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STOCKHOLDER VOTING AGREEMENT
STOCKHOLDER VOTING AGREEMENT, dated as of July 12, 2000 (this
"Agreement"), between Joseph J. Grano, Jr., in his individual capacity
("Stockholder"), and UBS AG, an Aktiengesellschaft organized under the laws of
Switzerland ("UBS").
WHEREAS, Paine Webber Group Inc. a Delaware corporation (the
"Company"), UBS and Neptune Merger Subsidiary, Inc., a Delaware corporation and
a wholly owned subsidiary of UBS ("Merger Subsidiary"), are contemporaneously
herewith entering into an Agreement and Plan of Merger, dated as of the date
hereof (the "Merger Agreement"), which provides, among other things, for the
merger of the Company with and into Merger Subsidiary (the "Merger");
WHEREAS, as a condition and inducement to their willingness to
enter into the Merger Agreement, UBS and Merger Subsidiary have requested that
Stockholder make certain agreements with respect to the shares of common stock,
par value $1.00 per share, having one vote per share ("Shares"), of the Company
owned of record by Stockholder set forth opposite Stockholder's name on Schedule
A hereto (such Shares, together with any additional securities of the Company
acquired as described in Section 4 (including through the exercise of any stock
options, warrants or similar instruments), being referred to herein as the
"Subject Shares"), upon the terms and subject to the conditions hereof; and
WHEREAS, in order to induce UBS and Merger Subsidiary to enter
into the Merger Agreement, Stockholder is willing to make certain agreements
with respect to the Subject Shares;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
1. Voting Agreements. (a) For so long as this Agreement is in
effect, at any meeting of stockholders of the Company, however called, including
any adjourned or postponed meeting, and in any action by consent of the
stockholders of the Company or in any other circumstances upon which a vote,
consent or other approval is sought, Stockholder shall vote (or cause to be
voted), or, if applicable, give consent or approval with respect to, all of the
Subject Shares that Stockholder has the right to vote in favor of adoption of
the Merger Agreement and approval of the Merger and any other transaction
contemplated by the Merger Agreement. Any such vote shall be cast or consent
shall be given for purposes of this Section 1 in accordance with such procedures
relating thereto as shall ensure that it is duly counted for purposes of
determining that a quorum is present and for purposes of recording in accordance
herewith the results of such vote or consent.
(b) Individual Capacity. The parties hereto acknowledge that
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Stockholder is entering into this Agreement solely in his individual capacity.
Nothing in this Agreement shall obligate Stockholder to take any action in
Stockholder's capacity as an officer or director of the Company.
2. Covenants. From and after the date of this Agreement,
Stockholder agrees not to, and to use best efforts to cause any investment
banker, attorney or other adviser or representative of Stockholder not to (i)
sell, transfer, exchange, pledge, assign, hypothecate, encumber, tender or
otherwise dispose of, or enter into any contract, option or other arrangement
with respect to the sale, transfer, exchange, pledge, assignment, hypothecation,
encumbrance, tender or other disposition of the Subject Shares; (ii) exchange or
convert Subject Shares for or into shares of non-voting common stock, par value
$1.00 per share, of the Company prior to the time the stockholders of the
Company have voted on the Merger; (iii) grant any proxies with respect to any
Subject Shares, deposit any such Subject Shares into a voting trust or enter
into a voting or option agreement with respect to any of such Subject Shares;
(iv) directly or indirectly, solicit or encourage inquiries or proposals with
respect to, or engage in any negotiations concerning, or provide any
confidential information to, or have any discussions with, any person relating
to, an Acquisition Proposal; or (v) take any action which would make any
representation or warranty of Stockholder herein untrue or incorrect or prevent,
burden or materially delay the consummation of the transactions contemplated by
this Agreement. As used in this Agreement, "person" shall have the meaning
specified in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of
1934, as amended (the "Exchange Act").
3. Representations and Warranties of Stockholder. Stockholder
represents and warrants to UBS that:
(a) Capacity; No Violations. Stockholder has the necessary
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Stockholder, and constitutes a valid and binding agreement of Stockholder
enforceable against Stockholder in accordance with its terms; and such execution
and delivery and performance by Stockholder of this Agreement will not (i)
constitute a breach or violation of, or a default under, or cause or allow the
acceleration or creation of a Lien (with or without the giving of notice,
passage of time or both) pursuant to, any law, rule or regulation or any
judgment, decree, order, governmental or non-governmental permit or license, or
any material contract of Stockholder or to which Stockholder or his properties
is subject or bound or (ii) require any consent or approval under any such law,
rule, regulation, judgment, decree, order, governmental or non-governmental
permit or license or the consent or approval of any other party to any material
contract of Stockholder or to which Stockholder or his properties is subject or
bound. In this Agreement, "Lien" shall mean any lien, pledge, security interest,
claim, third party right or other encumbrance.
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(b) Subject Shares. Stockholder is the record holder of, has
sole voting and dispositive power over, and has good and valid title to, the
Subject Shares free and clear of all Liens (other than any Lien created by this
Agreement) and, except as provided by this Agreement, there are no options or
rights to acquire or proxies, voting trusts or voting agreements relating to the
Subject Shares to which Stockholder is a party. Except as otherwise disclosed on
Schedule A to this Agreement, as of the date hereof, the Subject Shares are the
only shares of any class of capital stock of the Company which Stockholder has
the right, power or authority (sole or shared) to sell or vote, and Stockholder
does not have any right to acquire, nor is he the beneficial owner of, any other
shares of any class of capital stock of the Company or any securities
convertible into or exchangeable or exercisable for any shares of any class of
capital stock of the Company (other than options to acquire 1,686,000 Shares).
4. Adjustments; Additional Shares. In the event (a) of any
stock dividend, stock split, recapitalization, reclassification, subdivision,
combination or exchange of Shares on, of or affecting the Subject Shares, or (b)
Stockholder shall become the owner of any additional Shares (including through
the exercise of any stock options, warrants or similar instruments) or other
securities of the Company, then such Shares held by Stockholder immediately
following the effectiveness of the events described in clause (a) or Stockholder
becoming the owner of the Shares or other securities, as described in clause
(b), shall become Subject Shares hereunder; provided, however, that proxies
solicited by management of the Company with respect to another transaction
proposal shall not be deemed to result in the acquisition of Subject Shares and
such proxies shall not be subject to the terms of this Agreement.
5. Expenses. Each party hereto shall pay its own expenses
incurred in connection with this Agreement.
6. Specific Performance. Stockholder acknowledges and agrees
that if he fails to perform any of his obligations under this Agreement
immediate and irreparable harm or injury would be caused to UBS for which money
damages would not be an adequate remedy. In such event, Stockholder agrees that
UBS shall have the right, in addition to any other rights it may have, to
specific performance of this Agreement. Accordingly, if UBS should institute an
action or proceeding seeking specific enforcement of the provisions hereof,
Stockholder hereby waives the claim or defense that UBS has an adequate remedy
at law and hereby agrees not to assert in any such action or proceeding the
claim or defense that such a remedy at law exists. Stockholder further agrees to
waive any requirements for the securing or posting of any bond in connection
with obtaining any such equitable relief.
7. Notices. All notices or other communications under this
Agreement shall be in writing and shall be deemed duly given, effective (i)
three business days later, if sent by registered or certified mail, return
receipt requested, postage prepaid, (ii) when sent, if sent by facsimile,
provided that the facsimile is promptly confirmed by
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telephone confirmation thereof, (iii) when served, if delivered personally to
the intended recipient, and (iv) one business day later, if sent by overnight
delivery via a national courier service, and in each case, addressed to the
intended recipient at the address set forth in the preamble hereof. Any party
may change the address to which notices or other communications hereunder are to
be delivered by giving the other party notice in the manner herein set forth:
If to UBS:
Bahnhofstrasse 45
Zurich, Switzerland
Attention: Luqman Arnold
Phone: 41-1-234-5801
Fax: 41-1-234-3700
With a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: James C. Morphy, Esq.
Phone: (212) 558-4000
Fax: (212) 558-3588
If to Stockholder:
Joseph J. Grano, Jr.
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Phone: (212) 713-2000
Fax: (212) 713-4177
With a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Attention: Peter S. Wilson, Esq.
Phone: (212) 474-1000
Fax: (212) 474-3700
8. Parties in Interest. This Agreement shall inure to the
benefit of and
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be binding upon the parties named herein and their respective successors and
assigns; provided, however, that such successor in interest or assigns shall
agree to be bound by the provisions of this Agreement. Nothing in this
Agreement, express or implied, is intended to confer upon any Person other than
UBS, Stockholder or their successors or assigns, any rights or remedies under or
by reason of this Agreement.
9. Entire Agreement; Amendments. This Agreement contains the
entire agreement between Stockholder and UBS with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, oral or written, with respect to such transactions. This
Agreement may not be changed, amended or modified orally, but may be changed
only by an agreement in writing signed by the party against whom any waiver,
change, amendment, modification or discharge may be sought.
10. Assignment. No party to this Agreement may assign any of
its rights or obligations under this Agreement without the prior written consent
of the other party hereto, except that UBS may assign its rights and obligations
hereunder to any of its direct or indirect wholly owned subsidiaries (including
Merger Subsidiary).
11. Cooperation. If any notices, approvals or filings are
required with any regulatory commission or agency in order to allow the parties
hereto to effectively carry out the transactions contemplated by this Agreement,
Stockholder and UBS shall cooperate in making such notices or filings or in
obtaining such approvals.
12. Headings. The section headings herein are for convenience
only and shall not affect the construction of this Agreement.
13. Counterparts. This Agreement may be executed in any number
of counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall constitute one and the same document.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (regardless of
the laws that might otherwise govern under applicable Delaware principles of
conflicts of law).
15. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability or the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
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16. Termination. The provisions of this Agreement shall
terminate at the earlier of (i) the Effective Time (as defined in the Merger
Agreement) and (ii) the termination of the Merger Agreement in accordance with
its terms.
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IN WITNESS WHEREOF, Stockholder and UBS have caused this
Agreement to be duly executed and delivered on the day and year first above
written.
By: _____________________________
Name: Joseph J. Grano, Jr.
UBS AG
By: _____________________________
Name:
Title
By: _____________________________
Name:
Title
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