial interest in the assets
of the Trust.
SECTION 3.08. Powers and Duties of the Regular Trustees. The Regular
Trustees shall have the exclusive power, authority and duty to cause the Trust,
and shall cause the Trust, to engage in the following activities:
(a) to issue Preferred Securities and Common Securities, in each
case in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no
more than one series of Common Securities; and provided further that there
shall be no interests in the Trust other than the Securities and the
issuance of Securities shall be limited to (x) a one-time, simultaneous
issuance of both Preferred Securities and Common Securities on the Closing
Date and (y) any subsequent issuance of both Preferred Securities and
Common Securities on the Option Closing Date pursuant to an exercise of
the overallotment option granted to the underwriters in the Underwriting
Agreement;
(b) in connection with the issuance of the Preferred Securities, at
the direction of the Sponsor, to effect or cause to be effected the
filings, and to execute or cause to be executed the documents, set forth
in Section 3.13 and to execute, deliver and perform on behalf of the Trust
the Depositary Agreement;
(c) to acquire as trust assets Debentures with the proceeds of the
sale of the Preferred Securities and Common Securities; provided, however,
that the Regular Trustees shall cause all the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders
of the Preferred Securities and the Common Securities;
(d) to cause the Trust to enter into such agreements and
arrangements as may be necessary or desirable in connection with the sale
of Preferred Securities to the initial purchasers thereof and the
<PAGE> 24
17
consummation thereof, and to take all action, and exercise all discretion,
as may be necessary or desirable in connection with the consummation
thereof;
(e) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular
Trustees shall consult with the Sponsor and the Property Trustee before
taking or refraining to take any Ministerial Action in relation to a
Special Event;
(f) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including for
the purposes of Section 316(c) of the Trust Indenture Act and with respect
to Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to Holders of the Preferred Securities and the Common
Securities as to such actions and applicable record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless, pursuant to Section 3.10(e), the Property
Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate to the Property Trustee required by
Section 314(a)(4) of the Trust Indenture Act, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses which are necessary or incidental to carrying
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities,
<PAGE> 25
18
the Regular Trustees hereby initially appointing the Property Trustee for
such purposes;
(m) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities set forth
in Exhibits B and C hereto;
(n) to execute all documents or instruments, perform all duties and
powers and do all things for and on behalf of the Trust in all matters
necessary, convenient or incidental to the foregoing;
(o) to take all action which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a business trust under the laws of the State
of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the
Securities or to enable the Trust to effect the purposes for which the
Trust has been created;
(p) to take all action, not inconsistent with this Declaration or
with applicable law, which the Regular Trustees determine in their
discretion to be reasonable and necessary or desirable in carrying out the
activities of the Trust as set out in this Section 3.08, in order that:
(i) the Trust will not be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) the Trust will not be classified for United States
Federal income tax purposes as an association taxable as a
corporation or a partnership and will be treated as a grantor trust
for United States Federal income tax purposes; and
(iii) the Trust will comply with any requirements imposed by
any taxing authority on holders of instruments treated as
indebtedness for Unites States Federal income tax purposes;
provided that such action does not adversely affect the interests of
Holders;
<PAGE> 26
19
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
(r) subject to the requirements of Rule 3a-7 and Section 317(b) of
the Trust Indenture Act, to appoint one or more Paying Agents in addition
to the Property Trustee.
The Regular Trustees must exercise the powers set forth in this
Section 3.08 in a manner which is consistent with the purposes and functions of
the Trust set out in Section 3.05 and the Regular Trustees shall not take any
action which is inconsistent with the purposes and functions of the Trust set
forth in Section 3.05.
Subject to this Section 3.08, the Regular Trustees shall have none
of the powers nor any of the authority of the Property Trustee set forth in
Section 3.10.
SECTION 3.09. Prohibition of Actions by Trust and Trustees. The
Trust shall not, and no Trustee (including the Property Trustee) shall cause the
Trust to, engage in any activity other than as required or authorized by this
Declaration. In particular, the Trust shall not, and no Trustee (including the
Property Trustee) shall cause the Trust to:
(a) invest any proceeds received by the Trust from holding the
Debentures, but shall promptly distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the Debentures;
(e) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
<PAGE> 27
20
(f) issue any securities or other evidences of beneficial ownership
of, or beneficial interests in, the Trust other than the Securities;
(g) incur any indebtedness for borrowed money; or
(h)(i) direct the time, method and place of exercising any trust or
power conferred upon the Debenture Trustee with respect to the Debentures,
(ii) waive any past default that is waivable under Section 6.06 of the
Indenture, (iii) exercise any right to rescind or annul any declaration
that the principal of all of the Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the
Indenture or the Debentures, where such consent shall be required, unless
in the case of this clause (h) the Property Trustee shall have received an
unqualified opinion of nationally recognized independent tax counsel
recognized as expert in such matters to the effect that such action will
not cause the Trust to be classified for United States Federal income tax
purposes as an association taxable as a corporation or partnership and
that the Trust will continue to be classified as a grantor trust for
United States federal income tax purposes.
SECTION 3.10. Powers and Duties of the Property Trustee. (a) The
Debentures shall be held of record in the name of the Property Trustee in trust
for the benefit of the Holders of the Securities. The right, title and interest
of the Property Trustee to the Debentures shall vest automatically in each
Person who may hereafter be appointed as Property Trustee in accordance with
Article V. Such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or, if the Property Trustee
does not also act as the Delaware Trustee, the Delaware Trustee.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing bank
account (the "Property Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the
<PAGE> 28
21
Securities and on the receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds into the
Property Account and, without any further acts of the Property Trustee or
the Regular Trustees, promptly make payments to the Holders of the
Preferred Securities and Common Securities from the Property Account in
accordance with Section 6.01. Funds in the Property Account shall be held
uninvested, and without liability for interest thereon, until disbursed in
accordance with this Declaration. The Property Account shall be an account
which is maintained with a banking institution whose long term unsecured
indebtedness is rated by a "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act, at least equal to (but in no event less than "A"
or the equivalent) the rating assigned to the Preferred Securities by a
nationally recognized statistical rating organization;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Preferred Securities
and the Common Securities to the extent the Debentures are redeemed or
mature;
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary or
appropriate to effect promptly, pursuant to the terms of the Securities,
the distribution of Debentures to Holders of Securities upon the
occurrence of a Special Event; and
(iv) have the legal power to exercise all of the rights, powers and
privileges of a holder of the Debentures under the Indenture and, if an
Event of Default occurs and is continuing, the Property Trustee, subject
to Section 2.06(b), shall, for the benefit of the Holders of the
Securities, enforce its rights as holder of the Debentures under the
Indenture, subject to the rights of the Holders of the Preferred
Securities pursuant to the terms of this Declaration, the Business Trust
Act and the Trust Indenture Act.
<PAGE> 29
22
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities set forth in Exhibits B and C hereto.
(e) The Property Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default or the Property Trustee's
duties and obligations under this Declaration, the Business Trust Act or the
Trust Indenture Act.
(f) All moneys deposited in the Property Account, and all Debentures
held by the Property Trustee for the benefit of the Holders of the Securities,
will not be subject to any right, charge, security interest, lien or claim of
any kind in favor of, or for the benefit of, the Property Trustee or its agents
or their creditors.
(g) The Property Trustee shall, within 90 days after the occurrence
of a default with respect to the Securities, transmit by mail, first class
postage prepaid, to the Holders of the Securities, as their names and addresses
appear upon the register, notice of all defaults with respect to the Securities
known to the Property Trustee, unless such defaults shall have been cured before
the giving of such notice (the term "defaults" for the purposes of this Section
3.10(g) being hereby defined to be an Indenture Event of Default, not including
any periods of grace provided for in the Indenture and irrespective of the
giving of any notice provided therein); provided that, except in the case of
default in the payment of the principal of (or premium, if any) or interest on
any of the Debentures, the Property Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or
a trust committee of directors and/or Responsible Officers of the Property
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Securities. The Property Trustee shall not be
deemed to have knowledge of any default, except (i) a default in the payment of
principal of (or premium, if any) or interest on the Debentures or (ii) any
default as to which the Property Trustee shall have received written notice or a
Responsible Officer charged with the administration of this Declaration shall
have obtained written notice.
<PAGE> 30
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(h) The Property Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds
thereof distributed to the Holders of Securities pursuant to the terms of
the Securities; or
(ii) a Successor Property Trustee has been appointed and accepted
that appointment in accordance with Article V.
(i) The Property Trustee shall act as paying agent in respect of the
Common Securities and the Preferred Securities and, subject to Section 3.08(r),
may authorize one or more Persons (each, a "Paying Agent") to pay Distributions,
redemption payments or liquidation payments on behalf of the Trust with respect
to the Preferred Securities. Any such Paying Agent shall comply with Section
317(b) of the Trust Indenture Act. Any Paying Agent may be removed by the
Property Trustee, after consultation with the Regular Trustees, at any time and
a successor Paying Agent or additional Paying Agents may be appointed at any
time by the Property Trustee, subject to Section 3.08(r).
(j) The Property Trustee shall give prompt written notice to the
Holders of the Securities of any notice received by it from PWG of its election
to defer payments of interest on the Debentures by extending the interest
payment period with respect thereto.
(k) Subject to this Section 3.10, the Property Trustee shall have
none of the powers or the authority of the Regular Trustees set forth in Section
3.08.
(1) The Property Trustee shall exercise the powers, duties and
rights set forth in this Section 3.10 and Section 3.12 in a manner which is
consistent with the purposes and functions of the Trust set out in Section 3.05,
and the Property Trustee shall not take any action which is inconsistent with
the purposes and functions of the Trust set forth in Section 3.05.
SECTION 3.11. Delaware Trustee. Notwithstanding any other provision
of this Declaration other than Section 5.01(a)(3), the Delaware Trustee shall
not be entitled to exercise any powers, nor shall the Delaware Trustee have any
of the duties and responsibilities of the
<PAGE> 31
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Regular Trustees or the Property Trustee described in this Declaration. Except
as set forth in Section 5.01(a)(3), the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Business Trust Act. In the event the Delaware Trustee shall at any time be
required to take any action or perform any duty hereunder, the Delaware Trustee
shall be entitled to the benefits of Section 3.12(b)(ii), (iii) and (iv) and
Section 3.12(c). No implied covenants or obligations shall be read into this
Declaration against the Delaware Trustee.
SECTION 3.12. Certain Rights and Duties of the Property Trustee.
(a) The Property Trustee, before the occurrence of an Event of Default and after
the curing or waiving of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration, and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.06), the Property Trustee shall
exercise such of the rights and powers vested in it by this Declaration, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this Declaration,
and the Property Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Property Trustee;
and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may
<PAGE> 32
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conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Property Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee, the
Property Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders as provided herein relating to the time,
method and place of conducting any proceeding for any remedy available to
the Property Trustee hereunder or under the Indenture, or exercising any
trust or power conferred upon the Property Trustee under this Declaration;
and
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable
ground for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or adequate
indemnity against such risk or liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.12(a) and (b):
(i) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder,
<PAGE> 33
26
the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part and, if the Trust
is excluded from the definition of Investment Company solely by means of
Rule 3a-7, subject to the requirements of Rule 3a-7, request and rely upon
a certificate, which shall comply with the provisions of Section 314(e) of
the Trust Indenture Act, signed by any two of the Regular Trustees or by
an authorized officer of the Sponsor, as the case may be;
(ii) the Property Trustee (A) may consult with counsel (which may be
counsel to the Sponsor or any of its Affiliates and may include any of its
employees) selected by it in good faith and with due care and the written
advice or opinion of such counsel with respect to legal matters shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon and in accordance with such advice and opinion and (B) shall have
the right at any time to seek instructions concerning the administration
of this Declaration from any court of competent jurisdiction;
(iii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed by it in good faith and with due care;
(iv) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Declaration at the
request or direction of any Holders, unless such Holders shall have
offered to the Property Trustee reasonable security and indemnity against
the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction; provided that nothing contained in this clause (iv) shall
relieve the Property Trustee of the obligation, upon the occurrence of an
Event of Default (which has not been cured or waived) to exercise such of
the rights and powers vested in it by this Declaration, and to use the
same degree of care and skill in such exercise, as a prudent
<PAGE> 34
27
person would exercise or use under the circumstances in the conduct of his
or her own affairs;
(v) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of the Securities and the signature
of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action; and no third party shall be required
to inquire as to the authority of the Property Trustee to so act, or as to
its compliance with any of the terms and provisions of this Declaration,
both of which shall be conclusively evidenced by the Property Trustee's or
its agent's taking such action;
(vi) the Property Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, security or other paper or document believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties; and
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, security or other paper or document, but
the Property Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
SECTION 3.13. Registration Statement and Related Matters. In
accordance with the Original Declaration, PWG and the Trustees have authorized
and directed, and hereby confirm the authorization of, PWG, as the sponsor of
the Trust, (i) to file with the Commission and execute, in each case on behalf
of the Trust, (a) the Registration Statement on Form S-3 (File Nos. 333-13831,
333-13831-01, 333-13831-02, 333-13831-03 and 333-13831-04) (the "1933 Act
Registration Statement") including any amendments thereto and any further
pre-effective or post-effective amendments to such Registration Statement,
relating to the registration under the Securities Act of, among other things,
the Preferred Securities of the Trust and the related guarantees of such
Preferred Securities by the Sponsor and (b) a
<PAGE> 35
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Registration Statement on Form 8-A or other appropriate form (the "1934 Act
Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities of
the Trust and the related guarantees of such Preferred Securities by the Sponsor
under Section 12(b) of the Exchange Act; (ii) to file with the New York Stock
Exchange and execute on behalf of the Trust a listing application and all other
applications, statements, certificates, agreements and other instruments as
shall be necessary or desirable to cause the Preferred Securities to be listed
on the New York Stock Exchange; (iii) to file and execute on behalf of the Trust
such applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under the securities
or "Blue Sky" laws of such jurisdictions as PWG, on behalf of the Trust, may
deem necessary or desirable and (iv) to negotiate and execute on behalf of the
Trust the Underwriting Agreement. In the event that any filing referred to in
clauses (i)-(iii) above is required by the rules and regulations of the
Commission, the New York Stock Exchange or state securities or blue sky laws, to
be executed on behalf of the Trust by the Trustees, the Regular Trustees, in
their capacities as Trustees of the Trust, are hereby authorized and directed to
join in any such filing and to execute on behalf of the Trust any and all of the
foregoing, it being understood that the Property Trustee and the Delaware
Trustee, in their capacities as Trustees of the Trust, shall not be required to
join in any such filing or execute on behalf of the Trust any such document
unless required by the rules and regulations of the Commission, the New York
Stock Exchange or state securities or blue sky laws. In connection with all of
the foregoing, PWG and each Trustee, solely in its capacity as a Trustee of the
Trust, have constituted and appointed, and hereby confirm the appointment of
Donald B. Marron, Regina A. Dolan, Pierce R. Smith and William J. Nolan, and
each of them, as his, her or its, as the case may be, true and lawful
attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for PWG or such Trustee or in PWG's or such Trustee's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to the 1933 Act Registration Statement and
the 1934 Act Registration Statement and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Commission,
granting unto said
<PAGE> 36
29
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as PWG or such Trustee might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitute or substitutes, shall
do or cause to be done by virtue hereof.
SECTION 3.14. Filing of Amendments to Certificate of Trust. The
Certificate of Trust as filed with the Secretary of State of the State of
Delaware on October 7, 1996 is attached hereto as Exhibit A. On or after the
date of execution of this Declaration, the Trustees shall cause the filing with
the Secretary of State of the State of Delaware of such amendments to the
Certificate of Trust as the Trustees shall deem necessary or desirable.
SECTION 3.15. Execution of Documents by Regular Trustees. Unless
otherwise determined by the Regular Trustees and except as otherwise required by
the Business Trust Act with respect to the Certificate of Trust or otherwise, a
majority of, or if there are only two, both of, the Regular Trustees are
authorized to execute and deliver on behalf of the Trust any documents which the
Regular Trustees have the power and authority to execute or deliver pursuant to
this Declaration.
SECTION 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities. The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.17. Duration of Trust. The Trust, absent termination
pursuant to the provisions of Article VIII hereof, shall have existence until
March 1, 2042.
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ARTICLE IV
Sponsor
SECTION 4.01. Purchase of Common Securities by Sponsor. On the
Closing Date, the Sponsor will purchase all of the Common Securities issued by
the Trust at the same time as the Preferred Securities to be issued on such date
are issued, such purchase to be in an amount equal to 3% of the total capital of
the Trust. On the Option Closing Date, the Sponsor shall purchase all of the
Common Securities issued by the Trust at the same time as the Preferred
Securities to be issued on such date are issued, such purchase to be in such
amount so that the Common Securities continue to represent 3% of the total
capital of the Trust.
SECTION 4.02. Expenses. (a) In connection with the purchase of
the Debentures by the Trust, the Sponsor, in its capacity as Sponsor and not as
a Holder, shall be responsible for and shall pay for all debts and obligations
(other than with respect to the Securities) and all costs and expenses of the
Trust (including, but not limited to, costs and expenses relating to the
organization of the Trust, the issuance of the Preferred Securities to initial
purchasers thereof, the fees and expenses (including reasonable counsel fees and
expenses) of the Trustees (including any amounts payable under Article X), the
costs and expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, Paying Agent(s), registrars, transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the disposition of Trust assets).
(b) In connection with the purchase of the Debentures by the
Trust, the Sponsor, in its capacity as Sponsor and not as a Holder, will pay any
and all taxes (other than United States withholding taxes attributable to the
Trust or its assets) and all liabilities, costs and expenses with respect to
such taxes of the Trust.
(c) The Sponsor's obligations under this Section 4.02 shall be
for the benefit of, and shall be enforceable by, any Person to whom any such
debts, obligations, costs, expenses and taxes are owed (a
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"Creditor") whether or not such Creditor has received notice hereof. Any such
Creditor may enforce the Sponsor's obligations under this Section 4.02 directly
against the Sponsor and the Sponsor irrevocably waives any right or remedy to
require that any such Creditor take any action against the Trust or any other
Person before proceeding against the Sponsor. The Sponsor agrees to execute such
additional agreements as may be necessary or desirable in order to give full
effect to the provisions of this Section 4.02.
ARTICLE V
Trustees
SECTION 5.01. Number of Trustees; Qualifications. (a) Except
as provided in (1) below, the number of Trustees initially shall be five (5). At
any time (i) before the issuance of the Securities, the Sponsor may, by written
instrument, increase or decrease the number of, and appoint, remove and replace
the, Trustees, and (ii) after the issuance of the Securities the number of
Trustees may be increased or decreased solely by, and Trustees may be appointed,
removed or replaced solely by, vote of Holders of Common Securities representing
a Majority in liquidation amount of the Common Securities voting as a class;
provided that in any case:
(1) the number of Trustees shall be at least five (5) unless
the Trustee that acts as the Property Trustee also acts as the Delaware
Trustee, in which case the number of Trustees shall be at least three
(3);
(2) at least a majority of the Trustees shall at all times be
officers or employees of PWG;
(3) if required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be either a natural person who is a resident
of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and
otherwise is permitted to act as a Trustee hereunder under the laws of
the State of Delaware, except that if the Property Trustee has its
principal place of business in the State of Delaware and
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otherwise is permitted to act as a Trustee hereunder under the laws of
the State of Delaware, then the Property Trustee shall also be the
Delaware Trustee and Section 3.09 shall have no application; and
(4) there shall at all times be a Property Trustee hereunder
which shall satisfy the requirements of Section 5.01(c).
Each Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed representatives.
(b) The initial Regular Trustees shall be:
Regina A. Dolan
John R. Grimm
William J. Nolan
In care of Paine Webber Group Inc.
1285 Avenue of the Americas
New York, New York 10019
(c) There shall at all times be one Trustee which shall act as
Property Trustee. In order to act as Property Trustee hereunder, such Trustee
shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000,
and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.01(c)(ii), the combined
capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published; and
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(iii) if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7 and to the extent Rule
3a-7 requires a trustee having certain qualifications to hold title to
the "eligible assets" (as defined in Rule 3a-7) of the Trust, the
Property Trustee shall possess those qualifications.
If at any time the Property Trustee shall cease to satisfy the
requirements of clauses (i)-(iii) above, the Property Trustee shall immediately
resign in the manner and with the effect set out in Section 5.02(d). If the
Property Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Property Trustee and
the Holders of the Common Securities (as if such Holders were the obligor
referred to in Section 310(b) of the Trust Indenture Act) shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act. The
Preferred Guarantee shall be deemed to be specifically described in this
Declaration for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
The initial Trustee which shall serve as the Property Trustee
is The Chase Manhattan Bank, a New York banking corporation, whose address is as
set forth in Section 14.01(b).
(d) The initial Trustee which shall serve as the Delaware
Trustee is Chase Manhattan Bank Delaware, a Delaware banking corporation, whose
address is as set forth in Section 14.01(c).
(e) Any action taken by Holders of Common Securities pursuant
to this Article V shall be taken at a meeting of Holders of Common Securities
convened for such purpose or by written consent as provided in Section 12.02.
(f) No amendment may be made to this Section 5.01 which would
change any rights with respect to the number, existence or appointment and
removal of Trustees, except with the consent of each Holder of Common
Securities.
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SECTION 5.02. Appointment, Removal and Resignation of
Trustees. (a) Subject to Section 5.02(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of the Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of the Securities by vote of the
Holders of a Majority in liquidation amount of the Common Securities
voting as a class.
(b)(i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.02(a) until a Successor Property
Trustee possessing the qualifications to act as Property Trustee under
Section 5.01(c) has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and
delivered to the Regular Trustees, the Sponsor and the Property Trustee
being removed; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.02(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Section
5.01(a)(3) (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such
Successor Delaware Trustee and delivered to the Regular Trustees, the
Sponsor and the Delaware Trustee being removed.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation.
(d) Any Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument (a "Resignation Request") in
writing signed by the Trustee and delivered to the Sponsor and the
<PAGE> 42
35
Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the
Property Trustee shall be effective until:
(A) a Successor Property Trustee possessing the
qualifications to act as Property Trustee under Section
5.01(c) has been appointed and has accepted such appointment
by instrument executed by such Successor Property Trustee and
delivered to the Trust, the Sponsor and the resigning Property
Trustee; or
(B) if the Trust is excluded from the definition of
an Investment Company solely by reason of Rule 3a-7, until the
assets of the Trust have been completely liquidated and the
proceeds thereof distributed to the Holders of the Securities;
and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the Trust,
the Sponsor and the resigning Delaware Trustee.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided
in this Section 5.02 within 60 days after delivery to the Sponsor and
the Trust of a Resignation Request, the resigning Property Trustee or
Delaware Trustee may petition any court of competent jurisdiction for
appointment of a Successor Property Trustee or Successor Delaware
Trustee. Such court may thereupon, after such notice, if any, as it may
deem proper and prescribe, appoint a Successor Property Trustee or
Successor Delaware Trustee, as the case may be.
(f) The Sponsor shall provide notice to the Property Trustee
of any resignation or removal of a Regular Trustee.
<PAGE> 43
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SECTION 5.03. Vacancies Among Trustees. If a Trustee ceases to
hold office for any reason and the number of Trustees is not reduced pursuant to
Section 5.01 or if the number of Trustees is increased pursuant to Section 5.01,
a vacancy shall occur. A resolution certifying the existence of such vacancy by
a majority of the Regular Trustees shall be conclusive evidence of the existence
of such vacancy. The vacancy shall be filled with a Trustee appointed in
accordance with the requirements of this Article V.
SECTION 5.04. Effect of Vacancies. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee, or any one of them, shall not
operate to annul the Trust. Whenever a vacancy in the number of Regular Trustees
shall occur until such vacancy is filled as provided in this Article V, the
Regular Trustees in office, regardless of their number, shall have all the
powers granted to the Regular Trustees and shall discharge all the duties
imposed upon the Regular Trustees by this Declaration.
SECTION 5.05. Meetings. Meetings of the Regular Trustees shall
be held from time to time upon the call of any Trustee. Regular meetings of the
Regular Trustees may be held at a time and place fixed by resolution of the
Regular Trustees. Notice of any in-person meeting of the Regular Trustees shall
be hand delivered or otherwise delivered in writing (including by facsimile,
with a hard copy by overnight courier) not less than 48 hours before such
meeting. Notice of any telephonic meeting of the Regular Trustees or any
committee thereof shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 24
hours before such meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in person
or by telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for the
express purpose of objecting to the transaction of any activity on the ground
that the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Regular Trustees may be taken
at a meeting by vote of a majority of the Regular Trustees present (whether in
person or by telephone) and eligible to vote with respect to such
<PAGE> 44
37
matter; provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees.
SECTION 5.06. Delegation of Power. (a) Any Regular Trustee
may, by power of attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the purpose of executing
any registration statement or amendment thereto or other document or schedule
filed with the Commission or making any other governmental filing (including,
without limitation the filings referred to in Section 3.13).
(b) The Regular Trustees shall have the power to delegate from
time to time to such of their number or to officers of the Trust or to officers
of PWG or PaineWebber Incorporated the doing of such things and the execution of
such instruments either in the name of the Trust or the names of the Regular
Trustees or otherwise as the Regular Trustees may deem expedient, to the extent
such delegation is not prohibited by applicable law or contrary to the
provisions of the Trust, as set forth herein.
ARTICLE VI
Distributions
SECTION 6.01. Distributions. Holders shall receive periodic
distributions, redemption payments and liquidation distributions in accordance
with the applicable terms of the relevant Holder's Securities ("Distributions").
Distributions shall be made to the Holders of Preferred Securities and Common
Securities in accordance with the terms of the Securities as set forth in
Exhibits B and C hereto. If and to the extent that PWG makes a payment of
interest (including Compounded Interest (as defined in the Indenture)), premium
or principal on the Debentures held by the Property Trustee (the amount of any
such payment being a "Payment Amount"), the Property Trustee shall and is
directed to promptly make a Distribution of the Payment Amount to Holders in
accordance with the terms of the Securities as set forth in Exhibits B and C
hereto.
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ARTICLE VII
Issuance of Securities
SECTION 7.01. General Provisions Regarding Securities. (a) The
Regular Trustees shall issue on behalf of the Trust Securities in fully
registered form representing undivided beneficial interests in the assets of the
Trust in accordance with Section 7.01(b) and for the consideration specified in
Section 3.03.
(b) The Regular Trustees shall issue on behalf of the Trust
one class of preferred securities representing preferred undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Exhibit B (the "Preferred Securities") which terms are incorporated by reference
in, and made a part of, this Declaration as if specifically set forth herein,
and one class of common securities representing common undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Exhibit C (the "Common Securities") which terms are incorporated by reference
in, and made a part of, this Declaration as if specifically set forth herein.
The Trust shall have no securities or other interests in the assets of the Trust
other than the Preferred Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust by
the Regular Trustees (or if there are more than two Regular Trustees by any two
of the Regular Trustees). Such signatures may be the manual or facsimile
signatures of the present or any future Regular Trustee. Typographical and other
minor errors or defects in any such reproduction of any such signature shall not
affect the validity of any Certificate. In case any Regular Trustee of the Trust
who shall have signed any of the Certificates shall cease to be such Regular
Trustee before the Certificate so signed shall be delivered by the Trust, such
Certificate nevertheless may be delivered as though the person who signed such
Certificate had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons as, at the actual date of the
execution of such Certificate, shall be the Regular Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
<PAGE> 46
39
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
the Securities may be listed, or to conform to usage. Pending the preparation of
definitive Certificates, the Regular Trustees on behalf of the Trust may execute
temporary Certificates (printed, lithographed or typewritten), in substantially
the form of the definitive Certificates in lieu of which they are issued, but
with such omissions, insertions and variations as may be appropriate for
temporary Certificates, all as may be determined by the Regular Trustees. Each
temporary Certificate shall be executed by the Regular Trustees on behalf of the
Trust upon the same conditions and in substantially the same manner, and with
like effect, as definitive Certificates. Without unnecessary delay, the Regular
Trustees on behalf of the Trust will execute and furnish definitive Certificates
and thereupon any or all temporary Certificates may be surrendered to the
transfer agent and registrar in exchange therefor (without charge to the
Holders). Each Certificate whether in temporary or definitive form shall be
countersigned by the manual or facsimile signature of an authorized signatory of
the Person acting as registrar and transfer agent for the Securities, which
shall initially be the Property Trustee.
(d) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable.
(f) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
(g) Upon issuance of the Securities as provided in this
Declaration, the Regular Trustees on behalf of the
<PAGE> 47
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Trust shall return to PWG the $10 constituting initial trust assets as set forth
in the Original Declaration.
ARTICLE VIII
Termination of Trust
SECTION 8.01. Termination of Trust. The Trust shall dissolve
when:
(i) all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders of Securities in accordance with the terms of
the Securities; or
(ii) all of the Debentures shall have been distributed to the
Holders of Securities in exchange for all of the Securities in
accordance with the terms of the Securities; or
(iii) upon the expiration of the term of the Trust
as set forth in Section 3.17,
and thereafter the Trustees shall, after satisfaction of all obligations of the
Trust, file a certificate of cancelation with the Secretary of State of the
State of Delaware and the Trust shall terminate. The Trustees shall so file such
a certificate as soon as practicable after the occurrence of an event referred
to in this Section 8.01.
The provisions of Sections 3.12 and 4.02 and Article X shall
survive the termination of the Trust.
ARTICLE IX
Transfer of Interests
SECTION 9.01. Transfer of Securities. (a) Securities may only
be transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.
<PAGE> 48
41
(b) Subject to this Article IX, Preferred Securities shall be
freely transferable.
(c) Subject to this Article IX, PWG and any Related Party may
only transfer Common Securities to PWG or a Related Party; provided that any
such transfer shall be subject to the condition that the transferor shall have
obtained (1) either a ruling from the Internal Revenue Service or an unqualified
written opinion addressed to the Trust and delivered to the Trustees of
nationally recognized independent tax counsel experienced in such matters to the
effect that such transfer will not (i) cause the Trust to be treated as issuing
a class of interests in the Trust differing from the class of interests
represented by the Common Securities originally issued to PWG, (ii) result in
the Trust acquiring or disposing of, or being deemed to have acquired or
disposed of, an asset, or (iii) result in or cause the Trust to be treated as
anything other than a grantor trust for United States Federal income tax
purposes and (2) an unqualified written opinion addressed to the Trust and
delivered to the Trustees of a nationally recognized independent counsel
experienced in such matters that such transfer will not cause the Trust to be an
Investment Company or controlled by an Investment Company.
SECTION 9.02. Transfer of Certificates. The Regular Trustees
shall cause to be kept at an office or agency to be maintained by the Trust a
register in which, subject to such reasonable regulations as it may prescribe,
the Trust shall provide for the registration of Certificates and of transfers of
Certificates, which will be effected without charge but only upon payment (with
such indemnity as the Trust or the Registrar (as defined below) may require) in
respect of any tax or other government charges which may be imposed in relation
to it. The Property Trustee will be the initial registrar and transfer agent
(the "Registrar") for the purpose of registering Certificates and transfers of
Certificates as provided herein.
Upon surrender for registration of transfer of any Certificate
at the office or agency of the Registrar, the Regular Trustees shall execute and
the Registrar shall countersign in accordance with section 7.01(c) one or more
new Certificates of any authorized denominations and of a like aggregate
liquidation amount to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer shall
<PAGE> 49
42
be accompanied by a written instrument of transfer in form satisfactory to the
Trust duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Certificate surrendered for registration of transfer shall be
canceled by the Regular Trustees. A transferee of a Certificate shall be
entitled to the rights and subject to the obligations of a Holder hereunder upon
the receipt by such transferee of a Certificate. By acceptance of a Certificate,
each transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.03. Deemed Security Holders. The Trustees may treat
the Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trustees shall have actual or other notice
thereof.
SECTION 9.04. Book Entry Interests. Unless otherwise specified
in the terms of the Preferred Securities, the Preferred Securities Certificates,
on original issuance (including Preferred Securities, if any, issued on the
Option Closing Date pursuant to the exercise of the overallotment option set
forth in the Underwriting Agreement), will be issued in the form of one or more,
fully registered, global Preferred Security Certificates (each a "Global
Certificate"), to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Trust. Such Global Certificates shall initially be registered on
the books and records of the Trust in the name of Cede & Co., the nominee of
DTC, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Certificates, except as provided in Section
9.07. Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners pursuant to Section 9.07:
(i) the provisions of this Section 9.04 shall be in full force
and effect;
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(ii) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificates and shall
have no obligation to the Preferred Security Beneficial Owners;
(iii) to the extent that the provisions of this Section 9.04
conflict with any other provisions of this Declaration, the provisions
of this Section 9.04 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants. DTC will make book entry transfers among
the Clearing Agency Participants and receive and transmit payments of
Distributions on the Global Certificates to such Clearing Agency
Participants.
SECTION 9.05. Notices to Holders of Certificates. Whenever a
notice or other communication to the Holders is required to be given under this
Declaration, unless and until Definitive Preferred Security Certificates shall
have been issued pursuant to Section 9.07, the relevant Trustees shall give all
such notices and communications, specified herein to be given to Preferred
Securities Holders, to the Clearing Agency and, with respect to any Preferred
Security Certificate registered in the name of a Clearing Agency or the nominee
of a Clearing Agency, the Trustees shall, except as set forth herein, have no
notice obligations to the Preferred Security Beneficial Owners.
SECTION 9.06. Appointment of Successor Clearing Agency. If any
Clearing Agency elects to discontinue its services as securities depository with
respect to the Preferred Securities, the Regular Trustees may, in their sole
discretion, appoint a successor Clearing Agency with respect to the Preferred
Securities.
SECTION 9.07. Definitive Preferred Securities Certificates. If
(i) a Clearing Agency elects to
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discontinue its services as securities depository with respect to the Preferred
Securities and a successor Clearing Agency is not appointed within 90 days after
such discontinuance pursuant to Section 9.06 or (ii) the Regular Trustees elect
after consultation with the Sponsor to terminate the book entry system through
the Clearing Agency with respect to the Preferred Securities, then (x)
Definitive Preferred Security Certificates shall be prepared by the Regular
Trustees on behalf of the Trust with respect to such Preferred Securities and
(y) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
definitive Preferred Security Certificates to be delivered to Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing Agency.
Neither the Trustees nor the Trust shall be liable for any delay in delivery of
such instructions and each of them may conclusively rely on, and shall be
protected in relying on, such instructions.
SECTION 9.08. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificates should be surrendered to the
Registrar, or if the Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there shall be delivered
to the Trustees such security or indemnity as may be required by them to keep
each of them harmless, then in the absence of notice that such Certificate shall
have been acquired by a bona fide purchaser, any two Regular Trustees on behalf
of the Trust shall execute and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under this
Section 9.08, the Regular Trustees may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
ARTICLE X
Limitation of Liability; Indemnification
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SECTION 10.01 Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of assets, liabilities, profits, losses or
any other facts pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of Securities, in their capacities as Holders, shall be entitled to the
same limitation of liability that is extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
SECTION 10.02. Indemnification and Compensation. (a) To the
fullest extent permitted by applicable law, the Sponsor shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage or claim
incurred by such Indemnified Person by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by this Declaration, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
<PAGE> 53
46
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Sponsor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Sponsor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 10.02(a).
(c) The Sponsor agrees to pay the Property Trustee and the
Delaware Trustee from time to time such compensation for all services rendered
by the Property Trustee and the Delaware Trustee hereunder as may be mutually
agreed upon in writing by the Sponsor and the Property Trustee or the Delaware
Trustee, as the case may be, and, except as otherwise expressly provided herein,
to reimburse the Property Trustee and the Delaware Trustee upon its or their
request for all reasonable expenses, disbursements and advances incurred or made
by the Property Trustee or the Delaware Trustee, as the case may be, in
accordance with the provisions of this Declaration, except any such expense,
disbursement or advance as may be attributable to its or their negligence or bad
faith.
SECTION 10.03. Outside Businesses. Any Covered Person, the
Sponsor, PWG, the Delaware Trustee and the Property Trustee may engage in or
possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust and the Holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. None of the Covered Persons, the Sponsor, PWG, the Delaware Trustee or
the Property Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, PWG, the Delaware Trustee and the
<PAGE> 54
47
Property Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, the Delaware Trustee and
the Property Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
Accounting
SECTION 11.01. Fiscal Year. The fiscal year ("Fiscal Year") of
the Trust shall be the calendar year, or such other year as is required by the
Code.
SECTION 11.02. Certain Accounting Matters. (a) At all times
during the existence of the Trust, the Regular Trustees shall keep, or cause to
be kept, full books of account, records and supporting documents, which shall
reflect in reasonable detail each transaction of the Trust. The books of account
shall be maintained on the accrual method of accounting, in accordance with
generally accepted accounting principles consistently applied. The Trust shall
use the accrual method of accounting for United States Federal income tax
purposes. The books and records of the Trust, together with a copy of this
Declaration and a certified copy of the Certificate of Trust, or any amendment
thereto, shall at all times be maintained at the principal office of the Trust
and shall be open for inspection by any Holder or its duly authorized
representative for any purpose reasonably related to its interest in the Trust
during normal business hours.
(b) The Regular Trustees shall, as soon as available after the
end of each Fiscal Year of the Trust, cause to be prepared and mailed to each
Holder of Securities unaudited financial statements of the Trust for such Fiscal
Year, prepared in accordance with generally accepted accounting principles;
provided that if the Trust is required to comply with the periodic reporting
requirements
<PAGE> 55
48
of Sections 13(a) or 15(d) of the Exchange Act, such financial statements for
such Fiscal Year shall be examined and reported on by a firm of independent
certified public accountants selected by the Regular Trustees (which firm may be
the firm used by the Sponsor).
(c) The Regular Trustees shall cause to be prepared and mailed
to each Holder of Securities an annual United States Federal income tax
information statement, on such form as is required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be prepared and filed
with the appropriate taxing authority an annual United States Federal income tax
return, on such form as is required by the Code, and any other annual income tax
returns required to be filed by the Regular Trustees on behalf of the Trust with
any state or local taxing authority, such returns to be filed as soon as
practicable after the end of each Fiscal Year of the Trust.
SECTION 11.03. Banking. The Regular Trustees shall maintain
one or more bank accounts in the name and for the sole benefit of the Trust;
provided, however, that all payments of funds in respect of the Debentures held
by the Property Trustee shall be made directly to the Property Account and no
other funds from the Trust shall be deposited in the Property Account. The sole
signatories for such accounts shall be designated by the Regular Trustees;
provided, however, that the Property Trustee shall designate the sole
signatories for the Property Account.
SECTION 11.04. Withholding. The Trust and the Trustees shall
comply with all withholding requirements under United States Federal, state and
local law. The Trust shall request, and the Holders shall provide to the Trust,
such forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations.
<PAGE> 56
49
The Property Trustee shall file required forms with applicable jurisdictions
and, unless an exemption from withholding is properly established by a Holder,
the Property Trustee shall remit amounts withheld with respect to the Holder to
applicable jurisdictions. To the extent that the Trust is required to withhold
and pay over any amounts to any authority with respect to distributions or
allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed overwithholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount to be withheld was not withheld from a
Distribution, the Property Trustee may reduce subsequent Distributions by the
amount of such withholding.
ARTICLE XII
Amendments and Meetings
SECTION 12.01. Amendments. (a) Except as otherwise provided in
this Declaration or by any applicable terms of the Securities, this Declaration
may be amended by, and only by, a written instrument executed by a majority of
the Regular Trustees (or, if there are only two Regular Trustees, both Regular
Trustees); provided, however, that (i) no amendment to this Declaration shall be
made unless the Regular Trustees shall have obtained (A) either a ruling from
the Internal Revenue Service or a written unqualified opinion of nationally
recognized independent tax counsel experienced in such matters to the effect
that such amendment will not cause the Trust to be classified for United States
Federal income tax purposes as an association taxable as a corporation or a
partnership and to the effect that the Trust will continue to be treated as a
grantor trust for purposes of United States Federal income taxation and (B) a
written unqualified opinion of nationally recognized independent counsel
experienced in such matters to the effect that such amendment will not cause the
Trust to be an Investment Company which is required to be registered under the
Investment Company Act, (ii) if Securities are outstanding, any amendment which
would adversely affect the rights, privileges or preferences of any Holder of
Securities may be effected only after satisfaction of such additional
requirements as may be set forth in the terms of such Securities, (iii) Section
4.02, Section 9.01(c) and this Section 12.01 shall not be amended
<PAGE> 57
50
without the consent of all Holders of the Securities, (iv) no amendment which
adversely affects the rights, powers and privileges of the Property Trustee or
the Delaware Trustee shall be made without the consent of the Property Trustee
or the Delaware Trustee, as the case may be, (v) Article IV shall not be amended
without the consent of the Sponsor, and (vi) the rights of Holders of Common
Securities under Article V to increase or decrease the number of, and to
appoint, replace or remove, Trustees shall not be amended without the consent of
each Holder of Common Securities.
(b) Notwithstanding Section 12.02(a)(ii), this Declaration may
be amended without the consent of the Holders of the Securities to (i) cure any
ambiguity, (ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration, (iii)
to add to the covenants, restrictions or obligations of the Sponsor, and (iv) to
conform to any changes in Rule 3a-7 or any change in interpretation or
application of Rule 3a-7 by the Commission, which amendment does not adversely
affect the rights, preferences or privileges of the Holders.
(c) The Regular Trustees shall promptly furnish to each of the
Property Trustee and the Delaware Trustee a copy of each amendment to this
Declaration.
SECTION 12.02. Meetings of the Holders of Securities; Action
by Written Consent. (a) Meetings of the Holders of Preferred Securities and/or
Common Securities may be called at any time by the Regular Trustees (or as
provided in the terms of the Securities) to consider and act on any matter on
which Holders of such class of Securities are entitled to act under the terms of
this Declaration, the terms of the Securities or the rules of any stock exchange
on which the Preferred Securities are listed or admitted for trading. The
Regular Trustees shall call a meeting of Holders of Preferred Securities or
Common Securities if directed to do so by Holders of at least 10% in liquidation
amount of such class of Securities. Such direction shall be given by delivering
to the Regular Trustees one or more notices in writing stating that the signing
Holders of Securities wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the Certificates held by
the Holders of Securities
<PAGE> 58
51
exercising the right to call a meeting and only those specified Certificates
shall be counted for purposes of determining whether the required percentage set
forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provision shall apply to meetings of Holders of
Securities:
(i) Notice of any such meeting shall be given by mail to each
Trustee and all the Holders of Securities having a right to vote
thereat not less than seven days nor more than 60 days prior to the
date of such meeting. Whenever a vote, consent or approval of the
Holders of Securities is permitted or required under this Declaration
or the rules of any stock exchange on which the Preferred Securities
are listed or admitted for trading, such vote, consent or approval may
be given at a meeting of the Holders of Securities. Any action that may
be taken at a meeting of the Holders of Securities may be taken without
a meeting if a consent in writing setting forth the action so taken is
signed by Holders of Securities owning not less than the minimum
aggregate liquidation amount of Securities that would be necessary to
authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting.
Prompt notice of the taking of action without a meeting shall be given
to the Holders of Securities entitled to vote who have not consented in
writing. The Regular Trustees may specify that any written ballot
submitted to the Holders of Securities for the purpose of taking any
action without a meeting shall be returned to the Trust within the time
specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of a Security is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
Holder of Security executing it. Except as otherwise provided herein or
in the terms of the Securities, all matters relating to the giving,
voting or validity of proxies
<PAGE> 59
52
shall be governed by the General Corporation Law of the State of
Delaware relating to proxies and judicial interpretations thereunder as
if the Trust were a Delaware corporation and the Holders of the
Securities were stockholders of a Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate.
(iv) Unless otherwise provided in the Business Trust Act, this
Declaration or the rules of any stock exchange on which the Preferred
Securities are then listed or admitted for trading, the Regular
Trustees, in their sole discretion, shall establish all other
provisions relating to meetings of Holders of Securities, including
notice of the time, place or purpose of any meeting at which any matter
is to be voted on by any Holders of Securities, waiver of any such
notice, action by consent without a meeting, the establishment of a
record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
Representations of Property Trustee
and Delaware Trustee
SECTION 13.01. Representations and Warranties of Property
Trustee. (a) The Trustee which acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(i) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the
laws of the State of its incorporation, with trust power and authority
to execute and deliver, and to carry out and perform its obligations
under the terms of, this Declaration.
<PAGE> 60
53
(ii) The execution, delivery and performance by the Property
Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee. The Declaration
has been duly executed and delivered by the Property Trustee, and
constitutes a legal, valid and binding obligation of the Property
Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law).
(iii) The execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or
constitute a breach of the charter or By-laws of the Property Trustee.
(iv) No consent, approval or authorization of, or registration
with or notice to, any banking authority which supervises or regulates
the Property Trustee is required for the execution, delivery or
performance by the Property Trustee of this Declaration.
(v) The Property Trustee satisfies the qualifications set
forth in Section 5.01(c).
(b) The Trustee which acts as initial Delaware Trustee
represents and warrants to the Trust and the Sponsor at the date of this
Declaration, and each Successor Delaware Trustee represents and warrants to the
Trust and the Sponsor at the time of the Successor Delaware Trustee's acceptance
of its appointment as Delaware Trustee, that it satisfies the qualifications set
forth in Section 5.01(a)(3).
ARTICLE XIV
Miscellaneous
SECTION 14.01. Notices. All notices provided for in this
Declaration shall be in writing, duly signed by the
<PAGE> 61
54
party giving such notice, and shall be delivered, telecopied or mailed by first
class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as
the Regular Trustees on behalf of the Trust may give notice of to the
Property Trustee, the Delaware Trustee and the Holders of the
Securities):
PWG Capital Trust II
In care of Paine Webber Group Inc.
1285 Avenue of the Americas
New York, New York 10019
Attention of Regina A. Dolan
John R. Grimm
William J. Nolan,
Trustees
Facsimile No: (212) 713-3681
(b) if given to the Property Trustee, at the mailing address
of the Property Trustee set forth below (or such other address as the
Property Trustee may give notice of to the Trust and the Holders of the
Securities):
The Chase Manhattan Bank
450 W. 33rd Street
New York, New York 10001
Attention of Corporate Trust Trustee
Administration
Facsimile No: (212) 946-8160
(c) if given to the Delaware Trustee, at the mailing address
of the Delaware Trustee set forth below (or such other address as the
Delaware Trustee may give notice of to the Trust and the Holders of the
Securities):
Chase Manhattan Bank Delaware
1201 North Market Street
Wilmington, Delaware 19801
Attention of Delaware Trustee,
Corporate Trust Administration
Facsimile No: (302) 428-3390
<PAGE> 62
55
with a copy to:
The Chase Manhattan Bank
450 W. 33rd Street
New York, New York 10001
Attention of Corporate Trust Trustee
Administration
Facsimile No: (212) 946-8160
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address
as the Holder of the Common Securities may give notice to the Property
Trustee, the Delaware Trustee and the Trust):
Paine Webber Group Inc.
1285 Avenue of the Americas
New York, New York 10019
Attention of Corporate Secretary
Facsimile No: (212) 713-2114
(e) if given to any other Holder, at the address
set forth on the books and records of the Trust.
A copy of any notice to the Property Trustee or the Delaware
Trustee shall also be sent to the Trust. All notices shall be deemed to have
been given when received in person, telecopied with receipt confirmed, or mailed
by first class mail, postage prepaid except that if a notice or other document
is refused delivery or cannot be delivered because of a changed address of which
no notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 14.02. Undertaking for Costs. All parties to this
Declaration agree, and each Holder of any Securities by his or her acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Declaration, or in any suit against the Property Trustee for any action taken or
omitted by it as Property Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits
<PAGE> 63
56
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 14.02 shall not apply to any suit instituted by the
Property Trustee, to any suit instituted by any Holder of Preferred Securities,
or group of Holders of Preferred Securities, holding more than 10% in aggregate
liquidation amount of the outstanding Preferred Securities, or to any suit
instituted by any Holder of Preferred Securities for the enforcement of the
payment of the principal of (or premium, if any) or interest on the Debentures,
on or after the respective due dates expressed in such Debentures.
SECTION 14.03. Governing Law. This Declaration and the rights
of the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware and all rights and remedies shall be governed
by such laws without regard to principles of conflict of laws.
SECTION 14.04. Headings. Headings contained in this
Declaration are inserted for convenience of reference only and do not affect the
interpretation of this Declaration or any provision hereof.
SECTION 14.05. Partial Enforceability. If any provision of
this Declaration, or the application of such provision to any Person or
circumstance, shall be held invalid, the remainder of this Declaration, or the
application of such provision to persons or circumstances other than those to
which it is held invalid, shall not be affected thereby.
SECTION 14.06. Counterparts. This Declaration may contain more
than one counterpart of the signature pages and this Declaration may be executed
by the affixing of the signature of the Sponsor and each of the Trustees to one
of such counterpart signature pages. All of such counterpart signature pages
shall be read as though one, and they shall have the same force and effect as
though all of the signers had signed a single signature page.
SECTION 14.07. Intention of the Parties. It is the intention
of the parties hereto that the Trust not be classified for United States Federal
income tax purposes as an association taxable as a corporation or partnership
but that the Trust be treated as a grantor trust for United States Federal
income tax purposes. The provisions of this
<PAGE> 64
57
Declaration shall be interpreted to further this intention of the parties.
SECTION 14.08. Successors and Assigns. Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Declaration by the Sponsor and the Trustees shall bind and
inure to the benefit of their respective successors and assigns, whether so
expressed.
<PAGE> 65
58
IN WITNESS WHEREOF, the undersigned have caused these presents
to be executed as of the day and year first above written.
PAINE WEBBER GROUP INC., as
Sponsor,
by
-------------------------
Name:
Title:
REGULAR TRUSTEES:
-------------------------
Regina A. Dolan,
as Regular Trustee
-------------------------
John R. Grimm,
as Regular Trustee
-------------------------
William J. Nolan,
as Regular Trustee
THE CHASE MANHATTAN BANK, as
Property Trustee,
by
-------------------------
Name:
Title:
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee,
by
-------------------------
Name:
Title:
<PAGE> 66
EXHIBIT A
CERTIFICATE OF TRUST
OF
PWG Capital Trust II
THIS Certificate of Trust of PWG Capital Trust II (the
"Trust"), dated as of October 7, 1996, is being duly executed and filed by the
undersigned, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. Code Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby is
PWG Capital Trust II.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of Delaware
is Chase Manhattan Bank Delaware, a Delaware banking corporation, White Clay
Center, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be
effective as of its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustees
of the Trust, have executed this Certificate of Trust as of the date first above
written.
CHASE MANHATTAN BANK DELAWARE, as
Delaware Trustee,
by
-------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Property Trustee,
by
-------------------------------
Name:
Title:
REGULAR TRUSTEES:
<PAGE> 67
2
----------------------------------------
Regina A. Dolan,
as Regular Trustee
----------------------------------------
Pierce R. Smith,
as Regular Trustee
----------------------------------------
William J. Nolan,
as Regular Trustee
<PAGE> 68
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.01 of the Amended and Restated
Declaration of Trust of PWG Capital Trust II dated as of March 14, 1997 (as
amended from time to time, the "Declaration"), the designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth below (each capitalized term used but not
defined herein having the meaning set forth in the Declaration):
1. Designation and Number. Preferred Securities of the Trust
with an aggregate liquidation amount in the assets of the Trust of up to Two
Hundred One Million Two Hundred Fifty Thousand Dollars ($201,250,000) (including
up to Twenty Six Million Two Hundred Fifty Thousand Dollars ($26,250,000)
issuable upon exercise of the overallotment option set forth in the Underwriting
Agreement) and a liquidation amount in the assets of the Trust of $25 per
Preferred Security are hereby designated as "8.08% Preferred Trust Securities".
The Preferred Security Certificates evidencing the Preferred Securities shall be
substantially in the form attached hereto as Annex I, with such changes and
additions thereto or deletions therefrom as may be required by ordinary usage,
custom or practice or to conform to the rules of any stock exchange on which the
Preferred Securities are listed. In connection with the issuance and sale of the
Preferred Securities and the Common Securities, the Trust will purchase, as
trust assets, Debentures of PWG having an aggregate principal amount equal to
the aggregate liquidation amount of the Preferred Securities and the Common
Securities so issued and bearing interest at an annual rate equal to the annual
Distribution rate on the Preferred Securities and the Common Securities and
having payment and redemption provisions which correspond to the payment and
redemption provisions of the Preferred Securities and the Common Securities.
2. Distributions. (a) Distributions payable on each Preferred
Security will be fixed at a rate per annum of 8.08% (the "Coupon Rate") of the
stated liquidation amount of $25 per Preferred Security. Distributions in
arrears for more than one month will bear interest at the rate per annum of
8.08% thereof (to the extent permitted by law), compounded monthly. The term
"Distributions" as used in these terms means such periodic cash distributions
and any such interest payable unless otherwise stated. A Distribution will be
made by the Property Trustee only to the extent that interest payments are made
in respect of the Debentures held by the Property Trustee. The amount of
<PAGE> 69
2
Distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a 30-day period
for which Distributions are computed, Distributions will be computed on the
basis of the actual number of days elapsed.
(b) Distributions on the Preferred Securities will be
cumulative, will accrue from March 14, 1997, and will be payable monthly in
arrears, on the first day of each month commencing on April 1, 1997, except as
otherwise described below, but only if and to the extent that interest payments
are made in respect of the Debentures held by the Property Trustee. So long as
PWG is not in default in the payment of interest on the Debentures, PWG shall
have the right under the Indenture for the Debentures to defer payments of
interest by extending the interest payment period from time to time on the
Debentures for a period not to exceed 60 consecutive monthly interest periods
(an "Extension Period"), provided, however, that an Extension Period may not
extend beyond the maturity of the Debentures. During any such Extension Period,
monthly Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the rate of 8.08% per annum, compounded
monthly . Prior to the termination of any such Extension Period, PWG may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 60 consecutive
monthly interest periods. Upon the termination of any Extension Period and the
payment of all amounts then due, PWG may commence a new Extension Period,
subject to the above requirements. Payments of accrued Distributions will be
payable to Holders of Preferred Securities as they appear on the books and
records of the Trust on the record date for the first interest payment date
occurring at or after the end of the Extension Period.
(c) Distributions on the Preferred Securities will be payable
promptly by the Property Trustee (or other Paying Agent) upon receipt of
immediately available funds to the Holders thereof as they appear on the books
and records of the Trust on the relevant record dates. While the Preferred
Securities remain in book-entry only form, the relevant record dates shall be
one Business Day prior to the relevant Distribution date, and if the Preferred
Securities are no longer in book-entry only form, the relevant record dates will
be the fifteenth (15th) day of the month immediately preceding the month in
which the relevant
<PAGE> 70
3
Distribution date occurs, which record and payment dates correspond to the
record and interest payment dates for the Debentures. Distributions payable on
any Preferred Securities that are not punctually paid on any Distribution
payment date as a result of PWG having failed to make the corresponding interest
payment on the Debentures will forthwith cease to be payable to the Person in
whose name such Preferred Security is registered on the relevant record date,
and such defaulted Distribution will instead be payable to the Person in whose
name such Preferred Security is registered on the special record date
established by the Regular Trustees, which record date shall correspond to the
special record date or other specified date determined in accordance with the
Indenture; provided, however, that Distributions shall not be considered payable
on any Distribution payment date falling within an Extension Period unless PWG
has elected to make a full or partial payment of interest accrued on the
Debentures on such Distribution payment date. Subject to any applicable laws and
regulations and the provisions of the Declaration, each payment in respect of
the Preferred Securities will be made as described in paragraph 9 hereof. If any
date on which Distributions are payable on the Preferred Securities is not a
Business Day, then payment of the Distribution payable on such date will be made
on the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
(d) All Distributions paid with respect to the Preferred
Securities and the Common Securities will be paid pro rata to the Holders
thereof entitled thereto. If an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities with
respect to Distributions.
(e) In the event that there is any money or other property
held by or for the Trust that is not accounted for under the Declaration, such
money or property shall be distributed pro rata among the Holders of the
Preferred Securities and the Common Securities.
3. Liquidation Distribution upon Dissolution. In the event of
any voluntary or involuntary dissolution, winding-up or termination of the
Trust, the Holders of the
<PAGE> 71
4
Preferred Securities and the Common Securities at the date of the dissolution,
winding-up or termination, as the case may be, will be entitled to receive pro
rata solely out of the assets of the Trust available for distribution to Holders
of Preferred Securities and Common Securities after satisfaction of liabilities
to creditors, an amount equal to the aggregate of the stated liquidation amount
of $25 per Preferred Security and Common Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such dissolution, winding-up or
termination, and after satisfaction of liabilities to creditors, Debentures in
an aggregate principal amount equal to the aggregate stated liquidation amount
of such Preferred Securities and Common Securities, and bearing accrued and
unpaid interest in an amount equal to the accrued and unpaid Distributions on
such Preferred Securities and Common Securities, shall be distributed pro rata
to the Holders of the Preferred Securities and Common Securities in exchange for
such Securities.
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and the Common Securities
shall be paid, subject to the next paragraph, on a pro rata basis.
Holders of Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution pro rata with Holders of
Preferred Securities, except that, if an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to such Liquidation Distribution.
4. Redemption and Distribution of Debentures. The Preferred
Securities and the Common Securities may only be redeemed if Debentures having
an aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and the Common Securities are repaid, redeemed or
distributed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part,
whether at maturity or upon redemption at any time or from time to time on or
after March 1, 2002, the proceeds of such repayment will be promptly applied to
<PAGE> 72
5
redeem pro rata Preferred Securities and Common Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
repaid, upon not less than 30 nor more than 60 days notice, at a redemption
price of $25 per Preferred Security and Common Security plus an amount equal to
accrued and unpaid Distributions thereon to the date of redemption, payable in
cash (the "Redemption Price"). The date of any such repayment of Preferred
Securities and Common Securities shall be established to coincide with the
repayment date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and
Common Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed pro rata, it being understood that Preferred
Securities held of record by a Clearing Agency or nominee will be redeemed as
described in paragraph 4(f)(ii) below. If a partial redemption would result in
the delisting of the Preferred Securities by any national securities exchange or
other organization on which the Preferred Securities are then listed, PWG
pursuant to the Indenture, will only redeem Debentures in whole and the Trust
will only redeem the Preferred Securities in whole.
(c) If, at any time, a Tax Event or an Investment Company
Event (each as hereinafter defined, and each a "Special Event") shall occur and
be continuing, the Regular Trustees shall, unless the Debentures are redeemed in
the limited circumstances described below, dissolve the Trust and, after
satisfaction of creditors, cause Debentures held by the Property Trustee having
an aggregate principal amount equal to the aggregate stated liquidation amount
of, and bearing accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as, the Preferred
Securities and the Common Securities, to be distributed to the Holders of the
Preferred Securities and the Common Securities on a pro rata basis in
liquidation of such Holders' interests in the Trust, within 90 days following
the occurrence of such Special Event (the "90 Day Period"); provided, however,
that in the case of the occurrence of a Tax Event, as a condition of such
dissolution and distribution, the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on any then
applicable published revenue rulings of the Internal Revenue
<PAGE> 73
6
Service, to the effect that the Holders of the Preferred Securities will not
recognize any gain or loss for United States Federal income tax purposes as a
result of the dissolution of the Trust and distribution of Debentures; and
provided further that, if at the time there is available to PWG or the Regular
Trustees, on behalf of the Trust, the opportunity to eliminate, within the 90
Day Period, the Special Event by taking some ministerial action, such as filing
a form or making an election, or pursuing some other similar reasonable measure
that has no adverse effect on the Trust, PWG or the Holders of the Preferred
Securities (a "Ministerial Action"), PWG or the Regular Trustees, on behalf of
the Trust, will pursue such Ministerial Action in lieu of dissolution.
If in the case of the occurrence of a Tax Event, (i) the
Regular Trustees have received an opinion (a "Redemption Tax Opinion") of
nationally recognized independent tax counsel experienced in such matters that,
as a result of a Tax Event, there is more than an insubstantial risk that PWG
would be precluded from deducting the interest on the Debentures for United
States Federal income tax purposes even if the Debentures were distributed to
the Holders of Preferred Securities and Common Securities in liquidation of such
Holder's interest in the Trust as described in this paragraph 4(c) or (ii) the
Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, PWG shall have the right
at any time, upon not less than 30 nor more than 60 days notice, to redeem the
Debentures in whole or in part for cash at the Redemption Price within 90 days
following the occurrence of such Tax Event, and, promptly following such
redemption, Preferred Securities and Common Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
redeemed will be redeemed by the Trust at the Redemption Price on a pro rata
basis; provided, however, that, if at the time there is available to PWG or the
Regular Trustees, on behalf of the Trust, the opportunity to eliminate, within
such 90 day period, the Tax Event by taking some Ministerial Action, PWG or the
Regular Trustees, on behalf of the Trust, will pursue such measure in lieu of
redemption; and provided further that PWG shall have no right to redeem the
Debentures while the Regular Trustees, on behalf of the Trust, are pursuing such
Ministerial Action. The Common Securities will be redeemed pro rata with the
Preferred Securities, except that if an Event of Default under the
<PAGE> 74
7
Indenture has occurred and is continuing, the Preferred Securities will have a
priority over the Common Securities with respect to payment of the Redemption
Price.
"Tax Event" means that the Regular Trustees shall have
obtained an opinion of nationally recognized independent tax counsel experienced
in such matters (a "Dissolution Tax Opinion") to the effect that, on or after
March 11, 1997, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change (including any announced prospective
change) in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the theretofore generally accepted position or (d) any action taken
by any governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or effective or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after March 11, 1997, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States Federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges or (iii) interest payable by PWG to the Trust on the
Debentures is not, or within 90 days of the date thereof will not be, deductible
by PWG for United States Federal income tax purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of nationally recognized independent counsel
experienced in practice under the Investment Company Act that, as a result of
the occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law"), there is more than
an insubstantial risk that the Trust is or will be considered an Investment
Company which is required to be
<PAGE> 75
8
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after March 11, 1997.
On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Preferred Securities will no longer be deemed
to be outstanding, and (ii) certificates representing Preferred Securities will
be deemed to represent beneficial interests in the Debentures having an
aggregate principal amount equal to the stated liquidation amount of, and
bearing accrued and unpaid interest equal to accrued and unpaid Distributions
on, such Preferred Securities until such certificates are presented to PWG or
its agent for transfer or reissuance.
(d) The Trust may not redeem fewer than all the outstanding
Preferred Securities unless all accrued and unpaid Distributions have been paid
on all Preferred Securities for all monthly Distribution periods terminating on
or prior to the date of redemption.
(e) If Debentures are distributed to Holders of the Preferred
Securities, PWG, pursuant to the terms of the Indenture, will use its best
efforts to have the Debentures listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities were listed immediately prior to the
distribution of the Debentures.
(f)(i) Notice of any redemption of, or notice of distribution
of Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the Regular
Trustees on behalf of the Trust by mail to each Holder of Preferred Securities
and Common Securities to be redeemed or exchanged not less than 30 nor more than
60 days prior to the date fixed for redemption or exchange thereof. For purposes
of the calculation of the date of redemption or exchange and the dates on which
notices are given pursuant to this paragraph (f)(i), a Redemption/Distribution
Notice shall be deemed to be given on the day such notice is first mailed by
first class mail, postage prepaid, to Holders of Preferred Securities and Common
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Preferred Securities and Common Securities at the address of each
such Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the
<PAGE> 76
9
redemption or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Preferred Securities are to be redeemed, the Preferred Securities to be redeemed
will be redeemed pro rata from each Holder of Preferred Securities, it being
understood that, in respect of Preferred Securities registered in the name of
and held of record by DTC (or a successor Clearing Agency) or any other nominee,
the Preferred Securities will be redeemed from, and the distribution of the
proceeds of such redemption will be made to, each Clearing Agency Participant
(or person on whose behalf such nominee holds such securities) in accordance
with the procedures applied by such agency or nominee.
(iii) Subject to paragraph 9 hereof, if the Trust gives a
Redemption/Distribution Notice in respect of a redemption of Preferred
Securities as provided in this paragraph 4 (which notice will be irrevocable)
then (A) while the Preferred Securities are in book-entry only form, by 12:00
noon, New York City time, on the redemption date, provided that PWG has paid the
Property Trustee in immediately available funds a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Property Trustee will deposit irrevocably with DTC (or any successor Clearing
Agency) funds sufficient to pay the applicable Redemption Price with respect to
the Preferred Securities and will give DTC (or any successor Clearing Agency)
irrevocable instructions and authority to pay the Redemption Price to the
Holders of the Preferred Securities and (B) if the Preferred Securities are
issued in definitive form, and provided that PWG has paid the Property Trustee
in immediately available funds a sufficient amount of cash in connection with
the related redemption or maturity of the Debentures, the Property Trustee will
pay the relevant Redemption Price to the Holders of such Preferred Securities by
check mailed to the address of the relevant Holder appearing on the books and
records of the Trust on the redemption date. If a Redemption/Distribution Notice
shall have been given and funds deposited as required, if applicable, then
immediately prior to the close of business on the redemption date, Distributions
will cease to accrue on the Preferred Securities called for redemption, such
Preferred Securities will no longer be deemed to be outstanding and all rights
of Holders of such Preferred Securities so called for redemption will cease,
except the
<PAGE> 77
10
right of the Holders of such Preferred Securities to receive the Redemption
Price, but without interest on such Redemption Price. Neither the Trustees nor
the Trust shall be required to register or cause to be registered the transfer
of any Preferred Securities which have been so called for redemption. If any
date fixed for redemption of Preferred Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. If PWG fails to repay Debentures on maturity or on
the date fixed for redemption or if payment of the Redemption Price in respect
of Preferred Securities is improperly withheld or refused and not paid either by
the Property Trustee or, pursuant to the Preferred Securities Guarantee, by PWG,
Distributions on such Preferred Securities will continue to accrue, from the
original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to DTC or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been issued or,
if Definitive Preferred Security Certificates have been issued, to the Holders
of the Preferred Securities.
(v) Upon the date of dissolution of the Trust and distribution
of Debentures as a result of the occurrence of a Special Event, Preferred
Security Certificates shall be deemed to represent beneficial interests in the
Debentures so distributed, and the Preferred Securities will no longer be deemed
outstanding and may be canceled by the Regular Trustees. The Debentures so
distributed shall have an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities so distributed.
(vi) If a partial redemption of the Preferred Securities would
result in the delisting of the Preferred Securities by any national securities
exchange or other organization on which the Preferred Securities are then
<PAGE> 78
11
listed, the Company pursuant to the Indenture will only redeem Debentures in
whole and, as a result, the Trust would only redeem the Preferred Securities in
whole.
(vii) Subject to the foregoing and applicable law (including,
without limitation, United States Federal securities laws), PWG or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
5. Voting Rights. (a) Except as provided under paragraph 5(b)
below and as otherwise required by law and the Declaration, the Holders of the
Preferred Securities will have no voting rights.
(b) If any proposed amendment to the Declaration provides for,
or the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than in connection
with the distribution of Debentures held by the Property Trustee, upon the
occurrence of a Special Event or in connection with the redemption of Preferred
Securities as a consequence of a redemption of Debentures, then the Holders of
outstanding Securities will be entitled to vote on such amendment or proposal as
a class and such amendment or proposal shall not be effective except with the
approval of the Holders of Securities representing 66-2/3% in liquidation amount
of such Securities; provided, however, that (A) if any amendment or proposal
referred to in clause (i) above would adversely affect only the Preferred
Securities or the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of 66-2/3% in liquidation amount
of such class of Securities and (B) amendments to the Declaration shall be
subject to such further requirements as are set forth in Sections 12.01 and
12.02 of the Declaration.
In the event the consent of the Property Trustee, as the
holder of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Property Trustee shall request the written direction of the Holders
<PAGE> 79
12
of the Securities with respect to such amendment, modification or termination.
The Property Trustee shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of the Securities
voting together as a single class; provided that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures
affected thereby, the Property Trustee may only vote with respect to that
amendment, modification or termination as directed by, in the case of clause (1)
above, the vote of Holders of Securities representing such specified percentage
of the aggregate liquidation amount of the Securities, or, in the case of clause
(2) above, each Holder of Securities affected thereby; and provided further that
the Property Trustee shall be under no obligation to take any action in
accordance with the directions of the Holders of Securities unless the Property
Trustee shall have received, at the expense of the Sponsor, an opinion of
nationally recognized independent tax counsel recognized as expert in such
matters to the effect that the Trust will not be classified for United States
Federal income tax purposes as an association taxable as a corporation or a
partnership on account of such action and will be treated as a grantor trust for
United States Federal income tax purposes following such action.
Subject to Section 2.06 of the Declaration, and the provisions
of this and the next succeeding paragraph, the Holders of a Majority in
liquidation amount of the Preferred Securities, voting separately as a class,
shall have the right to (A) on behalf of all Holders of Preferred Securities,
waive any past default that is waivable under the Declaration (subject to, and
in accordance with, the Declaration) and (B) direct the time, method and place
of conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee, as the holder
of the Debentures, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising any
trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 6.06 of
the Indenture, or (iii) exercise any right to rescind or annul a declaration
that the principal
<PAGE> 80
13
of all the Debentures shall be due and payable; provided that where the taking
of any action under the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures affected
thereby, the Property Trustee may only take such action if directed by, in the
case of clause (1) above, the vote of Holders of Preferred Securities
representing such specified percentage of the aggregate liquidation amount of
the Preferred Securities, or, in the case of clause (2) above, each Holder of
Preferred Securities affected thereby. The Property Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the Property
Trustee or the Debenture Trustee as set forth above, the Property Trustee shall
be under no obligation to take any of the foregoing actions at the direction of
the Holders of Preferred Securities unless the Property Trustee shall have
received, at the expense of the Sponsor, an opinion of nationally recognized
independent tax counsel recognized as expert in such matters to the effect that
the Trust will not be classified for United States Federal income tax purposes
as an association taxable as a corporation or a partnership on account of such
action and will be treated as a grantor trust for United States federal income
tax purposes following such action. If the Property Trustee fails to enforce its
rights under the Declaration (including, without limitation, its rights, powers
and privileges as a holder of the Debentures under the Indenture), any Holder of
Preferred Securities may, to the extent permitted by law, after a period of 30
days has elapsed from such Holder's written request to the Property Trustee to
enforce such rights, institute a legal proceeding directed against PWG to
enforce the Property Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Property Trustee or any other Person.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of PWG to pay interest
or principal on the Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, the redemption date), then a
Holder of Preferred Securities may directly institute suit against PWG for
enforcement of payment to such Holder of the principal of or interest on
Debentures having a principal amount equal to
<PAGE> 81
14
the aggregate liquidation amount of the Preferred Securities held by such Holder
on or after the respective due date specified in the Debentures. The Holders of
Preferred Securities will not be able to exercise directly against PWG any other
remedy available to the Holders of the Debentures unless the Property Trustee
first fails to do so.
A waiver of an Indenture Event of Default by the Property
Trustee at the direction of the Holders of the Preferred Securities will
constitute a waiver of the corresponding Event of Default under the Declaration
in respect of the Securities.
Any required approval or direction of Holders of Preferred
Securities may be given at a separate meeting of Holders of Preferred Securities
convened for such purpose, at a meeting of all of the Holders of Securities of
the Trust or pursuant to written consent. The Regular Trustees will cause a
notice of any meeting at which Holders of Preferred Securities are entitled to
vote, or of any matter upon which action by written consent of such Holders is
to be taken, to be mailed to each Holder of record of Preferred Securities. Each
such notice will include a statement setting forth (i) the date of such meeting
or the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities in
accordance with the Declaration.
Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Preferred Securities at such time that are owned by PWG or by any entity
directly or indirectly controlling or controlled by or under direct or indirect
common control with PWG shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
Holders of the Preferred Securities will have no
rights to increase or decrease the number of Trustees or to
<PAGE> 82
15
appoint, remove or replace a Trustee, which voting rights are vested exclusively
in the Holders of the Common Securities.
6. Pro Rata Treatment. A reference in these terms of the
Preferred Securities to any payment, distribution or treatment as being "pro
rata" shall mean pro rata to each Holder of Securities according to the
aggregate liquidation amount of the Securities held by the relevant Holder in
relation to the aggregate liquidation amount of all Securities outstanding
unless, in relation to a payment, an Event of Default has occurred and is
continuing, in which case any funds available to make such payment shall be paid
first to each Holder of the Preferred Securities pro rata according to the
aggregate liquidation amount of Preferred Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Preferred Securities, to each Holder of Common Securities pro rata according
to the aggregate liquidation amount of Common Securities held by the relevant
Holder relative to the aggregate liquidation amount of all Common Securities
outstanding.
7. Ranking. The Preferred Securities rank pari passu and
payment thereon will be made pro rata with the Common Securities except that
where an Event of Default occurs and is continuing, the rights of Holders of
Preferred Securities to payment in respect of Distributions and payments upon
liquidation, redemption or otherwise rank in priority to the rights of Holders
of the Common Securities.
8. Mergers, Consolidations or Amalgamations. The Trust may not
consolidate, amalgamate, merge with or into, or be replaced by, or sell,
transfer or lease all or substantially all its properties and assets to, any
Person.
9. Transfer, Exchange, Method of Payments. Payment of
Distributions and payments on redemption of the Preferred Securities will be
payable, the transfer of the Preferred Securities will be registrable, and
Preferred Securities will be exchangeable for Preferred Securities of other
denominations of a like aggregate liquidation amount, at the principal corporate
trust office of the Property Trustee in The City of New York; provided that
payment of Distributions may be made at the option of the Regular Trustees on
behalf of the Trust by check mailed to the
<PAGE> 83
16
address of the Persons entitled thereto and that the payment on redemption of
any Preferred Security will be made only upon surrender of such Preferred
Security to the Property Trustee.
10. Acceptance of Indenture and Preferred Guarantee. Each
Holder of Preferred Securities, by the acceptance thereof, agrees to the
provisions of (i) the Preferred Guarantee, including the subordination
provisions thereof and (ii) the Indenture and the Debentures, including the
subordination provisions of the Indenture.
11. No Preemptive Rights. The Holders of Preferred Securities
shall have no preemptive rights to subscribe to any additional Preferred
Securities or Common Securities.
12. Miscellaneous. These terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the Indenture
to a Holder without charge on written request to the Trust at its principal
place of business.
<PAGE> 84
ANNEX I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT--THIS PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS
EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF
THIS PREFERRED SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF
DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TO THE TRUST OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC OR ANY SUCCESSOR DEPOSITARY AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC OR ANY SUCCESSOR DEPOSITARY, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL, SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Preferred Securities:
Number:
CUSIP NO.: 69366F 20 8
<PAGE> 85
2
Certificate Evidencing Preferred Securities
of
PWG Capital Trust II
8.08% Preferred Trust Securities
(liquidation amount $25 per Preferred Security)
PWG Capital Trust II, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
(the "Holder") is the registered owner of preferred securities of
the Trust representing undivided beneficial interests in the assets of the Trust
designated the 8.08% Preferred Trust Securities (liquidation amount $25 per
Preferred Security) (the "Preferred Securities"). The transfer of Preferred
Securities is registrable on the books and records of the Trust, in person or by
a duly authorized attorney, upon surrender of this certificate duly endorsed and
in proper form for registration of transfer. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth in, and this certificate and the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Declaration of Trust of
the Trust dated as of March 14, 1997, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of Preferred
Securities as set forth in Exhibit B thereto. The Preferred Securities and the
Common Securities issued by the Trust pursuant to the Declaration represent
undivided beneficial interests in the assets of the Trust, including the
Debentures (as defined in the Declaration) issued by Paine Webber Group Inc., a
Delaware corporation ("PWG"), to the Trust pursuant to the Indenture referred to
in the Declaration. The Holder is entitled to the benefits of the Guarantee
Agreement of PWG dated as of March 14, 1997 (the "Guarantee"), to the extent
provided therein. The Trust will furnish a copy of the Declaration, the
Guarantee and the Indenture to the Holder without charge, upon written request
to the Trust, at its principal place of business or registered office.
The Holder of this Certificate, by accepting this Certificate,
is deemed to have (i) agreed to the terms of
<PAGE> 86
3
the Indenture and the Debentures, including that the Debentures are subordinate
and junior in right of payment to all Senior Indebtedness (as defined in the
Indenture) as and to the extent provided in the Indenture and (ii) agreed to the
terms of the Guarantee, including that the Guarantee is subordinate and junior
in right of payment to all other indebtedness, liabilities and obligations of
PWG, including the Debentures, except those made pari passu or subordinate by
their terms, and senior to all capital stock now or hereafter issued by PWG and
to any guarantee now or hereafter entered into by PWG in respect of any of its
capital stock.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed
this certificate this day of .
PWG Capital Trust II,
by
---------------------------------------
Name:
Title: Regular Trustee
by
---------------------------------------
Name:
Title: Regular Trustee
Dated:
Countersigned and Registered:
The Chase Manhattan Bank, as
Transfer Agent and Registrar
by
------------------------------
Authorized Officer
<PAGE> 87
4
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE> 88
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.01 of the Amended and Restated
Declaration of Trust of PWG Capital Trust II dated as of March 14, 1997 (as
amended from time to time, the "Declaration"), the designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities are set forth below (each capitalized term used but not
defined herein having the meaning set forth in the Declaration):
1. Designation and Number. Common Securities of the Trust with
an aggregate liquidation amount in the assets of the Trust of up to Six Million
Two Hundred Twenty Four Thousand Two Hundred Fifty Dollars ($6,224,250)
(including up to Eight Hundred Eleven Thousand Eight Hundred Seventy Five
Dollars ($811,875) issuable upon exercise of the overallotment option set forth
in the Underwriting Agreement) and a liquidation amount in the assets of the
Trust of $25 per Common Security are hereby designated as "8.08% Common Trust
Securities". The Common Security Certificates evidencing the Common Securities
shall be substantially in the form attached hereto as Annex I, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice. The Common Securities are to be issued and sold to
Paine Webber Group Inc. ("PWG"). In connection with the issuance and sale of the
Preferred Securities and the Common Securities, the Trust will purchase, as
trust assets, Debentures of PWG having an aggregate principal amount equal to
the aggregate liquidation amount of the Preferred Securities and the Common
Securities so issued, and bearing interest at an annual rate equal to the annual
Distribution rate on the Preferred Securities and the Common Securities and
having payment and redemption provisions which correspond to the payment and
redemption provisions of the Preferred Securities and the Common Securities.
2. Distributions. (a) Distributions payable on each Common
Security will be fixed at a rate per annum of 8.08% (the "Coupon Rate") of the
stated liquidation amount of $25 per Common Security. Distributions in arrears
for more than one month will bear interest at the rate per annum of 8.08%
thereof (to the extent permitted by applicable law), compounded monthly. The
term "Distributions" as used in these terms means such periodic cash
distributions and any such interest payable unless otherwise stated. A
Distribution will be made by the Property Trustee only to the extent that
interest payments are made in respect of the
<PAGE> 89
2
Debentures held by the Property Trustee. The amount of Distributions payable for
any period will be computed on the basis of a 360-day year of twelve 30-day
months, and for any Distribution period shorter than a 30-day period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed.
(b) Distributions on the Common Securities will be cumulative,
will accrue from March 14, 1997, and will be payable monthly in arrears, on the
first day of each month, commencing on April 1, 1997, except as otherwise
described below, but only if and to the extent that interest payments are made
in respect of the Debentures held by the Property Trustee. So long as PWG is not
in default in the payment of interest on the Debentures, PWG shall have the
right under the Indenture for the Debentures to defer payments of interest by
extending the interest payment period from time to time on the Debentures for a
period not to exceed 60 consecutive monthly interest periods (each, an
"Extension Period"), provided, however, that an Extension Period may not extend
beyond the maturity of the Debentures. During any such Extension Period, monthly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the rate of 8.08% per annum, compounded monthly.
Prior to the termination of any such Extension Period, PWG may further extend
such Extension Period; provided that such Extension Period, together with all
such previous and further extensions thereof, may not exceed 60 consecutive
monthly interest periods. Upon the termination of any Extension Period and the
payment of all amounts then due, PWG may commence a new Extension Period,
subject to the above requirements. Payments of accrued Distributions will be
payable to Holders of Common Securities as they appear on the books and records
of the Trust on the record date for the first interest payment date occurring at
or after the end of the Extension Period.
(c) Distributions on the Common Securities will be payable
promptly by the Property Trustee (or other Paying Agent) upon receipt of
immediately available funds to the Holders thereof as they appear on the books
and records of the Trust on the relevant record dates which will be one Business
Day prior to the relevant Distribution date unless the Preferred Securities are
no longer in book-entry only form, in which event the relevant record dates will
be the fifteenth (15th) day of the month immediately preceding the month in
which the relevant Distribution date occurs, which
<PAGE> 90
3
record and payment dates correspond to the record and interest payment dates for
the Debentures. Distributions payable on any Common Securities that are not
punctually paid on any Distribution date as a result of PWG having failed to
make the corresponding interest payment on the Debentures will forthwith cease
to be payable to the Person in whose name such Common Security is registered on
the relevant record date, and such defaulted Distribution will instead be
payable to the Person in whose name such Common Security is registered on the
special record date established by the Regular Trustees, which record date shall
correspond to the special record date or other specified date determined in
accordance with the Indenture; provided, however, that Distributions shall not
be considered payable on any Distribution payment date falling within an
Extension Period unless PWG has elected to make a full or partial payment of
interest accrued on the Debentures on such Distribution payment date. Subject to
any applicable laws and regulations and the provisions of the Declaration, each
payment in respect of the Common Securities will be made as described in
paragraph 9 hereof. If any date on which Distributions are payable on the Common
Securities is not a Business Day, then payment of the Distribution payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except that,
if such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
(d) All Distributions paid with respect to the Common
Securities and the Preferred Securities will be paid pro rata to the Holders
thereof entitled thereto. If an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities with
respect to Distributions.
(e) In the event that there is any money or other property
held by or for the Trust that is not accounted for under the Declaration, such
money or property shall be distributed pro rata among the Holders of the
Preferred Securities and the Common Securities.
3. Liquidation Distribution Upon Dissolution. In the event of
any voluntary or involuntary dissolution, winding-up or termination of the
Trust, the Holders of the Preferred Securities and Common Securities at the date
of
<PAGE> 91
4
the dissolution, winding-up or termination, as the case may be, will be entitled
to receive pro rata solely out of the assets of the Trust available for
distribution to Holders of Preferred Securities and the Common Securities, after
satisfaction of liabilities to creditors, an amount equal to the aggregate of
the stated liquidation amount of $25 per Preferred Security and Common Security
plus accrued and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"), unless, in connection with such
dissolution, winding-up or termination, and after satisfaction of liabilities to
creditors, Debentures in an aggregate principal amount equal to the aggregate
stated liquidation amount of such Preferred Securities and Common Securities,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on such Preferred Securities and Common Securities, shall
be distributed pro rata to the Holders of the Preferred Securities and Common
Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and the Common Securities
shall be paid, subject to the next paragraph, on a pro rata basis.
Holders of Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution pro rata with Holders of
Preferred Securities, except that, if an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to such Liquidation Distribution.
4. Redemption and Distribution of Debentures. The Preferred
Securities and the Common Securities may only be redeemed if Debentures having
an aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and the Common Securities are repaid, redeemed or
distributed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part,
whether at maturity or upon redemption at any time or from time to time on or
after March 1, 2002, the proceeds of such repayment will be promptly applied to
redeem pro rata Preferred Securities and Common Securities
<PAGE> 92
5
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid, upon not less than 30 nor more than 60 days notice,
at a redemption price of $25 per Preferred Security and Common Security plus an
amount equal to accrued and unpaid Distributions thereon to the date of
redemption, payable in cash (the "Redemption Price"). The date of any such
repayment of Preferred Securities and Common Securities shall be established to
coincide with the repayment or redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and
Common Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed pro rata and, with respect to the Common Securities
to be redeemed, as described in paragraph 4(e)(ii) below. If a partial
redemption would result in the delisting of the Preferred Securities by any
national securities exchange or other organization on which the Preferred
Securities are then listed, PWG, pursuant to the Indenture, will only redeem
Debentures in whole and the Trust will only redeem the Common Securities in
whole.
(c) If, at any time, a Tax Event or an Investment Company
Event (each, as hereinafter defined and, each, a "Special Event") shall occur
and be continuing, the Regular Trustees shall, unless the Debentures are
redeemed in the limited circumstances described below, dissolve the Trust and,
after satisfaction of creditors, cause Debentures held by the Property Trustee
having an aggregate principal amount equal to the aggregate stated liquidation
amount of, and bearing accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as, the Preferred
Securities and the Common Securities, to be distributed to the Holders of the
Preferred Securities and the Common Securities on a pro rata basis in
liquidation of such Holders' interests in the Trust, within 90 days following
the occurrence of such Special Event (the "90 Day Period"); provided, however,
that in the case of the occurrence of a Tax Event, as a condition of such
dissolution and distribution, the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on any then
applicable published revenue rulings of the Internal Revenue Service, to the
effect that the Holders of the Preferred Securities will not recognize any gain
or loss for United
<PAGE> 93
6
States Federal income tax purposes as a result of the dissolution of the Trust
and distribution of Debentures; and provided further that, if at the time there
is available to PWG or the Regular Trustees, on behalf of the Trust, the
opportunity to eliminate, within such 90 Day Period, the Special Event by taking
some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure that has no adverse effect on the
Trust, PWG or the Holders of the Preferred Securities (a "Ministerial Action"),
PWG or the Regular Trustees, on behalf of the Trust, will pursue such
Ministerial Action in lieu of dissolution.
If in the case of the occurrence of a Tax Event, (i) the
Regular Trustees have received an opinion (a "Redemption Tax Opinion") of
nationally recognized independent tax counsel experienced in such matters that,
as a result of a Tax Event, there is more than an insubstantial risk that PWG
would be precluded from deducting the interest on the Debentures for United
States Federal income tax purposes even if the Debentures were distributed to
the Holders of Preferred Securities and Common Securities in liquidation of such
Holders' interest in the Trust as described in this paragraph 4(c) or (ii) the
Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, PWG shall have the right
at any time, upon not less than 30 nor more than 60 days notice, to redeem the
Debentures in whole or in part for cash at the Redemption Price within 90 days
following the occurrence of such Tax Event, and, promptly following such
redemption, Preferred Securities and Common Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
redeemed will be redeemed by the Trust at the Redemption Price on a pro rata
basis; provided, however, that, if at the time there is available to PWG or the
Regular Trustees on behalf of the Trust, the opportunity to eliminate, within
such 90 Day Period, the Tax Event by taking some Ministerial Action, PWG or the
Holders of the Preferred Securities, PWG or the Regular Trustees, on behalf of
the Trust, will pursue such measure in lieu of redemption; and provided further,
that PWG shall have no right to redeem the Debentures while the Regular
Trustees, on behalf of the Trust, are pursuing such Ministerial Action. The
Common Securities will be redeemed pro rata with the Preferred Securities,
except that if an Event of Default under the Indenture has occurred and is
continuing, the Preferred Securities will have a priority
<PAGE> 94
7
over the Common Securities with respect to payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have
obtained an opinion of nationally recognized independent tax counsel experienced
in such matters (a "Dissolution Tax Opinion") to the effect that, on or after
March 11, 1997, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change (including any announced prospective
change) in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the theretofore generally accepted position or (d) any action taken
by any governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or effective or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after March 11, 1997, there is more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States Federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes, duties or other governmental
charges or (iii) interest payable by PWG to the Trust on the Debentures is not,
or within 90 days of the date thereof will not be, deductible by PWG for United
States Federal income tax purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of nationally recognized independent counsel
experienced in practice under the Investment Company Act that, as a result of
the occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law"), there is more than
an insubstantial risk that the Trust is or will be considered an Investment
Company which is required to be
<PAGE> 95
8
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after March 11, 1997.
On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Common Securities will no longer be deemed to
be outstanding and (ii) any certificates representing Common Securities will be
deemed to represent beneficial interests in the Debentures having an aggregate
principal amount equal to the stated liquidation amount of, and bearing accrued
and unpaid interest equal to accrued and unpaid Distributions on, such Common
Securities until such certificates are presented to PWG or its agent for
transfer or reissuance.
(d) The Trust may not redeem fewer than all the outstanding
Common Securities unless all accrued and unpaid Distributions have been paid on
all Common Securities for all monthly Distribution periods terminating on or
prior to the date of redemption.
(e)(i) Notice of any redemption of, or notice of distribution
of Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the Regular
Trustees on behalf of the Trust by mail to each Holder of Preferred Securities
and Common Securities to be redeemed or exchanged not less than 30 nor more than
60 days prior to the date fixed for redemption or exchange thereof. For purposes
of the calculation of the date of redemption or exchange and the dates on which
notices are given pursuant to this paragraph (e)(i), a Redemption/Distribution
Notice shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of Preferred Securities and Common
Securities. Each Redemption/ Distribution Notice shall be addressed to the
Holders of Preferred Securities and Common Securities at the address of each
such Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Common
Securities are to be redeemed, the Common Securities to be redeemed will be
redeemed pro rata from
<PAGE> 96
9
each Holder of Common Securities (subject to adjustment to eliminate fractional
Common Securities).
(iii) If the Trust gives a Redemption/Distribution Notice in
respect of a redemption of Common Securities as provided in this paragraph 4
(which notice will be irrevocable), then immediately prior to the close of
business on the redemption date, provided that PWG has paid to the Property
Trustee in immediately available funds a sufficient amount of cash in connection
with the related redemption or maturity of the Debentures, Distributions will
cease to accrue on the Common Securities called for redemption, such Common
Securities will no longer be deemed to be outstanding and all rights of Holders
of such Common Securities so called for redemption will cease, except the right
of the Holders of such Common Securities to receive the Redemption Price, but
without interest on such Redemption Price. Neither the Trustees nor the Trust
shall be required to register or cause to be registered the transfer of any
Common Securities which have been so called for redemption. If any date fixed
for redemption of Common Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect of Common Securities
is improperly withheld or refused and not paid by the Property Trustee,
Distributions on such Common Securities will continue to accrue, from the
original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to the Holders of the Common Securities.
(v) Upon the date of dissolution of the Trust and distribution
of Debentures as a result of the occurrence of a Special Event, Common Security
Certificates shall be deemed to represent beneficial interests in the Debentures
so distributed, and the Common Securities will no longer be deemed outstanding
and may be canceled by the Regular
<PAGE> 97
10
Trustees. The Debentures so distributed shall have an aggregate principal amount
equal to the aggregate liquidation amount of the Common Securities so
distributed.
5. Voting Rights. (a) Except as provided under paragraph 5(b)
below and as otherwise required by law and the Declaration, the Holders of the
Common Securities will have no voting rights.
(b) Holders of Common Securities have the sole right under the
Declaration to increase or decrease the number of Trustees, and to appoint,
remove or replace a Trustee, any such increase, decrease, appointment, removal
or replacement to be approved by Holders of Common Securities representing a
Majority in liquidation amount of the Common Securities.
If any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than in connection
with the distribution of Debentures held by the Property Trustee, upon the
occurrence of a Special Event or in connection with the redemption of Common
Securities as a consequence of a redemption of Debentures, then the Holders of
outstanding Securities will be entitled to vote on such amendment or proposal as
a class and such amendment or proposal shall not be effective except with the
approval of the Holders of Securities representing 66-2/3% in liquidation amount
of such Securities; provided, however, that (A) if any amendment or proposal
referred to in clause (i) above would adversely affect only the Preferred
Securities or the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of 66-2/3% in liquidation amount
of such class of Securities, (B) the rights of Holders of Common Securities
under Article V of the Declaration to increase or decrease the number of, and to
appoint, replace or remove, Trustees shall not be amended without the consent of
each Holder of Common Securities, and (C) amendments to the Declaration shall be
subject to such further requirements as are set forth in Sections 12.01 and
12.02 of the Declaration.
<PAGE> 98
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In the event the consent of the Property Trustee as the holder
of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Property Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination. The
Property Trustee shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of the Securities
voting together as a single class; provided that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures
affected thereby, the Property Trustee may vote only with respect to that
amendment, modification or termination as directed by, in the case of clause (1)
above, the vote of Holders of Securities representing such specified percentage
of the aggregate liquidation amount of the Securities, or, in the case of clause
(2) above, each Holder of Securities affected thereby; and provided, further,
that the Property Trustee shall be under no obligation to take any action in
accordance with the directions of the Holders of the Securities unless the
Property Trustee shall have received, at the expense of the Sponsor, an opinion
of nationally recognized independent tax counsel recognized as an expert in such
matters to the effect that the Trust will not be classified for United States
Federal income tax purposes as an association taxable as a corporation or a
partnership on account of such action and will be treated as a grantor trust for
United States Federal income tax purposes following such action.
Subject to Section 2.06 of the Declaration and the provisions
of this and the next succeeding paragraph, the Holders of a Majority in
liquidation amount of the Common Securities, voting separately as a class, shall
have the right to (A) on behalf of all Holders of Common Securities, waive any
past default that is waivable under the Declaration (subject to, and in
accordance with, the Declaration) and (B) direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee, as holder of
the Debentures, to (i) direct the time, method and place of
<PAGE> 99
12
conducting any proceeding for any remedy available to the Debenture Trustee, or
exercising any trust or power conferred on the Debenture Trustee with respect to
the Debentures, (ii) waive any past default and its consequences that is
waivable under Section 6.06 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures shall be
due and payable; provided that where the taking of any action under the
Indenture requires the consent or vote of (1) holders of Debentures representing
a specified percentage greater than a majority in principal amount of the
Debentures or (e) each holder of Debentures affected thereby, the Property
Trustee may take such action only if directed by, in the case of clause (1)
above, the vote of Holders of Common Securities representing such specified
percentage of the aggregate liquidation amount of the Common Securities, or, in
the case of clause (2) above, each Holder of Common Securities affected thereby.
Pursuant to this paragraph, the Property Trustee shall not revoke, or take any
action inconsistent with, any action previously authorized or approved by a vote
of the Holders of the Preferred Securities, and shall not take any action in
accordance with the direction of the Holders of the Common Securities under this
paragraph if the action is prejudicial to the Holders of Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee or the Debenture
Trustee as set forth above, the Property Trustee shall be under no obligation to
take any of the foregoing actions at the direction of the Holders of Common
Securities unless the Property Trustee shall have received, at the expense of
the Sponsor, an opinion of nationally recognized independent tax counsel
recognized as expert in such matters to the effect that the Trust will not be
classified for United States Federal income tax purposes as an association
taxable as a corporation or a partnership on account of such action and will be
treated as a grantor trust for United States income tax purposes following such
action.
Notwithstanding any other provision of these terms, each
Holder of Common Securities will be deemed to have waived any Event of Default
with respect to the Common Securities and its consequences until all Events of
Default with respect to the Preferred Securities have been cured, waived by the
Holders of Preferred Securities as provided in the Declaration or otherwise
eliminated, and until all Events of Default with respect to the Preferred
Securities
<PAGE> 100
13
have been so cured, waived by the Holders of Preferred Securities or otherwise
eliminated, the Property Trustee will be deemed to be acting solely on behalf of
the Holders of Preferred Securities and only the Holders of the Preferred
Securities will have the right to direct the Property Trustee in accordance with
the terms of the Declaration or of the Securities. In the event that any Event
of Default with respect to the Preferred Securities is waived by the Holders of
Preferred Securities as provided in the Declaration, the Holders of Common
Securities agree that such waiver shall also constitute the waiver of such Event
of Default with respect to the Common Securities for all purposes under the
Declaration without any further act, vote or consent of the Holders of the
Common Securities.
A waiver of an Indenture Event of Default by the Property
Trustee at the direction of the Holders of the Preferred Securities will
constitute a waiver of the corresponding Event of Default under the Declaration
in respect of the Securities.
Any required approval of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities of the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of Common Securities will be
required for the Trust to redeem and cancel Common Securities in accordance with
the Declaration.
6. Pro Rata Treatment. A reference in these terms of the
Common Securities to any payment, distribution or treatment as being "pro rata"
shall mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in
<PAGE> 101
14
relation to the aggregate liquidation amount of all Securities outstanding
unless, in relation to a payment, an Event of Default has occurred and is
continuing, in which case any funds available to make such payment shall be paid
first to each Holder of the Preferred Securities pro rata according to the
aggregate liquidation amount of Preferred Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Preferred Securities, to each Holder of Common Securities pro rata according
to the aggregate liquidation amount of Common Securities held by the relevant
Holder relative to the aggregate liquidation amount of all Common Securities
outstanding.
7. Ranking. The Common Securities rank pari passu and payment
thereon will be made pro rata with the Preferred Securities except that where an
Event of Default occurs and is continuing, the rights of Holders of Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption or otherwise are subordinate to the rights of Holders of the
Preferred Securities.
8. Mergers, Consolidations or Amalgamations. The Trust may not
consolidate, amalgamate, merge with or into, or be replaced by, or sell,
transfer or lease all or substantially all its properties and assets to, any
Person.
9. Transfers, Exchanges, Method Payments. Payment of
Distributions and payments on redemption of the Common Securities will be
payable, the transfer of the Common Securities will be registrable, and Common
Securities will be exchangeable for Common Securities of other denominations of
a like aggregate liquidation amount, at the principal corporate trust office of
the Property Trustee in The City of New York; provided that payment of
Distributions may be made at the option of the Regular Trustees on behalf of the
Trust by check mailed to the address of the Persons entitled thereto and that
the payment on redemption of any Common Security will be made only upon
surrender of such Common Security to the Property Trustee. Notwithstanding the
foregoing, transfers of Common Securities are subject to conditions set forth in
Section 9.01(c) of the Declaration.
10. Acceptance of Indenture. Each Holder of Common Securities,
by the acceptance thereof, agrees to the
<PAGE> 102
15
provisions of the Indenture and the Debentures, including the subordination
provisions thereof.
11. No Preemptive Rights. The Holders of Common Securities
shall have no preemptive rights to subscribe to any additional Common Securities
or Preferred Securities.
12. Miscellaneous. These terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the Indenture
to a Holder without charge on written request to the Trust at its principal
place of business.
<PAGE> 103
Annex I
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Number: Common Securities:
Certificate Evidencing Common Securities
of
PWG Capital Trust II
8.08% Common Trust Securities
(liquidation amount $25 per Common Security)
PWG Capital Trust II, a business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that Paine Webber Group
Inc. (the "Holder") is the registered owner of common securities of
the Trust representing undivided beneficial interests in the assets of the Trust
designated the "8.08% Common Trust Securities" (liquidation amount $25 per
Common Security) (the "Common Securities"). The transfer of Common Securities is
registrable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for registration of transfer and satisfaction of the other
conditions set forth in the Declaration (as defined below) including, without
limitation, Section 9.01(c) thereof. The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Declaration of Trust of the Trust
dated as of March 14, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of Common Securities as
set forth in Exhibit C thereto. The Common Securities and the Preferred
Securities issued by the Trust pursuant to the Declaration represent undivided
beneficial interests in the assets of the Trust, including the Debentures (as
defined in the Declaration) issued by Paine Webber Group Inc., a Delaware
corporation, to the Trust pursuant to the Indenture
<PAGE> 104
2
referred to in the Declaration. The Trust will furnish a copy of the Declaration
and the Indenture to the Holder without charge upon written request to the Trust
at its principal place of business or registered office.
The Holder of this Certificate, by accepting this Certificate,
is deemed to have agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture.
<PAGE> 105
3
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed
this certificate this day of .
PWG Capital Trust II,
by_________________________
Name:
Title: Regular Trustee
by_________________________
Name:
Title: Regular Trustee
Dated:
Countersigned and Registered:
The Chase Manhattan Bank, as
Transfer Agent and Registrar
by_____________________________
Authorized Officer
<PAGE> 106
4
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
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(Insert assignee's social security or tax identification number)
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(Insert address and zip code of assignee)
and irrevocably appoints
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agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _____________________
Signature: _________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
