<PAGE> 1
As filed with the Securities and Exchange Commission on September 13, 1994
Registration Statement No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_______________
PAINE WEBBER GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware 13-2760086
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1285 Avenue of the Americas
New York, New York 10019
(Address, including zip code, of principal executive offices)
_______________
PAINE WEBBER GROUP INC. 1994 EXECUTIVE STOCK AWARD PLAN
(full title of the plan)
_______________
Theodore A. Levine
Vice President, General Counsel and Secretary
Paine Webber Group Inc.
1285 Avenue of the Americas
New York, New York 10019
(212) 713-2879
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_______________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Securities Amount to be Price Per Offering Registration
to be Registered Registered(1) Share(2) Price(2) Fee
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($1 par value) 3,000,000 $15.6875 $47,062,500 $16,229
==================================================================================================
</TABLE>
(1) The aggregate maximum number of shares of Common Stock which may be granted
or awarded under the Plan during the following three calendar years (or any
part of any such calendar year) during which the Plan is effective. Also
being registered pursuant to Rule 416 are such additional indeterminate
number of shares of Common Stock as may be required to cover possible
antidilution adjustments under the Plan.
(2) The calculation is made solely for the purpose of determining the amount of
the registration fee and is computed upon the basis of the average of the
high and low prices reported in the consolidated reporting system as of
September 9, 1994.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION
STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Commission by the Registrant
are incorporated by reference in this Prospectus as of its effective date:
a. The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, filed with the Commission on March 30, 1994;
b. The Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1994 and June 30, 1994;
c. The Registrant's Current Report on Form 8-K, filed with the
Commission dated January 27, 1994, March 17, 1994, March 18, 1994, June 15,
1994, July 28, 1994 and August 5, 1994; and
d. The description of the Common Stock set forth in the
Registrant's registration statement on Form 8 as filed with the Securities and
Exchange Commission, under Section 12 of the Exchange Act, including Amendment
No. 4 thereto dated January 30, 1986, and any other amendment or report filed
under the Exchange Act for the purpose of updating such description.
All documents subsequently filed by the Registrant or the Plan
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated herein by reference and to be a part
hereof from the date of filing of such documents.
The consolidated financial statements and schedules of the Registrant
incorporated by reference in the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1993 have been audited by Ernst & Young,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such financial statements are, and audited
financial statements to be included in subsequently filed documents will be,
incorporated herein in reliance upon the reports of Ernst & Young pertaining to
such financial statements to the extent covered by consents filed with the
Securities and Exchange Commission and given upon authority of such firm as
experts in accounting and auditing.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
1
<PAGE> 3
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the securities offered hereby has been passed upon
for the Registrant by Theodore A. Levine, Vice President and General Counsel of
Registrant, who owns beneficially 24,750 shares of Registrant's Common Stock
(all of which are Restricted Stock) and options to purchase 30,000 shares of
Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 145 of the General Corporation Law of
the State of Delaware which provides for indemnification of directors or
officers of a corporation in certain circumstances. Under Article VII of the
By-laws of the registrant, filed as Exhibit 3.1 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1987, which Exhibit
is incorporated herein by reference, the registrant has the power to and under
certain circumstances is required to indemnify its directors or officers.
The registrant also maintains directors and officers liability and
corporate reimbursement insurance which provides for coverage against loss
arising from claims made against directors and officers in their capacity as
such. The general scope of coverage is any breach of duty, neglect, error,
misstatement, misleading statement or omission. Such policy does not exclude
liabilities under the Securities Act of 1933, as amended. The registrant also
maintains fiduciary liability insurance for losses in connection with claims
made against directors or officers for violation of any of the
responsibilities, obligations or duties imposed upon fiduciaries under the
Employee Retirement Income Act of 1974 ("ERISA").
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4.1 Paine Webber Group Inc. 1994 Executive Stock
Award Plan
4.2 Form of Stock Option Agreement
4.3 Form of Restricted Stock Unit Agreement
4.4 Form of Restricted Stock Agreement
5 Opinion of Theodore A. Levine as to Legality of
Securities being Registered
23.1 Consent of Ernst & Young
23.2 Consent of Theodore A. Levine (set forth in Exhibit 5
Opinion)
24 Power of Attorney (set forth on the signature pages
of this Registration Statement)
2
<PAGE> 4
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post effective amendment thereof) which,
individually or in the aggregate, represents a fundamental
change in the information set forth in the registration
statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8 and
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
3
<PAGE> 5
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in The City of New York, State of New York, on August 31, 1994.
PAINE WEBBER GROUP INC.
(Registrant)
By /s/ Donald B. Marron
-------------------------
Donald B. Marron
Chairman of the Board and
Chief Executive Officer
4
<PAGE> 6
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENT, that each person whose signature appears
below constitutes and appoints DONALD B. MARRON, PIERCE R. SMITH and REGINA A.
DOLAN, and each of them (with full power to each of them to act alone), his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or his
or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and Power of Attorney has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald B. Marron Chairman of the Board, August 31, 1994
- -------------------- Chief Executive Officer
Donald B. Marron and Director (principal
executive officer)
/s/ Regina A. Dolan Vice President and Chief August 31, 1994
- -------------------- Financial Officer (principal
Regina A. Dolan financial and accounting
officer)
/s/ T. Stanton Armour Director August 31, 1994
- ---------------------
T. Stanton Armour
</TABLE>
5
<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ E. Garrett Bewkes, Jr. Director August 31, 1994
- --------------------------
E. Garrett Bewkes, Jr.
/s/ John A. Bult Director August 31, 1994
- --------------------------
John A. Bult
/s/ Reto Braun Director August 31, 1994
- --------------------------
Reto Braun
/s/ Yozo Fujisawa Director August 31, 1994
- --------------------------
Yozo Fujisawa
/s/ Joseph J. Grano, Jr. Director August 31, 1994
- --------------------------
Joseph J. Grano, Jr.
/s/ Paul B. Guenther Director August 31, 1994
- --------------------------
Paul B. Guenther
/s/ John E. Kilgore, Jr. Director August 31, 1994
- --------------------------
John E. Kilgore, Jr.
/s/ James W. Kinnear Director August 31, 1994
- --------------------------
James W. Kinnear
/s/ Robert M. Loeffler Director August 31, 1994
- --------------------------
Robert M. Loeffler
/s/ Edward Randall, III Director August 31, 1994
- --------------------------
Edward Randall, III
/s/ Henry Rosovsky Director August 31, 1994
- --------------------------
Henry Rosovsky
/s/ Kyosaku Sorimachi Director August 31, 1994
- --------------------------
Kyosaku Sorimachi
</TABLE>
6
<PAGE> 8
EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Description Page
- ------- ------------ -----------
4.1 Paine Webber Group Inc. 1994 Executive Stock
Award Plan
4.2 Form of Stock Option Agreement
4.3 Form of Restricted Stock Unit Agreement
4.4 Form of Restricted Stock Agreement
5 Opinion of Theodore A. Levine as to Legality of
Securities being Registered
23.1 Consent of Ernst & Young
23.2 Consent of Theodore A. Levine (set forth in Exhibit 5
Opinion)
24 Power of Attorney (set forth on the signature pages
of this Registration Statement)
<PAGE> 1
EXHIBIT 4.1
PAINE WEBBER GROUP INC.
________________________________________________________________________________
1994 EXECUTIVE STOCK AWARD PLAN
________________________________________________________________________________
<PAGE> 2
PAINE WEBBER GROUP INC.
________________________________________________________________________________
1994 EXECUTIVE STOCK AWARD PLAN
________________________________________________________________________________
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(a) Authority of the Committee . . . . . . . . . . . . . . . . . . 2
(b) Manner of Exercise of Committee Authority . . . . . . . . . . 2
(c) Limitation of Liability . . . . . . . . . . . . . . . . . . . 2
4. Stock Subject to Plan . . . . . . . . . . . . . . . . . . . . . . . 3
5. Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
6. Specific Terms of Awards . . . . . . . . . . . . . . . . . . . . . 4
(a) General . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Options . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(c) Stock Appreciation Rights . . . . . . . . . . . . . . . . . . 4
(d) Restricted Stock . . . . . . . . . . . . . . . . . . . . . . . 5
(e) Restricted Units . . . . . . . . . . . . . . . . . . . . . . . 6
(f) Bonus Stock and Awards in Lieu of Cash Obligations . . . . . . 7
(g) Dividend Equivalents . . . . . . . . . . . . . . . . . . . . . 7
(h) Other Stock-Based Awards . . . . . . . . . . . . . . . . . . . 7
7. Certain Provisions Applicable to Awards . . . . . . . . . . . . . . 8
(a) Stand-Alone, Additional, Tandem, and Substitute Awards . . . . 8
(b) Performance Conditions . . . . . . . . . . . . . . . . . . . . 8
(c) Term of Awards . . . . . . . . . . . . . . . . . . . . . . . . 8
(d) Form and Timing of Payment Under Awards; Deferrals . . . . . . 8
(e) Rule 16b-3 Compliance . . . . . . . . . . . . . . . . . . . . 8
(f) Performance-Based Awards to "Covered Executives: . . . . . . . 9
</TABLE>
<PAGE> 3
PAINE WEBBER GROUP INC.
________________________________________________________________________________
1994 EXECUTIVE STOCK AWARD PLAN
________________________________________________________________________________
<TABLE>
<CAPTION>
Page
----
<S> <C>
1. General Provisions . . . . . . . . . . . . . . . . . . . . . . . . 10
(a) Compliance With Legal and Other Requirements . . . . . . . . . 10
(b) Limits on Transferability; Beneficiaries . . . . . . . . . . . 10
(c) Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . 10
(d) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(e) Changes to the Plan and Awards . . . . . . . . . . . . . . . . 11
(f) Limitation on Rights Conferred Under Plan . . . . . . . . . . 12
(g) Unfunded Status of Awards; Creation of Trusts . . . . . . . . 12
(h) Nonexclusivity of the Plan . . . . . . . . . . . . . . . . . . 12
(i) Payments in the Event of Forfeitures; Fractional Shares . . . 12
(j) Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 12
(k) Effective Date . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
<PAGE> 4
PAINE WEBBER GROUP INC.
1994 EXECUTIVE STOCK AWARD PLAN
1. Purpose. The purpose of this 1994 Executive Stock Award Plan (the
"Plan") is to assist Paine Webber Group Inc. ("PaineWebber") and its
subsidiaries in attracting, retaining, and rewarding high-quality executive
officers and other key executives, enabling such executives to acquire or
increase a proprietary interest in PaineWebber in order to strengthen the
mutuality of interests between such executives and PaineWebber's stockholders,
and providing such executives with performance incentives to expend their
maximum efforts in the creation of long-term stockholder value. The Plan is
also intended to endeavor to qualify the compensation awarded under the Plan
for tax deductibility under Section 162(m) of the Internal Revenue Code to the
extent deemed appropriate by the Compensation Committee of the Board of
Directors of PaineWebber.
2. Definitions. The definitions of awards under the Plan, including
Options, SARs (including Limited SARs), Restricted Stock, Restricted Units,
Stock granted as a bonus or in lieu of other awards, Dividend Equivalents, and
Other Stock-Based Awards are set forth in Section 6 of the Plan. Such awards,
together with any other right or interest granted to a Participant under the
Plan, are termed "Awards." The following additional terms shall be defined as
set forth below:
(a) "Board" shall mean PaineWebber's Board of Directors.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, including regulations thereunder and successor
provisions and regulations thereto.
(c) "Committee" shall mean the Compensation Committee of the Board,
or such other Board committee as may be designated by the Board to
administer the Plan; provided that the Committee shall consist solely of
two or more directors, each of whom is a "disinterested person" within the
meaning of Rule 16b-3 under the Exchange Act.
(d) "Eligible Employee" shall mean each executive officer of
PaineWebber, including those employed by subsidiaries, and other key
executives selected by the Committee.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time, including rules thereunder and successor
provisions and rules thereto.
(f) "Fair Market Value" shall mean the fair market value of Stock,
Awards, or other property as determined by the Committee or under
procedures established by the Committee. Unless otherwise determined by
the Committee, the Fair Market Value of Stock as of any given date shall
be the mean between the high and low sales prices of Stock on the stock
exchange or market on which Stock is primarily traded on the date as of
which such value is being determined or, if there shall be no sale on that
date, then on the basis of the average of the means between the high and
low sales prices of Stock on the nearest date before and the nearest date
after the date on which such value is being determined.
<PAGE> 5
(g) "ISO" shall mean any Option intended to be and designated as an
incentive stock option within the meaning of Section 422 of the Code.
(h) "Participant" shall mean an Eligible Employee who has been
granted an Award under the Plan.
(i) "PaineWebber" shall mean Paine Webber Group Inc.
(j) "Stock" shall mean PaineWebber's Common Stock, par value $1.00
per share, and such other securities as may be substituted (or
resubstituted) for Stock pursuant to Section 4.
3. Administration.
(a) Authority of the Committee. The Plan shall be administered by
the Committee, no member of which shall be eligible to participate in the
Plan. The Committee shall have full and final authority, in each case
subject to and consistent with the provisions of the Plan, to select
Participants, grant Awards, determine the type, number, and other terms
and conditions of, and all other matters relating to, Awards, prescribe
Award agreements (which need not be identical for each Participant) and
rules and regulations for the administration of the Plan, construe and
interpret the Plan and Award agreements and correct defects, supply
omissions, or reconcile inconsistencies therein, and to make all other
decisions and determinations as the Committee may deem necessary or
advisable for the administration of the Plan.
(b) Manner of Exercise of Committee Authority. The Committee shall
exercise sole and exclusive discretion on any matter relating to a
Participant subject to Section 16 of the Exchange Act if and to the extent
it deems necessary or advisable to obtain the exemption under Rule 16b-3
under the Exchange Act. Any action of the Committee shall be final,
conclusive, and binding on all persons, including PaineWebber, its
subsidiaries, Participants, persons claiming rights from or through a
Participant, and stockholders. The express grant of any specific power to
the Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee. The
Committee may delegate to officers or managers of PaineWebber or any
subsidiary, or committees thereof, the authority, subject to such terms as
the Committee shall determine, to perform administrative functions and,
with respect to Participants not subject to Section 16 of the Exchange
Act, to perform any such other functions as the Committee may determine,
to the extent permitted under Rule 16b-3 and applicable law.
(c) Limitation of Liability. The Committee may appoint agents to
assist it in administering the Plan. The Committee and each member thereof
shall be entitled to, in good faith, rely or act upon any report or other
information furnished to him or her by any officer or employee of
PaineWebber or a subsidiary, PaineWebber's independent certified public
accountants, consultants or any other agent assisting in the
administration of the Plan. Members of the Committee and any officer or
employee of PaineWebber or a subsidiary acting at the direction or on
behalf of the Committee shall not be personally liable for any action or
determination taken or made in good faith with respect to the
- 2 -
<PAGE> 6
Plan, and shall, to the extent permitted by law, be fully indemnified and
protected by PaineWebber with respect to any such action or determination.
4. Stock Subject to Plan. Subject to adjustment as provided in Section
8(c), the total number of shares of Stock reserved and available for issuance
in connection with Awards granted under the Plan in each calendar year during
any part of which the Plan is in effect shall be 975,000; provided that such
number shall be increased in any calendar year by the number of shares of Stock
which were available in such previous calendar years but which are neither
subject to outstanding Awards nor were previously delivered to a Participant
(or a trust established under Section 9(g)) in settlement of Awards. In
addition, during the term in which the Plan is in effect, the number of shares
of Stock reserved and available for issuance in connection with Awards under
the Plan shall include the remaining shares of Stock that are available or
become available following termination of the PaineWebber 1990 Stock Award and
Option Plan. Notwithstanding anything to the contrary, no more than 1,500,000
shares of Stock shall be available for grants of ISOs or Stock Appreciation
Rights in tandem with ISOs. When Awards that may be settled by delivery of
stock to the Participant are granted and while they are outstanding, shares
relating to an Award will be counted against the limitation set forth in this
Section 4 in accordance with Rule 16b-3. In the case of Awards valued by
reference to Stock but which may be settled only by delivery to the Participant
of cash or property other than Stock ("Other Awards"), no such Other Award may
be granted if and to the extent that a number of shares to which such Other
Award relates, when added to the number of shares to which all Other Awards
relate, exceeds a number equal to the total number of shares of Stock reserved
and available in such calendar year (without adjustment for grants in that year
of Awards that may be settled by delivery of Stock to Participants). The
Committee may adopt reasonable counting procedures, consistent with Rule 16b-3,
to ensure appropriate counting, avoid double counting (as, for example, in the
case of tandem or substitute awards), and make adjustments if the number of
shares actually delivered differs from the number of shares previously counted
in connection with an Award. Shares subject to an award that is forfeited or
settled in cash or otherwise terminated without a delivery of shares to the
Participant, including shares withheld in payment of taxes relating to Awards
and the number of shares equal to the number of shares surrendered in payment
of the exercise price of Options (or any other Awards in the nature of purchase
rights) or taxes relating to Awards, will again be available for Awards under
the Plan, except that, if any such shares could not again be available under
Rule 16b-3 for Awards to a Participant who is subject to Section 16 of the
Exchange Act, such shares shall be available exclusively for Awards to
Participants who are not subject to Section 16. Any shares delivered under the
Plan may consist, in whole or in part, of authorized and unissued shares or
treasury shares.
5. Eligibility. Eligible Employees may be granted Awards under the Plan.
In each calendar year during any part of which the Plan is in effect, an
Eligible Employee may not be granted Awards relating to more than 450,000
shares of Stock, subject to adjustment as provided in Section 8(c), under each
of Section 6(b), 6(c), 6(d), 6(e), 6(f), or 6(h) of the Plan. With respect to
cash awards under Section 6(h) or Other Awards settled in cash, no amount may
be paid that exceeds the greater of the Fair Market Value of the number of
shares of Stock set forth in the preceding sentence at the date of grant or the
date of settlement of the Award (this limitation is separate and not affected
by the number of Awards granted during such calendar year subject to the
limitation in the preceding sentence).
- 3 -
<PAGE> 7
6. Specific Terms of Awards.
(a) General. Awards may be granted on the terms and conditions set
forth in this Section 6. In addition, the Committee may impose on any
Award or the exercise thereof, at the date of grant or thereafter (subject
to Section 8(e)), such additional terms and conditions, not inconsistent
with the provisions of the Plan, as the Committee shall determine,
including terms requiring forfeiture of Awards in the event of
termination of employment by the Participant. The Committee shall retain
full power to accelerate or waive, at any time, any term or condition of
any Award that is not mandatory under the Plan. Except in cases in which
the Committee is specifically authorized to require other forms of
consideration by the Plan, or to the extent other forms of consideration
must be paid to satisfy the requirements of the Delaware General
Corporation Law, only services may be required as consideration for the
grant (but not the exercise) of any Award.
(b) Options. The Committee is authorized to grant Options to
Participants on the following terms and conditions:
(i) Exercise Price. The exercise price per share of Stock
purchasable under an Option shall be determined by the
Committee, provided that such exercise price shall be not less
than the Fair Market Value of a share on the date of grant of
such Option except as provided under Section 7(a) hereof.
(ii) Time and Method of Exercise. The Committee shall at the
date of grant or thereafter, determine the time or times at
which or the circumstances under which an Option may be
exercised in whole or in part, the methods by which such
exercise price may be paid or deemed to be paid, the form of
such payment, including, without limitation, cash, Stock, other
Awards or awards issued under other PaineWebber plans, or other
property (including notes or other contractual obligations of
Participants to make payment on a deferred basis, such as
through "cashless exercise" arrangements, to the extent
permitted by applicable law), and the methods by or forms in
which Stock will be delivered or deemed to be delivered to
Participants.
(iii) ISOs. The terms of any ISO granted under the Plan shall
comply in all respects with the provisions of Section 422 of
the Code, including but not limited to the requirements that no
ISO shall be granted more than ten years after the effective
date of the Plan, no ISO shall be exercisable more than ten
years after the date of grant, and ISOs shall not be
transferable otherwise than by will or the laws of descent and
distribution and shall be exercisable, during the Participant's
lifetime, only by the Participant.
(c) Stock Appreciaiton Rights. The Committee is authorized to grant
Stock Appreciation Rights ("SARs") to Participants on the following terms
and conditions:
(i) Right of Payment. An SAR shall confer on the Participant to
whom it is granted a right to receive, upon exercise thereof,
the excess of (A) the Fair Market Value of one share of Stock
on the date of exercise (or, if the
- 4 -
<PAGE> 8
Committee shall so determine in the case of any such right other
than one related to an ISO, the Fair Market Value of one share
at any time during a specified period before or after the date
of exercise, or, in the case of a "Limited SAR," the Fair
Market Value determined by reference to amounts paid or payable
in connection with a change in control of PaineWebber, as
specified by the Committee), over (B) the grant price of the SAR
as determined by the Committee as of the date of grant of the
SAR.
(ii) Other Terms. The Committee shall determine at the date of grant
or thereafter, the time or times at which and the
circumstances under which an SAR may be exercised in whole or in
part, the method of exercise, method of settlement, form of
consideration payable in settlement, method by or forms in which
Stock will be delivered or deemed to be delivered to
Participants, whether or not an SAR shall be in tandem or in
combination with any other Award, and any other terms and
conditions of any SAR. Limited SARs that may only be exercised
in connection with a change in control or other event as
specified by the Committee may be granted on such terms, not
inconsistent with this Section 6(c), as the Committee may
determine. Limited SARs may be either freestanding or in tandem
with other Awards.
(d) Restricted Stock. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and conditions:
(i) Issuance and Restrictions. Restricted Stock shall be subject to
such restrictions on transferability and other restrictions,
if any, as the Committee may impose, which restrictions may
lapse separately or in combination at such times, under such
circumstances, in such installments, or otherwise, as the
Committee may determine at the date of grant or thereafter.
Except to the extent restricted under the terms of the Plan and
any Award agreement relating to the Restricted Stock, a
Participant granted Restricted Stock shall have all of the
rights of a stockholder including, without limitation, the right
to vote Restricted Stock and the right to receive dividends
thereon. During the restricted period applicable to the
Restricted Stock, subject to Section 8(b) below, the Restricted
Stock may not be sold, transferred, pledged, margined or
otherwise encumbered by the Participant.
(ii) Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment during the applicable restriction
period, Restricted Stock that is at that time subject to
restrictions shall be forfeited and reacquired by PaineWebber;
provided that the Committee may provide, by rule or regulation
or in any Award agreement, or may determine in any individual
case, that restrictions or forfeiture conditions relating to
Restricted Stock will be waived in whole or in part in the event
of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part the
forfeiture of Restricted Stock.
- 5 -
<PAGE> 9
(iii) Certificates for Stock. Restricted Stock granted under the Plan
may be evidenced in such manner as the Committee shall
determine. If certificates representing Restricted Stock are
registered in the name of the Participant, the Committee may
require such certificates to bear an appropriate legend
referring to the terms, conditions, and restrictions applicable
to such Restricted Stock, with PaineWebber to retain physical
possession of the certificates, and/or the Participant to
deliver a stock power to PaineWebber, endorsed in blank,
relating to the Restricted Stock.
(iv) Dividends. Unless otherwise determined by the Committee, Stock
distributed in connection with a Stock split or Stock
dividend, and other property distributed as a dividend, shall be
subject to restrictions and a risk of forfeiture to the same
extent as the Restricted Stock with respect to which such Stock
or other property has been distributed. As a condition to the
grant of an Award of Restricted Stock, the Committee may require
that any cash dividends paid on a share of Restricted Stock be
automatically reinvested in additional shares of Restricted
Stock or applied to the purchase of additional Awards under the
Plan.
(e) Restricted Units. The Committee is authorized to grant
Restricted Units ("RUs") to Participants which are rights to receive
Stock, cash or a combination thereof at the end of a specified deferral
period, subject to the following terms and conditions:
(i) Award and Restrictions. Satisfaction of an RU Award will occur
upon expiration of the deferral period specified for an Award
of RUs by the Committee (or, if permitted by the Committee, as
elected by the Participant). In addition, RUs shall be subject
to such restrictions as the Committee may impose, if any, which
restrictions may lapse at the expiration of the deferral period
or at earlier specified times, separately or in combination, in
installments, or otherwise, as the Committee may determine. RU
Awards may be satisfied by delivery of Stock, cash equal to the
Fair Market Value of the specified number of shares of Stock
covered by the RU Award, or a combination thereof, as determined
by the Committee at the date of grant or thereafter.
(ii) Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment (as determined under criteria
established by the Committee) during the applicable deferral
period or portion thereof to which forfeiture conditions apply
(as provided in the Award agreement evidencing the RUs), all RUs
that are at that time subject to deferral (other than a deferral
at the election of the Participant) shall be forfeited; provided
that the Committee may provide, by rule or regulation or in any
Award agreement, or may determine in any individual case, that
restrictions or forfeiture conditions relating to RUs will be
waived in whole or in part in the event of terminations
resulting from specified causes, and the Committee may in other
cases waive in whole or in part the forfeiture of RUs.
- 6 -
<PAGE> 10
(iii) Dividend Equivalents. Unless otherwise determined by the
Committee at date of grant, Dividend Equivalents on the
specified number of shares of Stock covered by the RU Award
will be paid with respect to RU Awards either at the dividend
payment date in cash or in shares of unrestricted Stock having
a Fair Market Value equal to the amount of such dividends, or
the payment of such dividends shall be deferred and/or the
amount or value thereof automatically reinvested in additional
RUs, other Awards, or other investment vehicles, as the
Committee shall determine or permit the Participant to elect.
Unless otherwise determined by the Committee, Stock distributed
in connection with a Stock split or Stock dividend, and other
property distributed as a dividend, shall be subject to
restrictions, a risk of forfeiture, and/or deferral to the same
extent as the RUs with respect to which such Stock or other
property has been distributed.
(f) Bonus Stock and Awards in Lieu of Cash Obligations. The
Committee is authorized to grant Stock as a bonus, or to grant Stock or
other Awards in lieu of PaineWebber obligations to pay cash or deliver
other property under other plans, provided that, in the case of
Participants subject to Section 16 of the Exchange Act, such grants or
Awards are made in a manner that complies with applicable requirements of
Rule 16b-3 so that the acquisition of Stock or Awards hereunder shall be
exempt from liability under Section 16(b) of the Exchange Act, to the
extent such compliance is deemed necessary or appropriate by the
Committee. Stock or Awards granted hereunder shall be subject to such
other terms as shall be determined by the Committee.
(g) Dividend Equivalents. The Committee is authorized to grant
Dividend Equivalents to a Participant, entitling the Participant to
receive cash, Stock, other Awards, or other property equal in value to
dividends paid with respect to a specified number of shares of Stock, or
other periodic payments. Dividend Equivalents may be awarded on a
free-standing basis or in connection with another Award. The Committee may
provide that Dividend Equivalents will be paid or distributed when accrued
or will be deemed to have been reinvested in additional Stock, Awards, or
other investment vehicles as the Committee may specify.
(h) Other Stock-Based Awards. The Committee is authorized, subject
to limitations under applicable law, to grant to Participants such other
Awards that may be denominated or payable in, valued in whole or in part
by reference to, or otherwise based on, or related to, Stock, as deemed by
the Committee to be consistent with the purposes of the Plan, including,
without limitation, convertible or exchangeable debt securities, other
rights convertible or exchangeable into Stock, purchase rights for Stock,
Awards with value and payment contingent upon performance of PaineWebber
or any other factors designated by the Committee, and Awards valued by
reference to the book value of Stock or the value of securities of or the
performance of specified subsidiaries. The Committee shall determine the
terms and conditions of such Awards. Stock delivered pursuant to an Award
in the nature of a purchase right granted under this Section 6(h) shall be
purchased for such consideration, paid for at such times, by such methods,
and in such forms, including, without limitation, cash, Stock, other
Awards, or other property, as the Committee shall determine. Cash awards,
as an element of or supplement to any other Award under the Plan, may also
be authorized pursuant to this Section 6(h).
- 7 -
<PAGE> 11
7. Certain Provisions Applicable to Awards.
(a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards
granted under the Plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with, or in substitution or
exchange for, any other Award or award granted under any plan of
PaineWebber, any subsidiary, or any business entity to be acquired by
PaineWebber or a subsidiary, or any other right of a Participant to
receive payment from PaineWebber or any subsidiary. Such additional,
tandem, and substitute or exchange Awards may be granted at any time. If
an Award is granted in substitution or exchange for another Award or
award, the Committee shall require the surrender of such other Award or
award in consideration for the grant of the new Award. In addition, grants
of Awards in lieu of cash compensation, including in lieu of cash amounts
payable under other plans of PaineWebber, in which the value of Stock
subject to the Award is equivalent in value to the cash compensation (for
example, RUs or Restricted Stock), or in which the exercise price, grant
price, or purchase price of the Award in the nature of a right that may be
exercised is equal to Fair Market Value of the underlying Stock minus the
value of the cash compensation surrendered (for example, Options granted
with an exercise price "discounted" by the amounted of the cash
compensation surrendered), are specifically authorized.
(b) Performance Conditions. The right of the Participant to exercise
or receive a grant or settlement of any Award, and the timing thereof, may
be subject to such performance conditions as may be specified by the
Committee. Any Award subject to such conditions may be denominated
"perfomance shares," "performance units," or any other title deemed
appropriate by the Committee.
(c) Term of Awards. The term of each Award shall be for such period
as may be determined by the Committee; provided that in no event shall the
term of any ISO or any SAR granted in tandem therewith exceed a period of
ten years (or such shorter term as may be required under Section 422 of
the Code).
(d) Form and Timing of Payment Under Awards; Deferrals. Subject to
the terms of the Plan and any applicable Award agreement, payments to be
made by PaineWebber or a subsidiary upon the exercise of an Option or
other Award or settlement of an Award may be made in such forms as the
Committee shall determine, including, without limitation, cash, Stock,
other Awards, or other property, and may be made in a single payment or
transfer, in installments, or on a deferred basis. The settlement of any
Award may be accelerated, and cash paid in lieu of Stock in connection
with such settlement, in the discretion of the Committee or upon
occurrence of one of more specified events, including a change in control
as defined by the Committee (subject to Section 8(e) of the Plan) or
permitted at the election of the Participant. Payments may include,
without limitation, provisions for the payment or crediting of reasonable
interest on installment or deferred payments or the grant or crediting of
Dividend Equivalents in respect of installment or deferred payments
denominated in Stock.
(e) Rule 16b-3 Compliance. It is the intent of PaineWebber that this
Plan comply in all respects with applicable provisions of Rule 16b-3 or
Rule 16a-1(c)(3) under the Exchange Act in connection with any grant of
Awards to or other transaction by a
- 8 -
<PAGE> 12
Participant who is subject to Section 16 of the Exchange Act (except
for transactions exempted under alternative Exchange Act Rules or
acknowledged in writing to be non-exempt by such Participant).
Accordingly, if any provision of this Plan or any Award agreement does not
comply with the requirements of Rule 16b-3 or Rule 16a-1(c)(3) as then
applicalbe to any such transaction, such provision will be construed or
deemed amended to the extent necessary to conform to the applicable
requirements of Rule 16b-3 or Rule 16a-1(c)(3) so that such Participant
shall avoid liability under Section 16(b). In addition, the per share
exercise price of any Option, grant price of any SAR, or purchase price of
any other Award conferring a right to purchase Stock shall be not less
than any specified percentage of the Fair Market Value of Stock at the
date of grant of the Award then required in order to comply with Rule
16b-3.
(f) Performance-Based Awards to "Covered Employee". Other provisions
of the Plan notwithstanding, the provisions of this Section 7(f) shall
apply to any Award the exercisability or settlement of which is subject to
the achievement of performance conditions (other than an Option or SAR
granted with an exercise or base price at least equal to 100% of Fair
Market Value of Stock on the date of grant) if such Award is granted to a
person who, at the time of grant, is a "covered employee." The definition
of "covered employee," and other terms used in this Section 7(f), shall be
interpreted in a manner consistent with Section 162(m) of the Code and
regulations thereunder (including Proposed Regulation 1.162-27). The
performance goals for an Award subject to this Section 7(f) shall consist
of one or more business criteria and a targeted level or levels of
performance with respect to such criteria, as specified by the Committee
but consistent with this Section 7(f). Performance goals shall be
objective and shall otherwise meet the requirements of Section
162(m)(4)(C) of the Code and regulations thereunder (including Proposed
Regulation 1.162-27(e)(2)). The following business criteria for
PaineWebber on a consolidated basis shall be used by the Committee in
connection with a performance goal: (1) net earnings; (2) fully diluted
earnings per common share; (3) return on average common equity; (4)
pre-tax income; and (5) pre-tax operating income before accounting for
incentive compensaiton, corporate charges and the cost of restructuring and
discontinued operations.
Achievement of performance goals shall be measured over a period of
one, two, three or four years, as specified by the Committee. No business
criteria other than those named above may be used in establishing the
performance goal for an Award to a covered executive. For each such Award
relating to a covered executive, the Committee shall establish the
targeted level or levels of performance for each busines criteria.
Performance goals may differ for Awards under this Section 7(f) to
different covered executives. The Committee may determine that an Award
under this Section 7(f) shall be payable upon achievement of any one of
the performance goals or may require that two or more of the performance
goals must be achieved in order for an Award to be payable. The Committee
may, in its discretion, reduce the amount of a payout otherwise to be made
in conneciton with an Award under this Section 7(f), but may not exercise
discretion to increase such amount, and the Committee may consider other
performance criteria in exercising such discretion. All determinations by
the Committee as to the achievement of performance goals shall be made in
writing. The Committee may not delegate any responsibility under this
Section 7(f).
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<PAGE> 13
8. General Provisions.
(a) Compliance With Legal and Other Requirements. PaineWebber may, in
its discretion, postpone the issuance or delivery of Stock under any Award
until completion of such registration or qualification of such Stock or
other required action under any federal or state law, rule, or regulation,
listing or other required action with respect to any stock exchange or
automated quotation system upon which the Stock or other PaineWebber
securities are listed or designated, or compliance with any other
contractual obligation of PaineWebber, as PaineWebber may consider
appropriate, and may require any Participant to make such representations
and furnish such information as it may consider appropriate in connection
with the issuance or delivery of Stock in compliance with applicable laws,
rules, regulations, listing or designation, or other contractual
obligations.
(b) Limits on Transferability; Beneficiaries. No Award or other right
or interest of a Participant under the Plan shall be pledged, encumbered,
or hypothecated to or in favor or subject to any lien, obligation, or
liability of such Participant to any party other than PaineWebber or a
subsidiary, or assigned or transferred by such Participant otherwise than
by will or the laws of descent and distribution, and such Awards or rights
shall be exercisable during the lifetime of the Participant only by the
Participant or his or her guardian or legal representative.
Notwithstanding the foregoing, subject to the transferability restrictions
applicable to derivative securities under Rule 16b-3 of the Exchange Act
and the limits on the transferability of Options under any registration
statement in effect and applicable to the grant and exercise of such
Options, the Committee may, in its sole discretion, provide that Awards or
other rights or interests of a Participant granted pursuant to the Plan be
transferable, without consideration, to immediate family members (i.e.,
children, grandchildren or spouse), to trusts for the benefit of such
immediate family members and to partnerships in which such family members
are the only partners. The Committee may attach to such transferability
feature such terms and conditions as it deems advisable. In addition, a
Participant may, in the manner established by the Committee, designate a
beneficiary (which may be a person or a trust) to exercise the rights of
the Participant, and to receive any distribution, with respect to any
Award upon the death of the Participant. A beneficiary, guardian, legal
representative, or other person claiming any rights under the Plan from or
through any Participant shall be subject to all terms and conditions of
the Plan and any Award agreement applicalbe to such Participant, except as
otherwise determined by the Committee, and to any additional restrictions
deemed necessary or appropriate by the Committee.
(c) Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, Stock, or other property), recapitalization,
forward or reverse split, reorganization, merger, consolidation, spin-off,
combination, repurchase, share exchange, liquidation, dissolution or other
similar corporate transaction or event, affects the Stock such that an
adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the rights of Participants under the
Plan, then the Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and kind of shares of Stock which may
thereafter be issued in connection with Awards (including the limitations
set forth in Sections 4 and 5), (ii) the number and kind of shares of
Stock issued or issuable in respect of outstanding Awards, and (iii) the
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<PAGE> 14
exercise price, grant price, or purchase price relating to any Award
or, if deemed appropriate, make provisions for payment of cash or other
property with respect to any outstanding Award; provided, in each case,
that, with respect to ISOs, no such adjustment shall be authorized or made
to the extent that such authority or the making of such adjustment would
cause the Plan or the ISO not to comply with Section 422 of the Code. In
addition, the Committee is authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including, without limitaiton, events
described in the preceding sentence) affecting PaineWebber, any subsidiary
or any business division or unit, or the financial statements of
PaineWebber or any subsidiary, or in response to changes in applicalbe
laws, regulations, accounting principles, tax rates and regulations or
business conditions or in view of the Committee's assessment of the
business strategy of PaineWebber, any subsidiary, division or unit
thereof, performance of comparable organizations, economic and business
conditions, personal performance of a Participant, and any other
circumstances deemed relevant; provided that, unless otherwise determined
by the Committee in its sole discretion, no such adjustment shall be
authorized or made if and to the extent that such authority or the making
of such adjustment would cause Options, or Awards subject to Section 7(f),
granted to "covered employees" (as defined in Section 7(f) hereof) to fail
to qualify as "performance-based compensation" under Section 162(m)(4)(c)
of the Code and regulations thereunder (including Proposed Regulations
1.162-27(e)(2)).
(d) Taxes. PaineWebber or any subsidiary is authorized to withhold
from any Award granted, any payment relating to an Award under the Plan,
including from a distribution of Stock, or any payroll or other payment to
a Participant, amounts of withholding and other taxes due in connection
with any transaction involving an Award, and to take such other action as
the Committee may deem advisable to enable PaineWebber and Participants to
satisfy obligations for the payment fo withholding taxes and other tax
obligations relating to any Award. This authority shall include authority
for PaineWebber to withhold or receive Stock or other property and to make
cash payments in respect thereof in satisfaction of a Participant's tax
obligations, either on a mandatory or elective basis in the discretion of
the Committee.
(e) Changes to the Plan and Awards. The Board may amend, alter,
suspend, discontinue, or terminate the Plan or the Committee's authority
to grant Awards under the Plan without the consent of stockholders or
Participants, except that any such action shall be subject to the approval
of PaineWebber's stockholders not later than the annual meeting next
following such Board action if such stockholder approval is required by
any federal or state law or regulation or the rules of any stock exchange
or automated quotation system on which the Stock may then be listed or
quoted, and the Board may otherwise, in its discretion, determine to
submit other such changes to the Plan to stockholders for approval;
provided that, without the consent of an affected Participant no such
Board action may materially and adversely affect the rights of such
Participant under any Award theretofore granted to him or her. The
Committee may waive any conditions or rights under, or amend, alter,
suspend, discontinue, or terminate, any Award theretofore granted and any
Award agreement relating thereto; provided that, without the consent of an
affected Participant, no such Committee action may materially and
adversely affect the rights of such Participant under such Award.
- 11 -
<PAGE> 15
(f) Limitation on Rights Conferred Under Plan. Neither the Plan nor
any action taken hereunder shall be construed as (i) giving any Eligible
Employee or Participant the right to continue as an Eligible Employee,
Participant or in the employ of PaineWebber or a subsidiary, (ii)
interfering in any way with the right of PaineWebber or a subsidiary to
terminate any Eligible Employee's or Participant's employment at any time,
(iii) giving an Eligible Employee or Participant any claim to be granted
any Award under the Plan or to be treated uniformly with other
Participants and employees, or (iv) conferring on a Participant any of the
rights of a stockholder of PaineWebber unless and until the Participant
has validly exercised an Option or Stock is otherwise duly issued or
transferred to the Participant in accordance with the terms of the Award.
(g) Unfunded Status of Awards; Creation of Trusts. The Plan is
intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments payable to a Participant or
obligation to issue Stock pursuant to an Award, nothing contained in the
Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of PaineWebber; provided that the
Committee may authorize the creation of trusts and deposit therein cash,
Stock, other Awards, or other property, or make other arrangements, to
meet PaineWebber's obligations under the Plan. Such trusts or other
arrangements shall be consistent with the "unfunded" status of the Plan
unless the Committee otherwise determines with the consent of each
affected Participant. The trustee of such trusts may be authorized to
dispose of trust assets and reinvest the proceeds in alternative
investments, subject to such terms and conditions as the Committee may
specify and in accordance with applicable law.
(h) Nonexclusivity of the Plan. Neither the adoption of the Plan by
the Board nor its submission to the stockholders of PaineWebber for
approval shall be construed as creating any limitations on the power of
the Board to adopt such other incentive arrangements as it may deem
desirable.
(i) Payments In the Event of Forfeitures; Fractional Shares. Unless
otherwise determined by the Committee, in the event of a forfeiture of an
Award with respect to which a Participant paid cash or other
consideration, the Participant shall be repaid the amount of such cash or
other consideration. No fractional shares of Stock shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in
lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.
(j) Governing Law. The validity, construction, and effect of the
Plan, any rules and regulations relating to the Plan, and any Award
agreement shall be determined in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of laws, and
applicable federal law.
(k) Effective Date. The Plan shall become effective on February 22,
1994, subject to subsequent approval by PaineWebber stockholders at the
1994 annual meeting.
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<PAGE> 1
EXHIBIT 4.2
PAINEWEBBER
________________________________________________________________________________
STOCK OPTION AGREEMENT
under the
1994 EXECUTIVE STOCK AWARD PLAN
________________________________________________________________________________
PAINEWEBBER STOCK OPTION AGREEMENT (the "Agreement"), effective as of
__________________ (the "Effective Date"), between Paine Webber Group Inc.
("PaineWebber") and the individual whose signature appears below (the
"Participant").
The Compensation Committee of the Board of Directors of PaineWebber (the
"Committee") has awarded to the Participant the option to purchase the number
of shares of Stock set forth below (the "Option") under the PaineWebber 1994
Executive Stock Award Plan (the "Plan"), subject to the terms and conditions of
the Plan and this Agreement (including the Stock Option Terms and Conditions
attached hereto).
The Option awarded hereby is a non-qualified stock option and not an
"incentive stock option" as defined in Section 422 of the Code. The Option will
first become exercisable at the time or times specified in Section 3 of the
attached Stock Option Terms and Conditions, and will be subject to expiration,
including early expiration (i.e., forfeiture) in the event of the termination
of the Participant's employment in certain circumstances, as specified in
Section 2(a) hereof.
1. Participant:
Name __________________________________
Address _______________________________
Social Security Number ________________
2. Certain Option Terms:
Total Number of Shares Purchasable Upon Exercise ____________
Exercise Price Per Share ____________
Date of Grant ____________
<PAGE> 2
IN WITNESS WHEREOF, PaineWebber and the Participant have duly executed
this Agreement, as of the Effective Date stated above.
PAINE WEBBER GROUP INC. PARTICIPANT
By ____________________________ By _____________________________
Name _________________________ Name __________________________
Title ________________________
Enclosures: Stock Option Terms and Conditions for 1994 Executive Stock
Award Plan
1994 Executive Stock Award Plan Document
<PAGE> 3
STOCK OPTION TERMS AND CONDITIONS
of Stock Option Agreement under the
1994 Executive Stock Award Plan
________________________________________________________________________________
1. Acceptance of Option; Incorporation of Plan Provisions. The
Participant hereby accepts the Option subject to the terms and conditions set
forth in this Agreement and consents to and agrees to comply with such terms
and conditions. All of the terms and conditions of the Plan are hereby
incorporated by reference in this Agreement as though fully set forth herein.
Terms defined in the Plan but not in this Agreement shall have the meanings set
forth in the Plan. To the extent of any conflict between the provisions of this
Agreement and those of the Plan, the provisions of the Plan shall govern.
Participant acknowledges receipt of a copy of the Plan. This Option is granted
for no consideration other than the services of Participant and Participant's
agreements set forth herein.
2. Expiration of Option.
(a) The Option will expire at the earliest of the following:
(i) Ten years after the Date of Grant (i.e., the close of business on the
day before the tenth anniversary of the Date of Grant);
(ii) One year after the Participant's death;
(iii) One year after the Participant's "Disability" (as defined in the
PaineWebber tax qualified defined pension plan applicable to the
Participant) resulting in a termination of Participant's employment by
PaineWebber;
(iv) One year after the Participant's voluntary retirement from
employment by PaineWebber ("Retirement") on or after his or her "Normal
Retirement Date" (as defined in such pension plan);
(v) One-year after the Participant's early retirement with the consent of
the Committee from employment by PaineWebber ("Retirement");
(vi) Immediately upon the termination of Participant's employment by
PaineWebber for "Cause" (as hereinafter defined); and
(vii) Three months after the Participant's termination of employment by
PaineWebber for reasons other than death, Disability, or Retirement.
(b) For purposes of this Agreement, the term "Cause" shall mean (i) the
willful and continued failure by Participant to perform substantially his or
her duties with PaineWebber (other than such failure resulting from the
Participant's incapacity due to physical or mental illness) or (ii) the
engaging by Participant in illegal conduct, including but not limited to the
violation, in the sole opinion of the Committee, of any state or federal
securities, commodities, or insurance statute or regulation, or (iii) the
engaging by Participant in conduct in violation, in the sole opinion of the
Committee, of any provision of the constitution, by-laws, or rules or
regulations of any securities or commodities or insurance exchange or
association of which
<PAGE> 4
PaineWebber is now or may later become a member or in violation of the Code of
Conduct or published policies of PaineWebber or its subsidiaries, or (iv) the
willful engaging by Participant in any act of serious dishonesty which
adversely affects, or in the sole opinion of the Committee, could in the future
adversely affect, the value, reliability or performance of the Participant to
PaineWebber (including any misrepresentations by Participant to PaineWebber of
prior production levels or any prior or existing customer complaint, or
regulatory, administrative, civil or criminal matter affecting Participant's
employment). For purposes of this definition, no act, or failure to act, on the
part of the Participant shall be considered "willful" unless done, or omitted
to be done, by the Participant in bad faith and without reasonable belief that
his or her action or omission was in, or not opposed to, the best interest of
PaineWebber.
3. Times at Which Option May be Exercised.
(a) Participant may only exercise the Option to purchase Stock at such
times and to the extent that the Option has become exercisable. Except as
provided in this Section 3(a) and Section 3(b) hereof, the Option may not be
exercised to purchase any Stock until the date one year after the "Date of
Grant" appearing in this Agreement (the "Date of Grant"). On each of the first,
second, and third anniversaries of the Date of Grant, the Option will become
cumulatively exercisable for one-third of the total number of shares of Stock
(rounded to the nearest whole share), subject to accelerated exercisability as
provided in this Section 3(a) and Section 3(b) hereof. The foregoing
notwithstanding, the Option will become immediately exercisable in the event of
a "Change in Control" as hereinafter defined.
(b) The provisions of Section 3(a) notwithstanding, in the event of the
death, Disability, or Retirement of the Participant, the Option may be
exercised immediately in full. In the event of termination of the Participant's
employment by PaineWebber or its subsidiaries for any other reason, the Option
may be exercised prior to its expiration only to the extent that the Option was
exercisable on the date of such termination.
(c) "Change in Control" shall mean the occurrence of any of the following
events:
(i) Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than PaineWebber, a subsidiary, any trustee or other
fiduciary holding securities under an employee benefit plan of PaineWebber
or a subsidiary, or any corporation owned, directly or indirectly, by the
stockholders of PaineWebber in substantially the same proportions as their
contemporaneous ownership of voting securities of PaineWebber, is or
becomes a "20% Beneficial Owner." For purposes of this provision, a "20%
Beneficial Owner" shall mean a person who is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of PaineWebber representing 20% or more of the
combined voting power of PaineWebber's then-outstanding voting securities;
provided that (A) the term "20% Beneficial Owner" shall not include any
Beneficial Owner who has crossed such 20% percent threshold solely as a
result of an acquisition of securities directly from PaineWebber, or
solely as a result of an acquisition by PaineWebber of PaineWebber
securities, until such time thereafter as such person acquires additional
voting securities other than directly from PaineWebber and, after giving
effect to such acquisition, such person would constitute a 20% Beneficial
Owner, and (B) with respect to any person who is and remains eligible to
file a Schedule
- 2 -
<PAGE> 5
13G pursuant to Rule 13d-1(b)(1) under the Exchange Act with respect to
PaineWebber securities, there shall be excluded from the number of
securities deemed to be beneficially owned by such person for purposes of
determining whether such person is a 20% Beneficial Owner a number of
securities representing 10% of the combined voting power of PaineWebber's
then-outstanding voting securities;
(ii) During any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of PaineWebber,
together with any new director (other than a director designated by a
person who has entered into an agreement with PaineWebber to effect a
transaction described in paragraph (i), (iii), or (iv) hereof) whose
election by the Board or nomination for election by PaineWebber's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously
so approved (the "Continuing Directors"), cease for any reason to
constitute at least a majority thereof;
(iii) The stockholders of PaineWebber approve a merger, consolidation,
recapitalization, or reorganization of PaineWebber, or a reverse stock
split of any class of voting securities of PaineWebber, or the
consummation of any such transaction if stockholder approval is not
obtained, other than any such transaction which would result in at least
80% of the total voting power represented by the voting securities of
PaineWebber or the surviving entity outstanding immediately after such
transaction being beneficial owned by persons who together beneficially
owned at least 80% of the combined voting power of the voting securities
of PaineWebber outstanding immediately prior to such transaction, with the
relative voting power of each such continuing holder compared to the
voting power of each other continuing holder not substantially altered as
a result of the transaction; provided that, for purposes of this paragraph
(iii), such continuity of ownership (and preservation of relative voting
power) shall be deemed to be satisfied if the failure to meet such 80%
threshold (or to substantially preserve such relative voting power) is due
solely to the acquisition of voting securities by an employee benefit plan
of PaineWebber or its subsidiaries, such surviving entity, or of any
subsidiary of PaineWebber or such surviving entity;
(iv) The stockholders of PaineWebber approve a plan of complete
liquidation of PaineWebber or an agreement for the sale or disposition by
PaineWebber of all or substantially all of PaineWebber's assets (or any
transaction having a similar effect); or
(v) Any other event which the Board of Directors (or the Committee, if
and to the extent that the Committee must exercise sole discretion over
the matter in order to comply with applicable requirements of Rule 16b-3
under the Exchange Act), determines shall constitute a Change in Control
for purposes of this Agreement;
provided that a Change in Control shall not be deemed to have occurred under
this Agreement if, prior to the occurrence of a specified event that would
otherwise constitute a Change in Control under paragraphs (i) through (iv)
hereof, the Continuing Directors of PaineWebber then in office,
- 3 -
<PAGE> 6
by a majority vote thereof, determine that the occurrence of such specified
event shall not be deemed to be a Change in Control hereunder or shall not be
deemed to be a Change in Control with respect to a particular Participant under
this Agreement if the Change in Control results from actions or events in which
such Participant is a participant in a capacity other than solely as an
officer, employee or director of PaineWebber or its subsidiaries.
4. Nontransferability. Neither the Option or other right of the
Participant relating thereto shall be pledged, encumbered, or hypothecated to
or in favor or subject to any lien, obligation, or liability of such
Participant to any party other than PaineWebber or a subsidiary, or assigned.
Unless otherwise determined by the Committee in accordance with Section 8(b) of
the Plan, the Option or other right of the Participant relating thereto shall
not be the transferred by the Participant otherwise than by will or the laws of
descent and distribution, and such Option and right shall be exercisable during
the lifetime of the Participant only by the Participant or his or her guardian
or legal representative. The Participant shall be entitled to designate a
beneficiary(ies) who may exercise the Option or other right upon the death of
the Participant.
5. Manner of Exercise of Option.
(a) In order to exercise all or any part of the Option, the Participant
must give written notice to PaineWebber, signed by the Participant. That notice
should be sent or delivered to:
Paine Webber Group Inc.
1285 Avenue of the Americas
New York, NY 10019
Attention: Executive Vice President, Administration
The notice should refer to this Option (including the Date of Grant), and the
notice should include the following information:
(i) The number of shares of Stock for which the Option is being
exercised;
(ii) The name or names of the persons in whose names the certificate(s)
for the shares of Stock issuable upon exercise should be registered; and
(iii) The address to which such certificate(s) should be sent or
delivered.
In addition to such notice, the Participant must include a check payable
to "Paine Webber Group Inc." for the total exercise price of the number of
shares to be purchased upon exercise of the Option, unless an approved
alternative payment method is then permitted under the Plan. An approved
alternative payment method will be for the Participant to pay all or a part of
such exercise price by delivering and transferring to PaineWebber that number
of shares of Stock previously acquired by the Participant (and owned for the
period of six months before the date of exercise) with an aggregate Fair Market
Value (determined in accordance with the Plan) equal to the aggregate exercise
price of that number of shares of Stock for which the Option is being exercised
or such lesser portion of the aggregate purchase price as may be specified by
the Participant.
- 4 -
<PAGE> 7
Upon satisfaction of all applicable requirements for the exercise of the
Option (including those under Section 6 relating to taxes), a certificate or
certificates for the number of shares of Stock purchased will be issued in the
denominations and registered in the names of the persons set forth by the
Participant on the notice, and such certificate(s) will be delivered to the
Participant or as directed by the Participant.
(b) Unless otherwise determined by the Committee, upon exercise in which
the exercise price is paid by delivering and transferring to PaineWebber
previously acquired Stock, the Participant may defer receipt of Stock pursuant
to a valid election filed under the Senior Officer Deferred Compensation Plan
and otherwise in accordance with such rules as the Committee may from time to
time approve.
6. Taxes. Upon the exercise of the Option, PaineWebber shall be entitled
to require as a condition of delivery of Stock that the Participant remit or,
in appropriate cases (including cases in which taxation of the Participant is
deferred), agree to remit when due an amount sufficient to satisfy all federal,
state and local withholding and employment tax requirements relating to such
exercise. Subject to the approval of the Committee, the Participant will be
entitled to elect to have PaineWebber withhold from the Stock to be delivered
upon the exercise of the Option, or to elect to deliver to PaineWebber from
shares of Stock owned separately by the Participant, a sufficient number of
such shares of Stock to satisfy the federal, state and local withholding and
employment tax obligations relating to the Participant's exercise of the
Option (and the Company's withholding obligations) to the extent, if any,
permitted under rules and regulations adopted by the Committee and in effect at
the time of such exercise. In such case, the Stock withheld or the Stock
surrendered will be valued at the Fair Market Value determined in accordance
with the Plan.
7. Adjustments. The number of shares purchasable upon exercise of the
Option, and other terms hereof, shall be appropriately adjusted, in the
discretion of the Committee, in accordance with Section 8(c) of the Plan.
8. Limitation of Rights Conferred under the Plan. Neither the grant of
the Option nor anything in this Agreement or the Plan shall be construed as (i)
giving the Participant or employee the right to continue as a Participant or
employee of PaineWebber or a subsidiary, (ii) interfering in any way with the
right of PaineWebber or a subsidiary to terminate the Participant's or
employee's employment at any time, (iii) giving the Participant or employee any
claim to be granted any Option or other Award under the Plan or to be treated
uniformly with other Participants and employees, or (iv) conferring on the
Participant any of the rights of a stockholder of PaineWebber unless and until
the Participant has validly exercised an Option.
9. Miscellaneous.
(a) This Agreement shall bind and inure to the benefit of the
Participant and his or her executors or administrators, heirs and personal and
legal representatives, and to PaineWebber and its successors and assigns.
(b) This Agreement shall be construed and enforced in accordance with
Section 8(j) of the Plan.
(c) This Agreement, together with the Plan, sets forth the entire
agreement between the parties with respect to the subject matter hereof, and
there are no agreements,
-5-
<PAGE> 8
understandings, warranties or representations, written, express or implied,
between them with respect to the Option other than as set forth herein or
therein.
(d) When used herein, "PaineWebber" shall mean Paine Webber Group Inc.
and shall include any corporation which, at the time of reference, is a
subsidiary of Paine Webber Group Inc. within the meaning of Section 424(f) of
the Code.
(e) Except as otherwise expressly provided in this Agreement, this
Agreement may not be modified, amended or terminated except by a writing
signed by both parties hereto. No waiver of any provision hereof shall be
effective unless evidenced by a writing signed by the party against whom it is
sought to be enforced. No waiver of any breach of any term hereof shall be
construed as a waiver of any subsequent breach of such term or as a waiver of
any other term hereof.
- 6 -
<PAGE> 1
EXHIBIT 4.3
PAINEWEBBER
________________________________________________________________________________
RESTRICTED STOCK UNIT AGREEMENT
under the
1994 EXECUTIVE STOCK AWARD PLAN
________________________________________________________________________________
PAINEWEBBER RESTRICTED STOCK UNIT AGREEMENT (the "Agreement"),
effective as of __________ (the "Effective Date"), between Paine Webber Group
Inc. ("PaineWebber") and the individual whose signature appears below (the
"Particiapnt").
The Compensation Committee of the Board of Directors of PaineWebber
(the "Committee") has awarded to Participant the number of Restricted Stock
Units ("RSUs") set forth below under the PaineWebber 1994 Executive Stock Award
Plan (the "Plan"), subject to the terms, definitions, and conditions of the
Plan and this Agreement (including the RSU Terms and Conditions attached
hereto.)
The RSUs awarded hereby are subject to forfeiture in the event of the
termination of Participant's employment prior to the expiration of the
Restricted Period specified below opposite such number of RSUs, as specified in
Section 4(a) and (b) hereof. Upon expiration of the Restricted Period specified
below opposite RSUs, PaineWebber will distribute to the Participant one share
of Stock for each such RSU subject to any deferral period mandated by the
Committee and/or elected by the Participant under the PaineWebber Senior
Officer Deferred Compensation Plan. The expiration of the Restricted Period
(and any subsequent deferral period) is subject to acceleration as specified in
Section 4(a) hereof.
1. Participant:
Name _________________________________________
Address _________________________________________
Social Security Number _________________________
2. Total Number of RSUs Granted: ________________
3. Restricted Periods:
Number of Restricted Period
RSUs End Date
______________ _________________
______________ _________________
______________ _________________
______________ _________________
* * * *
<PAGE> 2
IN WITNESS WHEREOF, PaineWebber and the Participant have duly executed
this Agreement, as of the Effective Date stated above.
PAINE WEBBER GROUP INC. PARTICIPANT
By ______________________________ By ______________________________
Name ___________________________ Name ___________________________
Title __________________________
Enclosures: Restricted Stock Unit Terms and Conditions for 1994 Executive Stock
Award Plan
1994 Executive Stock Award Plan Document
<PAGE> 3
RESTRICTED STOCK UNIT TERMS AND CONDITIONS
of the Restricted Stock Unit Agreement under the
1994 Executive Stock Award Plan
________________________________________________________________________________
1. Acceptance of RSUs; Incorporation of Plan Provisions. The Participant
hereby accepts the RSUs subject to the terms and conditions set forth in this
Agreement and consents to and agrees to comply with such terms and conditions.
All of the terms and conditions of the Plan are hereby incorporated by
reference in this Agreement as though fully set forth herein. Terms defined in
the Plan but not in this Agreement shall have the meanings set forth in the
Plan. To the extent of any conflict between the provisions of this Agreement
and those of the Plan, the provisions of the Plan shall govern. Participant
acknowledges receipt of a copy of the Plan.
2. Rights Under RSUs Generally. The RSUs awarded hereunder to the
Participant, together with such additional RSUs (if any) credited to the
Participant pursuant to Section 5 hereof, entitle the Participant to receive,
upon expiration of the Restricted Period applicable to each such RSU (as
specified on the signature page of this Agreement and in Sections 4 and 6
hereof), delivery by PaineWebber of one share of PaineWebber's Stock for each
such RSU not theretofore forfeited, subject to mandatory deferral by the
Committee and/or elective deferral by the Participant under the PaineWebber
Senior Officer Deferred Compensation Plan. Until such Stock is issued or
transferred and delivered in settlement of RSUs, the Participant shall have no
rights of a stockholder (including no rights to vote or receive dividends or
distributions) with respect to RSUs or the Stock that may ultimately be issued
or transferred and delivered in settlement of the RSUs. The Participant will,
however, be entitled to receive payments of dividend equivalents with respect
to such RSUs as provided in Section 5 hereof subject to elective deferral by
the Participant under the PaineWebber Senior Officer Deferred Compensation
Plan.
3. Nontransferability. The rights of the Participant with respect to
RSUs may not be assigned or transferred, otherwise than by will or the laws of
descent and distribution, except that the Participant shall be entitled to
designate in writing the beneficiary to receive distributions, if any, under
this Agreement in the event of the Participant's death.
4. Expiration of Restricted Period.
(a) The Restricted Period will end ("vesting" will occur) with respect
the number of RSUs specified in this Agreement on the date designated as
"Restricted Period End Date" opposite such number of RSUs on the signature page
of this Agreement. The foregoing notwithstanding, the Restricted Period
applicable to all RSUs under this Agreement shall expire on an accelerated
basis at the time the Participant's employment with PaineWebber terminates as a
result of his or her (i) death, (ii) "Disability" (as defined in the
PaineWebber tax qualified defined benefit pension plan applicable to the
Participant), or (iii) voluntary retirement on or after his or her "Normal
Retirement Date" (as defined in such pension plan) or early retirement with the
consent of the Committee from employment by PaineWebber ("Retirement"), and
such Restricted Period shall expire on an accelerated basis upon the occurrence
of a Change in Control (as defined below).
<PAGE> 4
(b) In the event that, prior to the expiration of the Restricted Period
applicable to RSUs, the Participant shall cease to be an employee of
PaineWebber for any reason other than death, Disability, or Retirement, such
RSUs shall automatically be forfeited by the Participant.
(c) "Change in Control" shall mean the occurrence of any of the following
events:
(i) Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than PaineWebber, any trustee or other fiduciary
holding securities under an employee benefit plan of PaineWebber, or any
corporation owned, directly or indirectly, by the stockholders of
PaineWebber in substantially the same proportions as their contemporaneous
ownership of voting securities of PaineWebber, is or becomes a "20%
Beneficial Owner." For purposes of this provision, a "20% Beneficial
Owner" shall mean a person who is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of PaineWebber representing 20% or more of the combined voting
power of PaineWebber's then-outstanding voting securities; provided that
(A) the term "20% Beneficial Owner" shall not include any Beneficial Owner
who has crossed such 20% percent threshold solely as a result of an
acquisition of securities directly from PaineWebber, or solely as a result
of an acquisition by PaineWebber of PaineWebber securities, until such
time thereafter as such person acquires additional voting securities other
than directly from PaineWebber and, after giving effect to such
acquisition, such person would constitute a 20% Beneficial Owner; and (B)
with respect to any person who is and remains eligible to file a Schedule
13G pursuant to Rule 13d-1(b)(1) under the Exchange Act with respect to
PaineWebber securities, there shall be excluded from the number of
securities deemed to be beneficially owned by such person for purposes of
determining whether such person is a 20% Beneficial Owner a number of
securities representing 10% of the combined voting power of PaineWebber's
then-outstanding voting securities;
(ii) During any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of PaineWebber,
together with any new director (other than a director designated by a
person who has entered into an agreement with PaineWebber to effect a
transaction described in paragraph (i), (iii), or (iv) hereof) whose
election by the Board or nomination for election by PaineWebber's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously
so approved (the "Continuing Directors"), cease for any reason to
constitute at least a majority thereof;
(iii) The stockholders of PaineWebber approve a merger, consolidation,
recapitalization, or reorganization of PaineWebber, or a reverse stock
split of any class of voting securities of PaineWebber, or the
consummation of any such transaction if stockholder approval is not
obtained, other than any such transaction which would result in at least
80% of the total voting power represented by the voting securities of
PaineWebber or the surviving entity outstanding immediately after such
transaction being beneficially owned by persons who together beneficially
owned at least 80% of the combined voting
- 2 -
<PAGE> 5
power of the voting securities of PaineWebber outstanding immediately
prior to such transaction, with the relative voting power of each such
continuing holder compared to the voting power of each other continuing
holder not substantially altered as a result of the transaction; provided
that, for purposes of this paragraph (iii), such continuity of ownership
(and preservation of relative voting power) shall be deemed to be
satisfied if the failure to meet such 80% threshold (or to substantially
preserve such relative voting power) is due solely to the acquisition of
voting securities by an employee benefit plan of PaineWebber, such
surviving entity, or of any subsidiary of such surviving entity;
(iv) The stockholders of PaineWebber approve a plan of complete liquidation
of PaineWebber or an agreement for the sale or disposition by PaineWebber
of all or substantially all of PaineWebber's assets (or any transaction
having a similar effect); or
(v) Any other event which the Board of Directors (or the Compensation
Committee of the Board of Directors, if and to the extent that the
Compensation Committee must exercise sole discretion over the matter in
order to comply with applicable requirements of Rule 16b-3 under the
Exchange Act), determines shall constitute a Change in Control for
purposes of this Agreement;
provided that a Change in Control shall not be deemed to have occurred under
this Agreement if, prior to the occurrence of a specified event that would
otherwise constitute a Change in Control under paragraphs (i) through (iv)
hereof, the Continuing Directors of PaineWebber then in office, by a majority
vote thereof, determine that the occurrence of such specified event shall not
be deemed to be a Change in Control hereunder or shall not be deemed to be a
Change in Control with respect to a particular Participant under this Agreement
if the Change in Control results from actions or events in which such
Participant is a participant in a capacity other than solely as an officer,
employee or director of PaineWebber.
(d) The Participant may elect to defer the delivery at the end of the
Restricted Period of PaineWebber Stock representing vested RSUs if and to the
extent permitted by the Committee pursuant to the PaineWebber Senior Officer
Deferred Compensation Plan. The Committee shall, in its sole discretion, have
the right at any time to mandatorily defer such delivery and cause to be deemed
credited an equivalent number of shares of Common Stock to a deferral account
of the Participant under the PaineWebber Senior Officer Deferred Compensaiton
Plan. No action of the Committee under this Section 4(d) shall have the effect
of accelerating or extending the vesting of a Participant's Award hereunder
and any credit to the deferral account of the Participant under the PaineWebber
Senior Officer Deferred Compensation Plan shall be subject to the same terms
and conditions with regard to vesting as set forth in Section 4(a) hereof.
5. Dividend Equivalents.
(a) In the event of an ordinary cash dividend payable on Stock the record
date of which is prior to forfeiture or settlement of RSUs, PaineWebber shall
pay to the Participant an amount equal to the amount of ordinary cash dividends
paid as a dividend on each share of Stock multiplied by the number of such RSUs
credited to the Participant at the record date for such dividend. Such amounts
shall be paid by PaineWebber at the same time that the corresponding cash
dividend on shares of Stock is paid to the PaineWebber stockholders. If so
mandated by the Committee or elected by the Participant under the PaineWebber
Senior Officer
- 3 -
<PAGE> 6
Deferred Compensation Plan, such amounts will not be paid to the Participant,
but will instead be deemed to be reinvested in additional RSUs in accordance
with Section 5(d) herof, which RSUs will be subject to no Restricted Period,
but to the same deferral period mandated by the Committee or elected by the
Participant under the PaineWebber Senior Officer Deferred Compensation Plan.
(b) In the event of an extraordinary cash dividend or a non-cash dividend
or distribution in the form of property other than Stock payable on Stock the
record date of which is prior to forfeiture or settlement of RSUs, PaineWebber
shall credit to the Participant the amount of such extraordinary cash dividend
or the fair market value at such record date of the property other than Stock
paid as a dividend or distribution on each share of Stock multiplied by the
number of such RSUs credited to the Participant at such record date. Such amount
will be deemed to be reinvested in additional RSUs in accordance with Section
5(d) hereof, which RSUs will be subject to the same Restricted Period (if any)
and to the same mandatory and/or elective deferral period, if any, as applied
to the RSUs with respect to which such payment was credited.
(c) In the event of a dividend or distribution in the form of Stock
payable on Stock the record date of which is prior to forfeiture or settlement
of RSUs, PaineWebber shall credit to the Participant the number of RSUs equal
to the number of whole or fractional shares of Stock paid as a dividend or
distribution on each share of Stock multiplied by the number of such RSUs
credited to the Participant at the record date for such dividend or
distribution. Such additional RSUs will be subject to the same Restricted
Period, if any, and to the same mandatory or elective deferral period, if any,
as applied to the RSUs with respect to which such additional RSUs were
credited.
(d) Dividend equivalent amounts deemed to be reinvested under Section
5(a) or 5(b) entitle the Participant to be credited with a number of additional
RSUs at the date any such dividend or distribution is paid on Stock equal to
the per-share amount of the dividend or distribution multiplied by the number
of RSUs credited to the Participant at the record date for such dividend or
distribution divided by the Fair Market Value per share of Stock determined in
accordance with the Plan on the dividend or distribution payment date.
6. Settlement. RSUs not theretofore forfeited under Section 4(b) shall be
settled by delivery as promptly as practicable following the expiration of the
Restricted Period, if any, and any mandatory or elective deferral period of one
share of Stock for each RSU with respect to which the Restricted Period and any
mandatory or elective deferral period has lapsed. Upon settlement of any RSU,
such RSU will be cancelled.
7. Taxes. Upon expiration of the Restricted Period under Section 4(a)
hereof and any mandatory or elective deferral period under the PaineWebber
Senior Officer Deferred Compensation Plan, PaineWebber shall be entitled as a
condition of the delivery of Stock represnting the RSUs to the Participant
that the Participant remit or, in appropriate cases (including cases in which
taxation of the Participant is deferred), agree to remit when due an amount
sufficient to satisfy all federal, state and local withholding and employment
tax requirements relating to such delivery. Subject to the approval of the
Committee, the Participant will be entitled to elect to have PaineWebber
withhold from the Stock to be delivered or elect to deliver to PaineWebber from
shares of Stock owned seperately by the Participant, a sufficient number of
such shares of Stock to satisfy the federal, state and local withholding and
employment tax obligations relating to the expiration of the Restricted Period
and any deferral period and the delivery of Stock (and the Company's
withholding obligations) to the extent, if any, permitted under rules and
regulations adopted by the Committee and in effect at the time of such
- 4 -
<PAGE> 7
exercise. In such case, the Stock withheld or the Stock surrenderd will be
valued at the Fair Market Value determined in accordance with the Plan.
8. Adjustments. The number of RSUs credited to the Participant, and the
kind of security to be delivered in settlement thereof, shall be appropriately
adjusted, in the discretion of the Committee, to reflect transactions specified
in Section 8(c) of the Plan affecting Stock other than dividends (which result
in payments or crediting of additional RSUs under Section 5 hereof).
9. Employment of Participant. Neither the grant of the RSUs nor anything
in this Agreement or the Plan shall (i) be construed as a commitment,
guarantee, agreement or understanding of any kind that PaineWebber will
continue to employ the Participant or employee, employee's employment at any
time.
10. Miscellaneous.
(a) This Agreement shall bind and inure to the benefit of the Participant
and his or her executors or administrator, heirs and personal and legal
representatives, and to PaineWebber and its successors and assigns.
(b) This Agreement shall be construed and enforced in accordance with
Section 8(j) of the Plan.
(c) This Agreement, together with the Plan, sets forth the entire
agreement between the parties with respect to the subject matter hereof, and
there are no agreements, understandings, warranties or representations, written,
express or implied, between them with respect to the RSUs other than as set
forth herin or therein.
(d) When used herein, "PaineWebber" shall mean Paine Webber Group Inc.
and shall include any corporation which, at the time of reference, is a
subsidiary of PaineWebber within the meaning of Section 424(f) of the Code.
(e) Except as otherwise expressly provided in this Agreement, this
Agreement may not be modified, amended or terminated except by a writing
signed by both parties hereto provided that PaineWebber, upon notice to the
Participant, may unilaterally amend this Agreement in any way that does not
extend the Restricted Period or materially adversely affect the Participant's
rights in or to the RSUs awarded hereunder. No waiver of any provision hereof
shall be effective unless evidenced by a writing signed by the party against
whom it is sought to be enforced. No waiver of any breach of any term hereof
shall be construed as a waiver of any subsequent breach of such term or as
waiver of any other term hereof.
- 5 -
<PAGE> 8
EXHIBIT 4.4
PAINEWEBBER
________________________________________________________________________________
RESTRICTED STOCK AGREEMENT
under the
1994 EXECUTIVE STOCK AWARD PLAN
________________________________________________________________________________
PAINEWEBBER RESTRICTED STOCK AGREEMENT (the "Agreement"),
effective as of __________ (the "Effective Date"), between Paine Webber Group
Inc. ("PaineWebber") and the individual whose signature appears below (the
"Participant").
The Compensation Committee of the Board of Directors of PaineWebber
(the "Committee") has awarded to Participant the number of shares of
PaineWebber Stock (the "Award Shares," which includes any additional Award
Shares acquired under Section 5) set forth below as Restricted Stock under the
PaineWebber 1994 Executive Stock Award Plan (the "Plan"), subject to the terms,
definitions, and conditions of the Plan and this Agreement (including the
Restricted Stock Terms and Conditions attached hereto).
The Award Shares of Restricted Stock granted hereby are subject to
forfeiture in the event of the termination of Participant's employment prior to
the expiration of the Restricted Period specified below opposite such number of
Award Shares, as specified in Section 4(a) and (b) hereof. Upon expiration of
the Restricted Period, all restrictions on the Award Shares under the Plan and
this Agreement will lapse, and PaineWebber will cause to be delivered one or
more certificates representing the Award Shares to Participant. The expiration
of the Restricted Periods is subject to acceleration as specified in Section
4(a) hereof.
1. Participant:
Name _________________________________________
Address _________________________________________
Social Security Number _________________________
2. Total Number of Award Shares Granted: ___________
3. Restricted Periods:
Number of Restricted Period
Award Shares End Date
______________ _________________
______________ _________________
______________ _________________
______________ _________________
* * * *
<PAGE> 9
IN WITNESS WHEREOF, PaineWebber and the Participant have duly executed
this Agreement, as of the Effective Date stated above.
PAINE WEBBER GROUP INC. PARTICIPANT
By ______________________________ By ______________________________
Name ___________________________ Name ___________________________
Title __________________________
Enclosures: Restricted Stock Terms and Conditions for 1994 Executive Stock
Award Plan
1994 Executive Stock Award Plan Document
<PAGE> 1
RESTRICTED STOCK TERMS AND CONDITIONS
of the Restricted Stock Agreement under the
1994 Executive Stock Award Plan
________________________________________________________________________________
1. Acceptance of Award Shares; Incorporation of Plan Provisions.
(a) The Participant hereby accepts the Award Shares subject to the terms
and conditions set forth in this Agreement and consents to and agrees to comply
with such terms and conditions. All of the terms and conditions of the Plan are
hereby incorporated by reference in this Agreement as though fully set forth
herein. Terms defined in the Plan but not in this Agreement shall have the
meanings set forth in the Plan. To the extent of any conflict between the
provisions of this Agreement and those of the Plan, the provisions of the Plan
shall govern. Participant acknowledges receipt of a copy of the Plan.
(b) The facilitate the operation of the Plan and secure the restrictions
thereof and hereof, PaineWebber has entered into an agreement with Mellon Bank
Corporation (together with its successors and assigns, the "Agent") pursuant to
which the Agent, as custodian, will hold on behalf and for the benefit of the
Participant the certificate(s) representing the Award Shares and deliver them
as provided herein (the "Custodianship Agreement"); and the Participant
acknowledges and consents to the delivery of the certificate(s) representing
the Award Shares to the Agent. Until delivered to the Participant by the Agent,
the Award Shares shall be evidenced by one or more certificates registered in
the name of the Agent or its nominee (which may be held in the form of a single
certificate representing all Award Shares held by the Agent for some or all
recipients of similar awards under the Plan and other plans of PaineWebber). The
Participant agrees to execute such other instruments and documents, and take
such further action, as may be requested from time to time by PaineWebber or the
Agent to maintain such registration or to effectuate or enforce the
restrictions hereunder.
(c) The Award Shares awarded as Restricted Stock to the Participant under
this Agreement are awarded in consideration of past services of the
Participant, and in consideration of the services to be performed by the
Participant during the Restricted Period. The Committee hereby determines that
the aggregate value of such past services of Participant serving as
consideration for the Award Shares is equal to the aggregate par value of the
Award Shares.
2. Rights as a Stockholder. Subject to the terms and provisions of the
Delaware General Corporation Law and of this Agreement, the Participant shall
have all of the rights of a beneficial owner of the Award Shares, including the
right to vote or direct the voting of the Award Shares and to receive all
ordinary cash dividends with respect thereto; provided that, if any
extraordinary cash dividend or any non-cash dividend or distribution is made
with respect to Award Shares prior to the expiration of the Restricted Period,
such dividend will not be paid to the Participant directly but instead will be
subject to Section 5 hereof, and in other cases of changes affecting the Award
Shares any property representing the Award Shares will remain subject to
Section 7 hereof.
3. Transfer Restrictions. During the applicable Restricted Period, the
Award Shares, the rights of the Participant with respect thereto, and this
Agreement may not be assigned, transferred, sold, margined, optioned, pledged
or otherwise encumbered or disposed of by the Participant or by the Agent on
behalf of the Participant (collectively, a "Transfer") unless otherwise
determined by the Committee. PaineWebber will not be required to recognize or
to record any Transfer or attempted Transfer of any Award Shares in violation
of the foregoing restrictions, and
<PAGE> 2
any such Transfer or attempted Transfer shall be null and void unless otherwise
determined by the Committee. The certificate(s) representing the Award Shares
shall bear such restrictive legends as PaineWebber may deem appropriate to
reflect any restrictions applicable to the Award Shares, including the
foregoing and any restrictions on transfer applicable under the Securities Act
of 1933, as amended.
4. Expiration of Restricted Period.
(a) The Restricted Period will expire ("vesting" will occur) with respect
the number of Award Shares specified in this Agreement (and any additional
Award Shares relating thereto acquired under Section 5) on the date designated
as "Restricted Period End Date" opposite such number of Award Shares on the
signature page of this Agreement. The foregoing notwithstanding, the Restricted
Period applicable to all Award Shares under this Agreement shall expire on an
accelerated basis at the time the Participant's employment with PaineWebber
terminates as a result of his or her (i) death, (ii) "Disability" (as defined
in the PaineWebber tax qualified defined benefit pension plan applicable to the
Participant), or (iii) voluntary retirement on or after his or her "Normal
Retirement Date" (as defined in such pension plan) or early retirement with the
consent of the Committee from employment by PaineWebber or its subsidiaries
("Retirement"), and such Restricted Period shall expire on an accelerated basis
upon the occurrence of a Change in Control (as defined below). As promptly as
practicable following the expiration of the Restricted Period, PaineWebber
shall cause the certificate(s) representing the Award Shares on which the
restrictions have lapsed to be released by the Agent and transferred and
delivered by the Agent to the Participant free of such restrictions, subject to
the terms of Section 6 hereof and to any restrictions under Section 8(a) of the
Plan.
(b) In the event that, prior to the expiration of the Restricted Period
applicable to Award Shares, the Participant shall cease to be an employee of
PaineWebber for any reason other than death, Disability, or Retirement, such
Award Shares (including any additional Award Shares relating thereto acquired
under Section 5 hereof) shall automatically be forfeited by the Participant.
Participant hereby acknowledges and consents that the Agent, upon such a
forfeiture, shall, on behalf of the Participant, relinquish, forfeit and
transfer such Award Shares to PaineWebber without any further action on the
part of the Participant.
(c) "Change in Control" shall mean the occurrence of any of the following
events:
(i) Any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than PaineWebber, any trustee or other
fiduciary holding securities under an employee benefit plan of
PaineWebber, or any corporation owned, directly or indirectly, by the
stockholders of PaineWebber in substantially the same proportions as their
contemporaneous ownership of voting securities of PaineWebber, is or
becomes a "20% Beneficial Owner." For purposes of this provision, a "20%
Beneficial Owner" shall mean a person who is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of PaineWebber representing 20% or more of the
combined voting power of PaineWebber's then-outstanding voting securities;
provided that (A) the term "20% Beneficial Owner" shall not include any
Beneficial Owner who has crossed such 20% percent threshold solely as a
result of an acquisition of securities directly from PaineWebber, or
solely as a result of an acquisition by PaineWebber of PaineWebber
securities, until such time thereafter as such person acquires additional
voting securities other than directly from PaineWebber and, after giving
effect to such acquisition, such person would constitute a 20% Beneficial
Owner; and (B) with respect to any person who is and remains eligible to
file a Schedule 13G pursuant to Rule 13d-1(b)(1) under the Exchange Act
with respect to PaineWebber securities, there shall be excluded from the
number of securities deemed to be
- 2 -
<PAGE> 3
beneficially owned by such person for purposes of determining whether such
person is a 20% Beneficial Owner a number of securities representing 10%
of the combined voting power of PaineWebber's then-outstanding voting
securities;
(ii) During any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of
PaineWebber, together with any new director (other than a director
designated by a person who has entered into an agreement with PaineWebber
to effect a transaction described in paragraph (i), (iii), or (iv) hereof)
whose election by the Board or nomination for election by PaineWebber's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously
so approved (the "Continuing Directors"), cease for any reason to
constitute at least a majority thereof;
(iii) The stockholders of PaineWebber approve a merger, consolidation,
recapitalization, or reorganization of PaineWebber, or a reverse stock
split of any class of voting securities of PaineWebber, or the
consummation of any such transaction if stockholder approval is not
obtained, other than any such transaction which would result in at least
80% of the total voting power represented by the voting securities of
PaineWebber or the surviving entity outstanding immediately after such
transaction being beneficially owned by persons who together beneficially
owned at least 80% of the combined voting power of the voting securities
of PaineWebber outstanding immediately prior to such transaction, with the
relative voting power of each such continuing holder compared to the
voting power of each other continuing holder not substantially altered as
a result of the transaction; provided that, for purposes of this paragraph
(iii), such continuity of ownership (and preservation of relative voting
power) shall be deemed to be satisfied if the failure to meet such 80%
threshold (or to substantially preserve such relative voting power) is due
solely to the acquisition of voting securities by an employee benefit plan
of PaineWebber, such surviving entity, or of any subsidiary of such
surviving entity;
(iv) The stockholders of PaineWebber approve a plan of complete
liquidation of PaineWebber or an agreement for the sale or disposition by
PaineWebber of all or substantially all of PaineWebber's assets (or any
transaction having a similar effect);
or
(v) Any other event which the Board of Directors (or the Compensation
Committee of the Board of Directors, if and to the extent that the
Compensation Committee must exercise sole discretion over the matter in
order to comply with applicable requirements of Rule 16b-3 under the
Exchange Act), determines shall constitute a Change in Control for
purposes of this Agreement;
provided that a Change in Control shall not be deemed to have occurred under
this Agreement if, prior to the occurrence of a specified event that would
otherwise constitute a Change in Control under paragraphs (i) through (iv)
hereof, the Continuing Directors of PaineWebber then in office, by a majority
vote thereof, determine that the occurrence of such specified event shall not
be deemed to be a Change in Control hereunder or shall not be deemed to be a
Change in Control with respect to a particular Participant under this Agreement
if the Change in Control results from actions or events in which such
Participant is a participant in a capacity other than solely as an officer,
employee or director of PaineWebber.
- 3 -
<PAGE> 4
5. Other Dividends.
(a) In the event of an extraordinary cash dividend or a non-cash dividend
or distribution in the form of property other than Stock payable on Award
Shares the record date of which is prior to the expiration of the Restricted
Period applicable to such Award Shares, PaineWebber shall retain the amount of
such extraordinary cash dividend or such other property and, in lieu of
delivery thereof, shall award to the Participant additional shares of
Restricted Stock having a Fair Market Value at the record date of the dividend
or distribution equal to the amount of cash and fair market value (as
determined by the Committee) of such property paid as a dividend or
distribution on each share of Stock multiplied by the number of Award Shares as
to which the Restricted Period had not expired at the record date thereof. Such
additional Award Shares will be subject to the same Restriction Period and the
terms and conditions of this Agreement as applied to the Award Shares with
respect to which such dividend or distribution was made.
(b) In the event of a dividend or distribution in the form of Stock
payable on Award Shares the record date of which is prior to the expiration of
the Restricted Period applicable to such Award Shares, the Stock issued or
delivered as such dividend or distribution shall be deemed to be additional
Award Shares, and shall be subject to the same Restricted Period and the terms
and conditions of this Agreement as applied to the Award Shares with respect to
which such dividend or distribution was made.
6. Taxes. Upon expiration of the Restricted Period under Section 4(a)
hereof or simultaneously with the filing with the Internal Revenue Service of
the election permitted to be made under Section 83(b) of the Code with respect
to Award Shares, PaineWebber shall be entitled to require as a condition of the
delivery of Stock representing the Award Shares to the Participant that the
Participant remit, or agree to remit when due, an amount sufficient to satisfy
all federal state or local withholding and employment tax requirements relating
to such expiration or filing of such election. Furthermore, PaineWebber shall
have the right to deduct and withhold from any dividends or other distributions
paid with respect to Award Shares any applicable withholding and employment
taxes. Subject to approval of the Committee, the Participant will be entitled
to elect to have PaineWebber withhold from the Stock to be delivered or elect
to deliver to PaineWebber from shares of Stock owned separately by the
Particpant, a sufficient number of shares of Stock to satisfy the federal,
state and local withholding and employment tax obligations of the Participant
relating to the expiraiton of the Restricted Period or filing of an election
with the Internal Revenue Service (and the Company's withholding obligation) to
the extent, if any, permitted under rules and regulations adopted by the
Committee and in effect at the time of such expiration or filing of such
election. In such case, the Stock withheld or Stock surrendered will be valued
at the Fair Market Value determined in accordance with the Plan.
7. Adjustments. In the event of any transaction specified in Section
8(c) of the Plan affecting Stock other than dividends (which are subject to
Section 5 hereof), any property into which the Award Shares are changed or
distributed in additional to Award Shares shall be subject to the same
Restricted Period and the terms and conditions of this Agreement as would have
then applied to the Award Shares.
8. Employment of Participant. Neither the grant of the Award Shares nor
anything in this Agreement or the Plan shall (i) be construed as a commitment,
guarantee, agreement or understanding of any kind that PaineWebber will
continue to employ the Participant or employee, or (b) interfere in any way
with the right of PaineWebber to terminate the Participant's or employee's
employment at any time.
- 4 -
<PAGE> 5
9. Miscellaneous.
(a) This Agreement shall bind and inure to the benefit of the Participant
and his or her executors or administrators, heirs and personal and legal
representatives, and to PaineWebber and its successors and assigns.
(b) This Agreement shall be construed and enforced in accordance with
Section 8(j) of the Plan.
(c) This Agreement, together with the Plan, sets forth the entire
agreement between the parties with respect to the subject matter hereof, and
there are no agreements, understandings, warranties or representations,
written, express or implied, between them with respect to the Award Shares
other than as set forth herein or therein.
(d) When used herein, "PaineWebber" shall mean Paine Webber Group Inc.
and shall include any corporation which, at the time of reference, is a
subsidiary of PaineWebber within the meaning of Section 424(f) of the Code.
(e) Except as otherwise expressly provided in this Agreement, this
Agreement may not be modified, amended or terminated except by a writing signed
by both parties hereto, provided that PaineWebber, upon notice to the
Participant, may unilaterally amend this Agreement in any way that does not
extend the Restricted Period or materilaly adversely affect the Participant's
rights in or to the Award Shares. No waiver of any provision hereof shall be
effective unless evidenced by a writing signed by the party against whom it is
sought to be enforced. No waiver of any breach of any term hereof shall be
construed as a waiver of any subsequent breach of such term or as a waiver of
any other term hereof.
- 5 -
<PAGE> 1
EXHIBIT 5
September 12, 1994
Board of Directors
Paine Webber Group Inc.
1285 Avenue of the Americas
New York, New York 10019
RE: Registration Statement On Form S-8
1994 Executive Stock Award Plan
Dear Sirs:
In connection with the registration statement on Form S-8 of Paine
Webber Group., a Delaware corporation (the "Company"), being filed with the
Securities and Exchange Commission on about September 13, 1994 and relating to
the offering of shares of the Company's common stock, par value $1 per share
(the "Stock"), under the Company's 1994 Executive Stock Award Plan (the
"Plan"), I have examined the Company's corporate records, certificates and
other documents and instruments and have considered such questions of law as I
deemed necessary to render this opinion.
On the basis of the foregoing, I am of the opinion that, under the laws
of the State of Delaware, the Stock has been duly authorized and, when issued
and paid for pursuant to the Plan, will be legally issued, fully paid and
nonassessable.
I consent to the filing of this opinion as an exhibit to the
above-mentioned registration statement.
Very truly yours,
Theodore A. Levine
General Counsel
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm as experts in "Item 3. Incorporation
of Documents by Reference" of the Registration Statement (Form S-8) pertaining
to the Paine Webber Group Inc. 1994 Executive Stock Award Plan of Paine Webber
Group Inc. for the registration of 3,000,000 shares of its common stock and to
the incorporation by reference therein of our report dated January 24, 1994,
except for the note as to the subsequent event, for which the date is February
3, 1994, with respect to the consolidated financial statements and schedules of
Paine Webber Group Inc. included or incorporated by reference in its Annual
Report (Form 10-K) for the year ended December 31, 1993, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
September 12, 1994
