FILED PURSUANT TO RULE 424(b)(2)
Registration No. 33-51149
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED NOVEMBER 29, 1993)
$200,000,000]
PAINE WEBBER GROUP INC.
7 5/8% NOTES DUE 2014
---------------
Interest on the Notes will accrue from February 15, 1994 and will be
payable semi-annually on February 15 and August 15, beginning August 15, 1994.
The Notes will mature on February 15, 2014 and are not redeemable prior to
maturity.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE> <CAPTION>
Price Underwriting Proceeds
to Discounts and to
Public(1) Commissions Company(1)(2)
<S> <C> <C> <C>
Per Note.................................. 99.594% .875% 98.719%
Total..................................... $199,188,000 $1,750,000 $197,438,000
</TABLE>
(1) Plus accrued interest, if any, from February 15, 1994 to date of delivery.
(2) Before deducting expenses payable by the Company estimated to be $50,000.
---------------
The Notes are offered subject to receipt and acceptance by the Underwriter,
to prior sale and to the Underwriter's right to reject any order in whole or in
part and to withdraw, cancel or modify the offer without notice. It is expected
that delivery of the Notes will be made in New York, New York, on or about
February 15, 1994.
This Prospectus Supplement and the accompanying Prospectus may be used by
the Company, PaineWebber Incorporated ("PaineWebber") or other affiliates of the
Company in connection with offers and sales related to secondary market
transactions in the Notes at negotiated prices related to prevailing market
prices at the time of sale or otherwise. PaineWebber or such other Company
affiliates may act as principal or agent in such transactions.
------------------------
PAINEWEBBER INCORPORATED
------------------------
The date of this Prospectus Supplement is February 8, 1994.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY OR OTHER SECURITIES OF PAINE WEBBER GROUP INC. AT LEVELS ABOVE THOSE
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE
EFFECTED IN ANY OVER-THE-COUNTER MARKET OR OTHERWISE AND, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
USE OF PROCEEDS
The net proceeds, after payment of commissions and expenses, from the sale
of the Notes offered hereby, estimated to be approximately $197,388,000, will be
used by Paine Webber Group Inc. (the "Company") for general corporate purposes.
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company at September 30, 1993 and as adjusted to give effect to (i) the sale of
the Notes offered hereby, (ii) the sale of the 6 1/2% Notes due November 1, 2005
issued October 26, 1993, (iii) the redemption or conversion of the entire
$38,755,000 of the Company's $1.375 Convertible Exchangeable Preferred Stock as
of November 8, 1993 and (iv) the declaration by the Board of Directors on
February 3, 1994 of a 3 for 2 common stock split to holders of record on
February 17, 1994, effective March 10, 1994.
<TABLE> <CAPTION>
ACTUAL AS ADJUSTED
------------- -------------
(IN THOUSANDS EXCEPT SHARES)
<S> <C> <C>
Long-Term Debt*:
Medium-Term Subordinated Notes.................................................... $ 297,150 $ 297,150
Medium-Term Senior Notes.......................................................... 233,775 233,775
7% Notes Due March 1, 2000........................................................ 199,496 199,496
6 1/4% Notes Due June 15, 1998.................................................... 199,374 199,374
7 3/4% Subordinated Notes Due September 1, 2002................................... 174,214 174,214
9 1/4% Notes Due December 15, 2001................................................ 150,000 150,000
9 5/8% Notes Due May 1, 1995...................................................... 150,000 150,000
7 7/8% Notes Due February 15, 2003................................................ 99,960 99,960
Bank Term Loans................................................................... 70,000 70,000
Convertible Debentures............................................................ 15,497 15,497
Zero Coupon Bonds................................................................. 17,473 17,473
Other............................................................................. 30,257 30,257
6 1/2% Notes Due November 1, 2005................................................. -- 199,256
7 5/8% Notes Due February 15, 2014 offered hereby................................. -- 199,188
Stockholders' Equity:
Preferred Stock................................................................... 38,755 --
Common Stock, $1 par value, 100,000,000 shares authorized; issued 53,362,951 at
September 30, 1993 (80,595,327, as adjusted)................................... 53,363 80,595
Additional Paid-in Capital........................................................ 523,040 506,615
Retained Earnings................................................................. 672,528 671,678
Common Stock held in Treasury, at cost: 4,099,838 shares at September 30, 1993
(6,149,757, as adjusted)....................................................... (104,693) (104,693)
Unamortized Cost of Restricted Stock Awards....................................... (28,874) (28,874)
Foreign Currency Translation Adjustment........................................... (1,951) (1,951)
------------- -------------
Total Capitalization................................................................ $ 2,789,364 $ 3,159,010
------------- -------------
------------- -------------
</TABLE>
- ---------------
* In addition to the indebtedness shown in the foregoing table, the Company and
its consolidated subsidiaries had outstanding at September 30, 1993,
short-term bank loans totalling $2,046,016,000, commercial paper totalling
$546,619,000 and medium-term notes with maturities of less than one year
totalling $135,000,000.
S-2
<PAGE>
DESCRIPTION OF NOTES
The Notes are entitled 7 5/8% Notes Due 2014, are unsecured, and will be
issued as a series of Senior Securities under an Indenture dated as of March 15,
1988, as amended by a supplemental indenture dated as of September 22, 1989, and
by a supplemental indenture dated as of March 22, 1991, between the Company and
Chemical Bank, as Trustee (the "Trustee"), which is more fully described in the
accompanying Prospectus (as so amended, the "Indenture"). The statements under
this caption are brief summaries of certain provisions of the Notes, do not
purport to be complete, and are qualified in their entirety by reference to the
Notes and the description of the general terms and provisions of the Securities
set forth under the caption "Description of Securities" in the accompanying
Prospectus.
GENERAL
The Notes will be limited to $200,000,000 aggregate principal amount, will
be issued in fully registered form only in denominations of $1,000 and any
integral multiple thereof, and will mature on February 15, 2014. The Notes are
not redeemable by the Company prior to maturity.
The principal and interest on the Notes will be payable and the Notes may
be transferred or exchanged at the principal corporate trust office of the
Trustee in the Borough of Manhattan, The City of New York, or at such other
places as may be designated pursuant to the Indenture, provided that payment of
interest may be made at the option of the Company by check mailed to registered
holders. The Notes may be transferred or exchanged, subject to the limitations
provided in the Indenture, without the payment of any service charge, other than
any tax or other governmental charge payable in connection therewith.
INTEREST
Interest on the Notes will accrue from February 15, 1994 at the rate of 7
5/8% per annum and will be payable semi-annually on February 15 and August 15 of
each year, beginning August 15, 1994, to the persons in whose names the Notes
are registered at the close of business on the next preceding February 1 and
August 1, and may be paid by checks mailed to such persons.
CERTAIN RESTRICTIVE PROVISIONS
The provisions set forth under the caption "Description of
Securities--Certain Restrictive Provisions" in the accompanying Prospectus will
apply to the Notes.
DEFEASANCE
The Notes will be subject to defeasance as set forth under the caption
"Description of Securities-- Defeasance" in the accompanying Prospectus.
INFORMATION CONCERNING THE TRUSTEE
Chemical Bank, Trustee under the Indenture, is a depositary for funds and
performs other services for, and transacts other banking business with, the
Company in the normal course of business.
UNDERWRITING
Subject to the terms and conditions contained in the Underwriting
Agreement, the Company has agreed to sell to PaineWebber, the sole Underwriter,
and the Underwriter has agreed to purchase from the Company the entire
$200,000,000 aggregate principal amount of the Notes. The Company has been
advised by the Underwriter that it proposes initially to offer the Notes to the
public at the public offering price set forth on the cover page of this
Prospectus Supplement, and to certain dealers at such price less a concession
not in excess of 0.50% of the principal amount of the Notes. The Underwriter may
allow and such dealers may reallow a concession not in excess of 0.25% of such
principal amount. After the initial public offering, the public offering price
and such concessions may be changed.
S-3
<PAGE>
The Notes are a new issue of securities with no established trading market.
The Company does not intend to apply for listing of the Notes on a national
securities exchange, but has been advised by the Underwriter that it presently
intends to make a market in the Notes, as permitted by applicable laws and
regulations. The Underwriter is not obligated, however, to make a market in the
Notes and any such market making may be discontinued at any time at the sole
discretion of the Underwriter. No assurance can be given as to whether a trading
market for the Notes will develop or as to the liquidity of any such trading
market.
The Underwriter is a wholly owned subsidiary of the Company. The
underwriting of the Notes offered hereby will conform to the requirements set
forth in applicable sections of Schedule E of the By-laws of the National
Association of Securities Dealers, Inc.
The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, or
contribute to payments which the Underwriter may be required to make in respect
thereof.
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for the
Company by its General Counsel, Theodore A. Levine.
S-4
<PAGE>
PROSPECTUS
PAINE WEBBER GROUP INC.
DEBT SECURITIES
------------------------
Paine Webber Group Inc. (the "Company") intends to issue from time to time
in one or more series senior debt securities (the "Senior Securities") and/or
subordinated debt securities (the "Subordinated Securities") each of which will
be a direct, unsecured obligation of the Company and which will be offered to
the public on terms to be determined at the time of sale (the Senior Securities
and the Subordinated Securities being herein referred to collectively as the
"Securities"). The Company may sell Securities with an aggregate principal
amount of up to $1,587,775,000, or the equivalent thereof if any of the
Securities are denominated in a foreign currency or a composite currency.
The Securities may be sold for U.S. dollars, foreign currencies or
composite currencies, and the principal, premium, if any, and any interest on
the Securities may be payable in U.S. dollars, foreign currencies or composite
currencies. The Securities of a series may be issued in registered form without
coupons, in bearer form with or without coupons attached or in the form of one
or more global securities in registered or bearer form. The classification as
Senior Securities or Subordinated Securities, specific designation, aggregate
principal amount, currency or composite currency in which the principal,
premium, if any, or any interest is payable, authorized denominations, offering
price, maturity, rate (or method of calculation) and time and place of payment
of any interest, any redemption terms or other specific terms of the Securities
in respect of which this Prospectus is being delivered ("Offered Securities")
and any listing on a securities exchange are set forth in an accompanying
supplement to this Prospectus (the "Prospectus Supplement"), together with the
terms of offering of the Offered Securities.
The Securities may be sold (i) directly to purchasers, (ii) through agents
designated from time to time, (iii) to dealers or (iv) through underwriters or a
group of underwriters. If agents of the Company or underwriters are involved in
the sale of the Offered Securities, their names are set forth in the applicable
Prospectus Supplement. If agents of the Company, underwriters or dealers are
involved in the sale of the Offered Securities, descriptions of their
compensation and indemnification arrangements and the net proceeds to the
Company are set forth in the applicable Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------------------------------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
------------------------
This Prospectus and the related Prospectus Supplement may be used by the
Company, PaineWebber Incorporated ("PaineWebber") or PaineWebber International
(U.K.) Ltd. ("PaineWebber International"), each a wholly owned subsidiary of the
Company, or other affiliates of the Company in connection with offers and sales
related to secondary market transactions in the Securities at negotiated prices
related to prevailing market prices at the time of sale or otherwise.
PaineWebber, PaineWebber International or such other Company affiliates may act
as principal or agent in such transactions.
------------------------
The date of this Prospectus is November 29, 1993.
<PAGE>
IN CONNECTION WITH AN OFFERING OR DISTRIBUTION, THE UNDERWRITERS OR, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, THE AGENTS FOR SUCH OFFERING OR DISTRIBUTION
MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICE OF THE OFFERED SECURITIES OR OTHER SECURITIES OF THE COMPANY AT LEVELS
ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS
MAY BE EFFECTED IN ANY OVER-THE-COUNTER MARKET OR OTHERWISE AND, IF COMMENCED,
MAY BE DISCONTINUED AT ANY TIME.
------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the office of
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C., as well
as at the Regional Offices of the Commission at North Western Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois, and Seven World Trade
Center, 13th Floor, New York, New York. Copies can also be obtained by mail from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Reports, proxy statements and other
information concerning the Company can also be inspected at the offices of the
New York Stock Exchange (the "NYSE"), 20 Broad Street, New York, New York, and
the Pacific Stock Exchange, 111 Sansome Street, San Francisco, California. The
Company has filed with the Commission registration statements on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the Securities. This Prospectus does not contain
all of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement.
------------------------
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1992, the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1993, June 30, 1993 and September 30, 1993 and the Company's Current
Reports on Form 8-K dated February 4, 1993, May 25, 1993, August 5, 1993,
October 12, 1993 and October 26th, 1993, as filed with the Commission pursuant
to the Exchange Act (File No. 1-7367), are hereby incorporated by reference in
this Prospectus.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated in this Prospectus by reference and to be a part hereof from the
respective date of filing of each such document. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement herein, in any Prospectus Supplement or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will furnish without charge upon written or oral request by any
person, including any beneficial owner, to whom this Prospectus is delivered, a
copy of any or all of the documents referred to above which have been or may be
incorporated in this Prospectus by reference, other than exhibits to such
documents unless such exhibits are specifically incorporated by reference into
such documents. Requests for such copies should be directed to Assistant
Secretary, Paine Webber Group Inc., 1285 Avenue of the Americas, New York, New
York 10019, telephone (212) 713-2722.
------------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, A
PROSPECTUS SUPPLEMENT OR THE DOCUMENTS INCORPORATED BY REFERENCE AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY PAINE WEBBER GROUP INC. OR ANY AGENT, UNDERWRITER OR DEALER.
NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. THE DELIVERY OF THIS PROSPECTUS AND A
PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION THEY
CONTAIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE DATES.
References herein to "U.S. dollars", "U.S. $" or "$" are to the lawful
currency of the United States.
2
<PAGE>
THE COMPANY
Paine Webber Group Inc. is a holding company which, together with its
operating subsidiaries, forms one of the largest full-service securities and
commodities firms in the industry. Founded in 1879, the Company employs
approximately 14,200 people in 272 offices worldwide as of October 31, 1993. The
Company's principal line of business is to serve the investment and capital
needs of individual, corporate, institutional and public agency clients through
its broker-dealer subsidiary, PaineWebber, and other specialized subsidiaries.
The Company holds memberships in all major securities and commodities exchanges
in the United States, and makes a market in many securities traded on the
Automated Quotation System of the National Association of Securities Dealers,
Inc. ("NASD") or in other over-the-counter markets. Additionally, PaineWebber is
a primary dealer in U.S. government securities.
The Company is comprised of four interrelated core business groups--Retail
Sales and Marketing, Asset Management, Institutional Sales and Trading and
Investment Banking--which utilize common operational and administrative
personnel and facilities.
RETAIL SALES AND MARKETING consists primarily of a domestic branch office
system and consumer product groups through which PaineWebber and certain other
subsidiaries provide clients with financial services and products, including the
purchase and sale of securities, option contracts, commodity and financial
futures contracts, direct investments, selected insurance products, fixed income
instruments and mutual funds. The Company may act as principal or agent in
providing these services. Fees charged vary according to the size and complexity
of a transaction, and the activity level of a client's account.
The ASSET MANAGEMENT group is comprised of Mitchell Hutchins Asset
Management Inc. ("MHAM"), Mitchell Hutchins Institutional Investors Inc.
("MHII") and Mitchell Hutchins Investment Advisory division ("MHIA"). MHAM and
MHII provide investment advisory and portfolio management services to pension
and endowment funds. MHAM also provides investment advisory and portfolio
management services to individuals and mutual funds. MHIA provides portfolio
management services to individuals, trusts and institutions.
INSTITUTIONAL SALES AND TRADING is comprised of five businesses: Fixed
Income, U.S. Equity, International, Derivatives and Research. The Company places
securities with, and executes trades on behalf of, institutional clients both
domestically and internationally. In addition, the Company takes positions in
both listed and unlisted equity and fixed income securities to facilitate client
transactions or for the Company's own account.
Through the INVESTMENT BANKING group, the Company provides financial advice
to, and raises capital for, a broad range of domestic and international
corporate clients. The Investment Banking division manages and underwrites
public offerings, participates as an underwriter in syndicates of public
offerings managed by others, and provides advice in connection with mergers and
acquisitions, lease financings and debt restructurings. The Municipal Securities
group originates, underwrites, sells and trades taxable and tax-exempt issues
for municipal and public agency clients.
The securities business is one of the nation's most highly regulated
industries. Violations of applicable regulations can result in the revocation of
broker-dealer licenses, the imposition of censures or fines, and the suspension
or expulsion of a firm, its officers or employees. The Company's securities
business is regulated by various agencies, including the Commission, the NYSE,
the Commodity Futures Trading Commission and the NASD.
The Company's principal executive offices are located at 1285 Avenue of the
Americas, New York, New York 10019 (Telephone: (212) 713-2000).
For purposes of the foregoing description, all references to the "Company"
refer collectively to Paine Webber Group Inc. and its operating subsidiaries,
unless the context otherwise requires.
3
<PAGE>
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Securities offered hereby will be used for general corporate purposes,
including, but not limited to, funding investments in or extensions of credit to
subsidiaries, repayments of indebtedness of the Company or its subsidiaries, and
possible acquisitions. The precise amount and timing of the application of the
funds will depend upon future requirements and the availability of other funds
to the Company and its subsidiaries. Management of the Company expects that the
Company and its subsidiaries will engage in additional financings as needs
arise.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for the five-year period ended December 31, 1992, and the nine-month
period ended September 30, 1993.
<TABLE> <CAPTION>
FISCAL YEAR ENDED NINE MONTHS ENDED
DECEMBER 31 SEPTEMBER 30
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------- -----------------------
1988 1989 1990 1991 1992 1993
- ----------- ----------- ----------- ----------- ----------- -----------------------
1.1 1.1 * 1.2 1.4 1.4
</TABLE>
* For 1990, earnings were inadequate to cover fixed charges and would have had
to increase approximately $102,633,000 in order to cover the deficiency.
For purposes of computing the ratio of earnings to fixed charges,
"earnings" consist of earnings before taxes on income and fixed charges and
"fixed charges" consist of interest expense incurred on securities sold under
repurchase agreements, and short-term and long-term borrowings and that portion
of rental expense estimated to be representative of the interest factor.
DESCRIPTION OF SECURITIES
The Senior Securities are to be issued under an Indenture dated as of March
15, 1988, as amended by a supplemental indenture dated as of September 22, 1989,
and by a supplemental indenture dated as of March 22, 1991, between the Company
and Chemical Bank, as Trustee (the "Senior Indenture"). The Subordinated
Securities are to be issued under an Indenture dated as of March 15, 1988, as
amended by a supplemental indenture dated as of September 22, 1989, by a
supplemental indenture dated as of March 22, 1991, and by a supplemental
indenture dated as of November 30, 1993, between the Company and Chemical Bank
Delaware, as Trustee (the "Subordinated Indenture"). The Senior Indenture and
the Subordinated Indenture (being sometimes referred to herein collectively as
the "Indentures" and individually as an "Indenture") are filed as exhibits to
the Registration Statement. The Company may enter into one or more additional
indentures providing for Senior Securities or Subordinated Securities with one
or more banking institutions organized under the laws of the United States or
any state serving as trustee. Reference is made to the Prospectus Supplement for
information regarding the indenture under which the Offered Securities will be
issued.
The statements under this heading are subject to the detailed provisions of
each Indenture. Whenever particular provisions of the Indentures or terms
defined therein are referred to, such provisions or definitions are incorporated
by reference herein as a part of the statements made and the statements are
qualified in their entirety by such reference.
4
<PAGE>
GENERAL
The Securities of a series may be issued in fully registered form without
Coupons ("Registered Securities") or in bearer form with or without Coupons
attached ("Bearer Securities") or both. Securities of a series may also be
issued in whole or in part in the form of one or more global securities (each, a
"Global Security"). Unless otherwise specified in the applicable Prospectus
Supplement, the Securities will be only Registered Securities. Registered
Securities which are book-entry securities ("Book-Entry Securities") will be
issued in the form of registered Global Securities. Securities denominated in
U.S. dollars will be issued, unless otherwise set forth in the applicable
Prospectus Supplement, in denominations of $1,000 or an integral multiple
thereof for Registered Securities, and only in the denomination of $5,000 for
Bearer Securities.
Neither of the Indentures limits the aggregate principal amount of
Securities which may be issued thereunder. The Securities will be direct,
unsecured obligations of the Company. The Subordinated Securities will be
subordinated in right of payment, to the extent and in the manner set forth in
the Subordinated Indenture, to the prior payment in full of all Superior
Indebtedness as described below under "Subordination".
If any of the Securities are sold for any foreign currency or composite
currency or if principal of (or premium, if any) or any interest on any of the
Securities is payable in any foreign currency or composite currency, the
restrictions, elections, Federal income tax consequences, specific terms and
other information with respect to such issue of Securities and such foreign
currency or composite currency will be set forth in the Prospectus Supplement
relating thereto.
If the amount of payments of principal of (or premium, if any) or any
interest on any of the Securities is determined with reference to any type of
index or formula or changes in prices of particular securities, currencies,
intangibles, goods, articles or commodities, the Federal income tax
consequences, specific terms and other information with respect to such
Securities and such index or formula, securities, currencies, intangibles,
goods, articles or commodities will be described in the Prospectus Supplement
relating thereto.
The Securities may be issued in one or more series with the same or various
maturities at or above par or with an original issue discount. Certain
Securities may be issued which provide for an amount less than the principal
amount thereof to be due and payable in the event of an acceleration of the
maturity thereof (each an "Original Issue Discount Security"), including by
reason of redemption or early repayment. Original Issue Discount Securities may
bear no interest or may bear interest at a rate which at the time of issuance is
below market rates and will be sold at a discount (which may be substantial)
below their stated principal amount. Certain Original Issue Discount Securities
may be issued with original issue discount for United States Federal income tax
purposes. The Prospectus Supplement with respect to any Offered Securities
issued with such original issue discount will contain a discussion of Federal
income tax considerations with respect thereto.
Reference is made to the Prospectus Supplement for the following terms of
the Offered Securities: (i) the title and any limit on the aggregate principal
amount of the Offered Securities and whether the Offered Securities are Senior
Securities or Subordinated Securities; (ii) the percentage of their principal
amount at which the Offered Securities will be issued; (iii) the date or dates
on which the Offered Securities will mature; (iv) the rate or rates (which may
be fixed or variable) per annum, if any, at which the Offered Securities will
bear interest or the method of determining such rate or rates; (v) the date or
dates from which such interest, if any, shall accrue and the date or dates at
which such interest, if any, will be payable; (vi) the place where the principal
of (and premium, if any) and interest, if any, on the Offered Securities will be
payable; (vii) the terms for redemption or early repayment, if any, including
any mandatory or optional sinking fund or analogous provision; (viii) the
principal amount of any Offered Securities which are Original Issue Discount
Securities that is payable upon acceleration of the maturity of such Offered
Securities; (ix) the currency, currencies, composite
5
<PAGE>
currency or composite currencies for which the Offered Securities may be
purchased and the currency, currencies, composite currency or composite
currencies in which the payment of principal of (or premium, if any) or any
interest on such Offered Securities will be made and, if the Company or the
Holders of Offered Securities may elect to receive such payment in a currency,
currencies, composite currency or composite currencies other than that in which
the Offered Securities are stated to be payable, then, the period or periods
within which, and the terms and conditions upon which, such election may be made
and, if the amount of such payments may be determined with reference to an index
based on a currency, currencies, composite currency or composite currencies
other than that in which the Offered Securities are stated to be payable, then
the manner in which such amounts shall be determined; (x) whether the Offered
Securities will be issued as Registered Securities or Bearer Securities or both
and the terms upon which any Bearer Securities of such series may be exchanged
for Registered Securities of such series; (xi) whether the Offered Securities
are to be issued in whole or in part in the form of one or more Global
Securities and, if so, the identity of the depositary or depositaries for such
Global Security or Securities; (xii) if a temporary Global Security is to be
issued with respect to some of or all the Offered Securities, any requirements
for certification of ownership by non-United States persons that will apply
prior to (a) the issuance of a definitive Security or (b) the payment of
interest on an interest payment date that occurs before the issuance of a
definitive Security; (xiii) if a temporary Global Security is to be issued with
respect to some of or all the Offered Securities, the terms upon which interests
in such temporary Global Security may be exchanged for interests in a definitive
Global Security or for definitive Securities and the terms upon which interests
in a definitive Global Security, if any, may be exchanged for definitive
Securities; (xiv) whether and under what circumstances the Company will pay
additional amounts to certain Holders of Offered Securities in respect of any
tax, assessment or governmental charge required to be withheld or deducted and,
if so, whether the Company will have the option to redeem such Offered
Securities rather than pay any additional amounts; (xv) if the amount of
payments of principal of (or premium, if any) or any interest on the Offered
Securities may be determined with reference to an index based on the prices,
changes in prices, or differences between prices, of securities, currencies,
intangibles, goods, articles or commodities, or otherwise by application of a
formula, the manner in which such amounts shall be determined; (xvi) any
additional Events of Default (as defined below under "Events of Default, Notice
and Waiver") or restrictive covenants provided for with respect to the Offered
Securities; and (xvii) any other terms of the Offered Securities not
inconsistent with the applicable Indenture.
If any Offered Securities are Bearer Securities, the Prospectus Supplement
will describe any applicable restrictions (including, without limitation, any
restrictions required to comply with United States Federal income tax laws and
regulations) on the offer, sale and delivery of such Bearer Securities in
addition to those set forth under "Limitations on Issuance of Bearer
Securities".
Each Indenture provides that, at the option of the Company, interest on the
Registered Securities of any series that bears interest may be paid by mailing a
check to the address of the Person entitled thereto as such address shall appear
in the Security Register. (Section 301)
The Indentures do not prohibit (i) a consolidation, merger or sale of
assets or other similar transactions that may adversely affect the
creditworthiness of the Company or a successor or combined entity, (ii) a change
of control of the Company or (iii) leveraged transactions involving the Company,
whether or not involving a change of control. In addition, under the terms of
the Indentures the Company is entitled to defease the Offered Securities. As a
result, the Indentures do not protect Holders against a substantial decline in
the value of the Offered Securities which may result from the aforementioned
transactions.
EXCHANGE, REGISTRATION AND TRANSFER
Registered Securities (other than a Global Security, except as provided
below) of any series will be exchangeable for other Registered Securities of the
same series and of a like aggregate principal amount and tenor of any authorized
denominations. In addition, if Securities of any series are issuable
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as both Registered Securities and Bearer Securities, at the option of the
Holder, and subject to the terms of the Indenture, Bearer Securities (with all
unmatured Coupons, except as provided below, and all matured Coupons in default)
of such series will be exchangeable into Registered Securities of the same
series of any authorized denominations and of a like aggregate principal amount
and tenor. Bearer Securities with coupons appertaining thereto surrendered in
exchange for Registered Securities between a Regular Record Date or a Special
Record Date and the relevant date for payment of interest shall be surrendered
without the Coupon relating to such date for payment of interest and interest
will not be payable on such date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such Coupon when due in accordance with the terms of the applicable Indenture.
Bearer Securities will not be issued in exchange for Registered Securities.
(Section 305)
No service charge will be made for any transfer or exchange of the
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge in connection therewith. (Section 305)
Securities may be presented for exchange as provided above, and Registered
Securities (other than a Global Security) may be presented for registration of
transfer (duly endorsed, or accompanied by a satisfactory instrument of
transfer), at the office of the Security Registrar or at the office of any
transfer agent designated by the Company for such purpose with respect to any
series of Securities and referred to in an applicable Prospectus Supplement,
without service charge and upon payment of any taxes and other governmental
charges as described in the applicable Indenture. The Company has appointed
Chemical Bank as Security Registrar for each Indenture. (Section 305) If a
Prospectus Supplement refers to any transfer agents (in addition to the Security
Registrar) initially designated by the Company with respect to any series of
Securities, the Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that, if Securities of a series are issuable solely
as Registered Securities, the Company will be required to maintain a transfer
agent in each Place of Payment for such series and, if Securities of a series
are issuable as Bearer Securities, the Company will be required to maintain (in
addition to the Security Registrar) a transfer agent in a Place of Payment for
such series located in Europe. The Company may at any time designate additional
transfer agents with respect to any series of Securities. (Section 1002)
The Company shall not be required to: (i) issue, register the transfer of
or exchange Securities of any series during a period beginning at the opening of
business 15 days before any selection of Securities of that series to be
redeemed and ending at the close of business on (a) if Securities of the series
are issuable only as Registered Securities, the day of mailing of the relevant
notice of redemption and (b) if Securities of the series are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if Securities of the series are also issuable as Registered
Securities and there is no publication, the day of mailing of the relevant
notice of redemption; (ii) register the transfer of or exchange any Registered
Security, or portion thereof, called for redemption, except the unredeemed
portion of any Registered Security being redeemed in part; or (iii) exchange any
Bearer Security called for redemption, except to exchange such Bearer Security
for a Registered Security of that series and like tenor which is simultaneously
surrendered for redemption. (Section 305)
For a discussion of restrictions on the exchange, registration and transfer
of Global Securities, see "Global Securities" below.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of (and premium, if any) and any interest on Bearer Securities will
be payable, subject to any applicable laws and regulations, at the offices of
such Paying Agents outside the United States as the Company may designate from
time to time and payment of interest on Bearer Securities with Coupons
appertaining
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thereto will be made only against surrender of the Coupon relating to the
applicable Interest Payment Date. (Sections 311 and 1002) No payment with
respect to any Bearer Security will be made at any office or agency of the
Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States. Notwithstanding the foregoing, payments of principal of (and premium, if
any) and any interest on Bearer Securities denominated and payable in U.S.
dollars will be made at the office of the Company's Paying Agent in the Borough
of Manhattan, The City of New York, if (but only if) payment of the full amount
thereof in U.S. dollars at all offices or agencies outside the United States is
illegal or effectively precluded by exchange controls or other similar
restrictions. (Section 1002)
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of (and premium, if any) and any interest on Registered Securities
will be made at the office of such Paying Agent or Paying Agents as the Company
may designate from time to time, except that at the option of the Company
payment of any interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register. (Section
301) Unless otherwise indicated in an applicable Prospectus Supplement, payment
of any installment of interest on Registered Securities will be made to the
Person in whose name such Registered Security is registered at the close of
business on the Regular Record Date for such interest. (Section 307)
Unless otherwise indicated in an applicable Prospectus Supplement, the
Corporate Trust Office of Chemical Bank in the Borough of Manhattan, The City of
New York, will be designated as the Company's Paying Agent in the Borough of
Manhattan, The City of New York, for payments with respect to Offered Securities
(subject to the limitation described above in the case of Bearer Securities).
Any Paying Agents outside the United States and any other Paying Agents in the
United States initially designated by the Company for the Offered Securities
will be named in an applicable Prospectus Supplement. The Company may at any
time designate additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying Agent acts,
except that, if Securities of a series are issuable solely as Registered
Securities, the Company will be required to maintain a Paying Agent in each
Place of Payment for such series and, if Securities of a series are issuable as
Bearer Securities, the Company will be required to maintain (i) a Paying Agent
in the Borough of Manhattan, The City of New York, for payments with respect to
any Registered Securities of the series (and for payments with respect to Bearer
Securities of the series in the circumstances described above, but not
otherwise), and (ii) a Paying Agent in a Place of Payment located outside the
United States where Securities of such series and any Coupons appertaining
thereto may be presented and surrendered for payment; provided that if any of
the Securities of such series are listed on The International Stock Exchange of
the United Kingdom and the Republic of Ireland Limited or the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and such
stock exchange shall so require, the Company will maintain a Paying Agent in
London or Luxembourg or any other required city located outside the United
States, as the case may be, for the Securities of such series. (Section 1002)
All money paid by the Company to a Paying Agent for the payment of
principal of (or premium, if any) or any interest on any Security or Coupon that
remains unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will be repaid to the Company and the
Holder of such Security or Coupon will thereafter look only to the Company for
payment thereof. (Section 1003)
GLOBAL SECURITIES
If so specified in an applicable Prospectus Supplement, all or any portion
of the Securities of a series may be issued in the form of one or more Global
Securities that will be deposited with, or on behalf of, a depositary (a
"Depositary") identified in the Prospectus Supplement relating to such series.
Global Securities may be issued in either registered or bearer form and in
either temporary or definitive form. The specific terms of the depositary
arrangement with respect to any Securities of a series will be
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described in the Prospectus Supplement relating to such series. Unless otherwise
specified in the applicable Prospectus Supplement, the Company anticipates that
the following provisions will apply to all depositary arrangements.
Unless otherwise specified in an applicable Prospectus Supplement,
Securities which are to be represented by a Global Security to be deposited with
or on behalf of a Depositary will be represented by a Global Security registered
in the name of such Depositary or its nominee. Upon the issuance of a Global
Security, the Depositary for such Global Security will credit, on its book-entry
registration and transfer system, the respective principal amounts of the
Securities represented by such Global Security to the accounts of institutions
that have accounts with such Depositary or its nominee ("participants"). The
accounts to be credited shall be designated by the underwriters of such
Securities, by certain agents of the Company or by the Company, if such
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in a Global Security will be limited to participants or persons that
may hold interests through participants. Ownership of a beneficial interest in
such Global Security will be shown on, and the transfer of that ownership will
be effected only through, records maintained by the Depositary or its nominee
(with respect to participants' interests) for such Global Security or by
participants or persons that hold through participants. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security.
So long as the Depositary for a Security, or its nominee, is the owner of
such Global Security, such Depositary or such nominee, as the case may be, will
be considered the sole owner or holder of the Securities represented by such
Global Security for all purposes under the Indenture governing such Securities.
Except as set forth below, owners of beneficial interests in a Global Security
will not be entitled to have Securities of the series represented by such Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of Securities of such series in definitive form and will not
be considered the owners or holders thereof under the Indenture governing such
Securities. Accordingly, each person owning a beneficial interest in a Global
Security must rely on the procedures of the Depositary for such Global Security
and, if such person is not a participant, on the procedures of the participant
and, if applicable, the indirect participant, through which such person owns its
interest, to exercise any rights of a holder under such Indenture.
Subject to the restrictions discussed below, payment of principal of (and
premium, if any) and any interest on Securities registered in the name of or
held by a Depositary or its nominee will be made to such Depositary or its
nominee, as the case may be, as the registered owner or the holder of the Global
Security representing such Securities. None of the Company, the Trustee for such
Securities, any Paying Agent, any Authenticating Agent or the Security Registrar
for such Securities will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests in a Global Security representing such Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. (Section 307)
The Company expects that the Depositary for Securities, upon receipt of any
payment of principal of (or premium, if any) or any interest on a definitive
Global Security, will credit immediately participants' accounts with payments in
amounts proportionate to their respective holdings in principal amount of
beneficial interest in such Global Security as shown on the records of such
Depositary. The Company also expects that payments by participants to owners of
beneficial interests in such Global Security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name". Such payments will be the responsibility of such participants.
Receipt by owners of beneficial interests in a temporary Global Security of
payments of principal of (or premium, if any) or any interest on such Global
Security will be subject to the restrictions discussed below.
Unless and until it is exchanged in whole for Securities in definitive
form, a Global Security may not be transferred except as a whole by the
Depositary for such Global Security to a nominee of such
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Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor of such Depositary or a nominee of such successor. (Section 312) If a
Depositary for Securities of any series is at any time unwilling or unable to
continue as depositary and a successor depositary is not appointed by the
Company within ninety days, the Company will issue Securities of such series in
definitive registered form in exchange for the Global Security or Global
Securities representing all such Securities. Further, an owner of a beneficial
interest in a Global Security representing Securities of a series may, on terms
acceptable to the Company and the Depositary for such Global Security, receive
Securities of such series in definitive registered form. In addition, the
Company may at any time and in its sole discretion determine not to have any
Securities of a series represented by Global Securities and, in such event, will
issue Securities of such series in definitive registered form in exchange for
the Global Security or Global Securities representing all such Securities. In
any such instance, an owner of a beneficial interest in a Global Security will
be entitled to physical delivery in definitive form of Securities of the series
represented by such Global Security equal in aggregate principal amount to such
beneficial interest and to have such Securities registered in the name of the
owner of such beneficial interest. (Section 312)
If so specified in an applicable Prospectus Supplement, all or any portion
of the Securities of a series that are issuable as Bearer Securities initially
will be represented by one or more temporary Global Securities, with one or more
Coupons or without Coupons, to be deposited with a common depository in London
for Morgan Guaranty Trust Company of New York, Brussels Office, as operator of
the Euro-clear System ("Euro-clear") and Centrale de Livraison de Valeurs
Mobilieres S.A. ("CEDEL") for credit to the respective accounts of the
beneficial owners of such Securities (or to such other accounts as they may
direct). On and after the exchange date determined as provided in any such
temporary Global Security and described in an applicable Prospectus Supplement,
each such temporary Global Security will be exchangeable for definitive
Securities in bearer form, registered form or definitive global bearer form, or
any combination thereof, as specified in an applicable Prospectus Supplement. No
Bearer Security (including a Global Security in definitive bearer form)
delivered in exchange for a portion of a temporary Global Security shall be
mailed or otherwise delivered to any location in the United States (as defined
under "Limitations on Issuance of Bearer Securities") in connection with such
exchange. (Sections 303 and 304)
Unless otherwise specified in an applicable Prospectus Supplement,
definitive Securities in respect of any portion of a temporary Global Security
will only be delivered, and interest in respect of any portion of a temporary
Global Security payable in respect of an Interest Payment Date occurring prior
to the issuance of definitive Securities will only be paid, upon delivery of a
certificate signed by Euro-clear or CEDEL, as the case may be, with respect to
the portion of the temporary Global Security held for its account in the form
required by the applicable Indenture. Such certificate must be dated no earlier
than the exchange date or such Interest Payment Date, as the case may be, and
must be based on statements provided to Euro-clear or CEDEL, as applicable, by
its account holders who are beneficial owners of interests in such temporary
Global Security to the effect that such portion is beneficially owned (i) by a
person that is not a United States person or (ii) by or through a qualifying
financial institution in compliance with applicable Treasury regulations.
If any Securities of a series are issuable in definitive global form, the
applicable Prospectus Supplement will describe the circumstances, if any, under
which beneficial owners of interests in any such definitive Global Security may
exchange such interests for Securities of such series and of like tenor and
principal amount in any authorized form and denomination. No Bearer Security
delivered in exchange for a portion of a definitive Global Security shall be
mailed or otherwise delivered to any location in the United States in connection
with such exchange. (Section 305) A Person having a beneficial interest in a
definitive Global Security, except with respect to payment of principal of (and
premium, if any) and any interest on such definitive Global Security, will be
treated as a Holder of such principal amount of Outstanding Securities
represented by such definitive Global Security as shall be specified in a
written statement of the Holder of such definitive Global Security, or, in the
case of a definitive Global Security in bearer form, of Euro-clear or CEDEL,
which is produced to the Trustee by such Person. (Section 203) Principal of (and
premium, if any) and any interest on a definitive Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
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CERTAIN RESTRICTIVE PROVISIONS
The Senior Indenture relating to Offered Securities to be issued on a
parity with other senior indebtedness of the Company provides that, with certain
limited exceptions, the Company will not, nor will it permit any Restricted
Subsidiary (as defined in the Senior Indenture) to, pledge as security for any
loan the capital stock or indebtedness of any Restricted Subsidiary or create,
incur, assume or permit to exist any lien on any property or asset of the
Company. (Section 1008) Such provisions shall apply to all such Offered
Securities unless the applicable Prospectus Supplement expressly states
otherwise.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Each Indenture provides that the Company, without the consent of the
Holders of any of the Outstanding Securities, may consolidate with or merge into
any other corporation or transfer or lease its assets substantially as an
entirety to any Person or may acquire or lease the assets of any Person
substantially as an entirety or may permit any corporation to merge into the
Company provided that: (i) the successor is a corporation organized under the
laws of any domestic jurisdiction; (ii) the successor corporation, if other than
the Company, assumes the Company's obligations under such Indenture and the
Securities issued thereunder; (iii) immediately after giving effect to the
transaction, no Event of Default and no event that, after notice or lapse of
time, or both, would become an Event of Default, shall have occurred and be
continuing; and (iv) certain other conditions are met. (Section 801)
MODIFICATION OF THE INDENTURES
Each Indenture provides that the Company and the Trustee thereunder may,
without the consent of any Holders of Securities, enter into supplemental
indentures for the purposes, among other things, of adding to the Company's
covenants, adding additional Events of Default, establishing the form or terms
of Securities or, provided such action shall not adversely affect the interests
of the Holders of any series of Securities in any material respect, curing
ambiguities or inconsistencies in such Indenture or making other provisions.
(Section 901)
Each Indenture contains provisions permitting the Company, with the consent
of the Holders of not less than 66 2/3% in principal amount of the Outstanding
Securities of each affected series, to execute supplemental indentures adding
any provisions to or changing or eliminating any of the provisions of such
Indenture or modifying the rights of the Holders of the Securities of such
series, except that no such supplemental indenture may, without the consent of
the Holders of all the Outstanding Securities affected thereby, among other
things: (i) change the maturity of the principal of, or any installment of
principal of or interest on, any of the Securities; (ii) reduce the principal
amount thereof (or any premium thereon) or the rate of interest, if any,
thereon; (iii) reduce the amount of the principal of Original Issue Discount
Securities payable on any acceleration of maturity; (iv) change the currency,
currencies, composite currency or composite currencies in which any of the
Securities or any premium or interest thereon is payable; (v) change any
obligation of the Company to maintain an office or agency in the places and for
the purposes required by such Indenture; (vi) impair the right to institute suit
for the enforcement of any payment due on any Securities on or after their
applicable maturity date; (vii) reduce the percentage in principal amount of the
Outstanding Securities of any series the consent of the Holders of which is
required for any such supplemental indenture or for any waiver of compliance
with certain provisions of, or of certain defaults under, such Indenture; or
(viii) with certain exceptions, modify the provisions for the waiver of certain
covenants and defaults and any of the foregoing provisions. (Section 902)
WAIVER OF CERTAIN COVENANTS
The Senior Indenture provides that the Company will not be required to
comply with certain restrictive covenants (including those described above under
"Certain Restrictive Provisions") if the
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Holders of not less than 66 2/3% in principal amount of each series of
Outstanding Securities affected thereby waive compliance with such restrictive
covenants. (Section 1005)
EVENTS OF DEFAULT, NOTICE AND WAIVER
An Event of Default in respect of any series of Securities (unless it is
either inapplicable to a particular series or has been modified or deleted with
respect to any particular series) is defined in each Indenture to be: (i) a
default for 30 days in the payment of any installment of interest upon any of
the Securities of such series when due; (ii) a default in the payment of
principal of (or premium, if any, on) any of the Securities of such series when
due; (iii) a default in the deposit of any sinking fund payment when the same
becomes due by the terms of the Securities of such series; (iv) a default in the
performance, or breach, of any other covenants or warranties of the Company in
the applicable Indenture which shall not have been remedied for a period of 60
days after notice from the Trustee thereunder or the Holders of not less than
25% in principal amount of the Outstanding Securities of such series; (v)
certain events of bankruptcy, insolvency or reorganization of the Company; and
(vi) such other events as may be specified for such series. (Section 501)
Each Indenture provides that if an Event of Default specified therein in
respect of any series of Outstanding Securities issued under such Indenture
shall have occurred and be continuing, either the Trustee thereunder or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of such series may declare the principal (or, if such Securities are Original
Issue Discount Securities, such portion of the principal amount as may be
specified by the terms of such Securities) of all of the Outstanding Securities
of such series to be immediately due and payable. (Section 502)
Each Indenture provides that the Holders of not less than a majority in
principal amount of the Outstanding Securities of any series may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee thereunder, or exercising any trust or power conferred on such
Trustee, with respect to the Securities of such series, provided that such
Trustee may act in any way that is not inconsistent with such directions and may
decline to act if any such direction is contrary to law or to such Indenture or
would involve such Trustee in personal liability. (Section 512)
Each Indenture provides that the Holders of not less than a majority in
principal amount of the Outstanding Securities of any series may on behalf of
the Holders of all of the Outstanding Securities of such series waive any past
default under the applicable Indenture with respect to such series and its
consequences, except a default (i) in the payment of the principal of (or
premium, if any) or any interest on any of the Securities of such series or (ii)
in respect of a covenant or provision of such Indenture which, under the terms
of such Indenture, cannot be modified or amended without the consent of the
Holders of all of the Outstanding Securities of such series affected thereby.
(Section 513)
Each Indenture contains provisions entitling the Trustee thereunder,
subject to the duty of such Trustee during an Event of Default in respect of any
series of Securities to act with the required standard of care, to be
indemnified by the Holders of the Securities of such series before proceeding to
exercise any right or power under such Indenture at the request of the Holders
of the Securities of such series. (Sections 601 and 603)
Each Indenture provides that the Trustee thereunder will, within 90 days
after the occurrence of a default in respect of any series of Securities, give
to the Holders of the Securities of such series notice of all uncured and
unwaived defaults known to it; provided, however, that, except in the case of a
default in the payment of the principal of (or premium, if any) or any interest
on, or any sinking fund installment with respect to, any of the Securities of
such series, such Trustee will be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in the interest of
the Holders of the Securities of such series; and provided, further, that such
notice shall not be given until at least 30 days after the occurrence of an
Event of Default regarding the performance, or breach, of any covenant or
warranty of the Company under such Indenture other than for the payment of the
principal of (or premium, if any) or any interest on, or any sinking fund
installment with respect
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to, any of the Securities of such series. The term default for the purpose of
this provision only means any event that is, or after notice or lapse of time,
or both, would become, an Event of Default with respect to the Securities of
such series. (Section 602)
Each Indenture requires the Company to file annually with the Trustee
thereunder a certificate, executed by an officer of the Company, indicating
whether the Company is in default under such Indenture. (Section 1004)
MEETINGS
Each Indenture contains provisions for convening meetings of the Holders of
Securities of a series if Securities of that series are issuable as Bearer
Securities. (Section 1301). A meeting may be called at any time by the Trustee
under the applicable Indenture, and also, upon request, by the Company or the
Holders of at least 10% in principal amount of the Outstanding Securities of
such series, in any such case upon notice given in accordance with "Notices"
below. (Section 1302) Persons entitled to vote a majority in principal amount of
the Outstanding Securities of a series shall constitute a quorum at a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which is
required to be given by the Holders of not less than 66 2/3% in principal amount
of the Outstanding Securities of a series, the Persons entitled to vote 66 2/3%
in principal amount of the Outstanding Securities of such series shall
constitute a quorum. In the absence of a quorum, a meeting called by the Company
or the Trustee shall be adjourned for a period of not less than 10 days, and in
the absence of a quorum at any such adjourned meeting, the meeting shall be
further adjourned for a period of not less than 10 days. Any resolution with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which may be made, given or taken by the Holders of a
specified percentage in principal amount of Outstanding Securities of a series
may be adopted at a meeting or adjourned meeting duly reconvened at which a
quorum is present by the affirmative vote of the Holders of such specified
percentage in principal amount of the Outstanding Securities of that series. Any
resolution passed or decision taken at any meeting of Holders of Securities of
any series duly held in accordance with the applicable Indenture will be binding
on all Holders of Securities of that series and of the related Coupons. With
respect to any consent, waiver or other action which the applicable Indenture
expressly provides may be given by the Holders of a specified percentage of
Outstanding Securities of all series affected thereby (acting as one class),
only the principal amount of Outstanding Securities of any series represented at
a meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid and voting in favor of such action shall be counted for purposes of
calculating the aggregate principal amount of Outstanding Securities of all
series affected thereby favoring such action. (Section 1304)
NOTICES
Except as otherwise provided in each Indenture, notices to Holders of
Bearer Securities will be given by publication at least once in a daily
newspaper in The City of New York and London and in such other city or cities as
may be specified in such Bearer Securities and will be mailed to such Persons
whose names and addresses were previously filed with the Trustee under the
applicable Indenture within the two preceding years, within the time prescribed
for the giving of such notice. Notices to Holders of Registered Securities will
be given by mail to the addresses of such Holders as they appear in the Security
Register, within the time prescribed for the giving of such notice. (Section
106)
TITLE
Title to any Bearer Securities (including Bearer Securities that are Global
Securities) and any Coupons appertaining thereto will pass by delivery. The
Company, the appropriate Trustee and any agent of the Company or such Trustee
may treat the Holder of any Bearer Security, the Holder of any Coupon and the
registered owner of any Registered Security as the absolute owner thereof
(whether or
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not such Security or Coupon shall be overdue and notwithstanding any notice to
the contrary) for the purpose of making payment and for all other purposes.
(Section 308)
REPLACEMENT OF SECURITIES AND COUPONS
Any mutilated Security and any Security with a mutilated Coupon
appertaining thereto will be replaced by the Company at the expense of the
Holder upon surrender of such mutilated Security or Security with a mutilated
Coupon to the appropriate Trustee. Securities or Coupons that become destroyed,
stolen or lost will be replaced by the Company at the expense of the Holder upon
delivery to the appropriate Trustee of evidence of the destruction, loss or
theft thereof satisfactory to the Company and such Trustee; in the case of any
Coupon which becomes destroyed, stolen or lost, such Coupon will be replaced
(upon surrender to the appropriate Trustee of the Security with all appurtenant
Coupons not destroyed, stolen or lost) by issuance of a new Security in exchange
for the Security to which such Coupon appertains. In the case of a destroyed,
lost or stolen Security or Coupon an indemnity satisfactory to the appropriate
Trustee and the Company may be required at the expense of the Holder of such
Security or Coupon before a replacement Security will be issued. (Section 306)
DEFEASANCE
Unless the Prospectus Supplement relating to the Offered Securities
provides otherwise, the Company at its option (a) will be Discharged (as such
term is defined in the applicable Indenture) from any and all obligations in
respect of the Offered Securities (except for certain obligations to register
the transfer or exchange of Securities, replace stolen, lost or mutilated
Securities and Coupons, maintain paying agencies and hold moneys for payment in
trust) or (b) need not comply with certain restrictive covenants of the
applicable Indenture (including those described above under "Certain Restrictive
Provisions"), if there is deposited with the Trustee money and/or (i) in the
case of Securities and Coupons denominated in U.S. dollars, U.S. Government
Obligations (as defined in the applicable Indenture), or (ii) in the case of
Securities and Coupons denominated in a foreign currency, Foreign Government
Securities (as defined in the applicable Indenture), which in each case through
the payment of interest thereon and principal thereof in accordance with their
terms will provide money, in an amount sufficient to pay in the currency,
currencies, composite currency or composite currencies in which the Offered
Securities are payable all the principal of, and interest on, the Offered
Securities on the dates such payments are due in accordance with the terms of
the Offered Securities. Among the conditions to the Company's exercising any
such option, the Company is required to deliver to the appropriate Trustee an
opinion of counsel to the effect that the deposit and related defeasance would
not cause the Holders of the Offered Securities to recognize income, gain or
loss for United States Federal income tax purposes and that the Holders will be
subject to United States Federal income tax in the same amounts, in the same
manner and at the same times as would have been the case if such deposit and
related defeasance had not occurred. (Sections 401 and 403)
SUBORDINATION
The payment of the principal of (and premium, if any) and any interest on
the Subordinated Securities, including sinking fund payments, is subordinated in
right of payment, to the extent and in the manner set forth in the Subordinated
Indenture, to the prior payment in full of all Superior Indebtedness. (Section
1401) Superior Indebtedness is defined as (a) the principal of, premium, if any,
and accrued and unpaid interest on (i) indebtedness of the Company for money
borrowed, whether outstanding on the date of execution of the Subordinated
Indenture or thereafter created, incurred or assumed, (ii) guarantees by the
Company of indebtedness for money borrowed by any other person, whether
outstanding on the date of execution of the Subordinated Indenture or thereafter
created, incurred or assumed, (iii) indebtedness evidenced by notes, debentures,
bonds or other instruments of indebtedness for the payment of which the Company
is responsible or liable, by guarantees or otherwise, whether outstanding on the
date of execution of the Subordinated Indenture or thereafter created,
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incurred or assumed, and (iv) obligations of the Company under any agreement to
lease, or any lease of, any real or personal property, whether outstanding on
the date of execution of the Subordinated Indenture or thereafter created,
incurred or assumed, (b) any other indebtedness, liability or obligation,
contingent or otherwise, of the Company and any guarantee, endorsement or other
contingent obligation of the Company in respect of any indebtedness, liability
or obligation, whether outstanding on the date of execution of the Subordinated
Indenture or thereafter created, incurred or assumed, and (c) modifications,
renewals, extensions and refundings of any such indebtedness, liabilities,
obligations or guarantees; unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
indebtedness, liabilities, obligations or guarantees, or such modification,
renewal, extension or refunding thereof, are not superior in right of payment to
the Subordinated Securities; provided, however, that Superior Indebtedness will
not be deemed to include, and the Subordinated Securities will rank equal in
right of payment to, the Company's 7 3/4% Subordinated Notes due 2002, and all
other such subordinated securities, including but not limited to the Medium-Term
Subordinated Notes, Series B, and the Medium-Term Subordinated Notes, Series D,
of the Company, or any obligation of the Company to any subsidiary. (Sections
101, 1401 and 1408) The Subordinated Indenture and the Subordinated Securities
do not contain any covenants or other provisions that would limit the issuance
of additional Superior Indebtedness.
No payment by the Company on account of principal of (or premium, if any)
or any interest on the Subordinated Securities, including sinking fund payments,
may be made if any default or event of default with respect to any Superior
Indebtedness shall have occurred and be continuing and written notice thereof
shall have been given to the Trustee by the Company or to the Company and the
Trustee by the holders of at least 10% in principal amount of any kind or
category of any Superior Indebtedness (or a representative or trustee on their
behalf). Upon any acceleration of the principal due on the Subordinated
Securities or any payment or distribution of assets of the Company to creditors
upon any dissolution, winding up, liquidation or reorganization, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all principal of (and premium, if any) and interest due or to
become due on all Superior Indebtedness must be paid in full before the holders
of Subordinated Securities are entitled to receive or retain any payment (other
than shares of stock or subordinated indebtedness provided by a plan of
reorganization or adjustment which does not alter the rights of holders of
Superior Indebtedness). Subject to the payment in full of all Superior
Indebtedness, the holders of the Subordinated Securities are to be subrogated to
the rights of the holders of Superior Indebtedness to receive payments or
distributions of assets of the Company applicable to Superior Indebtedness until
the Subordinated Securities are paid in full. (Section 1402)
By reason of such subordination, in the event of insolvency, creditors of
the Company who are holders of Superior Indebtedness, as well as certain general
creditors of the Company, may recover more, ratably, than the holders of the
Subordinated Securities. In addition, since the Company is a holding company,
the right of the Company, and therefore the right of creditors of the Company
(including holders of Senior Securities and Subordinated Securities), to
participate in any distribution of assets of any subsidiary of the Company upon
its liquidation or reorganization or otherwise is necessarily subject to the
prior claims of creditors of the subsidiary, except to the extent that claims of
the Company itself as a creditor of the subsidiary may be recognized. Also,
dividend payments and advances to the Company by PaineWebber are restricted by
the provisions of the net capital rules of the Commission and the NYSE and
covenants in various loan agreements.
GOVERNING LAW
The Indenture, the Securities and the Coupons will be governed by, and
construed in accordance with, the laws of the State of New York. (Section 112)
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THE TRUSTEES UNDER THE INDENTURES
Chemical Bank is the Trustee under the Senior Indenture. Chemical Bank is a
depositary for funds and performs other services for, and transacts other
banking business with, the Company in the normal course of business.
Chemical Bank Delaware is the Trustee under the Subordinated Indenture.
ERISA MATTERS
The Company, PaineWebber, PaineWebber International and other affiliates of
the Company may each be considered a "party in interest" (within the meaning of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) or a
"disqualified person" (within the meaning of Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code")) with respect to many employee
benefit plans ("Plans") that are subject to ERISA. The purchase of Securities by
a Plan that is subject to the fiduciary responsibility provisions of ERISA or
the prohibited transaction provisions of Section 4975 of the Code (including
individual retirement arrangements and other plans described in Section
4975(e)(1) of the Code) and with respect to which the Company, PaineWebber,
PaineWebber International or any other affiliate of the Company is a service
provider (or otherwise is a party in interest or a disqualified person) may
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Code, unless such Securities are acquired pursuant to and in accordance with
an applicable exemption, such as Prohibited Transaction Class Exemption ("PTCE")
84-14 (an exemption for certain transactions determined by an independent
qualified professional asset manager), PTCE 91-38 (an exemption for certain
transactions involving bank collective investment funds) or PTCE 90-1 (an
exemption for certain transactions involving insurance company pooled separate
accounts). Any pension or other employee benefit plan proposing to acquire any
Securities should consult with its counsel.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby (i) directly to
one or more purchasers, (ii) through agents designated from time to time, (iii)
to dealers or (iv) through underwriters or a group of underwriters. The
applicable Prospectus Supplement will set forth the terms of the offering of any
Offered Securities, including the name or names of any underwriters, the
purchase price of the Offered Securities and the proceeds to the Company from
such sale, any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers and any securities exchanges on which
the Offered Securities may be listed. If a bidding or auction process is
utilized, it will be described in the Prospectus Supplement.
If underwriters are used in the sale, Offered Securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The Offered
Securities may be offered to the public either through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
Unless otherwise set forth in the applicable Prospectus Supplement, the
obligations of the underwriters to purchase the Offered Securities will be
subject to certain conditions precedent, and the underwriters will be obligated
to purchase all of the Offered Securities if any are purchased. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
Offered Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of Offered Securities will be named, and any commissions payable by the
Company to such agents will be set forth, in the applicable Prospectus
Supplement. Unless otherwise indicated in the applicable Prospectus Supplement,
any such agent will be acting on a best efforts basis for the period of its
appointment.
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If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Offered Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to those conditions set forth in the
applicable Prospectus Supplement and such Prospectus Supplement will set forth
the commission payable for the solicitation of such contracts.
Any underwriters, dealers or agents participating in the distribution of
Securities may be deemed to be underwriters and any discounts or commissions
received by them on the sale or resale of Offered Securities may be deemed to be
underwriting discounts and commissions under the Securities Act. Agents and
underwriters may be entitled under agreements entered into with the Company to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments which the agents or underwriters may be required to make in respect
thereof. Agents and underwriters may be customers of, engage in transactions
with, or perform services for the Company in the ordinary course of business.
Unless otherwise specified in the applicable Prospectus Supplement, the
Company and each underwriter, dealer and agent participating in the distribution
of any Offered Securities which are issuable in bearer form will agree that, in
connection with the original issuance of any Bearer Security and during the
period ending 40 days after the date of original issuance of such Bearer
Security, they will not offer, sell or deliver such Bearer Security, directly or
indirectly, to a United States person or to any person within the United States,
except to the extent permitted under applicable Treasury regulations. Any other
restrictions on the offer or sale of Offered Securities in or from jurisdictions
other than the United States or within the United States will be set forth in
the applicable Prospectus Supplement.
All Offered Securities will be a new issue of securities with no
established trading market. Certain agents through whom, and underwriters to
whom, Offered Securities are sold by the Company for public offering and sale
may make a market in such Offered Securities, but such agents and underwriters
will not be obligated to do so and may discontinue any market making at any time
without notice. No assurance can be given as to the liquidity of the trading
market for any Offered Securities.
PaineWebber, PaineWebber International or one or more other affiliates of
the Company may participate in distributions of the Offered Securities. All
distributions of the Offered Securities will conform to the requirements set
forth in the applicable sections of Schedule E of the By-laws of the NASD.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States Federal income tax laws and regulations,
in general a Bearer Security may not be offered, sold or delivered, directly or
indirectly, to a United States person or to any person within the United States
in connection with the original issuance of such Bearer Security or during the
period ending 40 days after the date of original issuance of such Bearer
Security. However, offers or sales can be made during this period to certain
institutions, including certain international organizations and foreign branches
of U.S. financial institutions (a "qualifying financial institution"), that
satisfy the requirements prescribed by applicable Treasury regulations. In
addition, sales can be made to a United States person acquiring a Bearer
Security through a qualifying financial institution in compliance with
applicable Treasury regulations. Definitive Bearer Securies will not be
delivered to a holder, however, unless the beneficial owner of the Securities
has complied with the certification requirements described above under
"Description of Securities--Global Securities" or, in any event, within the
United States.
Bearer Securities will bear the following legend on their face and on any
Coupons which may be detached therefrom or, if the obligation is evidenced by a
book entry, in the book of record in which the
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book entry is made: "Any United States person who holds this obligation will be
subject to limitations under the United States income tax laws, including the
limitations provided in Sections 165(j) and 1287(a) of the United States
Internal Revenue Code". The Sections referred to in such legend provide that,
with certain exceptions, a United States taxpayer who holds a Bearer Security
will not be allowed to deduct any loss with respect to, and will not be eligible
for capital gain treatment with respect to any gain realized on, the sale,
exchange, redemption or other disposition of such Bearer Security.
As used herein, "United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or organized
in or under the laws of the United States or any political subdivision thereof,
or any estate or trust the income of which is subject to United States Federal
income taxation regardless of its source, and "United States" means the United
States of America and its possessions (including Puerto Rico, the U.S. Virgin
Islands, Guam, American Samoa and the Northern Mariana Islands).
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for the
Company by its General Counsel, Theodore A. Levine, and for the agents or
underwriters, if any, by Cravath, Swaine & Moore, 825 Eighth Avenue, New York,
New York. Cravath, Swaine & Moore acts from time to time as legal counsel to the
Company and its subsidiaries on various matters.
EXPERTS
The consolidated financial statements of the Company for the year ended
December 31, 1992, incorporated by reference in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992, have been audited by
Ernst & Young, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
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NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY PAINE WEBBER
GROUP INC. OR THE UNDERWRITER. THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN
SUCH JURISDICTION. THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AT
ANY TIME DOES NOT IMPLY THAT THE INFORMATION
THEY CONTAIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THEIR RESPECTIVE DATES.
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TABLE OF CONTENTS
PAGE
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Prospectus Supplement
Use of Proceeds............................... S-2
Capitalization................................ S-2
Description of Notes.......................... S-3
Underwriting.................................. S-3
Legal Matters................................. S-4
Prospectus
Available Information......................... 2
Documents Incorporated
by Reference............................... 2
The Company................................... 3
Use of Proceeds............................... 4
Ratio of Earnings to Fixed Charges............ 4
Description of Securities..................... 4
ERISA Matters................................. 16
Plan of Distribution.......................... 16
Limitations on Issuance of Bearer
Securities................................. 17
Legal Matters................................. 18
Experts....................................... 18
[INSERT LOGO]
$200,000,000
PAINE WEBBER GROUP INC.
7 5/8% NOTES DUE 2014
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PROSPECTUS SUPPLEMENT
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PAINEWEBBER INCORPORATED
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February 8, 1994
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