AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 16, 1995
REGISTRATION NOS. 33-52695-01
33-52695
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
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
incorporation or organization) Identification No.)
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(212) 713-2000
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive office)
THEODORE A. LEVINE
VICE PRESIDENT, GENERAL COUNSEL & SECRETARY
PAINE WEBBER GROUP INC.
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(212) 713-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
PETER S. WILSON
CRAVATH, SWAINE & MOORE
WORLDWIDE PLAZA
825 EIGHTH AVENUE
NEW YORK, NEW YORK 10019
(212) 474-1000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
When market conditions warrant after the effective date of this Registration
Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. Z
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
<TABLE><CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS TO BE OFFERING PRICE AGGREGATE REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE(2) FEE(3)
<S> <C> <C> <C> <C>
Debt Securities(4).............................. $400,000,000 100% $400,000,000 $137,932
</TABLE>
(1) Or, if any Debt Securities are issued at an original issue discount, such
greater amount as shall result in an aggregate offering price to the public
which shall not exceed the amount set forth under "Proposed maximum
aggregate offering price". Debt Securities may be denominated in U.S.
Dollars or the equivalent in other currencies or composite currencies.
(2) Estimated solely for the purpose of determining the registration fee.
(3) Previously paid.
(4) This Registration Statement also relates to $444,575,000 in Debt Securities
previously registered pursuant to Registration Statement No. 33-51149. A
registration fee of $517,241 was paid in connection with Registration
Statement No. 33-51149.
-------------------
Pursuant to Rule 429 of the rules and regulations of the Commission under
the Securities Act of 1933, the Prospectus contained herein also relates to
Registration Statement No. 33-51149, as to which this constitutes Post-Effective
Amendment No. 1. Such Post-Effective Amendment shall hereafter become effective
concurrently with the effectiveness of this Registration Statement in accordance
with Section 8(c) of the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION--OCTOBER 16, 1995
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1995)
PAINE WEBBER GROUP INC.
MEDIUM-TERM SENIOR NOTES, SERIES C, AND
MEDIUM-TERM SUBORDINATED NOTES, SERIES D
DUE FROM NINE MONTHS TO 30 YEARS FROM DATE OF ISSUE
------------
Paine Webber Group Inc. (the "Company") may offer from time to time its
Medium-Term Senior Notes, Series C ("Senior Notes"), and Medium-Term
Subordinated Notes, Series D ("Subordinated Notes"). The Senior Notes and
Subordinated Notes offered by this Prospectus Supplement are hereinafter
referred to as the "Notes". The Company may sell up to U.S. $844,575,000
aggregate principal amount (or its equivalent in another currency or composite
currency) of Notes, subject to reduction as a result of the sale of other
Securities (as defined in the accompanying Prospectus). The Notes will be due
from nine months to 30 years from the date of issue, as selected by the
purchaser and agreed to by the Company, and may be subject to redemption at the
option of the Company or repayment at the option of the holder. The Notes may be
denominated or payable in U.S. dollars or in such foreign currencies or
composite currencies (each a "Specified Currency") as may be designated by the
Company at the time of offering. The Specified Currency, interest rate or
interest rate formula, issue price and stated maturity ("Stated Maturity") of
any Note and any other terms of such Note not set forth herein or in the
accompanying Prospectus will be set forth in a related Pricing Supplement (the
"Pricing Supplement") to this Prospectus Supplement. Unless otherwise indicated
in the applicable Pricing Supplement, each Note will bear interest at a fixed
rate (a "Fixed Rate Note"), which may be zero in the case of certain Notes
issued at a price representing a discount from the principal amount payable at
Stated Maturity (a "Zero-Coupon Note"), or at a floating rate (a "Floating Rate
Note") determined by reference to the Commercial Paper Rate, the Prime Rate, the
Federal Funds Rate, LIBOR, the Treasury Rate (each as defined under "Description
of Notes") or such other interest rate formula as may be designated in the
applicable Pricing Supplement, as adjusted by the Spread or Spread Multiplier
(each as defined under "Description of Notes"), if any, applicable to such Note.
The Senior Notes will constitute Superior Indebtedness (as defined in the
accompanying Prospectus), and the Subordinated Notes will be subordinated to all
Superior Indebtedness. See "Description of Notes".
Each Note will be represented by either a global security (a "Global Note")
registered in the name of The Depository Trust Company, as Depositary (the
"Depositary") or its nominee (each such Note represented by a Global Note being
referred to herein as a "Book-Entry Note"), or a certificate issued in
definitive form (a "Certificated Note"), as set forth in the applicable Pricing
Supplement. Interests in Book-Entry Notes will be shown on, and transfers
thereof will be effected only through, the records maintained by the Depositary
and its participants. Except as described in "Description of Notes--Book-Entry
Notes", owners of beneficial interests in Global Notes will not be entitled to
receive Notes in definitive form and will not be considered the holders thereof.
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
cannot be redeemed or repaid prior to their Stated Maturity and will be issued
only in fully registered form in the denomination of U.S. $100,000 or any larger
amount that is an integral multiple of U.S. $1,000 or, in the case of Notes
denominated in a Specified Currency other than U.S. dollars, in the
denominations set forth in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, interest on
the Fixed Rate Notes will be payable on each March 1 and September 1 and at
maturity. Interest on the Floating Rate Notes will be payable on the dates
specified herein and in the applicable Pricing Supplement. See "Description of
Notes".
Unless otherwise specified in the applicable Pricing Supplement, Notes
denominated or payable in other than U.S. dollars or European Currency Units
("ECU") will not be sold in, or to residents of, the country issuing the
Specified Currency.
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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, ANY PRICING SUPPLEMENT HERETO OR THE PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Price to Public(1) Agent's Commissions(2) Proceeds to Company (2)(3)
<S> <C> <C> <C>
Per Note....................... 100% .08% to .75% 99.25% to 99.92%
Total(4)....................... U.S. $844,575,000 U.S. $675,660 to $6,334,313 U.S. $838,240,688 to $843,899,340
</TABLE>
(1) Unless otherwise specified in the applicable Pricing Supplement, the price
to the public of Notes will be 100% of their principal amount.
(2) The Company will pay each of PaineWebber Incorporated ("PWI") and CS First
Boston Corporation (with PWI, the "Agents", and each, an "Agent") a
commission of from .08% to .75%, depending on Stated Maturity, of the
principal amount of any Notes sold through such Agent, as agent (or sold to
such Agent as principal under circumstances in which no other discount is
agreed upon).
(3) Before deducting estimated expenses of U.S. $[ ] payable by the Company,
including reimbursement of certain of the Agents' expenses. See "Plan of
Distribution".
(4) Or the equivalent thereof in other currencies or composite currencies.
------------
Offers to purchase Notes are being solicited on a reasonable efforts basis,
from time to time, by the Agents on behalf of the Company. The Notes are not and
will not be listed on any securities exchange; the Notes do not have an
established trading market; and there can be no assurance that the maximum
amount of the Notes offered by this Prospectus Supplement will be sold or that
there will be a secondary market for the Notes. The Company reserves the right
to sell Notes directly on its own behalf. The Company may use additional agents
as it may designate from time to time to solicit offers to purchase Notes. The
name of any such additional agent and details as to the arrangements between
such agent and the Company will be set forth in the applicable Pricing
Supplement. The Company also may sell Notes at a discount to an Agent for its
own account or for resale to one or more purchasers at varying prices relating
to prevailing market prices at the time of resale or, if set forth in the
applicable Pricing Supplement, at a fixed public offering price, as determined
by such Agent. In addition, an Agent may offer Notes purchased by it as
principal to other dealers. The Company reserves the right to withdraw, cancel
or modify the offering contemplated hereby without notice. The Company or the
soliciting Agent may reject any offer to purchase Notes in whole or in part. See
"Plan of Distribution".
This Prospectus Supplement and the accompanying Prospectus may be used by the
Company, PWI (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 Notes and in Senior Notes and Subordinated Notes previously
sold at negotiated prices related to prevailing market prices at the time of
sale or otherwise. PWI or such other Company affiliates may act as principal or
agent in such transactions.
------------
PAINEWEBBER INCORPORATED CS FIRST BOSTON
------------
The date of this Prospectus Supplement is , 1995.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
IN CONNECTION WITH THE DISTRIBUTION OF THE NOTES, THE AGENTS MAY, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, OVER-ALLOT OR EFFECT TRANSACTIONS WITH A
VIEW TO STABILIZING OR MAINTAINING THE MARKET PRICE OF THE NOTES 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.
IMPORTANT CURRENCY INFORMATION
Unless otherwise specified in the applicable Pricing Supplement, purchasers
are required to pay for each Note by delivery of the requisite amount of the
Specified Currency in which such Note is denominated. Unless otherwise specified
in the applicable Pricing Supplement and except, under certain circumstances,
for Notes payable in a Specified Currency other than U.S. dollars as described
under "Foreign Currency Risks--Payment Currency", payments of principal of and
premium, if any, and interest on each Note will be made in the Specified
Currency in which such Note is denominated. However, at the election of the
holder of a Note, payments of principal of and premium, if any, and interest on
Notes payable in other than U.S. dollars may be converted into U.S. dollars on
the terms and conditions described below under "Description of Notes--Payment of
Principal and Interest".
References herein to "U.S. dollars", "U.S. $" or "$" are to the lawful
currency of the United States.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby (referred to in the accompanying Prospectus as "Offered Securities")
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of Offered Securities set forth in the
Prospectus, to which description reference is hereby made. The following
description will apply to each Note unless otherwise specified in the applicable
Pricing Supplement. The statements under this heading are subject to the
detailed provisions of each Indenture (as defined below). Whenever particular
provisions of an Indenture are referred to, such provisions are incorporated by
reference herein as a part of the statements made and the statements are
qualified in their entirety by such reference.
GENERAL
The Senior Notes offered hereby will be issued under the Senior Indenture
referred to in the accompanying Prospectus with Chemical Bank, as Trustee
("Senior Trustee"). The Subordinated Notes offered hereby will be issued under
the Subordinated Indenture referred to in the accompanying Prospectus with
Chemical Bank Delaware, as Trustee ("Subordinated Trustee"). The Senior
Indenture and Subordinated Indenture are herein sometimes referred to
collectively as the "Indentures" and individually as an "Indenture". The Senior
Trustee and Subordinated Trustee are herein sometimes referred to collectively
as the "Trustees" and individually as a "Trustee". The Senior Notes constitute a
single series of Securities under the Senior Indenture and currently may be
issued in an aggregate principal amount of up to an additional U.S.
$844,575,000, less an amount equal to the aggregate principal amount of any
other Securities, including any other series of medium-term notes (including any
Subordinated Notes), issued under the accompanying Prospectus. The Subordinated
Notes constitute a single series of Securities under the Subordinated Indenture
and currently may be issued in an
S-2
<PAGE>
aggregate principal amount of up to an additional U.S. $844,575,000, less an
amount equal to the aggregate principal amount of any other Securities,
including any other series of medium-term notes (including any Senior Notes),
issued under the accompanying Prospectus. The foregoing limits may be increased
by the Company without the consent of any of the holders of the Notes if in the
future it determines that it may wish to sell additional Senior Notes or
Subordinated Notes. Any Note denominated in other than U.S. dollars will be
treated for purposes of the foregoing limit as having a principal amount in U.S.
dollars determined by converting the principal amount of such Note into U.S.
dollars at the noon buying rate in The City of New York for cable transfers for
the Specified Currency thereof as certified for customs purposes by the Federal
Reserve Bank of New York (the "Exchange Rate") on the first New York Business
Day (as hereinafter defined) next preceding the date on which the Company
accepts the offer to purchase such Note. For a description of the rights
associated with different series of Securities under the Indentures, see
"Description of Securities" in the accompanying Prospectus.
Unless previously redeemed or repaid, a Note offered hereby will mature at
its Stated Maturity, which may be a date from nine months to 30 years from its
date of issue as selected by the purchaser and agreed to by the Company, and may
be subject to redemption at the option of the Company or repayment at the option
of the holder prior to its Stated Maturity as set forth under "Optional
Redemption, Repayment and Repurchase". As used herein, "Maturity" with respect
to a Note shall mean the date on which the principal of such Note or an
installment of principal becomes due, whether at its Stated Maturity, upon
redemption or early repayment or otherwise.
Each Note will be denominated and payable in a Specified Currency as
specified in the applicable Pricing Supplement.
The Notes will be issuable only in fully registered form without coupons.
Each Note will be issued initially as either a Book-Entry Note or a Certificated
Note. See "Book-Entry Notes" below. Currently, only Notes that are denominated
and payable in U.S. dollars may be issued as Book-Entry Notes. Unless otherwise
specified in the applicable Pricing Supplement, the authorized denominations of
any Note denominated in U.S. dollars will be U.S. $100,000 and integral
multiples of U.S. $1,000 in excess thereof. The authorized denominations of
Notes denominated in other than U.S. dollars will be set forth in the applicable
Pricing Supplement.
Certificated Notes may be presented for registration of transfer or exchange
at the Corporate Trust Office of Chemical Bank in the Borough of Manhattan, The
City of New York (the "Notes Office"). Chemical Bank will act as Paying Agent
(the "Paying Agent") with respect to the Subordinated Notes.
Certain Notes 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. The amount so payable on an Original
Issue Discount Security in the event of such an acceleration will be determined
in accordance with the applicable Pricing Supplement and the terms of such
Original Issue Discount Security. Original Issue Discount Securities may be
Zero-Coupon Notes 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. For a discussion of Federal income tax considerations with respect to
Notes issued with such original issue discount, see "Certain United States
Federal Income Tax Considerations--United States Holders--Original Issue
Discount".
The Company has previously sold Senior Notes and Subordinated Notes and
other series of medium-term notes. As of September 18, 1995, 1995, U.S.
$636,475,000 aggregate principal amount of
S-3
<PAGE>
Senior Notes were outstanding under the Senior Indenture and U.S. $6,000,000
aggregate principal amount of the Company's Medium-Term Subordinated Notes,
Series B, and U.S. $282,150,000 aggregate principal amount of Subordinated Notes
were outstanding under the Subordinated Indenture.
The Senior Notes will constitute Superior Indebtedness and will rank pari
passu with all other unsecured debt of the Company except subordinated debt. The
Subordinated Notes 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 of June 30, 1995, the aggregate
outstanding principal amount of Superior Indebtedness was U.S. $2.8 billion
(including U.S. $547.4 million of commercial paper U.S. $44.9 million of bank
loans, but excluding Superior Indebtedness consisting of guarantees and other
commitments and contingent liabilities and obligations of the type which are
generally described in the notes entitled "Short-Term Borrowings" and
"Commitments and Contingencies in the notes to the Company's Consolidated
Financial Statements for the quarter ended June 30, 1995, included in the
Company's Quarterly Report on Form 10-Q for such fiscal quarter). See
"Description of Securities--Subordination" in the accompanying Prospectus.
PAYMENT OF PRINCIPAL AND INTEREST
Unless otherwise specified in the applicable Pricing Supplement and except,
under certain circumstances, for a Note payable in a Specified Currency other
than U.S. dollars, payments of principal of and premium, if any, and interest on
each Note will be made in the Specified Currency in which such Note is
denominated, provided that holders of Notes payable in other than U.S. dollars
may, by following the procedures described in the next paragraph, elect to have
such payments converted into U.S. dollars. See also "Foreign Currency Risks".
Unless otherwise specified in the applicable Pricing Supplement, a holder of
a Note payable in other than U.S. dollars may elect to receive payment of
principal of and premium, if any, and interest on such Note in U.S. dollars by
transmitting a written request for such payment to the Senior Trustee, in the
case of Senior Notes, or to the Paying Agent, in the case of Subordinated Notes,
at the Notes Office on or prior to the applicable Regular Record Date (as
hereinafter defined) or at least 16 days prior to Maturity, as the case may be.
Such request may be in writing (mailed or hand delivered) or by cable, telex or
other form of facsimile transmission. A holder of a Note payable in other than
U.S. dollars may elect to receive payment in U.S. dollars for all principal,
premium, if any, and interest payments and need not file a separate election for
each payment. Such election will remain in effect until such Note is transferred
or until such election is changed by written notice to the Senior Trustee or the
Paying Agent, as the case may be, but written notice of any such change must be
received by the Senior Trustee or the Paying Agent, as the case may be, on or
prior to the applicable Regular Record Date or at least 16 days prior to
Maturity, as the case may be. Holders of Notes payable in other than U.S.
dollars whose Notes are to be held in the name of a broker or nominee should
contact such broker or nominee to determine whether and how an election to
receive payments in U.S. dollars may be made.
The U.S. dollar amount to be received by a holder of a Note denominated in
other than U.S. dollars who elects to receive payment in U.S. dollars will be
based on the highest bid quotation in The City of New York received by an agent
(which may be Chemical Bank or an affiliate thereof) appointed by the Company
for such purpose (the "Exchange Rate Agent") as of 11:00 A.M., New York City
time, on the second Business Day (as hereinafter defined) preceding the
applicable payment date from three recognized foreign exchange dealers (one of
which may be the Exchange Rate Agent) selected by the Exchange Rate Agent for
the purchase by the quoting dealer of the Specified Currency for U.S. dollars
for settlement on such payment date in the aggregate amount of the Specified
Currency payable to all holders of Notes electing to receive U.S. dollar
payments and at which the applicable dealer commits to
S-4
<PAGE>
execute a contract. If such bid quotations are not available, payments will be
made in the Specified Currency, except as provided below under "Foreign Currency
Risks--Payment Currency". All currency exchange costs will be borne by the
holder of the Note by deductions from such payments.
Interest will be payable to the person in whose name a Note is registered at
the close of business on the Regular Record Date next preceding each Interest
Payment Date (as hereinafter defined) except that, in the case of Notes issued
between a Regular Record Date and an Interest Payment Date, interest payable on
such Interest Payment Date will be paid to the person in whose name such Note
was initially registered; provided, however, that interest payable at Maturity
will be payable to the person to whom principal shall be payable. Unless
otherwise indicated in the applicable Pricing Supplement, the "Regular Record
Date" with respect to any Note shall be the date 15 calendar days prior to each
Interest Payment Date, whether or not such date shall be a Business Day.
Unless otherwise indicated in the applicable Pricing Supplement and except
as provided below, interest will be payable, in the case of Fixed Rate Notes, on
each March 1 and September 1; in the case of Floating Rate Notes which reset
daily, weekly, monthly or quarterly, on the third Wednesday of March, June,
September and December of each year; in the case of Floating Rate Notes which
reset semi-annually, on the third Wednesday of the two months of each year
specified in the applicable Pricing Supplement; and, in the case of Floating
Rate Notes which reset annually, on the third Wednesday of the month specified
in the applicable Pricing Supplement, and, in each case, at Maturity. Each date
on which interest is payable on any Note (other than at Maturity) is referred to
in this Prospectus Supplement as an "Interest Payment Date". Holders of
Zero-Coupon Notes will not receive periodic payments of interest on such Notes.
Unless otherwise specified in the applicable Pricing Supplement, payments of
interest on any Note with respect to any Interest Payment Date or at Maturity
will include interest accrued from and including the later of the date of
issuance of such Note and the most recent Interest Payment Date for such Note to
which interest has been paid or provided for to but excluding such current
Interest Payment Date or Maturity; provided, however, that if the Interest Reset
Dates (as hereinafter defined) with respect to any Floating Rate Note are daily
or weekly, interest payable on such Note on any Interest Payment Date or at
Maturity will include interest accrued from and including the later of the date
of issuance of such Note and the day following the most recent Regular Record
Date to which interest on such Note has been paid or provided for to and
including the next preceding Regular Record Date or Maturity, except that, if
such a Note is issued between a Regular Record Date and the next succeeding
Interest Payment Date, interest paid on such Interest Payment Date will include
interest accrued from and including the date of issuance to but excluding such
Interest Payment Date, and interest paid on the Interest Payment Date following
such Interest Payment Date will include interest accrued from and including such
Interest Payment Date (or from and including the date of issuance, if interest
was not paid or provided for on such Interest Payment Date) to and including the
Regular Record Date following such Interest Payment Date.
With respect to a Floating Rate Note, accrued interest from the date of
issuance or from the last date to which interest has been paid or provided for
is calculated by multiplying the face amount of such Floating Rate Note by an
accrued interest factor. Such accrued interest factor is computed by adding the
interest factor calculated for each day from the date of issuance, or from the
last date to which interest has been paid or provided for, to the date for which
accrued interest is being calculated. Unless otherwise specified in the
applicable Pricing Supplement, the interest factor (expressed as a decimal) for
each such day is computed by dividing the interest rate (expressed as a decimal)
applicable to such date by 360, in the case of Commercial Paper Rate Notes,
Prime Rate Notes, Federal Funds Rate Notes or LIBOR Notes, or by the actual
number of days in the year, in the case of Treasury Rate Notes, or by such
number as may be specified in the applicable Pricing Supplement, in the case of
any Floating Rate Note with another Interest Rate Basis (as such terms are
hereinafter defined). Unless otherwise
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<PAGE>
specified in the applicable Pricing Supplement, interest on Fixed Rate Notes
will be computed on the basis of a 360-day year of twelve 30-day months.
Unless otherwise specified in the applicable Pricing Supplement, any payment
of principal, premium, if any, or interest required to be made on a Note on a
day which is not a Business Day in respect of such Note need not be made on such
day, but may be made on the next day which is such a Business Day with the same
force and effect as if made on such day, and no interest shall accrue as a
result of such delayed payment, except that in connection with any LIBOR Note,
if such next succeeding Business Day is in the next succeeding calendar month,
such payment shall be made on the immediately preceding Business Day. The term
"Business Day" as used herein with respect to any Note means each day, other
than a Saturday or Sunday, that is (i) not a day on which banking institutions
in the Business Day Centers with respect to such Note are authorized or
obligated by law or executive order to close, (ii) if such Note is a LIBOR Note,
a London Banking Day and (iii) if such Note is denominated in ECU, any day that
is not designated as an ECU settlement day by the ECU Banking Association in
Paris or otherwise generally regarded in the ECU interbank market as a day on
which payments in ECU shall not be made. "Business Day Centers", unless
otherwise specified in the applicable Pricing Supplement, with respect to any
Note shall mean The City of New York and, in the case of any Note payable in a
Specified Currency other than U.S. dollars or ECU, the principal financial
center of the country issuing the Specified Currency. As used herein, "London
Banking Day" shall mean any day on which dealings in deposits in U.S. dollars
are transacted in the London interbank market. "New York Business Day", as used
herein, shall mean each day, other than a Saturday or Sunday, that is not a day
on which banking institutions in The City of New York are authorized or
obligated by law or executive order to close.
Unless otherwise specified in the applicable Pricing Supplement, payments in
U.S. dollars of interest on Certificated Notes (other than interest payable at
Maturity) will be made by mailing a check to the registered holders of such
Notes entitled thereto at their addresses appearing on the security register for
the Notes. Notwithstanding the foregoing, at the option of the Company, such
payments may be made by wire transfer to an account with a bank located in the
continental United States (or other jurisdiction acceptable to the Company and
the Senior Trustee, in the case of Senior Notes, or the Paying Agent, in the
case of Subordinated Notes), but only if appropriate payment instructions from
the registered holder of a Certificated Note have been received in writing by
the Senior Trustee or the Paying Agent, as the case may be, not less than five
Business Days prior to the applicable Interest Payment Date. Unless otherwise
specified in the applicable Pricing Supplement, payments of principal of and
premium, if any, and interest on the Certificated Notes will be made, if at
Stated Maturity or upon earlier redemption, then on the Stated Maturity or the
date fixed for redemption, as applicable, upon surrender of the Notes at the
Notes Office, and if upon repayment prior to Stated Maturity, then on the
applicable date for repayment, provided the holder shall have complied with the
requirements for repayment set forth herein and in the Notes. See "Optional
Redemption, Repayment and Repurchase" below. All such payments shall be made in
immediately available funds, provided that the Certificated Notes to be paid are
presented to the Notes Office in time for the Senior Trustee or the Paying
Agent, as the case may be, to make such payments in such funds in accordance
with its normal procedures. Beneficial owners of Book-Entry Notes will be paid
in accordance with the Depositary's and its participants' procedures in effect
from time to time as described in the accompanying Prospectus under "Description
of Securities--Global Securities".
Unless otherwise specified in the applicable Pricing Supplement, payments of
principal of and premium, if any, and interest on any Note to be made in other
than U.S. dollars will be made on the date due by wire transfer to such account
with a bank located in the country issuing the Specified Currency (or, with
respect to Notes denominated in ECU, Brussels) or other jurisdiction acceptable
to the Company and the Senior Trustee, in the case of Senior Notes, or the
Paying Agent, in the case of Subordinated Notes, as shall have been designated
at least 15 days prior to the applicable Interest
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Payment Date or Maturity, as the case may be, by the registered holder of such
Note, provided that, in the case of payment of principal, premium, if any, and
interest due at Maturity, the Note is presented to the Senior Trustee or the
Paying Agent, as the case may be, in time for the Senior Trustee or the Paying
Agent, as the case may be, to make such payments in such funds in accordance
with its normal procedures. Such designation shall be made by filing the
appropriate information with the Senior Trustee or the Paying Agent, as the case
may be, at the Notes Office and, unless an appropriate revocation is received by
the Senior Trustee or the Paying Agent, as the case may be, any such designation
made with respect to any Note by a registered holder will remain in effect with
respect to any further payments with respect to such Note payable to such
holder. If a payment with respect to any such Note cannot be made by wire
transfer because the required designation has not been received by the Senior
Trustee or the Paying Agent, as the case may be, on or before the requisite date
or for any other reason, a notice will be mailed to the registered holder of
such Note at its registered address requesting a designation pursuant to which
such wire transfer can be made and, upon receipt by the Senior Trustee or the
Paying Agent, as the case may be, of such a designation, such payment will be
made within 15 days of such receipt.
The Company will pay any administrative costs imposed by banks in connection
with making payments by wire transfer, but any tax, assessment or governmental
charge imposed upon payments will be borne by the registered holders of the
Notes in respect of which payments are made.
At the option of the Company, payments on a Note may be made for value on
any date on which a payment of principal, premium, if any, or interest is due in
a place other than the United States, even though, as a result of time zone
differences, it may at the time such payment is made to the holder of such Note
be the preceding day in the United States or it may be necessary to make a
payment on the preceding day in the United States in order that such payment be
available to be credited for value on the due date in such place.
If the principal of or premium, if any, or interest on any Note is payable
in a Specified Currency other than U.S. dollars and such Specified Currency is
not available (as determined by the Company) due to the imposition of exchange
controls or other circumstances beyond the control of the Company and in certain
other circumstances, the Company will be entitled to satisfy its obligations to
the holder of such Note by making such payment in U.S. dollars, all as described
under "Foreign Currency Risks--Payment Currency". Any payment made under such
circumstances in U.S. dollars where the required payment is in other than U.S.
dollars will not constitute an Event of Default under the applicable Indenture.
Any such determination by the Company made in good faith will be binding on the
Senior Trustee or the Paying Agent, as the case may be, and such holder.
See "Description of Securities--Payment and Paying Agents" in the
accompanying Prospectus.
INTEREST RATE
Each Note will bear interest from its date of issuance until the principal
thereof is paid or made available for payment. Such interest will be payable on
each Interest Payment Date and at Maturity as specified above under "Payment of
Principal and Interest".
Each Fixed Rate Note will bear interest at a fixed rate, which may be zero
in the case of a Zero-Coupon Note. Each Floating Rate Note will bear interest at
a variable rate determined by reference to an interest rate formula, which may
be adjusted by adding or subtracting the Spread or multiplying by the Spread
Multiplier (each term as defined below), if any, unless otherwise specified
therein. A Floating Rate Note may also have either or both of the following: (a)
a maximum numerical interest rate limitation, or ceiling, on the rate of
interest which may accrue during any interest period (a
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"Maximum Rate"); and (b) a minimum numerical interest rate limitation, or floor,
on the rate of interest which may accrue during any interest period (a "Minimum
Rate"). The "Spread" is the number of basis points (one basis point equals
one-hundredth of a percentage point) specified in the applicable Pricing
Supplement as being applicable to the interest rate for such Note and the
"Spread Multiplier" is the percentage specified in the applicable Pricing
Supplement as being applicable to the interest rate for such Note. If so
specified in the applicable Pricing Supplement, the fixed rate of interest with
respect to a Fixed Rate Note or the Spread or Spread Multiplier, if any, with
respect to a Floating Rate Note may vary over the term of the Note in the manner
and to the extent specified in such Pricing Supplement. "Index Maturity" means,
with respect to a Floating Rate Note, the period to maturity of the instrument
or obligation on which the interest rate formula is based, as specified in the
applicable Pricing Supplement. Unless otherwise provided in the applicable
Pricing Supplement, Chemical Bank will be the calculation agent (the
"Calculation Agent") with respect to the Floating Rate Notes. In any case in
which determination of any interest rate requires the Calculation Agent to
obtain quotes of rates from banks or other sources, any such quote may be given
by the Calculation Agent or an affiliate of the Calculation Agent, provided that
the Calculation Agent or such affiliate satisfies all of the applicable criteria
for such a bank or other source set forth herein or in the applicable Pricing
Supplement. Absent manifest error, any calculation made by the Calculation Agent
shall be conclusive and binding on the Company, the applicable Trustee and the
holders of the applicable Notes.
The applicable Pricing Supplement relating to a Fixed Rate Note will
designate a fixed rate of interest per annum payable on such Fixed Rate Note.
The applicable Pricing Supplement relating to a Floating Rate Note will
designate an interest rate basis (the "Interest Rate Basis") for such Floating
Rate Note. The Interest Rate Basis for each Floating Rate Note will be: (a) the
Commercial Paper Rate, in which case such Note will be a Commercial Paper Rate
Note, (b) the Prime Rate, in which case such Note will be a Prime Rate Note, (c)
the Federal Funds Rate, in which case such Note will be a Federal Funds Rate
Note, (d) LIBOR, in which case such Note will be a LIBOR Note, (e) the Treasury
Rate, in which case such Note will be a Treasury Rate Note, or (f) such other
interest rate formula as is set forth in such Pricing Supplement. The applicable
Pricing Supplement for a Floating Rate Note will specify the Interest Rate Basis
and, if applicable, the Index Maturity, the Spread, the Spread Multiplier, the
Maximum Rate, the Minimum Rate, the Initial Interest Rate, the Interest Payment
Dates, the Regular Record Dates, the Calculation Dates, the Interest
Determination Dates and the Interest Reset Dates (as such terms are hereafter
defined) with respect to such Note.
Unless otherwise specified in the applicable Pricing Supplement, the rate of
interest on each Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semi-annually or annually (each an "Interest Reset Date"), as
specified in the applicable Pricing Supplement. Unless otherwise specified in
the applicable Pricing Supplement, the Interest Reset Date will be, in the case
of Floating Rate Notes which reset daily, each Business Day; in the case of
Floating Rate Notes (other than Treasury Rate Notes) which reset weekly, the
Wednesday of each week; in the case of Treasury Rate Notes which reset weekly,
the Tuesday of each week (except as hereinafter provided); in the case of
Floating Rate Notes which reset monthly, the third Wednesday of each month; in
the case of Floating Rate Notes which reset quarterly, the third Wednesday of
March, June, September and December; in the case of Floating Rate Notes which
reset semi-annually, the third Wednesday of two months of each year as specified
in the applicable Pricing Supplement; and in the case of Floating Rate Notes
which reset annually, the third Wednesday of one month of each year as specified
in the applicable Pricing Supplement; provided, however, that (a) the interest
rate in effect from the date of issuance to the first Interest Reset Date with
respect to a Floating Rate Note will be the Initial Interest Rate (as set forth
in the applicable Pricing Supplement) except that if the Interest Reset Date is
daily or weekly and such Note is issued between a Regular Record Date and an
Interest Payment Date, the Initial Interest Rate shall be the rate for the
period from original issuance of the Note until the first Interest Reset Date on
or after the first Interest Payment Date with respect to such Note and (b) the
interest rate in effect for the ten days immediately prior to Maturity of any
Note will be that in effect on the tenth day preceding such Maturity. Unless
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otherwise specified in the applicable Pricing Supplement, if any Interest Reset
Date for any Floating Rate Note would otherwise be a day that is not a Business
Day with respect to such Floating Rate Note, the Interest Reset Date for such
Floating Rate Note shall be postponed to the next day that is a Business Day
with respect to such Floating Rate Note, except that in the case of a LIBOR
Note, if such Business Day is in the next succeeding calendar month, such
Interest Reset Date shall be the immediately preceding Business Day.
Unless otherwise specified in the applicable Pricing Supplement, the
"Interest Determination Date" pertaining to an Interest Reset Date for a
Commercial Paper Rate Note (the "Commercial Paper Interest Determination Date")
and for a Prime Rate Note (the "Prime Rate Interest Determination Date") will be
the second New York Business Day preceding the Interest Reset Date with respect
to such Note, for a LIBOR Note will be the second London Banking Day (the "LIBOR
Interest Determination Date") preceding the Interest Reset Date with respect to
such Note, for a Federal Funds Rate Note will be the first New York Business Day
(the "Federal Funds Interest Determination Date") preceding the Interest Reset
Date with respect to such Note and for a Treasury Rate Note (the "Treasury
Interest Determination Date") will be the day of the week in which such Interest
Reset Date falls on which Treasury bills would normally be auctioned. Treasury
bills are usually sold at auction on Monday of each week, unless that day is a
legal holiday, in which case the auction is usually held on the following
Tuesday, except that such auction may be held on the preceding Friday. If, as
the result of a legal holiday, an auction is so held on the preceding Friday,
such Friday will be the Treasury Interest Determination Date pertaining to the
Interest Reset Date occurring in the next succeeding week. If an auction date
shall fall on any Interest Reset Date for a Treasury Rate Note, then such
Interest Reset Date shall instead be the first New York Business Day immediately
following such auction date.
All percentages resulting from any calculations will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point (with
five one-millionths of a percentage point being rounded upward) and all currency
or composite currency amounts used in or resulting from such calculation will be
rounded, if necessary, to the nearest one-hundredth of a unit (with .005 of a
unit being rounded upward).
In addition to any Maximum Rate which may be applicable to any Floating Rate
Note, the interest rate on the Notes will in no event be higher than the maximum
rate permitted by New York law, as the same may be modified by United States law
of general application. Under present New York law, the maximum rate of interest
is 25% per annum on a simple interest basis. This limit shall not apply to Notes
in which U.S. $2,500,000 or more has been invested.
Unless otherwise indicated in the applicable Pricing Supplement, the
"Calculation Date" pertaining to any Interest Determination Date will be the
earlier of (i) the tenth day after such Interest Determination Date or, if any
such day is not a New York Business Day, the next succeeding New York Business
Day and (ii) the New York Business Day next preceding the relevant Interest
Payment Date or Maturity, as the case may be.
Upon the request of the holder of any Floating Rate Note, the Calculation
Agent will provide the interest rate then in effect, and, if determined, the
interest rate which will become effective on the next Interest Reset Date with
respect to such Floating Rate Note.
Interest rates or interest rate formulas are subject to change by the
Company from time to time, but no such change will affect any Note already
issued or as to which an offer to purchase has been accepted by the Company.
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COMMERCIAL PAPER RATE NOTES
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated by the Calculation Agent with reference to the Commercial Paper Rate
and the Spread or Spread Multiplier, if any) specified on the face of the
Commercial Paper Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Commercial Paper Interest Determination
Date, the Money Market Yield (as defined below) of the rate on such date for
commercial paper having the Index Maturity specified in the applicable Pricing
Supplement as published by the Board of Governors of the Federal Reserve System
in "Statistical Release H.15(519), Selected Interest Rates" or any successor
publication of the Board of Governors of the Federal Reserve System
("H.15(519)") under the heading "Commercial Paper". In the event that such rate
is not published prior to 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Commercial Paper Interest Determination Date, then the
Commercial Paper Rate shall be the Money Market Yield of the rate on such
Commercial Paper Interest Determination Date for commercial paper having the
Index Maturity specified in the applicable Pricing Supplement as published by
the Federal Reserve Bank of New York in its daily statistical release "Composite
3:30 P.M. Quotations for U.S. Government Securities" or any successor
publication of the Federal Reserve Bank of New York ("Composite Quotations")
under the heading "Commercial Paper". If by 3:00 P.M., New York City time, on
such Calculation Date such rate is not yet published in Composite Quotations,
the rate for that Commercial Paper Interest Determination Date shall be
calculated by the Calculation Agent and shall be the Money Market Yield of the
arithmetic mean of the offered rates, as of 11:00 A.M., New York City time, on
that Commercial Paper Interest Determination Date, of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent for
commercial paper of the Index Maturity specified in the applicable Pricing
Supplement placed for an industrial issuer whose bond rating is "AA", or the
equivalent, from at least one nationally recognized rating agency; provided,
however, that if the dealers selected as aforesaid by the Calculation Agent are
not quoting as mentioned in this sentence, the Commercial Paper Rate will be the
Commercial Paper Rate in effect on such Commercial Paper Interest Determination
Date.
"Money Market Yield" shall be a yield (expressed as a percentage) calculated
in accordance with the following formula:
Money Market Yield = D X 360
-------------- X 100
360 - (D X M)
where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
PRIME RATE NOTES
Prime Rate Notes will bear interest at the interest rates (calculated by the
Calculation Agent with reference to the Prime Rate and the Spread or Spread
Multiplier, if any) specified on the face of the Prime Rate Note and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Prime Rate Interest Determination Date, the
arithmetic mean of the prime or base rates quoted on the basis of the actual
number of days in the year divided by 360 as of the close of business on such
Prime Rate Interest Determination Date by three major money center banks in The
City of New York selected by the Calculation Agent. If fewer than three such
quotations are provided, the Prime Rate shall be determined on the basis of the
quotations provided, if any, together with the rates furnished on such date in
The City of New York by the appropriate number of substitute banks or trust
companies organized and doing business under the laws of the United States, or
any State thereof, having total equity capital of at least U.S. $750 million and
being subject to supervision or examination
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by Federal or State authority, selected by the Calculation Agent to provide such
rate or rates; provided, however, that if the banks or trust companies selected
as aforesaid are not quoting as mentioned in this sentence, the Prime Rate will
be the Prime Rate in effect on such Prime Rate Interest Determination Date.
FEDERAL FUNDS RATE NOTES
Federal Funds Rate Notes will bear interest at the interest rates
(calculated by the Calculation Agent with reference to the Federal Funds Rate
and the Spread or Spread Multiplier, if any) specified on the face of the
Federal Funds Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Federal Funds Interest Determination
Date, the rate on such date for Federal Funds as published in H.15(519) under
the heading "Federal Funds (Effective)" or, if not so published by 9:00 A.M.,
New York City time, on the Calculation Date pertaining to such Federal Funds
Interest Determination Date, the Federal Funds Rate will be the interest rate on
such Federal Funds Interest Determination Date as published in Composite
Quotations under the heading "Federal Funds/Effective Rate". If such rate is not
yet published in Composite Quotations by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Federal Funds Interest Determination Date,
the Federal Funds Rate for such Federal Funds Interest Determination Date will
be the rate on such Federal Funds Interest Determination Date made publicly
available by the Federal Reserve Bank of New York which is equivalent to the
rate which appears in H.15(519) under the heading "Federal Funds (Effective)";
provided, however, that if such rate is not made publicly available by the
Federal Reserve Bank of New York by 9:00 A.M., New York City time, on the
Calculation Date, the Federal Funds Rate will be the Federal Funds Rate in
effect on such Federal Funds Interest Determination Date.
LIBOR NOTES
LIBOR Notes will bear interest at the interest rates (calculated by the
Calculation Agent with reference to LIBOR and the Spread or Spread Multiplier,
if any) specified on the face of the LIBOR Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "LIBOR"
will be indexed to the offered rate for U.S. dollar deposits and will be
determined by the Calculation Agent in accordance with the following provisions:
(i) As specified in the applicable Pricing Supplement, with respect to
any LIBOR Interest Determination Date, LIBOR will be determined on the basis
of either (a) the rate for deposits in U.S. dollars having the Index
Maturity specified in the applicable Pricing Supplement, commencing on the
second London Banking Day immediately following such LIBOR Interest
Determination Date, which appears on Telerate Screen Page 3750 (as defined
below) as of 11:00 A.M., London time, on such LIBOR Interest Determination
Date, if such rate appears on Telerate Screen Page 3750, or (b) the
arithmetic mean, as determined by the Calculation Agent, of the offered
rates for deposits in U.S. dollars of not less than $1,000,000 having the
Index Maturity specified in the applicable Pricing Supplement, commencing on
the second London Banking Day immediately following such LIBOR Interest
Determination Date, which appear on the Reuters Screen LIBO Page (as defined
below) as of 11:00 A.M., London time, on such LIBOR Interest Determination
Date, if at least two such offered rates appear on the Reuters Screen LIBO
Page. "Telerate Screen Page 3750" means the display designated as page
"British Bankers Assoc. Interest Settlement Rates" on the Telerate system,
page 3750 (or such other page or pages as may replace such page on the
system for the purpose of displaying such rates). "Reuters Screen LIBO Page"
means the display designated as page "LIBO" on the Reuters Monitor Money
Rates Service (or such other page or pages as may replace the LIBO page on
that service for the purpose of displaying London interbank offered rates of
major banks). If no rate appears on Telerate Screen Page 3750 or if
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fewer than two offered rates appear on the Reuters Screen LIBO Page, as
applicable, LIBOR for such LIBOR Interest Determination Date will be
determined as described in (ii) below. If neither Telerate Screen Page 3750
or the Reuters Screen LIBO Page is specified in the applicable Pricing
Supplement, LIBOR will be determined as if Telerate Screen Page 3750 had
been specified.
(ii) With respect to a LIBOR Interest Determination Date on which no
rate appears on Telerate Page 3750 as described in (i)(a) above, if LIBOR
determined on the basis of (i)(a) is specified in the applicable Pricing
Supplement, or on which fewer than two offered rates appear on the Reuters
Screen LIBO Page as described in (i)(b) above, if LIBOR determined on the
basis of (i)(b) is specified in the applicable Pricing Supplement, LIBOR
will be determined on the basis of the rates at approximately 11:00 A.M.,
London time, on such LIBOR Interest Determination Date at which deposits in
U.S. dollars having the Index Maturity specified in the applicable Pricing
Supplement, commencing on the second London Banking Day immediately
following such LIBOR Interest Determination Date and in a principal amount
equal to an amount of not less than U.S. $1,000,000 that in the Calculation
Agent's judgment is representative for a single transaction in such market
at such time, are offered to prime banks in the London interbank market by
four major banks in the London interbank market selected by the Calculation
Agent. The Calculation Agent will request the principal London office of
each of such banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR for such LIBOR Interest Determination Date
will be the arithmetic mean of such quotations. If fewer than two quotations
are provided, LIBOR for such LIBOR Interest Determination Date will be the
arithmetic mean of the rates quoted at approximately 11:00 A.M., New York
City time, on such LIBOR Interest Determination Date by three major banks in
The City of New York, selected by the Calculation Agent, for loans in U.S.
dollars to leading European banks having the Index Maturity specified in the
applicable Pricing Supplement commencing on the second London Banking Day
immediately following such LIBOR Interest Determination Date and in a
principal amount equal to an amount of not less than U.S. $1,000,000 that in
the Calculation Agent's judgment is representative for a single transaction
in such market at such time; provided, however, that if the banks selected
as aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, LIBOR with respect to such LIBOR Interest Determination Date will
be LIBOR in effect on such LIBOR Interest Determination Date.
If LIBOR with respect to any LIBOR Note is indexed to the offered rate for
deposits in a Specified Currency other than U.S. dollars, the applicable Pricing
Supplement will set forth the method for determining such rate.
TREASURY RATE NOTES
Treasury Rate Notes will bear interest at the interest rates (calculated by
the Calculation Agent with reference to the Treasury Rate and the Spread or
Spread Multiplier, if any) specified on the face of the Treasury Rate Note and
in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Treasury Interest Determination Date, the rate
for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified in the applicable Pricing
Supplement as published in H.15(519) under the heading "U.S. Government
Securities-Treasury Bills--Auction Average (Investment)" or, if not so published
by 9:00 A.M., New York City time, on the Calculation Date pertaining to such
Treasury Interest Determination Date, the auction average rate (expressed as a
bond equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) for such auction as otherwise made available by the
United States Department of the Treasury. In the event that the results of the
auction of Treasury bills having the Index Maturity designated in the applicable
Pricing Supplement are not published or made available as provided above by 3:00
P.M., New York City time, on such Calculation Date, or if no such auction is
held in a particular week (or on the preceding Friday, if applicable), then the
Treasury Rate shall be
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calculated by the Calculation Agent and shall be a yield to maturity (expressed
as a bond equivalent, on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) of the arithmetic mean of the secondary market bid
rates as of approximately 3:30 P.M., New York City time, on such Treasury
Interest Determination Date, of three leading primary United States government
securities dealers selected by the Calculation Agent, for the issue of Treasury
bills with a remaining maturity closest to the specified Index Maturity;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Treasury Rate will be
the Treasury Rate in effect on such Treasury Interest Determination Date.
BOOK-ENTRY NOTES
Upon issuance, all Book-Entry Notes having the same Specified Currency,
original issuance date, Stated Maturity, redemption and repayment provisions, if
any, Interest Payment Dates, Regular Record Dates, and, in the case of Fixed
Rate Notes, interest rate, or, in the case of Floating Rate Notes, Interest Rate
Basis, Initial Interest Rate, Index Maturity, Interest Reset Dates, Spread, if
any, Spread Multiplier, if any, Maximum Rate, if any, and Minimum Rate, if any,
will be represented by a single Global Note. Each Global Note representing
Book-Entry Notes will be deposited with, or on behalf of, the Depositary, and
registered in the name of the Depositary or its nominee. Book-Entry Notes will
not be exchangeable at the option of the holder for Certificated Notes and,
except under the circumstances described in the accompanying Prospectus under
"Description of Securities--Global Securities", will not otherwise be issuable
in the form of Certificated Notes.
The Depositary has advised the Company and the Agents as follows: The
Depositary is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. The Depositary holds securities of its participants and
facilitates the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. The Depositary's participants include securities
brokers and dealers (including the Agents), banks, trust companies, clearing
corporations and certain other organizations, some of whom (and/or their
representatives) own the Depositary. Access to the Depositary's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. The rules applicable to the
Depositary and its participants are on file with the Securities and Exchange
Commission.
A further description of the Depositary's procedures with respect to Global
Notes representing Book-Entry Notes is set forth in the accompanying Prospectus
under "Description of Securities-- Global Securities". The Depositary has
confirmed to the Company, the Agents and the Trustees that it intends to follow
such procedures.
OPTIONAL REDEMPTION, REPAYMENT AND REPURCHASE
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be redeemed prior to its Stated Maturity or that such Note will be
redeemable at the option of the Company on a date or dates or under
circumstances (which may include those described under "Payment of Additional
Amounts" below) specified prior to its Stated Maturity at a price or prices set
forth in the applicable Pricing Supplement, together with accrued interest to
the date of redemption. Unless otherwise specified in the applicable Pricing
Supplement, the Notes will not be subject to any sinking fund. The Company may
redeem any of the Notes that are redeemable and remain outstanding either in
whole or, except as otherwise provided under "Payment of Additional Amounts"
below, from time to time in part, upon not less than 30 nor more than 45 days'
notice. If less than all of the Notes having the same terms (except as to
principal amount and date of issuance) are to be redeemed, the
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Notes to be redeemed shall be selected by the applicable Trustee by such method
as such Trustee shall deem fair and appropriate and otherwise as provided under
the applicable Indentures.
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be repaid at the option of the holder prior to its Stated Maturity
or that such Note will be repayable at the option of the holder on a date or
dates or under circumstances specified prior to its Stated Maturity at a price
or prices set forth in the applicable Pricing Supplement, together with accrued
interest to the date of repayment.
In order for a Note to be repaid, the Senior Trustee, in the case of Senior
Notes, or the Paying Agent, in the case of Subordinated Notes, must receive at
the Notes Office at least 30 days but not more than 45 days prior to the
repayment date (a) appropriate wire instructions and (b) either (i) the Note
with the form entitled "Option to Elect Repayment" on the reverse of the Note
duly completed or (ii) a telegram, telex, facsimile transmission or letter from
a member of a national securities exchange or the National Association of
Securities Dealers, Inc., or a commercial bank or trust company in the United
States or any other "eligible guarantor institution" (as such term in defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended) setting
forth the name of the holder of the Note, the principal amount of the Note, the
portion of the principal amount of the Note to be repaid, the certificate number
or a description of the tenor and terms of the Note, a statement that the option
to elect repayment is being exercised thereby and a guarantee that the Note to
be repaid with the form entitled "Option to Elect Repayment" on the reverse of
the Note duly completed will be received by the Senior Trustee or the Paying
Agent, as the case may be, not later than five Business Days after the date of
such telegram, telex, facsimile transmission or letter and such Note and form
duly completed must be received by the Senior Trustee or the Paying Agent, as
the case may be, by such fifth Business Day. Tender of a Note for repayment
shall be irrevocable. The repayment option may be exercised by the holder of a
Note for less than the entire principal amount of the Note provided that the
principal amount of the Note remaining outstanding after repayment is an
authorized denomination. No transfer or exchange of any Note (or, in the event
that any Note is to be repaid in part, the portion of the Note to be repaid)
will be permitted after exercise of a repayment option. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any Note for
repayment will be determined by the Company, whose determination will be final,
binding and non-appealable.
If a Note is represented by a Global Note, the Depositary's nominee will be
the holder of such Note and therefore will be the only entity that can exercise
a right to repayment. In order to ensure that the Depositary's nominee will
timely exercise a right to repayment with respect to a particular Note, the
beneficial owner of such Note must instruct the broker or other direct or
indirect participant through which it holds an interest in such Note to notify
the Depositary of its desire to exercise a right to repayment. Different firms
have different cutoff times for accepting instructions from their customers and,
accordingly, each beneficial owner should consult the broker or other direct or
indirect participant through which it holds an interest in a Note in order to
ascertain the cutoff time by which such an instruction must be given in order
for timely notice to be delivered to the Depositary.
The Company may at any time repurchase Notes at any price in the open market
or otherwise. Notes so purchased by the Company may, at the discretion of the
Company, be held or resold or surrendered to the applicable Trustee for
cancellation.
PAYMENT OF ADDITIONAL AMOUNTS
If so specified in the applicable Pricing Supplement, the Company will,
subject to the limitations and exceptions set forth below, pay to the holder of
any Note who is a United States Alien (as defined below) such additional amounts
("Additional Amounts") as may be necessary in order that every net payment of
principal of, premium, if any, and interest on such Note, after deduction or
withholding by the Company, any Trustee, the Paying Agent or any of the
Company's other paying agents for or on account of any present or future tax,
assessment or other governmental charge imposed upon such
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holder with respect to or as a result of such payment by the United States or
any political subdivision or taxing authority thereof or therein, will not be
less than the amount provided for in such Note to be then due and payable;
provided, however, that the foregoing obligation to pay Additional Amounts shall
not apply to any one or more of the following: (a) any tax, assessment or other
governmental charge that would not have been imposed but for (i) the existence
of any present or former connection between such holder (or between a fiduciary,
settlor or beneficiary of, or person holding a power over, such holder, if such
holder is an estate or a trust, or between a member or shareholder of such
holder, if such holder is a partnership or corporation) and the United States,
including, without limitation, such holder (or such fiduciary, settlor,
beneficiary, person holding a power, member or shareholder) being or having been
a citizen or resident or treated as a resident thereof or being or having been
engaged in a trade or business therein or being or having been present therein
or having or having had a permanent establishment therein, or (ii) such holder's
present or former status as a domestic or foreign personal holding company, a
passive foreign investment company or a controlled foreign corporation, a
private foundation or other tax-exempt organization for United States Federal
income tax purposes or a corporation that accumulates earnings to avoid United
States Federal income tax; (b) any tax, assessment or other governmental charge
that would not have been so imposed but for the presentation by the holder of
such Note for payment on a date more than 15 days after the date on which such
payment became due and payable or the date on which payment thereof was duly
provided for, whichever occurs later; (c) any estate, inheritance, gift, sales,
transfer, excise or personal property tax or any similar tax, assessment or
other governmental charge; (d) any tax, assessment or other governmental charge
that would not have been imposed but for the failure to comply with
certification, information, documentation or other reporting requirements
concerning the nationality, residence, identity or connection with the United
States of the holder or beneficial owner of such Note, if such compliance is
required by statute or by regulation of the United States or any taxing
authority thereof as a precondition to relief or exemption from such tax,
assessment or other governmental charge; (e) any tax, assessment or other
governmental charge that is (i) payable otherwise than by deduction or
withholding from payments of principal of or premium, if any, or interest on
such Note or (ii) required to be deducted or withheld by any paying agent from
any such payment, if (and only if) such payment can be made without such
deduction or withholding by any other paying agent; (f) any tax, assessment or
other governmental charge imposed on interest received by a person holding,
actually or constructively, 10 percent or more of the total combined voting
power of all classes of stock of the Company entitled to vote (taking into
account the applicable attribution of ownership rules under Section 871(h)(3) of
the Internal Revenue Code of 1986, as amended (the "Code")) or that is a
controlled foreign corporation related to the Company (directly or indirectly)
through stock ownership; or (g) any combination of items (a), (b), (c), (d), (e)
and (f); nor will Additional Amounts be paid with respect to payment of the
principal of or premium, if any, or interest on such Note to any United States
Alien that is a fiduciary or partnership or to a person other than the sole
beneficial owner of such Note to the extent that a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or a beneficial owner
would not have been entitled to the Additional Amounts had such beneficiary,
settlor, member or beneficial owner been the holder of such Note.
If so specified in the applicable Pricing Supplement, any Note registered in
the name of a United States Alien may be redeemed at the option of the Company
in whole, but not in part, at any time, on giving not less than 30 nor more than
45 days' notice in accordance with the provisions described in "Description of
Securities--Notices" in the accompanying Prospectus (which notice shall be
irrevocable), at a redemption price equal to the principal amount thereof (or,
in the case of an Original Issue Discount Security, the amount specified in the
applicable Pricing Supplement), together with accrued interest to the redemption
date, if the Company determines that the Company has or will become obligated to
pay Additional Amounts with respect to such Note on the next succeeding Interest
Payment Date as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting taxation,
or any change in the application or official interpretation of such laws,
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regulations or rulings by a taxing authority, court or regulatory agency,
whether or not rendered or taken with respect to the Company, or any action
taken by any taxing authority, court or regulatory agency (including any change
in administrative policy or enforcement practice of such taxing authority),
whether or not taken with respect to the Company, which change or amendment
becomes effective, or action is taken, on or after the original issuance date of
such Note, and such obligation cannot be avoided by the Company taking
reasonable measures available to it. Prior to giving any such notice of
redemption, the Company shall deliver to the applicable Trustee a certificate
stating that the Company is entitled to effect such redemption and setting forth
a statement of such facts showing that the conditions precedent to the right of
the Company so to redeem have occurred, and an opinion of independent legal
counsel addressed to the Company and such Trustee to the effect that the Company
has or will become obligated to pay such Additional Amounts as a result of such
change or amendment. Notice of the intention of the Company to redeem any such
Note pursuant to this paragraph shall not be given earlier than 90 days prior to
the earliest date that the obligation to pay Additional Amounts would arise were
a payment in respect of such Note due on such date.
As used herein, "United States Alien" means any person who, for United
States Federal income tax purposes, is a foreign corporation, a nonresident
alien individual, a nonresident alien fiduciary of a foreign estate or trust, or
a foreign partnership, one or more of the members of which is, for United States
Federal income tax purposes, a foreign corporation, a nonresident alien
individual or a nonresident alien fiduciary of a foreign estate or trust.
NOTES LINKED TO COMMODITY PRICES, EQUITY INDICES OR OTHER FACTORS AND OTHER
TERMS OF NOTES
Notes may be issued, from time to time, with the principal amount payable on
any principal payment date, or the amount of interest payable on any Interest
Payment Date or on any principal payment date, to be determined by reference to
one or more commodity prices, equity indices, the rate of exchange between a
Specified Currency and any other currency or composite currency or other factors
or interest rate formulas and on such other terms (which may differ from the
terms set forth herein) as may be set forth in the relevant Pricing Supplement.
FOREIGN CURRENCY RISKS
THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS DO NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN NOTES DENOMINATED
OR PAYABLE IN A CURRENCY OTHER THAN U.S. DOLLARS, AND THE COMPANY DISCLAIMS ANY
RESPONSIBILITY TO ADVISE PROSPECTIVE PURCHASERS OF SUCH RISKS AS THEY EXIST AT
THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS SUCH RISKS MAY CHANGE FROM TIME TO
TIME. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL
ADVISERS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN NOTES DENOMINATED OR
PAYABLE IN A CURRENCY OTHER THAN U.S. DOLLARS. SUCH NOTES ARE NOT AN APPROPRIATE
INVESTMENT FOR PERSONS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY
TRANSACTIONS.
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes that are denominated or payable in a Specified
Currency other than U.S. dollars entails significant risks that are not
associated with a similar investment in a security denominated and payable in
U.S. dollars. Such risks include, without limitation, the possibility of
significant changes in rates of exchange between the U.S. dollar and such
Specified Currency and the possibility of the imposition or modification of
foreign exchange controls by either the U.S. or foreign governments. Such risks
generally depend on factors over which the Company has no control, such as
economic and political events and the supply of and demand for the relevant
currencies. In recent years, rates of exchange between the U.S. dollar and
certain foreign currencies have been highly volatile and such volatility may be
expected in the future. Fluctuations in any particular exchange rate that have
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occurred in the past are not necessarily indicative, however, of fluctuations in
the rate that may occur during the term of any Note. Depreciation of the
Specified Currency for a Note against the U.S. dollar would result in a decrease
in the effective yield of such Note below its coupon rate and, in certain
circumstances, could result in a loss to the investor on a U.S. dollar basis.
Governments have imposed from time to time, and may in the future impose,
exchange controls which could affect exchange rates as well as the availability
of a Specified Currency for making payments with respect to a Note. There can be
no assurances that exchange controls will not restrict or prohibit payments of
principal or any premium or interest in any Specified Currency. Even if there
are no actual exchange controls, it is possible that, on a payment date with
respect to any particular Note, the Specified Currency in which amounts then due
in respect of such Note are payable would not be available to the Company. In
that event, the Company will make any required payment in the manner set forth
below under "Payment Currency".
Foreign exchange rates can either be fixed by sovereign governments or
float. Exchange rates of most economically developed nations are permitted to
fluctuate in value relative to the U.S. dollar. Sovereign governments, however,
rarely voluntarily allow their currencies to float freely in response to
economic forces. Sovereign governments in fact use a variety of techniques, such
as intervention by a country's central bank or imposition of regulatory controls
or taxes, to affect the exchange rate of their currencies. Governments may also
issue a new currency to replace an existing currency or alter the exchange rate
or relative exchange characteristics by devaluation or revaluation of a
currency. Thus, a special risk in purchasing a Note that is denominated or
payable in a foreign currency or composite currency is that its U.S. dollar
equivalent yield could be affected by governmental actions which could change or
interfere with theretofore freely determined currency valuation, fluctuations in
response to other market forces and the movement of currencies across borders.
Currently, there are limited facilities in the United States for conversion
of U.S. dollars into foreign currencies and vice versa, and few banks offer
non-U.S. dollar-denominated checking or savings account facilities in the United
States. Accordingly, unless otherwise specified in the applicable Pricing
Supplement, payment of principal of and premium, if any, and interest on Notes
made in a Specified Currency other than U.S. dollars will be made from an
account with a bank located in the country issuing the Specified Currency (or,
with respect to Notes denominated in ECU, Brussels).
Unless otherwise specified in the applicable Pricing Supplement, Notes
denominated or payable in a Specified Currency other than U.S. dollars or ECU
will not be sold in, or to residents of, the country issuing such Specified
Currency.
The information set forth in this Prospectus Supplement, any Pricing
Supplement and the accompanying Prospectus is directed to prospective purchasers
of Notes who are United States residents, and the Company disclaims any
responsibility to advise prospective purchasers who are residents of countries
other than the United States with respect to any matters that may affect the
purchase or holding of, or receipt of payments of principal of and premium, if
any, and interest on, Notes. Such persons should consult their own legal and
financial advisors with regard to such matters.
Any Pricing Supplement relating to Notes denominated or payable in a
Specified Currency other than U.S. dollars will contain information concerning
historical exchange rates for such Specified Currency against the U.S. dollar, a
description of such Specified Currency, a description of any exchange controls
affecting such Specified Currency and any other required information concerning
such Specified Currency.
GOVERNING LAW AND JUDGMENTS
The Notes will be governed by and construed in accordance with the laws of
the State of New York. Courts in the United States have not customarily rendered
judgments for money damages denominated in any currency other than the U.S.
dollar. The Judiciary Law of the State of New York provides, however, that, in
an action based upon an obligation denominated in a currency other than U.S.
dollars, a court shall render a judgment or decree in the currency of the
underlying obligation and the judgment
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or decree shall be converted into U.S. dollars at the rate of exchange
prevailing on the date of entry of the judgment or decree. It is not known
whether the foregoing provision would be applied (a) in any action based on an
obligation denominated in a composite currency or (b) by a Federal court sitting
in the State of New York.
PAYMENT CURRENCY
Except as set forth below or in the applicable Pricing Supplement, if
payment in respect of a Note is required to be made in a Specified Currency
other than U.S. dollars and on any date on which a payment is due with respect
to such Note such Specified Currency is not available (as determined by the
Company) due to the imposition of exchange controls or other circumstances
beyond the Company's control, or is no longer used by the government of the
country issuing such Specified Currency or for the settlement of transactions by
public institutions of or within the international banking community, then all
such payments due on such payment date shall be made in U.S. dollars. The amount
so payable on any such payment date in such Specified Currency shall be
converted into U.S. dollars at a rate determined by the Exchange Rate Agent as
of the second Business Day prior to the date on which such payment is due on the
basis of the most recently available Exchange Rate for such Specified Currency,
or as otherwise specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, if payment
on a Note is required to be made in ECU and on a payment date with respect to
such Note ECU are not available (as determined by the Company) due to
circumstances beyond the Company's control, or are no longer used in the
European Monetary System, then all such payments due on such payment date shall
be made in U.S. dollars. Unless otherwise indicated in the applicable Pricing
Supplement, the amount so payable on any such payment date in ECU shall be
converted into U.S. dollars at a rate determined by the Exchange Rate Agent as
of the second Business Day prior to the date on which such payment is due on the
following basis: The component currencies of the ECU for this purpose (the
"Components") shall be the currency amounts that were components of the ECU as
of the last date on which ECU were used in the European Monetary System. The
equivalent of ECU in U.S. dollars shall be calculated by aggregating the U.S.
dollar equivalents of the Components. The U.S. dollar equivalent of each of the
Components shall be determined by the Exchange Rate Agent on the basis of the
most recently available Exchange Rate for the Components.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
shall be divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as Components shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated component currencies
expressed in such single currency. If any component currency is divided into two
or more currencies, the amount of that currency as a Component shall be replaced
by amounts of such two or more currencies, each of which shall have a value on
the date of division equal to the amount of the former component currency
divided by the number of currencies into which that currency was divided.
All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion (except to the extent expressly provided herein or in
the applicable Pricing Supplement that any determination is subject to approval
by the Company or other persons) and, in the absence of manifest error, shall be
conclusive for all purposes and binding on holders of the Notes and the Company,
and the Exchange Rate Agent shall have no liability therefor.
Unless otherwise specified in the applicable Pricing Supplement, Notes
denominated in a Specified Currency other than U.S. dollars will provide that,
in the event of an official redenomination of the Specified Currency, the
obligations of the Company with respect to payments on such Notes shall, in all
cases, be deemed immediately following such redenomination to provide for
payment of that amount of the redenominated Specified Currency representing the
amount of such obligations immediately before such redenomination.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the principal United States Federal income tax
consequences resulting from the beneficial ownership of Notes by certain
persons. This summary does not purport to consider all the possible United
States Federal tax consequences of the purchase, ownership or disposition of
Notes and is not intended to reflect the individual tax position of any
beneficial owner. It deals only with Notes and currencies or composite
currencies other than U.S. dollars ("Foreign Currency") held as capital assets.
Moreover, except as expressly indicated, it addresses initial purchasers and
does not address beneficial owners that may be subject to special tax rules,
such as banks, insurance companies, dealers in securities or currencies,
purchasers that hold Notes (or Foreign Currency) as a hedge against currency
risks or as part of a straddle with other investments or as part of a "synthetic
security" or other integrated investment (including a "conversion transaction")
comprised of a Note and one or more other investments, or purchasers that have a
"functional currency" other than the U.S. dollar. Except to the extent discussed
below under "Non-United States Holders", this summary is not applicable to
non-United States persons not subject to United States Federal income tax on
their worldwide income. This summary is based upon the United States Federal tax
laws and regulations as now in effect and as currently interpreted and does not
take into account possible changes in such tax laws or such interpretations, any
of which may be applied retroactively. It does not include any description of
the tax laws of any state, local or foreign governments that may be applicable
to Notes or holders thereof, and it does not discuss the tax treatment of Notes
denominated in certain hyperinflationary currencies or dual currency Notes.
Persons considering the purchase of Notes should consult their own tax advisors
concerning the application of the United States Federal tax laws to their
particular situations as well as any consequences to them under the laws of any
other taxing jurisdiction.
UNITED STATES HOLDERS
Payments of Interest
In general, interest on a Note, whether payable in U.S. dollars or a Foreign
Currency (other than certain payments on a Discount Note, as defined and
described below under "Original Issue Discount"), will be taxable to a
beneficial owner who or which is (i) a citizen or resident of the United States,
(ii) a corporation created or organized under the laws of the United States or
any State thereof (including the District of Columbia) or (iii) a person
otherwise subject to United States Federal income taxation on its worldwide
income (a "U.S. Holder") as ordinary income at the time it is received or
accrued, depending on the holder's method of accounting for tax purposes. If an
interest payment is denominated in or determined by reference to a Foreign
Currency, then special rules, described below under "Foreign Currency Notes",
apply.
Original Issue Discount
The following discussion summarizes the United States Federal income tax
consequences to U.S. Holders of Notes issued with original issue discount for
Federal income tax purposes ("OID"). U.S. Holders of a Note issued with OID
generally will be subject to special tax accounting rules provided in the Code.
On February 4, 1994, the Treasury Department published final regulations (the
"OID Regulations"), which expand and illustrate the rules provided by the Code.
Special rules apply to OID on a Discount Note that is denominated in Foreign
Currency. See "Foreign Currency Notes--Foreign Currency Discount Notes".
General. A Note will be treated as issued with OID (a "Discount Note") if
the excess of the Note's "stated redemption price at maturity" over its issue
price is greater than or equal to a de minimis amount (set forth in the Code and
the OID Regulations). Generally, the issue price of a Note (or any Note that is
part of an issue of Notes) will be the first price at which a substantial amount
of Notes that are part of such issue of Notes are sold (other than to
underwriters, placement agents or wholesalers). Under the OID Regulations, the
"stated redemption price at maturity" of a Note is the sum of all
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payments provided by the Note that are not payments of "qualified stated
interest". A "qualified stated interest" payment includes any stated interest
payment on a Note that is unconditionally payable at least annually at a single
fixed rate (or at certain floating rates) that appropriately takes into account
the length of the interval between stated interest payments. If a particular
issue of Notes will constitute an issue of Discount Notes, the applicable
Pricing Supplement will so state.
In general, if the excess of a Note's stated redemption price at maturity
over its issue price is de minimis, then such excess constitutes "de minimis
OID". Under the OID Regulations, unless the election described below under
"Election to Treat All Interest as Original Issue Discount" is made, such a Note
will not be treated as issued with OID (in which case the following paragraphs
under "Original Issue Discount" will not apply) and a U.S. Holder of such a Note
will recognize capital gain with respect to such de minimis OID as stated
principal payments on the Note are made. The amount of such gain with respect to
each such payment will equal the product of the total amount of the Note's de
minimis OID and a fraction, the numerator of which is the amount of the
principal payment made and the denominator of which is the stated principal
amount of the Note.
In certain cases, Notes that bear stated interest and are issued at par may
be deemed to bear OID for Federal income tax purposes, with the result that the
inclusion of interest in income for Federal income tax purposes may vary from
the actual cash payments of interest made on such Notes, generally accelerating
income for cash method taxpayers. Under the OID Regulations, a Note may be a
Discount Note where, among other things, (i) a Floating Rate Note provides for a
Maximum Rate or a Minimum Rate that is reasonably expected as of the issue date
to cause the yield on the debt instrument to be significantly less, in the case
of a Maximum Rate, or more, in the case of a Minimum Rate, than the expected
yield determined without the Maximum Rate or Minimum Rate, as the case may be;
(ii) a Floating Rate Note provides for significant front-loading or back-loading
of interest; or (iii) a Note bears interest at a floating rate in combination
with one or more other floating or fixed rates. Unless specified in the
applicable Pricing Supplement, Floating Rate Notes will not be Discount Notes.
The Code and the OID Regulations provide rules that require a U.S. Holder of
a Discount Note having a maturity of more than one year from its date of issue
to include OID in gross income before the receipt of cash attributable to such
income, without regard to the holder's method of accounting for tax purposes.
The amount of OID includible in gross income by a U.S. Holder of a Discount Note
is the sum of the "daily portions" of OID with respect to the Discount Note for
each day during the taxable year or portion of the taxable year in which the
U.S. Holder holds such Discount Note ("accrued OID"). The daily portion is
determined by allocating to each day in any "accrual period" a pro rata portion
of the OID allocable to that accrual period. Under the OID Regulations, accrual
periods with respect to a Note may be any set of periods (which may be of
varying lengths) selected by the U.S. Holder as long as (i) no accrual period is
longer than one year and (ii) each scheduled payment of interest or principal on
the Note occurs on the first day or final day of an accrual period.
The amount of OID allocable to an accrual period equals the excess of (a)
the product of the Discount Note's adjusted issue price at the beginning of the
accrual period and the Discount Note's yield to maturity (determined on the
basis of compounding at the close of each accrual period and properly adjusted
for the length of the accrual period) over (b) the sum of any payments of
qualified stated interest on the Discount Note allocable to the accrual period.
The "adjusted issue price" of a Discount Note at the beginning of the first
accrual period is the issue price and at the beginning of any accrual period
thereafter is (x) the sum of the issue price of such Discount Note, the accrued
OID for each prior accrual period (determined without regard to the amortization
of any acquisition premium or bond premium, which are discussed below), and the
amount of any qualified stated interest on the Note that has accrued prior to
the beginning of the accrual period but is not payable until a later date, less
(y) any prior payments on the Discount Note that were not qualified stated
interest payments. If a payment (other than a payment of qualified stated
interest) is made on the first day of an accrual period, then the adjusted issue
price at the beginning of such accrual period is reduced by the amount of the
payment. If a portion of the initial purchase price of a Note is attributable to
interest that accrued prior to the
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Note's issue date, the first stated interest payment on the Note is to be made
within one year of the Note's issue date and such payment will equal or exceed
the amount of pre-issuance accrued interest, then the issue price will be
decreased by the amount of pre-issuance accrued interest, in which case a
portion of the first stated interest payment will be treated as a return of the
excluded pre-issuance accrued interest and not as an amount payable on the Note.
The OID Regulations contain certain special rules that generally allow any
reasonable method to be used in determining the amount of OID allocable to a
short initial accrual period (if all other accrual periods are of equal length)
and require that the amount of OID allocable to the final accrual period equal
the excess of the amount payable at the maturity of the Discount Note (other
than any payment of qualified stated interest) over the Discount Note's adjusted
issue price as of the beginning of such final accrual period. In addition, if an
interval between payments of qualified stated interest on a Discount Note
contains more than one accrual period, then the amount of qualified stated
interest payable at the end of such interval is allocated pro rata (on the basis
of their relative lengths) between the accrual periods contained in the
interval.
U.S. Holders of Discount Notes generally will have to include in income
increasingly greater amounts of OID over the life of the Notes.
Acquisition Premium. A U.S. Holder that purchases a Discount Note at its
original issuance for an amount in excess of its adjusted issue price but less
than its stated redemption price at maturity (any such excess being "acquisition
premium"), and that does not make the election described below under "Election
To Treat All Interest as Original Issue Discount", is permitted to reduce the
daily portions of OID by a fraction, the numerator of which is the excess of the
U.S. Holder's purchase price for the Note over the issue price, and the
denominator of which is the excess of the sum of all amounts payable on the Note
after the purchase date, other than payments of qualified stated interest, over
the Note's issue price. Alternatively, a U.S. Holder may elect to compute OID
accruals as described under "Original Issue Discount--General" above, treating
the U.S. Holder's purchase price as the issue price.
Optional Redemption. If the Company has an option to redeem a Discount Note,
or the holder has an option to cause a Discount Note to be repaid, prior to the
Discount Note's Stated Maturity, such option will be presumed to be exercised
if, by utilizing any date on which such Discount Note may be redeemed or repaid
as the maturity date and the amount payable on such date in accordance with the
terms of such Discount Note (the "redemption price") as the stated redemption
price at maturity, the yield on the Discount Note would be (i) in the case of an
option of the Company, lower than its yield to Stated Maturity, or (ii) in the
case of an option of the holder, higher than its yield to Stated Maturity. If
such option is not in fact exercised when presumed to be exercised, the Note
would be treated solely for OID purposes as if it were redeemed or repurchased,
and a new Note were issued, on the presumed exercise date for an amount equal to
the Discount Note's adjusted issue price on that date.
Short-Term Notes. Under the Code, special rules apply with respect to OID on
Notes that mature one year or less from the date of issuance ("Short-Term
Notes"). In general, a cash basis U.S. Holder of a Short-Term Note is not
required to include OID in income as it accrues for United States Federal income
tax purposes unless it elects to do so. Accrual basis U.S. Holders and certain
other U.S. Holders, including banks, regulated investment companies, dealers in
securities and cash basis U.S. Holders who so elect, are required to include OID
in income as it accrues on Short-Term Notes on a straight-line basis or, at the
election of the U.S. Holder, under the constant yield method (based on daily
compounding). In the case of U.S. Holders not required and not electing to
include OID in income currently, any gain realized on the sale or retirement of
Short-Term Notes will be ordinary income to the extent of the OID accrued on a
straight-line basis (unless an election is made to accrue the OID under the
constant yield method) through the date of sale or retirement. U.S. Holders who
are not required and do not elect to include OID on Short-Term Notes in income
as it accrues will be required to defer deductions for interest on borrowings
allocable to Short-Term Notes in an amount not exceeding the deferred income
until the deferred income is realized.
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Any U.S. Holder of a Short-Term Note can elect to apply the rules in the
preceding paragraph taking into account the amount of "acquisition discount", if
any, with respect to the Note (rather than the OID with respect to such Note).
Acquisition discount is the excess of the stated redemption price at maturity of
the Short-Term Note over the U.S. Holder's purchase price therefor. Acquisition
discount will be treated as accruing on a ratable basis or, at the election of
the U.S. Holder, on a constant-yield basis.
For purposes of determining the amount of OID subject to these rules, the
OID Regulations provide that no interest payments on a Short-Term Note are
qualified stated interest, but instead such interest payments are included in
the Short-Term Note's stated redemption price at maturity.
Notes Purchased at a Premium
Under the Code, a U.S. Holder that purchases a Note for an amount in excess
of its stated redemption price at maturity will not be subject to the OID rules
and may elect to treat such excess as "amortizable bond premium", in which case
the amount of qualified stated interest required to be included in the U.S.
Holder's income each year with respect to interest on the Note will be reduced
by the amount of amortizable bond premium allocable (based on the Note's yield
to maturity) to such year. Any election to amortize bond premium is applicable
to all bonds (other than bonds the interest on which is excludible from gross
income) held by the U.S. Holder at the beginning of the first taxable year to
which the election applies or thereafter acquired by the U.S. Holder, and may
not be revoked without the consent of the Internal Revenue Service ("IRS"). See
also "Election to Treat All Interest as Original Issue Discount".
Notes Purchased at a Market Discount
A Note, other than a Short-Term Note, will be treated as issued at a market
discount (a "Market Discount Note") if the amount for which a U.S. Holder
purchased the Note is less than the Note's issue price, subject to a de minimis
rule similar to the rule relating to de minimis OID described under "Original
Issue Discount--General".
In general, any gain recognized on the maturity or disposition of a Market
Discount Note will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on the Note. Alternatively, a U.S.
Holder of a Market Discount Note may elect to include market discount in income
currently over the life of the Market Discount Note. Such an election applies to
all debt instruments with market discount acquired by the electing U.S. Holder
on or after the first day of the first taxable year to which the election
applies and may not be revoked without the consent of the IRS.
Market discount accrues on a straight-line basis unless the U.S. Holder
elects to accrue such discount on a constant yield to maturity basis. Such an
election is applicable only to the Market Discount Note with respect to which it
is made and is irrevocable. A U.S. Holder of a Market Discount Note that does
not elect to include market discount in income currently generally will be
required to defer deductions for interest on borrowings allocable to the Note in
an amount not exceeding the accrued market discount on the Note until the
maturity or disposition of the Note.
The market discount rules do not apply to a Short-Term Note.
Election To Treat All Interest as Original Issue Discount
Any U.S. Holder may elect to include in gross income all interest that
accrues on a Note using the constant yield method described above under the
heading "Original Issue Discount--General," with the modifications described
below. For purposes of this election, interest includes stated interest, OID, de
minimis OID, market discount, acquisition discount, de minimis market discount
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium.
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In applying the constant yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing U.S.
Holder's adjusted basis in the Note immediately after its acquisition, the issue
date of the Note will be the date of its acquisition by the electing U.S.
Holder, and no payments on the Note will be treated as payments of qualified
stated interest. This election is generally applicable only to the Note with
respect to which it is made and may not be revoked without the consent of the
IRS. If this election is made with respect to a Note with amortizable bond
premium, the electing U.S. Holder will be deemed to have elected to apply
amortizable bond premium against interest with respect to all debt instruments
with amortizable bond premium (other than debt instruments the interest on which
is excludible from gross income) held by such electing U.S. Holder as of the
beginning of the taxable year in which the election is made or any debt
instruments acquired thereafter. The deemed election with respect to amortizable
bond premium may not be revoked without the consent of the IRS.
If the election described above to apply the constant yield method to all
interest on a Note is made with respect to a Market Discount Note, as defined
above, then the electing U.S. Holder will be treated as having made the election
discussed above under "Notes Purchased at a Market Discount" to include market
discount in income currently over the life of all debt instruments held or
thereafter acquired by such U.S. Holder.
Purchase, Sale and Retirement of the Notes
A U.S. Holder's tax basis in a Note generally will equal its U.S. dollar
cost (which, in the case of a Note purchased with a Foreign Currency, will be
the U.S. dollar value of the purchase price on the date of purchase), increased
by the amount of any OID or market discount (or acquisition discount, in the
case of a Short-Term Note) included in the U.S. Holder's income with respect to
the Note and the amount, if any, of income attributable to de minimis OID
included in the U.S. Holder's income with respect to the Note, and reduced by
the sum of (i) the amount of any payments that are not qualified stated interest
payments, and (ii) the amount of any amortizable bond premium applied to reduce
interest on the Note. A U.S. Holder generally will recognize gain or loss on the
sale or retirement of a Note equal to the difference between the amount realized
on the sale or retirement and the U.S. Holder's tax basis in the Note. The
amount realized on a sale or retirement for an amount in Foreign Currency will
be the U.S. dollar value of such amount on the date of sale or retirement.
Except to the extent described above under "Original Issue Discount--Short Term
Notes" or "Notes Purchased at a Market Discount" or below under "Foreign
Currency Notes--Exchange Gain or Loss", and except to the extent attributable to
accrued but unpaid interest, gain or loss recognized on the sale or retirement
of a Note will be capital gain or loss and will be long-term capital gain or
loss if the Note was held for more than one year.
Foreign Currency Notes
Interest Payments. If an interest payment is denominated in or determined by
reference to a Foreign Currency, the amount of income recognized by a cash basis
U.S. Holder will be the U.S. dollar value of the interest payment, based on the
exchange rate in effect on the date of receipt, regardless of whether the
payment is in fact converted into U.S. dollars. Accrual basis U.S. Holders may
determine the amount of income recognized with respect to such interest payment
in accordance with either of two methods. Under the first method, the amount of
income recognized will be based on the average exchange rate in effect during
the interest accrual period (or, with respect to an accrual period that spans
two taxable years, the partial period within the taxable year). Upon receipt of
an interest payment (including a payment attributable to accrued but unpaid
interest upon the sale or retirement of a Note) determined by reference to a
Foreign Currency, an accrual basis U.S. Holder will recognize ordinary income or
loss measured by the difference between such average exchange rate and the
exchange rate in effect on the date of receipt, regardless of whether the
payment is in fact converted into U.S. dollars. Under the second method, an
accrual basis U.S. Holder may elect to translate interest income into U.S.
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dollars at the spot exchange rate in effect on the last day of the accrual
period or, in the case of an accrual period that spans two taxable years, at the
exchange rate in effect on the last day of the partial period within the taxable
year. Additionally, if a payment of interest is actually received within 5
business days of the last day of the accrual period or taxable year, an accrual
basis U.S. Holder applying the second method may instead translate such accrued
interest into U.S. dollars at the spot exchange rate in effect on the day of
actual receipt (in which case no exchange gain or loss will result). Any
election to apply the second method will apply to all debt instruments held by
the U.S. Holder at the beginning of the first taxable year to which the election
applies or thereafter acquired by the U.S. Holder and may not be revoked without
the consent of the IRS.
Exchange of Amounts in Other than U.S. Dollars. Foreign Currency received as
interest on a Note or on the sale or retirement of a Note will have a tax basis
equal to its U.S. dollar value at the time such interest is received or at the
time of such sale or retirement, as the case may be. Foreign Currency that is
purchased will generally have a tax basis equal to the U.S. dollar value of the
Foreign Currency on the date of purchase. Any gain or loss recognized on a sale
or other disposition of a Foreign Currency (including its use to purchase Notes
or upon exchange for U.S. dollars) will be ordinary income or loss.
Foreign Currency Discount Notes. OID for any accrual period on a Discount
Note that is denominated in a Foreign Currency will be determined in the Foreign
Currency and then translated into U.S. dollars in the same manner as stated
interest accrued by an accrual basis U.S. Holder. Upon receipt of an amount
attributable to OID (whether in connection with a payment of interest or the
sale or retirement of a Note), a U.S. Holder may recognize ordinary income or
loss.
Amortizable Bond Premium. In the case of a Note that is denominated in a
Foreign Currency, bond premium will be computed in units of Foreign Currency,
and amortizable bond premium will reduce interest income in units of the Foreign
Currency. At the time amortized bond premium offsets interest income, a U.S.
Holder may realize ordinary income or loss, measured by the difference between
exchange rates at that time and at the time of the acquisition of the Notes.
Market Discount. Market discount is determined in units of the Foreign
Currency, accrued market discount that is required to be taken into account on
the maturity or upon disposition of a Note is translated into U.S. dollars at
the exchange rate on the maturity or the disposition date, as the case may be
(and no part is treated as exchange gain or loss), accrued market discount
currently includible in income by an electing U.S. Holder is translated into
U.S. dollars at the average exchange rate for the accrual period (or the partial
accrual period during which the U.S. Holder held the Note), and exchange gain or
loss is determined on maturity or disposition of the Note (as the case may be)
in the manner described above under "Foreign Currency Notes--Interest Payments"
with respect to the computation of exchange gain or loss on the receipt of
accrued interest by an accrual method holder.
Exchange Gain or Loss. Gain or loss recognized by a U.S. Holder on the sale
or retirement of a Note that is attributable to changes in exchange rates will
be treated as ordinary income or loss. However, exchange gain or loss is taken
into account only to the extent of total gain or loss realized on the
transaction.
Notes Linked to Commodity Prices, Equity Indices or Other Factors
The applicable Pricing Supplement will contain a discussion of any special
United States Federal income tax rules with respect to Notes described above
under "Description of Notes--Notes Linked to Commodity Prices, Equity Indices or
Other Factors and Other Terms of Notes".
NON-UNITED STATES HOLDERS
Subject to the discussion of backup withholding below, payments of principal
(and premium, if any) and interest (including OID) by the Company or any agent
of the Company (acting in its capacity as such) to any holder of a Note that is
not a U.S. Holder (a "Non-U.S. Holder") will not be subject to
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United States Federal withholding tax, provided, in the case of interest
(including OID), that (i) the Non-U.S. Holder does not actually or
constructively own 10% or more of the total combined voting power of all classes
of stock of the Company entitled to vote, (ii) the Non-U.S. Holder is not a
controlled foreign corporation for United States tax purposes that is related to
the Company (directly or indirectly) through stock ownership and (iii) either
(A) the Non-U.S. Holder certifies to the Company or its agent under penalties of
perjury that it is not a United States person and provides its name and address
or (B) a securities clearing organization, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or business
(a "financial institution") and holds the Note certifies to the Company or its
agent under penalties of perjury that such statement has been received from the
Non-U.S. Holder by it or by another financial institution and furnishes the
payor with a copy thereof.
If a Non-U.S. Holder is engaged in a trade or business in the United States
and interest (including OID) on the Note is effectively connected with the
conduct of such trade or business, the Non-U.S. Holder, although exempt from the
withholding tax discussed in the preceding paragraph (provided that such holder
furnishes a properly executed IRS Form 4224 on or before any payment date to
claim such exemption), may be subject to United Stated Federal income tax on
such interest (or OID) in the same manner as if it were a U.S. Holder. In
addition, if the same Non-U.S. Holder is a foreign corporation, it may be
subject to a branch profits tax equal to 30% of its effectively connected
earnings and profits for the taxable year, subject to certain adjustments. For
purposes of the branch profits tax, interest (including OID) on a Note will be
included in the earnings and profits of such holder if such interest (or OID) is
effectively connected with the conduct by such holder of a trade or business in
the United States. In lieu of the certificate described in the preceding
paragraph, such a holder must provide the payor with a properly executed IRS
Form 4224 to claim an exemption from United States Federal withholding tax.
Any capital gain, market discount or exchange gain realized on the sale,
exchange, retirement or other disposition of a Note by a Non-U.S. Holder will
not be subject to United States Federal income or withholding taxes if (i) such
gain is not effectively connected with a United States trade or business of the
Non-U.S. Holder and (ii) in the case of an individual, such Non-U.S. Holder (A)
is not present in the United States for 183 days or more in the taxable year of
the sale, exchange, retirement or other disposition or (B) does not have a tax
home (as defined in Section 911(d)(3) of the Code) in the United States in the
taxable year of the sale, exchange, retirement or other disposition and the gain
is not attributable to an office or other fixed place of business maintained by
such individual in the United States.
Notes held by an individual who is neither a citizen nor a resident of the
United States for United States Federal tax purposes at the time of such
individual's death will not be subject to United States Federal estate tax,
provided that the income from such Notes was not or would not have been
effectively connected with a United States trade or business of such individual
and that such individual qualified for the exemption from United States Federal
withholding tax (without regard to the certification requirements) described
above.
PURCHASERS OF NOTES THAT ARE NON-U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE POSSIBLE APPLICABILITY OF UNITED STATES WITHHOLDING
AND OTHER TAXES UPON INCOME REALIZED IN RESPECT OF THE NOTES.
INFORMATION REPORTING AND BACKUP WITHHOLDING
For each calendar year in which Notes are outstanding, the Company is
required to provide the IRS with certain information, including each holder's
name, address and taxpayer identification number (either the holder's Social
Security number or its employer identification number, as the case may be), the
aggregate amount of principal and interest paid (including OID, if any) to that
holder
S-25
<PAGE>
during the calendar year and the amount of tax withheld, if any. This
obligation, however, does not apply with respect to certain U.S. Holders,
including corporations, tax-exempt organizations, qualified pension and profit
sharing trusts and individual retirement accounts.
In the event that a U.S. Holder subject to the reporting requirements
described above fails to supply its correct taxpayer identification number in
the manner required by applicable law or underreports its tax liability, the
Company, its agents or paying agents or a broker may be required to "backup"
withhold a tax equal to 31% of each payment of interest (including OID) and
principal (and premium if any) on the Notes. This backup withholding is not an
additional tax and may be credited against the U.S. Holder's United States
Federal income tax liability, provided that the required information is
furnished to the IRS.
Under current Treasury Department regulations, backup withholding and
information reporting will not apply to payments made by the Company or any
agent thereof (in its capacity as such) to a Non-U.S. Holder of a Note if such
holder has provided the required certification that it is not a United States
person as set forth in clause (iii) in the first paragraph under "Non-U.S.
Holders" above, or has otherwise established an exemption (provided that neither
the Company nor its agent has actual knowledge that the holder is a United
States person or that the conditions of any exemption are not in fact
satisfied).
Payment of the proceeds from the sale of a Note to or through a foreign
office of a broker will not be subject to information reporting or backup
withholding, except that if the broker is a United States person, a controlled
foreign corporation for United States tax purposes or a foreign person 50
percent or more of whose gross income from all sources for the three-year period
ending with the close of its taxable year preceding the payment was effectively
connected with a United States trade or business, information reporting may
apply to such payments. Payment of the proceeds from a sale of a Note to or
through the United States office of a broker is subject to information reporting
and backup withholding unless the holder or beneficial owner certifies as to its
taxpayer identification number or otherwise establishes an exemption from
information reporting and backup withholding.
S-26
<PAGE>
PLAN OF DISTRIBUTION
The Notes are being offered on a continuing basis by the Company through the
Agents, each of which has agreed to use its reasonable efforts to solicit offers
to purchase Notes. The Company will have the sole right to accept offers to
purchase Notes and may reject any proposed purchase of Notes in whole or in
part. Each of the Agents shall have the right, in its discretion reasonably
exercised, to reject any offer to purchase Notes received by it, in whole or in
part. The Company will pay each Agent a commission of from .08% to .75% of the
principal amount of any Note, depending upon the Stated Maturity of such Note,
for sales made through such Agent as agent.
The Company also may sell Notes at a discount to an Agent for its own
account or for resale to one or more purchasers at varying prices related to
prevailing market prices at the time of resale or, if set forth in the
applicable Pricing Supplement, at a fixed public offering price, as determined
by such Agent. After any initial public offering of Notes to be resold to
purchasers at a fixed public offering price, the public offering price and any
concession or discount may be changed. In addition, an Agent may offer Notes
purchased by it as principal to other dealers. Notes sold by an Agent to a
dealer may be sold at a discount and, unless otherwise specified in the
applicable Pricing Supplement, such discount allowed will not be in excess of
the discount received by such Agent from the Company. Unless otherwise specified
in the applicable Pricing Supplement, any Note purchased by an Agent as
principal will be purchased at 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of a Note of
identical maturity.
The Company reserves the right to sell Notes directly on its own behalf. No
commission will be payable on any Notes sold directly by the Company. In
addition, the Company may use additional agents as it may designate from time to
time to solicit offers to purchase Notes on terms substantially identical to
those set forth above for the Agents. The name of any such additional agent and
details as to the arrangements between such agent and the Company will be set
forth in the applicable Pricing Supplement.
Each of the Agents, whether acting as agent or principal, and any additional
agents appointed from time to time may be deemed to be an "underwriter" within
the meaning of the Securities Act of 1933 (the "Act"). The Company has agreed to
indemnify the Agents against certain liabilities, including liabilities under
the Act or to contribute to payments that the Agents may be required to make in
respect thereof. The Company has agreed to reimburse the Agents for all
out-of-pocket expenses (including advertising expenses) incurred by the Agents
with the advance approval of the Company. The estimated maximum amount of such
reimbursable expenses in connection with or related to the distribution of the
Notes is $100,000. In addition, the Company has agreed to reimburse the Agents
for the reasonable fees and disbursements of their counsel incurred in
connection with the distribution agreement between the Company and the Agents.
The estimated maximum amount of such reimbursable fees and disbursements
(excluding reimbursement of "blue sky" fees and other disbursements) is
$100,000.
The Notes do not have an established trading market and will not be listed
on any securities exchange. Each Agent may make a market in the Notes, but such
Agent is not obligated to do so and may discontinue any market-making at any
time without notice. No assurance can be given as to the existence or liquidity
of any secondary market for the Notes, or that the maximum amount of the Notes
offered hereby will be sold.
In addition to offering Notes through the Agents as described herein, the
Company may sell other Securities offered by the accompanying Prospectus. Such
Securities may include one or more series of medium-term notes other than the
Senior Notes and the Subordinated Notes. Any such Securities so offered and sold
will reduce correspondingly the maximum aggregate principal amount of Notes that
may be offered by this Prospectus Supplement.
PWI is a wholly owned subsidiary of the Company. CS First Boston Corporation
and certain affiliates thereof engage in transactions with and perform services
for the Company and its subsidiaries in the ordinary course of business.
All distributions of the Notes will conform to the requirements set forth in
the applicable sections of Schedule E of the By-laws of the National Association
of Securities Dealers, Inc.
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<PAGE>
SUBJECT TO COMPLETION OCTOBER 16, 1995
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 $844,575,000, 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 (if other than U.S. dollars) 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 [ ], 1995.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<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 (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. In addition, 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, 301 Pine 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 (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, 1994, the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1995, and June 30, 1995 and the Company's Current Reports on Form 8-K
dated December 27, 1994, as amended by Form 8-K/A dated February 24, 1995, and
May 1, 1995, 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 herein,
in any Prospectus Supplement or 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.
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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 16,100 people in 325 offices worldwide. In late 1994 and early
1995, the Company, in a series of transactions, acquired certain net assets and
specific businesses of Kidder, Peabody Group Inc.
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 Nasdaq National Market or on other over-the-counter
markets. Additionally, PaineWebber is a primary dealer in U.S. government
securities.
The Company is comprised of interrelated business groups, including the
Private Client Group, International, Institutional Fixed Income Sales and
Trading, Institutional Equity Sales and Trading, Municipal Securities Group,
Investment Banking, Asset Management, Real Estate, Research and Transaction
Services, which utilize common operational and administrative personnel and
facilities.
The Private Client Group 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 a 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.
Through the International, Institutional Fixed Income Sales and Trading and
Institutional Equity Sales and Trading groups, the Company places securities
for, 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.
The Municipal Securities Group originates, underwrites, sells and trades
taxable and tax-exempt issues for municipal and public agency clients.
Through the Investment Banking group, the Company provides financial advice
to, and raises capital for, a broad range of domestic and international
corporate clients. Investment Banking manages and underwrites public and private
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 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.
The Real Estate group provides a full range of capital market services to
real estate clients, including underwriting of debt and equity securities,
principal lending activity, debt restructuring, property sales and bulk sales
services, and a broad range of other advisory services.
The Research group provides investment advice to institutional and
individual investors, and other business areas of the Company, on approximately
890 companies in 62 industry sectors.
The Transaction Services group includes correspondent services, prime
brokerage and securities lending businesses, and specialist trading. Through
Correspondent Services Corporation, the Company provides execution and clearing
services to broker-dealers in the U.S. and overseas. The Company also
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acts as a specialist responsible for executing transactions and maintaining an
orderly market in certain securities.
The Company's businesses operate in 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
business is regulated by various agencies, including the Securities and Exchange
Commission, the New York Stock Exchange Inc. (the "NYSE") the Commodity Futures
Trading Commission and the National Association of Securities Dealers, Inc.
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.
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, 1994, and the six-month
period ended June 30, 1995.
FISCAL YEAR ENDED SIX MONTHS ENDED
DECEMBER 31 JUNE 30
- ---------------------------------------- ------------------
1990 1991 1992 1993 1994 1995
- ---- ---- ---- ---- ---- ------------------
* 1.2 1.4 1.3 1.0 **
* For 1990, earnings were inadequate to cover fixed charges and would have had
to increase $102,633,000 in order to cover the deficiency.
** For the six months ended June 30, 1995, earnings were inadequate to cover
fixed charges and would have had to increase $92,828,000 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
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"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.
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") may 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. (Section 302)
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 issue of
Securities and such index or formula, securities, currencies, intangibles,
goods, articles or commodities will be set forth 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
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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) if other than U.S.
dollars, the currency, currencies, composite 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
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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 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
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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 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, 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, Luxembourg or any other required city located outside the United States,
as the case may be, for the Securities of such series. (Section 1002)
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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)
If so specified in an applicable Prospectus Supplement, the Company may, at
its option, defer payments of interest otherwise payable on an Interest Payment
Date for a period and upon the terms and conditions described in such Prospectus
Supplement.
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 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 Global 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 under "Limitations on Issuance of
Bearer Securities," 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
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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 representing such Securities, 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 under "Limitation on Issuance of Bearer
Securities."
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 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 like tenor and terms 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
like tenor and terms 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 a like aggregate
principal amount of definitive Securities in like tenor and terms 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
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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 the
account of the beneficial owner 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, terms
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.
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)
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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 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)
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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 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 to make, give or take any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by such
Holders pursuant to such Indenture. (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, (i) 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 and (ii) a meeting called by the Holders shall
be dissolved. 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
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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 whether or not
present or represented at the meeting. 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 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 (i) 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 (ii)
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 (a) in the case of Securities
and Coupons denominated in U.S. dollars, U.S. Government Obligations (as defined
in the applicable Indenture), or (b) in the case of Securities and Coupons
denominated in a foreign currency, Foreign
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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 (i) the principal of, premium, if any,
and accrued and unpaid interest on (a) indebtedness of the Company for money
borrowed, whether outstanding on the date of execution of the Subordinated
Indenture or thereafter created, incurred or assumed, (b) 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, (c) 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, incurred
or assumed, and (d) 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, (ii) 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 (iii) 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
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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)
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.
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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)
through underwriters or dealers 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.
If so indicated in the applicable 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.
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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 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.
18
<PAGE>
EXPERTS
The consolidated financial statements of the Company for the year ended
December 31, 1994, incorporated by reference in the Company's Annual Report on
Form 10-K for the year ended December 31, 1994, have been audited by Ernst &
Young LLP, 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.
The combined statements of assets acquired and liabilities assumed of the
Real Estate, Eurobond, Retail, Brokerage and Asset Management businesses (the
"Purchased Businesses") of Kidder, Peabody Group Inc. as of December 26, 1994,
or prior date of transfer (the Real Estate and Eurobond businesses are combined
on their respective closing dates--December 9 and December 16, 1994) and the
combined statement of operations of the Purchased Businesses for the years ended
December 27, 1993, December 28, 1992 and December 30, 1991, in the Company's
Current Report of Form 8-K dated December 27, 1994, as amended by Form 8-K/A
dated February 24, 1995, have been audited by KPMG Peat Marwick, LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such combined statements are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
19
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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, THE ACCOMPANYING PROSPECTUS OR ANY PRICING SUPPLEMENT 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 SUPPLEMENT NOR THE ACCOMPANYING PROSPECTUS NOR ANY
PRICING 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 SUPPLEMENT, THE ACCOMPANYING
PROSPECTUS AND ANY PRICING SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT THE
INFORMATION THEY CONTAIN IS CORRECT AS OF ANY DATE OF ISSUE TIME SUBSEQUENT
TO THEIR RESPECTIVE DATES.
-------------------
TABLE OF CONTENTS
PAGE
----
Prospectus Supplement
Important Currency Information...... S-2
Description of Notes................ S-2
Foreign Currency Risks.............. S-16
Certain United States Federal Income
Tax Considerations................ S-19
Plan of Distribution................ S-27
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................ 17
Limitations on Issuance of Bearer
Securities........................ 18
Legal Matters....................... 18
Experts............................. 19
[LOGO]
U.S. $844,575,000
PAINE WEBBER GROUP INC.
MEDIUM-TERM SENIOR NOTES, SERIES C, AND
MEDIUM-TERM SUBORDINATED NOTES, SERIES D
DUE FROM NINE MONTHS TO 30 YEARS FROM
DATE OF ISSUE
-------------------
PROSPECTUS SUPPLEMENT
-------------------
PAINEWEBBER INCORPORATED
CS FIRST BOSTON
-------------------
[ * ] 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with the
issuance and distribution of the securities being registered. All the amounts
shown are estimates.
Registration fee.............................................. $137,932
NASD filing fee............................................... 30,500
Rating agency fees............................................ 101,000
Fees and expenses of accountants.............................. 40,000
Fees and expenses of counsel.................................. 100,000
Fees and expenses of Trustees................................. 50,000
Printing and engraving expenses............................... 9,000
Blue Sky fees and expenses.................................... 20,000
Miscellaneous................................................. 6,568
--------
Total................................................... $495,000
--------
--------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the General Corporation Law of the State of Delaware gives
corporations the power to eliminate or limit the personal liability of directors
under certain circumstances. Section 145 of the General Corporation Law of the
State of Delaware gives corporations the power to indemnify directors and
officers under certain circumstances.
Article IX of the Restated Certificate of Incorporation (relating to the
elimination of personal liability of directors to the Registrant) of Paine
Webber Group Inc. is hereby incorporated by reference to Exhibit 3.1 hereto.
Article VII of Paine Webber Group Inc.'s By-Laws (relating to indemnification of
directors and officers of the Registrant) is hereby incorporated by reference to
Exhibit 3.2 hereto.
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. 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 Security Act of
1974.
The indemnification provisions (relating to indemnification of, among
others, controlling persons, directors and officers of the Registrant against
certain liabilities) contained in the proposed forms of Underwriting Agreement
and Distribution Agreement are hereby incorporated by reference to Exhibits 1.1
and 1.2 hereto.
ITEM 16. EXHIBITS.
1.1* --Form of Underwriting Agreement.
1.2* --Form of Distribution Agreement.
3.1* --Restated Certificate of Incorporation of the Registrant.
3.2* --By-Laws of the Registrant.
4.1a* --Proposed Form of Debt Securities (Medium-Term Senior Note,
Series C, Fixed Rate).
4.1b* --Proposed Form of Debt Securities (Medium-Term Subordinated
Note, Series D, Fixed Rate).
II-1
<PAGE>
<TABLE>
<S> <C>
4.1c* --Proposed Form of Debt Securities (Medium-Term Senior Note, Series C,
Floating Rate).
4.1d* --Proposed Form of Debt Securities (Medium-Term Subordinated Note, Series D,
Floating Rate).
4.1e --Proposed form of Debt Securities (Senior Note, Fixed Rate). (incorporated
by reference to Exhibit 4.1e to Registrant's Registration Statement No.
33-58124 on Form S-3 filed with the Commission on February 10, 1993.)
4.1f --Proposed form of Debt Securities (Subordinated Note, Floating Rate).
(incorporated by reference to Exhibit 4.1f to Registrant's Registration
Statement No. 33-58124 on Form S-3 filed with the Commission on February
10, 1993.)
4.2a --Indenture dated as of March 15, 1988, between the Registrant and Chemical
Bank, as Trustee, relating to Senior Debt Securities. (incorporated by
reference to Exhibit No. 4.2a to the Registrant's Registration Statement
No. 33-29253 on Form S-3 filed with the Commission on June 14, 1989.)
4.2b* --Supplemental Indenture dated as of September 22, 1989, between the
Registrant and Chemical Bank, as Trustee, relating to Senior Debt
Securities.
4.2c* --Supplemental Indenture dated as of March 22, 1991, between the Registrant
and Chemical Bank, as Trustee, relating to Senior Debt Securities.
4.2d --Indenture dated as of March 15, 1988, between the Registrant and Chemical
Bank Delaware, as Trustee, relating to Subordinated Debt Securities.
(incorporated by reference to Exhibit No. 4.2b to Registrant's Registration
Statement No. 33-29253 on Form S-3 filed with the Commission on June 14,
1989.)
4.2e* --Supplemental Indenture dated as of September 22, 1989, between the
Registrant and Chemical Bank Delaware, as Trustee, relating to Subordinated
Debt Securities.
4.2f* --Supplemental Indenture dated as of March 22, 1991, between the Registrant
and Chemical Bank Delaware, as Trustee, relating to Subordinated Debt
Securities.
4.2g* --Supplemental Indenture dated as of November 30, 1993, between the
Registrant and Chemical Bank Delaware, as Trustee, relating to Subordinated
Debt Securities.
5* --Opinion of Theodore A. Levine in respect of the legality of the Debt
Securities registered hereunder, containing the consent of such counsel.
12 --Computation of Ratios of Earnings to Fixed Charges. (incorporated by
reference to Exhibit 12.2 to Registrant's Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 1995.)
23.1* --Consent of Ernst & Young LLP.
23.2* --Consent of KPMG Peat Marwick LLP.
23.3 --Consent of Counsel. (The consent of Theodore A. Levine is included in his
opinion filed herewith as Exhibit 5.)
24 --Power of Attorney (set forth on the signature pages of this Registration
Statement).
25.1* --Form T-1 Statement of Eligibility and Qualification Under the Trust
Indenture Act of 1939 of Chemical Bank.
25.2* --Form T-1 Statement of Eligibility and Qualification Under the Trust
Indenture Act of 1939 of Chemical Bank Delaware.
</TABLE>
- ------------
* Filed herewith.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a)(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,
represent a fundamental change in the information set forth in the
Registration Statement, notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
II-2
<PAGE>
deviation from the low or high end of the maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective 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
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.
(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 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 pursuant to the provisions described under Item 15 above, or
otherwise, 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.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF L933, PAINE WEBBER
GROUP INC. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT
NO., 1 TO THE 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 OCTOBER 16, 1995.
PAINE WEBBER GROUP INC.
(Registrant)
By /s/ DONALD B. MARRON
...................................
(Donald B. Marron, Chairman of the
Board,
Chief Executive Officer and
Director)
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
- ------------------------------------ ------------------------------------ -----------------
<C> <S> <C>
/s/ DONALD B. MARRON Chairman of the Board, Chief October 16, 1995
.................................... Executive Officer, Director
(Donald B. Marron) (principal executive officer)
* Vice President and Chief Financial October 16, 1995
.................................... Officer (principal financial and
(Regina Dolan) accounting officer)
* Director October 16, 1995
....................................
(T. Stanton Armour)
* Director October 16, 1995
....................................
(E. Garrett Bewkes, Jr.)
/s/ RETO BRAUN Director October 16, 1995
....................................
(Reto Braun)
* Director October 16, 1995
....................................
(John A. Bult)
/s/ FRANK P. DOYLE Director October 16, 1995
....................................
(Frank P. Doyle)
* Director October 16, 1995
....................................
(Joseph J. Grano, Jr.)
</TABLE>
II-4
<PAGE>
<TABLE><CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------ ------------------------------------ -----------------
<C> <S> <C>
* Director October 16, 1995
....................................
(John E. Kilgore, Jr.)
/s/ JAMES W. KINNEAR Director October 16, 1995
....................................
(James W. Kinnear)
/s/ NAOSHI KIYONO Director October 16, 1995
....................................
(Naoshi Kiyono)
* Director October 16, 1995
....................................
(Robert M. Loeffler)
* Director October 16, 1995
....................................
(Edward Randall, III)
* Director October 16, 1995
....................................
(Henry Rosovsky)
/s/ YOSHINAO SEKI Director October 16, 1995
....................................
(Yoshinao Seki)
*By: /s/ THEODORE A. LEVINE
...............................
Theodore A. Levine
Attorney-in-Fact
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
1.1* --Form of Underwriting Agreement.
1.2* --Form of Distribution Agreement.
3.1* --Restated Certificate of Incorporation of the Registrant.
3.2* --By-Laws of the Registrant.
4.1a* --Proposed Form of Debt Securities (Medium-Term Senior Note,
Series C, Fixed Rate).
4.1b* --Proposed Form of Debt Securities (Medium-Term Subordinated Note,
Series D, Fixed Rate).
4.1c* --Proposed Form of Debt Securities (Medium-Term Senior Note,
Series C, Floating Rate).
4.1d* --Proposed Form of Debt Securities (Medium-Term Subordinated Note,
Series D, Floating Rate).
4.1e --Proposed form of Debt Securities (Senior Note, Fixed Rate).
(incorporated by reference to Exhibit 4.1e to Registrant's
Registration Statement No. 33-58124 on Form S-3 filed with the
Commission on February 10, 1993.)
4.1f --Proposed form of Debt Securities (Subordinated Note, Floating
Rate). (incorporated by reference to Exhibit 4.1f to
Registrant's Registration Statement No. 33-58124 on Form S-3
filed with the Commission on February 10, 1993.)
4.2a --Indenture dated as of March 15, 1988, between the Registrant and
Chemical Bank, as Trustee, relating to Senior Debt Securities.
(incorporated by reference to Exhibit No. 4.2a to the
Registrant's Registration Statement No. 33-29253 on Form S-3
filed with the Commission on June 14, 1989.)
4.2b* --Supplemental Indenture dated as of September 22, 1989, between
the Registrant and Chemical Bank, as Trustee, relating to
Senior Debt Securities.
4.2c* --Supplemental Indenture dated as of March 22, 1991, between the
Registrant and Chemical Bank, as Trustee, relating to Senior
Debt Securities.
4.2d --Indenture dated as of March 15, 1988, between the Registrant
and Chemical Bank Delaware, as Trustee, relating to Subordinated
Debt Securities. (incorporated by reference to Exhibit No. 4.2b
to Registrant's Registration Statement No. 33-29253 on Form S-3
filed with the Commission on June 14, 1989.)
4.2e* --Supplemental Indenture dated as of September 22, 1989, between
the Registrant and Chemical Bank Delaware, as Trustee, relating
to Subordinated Debt Securities.
4.2f* --Supplemental Indenture dated as of March 22, 1991, between the
Registrant and Chemical Bank Delaware, as Trustee, relating to
Subordinated Debt Securities.
4.2g* --Supplemental Indenture dated as of November 30, 1993, between
the Registrant and Chemical Bank Delaware, as Trustee, relating
to Subordinated Debt Securities.
5* --Opinion of Theodore A. Levine in respect of the legality of the
Debt Securities registered hereunder, containing the consent of
such counsel.
12 --Computation of Ratios of Earnings to Fixed Charges.
(incorporated by reference to Exhibit 12.2 to Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1995.)
23.1* --Consent of Ernst & Young LLP.
23.2* --Consent of KPMG Peat Marwick LLP.
23.3 --Consent of Counsel. (The consent of Theodore A. Levine is
included in his opinion filed herewith as Exhibit 5.)
24 --Power of Attorney (set forth on the signature pages of this
Registration Statement).
25.1* --Form T-1 Statement of Eligibility and Qualification Under the
Trust Indenture Act of 1939 of Chemical Bank.
25.2* --Form T-1 Statement of Eligibility and Qualification Under the
Trust Indenture Act of 1939 of Chemical Bank Delaware.
- ------------
* Filed herewith.
[Draft--8/15/95]
PAINE WEBBER GROUP INC.
Underwriting Agreement
----------------------
, 199
To the Representative(s)
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
Paine Webber Group Inc., a Delaware corporation
(the "Company"), proposes to issue and sell to the under-
writers, including you, named in Schedule II hereto (the
"Underwriters") for whom (if more than you) you are acting
as representatives (the "Representatives"), the principal
amount of its securities identified in Schedule I hereto to
be issued under an Indenture dated as of March 15, 1988, as
supplemented by a First Supplemental Indenture dated as of
September 22, 1989, and by a Second Supplemental Indenture
dated as of March 22, 1991 (as so supplemented, the
"Indenture"), between the Company and ,
as trustee (the "Trustee"). All or part, as the context may
require, of such securities are hereinafter called the
"Securities". If the firm or firms listed in Schedule II
hereto include only the firm or firms listed in Schedule I
hereto, then the terms "Underwriters" and "Representatives"
shall each be deemed to refer to such firm or firms.
1. Sale and Purchase of the Securities. The
------------------------------------
Company agrees to sell to each Underwriter, and each Under-
writer, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and
conditions herein stated, agrees to purchase from the
Company, at the purchase price set forth in Schedule I
hereto the principal amount of Securities set forth opposite
the name of such Underwriter in Schedule II hereto except
that if Schedule I hereto provides for the sale of Securi-
ties pursuant to delayed delivery arrangements, the respec-
tive principal amounts of Securities to be purchased by the
Underwriters shall be as set forth in Schedule II hereto,
less the respective amounts of Contract Securities deter-
mined as provided below. Securities to be purchased by the
Underwriters are herein sometimes called the "Underwriters'
Securities" and Securities to be purchased pursuant to
<PAGE>
2
Delayed Delivery Contracts (as hereinafter defined) are
herein called "Contract Securities". The obligations of the
Underwriters under this Agreement are several and not joint.
If so provided in Schedule I hereto, the Under-
writers are authorized to solicit offers to purchase Securi-
ties from the Company pursuant to delayed delivery contracts
("Delayed Delivery Contracts"), substantially in the form of
Schedule III hereto, but with such changes therein as the
Company may authorize or approve. The Underwriters will
endeavor to make such arrangements, and, as compensation
therefor, the Company will pay to the Representatives, for
the account of the Underwriters, on the Closing Date (as
hereinafter defined), the fee set forth in Schedule I hereto
with respect to the principal amount of Securities for which
Delayed Delivery Contracts are made. Delayed Delivery
Contracts are to be with corporations or institutions. The
Company will make Delayed Delivery Contracts in all cases
where sales of Contract Securities arranged by the Under-
writers have been approved by the Company but, except as the
Company may otherwise agree, each such Delayed Delivery
Contract must be for not less than the minimum principal
amount set forth in Schedule I hereto and the total princi-
pal amount of Contract Securities may not exceed the maximum
principal amount set forth in Schedule I hereto. The
Underwriters will not have any responsibility in respect of
the validity or performance of Delayed Delivery Contracts.
The principal amount of Securities to be purchased by each
Underwriter as set forth in Schedule II hereto shall be
reduced by an amount which shall bear the same proportion to
the total principal amount of Contract Securities as the
principal amount of Securities set forth opposite the name
of such Underwriter bears to the total principal amount of
Securities set forth in Schedule II hereto, except to the
extent that you determine that such reduction shall be
otherwise than in such proportion and so advise the Company
in writing; provided, however, that the total principal
-------- -------
amount of Securities to be purchased by all Underwriters
shall be the total principal amount set forth in Schedule II
hereto less the total principal amount of Contract Securi-
ties.
2. Payment and Delivery. Delivery by the Company
---------------------
of the Underwriters' Securities to the Representatives for
the respective accounts of the several Underwriters and
payment by the Underwriters therefor by certified or offi-
cial bank check or checks payable in New York Clearing House
funds to the Company shall take place at the office, on the
<PAGE>
3
date and at the time specified in Schedule I hereto, which
date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 10
hereof (such date and time of delivery and payment for the
Underwriters' Securities being herein called the "Closing
Date").
The Underwriters' Securities shall be registered
in such names and shall be in such denominations as the
Representatives shall request at least three full business
days prior to the Closing Date and shall be made available
to the Representatives for checking and packaging, at such
place as is designated by the Representatives, at least one
full business day prior to the Closing Date.
3. Registration Statements and Prospectus; Public
----------------------------------------------
Offering. The Company represents and warrants to each
- ---------
Underwriter that the Company meets the requirements for the
use of Form S-3 under the Securities Act of 1933, as
amended, and the rules and regulations adopted thereunder
(respectively, the "Securities Act" and the "Rules"), and
has carefully prepared and filed with the Securities and
Exchange Commission (the "Commission") one or more
registration statements on Form S-3 (the file numbers of
which are set forth in Schedule I hereto), which have become
effective, for the registration under the Securities Act of
the Securities. Such registration statements, as amended by
any amendment which has become effective at the date of this
Agreement, meet the requirements set forth in Rule 415(a)
under the Securities Act and comply in all other material
respects with such Rule. The Company proposes to file with
the Commission pursuant to Rule 424(b) under the Securities
Act ("Rule 424(b)") a supplement to the form of prospectus
included in such registration statements relating to the
Securities and the plan of distribution thereof and has
previously advised you of all further information (financial
and other) with respect to the Company to be set forth
therein. The registration statements, each as amended by
any amendment which has become effective at the date of this
Agreement, including the exhibits thereto and all documents
incorporated therein by reference pursuant to Item 12 of
Form S-3 (the "Incorporated Documents"), are hereinafter
referred to as the "Registration Statements", and the form
of prospectus included in such Registration Statements as
then amended, including the Incorporated Documents, is
hereinafter referred to as the "Basic Prospectus"; and such
supplemented form of prospectus, in the form in which it
shall be filed with the Commission pursuant to Rule 424(b)
<PAGE>
4
(including the Basic Prospectus as so supplemented) is
hereinafter referred to as the "Final Prospectus". Any
preliminary form of the Final Prospectus which has
heretofore been filed pursuant to Rule 424(b) is hereinafter
called the "Interim Prospectus". Any reference herein to
the Registration Statements, the Basic Prospectus, any
Interim Prospectus or the Final Prospectus shall be deemed
to refer to and include the Incorporated Documents which
were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), on or before the date of this
Agreement or the issue date of the Basic Prospectus, any
Interim Prospectus or the Final Prospectus, as the case may
be; and any reference herein to the terms "amend", "amend-
ment" or "supplement" with respect to the Registration
Statements, the Basic Prospectus, any Interim Prospectus or
the Final Prospectus shall be deemed to refer to and include
the filing of any Incorporated Documents under the Exchange
Act after the date of this Agreement or the issue date of
the Basic Prospectus, any Interim Prospectus or the Final
Prospectus, as the case may be.
The Company hereby confirms that the Underwriters
and dealers have been authorized to distribute or cause to
be distributed any Interim Prospectus and are authorized to
distribute the Final Prospectus (as from time to time
amended or supplemented if the Company furnishes amendments
or supplements thereto to the Underwriters).
4. Representations and Warranties. The Company
-------------------------------
represents and warrants to each Underwriter that:
(a) The Commission has not issued an order
preventing or suspending the use of the Basic Prospec-
tus or any Interim Prospectus.
(b) The Basic Prospectus and any Interim Prospec-
tus have complied in all material respects with the
requirements of the Securities Act and of the Rules
and, as of their respective dates, did not include any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein
not misleading.
(c) As of the date hereof, when the Final Pro-
spectus is first filed with the Commission pursuant to
Rule 424(b), when, before the Closing Date, any amend-
ment to either of the Registration Statements becomes
effective, when, before the Closing Date, any document
<PAGE>
5
incorporated by reference in either of the Registration
Statements is filed with the Commission, when any
supplement to the Final Prospectus is filed with the
Commission and on the Closing Date, the Registration
Statements, the Final Prospectus and any such amendment
or supplement will comply in all material respects with
the requirements of the Securities Act and the Rules,
the Incorporated Documents will comply in all material
respects with the requirements of the Exchange Act and
the rules and regulations adopted by the Commission
thereunder, and the Registration Statements will not
contain any untrue statement of a material fact or omit
to state any material fact required to be stated
therein or necessary in order to make the statements
therein not misleading, the Indenture will comply in
all material respects with the requirements of the
Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules thereunder and the Final
Prospectus (together with any supplement thereto) will
not include any untrue statement of a material fact or
omit to state a material fact necessary in order to
make the statements therein, in the light of the
circumstances under which they were made, not
misleading; provided, however, that this representation
-------- -------
and warranty does not apply to (i) statements or
omissions in either of the Registration Statements or
the Final Prospectus (or in amendments or supplements
thereto) made in reliance upon information furnished in
writing to the Company by the Representatives on behalf
of any Underwriter expressly for use therein or
(ii) that part of either Registration Statement which
shall constitute the Statement of Eligibility and
Qualification of the Trustee under the Trust Indenture
Act on Form T-1, except statements or omissions therein
made in reliance upon information furnished in writing
to the trustee by or on behalf of the Company for use
therein.
(d) The certificate delivered pursuant to
paragraph (e) of Section 5 hereof will be on the date
on which it is to be delivered in all material respects
true and complete.
(e) No consent, approval, authorization or order
of any court or governmental agency or body is required
for the consummation by the Company of the transactions
<PAGE>
6
contemplated by this Agreement, except those which have
been obtained or which may be required under the
Securities Act and such qualifications as may be
required under state laws in connection with the
purchase and distribution of the Securities by the
Underwriters, and consummation of such transactions
will not result in the breach of any terms of, or
constitute a default under, any other agreement or
undertaking of the Company.
5. Conditions of the Underwriters' Obligations.
--------------------------------------------
The obligations of the Underwriters hereunder are subject to
the following conditions:
(a) Pursuant to Rule 424(b), the Final Prospectus
shall have been filed with the Commission no later than
the second business day following the earlier of the
date of the determination of the offering price of the
Securities or the date it is first used after
effectiveness in connection with a public offering or
sales, or transmitted by a means reasonably calculated
to result in filing with the Commission by that date.
(b) No order suspending the effectiveness of
either of the Registration Statements, as amended from
time to time, shall be in effect and no proceedings for
such purpose shall be pending before or threatened by
the Commission and any requests for additional
information on the part of the Commission (to be
included in either of the Registration Statements or
the Final Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the
Representatives.
(c) Since the respective dates as of which
information is given in the Registration Statements and
the Final Prospectus, (i) there shall not have been any
material change in the capital stock or long-term debt
of the Company and its subsidiaries, (ii) there shall
not have been any material adverse change in the
general affairs, management, financial position or
results of operations of the Company and its subsidiar-
ies taken as a whole, whether or not arising from
transactions in the ordinary course of business, in
each case other than as set forth in or contemplated by
the Final Prospectus and (iii) the Company and its
subsidiaries shall not have sustained any material loss
or interference with their business taken as a whole
<PAGE>
7
from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental
action, order or decree that is not set forth in the
Final Prospectus if, in the judgment of the Representa-
tives, any such development referred to in clauses (i),
(ii) or (iii) makes it impracticable or inadvisable to
proceed with the offering and delivery of the Securi-
ties as contemplated by the Registration Statements and
the Final Prospectus.
(d) The representations and warranties of the
Company contained herein shall be true and correct as
of the date hereof, as of the date of the effectiveness
of any amendment to either of the Registration
Statements filed before the Closing Date, as of the
date of filing of any document incorporated by
reference therein before the Closing Date and on and as
of the Closing Date and the Company shall have
performed all covenants and agreements herein contained
to be performed on its part at or prior to the Closing
Date.
(e) The Representatives shall have received on
the Closing Date a certificate, dated the Closing Date,
of the chief executive officer or a vice president and
of the principal financial or accounting officer of the
Company, which shall certify that (i) no order suspend-
ing the effectiveness of either of the Registration
Statements or prohibiting the sale of the Securities
has been issued and no proceedings for such purpose are
pending before or, to the knowledge of such officers,
threatened by the Commission and (ii) the
representations and warranties of the Company contained
herein are true and correct on and as of the Closing
Date and the Company has performed all covenants and
agreements herein contained to be performed on its part
at or prior to the Closing Date.
(f) The Representatives shall have received on
the Closing Date a signed letter (which may refer to
letters previously delivered to one or more of the
Representatives) from Ernst & Young, dated the Closing
Date, substantially in the form of Exhibit A hereto.
In addition, unless otherwise provided in
Schedule I hereto, at the time this Agreement is executed,
such firm of accountants shall have furnished to the Repre-
<PAGE>
8
sentatives a letter or letters, dated the date of this
Agreement, in form and substance satisfactory to the Repre-
sentatives, to the effect set forth in Schedule I hereto, in
the introductory paragraph to Exhibit A hereto, in
clauses (a) and (b)(2) of Exhibit A hereto and, to the
extent referring to information contained in Exchange Act
reports incorporated in the Registration Statements and the
Final Prospectus, in clauses (b)(1) and (c) of Exhibit A
hereto.
(g) The Representatives shall have received on
the Closing Date from the General Counsel of the
Company, an opinion and a letter, each dated the
Closing Date, substantially identical to the proposed
form of opinion and form of letter set forth in
Exhibit B hereto.
(h) The Representatives shall have received on
the Closing Date from Cravath, Swaine & Moore, counsel
for the Underwriters, an opinion and a letter, each
dated the Closing Date, with respect to the Company,
the Indenture, the Securities, the Registration
Statements, the Final Prospectus, this Agreement and
any Delayed Delivery Contracts and the form and
sufficiency of all proceedings taken in connection with
the authorization, sale and delivery of the Securities.
Such opinion, letter and proceedings shall be
reasonably satisfactory in all respects to the
Representatives, and the Company shall have furnished
to counsel for the Underwriters such documents as they
may reasonably request for the purpose of enabling them
to render such opinion and letter.
(i) Subsequent to the execution of this Agree-
ment, there shall not have been any decrease in the
ratings of any of the Company's debt securities by
Moody's Investors Service, Inc. or Standard & Poor's
Corporation.
(j) The Company shall have accepted Delayed
Delivery Contracts in any case where sales of Contract
Securities arranged by the Underwriters have been
approved by the Company.
(k) Subsequent to the execution of this Agree-
ment, the Company shall not have filed an Incorporated
Document under the Exchange Act unless a copy thereof
shall have first been submitted to the Representatives
<PAGE>
9
within a reasonable period of time prior to the filing
thereof and the Representatives shall not have rea-
sonably objected thereto in writing.
6. Covenants. The Company covenants and agrees
----------
as follows:
(a) Before the termination of the offering of the
Securities, not to file any amendment or supplement
(including the Final Prospectus) to either of the
Registration Statements relating to the Securities or
the Basic Prospectus (other than an Incorporated
Document filed under the Exchange Act) unless a copy
thereof shall have first been submitted to the
Representatives within a reasonable period of time
prior to the filing thereof and the Representatives
shall not have reasonably objected thereto in writing.
Subject to the foregoing sentence, the Company will
cause the Final Prospectus to be filed with the
Commission or transmitted for filing with the
Commission in accordance with the requirements of
Rule 424(b).
(b) As soon as the Company is advised thereof, to
advise the Representatives (i) when the Final Prospec-
tus shall have been filed with the Commission or mailed
to the Commission for filing pursuant to Rule 424(b),
(ii) when any amendment to either of the Registration
Statements relating to the Securities shall have become
effective, (iii) of the initiation or threatening by
the Commission of any proceedings for the issuance of
any order suspending the effectiveness of either of the
Registration Statements, or the qualification of the
Indenture, (iv) of receipt by the Company or any
representative of or attorney for the Company of any
other communication from the Commission relating to the
Company (except for routine communications relating to
the broker-dealer business of the Company), either of
the Registration Statements (except for communications
relating to securities other than the Securities), the
Basic Prospectus, any Interim Prospectus or the Final
Prospectus and (v) of the receipt by the Company or any
representative of or attorney for the Company of any
notification with respect to the suspension of the
qualification of the Securities for sale in any juris-
diction or the initiation or threatening of any pro-
ceeding for such purpose. The Company will make every
reasonable effort to prevent the issuance of an order
<PAGE>
10
suspending the effectiveness of either of the
Registration Statements or the qualification of the
Indenture and if any such order is issued to obtain as
soon as possible the lifting thereof.
(c) To deliver to the Representatives, without
charge, (i) upon request and to the extent not
previously delivered, signed copies of the Registration
Statements and of any amendments thereto (including all
exhibits filed with, or incorporated by reference in,
any such document) and (ii) as many conformed copies of
the Registration Statements and of any amendments
thereto which shall become effective on or before the
Closing Date (excluding exhibits) as the
Representatives may reasonably request.
(d) During such period as a prospectus is
required by law to be delivered by an Underwriter or
dealer, to deliver, without charge to the Representa-
tives and to Underwriters and dealers, at such office
or offices as the Representatives may designate, as
many copies of any Interim Prospectus and the Final
Prospectus as the Representatives may reasonably
request.
(e) During the period in which copies of the
Final Prospectus are to be delivered as provided in
paragraph (d) above, if any event occurs as a result of
which it shall be necessary to amend or supplement the
Final Prospectus in order to ensure that no part of the
Final Prospectus contains an untrue statement of a
material fact or omits to state a material fact neces-
sary to make the statements therein, in light of the
circumstances existing when the Final Prospectus is to
be delivered to a purchaser, not misleading, forthwith
to prepare, submit to the Representatives, file with
the Commission and deliver without charge, to the
Underwriters and to dealers (to the extent requested
and at the addresses furnished by the Representatives
to the Company) to whom Securities may have been sold
by the Underwriters, and to other dealers upon request,
either amendments or supplements to the Final Prospec-
tus so that the statements in the Final Prospectus, as
so amended or supplemented, will comply with the
standard set forth in this paragraph (e). Delivery by
Underwriters of any such amendments or supplements to
the Final Prospectus shall not constitute a waiver of
any of the conditions set forth in Section 5 hereof.
<PAGE>
11
(f) To make generally available to the Company's
security holders, as soon as practicable but in no
event later than 45 days after the end of the 12-month
period beginning at the end of the current fiscal
quarter of the Company, an earnings statement that
satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder.
(g) To take such action as the Representatives
may request in order to qualify the Securities for
offer and sale under the securities or "blue sky" laws
of such jurisdictions as the Representatives may
reasonably request; provided that in no event shall the
--------
Company be obligated to subject itself to taxation or
to qualify to do business in any jurisdiction where it
is not now so qualified or to take any action that
would subject it to service of process in suits, other
than those arising out of the offering or sale of the
Securities, in any jurisdiction where it is not now so
subject.
(h) For so long as any of the Securities remain
outstanding, to supply to the Representatives and to
each other Underwriter who may so request in writing
copies of such financial statements and other periodic
and special reports as the Company may from time to
time distribute generally to its lenders or to the
holders of any class of its capital stock and to
furnish to the Representatives copies of each annual or
other report it shall be required to file with the
Commission.
(i) To pay, or reimburse if paid by the Represen-
tatives, whether or not the transactions contemplated
hereby are consummated or this Agreement is terminated,
all costs and expenses incident to the performance of
the obligations of the Company under this Agreement,
including those relating to (i) the preparation,
printing and filing of the Registration Statements and
exhibits thereto, the Basic Prospectus, any Interim
Prospectus and the Final Prospectus, all amendments and
supplements to the Registration Statements, any Interim
Prospectus and the Final Prospectus, and the
preparation and printing or other reproduction of this
Agreement, the Indenture and any agreement among
underwriters and agreements with dealers relating to
the offering of the Securities, (ii) the issuance of
the Securities and the preparation and delivery of
<PAGE>
12
certificates for the Securities, (iii) the registration
or qualification of the Securities for offer and sale
under the securities or "blue sky" laws of the various
jurisdictions referred to in paragraph (g) above,
including the fees and disbursements of counsel for the
Underwriters in connection therewith and the prepara-
tion and printing of "blue sky" memoranda and legal
investment memoranda, (iv) the furnishing to the
Representatives and the Underwriters of copies of any
Interim Prospectus and the Final Prospectus and all
amendments or supplements to any Interim Prospectus and
the Final Prospectus, and of the several documents
required by this Section 6 to be so furnished, includ-
ing costs of shipping and mailing, (v) the filing
requirements, if any, of the National Association of
Securities Dealers, Inc., in connection with its review
of corporate financings, (vi) the furnishing to the
Representatives and to the Underwriters of copies of
all reports and information required by paragraph (h)
above, including costs of shipping and mailing,
(vii) all transfer taxes, if any, with respect to the
sale and delivery of the Securities by the Company to
the several Underwriters, (viii) the fees charged by
rating agencies in connection with the rating of the
Securities, (ix) the fees and expenses of the Trustee
and (ix) the fee, if any, for listing the Securities on
any national securities exchange.
(j) For a period beginning at the time of execu-
tion of this Agreement and ending on the later of the
Closing Date or the date on which any price restric-
tions on the sale of the Securities are terminated,
without the prior consent of the Underwriters or the
Representatives, not publicly to offer, sell, contract
to sell or otherwise dispose of any debt securities of
the Company.
(k) If the Final Prospectus states that the
Securities will be listed on a stock exchange, to use
its best efforts to cause the Securities to be listed
on such stock exchange.
7. Indemnification. (a) The Company agrees to
----------------
indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the
meaning of either the Securities Act or the Exchange Act
against any and all losses, claims, damages and liabilities,
joint or several (including any investigation, legal and
<PAGE>
13
other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become
subject under the Securities Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact
contained in either of the Registration Statements, the
Basic Prospectus, any Interim Prospectus or the Final
Prospectus, or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as any
such untrue statement or omission or alleged untrue
statement or omission was made in (i) either of the
Registration Statements, the Basic Prospectus, any Interim
Prospectus or the Final Prospectus, or such amendment or
supplement, in reliance upon and in conformity with
information furnished in writing to the Company by the
Representatives on behalf of any Underwriter expressly for
use therein or (ii) that part of either of the Registration
Statements which shall constitute the Statement of
Eligibility and Qualification on Form T-1 of the Trustee
under the Trust Indenture Act, except statements or
omissions in such Registration Statement made in reliance
upon information furnished in writing to the Trustee by or
on behalf of the Company for use therein; provided, however,
-------- -------
that such indemnity with respect to the Basic Prospectus or
any Interim Prospectus shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter)
from whom the person asserting any such loss, claim, damage
or liability purchased Securities that are the subject
thereof if such person did not receive a copy of the Final
Prospectus (not including the Incorporated Documents) at or
prior to the confirmation of the sale of such Securities to
such person in any case where such delivery is required by
the Securities Act and the untrue statement or omission of a
material fact contained in the Basic Prospectus or any
Interim Prospectus was corrected in the Final Prospectus,
unless such failure to deliver the Final Prospectus was a
result of noncompliance by the Company with Section 6(d)
hereof.
(b) Each Underwriter agrees to indemnify and hold
harmless the Company, each person, if any, who controls the
Company within the meaning of either the Securities Act or
the Exchange Act, each director of the Company and each
<PAGE>
14
officer of the Company who signs either of the Registration
Statements to the same extent as the foregoing indemnity
from the Company to each Underwriter, but only insofar as
such losses, claims, damages or liabilities arise out of or
are based upon any untrue statement or omission or alleged
untrue statement or omission that was made in either of the
Registration Statements, the Basic Prospectus, any Interim
Prospectus or the Final Prospectus, or any amendment or
supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by the
Representatives on behalf of such Underwriter expressly for
use therein; provided, however, that the obligation of each
-------- -------
Underwriter to indemnify the Company hereunder shall be
limited to the total price at which the Securities purchased
by such Underwriter hereunder were offered to the public.
The Company acknowledges that the statements set forth in
the last paragraph of the cover page, under the headings
"Underwriting" and "Plan of Distribution" and, if Schedule I
hereto provides for sales of Securities pursuant to delayed
delivery arrangements, under the heading "Delayed Delivery
Arrangements", in any Interim Prospectus or the Final
Prospectus constitute the only information furnished in
writing by or on behalf of the several Underwriters for
inclusion in the documents referred to in the foregoing
indemnity and you, as the Representatives, confirm that such
statements are correct.
(c) Any party that proposes to assert the right
to be indemnified under this Section 7 will, promptly after
receipt of notice of commencement of any action, suit or
proceeding against any such party in respect of which a
claim is to be made against an indemnifying party under this
Section 7, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a
copy of all papers served, but the omission so to notify
such indemnifying party of any such action, suit or proceed-
ing (i) shall not relieve it from liability under this
Section 7 unless and to the extent it did not otherwise
learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights
and defenses and (ii) shall not relieve it from any
liability that it may have to any indemnified party
otherwise than under this Section 7. In case any such
action, suit or proceeding shall be brought against any
indemnified party and it shall notify the indemnifying party
of the commencement thereof, such indemnifying party or
parties shall be entitled to participate in, and, to the
extent that it or they shall wish, jointly with any other
<PAGE>
15
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified
party, and after notice from the indemnifying party or
parties to such indemnified party of its or their election
so to assume the defense thereof, the indemnifying party or
parties shall not be liable to such indemnified party for
any legal or other expenses, other than reasonable costs of
investigation subsequently incurred by such indemnified
party in connection with the defense thereof. The
indemnified party shall have the right to employ its counsel
in any such action, but the fees and expenses of such
counsel shall be at the expense of such indemnified party
unless (i) the employment of counsel by such indemnified
party has been authorized by the indemnifying party or
parties, (ii) the indemnified party shall have reasonably
concluded that there may be a conflict of interest between
the indemnifying party or parties and the indemnified party
in the conduct of the defense of such action (in which case
the indemnifying party or parties shall not have the right
to direct the defense of such action on behalf of the
indemnified party) or (iii) the indemnifying party or
parties shall not in fact have employed counsel to assume
the defense of such action, in each of which cases the fees
and expenses of counsel shall be at the expense of the
indemnifying party or parties. An indemnifying party shall
not be liable for any settlement of any action or claim
effected without its written consent.
8. Contribution. In order to provide for just
-------------
and equitable contribution in circumstances in which the
indemnification provided for in Section 7(a) is applicable
but for any reason is held to be unavailable from the
Company, the Company and the Underwriters agree to
contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company and one or more
of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the
Company and by the Underwriters from the offering of the
Securities; provided, however, that in no case shall any
-------- -------
Underwriter (except as may be provided in any agreement
among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the
underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Underwriters
<PAGE>
16
shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the
relative fault of the Company and of the Underwriters in
connection with the statements or omissions which resulted
in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the
offering (before deducting expenses), and benefits received
by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set
forth on the cover page of the Final Prospectus. Relative
fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information
provided by the Company or the Underwriters. The Company
and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not
take into account the equitable considerations referred to
above. Notwithstanding the provisions of this Section 8, no
person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this
Section 8, each person who controls an Underwriter within
the meaning of either the Securities Act or the Exchange Act
shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within
the meaning of either the Securities Act or the Exchange
Act, each officer of the Company who shall have signed the
Registration Statements and each director of the Company
shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions
of this Section 8. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another
party or parties under this Section 8, notify such party or
parties from whom contribution may be sought, but the
omission so to notify such party or parties (i) shall not
relieve such party or parties from liability under this
Section 8 unless and to the extent it or they did not
otherwise learn of such action and such failure results in
the forfeiture by such party or parties of substantial
rights and defenses and (ii) shall not relieve such party or
parties from any other obligation it or they may have
hereunder or otherwise than under this Section 8. No party
shall be liable for contribution with respect to any action
or claim settled without its consent.
<PAGE>
17
9. Termination. This Agreement may be terminated
------------
by the Representatives or by Underwriters who have agreed to
purchase in the aggregate at least 50% of the principal
amount of the Securities by notifying the Company at any
time,
(a) prior to the earliest of (i) 5:00 p.m., New
York time, on the day the Final Prospectus is
transmitted for filing with the Commission pursuant to
Rule 424(b) (or the actual time of such filing, if such
filing in fact occurs prior to 5:00 p.m., New York
time, on such date), (ii) the time of release by the
Representatives for publication of the first newspaper
advertisement that is subsequently published with
respect to the Securities or (iii) the time when the
Securities are first generally offered by the
Representatives to dealers by letter or telegram;
(b) at or prior to the Closing Date if, in the
judgment of the Representatives or in the judgment of
such Underwriters, as the case may be, payment for and
delivery of the Securities is rendered impracticable or
inadvisable because (i) additional material governmen-
tal restrictions, not in force and effect on the date
hereof, shall have been imposed upon trading in securi-
ties generally or minimum or maximum prices shall have
been generally established on the New York Stock
Exchange, or trading in the Company's Common Stock
shall have been suspended by the Commission or the New
York Stock Exchange or trading in securities generally
shall have been suspended on such Exchange or a general
banking moratorium shall have been established by
Federal or New York authorities, (ii) any event shall
have occurred or shall exist which makes untrue or
incorrect in any material respect any material
statement or information contained in either of the
Registration Statements or the Final Prospectus or
which is not reflected in either of the Registration
Statements or the Final Prospectus but should be
reflected therein in order to make the statements or
information contained therein not misleading in any
material respect or (iii) any outbreak or escalation of
hostilities, declaration by the United States of a
national emergency or war or other calamity or crisis
shall have occurred or shall have accelerated to such
an extent as, in the judgment of the Representatives,
to affect adversely the marketability of the
Securities; or
<PAGE>
18
(c) at or prior to the Closing Date, if any of the
conditions specified in Section 5 hereof shall not have
been fulfilled when and as required by this Agreement.
If this Agreement is terminated pursuant to any of
the provisions hereof, the Company shall not be under any
liability (except as otherwise provided herein) to any
Underwriter and no Underwriter shall be under any liability
to the Company, except that (a) if this Agreement is termi-
nated by the Representatives or the Underwriters because of
any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this
Agreement, the Company will reimburse the Underwriters for
all reasonable out-of-pocket expenses (including the fees
and disbursements of their counsel) incurred by them and
(b) no Underwriter who shall have failed or refused to
purchase the Securities agreed to be purchased by it
hereunder, without some reason sufficient hereunder to
justify its cancelation or termination of its obligations
hereunder, shall be relieved of liability to the Company or
to the other Underwriters for damages occasioned by its
default.
10. Default of Underwriters. If one or more of
------------------------
the Underwriters shall fail (other than for a reason suffi-
cient to justify the termination of this Agreement) to
purchase on the Closing Date the Securities agreed to be
purchased by such Underwriter or Underwriters, the Represen-
tatives may find one or more substitute underwriters to
purchase such Securities or make such other arrangements as
the Representatives may deem advisable or one or more of the
remaining Underwriters may agree to purchase such Securities
in such proportions as may be approved by the Representa-
tives in each case upon the terms herein set forth. If no
such arrangements have been made within 24 hours after the
Closing Date, and
(a) the aggregate principal amount of Securities
to be purchased by the defaulting Underwriters on the
Closing Date shall not exceed 10% of the total princi-
pal amount of Securities that the Underwriters are
obligated to purchase on the Closing Date, each of the
nondefaulting Underwriters shall be obligated to
purchase such Securities on the terms herein set forth
in proportion to their respective obligations hereun-
der; or
<PAGE>
19
(b) the aggregate principal amount of Securities
to be purchased by the defaulting Underwriters on the
Closing Date shall exceed 10% of the total principal
amount of Securities that the Underwriters are
obligated to purchase on the Closing Date, the Company
shall be entitled to an additional period of 24 hours
within which to find one or more substitute
underwriters satisfactory to the Representatives to
purchase such Securities upon the terms set forth
herein.
In any such case, either the Representatives or
the Company shall have the right to postpone the Closing
Date for a period of not more than five business days in
order that the necessary changes and arrangements may be
effected by the Representatives and the Company. If the
aggregate principal amount of Securities to be purchased on
the Closing Date by such defaulting Underwriter or Under-
writers shall exceed 10% of the total principal amount of
Securities that the Underwriters are obligated to purchase
on the Closing Date, and neither the nondefaulting Under-
writers nor the Company shall make arrangements pursuant to
this Section 10 within the period stated for the purchase of
the Securities that the defaulting Underwriter or Underwrit-
ers agreed to purchase, this Agreement shall terminate
without liability on the part of any nondefaulting Under-
writer to the Company and without liability on the part of
the Company except, in both cases, as provided in Sec-
tions 6(i) and 9 hereof. The provisions of this Section 10
shall not in any way affect the liability of any defaulting
Underwriter to the Company or the nondefaulting Underwriters
arising out of such default. A substitute underwriter
hereunder shall become an Underwriter for all purposes of
this Agreement.
11. Miscellaneous. The reimbursement, indemnifi-
--------------
cation and contribution agreements contained in Sec-
tions 6(i), 7, 8 and 9 hereof and the representations,
warranties and agreements of the Company in this Agreement
shall remain in full force and effect regardless of (a) any
termination of this Agreement except insofar as such termi-
nation renders the performance of such agreements, other
than those in Sections 6(i), 7, 8 and 9, inappropriate,
(b) any investigation made by or on behalf of any
Underwriter or controlling person or by or on behalf of the
Company or any controlling person, director or officer and
(c) delivery of and payment for the Securities under this
Agreement.
<PAGE>
20
This Agreement has been and is made solely for the
benefit of the Underwriters and the Company, and their
respective successors and assigns, and, to the extent
expressed herein, for the benefit of persons controlling any
of the Underwriters or the Company, directors and officers
of the Company and their respective successors and assigns,
and no other person, partnership, association or corporation
shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not
include any purchaser of Securities from any Underwriter
merely because of such purchase. This Agreement may be
executed in counterparts, all of which, when taken together,
shall constitute one original.
12. Notices. All notices and communications
--------
hereunder shall be in writing and mailed or delivered, or by
telephone or telegraph if subsequently confirmed in writing,
to the Representatives at the address specified in Schedule
I hereto and to the Company at 1285 Avenue of the Americas,
New York, New York 10019, attention of the agent for service
shown on the cover page of the most recent Registration
Statement.
13. Applicable Law. This Agreement shall be
---------------
governed by, and construed in accordance with, the laws of
the State of New York.
Please confirm that the foregoing correctly sets
forth the agreement between us.
Very truly yours,
PAINE WEBBER GROUP INC.
By______________________
Confirmed:
[name of Representative],
By________________________
<PAGE>
21
[name of Representative],
By_________________________
Acting on behalf of themselves
and the several Underwriters
named in Schedule II annexed hereto.
<PAGE>
SCHEDULE I
Underwriting Agreement dated
Registration Statement No[s]. [insert 33-51149 or 33-
52695/52695-0 or both, as applicable].
Representative(s):
[include address(es) for notices]
Title, Purchase Price and Description of Securities:
Title:
Principal Amount:
Purchase Price (include accrued interest or
amortization, if any):
Sinking fund provision:
Redemption provisions:
Other provisions:
Closing Date, Time and Location:
Delayed Delivery Arrangements:
Fee:
Minimum principal amount of each Contract:
Maximum aggregate principal amount of all
Contracts: $
Modification of items to be covered by the letter from
Ernst & Young delivered pursuant to Section 5(f) at the time
this Agreement is executed or statement that no such letter
is to be delivered:
Stock Exchange Listing:
<PAGE>
SCHEDULE II
Principal
Amount
of Securities
to
Underwriters be Purchased
- ------------ -------------
$
Total . . . . . . . . . . . . . . . $ ____________
<PAGE>
SCHEDULE III
Delayed Delivery Contract
-------------------------
, 199
[Insert name and address of lead Representative]
Dear Sirs:
The undersigned hereby agrees to purchase from
Paine Webber Group Inc. (the "Company"), and the Company
agrees to sell to the undersigned, on ,
199 (the "Delivery Date"), $ principal amount of the
Company's (the "Securities") offered
by the Company's Prospectus dated , and
related Prospectus Supplement dated , receipt
of a copy of which is hereby acknowledged, at a purchase
price of % of the principal amount thereof, plus [accrued
interest or amortization of original issue discount], if
any, thereon from , 199 , to the date of
payment and delivery, and on the further terms and
conditions set forth in this contract.
Payment for the Securities to be purchased by the
undersigned shall be made on or before 11:00 a.m., New York
City time, on the Delivery Date to or upon the order of the
Company in New York Clearing House (next day) funds, at your
office or at such other place as shall be agreed between the
Company and the undersigned upon delivery to the undersigned
of the Securities in definitive fully registered form and in
such authorized denominations and registered in such names
as the undersigned may request by written or telegraphic
communication addressed to the Company not less than five
full business days prior to the Delivery Date. If no
request is received, the Securities will be registered in
the name of the undersigned and issued in a denomination
equal to the aggregate principal amount of Securities to be
purchased by the undersigned on the Delivery Date.
The obligation of the undersigned to take delivery
of and make payment of Securities on the Delivery Date, and
the obligation of the Company to sell and deliver Securities
on the Delivery Date, shall be subject to the conditions
<PAGE>
2
(and neither party shall incur any liability by reason of
the failure thereof) that (1) the purchase of Securities to
be made by the undersigned, which purchase the undersigned
represents is not prohibited on the date hereof, shall not
on the Delivery Date be prohibited under the laws of the
jurisdiction to which the undersigned is subject, and
(2) the Company, on or before the Delivery Date, shall have
sold to certain underwriters (the "Underwriters") such
principal amount of the Securities as is to be sold to them
pursuant to the Underwriting Agreement referred to in the
Prospectus and Prospectus Supplement mentioned above.
Promptly after completion of such sale to the Underwriters,
the Company will mail or deliver to the undersigned at its
address set forth below notice to such effect, accompanied
by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith. The
obligation of the undersigned to take delivery of and make
payment for the Securities, and the obligation of the
Company to cause the Securities to be sold and delivered,
shall not be affected by the failure of any purchaser to
take delivery of and make payment for the Securities
pursuant to other contracts similar to this contract.
This contract will inure to the benefit of and be
binding upon the parties hereto and their respective
successors, but will not be assignable by either party
hereto without the written consent of the other.
It is understood that acceptance of this contract
and other similar contracts is in the Company's sole
discretion and, without limiting the foregoing, need not be
on a first come, first served basis. If this contract is
acceptable to the Company, it is required that the Company
sign the form of acceptance below and mail or deliver one of
the counterparts hereof to the undersigned at its address
set forth below. This will become a binding contract
between the Company and the undersigned, as of the date
first above written, when such counterpart is so mailed or
delivered.
<PAGE>
3
This agreement shall be governed by and construed
in accordance with the laws of the State of New York.
Very truly yours,
______________________________
(Name of Purchaser)
By
____________________________
(Signature and Title
of Officer)
____________________________
(Address)
Accepted:
PAINE WEBBER GROUP INC.
By ____________________________
(Authorized Signature)
<PAGE>
EXHIBIT A
At the Closing Date, 1/ Ernst & Young shall
-
furnish to the Representatives a letter or letters (which
may refer to letters previously delivered to one or more of
the Representatives), dated as of the Closing Date, in form
and substance satisfactory to the Representatives, confirm-
ing that they are independent certified public accountants
within the meaning of the Securities Act and the Exchange
Act and the respective applicable published rules and
regulations thereunder, that the response to Item 10 of the
Registration Statements is correct insofar as it relates to
them and stating in effect that:
(a) in their opinion the consolidated financial
statements and schedules examined by them and incorpor-
ated by reference in the Registration Statements and
the Final Prospectus and reported on by them comply in
form in all material respects with the applicable
accounting requirements of the Securities Act and the
Exchange Act and the related published rules and
regulations;
(b) on the basis of a reading of the "Selected
Financial Data", if any, included or incorporated in
the Registration Statements and the Final Prospectus
and of the latest unaudited consolidated condensed
financial statements made available by the Company and
its consolidated subsidiaries; carrying out certain
specified procedures (but not an examination in
accordance with generally accepted auditing standards)
which would not necessarily reveal matters of
significance with respect to the comments set forth in
such letter; a reading of the minutes of the meetings
of the stockholders, directors and audit and executive
committees of the Company; and inquiries of certain
officials of the Company who have responsibility for
financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent
to the date of the most recent financial statements
included or incorporated in the Registration Statements
____________________
1/ All capitalized terms used herein shall have the
-
meanings ascribed to them in the Underwriting Agreement of
which this Exhibit A is a part.
<PAGE>
2
and the Final Prospectus, nothing came to their
attention which caused them to believe that:
(1) the amounts in the unaudited "Summary
Financial Information", if any, included in the
Final Prospectus, and the amounts in the "Selected
Financial Data", if any, included or incorporated
in the Registration Statements and the Final
Prospectus, do not agree with the corresponding
amounts in the audited financial statements from
which such amounts were derived;
(2) any unaudited financial statements
included or incorporated in the Registration
Statements and the Final Prospectus do not comply
as to form in all material respects with applic-
able accounting requirements and with the pub-
lished rules and regulations of the Commission
with respect to financial statements included or
incorporated in quarterly reports on Form 10-Q
under the Exchange Act or any material
modifications should be made to such unaudited
financial statements for them to be presented in
conformity with such generally accepted accounting
principles;
(3) with respect to the period subsequent to
the date of the most recent financial statements
included or incorporated in the Registration
Statement and the Final Prospectus, there were any
changes, at a specified date not more than five
business days prior to the date of the letter, in
the consolidated long-term debt or non-convertible
redeemable preferred stock of the Company and its
subsidiaries or capital stock of the Company
(excluding retained earnings and foreign currency
translation adjustment) as compared with the
amounts shown on the most recent consolidated
balance sheet included or incorporated in the
Registration Statements and the Final Prospectus,
except in all instances for changes disclosed in
such letter or letters; or
(4) if any unaudited pro forma financial
statements are included or incorporated in the
Registration Statement and the Final Prospectus,
on the basis of a reading of the unaudited pro
forma financial statements, carrying out certain
<PAGE>
3
specified procedures, inquiries of certain
officials of the Company and the acquired company
who have responsibility for financial and
accounting matters, and proving the arithmetic
accuracy of the application of the pro forma
adjustments to the historical amounts in the pro
forma financial statements, nothing came to their
attention which caused them to believe that the
pro forma financial statements do not comply in
form in all material respects with the applicable
accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments
have not been properly applied to the historical
amounts in the compilation of such statements; and
(c) they have performed certain other specified
procedures as a result of which they determined that
certain information of an accounting, financial or
statistical nature (which is limited to accounting,
financial or statistical information derived from the
general accounting records of the Company) set forth in
the Registration Statements, and the Final Prospectus,
as amended or supplemented, and in Exhibit 12 to the
Registration Statements, including specified informa-
tion, if any, included or incorporated from the Compa-
ny's Annual Report on Form 10-K incorporated therein or
specified information, if any, included or incorporated
from any of the Company's Quarterly Reports on Form
10-Q incorporated therein, agrees with the accounting
records of the Company and its subsidiaries, excluding
any questions of legal interpretation.
<PAGE>
EXHIBIT B
The Company 1/ shall furnish to the
-
Representatives the opinion of the General Counsel of the
Company, dated the Closing Date, to the effect that:
(i) each of the Company and PaineWebber Incorpo-
rated, Mitchell Hutchins Asset Management Inc. and
PaineWebber Real Estate Securities Inc., wholly owned
subsidiaries (individually a "Subsidiary" and
collectively the "Subsidiaries"), has been duly
incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction in
which it is chartered or organized, with full corporate
power and authority to own its properties and conduct
its business as described in the Final Prospectus, and
is duly qualified to do business as a foreign
corporation and is in good standing under the laws of
each jurisdiction in which the failure to qualify and
be in good standing would materially and adversely
affect the business or condition of the Company and its
consolidated subsidiaries, considered as a whole;
(ii) all the outstanding shares of capital stock
of each Subsidiary have been duly and validly
authorized and issued and are fully paid and
nonassessable, and are owned by the Company either
directly or through wholly owned subsidiaries free and
clear of any perfected security interest and, to the
knowledge of such counsel, after due inquiry of
appropriate officers of the Company, any other security
interests, claims, liens or encumbrances, except for
restrictions on sales of capital stock contained in
debt instruments;
(iii) the Securities conform to the description
thereof contained in the Final Prospectus; and, if the
Securities are to be listed on the New York Stock
Exchange, authorization thereof has been given, subject
to official notice of issuance and evidence of satis-
factory distribution, or the Company has filed a
preliminary listing application and all required
supporting documents with respect to the Securities
with the New York Stock Exchange and such counsel has
no reason to believe that the Securities will not be
________________
1/ All capitalized terms used and not otherwise defined
-
herein shall have the meanings ascribed to them in the
Underwriting Agreement of which this Exhibit B is a part.
<PAGE>
2
authorized for listing, subject to official notice of
issuance and evidence of satisfactory distribution;
(iv) the Indenture has been duly authorized,
executed and delivered by the Company, has been duly
qualified under the Trust Indenture Act and constitutes
a legal, valid and binding instrument enforceable
against the Company in accordance with its terms
(subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and
other similar laws affecting creditors' rights
generally from time to time in effect, and subject, as
to enforceability, to general principles of equity,
regardless of whether such enforceability is considered
in a proceeding in equity or at law); and the
Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the
Underwriters pursuant to the Underwriting Agreement of
which this Exhibit B is a part (the "Underwriting
Agreement"), in the case of the Underwriters'
Securities, or by the purchasers thereof pursuant to
Delayed Delivery Contracts, in the case of any Contract
Securities, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of
the Indenture enforceable in accordance with their
terms (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or
other similar laws affecting creditors' rights
generally from time to time in effect, and subject, as
to enforceability, to general principles of equity,
regardless of whether such enforceability is considered
in a proceeding in equity or at law);
(v) to the best knowledge of such counsel, there
is no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of
its subsidiaries, of a character required to be dis-
closed in the Registration Statements which are not
adequately disclosed in the Final Prospectus; there is
no franchise, contract or other document of a character
required to be described in the Registration Statements
or Final Prospectus, or to be filed as an exhibit,
which is not described or filed as required; and the
statements included or incorporated in the Final
Prospectus describing any legal proceedings or material
<PAGE>
3
contracts or agreements relating to the Company fairly
summarize such matters;
(vi) the Registration Statements and any
amendments thereto relating to the Securities have
become effective under the Securities Act; any required
filing of the Basic Prospectus, any Interim Prospectus
and the Final Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the
best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration
Statements, as amended, has been issued, no proceedings
for that purpose have been instituted or are pending or
contemplated under the Securities Act;
(vii) the Underwriting Agreement and any Delayed
Delivery Contracts have been duly authorized, executed
and delivered by the Company;
(viii) the information required to be set forth in
each of the Registration Statements in answer to
Item 10 (insofar as it relates to such counsel) of
Form S-3, to the best knowledge of such counsel, is
accurately set forth in such Registration Statement in
all material espects or no response is required with
respect to such Item; and the authorized equity
capitalization of the Company is as described in the
documents incorporated by reference in the Final
Prospectus;
(ix) no consent, approval, authorization or order
of any court or governmental agency or body is required
for the consummation by the Company of the transactions
contemplated in the Underwriting Agreement or in any
Delayed Delivery Contract, except such as have been
obtained under the Securities Act and the Trust Inden-
ture Act and such as may be required under the "blue
sky" laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in
such opinion) as have been obtained;
(x) none of the issue and sale of the Securities,
the consummation by the Company of any other of the
transactions contemplated in the Underwriting Agreement
or in any Delayed Delivery Contract or the fulfillment
of the terms of the Underwriting Agreement or of any
<PAGE>
4
Delayed Delivery Contract will conflict with,
result in a breach of, or constitute a default under the
Restated Certificate of Incorporation, as amended, or
By-laws of the Company or the terms of any indenture or other
agreement or instrument known to such counsel and to
which the Company or any of its subsidiaries is a party
or bound, or any order or regulation known to such
counsel to be applicable to the Company or any of its
Subsidiaries of any court, regulatory body, admin-
istrative agency, governmental body or arbitrator
having jurisdiction over the Company or any of its
Subsidiaries; and
(xi) to the knowledge of such counsel, no holder
of securities of the Company has rights to the regis-
tration of such securities under the Registration
Statement.
In rendering such opinion, such counsel may rely
as to matters involving the application of laws of any
jurisdiction other than the States of Delaware and New York
or the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel
of good standing believed to be reliable and who are satis-
factory to counsel for the Underwriters.
(B) The Company shall furnish to the Underwriters
a letter from the General Counsel of the Company, dated the
Closing Date to the effect that such counsel has no reason
to believe that: (i) either Registration Statement and the
Final Prospectus (except the Statements of Eligibility
(Form T-1) included as exhibits to the Registration
Statements, as to which he need not express any view) were
not appropriately responsive in all material respects to the
requirements of the Securities Act and the Trust Indenture
Act and the respective applicable rules and regulations of
the Securities and Exchange Commission thereunder and
(ii) the Registration Statements, at the respective times
they became effective, contained an untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus, at the date
of the letter, includes an untrue statement of a material
fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the
circumstances under which they were made, not misleading.
[Draft--8/18/95]
$[ ] 1/
-------------- -
Medium-Term Senior Notes, Series C, and
---------------------------------------
Medium-Term Subordinated Notes, Series D,
-----------------------------------------
Due from Nine Months to 30 Years
--------------------------------
from Date of Issue
------------------
Paine Webber Group Inc.
-----------------------
Distribution Agreement
----------------------
[ ], 1995
New York, New York
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
CS FIRST BOSTON CORPORATION
Park Avenue Plaza
New York, New York 10055
Dear Sirs:
Paine Webber Group Inc., a Delaware corporation
(the "Company"), confirms its agreement with each of you
with respect to the issue and sale by the Company of up to
$[ ] 1/ aggregate principal amount of its
-
Medium-Term Senior Notes, Series C, and Medium-Term
Subordinated Notes, Series D, Due from Nine Months to
30 Years from Date of Issue (the "Notes"). The Notes will
be issued either as subordinated to ("Subordinated Notes")
or on a parity with ("Senior Notes") other unsecured and
unsubordinated indebtedness of the Company and will have the
annual interest rates, maturities, redemption provisions,
optional repayment rights and other terms as set forth in a
supplement to the Prospectus referred to below. The Senior
Notes will be issued under an Indenture dated as of
March 15, 1988, between the Company and Chemical Bank, as
trustee (the "Senior Note Trustee"), as amended by the First
Supplemental Indenture dated as of September 22, 1989, and
by the Second Supplemental Indenture dated as of March 22,
1991 (such
- --------------------
1/ Or the U.S. dollar equivalent.
-
<PAGE>
2
Indenture, as so supplemented, being hereinafter referred to
as the "Senior Note Indenture"), each between the Company
and the Senior Note Trustee. The Subordinated Notes will be
issued under an Indenture dated as of March 15, 1988,
between the Company and Chemical Bank Delaware, as trustee
(the "Subordinated Note Trustee"), as amended by the First
Supplemental Indenture dated as of September 22, 1989, by
the Second Supplemental Indenture dated as of March 22,
1991, and by the Third Supplemental Indenture dated as of
November 30, 1993 (such Indenture, as so supplemented, being
hereinafter referred to as the "Subordinated Note
Indenture"), each between the Company and the Subordinated
Note Trustee. The Senior Note Indenture and the
Subordinated Note Indenture are hereinafter sometimes
referred to as the "Indentures"; and the Senior Note Trustee
and the Subordinated Note Trustee are hereinafter sometimes
referred to as the "Trustees". The Notes will be issued,
and the terms thereof established, in accordance with the
Indentures and, in the case of Notes sold pursuant to
Section l(a), the Medium-Term Notes Administrative
Procedures attached hereto as Annex A (the "Procedures").
For the purposes of this Agreement, the term the "Agent"
shall refer to each of you acting solely in the capacity as
agent for the Company pursuant to Section l(a) and not as
principal, the term the "Purchaser" shall in each instance
refer to the applicable Agent acting solely as principal
pursuant to Section l(g) and not as agent, and the term
"you" shall refer to each of you acting in both such capaci-
ties or in either such capacity.
1. Appointment of Agents; Solicitation by the
------------------------------------------
Agents of Offers to Purchase; Sales of Notes to a Purchaser.
- ------------------------------------------------------------
(a) Subject to the terms and conditions set forth herein,
the Company hereby appoints each of the Agents to act as its
agent for the purpose of soliciting offers to purchase all
or part of the Notes from the Company upon the terms set
forth in the Prospectus, as amended or supplemented from
time to time, and in the Procedures. The appointment of the
Agents hereunder is not exclusive and the Company may from
time to time offer Notes for sale otherwise than to or
through an Agent; provided, however, that so long as this
-------- -------
Agreement is in effect the Company will not solicit offers
to purchase Notes through any agent without amending this
Agreement to appoint such agent an additional Agent
hereunder on the same terms and conditions as provided
herein for the Agents and without giving the Agents prior
notice of such appointment. It is understood, however, that
if from time to time the Company is approached by a
prospective agent offering to solicit a specific purchase of
Notes, the Company may engage such agent with respect to
such specific purchase, provided that (i) such agent is
<PAGE>
3
engaged on terms substantially similar to the applicable
terms of this Agreement and (ii) the Agents are given notice
of such engagement promptly after it is agreed to.
(b) On the basis of the representations and
warranties set forth herein, but subject to the terms and
conditions set forth herein, each of the Agents agrees to
use reasonable efforts, as agent of the Company, to solicit
offers to purchase Notes from the Company upon the terms set
forth in the Prospectus, as amended or supplemented from
time to time, and in the Procedures. Each Agent shall make
reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes
has been solicited by such Agent and accepted by the
Company, but such Agent shall not, except as otherwise
provided in this Agreement, be obligated to disclose the
identity of any purchaser or have any liability to the
Company in the event any such purchase is not consummated
for any reason. Subject to the provisions of this Section
and to the Procedures, offers for the purchase of Notes may
be solicited by an Agent at such times and in such amounts
as such Agent may from time to time deem advisable.
(c) The Company reserves the right, in its
sole discretion, to suspend solicitation of offers to
purchase Senior Notes or Subordinated Notes from the Company
at any time for any period of time or permanently. Upon
receipt of instructions from the Company, each Agent
forthwith will suspend its solicitation of offers to
purchase Senior Notes or Subordinated Notes, as the case may
be, from the Company until such time as the Company has
advised such Agent that such solicitation may be resumed.
(d) Each Agent will communicate to the
Company, orally or in writing, each offer to purchase Notes
from the Company that is received by such Agent as agent of
the Company and that is not rejected by such Agent as
provided below. The Company will have the sole right to
accept offers to purchase Notes from the Company and may
reject any such offer, in whole or in part, for any reason.
Each of the Agents may, in its discretion reasonably
exercised, reject any offer to purchase Notes from the
Company that is received by such Agent, in whole or in part,
and any such rejection shall not be deemed a breach of such
Agent's agreements contained herein.
(e) The Company agrees to pay an Agent a
commission, on the date of delivery by the Company of any
Note sold hereunder (a "Closing Date"), with respect to each
sale of Notes by the Company as a result of a solicitation
made
<PAGE>
4
by such Agent, in an amount equal to that percentage speci-
fied in Schedule I hereto of the aggregate principal amount
of each Senior Note and each Subordinated Note sold by the
Company. Such commission shall be payable as specified in
the Procedures. The commission rates may be amended from
time to time by written agreement of the Company and the
Agents.
(f) Each of the Agents agrees, with respect to
any Note denominated in a currency other than the U.S.
dollar or the European Currency Unit, as agent, directly or
indirectly, not to solicit offers to purchase, and as
principal under any Terms Agreement (as hereinafter defined)
or otherwise, directly or indirectly, not to offer, sell or
deliver, such Note in, or to residents of, the country
issuing such currency, except as permitted by applicable
law.
(g) Subject to the terms and conditions stated
herein, whenever the Company and an Agent determine that the
Company shall sell Notes directly to such Agent as purchaser
(the "Purchaser"), each such sale of Notes shall be made in
accordance with the terms of this Agreement and any supple-
mental agreement relating thereto between the Company and
the Purchaser. Each such supplemental agreement (which
shall be substantially in the form of Annex B) is herein
referred to as a "Terms Agreement". The Purchaser's com-
mitment to purchase Notes pursuant to any Terms Agreement
shall be deemed to have been made on the basis of the
representations and warranties of the Company herein con-
tained and shall be subject to the terms and conditions
herein set forth. Each Terms Agreement shall describe the
Notes to be purchased by the Purchaser pursuant thereto and
shall specify the principal amount of such Notes, the price
to be paid to the Company for such Notes, the rate at which
interest will be paid on the Notes, the Closing Date for
such Notes, the place of delivery of the Notes and payment
therefor, the method of payment and any modification of the
requirements for the delivery of the opinions of counsel,
the certificates from the Company or its officers and the
letter from the Company's independent public accountants
pursuant to Section 7(c). Such Terms Agreement shall also
specify any period of time referred to in Section 5(l).
Delivery of the certificates for Notes sold to
the Purchaser pursuant to any Terms Agreement shall be made
as agreed to between the Company and the Purchaser and set
forth in the respective Terms Agreement, not later than the
Closing Date set forth in such Terms Agreement, against
payment of funds to the Company in the net amount due to the
<PAGE>
5
Company for such Notes by the method and in the form set
forth in such Terms Agreement.
2. Offering Procedures. The Procedures may be
--------------------
amended only by written agreement of the Company and the
Agents after notice to the Trustees, and, to the extent any
such amendment affects a Trustee, with the approval of such
Trustee. The Company and each of the Agents agree to
perform the respective duties and obligations specifically
provided to be performed by them in the Procedures.
3. Registration Statements and Prospectus.
---------------------------------------
The Company has filed with the Securities and Exchange
Commission (the "Commission"), pursuant to the Securities
Act of 1933, as amended (the "Securities Act"), and the
published rules and regulations adopted by the Commission
thereunder (the "Rules"), a registration statement on
Form S-3 (No. 33-51149) (the "First Registration Statement"),
and a registration statement on Form S-3 (No. 33-[ ]) (the
"Second Registration Statement") (such Second Registration
Statement also constituting Post-Effective Amendment No. 1
to the First Registration Statement), each including a basic
prospectus, which have become effective under the Securities
Act under which the sale of $[ ] aggregate
principal amount of debt securities (the "Securities"),
including the Notes, remains registered at this time (the
First Registration Statement and the Second Registration
Statement, each including all exhibits thereto and each as
amended at the date of this Agreement, being hereinafter
collectively called the "Registration Statements"). The
Company has included in the Registration Statements, or has
filed or will file with the Commission pursuant to the
applicable paragraph of Rules 424(b) and 429 under the
Securities Act, a supplement to the form of prospectus
included in the Registration Statements relating to the
Notes and the plan of distribution thereof (the "Prospectus
Supplement"). In connection with the sale of the Notes the
Company proposes to file with the Commission pursuant to the
applicable paragraph of Rules 424(b) and 429 under the
Securities Act further supplements to the Prospectus Supple-
ment specifying the interest rates, maturity dates, redemp-
tion provisions, if any, optional repayment rights, if any,
and other terms of the Notes sold pursuant hereto or the
offering thereof. The Indentures have been qualified under
the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"). The term "the Effective Date" shall mean,
for each of the Registration Statements, each date that such
Registration Statement and any post-effective amendment or
amendments thereto became or become effective. "Basic
Prospectus" shall mean the form of basic prospectus relating
to the Securities contained in each Registration Statement
<PAGE>
6
at the Effective Date. The term "Prospectus" means the
Basic Prospectus as supplemented by the Prospectus Supple-
ment. Any reference herein to a Registration Statement, the
Basic Prospectus, the Prospectus Supplement or the Prospec-
tus includes the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 (the "Incorporated Docu-
ments") which were filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), on or before the
Effective Date of such Registration Statement or the issue
date of the Basic Prospectus, the Prospectus Supplement or
the Prospectus, as the case may be, and any reference herein
to "amend", "amendment" or "supplement" with respect to a
Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Prospectus includes the Incorporated
Documents filed under the Exchange Act after the Effective
Date of such Registration Statement or the issue date of the
Basic Prospectus, the Prospectus Supplement or the
Prospectus, as the case may be; and any reference herein to
the Registration Statements includes each of the First
Registration Statement and the Second Registration Statement
only so long as Notes may be issued in the future thereunder
and shall refer to either one or both of such Registration
Statements, as appropriate.
The Company confirms that you are authorized to
distribute the Prospectus and any amendments or supplements
thereto.
4. Representations and Warranties. The
-------------------------------
Company represents and warrants to you as follows:
(a) The Company meets the requirements for the
use of Form S-3 under the Securities Act. The Registration
Statements meet the requirements set forth in Rule
415(a)(1)(ix) or (x) of the Rules and comply in all other
material respects with Rule 415 of the Rules.
(b) As of the date hereof, on the Effective
Date, when any amendment or supplement to the Prospectus is
filed with the Commission pursuant to Rule 424 or Rule 429
of the Rules, as of the date of any Terms Agreement and on
any Closing Date, (i) the Registration Statements, as
amended as of any such time, the Prospectus, as amended or
supplemented as of any such time, and the Incorporated
Documents will comply in all material respects with the
applicable requirements of the Securities Act and the Rules,
and the Exchange Act and the Trust Indenture Act and the
respective published rules and regulations adopted by the
Commission thereunder, (ii) the Registration Statements, as
amended as of any such time, did not or will not include any
untrue statement of a material fact or omit to state any
material fact required to
<PAGE>
7
be stated therein or necessary in order to make the state-
ments therein not misleading, and (iii) the Prospectus, as
amended or supplemented as of any such time, will not
contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the state-
ments therein, in the light of the circumstances under which
they were made, not misleading; except that this representa-
tion and warranty does not apply to (x) statements or
omissions made in reliance on and in conformity with infor-
mation relating to you furnished in writing to the Company
by you expressly for use in the Registration Statements, the
Prospectus or any amendment or supplement thereto or
(y) that part of the Registration Statements that shall
constitute the Statements of Eligibility and Qualification
on Form T-1 of the Trustees under the Trust Indenture Act,
except statements or omissions in any such Statement made in
reliance upon information furnished in writing to the
applicable Trustee by or on behalf of the Company for use
therein.
(c) As of the time any Notes are issued and
sold hereunder, the Indenture will constitute a legal, valid
and binding instrument enforceable against the Company in
accordance with its terms and such Notes will have been duly
authorized, executed, authenticated and, when paid for by
the purchasers thereof, will constitute legal, valid and
binding obligations of the Company entitled to the benefits
of the Indenture.
Each acceptance by the Company of an offer to
purchase Notes from the Company and each request by the
Company to you that you solicit offers to purchase Notes
from the Company will be deemed to be a representation and
warranty by the Company to you that the representations and
warranties of the Company in this Agreement are true and
correct as of the time of such acceptance and that such
representations and warranties will be true and correct as
of the Closing Date for such Notes, in each case as though
made at and as of such time; it being understood that such
representations and warranties will relate to the Registra-
tion Statements as amended as of any such time and the
Prospectus as amended or supplemented as of any such time.
5. Agreements. (a) Prior to the termination
-----------
of the offering of the Notes, the Company will not file any
amendment or supplement to either of the Registration
Statements or the Prospectus (except for (i) periodic or
current reports filed under the Exchange Act, (ii) a
supplement relating to any offering of Notes providing
solely for the specification of or a change in the maturity
dates, the interest rates, the issuance prices or other
<PAGE>
8
similar terms of any Notes or (iii) a supplement relating to
an offering of Securities other than Notes) (including any
document to be incorporated therein by reference) unless a
copy thereof has been submitted to you a reasonable period
of time before its filing and you have not reasonably
objected thereto within a reasonable period of time after
receiving such copy. Subject to the foregoing sentence, the
Company will cause each amendment or supplement to the
Prospectus to be filed with the Commission as required
pursuant to the Securities Act, the applicable paragraph of
Rules 424(b) and/or 429 of the Rules or, in the case of any
document to be incorporated therein by reference, to be
filed with the Commission as required pursuant to the
Exchange Act, within the time period prescribed and will
provide evidence satisfactory to you of such filing.
(b) The Company will advise you promptly
(i) when each amendment or supplement to the Prospectus
shall have been filed with the Commission pursuant to
Rules 424(b) and/or 429 or, in the case of any document
incorporated therein by reference, when such document shall
have been filed with the Commission pursuant to the Exchange
Act, (ii) when, prior to the termination of the offering of
the Notes, any amendment to either of the Registration
Statements shall have been filed or become effective,
(iii) of the initiation or threatening of any proceedings
for, or receipt by the Company of any notice with respect
to, the suspension of the qualification of the Notes for
sale in any jurisdiction or the issuance of any order by the
Commission suspending the effectiveness of either of the
Registration Statements and (iv) of the receipt by the
Company or any representative or attorney of the Company of
any other communication from the Commission relating to
either of the Registration Statements, the Prospectus or any
amendment or supplement thereto or to the transactions
contemplated by this Agreement. The Company will use its
best efforts to prevent the issuance of an order suspending
the effectiveness of either of the Registration Statements
and, if any such order is issued, to obtain its lifting as
soon as possible.
(c) The Company will deliver to you, without
charge, two conformed copies of the Second Registration
Statement and each post-effective amendment to the
Registration Statements filed after the date hereof (includ-
ing all exhibits filed with any such document) and as many
conformed copies of the Registration Statements and each
such amendment (excluding exhibits) and each Indenture as
you may reasonably request.
<PAGE>
9
(d) The Company, during the period when a
prospectus relating to the Notes is required to be delivered
under the Act, will deliver, without charge, to you, at such
office or offices as you may designate, as many copies of
the Prospectus or any amendment or supplement thereto as you
may reasonably request, and, if any event occurs during such
period as a result of which the Prospectus, as then amended
or supplemented, would include any untrue statement of a
material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or
if during such period it is necessary to amend either
Registration Statement or to amend or supplement the
Prospectus to comply with the Securities Act or the Rules or
the Exchange Act or the published rules and regulations
adopted by the Commission thereunder, the Company promptly
will (i) notify you to suspend solicitation of offers to
purchase Notes from the Company, (ii) prepare and file with
the Commission, subject to Section 5(a), and deliver,
without charge, to you, an amendment or supplement which
will correct such statement or omission or effect such
compliance and (iii) supply any amended or supplemented
Prospectus to you in such quantities as you may reasonably
request.
(e) The Company, during the period when a
prospectus relating to the Notes is required to be delivered
under the Act, will file promptly all documents required to
be filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act. The Company will
make generally available to its security holders as soon as
practicable, but in any event not later than fifteen months
after (i) the Effective Dates of the Registration
Statements, (ii) the Effective Date of each post-effective
amendment to either of the Registration Statements and
(iii) the date of each filing by the Company with the
Commission of an Annual Report on Form 10-K that is
incorporated by reference in the Registration Statements, an
earnings statement satisfying the provisions of Sec-
tion 11(a) of the Securities Act and Rule 158 of the Rules.
(f) The Company will take such actions as you
designate in order to qualify the Notes for offer and sale
under the securities or "blue sky" laws of such
jurisdictions as you designate, will maintain such qualifi-
cation in effect for so long as may be required for the
distribution of the Notes and will arrange for the determi-
nation of the legality of the Notes for purchase by institu-
tional investors.
<PAGE>
10
(g) The Company will supply to you copies of
such financial statements and other periodic and special
reports as the Company may from time to time distribute
generally to the holders of any class of its capital stock
and of each annual or other report it is required to file
with the Commission. The Company shall furnish to you such
information, documents, certificates of officers of the
Company and opinions of counsel for the Company relating to
the business, operations and affairs of the Company, the
Registration Statements, the Prospectus, and any amendments
thereof or supplements thereto, the Indenture, the Notes,
this Agreement, the Procedures and the performance by the
Company and you of its and your respective obligations
hereunder and thereunder as you may from time to time and at
any time prior to the termination of this Agreement reason-
ably request.
(h) The Company will, whether or not the
transactions contemplated by this Agreement are consummated
or this Agreement is terminated, (i) pay, or reimburse if
paid by you, all costs and expenses incident to the
performance of the obligations of the Company under this
Agreement, including costs and expenses relating to (A) the
preparation, printing and filing of the Registration
Statements and exhibits thereto, the Prospectus, all
amendments and supplements to either of the Registration
Statements and the Prospectus, and the printing or other
reproduction of the Indentures and this Agreement, (B) the
authorization and issuance of the Notes and the preparation
and delivery of certificates for the Notes, (C) the
registration or qualification of the Notes for offer and
sale under the securities or "blue sky" laws of the
jurisdictions referred to in paragraph (f) of this Section 5
and the determination of the legality of the Notes,
including the fees and disbursements of Cravath, Swaine &
Moore, your counsel, in that connection, and the preparation
and printing of preliminary and supplemental "blue sky"
memoranda and legal investment memoranda, (D) the furnishing
(including costs of shipping and mailing) to you of copies
of the Prospectus, and all amendments or supplements to the
Prospectus, and of all other documents, reports and other
information required by this Section to be so furnished,
(E) all transfer taxes, if any, with respect to the sale and
delivery of the Notes by the Company, (F) the fees and
expenses of the Trustees, (G) all fees charged by the
National Association of Securities Dealers, Inc., in
connection with the Notes and (H) the fees charged by rating
agencies in connection with any rating of the Notes,
(ii) reimburse you on a quarterly basis for all out-of-
pocket expenses (including advertising expenses) incurred by
you with the advance approval of the Company and
(iii) reimburse the reasonable fees and disbursements
<PAGE>
11
of Cravath, Swaine & Moore, your counsel, incurred in
connection with this Agreement.
(i) Each time that either of the Registration
Statements or the Prospectus is amended or supplemented
(other than by an amendment or supplement relating to any
offering of Securities other than the Notes or providing
solely for the specification of or a change in the maturity
dates, the interest rates, the issuance prices or other
similar terms of any Notes sold pursuant hereto), including
by the filing of any document incorporated therein by
reference, the Company will deliver or cause to be delivered
forthwith to you a certificate of the chief executive,
operating or financial officer or treasurer and the secre-
tary or chief financial or accounting officer or treasurer
of the Company, dated the date of the effectiveness of such
amendment or the date of filing of such supplement, in form
reasonably satisfactory to you, to the effect that the
statements contained in the certificate that was last
furnished to you pursuant to either Section 6(c) or this
paragraph (i) are true and correct at the time of the
effectiveness of such amendment or the filing of such
supplement as though made at and as of such time (except
that (i) the last day of the fiscal quarter for which
financial statements of the Company were last filed with the
Commission shall be substituted for the corresponding date
in such certificate and (ii) such statements shall be deemed
to relate to the Registration Statements and the Prospectus
as amended or supplemented to the time of the effectiveness
of such amendment or the filing of such supplement) or, in
lieu of such certificate, a certificate of the same tenor as
the certificate referred to in Section 6(c) but modified to
relate to the last day of the fiscal quarter for which
financial statements of the Company were last filed with the
Commission and to the Registration Statements and the Pro-
spectus as amended or supplemented to the time of the
effectiveness of such amendment or the filing of such
supplement.
(j) Each time that either of the Registration
Statements or the Prospectus is amended or supplemented
(other than by an amendment or supplement (i) relating to
any offering of Securities other than the Notes,
(ii) providing solely for the specification of or a change
in the maturity dates, the interest rates, the issuance
prices or other similar terms of any Notes sold pursuant
hereto, or (iii) setting forth or incorporating by reference
financial statements or other information as of and for a
fiscal quarter, unless, in the case of clause (iii) above,
in your reasonable judgment, such financial statements or
other information are of such a nature that an opinion of
<PAGE>
12
counsel should be furnished), including by the filing of any
document incorporated therein by reference, the Company will
furnish or cause to be furnished forthwith to you a written
opinion and a written letter of counsel for the Company
satisfactory to you, dated the date of the effectiveness of
such amendment or date of filing of such supplement, in form
satisfactory to you, of the same tenor as the opinion and
letter referred to in Section 6(d) but modified to relate to
the Registration Statements and the Prospectus as amended or
supplemented to the time of the effectiveness of such
amendment or the filing of such supplement or, in lieu of
such opinion and letter, counsel last furnishing such an
opinion and letter to you may furnish you with a letter to
the effect that you may rely on such counsel's last opinion
and last letter to the same extent as though it were dated
the date of such letter authorizing reliance (except that
statements in such counsel's last opinion and last letter
will be deemed to relate to the Registration Statements and
the Prospectus as amended or supplemented to the time of the
effectiveness of such amendment or the filing of such
supplement).
(k) Each time that either of the Registration
Statements or the Prospectus is amended or supplemented to
set forth amended or supplemental financial information,
including by the filing of any document incorporated therein
by reference, the Company will cause its independent public
accountants forthwith to furnish a letter, dated the date of
the effectiveness of such amendment or the date of filing of
such supplement, in form satisfactory to you, of the same
tenor as the letter referred to in Section 6(f) with such
changes as may be necessary to reflect the amended and
supplemental financial information included or incorporated
by reference in the Registration Statements and the Prospec-
tus, as amended or supplemented to the date of such letter,
provided that if either of the Registration Statements or
the Prospectus is amended or supplemented solely to include
or incorporate by reference financial information as of and
for a fiscal quarter, the Company's independent public
accountants may limit the scope of such letter, which shall
be satisfactory in form to you, to the unaudited financial
statements, the related "Management's Discussion and Analy-
sis of Financial Condition and Results of Operations" and
any other information of an accounting, financial or statis-
tical nature included in such amendment or supplement,
unless, in your reasonable judgment, such letter should
cover other information or changes in specified financial
statement line items.
(l) During the period, if any, specified in
any Terms Agreement, the Company shall not, without the
prior
<PAGE>
13
consent of the Purchaser, issue or announce the proposed
issuance of any of its debt securities, including Notes,
with terms substantially similar to the Notes being pur-
chased pursuant to such Terms Agreement.
(m) Upon your reasonable request on any
Closing Date, the Company will furnish or cause to be
furnished forthwith to you a written opinion of counsel for
the Company satisfactory to you, dated such Closing Date, of
the same tenor as paragraphs 1 and 3 of the opinion referred
to in Section 6(d), but modified, as necessary, to relate to
the Prospectus as amended or supplemented at such Closing
Date and except that such opinion shall state that the Notes
being sold by the Company on such Closing Date, when deliv-
ered against payment therefor as provided in the applicable
Indenture and this Agreement, will, assuming performance by
the authenticating agent or the applicable Trustee under the
applicable Indenture, have been duly executed, authenti-
cated, issued and delivered and will constitute legal, valid
and binding obligations of the Company entitled to the
benefits of the applicable Indenture and enforceable in
accordance with their terms, subject only to the exceptions
as to enforcement set forth in paragraph 3 of the opinion
referred to in Section 6(d), and that such Notes conform to
the description thereof contained in the Prospectus as
amended or supplemented to such Closing Date.
6. Conditions to the Obligations of each
-------------------------------------
Agent. The obligations of each Agent to solicit offers to
- ------
purchase Notes from the Company are subject to the accuracy,
on the date of this Agreement, on the Effective Date of each
Registration Statement, when any amendment or supplement to
the Prospectus is filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) and/or 429 of the Rules
and on each Closing Date, of the representations and
warranties of the Company in this Agreement, to the accuracy
and completeness of all statements made by the Company or
any of its officers in any certificate delivered to such
Agent or such Agent's counsel pursuant to this Agreement, to
performance by the Company of its obligations under this
Agreement and to each of the following additional
conditions:
(a) If filing of the Prospectus, or any
supplement thereto, is required pursuant to
Rule 424(b), the Prospectus, and any such
supplement, shall have been filed in the manner
and within the time period required by
Rule 424(b); and no order suspending the
effectiveness of either of the Registration
Statements, as amended from time to time, shall be
in effect and no proceedings for such purpose
shall be pending before or
<PAGE>
14
threatened by the Commission, and any requests for
additional information on the part of the Commission
(to be included in either of the Registration
Statements or the Prospectus or otherwise) shall have
been complied with to the reasonable satisfaction of
such Agent.
(b) Since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus, (i) there must not have been any change (of
the type indicated in paragraph (b)(3) of Annex D to
this Agreement) specified in the most recent letter of
the type referred to in Section 5(k), in paragraph (f)
of this Section 6 or in Section 7(c)(iv), (ii) there
must not have been any material adverse change in the
general affairs, prospects, management, business,
properties, financial condition or results of
operations of the Company and its subsidiaries taken as
a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in
or contemplated by the Prospectus, as then amended or
supplemented, (iii) the Company and its subsidiaries
must not have sustained any material loss or
interference with their business or properties from
fire, explosion, earthquake, flood or other calamity,
whether or not covered by insurance, or from any labor
dispute or any court or legislative or other
governmental action, order or decree not described in
the Prospectus, as then amended or supplemented, and
(iv) there must not have been any downgrading in the
rating of any of the Company's debt securities by any
nationally recognized statistical rating organization
(as defined for purposes of Rule 436(g) of the Rules)
or any public announcement by any such organization of
any proposal by it to downgrade such rating or that it
has under surveillance or review its rating of the
Notes or any other debt securities of the Company
(other than an announcement with positive implications
of a possible upgrading, and no implication of a
possible downgrading, of such rating) if, in the
judgment of such Agent, any such development referred
to in clause (i), (ii), (iii) or (iv) makes it
impracticable or inadvisable to proceed with the
soliciting of offers to purchase Notes from the Company
as contemplated by the Prospectus, as then amended or
supplemented.
(c) The Company shall have furnished to such Agent
on the date of this Agreement a certificate of the
Treasurer and the General Counsel of the Company, dated
such date, certifying that (i) the signers have
<PAGE>
15
carefully examined the Registration Statements, the
Prospectus, the Indentures and this Agreement, (ii) the
representations and warranties of the Company in this
Agreement are accurate on and as of the date of such
certificate and the Company has complied with all the
agreements and satisfied all the conditions on its part
to be performed or satisfied as a condition to the
obligation of such Agent to solicit offers to purchase
the Notes, (iii) since the date of the most recent
financial statements included or incorporated by
reference in the Prospectus, there has not been any
material adverse change in the general affairs,
prospects, management, business, properties, financial
condition or results of operations of the Company and
its subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the
Prospectus, as amended or supplemented as of the date
of such certificate, and (iv) to the knowledge of such
officers, no action to suspend the effectiveness of
either of the Registration Statements, as amended as of
the date of such certificate, or to prohibit the sale
of the Notes has been taken or threatened by the
Commission.
(d) Such Agent shall have received on the date of
this Agreement from the General Counsel of the Company
an opinion and a letter each dated such date
substantially identical to the proposed form of opinion
and form of letter set forth in Annex C to this
Agreement.
(e) Such Agent shall have received on the date of
this Agreement from Cravath, Swaine & Moore, its
counsel, an opinion and a letter each dated such date
with respect to the Company, the Notes, the Indentures,
the Registration Statements, the Prospectus, this
Agreement and the form and sufficiency of all
proceedings taken in connection with the sale and
delivery of the Notes. Such opinion, letter and
proceedings shall be satisfactory in all respects to
such Agent. The Company must have furnished to such
counsel such documents as they may reasonably request
for the purpose of enabling them to render such opinion
and letter.
(f) Such Agent shall have received, at the date
of this Agreement, a signed letter from Ernst & Young,
independent accountants for the Company, substantially
in the form of Annex D to this Agreement.
<PAGE>
16
All opinions, letters, evidence and certificates
mentioned above or elsewhere in this Agreement will comply with
this Agreement only if they are in form and scope satisfactory to
such Agent and its counsel.
If any of the conditions specified in this Section 6
shall not have been fulfilled in all material respects when and
as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form
and substance to such Agent and its counsel, this Agreement and
all obligations of such Agent hereunder may be canceled at any
time by such Agent. Notice of such cancelation shall be given to
the Company in writing or by telephone or telegraph confirmed in
writing.
The documents required to be delivered by this
Section 6 shall be delivered at the office of Cravath, Swaine &
Moore, counsel for the Agents, at Worldwide Plaza, 825 Eighth
Avenue, New York, New York, on the date of this Agreement.
7. Conditions to the Obligations of the Purchaser.
-----------------------------------------------
The obligations of the Purchaser to purchase any Notes from the
Company are subject to the accuracy, on the date of any related
Terms Agreement and on the Closing Date for such Notes, of the
representations and warranties of the Company in this Agreement,
to the accuracy and completeness of all statements made by the
Company or any of its officers in any certificate delivered to
the Purchaser or its counsel pursuant to this Agreement, to
performance by the Company of its obligations under this
Agreement and to each of the following additional conditions:
(a) No stop order suspending the effectiveness of
either of the Registration Statements shall have been
issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) Since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus, (i) there must not have been any change (of
the type indicated in paragraph (b)(3) of Annex D to
this Agreement) specified in the most recent letter of
the type referred to in Section 5(k), in Section 6(f)
or in paragraph (c)(iv) of this Section 7, (ii) there
must not have been any material adverse change in the
general affairs, prospects, management, business,
properties, financial condition or results of
operations of the Company and its subsidiaries taken as
<PAGE>
17
a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in
or contemplated by the Prospectus, as then amended or
supplemented, (iii) the Company and its subsidiaries
must not have sustained any material loss or interfer-
ence with their business or properties from fire,
explosion, earthquake, flood or other calamity, whether
or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental
action, order or decree not described in the Prospec-
tus, as then amended or supplemented, and (iv) there
must not have been any downgrading in the rating of any
of the Company's debt securities by any nationally
recognized statistical rating organization (as defined
for purposes of Rule 436(g) of the Rules) or, if so
specified in the applicable Terms Agreement, any public
announcement by any such organization of any proposal
by it to downgrade such rating or that it has under
surveillance or review its rating of the Notes or any
other debt securities of the Company (other than an
announcement with positive implications of a possible
upgrading, and no implication of a possible downgrad-
ing, of such rating) if, in the judgment of the
Purchaser, any such development referred to in
clause (i), (ii), (iii) or (iv) makes it impracticable
or inadvisable to consummate the purchase of the Notes.
(c) If specified by any related Terms Agreement and
except to the extent modified by such Terms Agreement,
the Purchaser shall have received, appropriately
updated, (i) a certificate of the Company, dated as of
the Closing Date, to the effect set forth in Sec-
tion 6(c) (except that references to the Prospectus
shall be to the Prospectus as supplemented at the time
of execution of the Terms Agreement), (ii) the opinion
of the General Counsel of the Company, dated as of the
Closing Date, to the effect set forth in Section 6(d),
(iii) the opinion of Cravath, Swaine & Moore, counsel
for the Purchaser, dated as of the Closing Date, to the
effect set forth in Section 6(e) and (iv) a letter of
Ernst & Young, independent accountants for the Company,
dated as of the Closing Date, to the effect set forth
in Section 6(f).
(d) Prior to the Closing Date, the Company shall
have furnished to the Purchaser such further informa-
tion, certificates and documents as the Purchaser may
reasonably request.
If any of the conditions specified in this Section 7
shall not have been fulfilled in all material
<PAGE>
18
respects when and as provided in this Agreement and any Terms
Agreement, or if any of the opinions and certificates mentioned
above or elsewhere in this Agreement or such Terms Agreement
shall not be in all material respects reasonably satisfactory in
form and substance to the Purchaser and its counsel, such Terms
Agreement and all obligations of the Purchaser thereunder and
with respect to the Notes subject thereto may be canceled at, or
at any time prior to, the respective Closing Date by the
Purchaser. Notice of such cancelation shall be given to the
Company in writing or by telephone or telegraph confirmed in
writing.
8. Right of Person Who Agreed to Purchase to Refuse
------------------------------------------------
to Purchase. The Company agrees that any person who has agreed
- ------------
to purchase and pay for any Note, including the Purchaser and any
person who purchases pursuant to a solicitation by an Agent,
shall have the right to refuse to purchase such Note if, at the
Closing Date therefor, any condition set forth in Section 6 or 7,
as applicable, shall not be satisfied, it being understood that
under no circumstances whatsoever shall an Agent have any duty or
obligation to exercise the judgment permitted under Section 6(b)
or Section 7(b) on behalf of any such person.
9. Indemnification. (a) The Company will indemnify
----------------
and hold harmless you, your directors, officers, employees and
agents and each person, if any, who controls you within the
meaning of either the Securities Act or the Exchange Act against
any and all losses, claims, damages and liabilities, joint or
several (including any investigation, legal and other expenses
reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject
under the Securities Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities arise out
of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary
prospectus, either Registration Statement or the Prospectus or
any amendment or supplement to any of the foregoing, or arise out
of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided
that the Company will not be liable to the extent that such loss,
claim, damage or liability arises from the sale of Notes by the
Company to any person in the manner contemplated in the
Prospectus, as amended or supplemented as of the time of the
confirmation of such sale, as a result of a solicitation by you
and is based upon an untrue statement or omission or alleged
untrue statement or omission
<PAGE>
19
(i) made in reliance upon and in conformity with information
relating to you furnished in writing to the Company by you
expressly for use in the document or (ii) in a preliminary
prospectus if the Prospectus, as amended or supplemented as of
the time of the confirmation of the sale to such person,
corrected the untrue statement or omission or alleged untrue
statement or omission which is the basis of the loss, claim,
damage or liability for which indemnification is sought and a
copy of the Prospectus, as so amended (but excluding any
documents incorporated therein by reference), was not sent or
given to such person at or before the confirmation of the sale to
such person in any case where such delivery is required by the
Securities Act, unless such failure to deliver the Prospectus, as
so amended, was a result of noncompliance by the Company with
Section 5(d). This indemnity agreement will be in addition to
any liability that the Company might otherwise have.
(b) You will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the
meaning of either the Securities Act or the Exchange Act, each
director of the Company and each officer of the Company who signs
either of the Registration Statements to the same extent as the
foregoing indemnity from the Company to you, but only insofar as
losses, claims, damages or liabilities arise from the sale of
Notes by the Company to any person in the manner contemplated in
the Prospectus as a result of a solicitation by you and are based
upon any untrue statement or omission or alleged untrue statement
or omission made in any preliminary prospectus, either
Registration Statement or the Prospectus or any amendment or
supplement to any of them in reliance upon and in conformity with
information relating to you furnished in writing to the Company
by you expressly for use in the document. This indemnity
agreement will be in addition to any liability that you might
otherwise have.
(c) Any party that proposes to assert the right to
be indemnified under this Section 9 will, promptly after receipt
of notice of commencement of any action against such party in
respect of which a claim is to be made against an indemnifying
party or parties under this Section 9, notify each such
indemnifying party of the commencement of such action, enclosing
a copy of all papers served, but the omission so to notify such
indemnifying party (i) will not relieve it from liability under
this Section 9 unless and to the extent it did not otherwise
learn of such action and such failure results in the forfeiture
by the indemnifying party of substantial rights and defenses and
(ii) will not relieve it from any liability that it may have to
any indemnified party otherwise than under this Section 9. If
<PAGE>
20
any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to
the extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume
the defense of the action, with counsel satisfactory to the
indemnified party, and, after notice from the indemnifying party
to the indemnified party of its election to assume the defense,
the indemnifying party will not be liable to the indemnified
party for any legal or other expenses except as provided below
and except for the reasonable costs of investigation subsequently
incurred by the indemnified party in connection with the defense.
The indemnified party will have the right to employ its own
counsel in any such action, but the fees and expenses of such
counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the
indemnified party has reasonably concluded that there may be
legal defenses available to it or other indemnified parties which
are different from or in addition to those available to the
indemnifying party (in which case the indemnifying party will not
have the right to direct the defense of such action on behalf of
the indemnified party) or (3) the indemnifying party has not in
fact employed counsel to assume the defense of such action within
a reasonable time after receiving notice of the commencement of
the action, in each of which cases the fees and expenses of such
counsel will be at the expense of the indemnifying party or
parties and all such fees and expenses will be reimbursed
promptly as they are incurred. An indemnifying party will not be
liable for any settlement of any action or claim effected without
its written consent or, in connection with any proceeding or
related proceedings in the same jurisdiction, for the fees and
expenses of more than one separate counsel for all indemnified
parties.
10. Contribution. In order to provide for just and
-------------
equitable contribution in circumstances in which the
indemnification provided for in Section 9 is applicable in
accordance with its terms but for any reason is held to be
unavailable from the Company or you, the Company and each of you
agree to contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other
expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any
claim asserted) (collectively "Losses") to which the Company and
one or more of you may be subject in such proportion as is
appropriate to reflect the relative
<PAGE>
21
benefits received by the Company and by each of you from the
offering of the Notes from which such Losses arise; provided,
--------
however, that in no case shall any of you be responsible for any
- -------
amount in excess of the commissions received by you yourself in
connection with the sale of Notes from which such Losses arise
(or, in the case of Notes sold pursuant to a Terms Agreement, the
aggregate commissions that would have been received by you
yourself if such commissions had been payable). If the
allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and each of you shall
contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the
Company and each of you in connection with the statements or
omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses) of the Notes from
which such Losses arise, and benefits received by each of you
shall be deemed to be equal to the total commissions received by
you yourself in connection with the sale of Notes from which such
Losses arise (or, in the case of Notes sold pursuant to a Terms
Agreement, the aggregate commissions that would have been
received by you yourself if such commissions had been payable).
Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information
provided by the Company or any of you. The Company and each of
you agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions
of this Section 10, no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 10, any person who controls a party to
this Agreement within the meaning of either the Securities Act or
the Exchange Act will have the same rights to contribution as
that party, and each officer of the Company who signed either of
the Registration Statements and each director of the Company will
have the same rights to contribution as the Company, subject in
each case to the applicable terms and conditions of this
Section 10. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action against
such party in respect of which a claim for contribution may be
made under this Section 10, notify such party or parties from
whom contribution may be sought, but the omission so to notify
(i) will
<PAGE>
22
not relieve such party or parties from liability under this
Section 10 unless and to the extent it or they did not otherwise
learn of such action and such failure results in the forfeiture
by such party or parties of substantial rights and defenses and
(ii) will not relieve the party or parties from whom contribution
may be sought from any other obligation it or they may have
otherwise than under this Section 10. No party will be liable
for contribution with respect to any action or claim settled
without its written consent.
11. Termination. (a) This Agreement may, as
------------
between the Company and you, be terminated for any reason at any
time by either the Company or you giving written notice of such
termination to the other party. If any such notice is given,
this Agreement will terminate, as between the Company and you, at
the close of business on the third business day following the
receipt of such notice by the party to whom such notice is given.
In the event of any such termination, no party shall have any
liability to the other party hereto, except as provided in
Sections l(e), 5(h), 9, 10 and 12, and this Agreement shall
continue between the Company and any other party to this
Agreement without regard to any such termination.
(b) Each Terms Agreement shall be subject to
termination in the absolute discretion of the Purchaser by notice
given to the Company if, prior to delivery of any payment for
Notes to be purchased thereunder, (1) trading in the equity
securities of the Company is suspended by the Commission, by an
exchange that lists such equity securities of the Company, or by
the NASDAQ National Market, (2) additional material governmental
restrictions, not in force on the date of this Agreement, have
been imposed upon trading in securities generally or minimum or
maximum prices have been generally established on the New York
Stock Exchange or on the American Stock Exchange, or trading in
securities generally has been suspended on any such Exchange or a
general banking moratorium has been established by Federal or New
York authorities or (3) any outbreak or material escalation of
hostilities or other calamity or crisis occurs the effect of
which is such as to make it, in the judgment of the Purchaser,
impracticable to market such Notes.
12. Miscellaneous. The respective representations,
--------------
warranties and agreements of the Company and you in this
Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of you, the Company or any
person controlling you or the Company and will survive delivery
of and payment for the Notes. The
<PAGE>
23
reimbursement, indemnification and contribution agreements in
Sections 1(e), 5(h), 9, 10 and 11 will remain in full force and
effect regardless of any termination of this Agreement.
This Agreement is for the benefit of you and the
Company and the respective successors of each of you and the
Company and, to the extent expressed in this Agreement, for the
benefit of persons controlling you or the Company, and directors
and officers of the Company, and their respective successors, and
no other person, partnership, association or corporation shall
acquire or have any right under or by virtue of this Agreement.
Notwithstanding anything to the contrary contained
in the Distribution Agreement dated November 30, 1993, between
the Company and you (the "Prior Agreement"), the Prior Agreement
shall terminate (except with respect to Sections 1(e), 5(h), 9,
10 and 11 thereof) immediately upon the execution and delivery of
this Agreement.
All notices and communications under this Agreement
will be in writing, effective only on receipt and mailed or
delivered by messenger, facsimile transmission or otherwise to
Paine Webber Incorporated at 1285 Avenue of the Americas, New
York, New York 10019, attention of General Counsel and Treasurer,
to CS First Boston Corporation at Park Avenue Plaza, New York,
New York 10055, attention of New Issue Processing Department, or
to the Company at 1285 Avenue of the Americas, New York, New York
10019, attention of General Counsel and Treasurer.
This Agreement may be signed in multiple counter-
parts that taken as a whole constitute one agreement.
This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
Please confirm that the foregoing correctly sets
forth the agreement between us.
Very truly yours,
PAINE WEBBER GROUP INC.
by
________________________
Title:
<PAGE>
24
Confirmed:
PAINEWEBBER INCORPORATED
by
____________________
Title:
CS FIRST BOSTON CORPORATION
by
____________________
Title:
<PAGE>
[Draft--8/16/95]
Schedule I
SENIOR AND SUBORDINATED MEDIUM-TERM NOTE FEES
Maturity Senior Subordinated
--------------------------------- ------ ------------
9 months to less than 12 months .080 .080
12 months to less than 18 months .125 .125
18 months to less than 2 years .150 .150
2 years to less than 3 years .250 .250
3 years to less than 4 years .350 .350
4 years to less than 5 years .450 .450
5 years to less than 7 years .500 .500
7 years to less than 10 years .550 .550
10 years to less than 20 years .600 .600
20 years to 30 years .750 .750
<PAGE>
Annex A
-------
PAINE WEBBER GROUP INC.
Medium-Term Notes Administrative Procedures
-------------------------------------------
[ ], 1995
-----------------
Medium-Term Senior Notes, Series C, and Medium-
Term Subordinated Notes, Series D, Due from Nine Months to
30 Years from Date of Issue (the "Notes") are to be offered
on a continuing basis by Paine Webber Group Inc. (the "Com-
pany"). Each of PaineWebber Incorporated, as agent, and CS
First Boston Corporation, as agent (collectively, the
"Agents"), has agreed to use reasonable efforts to solicit
offers to purchase Notes from the Company. Neither Agent
will be obligated to purchase Notes for its own account.
The Notes are being sold pursuant to a Distribution
Agreement between the Company and each of the Agents dated
[ ], 1995 (the "Distribution Agreement"). The Notes
will be issued either as subordinated to ("Subordinated
Notes") or on a parity with ("Senior Notes") other unsecured
and unsubordinated indebtedness of the Company and have been
registered with the Securities and Exchange Commission (the
"Commission"). Chemical Bank (the "Senior Note Trustee") is
the trustee under the Indenture dated as of March 15, 1988,
covering the Senior Notes, as supplemented by the First
Supplemental Indenture dated as of September 22, 1989, and
by the Second Supplemental Indenture dated as of March 22,
1991 (such Indenture, as so supplemented, being hereinafter
referred to as the "Senior Note Indenture"), each between
the Company and the Senior Note Trustee. Chemical Bank
Delaware (the "Subordinated Note Trustee") is the trustee
under the Indenture dated as of March 15, 1988, covering the
Subordinated Notes, as supplemented by the First
Supplemental Indenture dated as of September 22, 1989, by
the Second Supplemental Indenture dated as of March 22,
1991, and by the Third Supplemental Indenture dated as of
November 30, 1993 (such Indenture, as so supplemented, being
hereinafter referred to as the "Subordinated Note
Indenture"), each between the Company and the Subordinated
Note Trustee. The Senior Note Indenture and the
Subordinated Note Indenture are hereinafter sometimes called
the "Indentures"; and the Senior Note "Trustee and the
Subordinated Note Trustee are hereinafter sometimes called
the "Trustees".
Notes may be represented by a Global Note (as
hereinafter defined) delivered to Chemical Bank (in such
capacity, the "Custodian") as agent for The Depository Trust
Company ("DTC"), with ownership of beneficial interests in
such Global Notes recorded in the book-entry system main-
tained by DTC (each such interest in a Global Note being
<PAGE>
2
referred to herein as a "Book-Entry Note"), or may be
represented by a certificate delivered to the holder thereof
or a person designated by such holder (each a "Certificated
Note"). An owner of a Book-Entry Note will not be entitled
to receive a certificate representing such Note. In connec-
tion with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC,
Chemical Bank will perform the custodial, document control
and administrative functions described in Part II below, in
accordance with its respective obligations under a Letter of
Representations from the Company and Chemical Bank to DTC
relating to the Senior Notes and a Letter of Representations
from the Company, Chemical Bank and the Subordinated Note
Trustee to DTC relating to the Subordinated Notes (each a
"Letter of Representations", and, collectively, the "Letters
of Representations") and a Medium-Term Note Certificate
Agreement (the "Certificate Agreement") between Chemical
Bank and DTC, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement system ("SDFS").
Administrative procedures and certain terms of the
offering are explained below. Certain general terms of the
offering, applicable to both Book-Entry Notes and Certifi-
cated Notes, are set forth in Part I hereof. Book-Entry
Notes will be issued in accordance with the administrative
procedures set forth in Part II hereof, as adjusted in
accordance with changes in DTC's operating requirements, and
Certificated Notes will be issued in accordance with the
administrative procedures set forth in Part III hereof.
Unless otherwise defined herein, terms defined in the
Distribution Agreement, the Indentures and the Notes shall
be used herein as therein defined. Notes for which interest
is calculated on the basis of a fixed interest rate, which
may be zero, are referred to herein as "Fixed Rate Notes".
Notes for which interest is calculated on the basis of a
floating interest rate are referred to herein as "Floating
Rate Notes". To the extent the procedures set forth below
conflict with the provisions of the Notes, the Indentures,
DTC's operating requirements or the Distribution Agreement,
the relevant provisions of the Notes, the Indentures, DTC's
operating requirements and the Distribution Agreement shall
control. The Company will advise each Agent from time to
time in writing of those persons with whom such Agent is to
communicate with respect to offers to purchase Notes from
the Company and the details of their delivery. References
below to "the Agent" shall mean whichever of the Agents is
involved in any proposed purchase and sale of any Note or
Notes.
Part I. Certain Terms of the Offering
-----------------------------
<PAGE>
3
Price to Public: Each Note will be issued at the
---------------- percentage of its principal amount
specified in the Prospectus Supple-
ment, as then amended or supple-
mented, relating to the Notes.
Denominations: Notes denominated in U.S. dollars
-------------- will be issued in minimum denomina-
tions of $100,000 and in denomina-
tions exceeding such amount by
integral multiples of $1,000.
Book-Entry Notes will not be
denominated in any currency or
composite currency other than the
U.S. dollar. Certificated Notes
denominated in other than U.S.
dollars will be issued in the
denominations specified pursuant to
"Settlement Procedures" in Part III
below.
Registration: Notes will be issued only in fully
------------- registered form.
Maturities: Each Note will mature on a date
----------- selected by the purchaser and
agreed to by the Company, which
will be not less than nine months
and not more than 30 years after
the date of issue thereof.
Interest
Payment: Each Note will bear interest (i) in
-------- the case of Fixed Rate Notes, at
the annual rate stated on the face
thereof, payable in arrears on such
dates as are specified therein
(each such date of payment other
than the maturity date being an
"Interest Payment Date" with
respect to such respect to such
Fixed Rate Note) and at maturity
and (ii) in the case of Floating
Rate Notes, at a rate determined
pursuant to the formula stated on
the face thereof, payable in
arrears on such dates as are
<PAGE>
4
specified therein (each such date
of payment other than the maturity
date an "Interest Payment Date"
with respect to such Floating Rate
Note) and at maturity.
Unless otherwise specified, each
Note will bear interest from and
including the later of its date of
issue and the most recent date to
which interest has been paid or
provided for, to but excluding the
current Interest Payment Date or
the maturity date of such Note.
Interest payments for a Note will
include interest accrued to but
excluding the Interest Payment
Date; provided, however, that a
-------- -------
Floating Rate Note which has a rate
of interest that is reset daily or
weekly will bear interest from and
including the later of its date of
issue and the day following the
most recent Regular Record Date (as
defined below) to which interest on
such Note has been paid or provided
for, to and including the next
preceding Regular Record Date or
the maturity date of such Note,
except as otherwise provided in
such Note. Unless otherwise
specified, the "Regular Record
Date" with respect to any Interest
Payment Date for any Note shall be
the 15th day preceding such
Interest Payment Date, whether or
not such date shall be a Business
Day.
Unless otherwise specified,
interest (including payments for
partial periods) will be calculated
and paid, in the case of Fixed Rate
Notes, on the basis of a 360-day
year of twelve 30-day months and,
in the case of Floating Rate Notes,
on the basis of the actual number
of days elapsed over a year of
360 days, except with respect to
interest on Treasury Rate Notes (as
defined in the Prospectus
<PAGE>
5
Supplement relating to the Notes)
which will be calculated and paid
on the basis of the actual number
of days elapsed over a year of 365
or 366 days, as applicable.
Interest will be payable to the
person in whose name the Note is
registered at the close of business
on the Regular Record Date next
preceding the Interest Payment Date
except that, in the case of Notes
issued between a Regular Record
Date and an Interest Payment Date,
interest payable on such Interest
Payment Date will be paid to the
person in whose name such Note was
initially registered; provided,
--------
however, that interest payable at
-------
Maturity (as defined below) will be
payable to the person to whom
principal shall be payable.
"Maturity" shall mean the date on
which the principal of a Note or an
installment of principal becomes
due, whether on the Maturity Date
specified for such Note, upon
redemption or early repayment or
otherwise.
Procedure for Rate
------------------
Setting and Posting: The Company and the Agents will
-------------------- discuss from time to time the
interest rates per annum to be
borne by, the issuance price of,
the aggregate principal amount of
and maturity of Notes that may be
sold as a result of the
solicitation of offers by the
Agents. If the Company establishes
a fixed set of interest rates and
maturities for an offering period
(a "posting"), or if the Company
decides to change already posted
rates, it will promptly advise the
Agents of the rates and maturities
to be posted.
If the Company decides to post
interest rates and a decision has
been reached to change the posted
<PAGE>
6
interest rates, the Company will
promptly notify the Agents. Each
Agent forthwith will suspend
solicitation of offers to purchase
notes from the Company until such
time as the Company has advised
such Agent as to the new rates.
Until such time only "indications
of interest" may be recorded.
Acceptance of
-------------
Offers: The Agent will communicate to the
------- Company, orally or in writing, each
offer to purchase Notes from the
Company that is received by the
Agent as agent of the Company and
that is not rejected by the Agent
as provided below. The Company
will have the sole right to accept
offers to purchase Notes from the
Company and may reject any such
offer, in whole or in part, for any
reason. The Agent may, in its
discretion reasonably exercised,
reject any offer to purchase Notes
from the Company that is received
by the Agent, in whole or in part.
The Company will promptly notify
the Agent of its acceptance or
rejection of an offer to purchase
Notes. If the Company accepts an
offer to purchase Notes it will
confirm such acceptance in writing
to the Agent.
Suspension of
-------------
Solicitation;
-------------
Amendment or
------------
Supplement: As provided in the Distribution
----------- Agreement, the Company may suspend
solicitation of offers to purchase
at any time and, upon receipt of
instructions from the Company, an
Agent will forthwith suspend
solicitation until such time as the
Company has advised it that
solicitation of offers to purchase
may be resumed.
<PAGE>
7
If an Agent receives the notice
from the Company contemplated by
Section 5(d) of the Distribution
Agreement, it will promptly suspend
solicitation and will only resume
solicitation as provided in the
Distribution Agreement. If the
Company is required, pursuant to
Section 5(d) of the Distribution
Agreement, to prepare an amendment
or supplement, it will promptly
furnish such Agent with the pro-
posed amendment or supplement; in
all other cases, if the Company
decides to amend or supplement
either of the Registration
Statements or the Prospectus, it
will promptly advise such Agent and
will furnish such Agent with the
proposed amendment or supplement in
accordance with the terms of the
Distribution Agreement. The
Company will promptly file such
amendment or supplement, provide
such Agent (and Cravath, Swaine &
Moore or such other law firm as may
be counsel to such Agent at the
time) with copies of any such
amendment or supplement, confirm to
such Agent that such amendment or
supplement has been filed with the
Commission and advise such Agent
that solicitation may be resumed.
In the event that at any time the
Company suspends solicitation of
offers to purchase Notes from the
Company there shall be any out-
standing offers to purchase Notes
from the Company that have been
accepted by the Company but for
which settlement has not yet
occurred, the Company will promptly
advise the Agent and the Trustees
whether such sales may be settled
and whether copies of the Pro-
spectus as amended or supplemented
to the time of the suspension may
be delivered in connection with the
settlement of such sales. The
Company will have the sole respon-
<PAGE>
8
sibility for such decision and for
any arrangements which may be made
in the event that the Company
determines that such sales may not
be settled or that copies of the
Prospectus as so amended or supple-
mented may not be so delivered.
Delivery of
-----------
Prospectus: A copy of the Prospectus, as most
----------- recently amended or supplemented on
the date of delivery thereof
(except as provided below),
relating to any Note must be
delivered to a purchaser prior to
or together with the earliest of
(i) any written offer of such Note,
(ii) the delivery of the written
confirmation provided for below and
(iii) the delivery of any Note
purchased by such purchaser.
Subject to the foregoing and to the
procedures described in Part II
below, it is anticipated that
delivery of the Prospectus,
confirmation and Notes to the
purchaser will be made simultane-
ously at settlement. The Company
shall ensure that the Agent
receives copies of the Prospectus
and each amendment or supplement
thereto (including appropriate
pricing stickers) in such
quantities and within such time
limits as will enable the Agent to
deliver such confirmation or Note
to a Purchaser as contemplated by
these procedures and in compliance
with the preceding sentence. If,
since the date of acceptance of a
purchaser's offer, the Prospectus
shall have been supplemented solely
to reflect any sale of Notes on
terms different from those agreed
to between the Company and such
purchaser or a change in posted
rates not applicable to such
purchaser, such purchaser shall not
receive the Prospectus as
supplemented by such new
supplement, but shall receive the
<PAGE>
9
Prospectus as supplemented to
reflect the terms of the Notes
being purchased by such Purchaser
and otherwise as most recently
amended or supplemented on the date
of delivery of the Prospectus.
Confirmation: For each offer to purchase a Note
------------- from the Company solicited by the
Agent and accepted by the Company,
the Agent will issue a confirmation
to the purchaser, with a copy to
the Company, setting forth the
Settlement Details (as hereinafter
defined) and delivery and payment
instructions.
Business Day: "Business Day" with respect to any
------------- Note means each day, other than a
Saturday or Sunday, that is (i) not
a day on which banking institutions
in the Business Day Centers with
respect to such Note are authorized
or obligated by law or executive
order to close, (ii) if such Note
is a LIBOR Note (as defined in the
Prospectus Supplement), a London
Banking Day (as hereinafter
defined) and (iii) if such Note is
denominated in the European
Currency Unit ("ECU"), any day that
is not designated as an ECU
settlement day by the ECU Banking
Association in Paris or otherwise
generally regarded in the ECU
interbank market as a day on which
payments in ECU shall not be made.
"Business Day Centers", unless
otherwise specified in the
applicable Note, with respect to
any Note shall mean The City of New
York and, in the case of any Note
payable in a Specified Currency
other than U.S. dollars or ECU, the
principal financial center of the
country issuing the Specified
Currency. As used herein, "London
Banking Day" shall mean any day on
which dealings in deposits in U.S.
dollars are transacted in the
London interbank market.
<PAGE>
10
Advertising Cost: The Company will determine with the
----------------- Agents the amount of advertising
that may be appropriate in offering
the Notes. Advertising expenses
approved in advance by the Company
will be paid by the Company.
Payment of Expenses: Each Agent will forward to the
-------------------- Company, following the end of each
quarter, a statement of the out-
of-pocket expenses incurred by such
Agent during that quarter which are
reimbursable to it pursuant to the
terms of the Distribution Agree-
ment. The Company will remit
payment to such Agent promptly
following the receipt of each such
statement.
Authenticity of
---------------
Signatures: Neither Agent will have any obliga-
----------- tion or liability to the Company or
either Trustee or any
Authenticating Agent in respect of
the authenticity of the signature
of any officer, employee or agent
of the Company or either Trustee or
such Authenticating Agent on any
Note.
PART II. Administrative Procedures for Book-Entry Notes
----------------------------------------------
Issuance: On any date of settlement (as
--------- defined under "Settlement" below)
for one or more Book-Entry Notes,
the Company will issue a single
global note in fully registered
form without coupons (a "Global
Note") representing up to
$150,000,000 principal amount of
all of such Book-Entry Notes that
have the same terms, except as to
principal amount. Each Global Note
will be dated and issued as of the
date of its authentication by the
relevant Trustee (or, in the case
of the Subordinated Note Trustee,
by Chemical Bank, as the
Authenticating Agent). No Global
<PAGE>
11
Note will represent any
Certificated Note.
Identification
--------------
Numbers: The Company will arrange with the
-------- CUSIP Service Bureau of Standard &
Poor's Corporation (the "CUSIP
Service Bureau") for the
reservation of a series of CUSIP
numbers (including tranche numbers)
consisting of approximately 900
CUSIP numbers and relating to
Global Notes representing Book-
Entry Notes. The Company will
obtain from the CUSIP Service
Bureau a written list of such
series of reserved CUSIP numbers
and will deliver such list to
Chemical Bank and DTC. The Company
will assign CUSIP numbers to Global
Notes as described below under
Settlement Procedure "B". DTC will
notify the CUSIP Service Bureau
periodically of the CUSIP numbers
that the Company has assigned to
Global Notes. Chemical Bank will
notify the Company at any time when
fewer than 100 of the reserved
CUSIP numbers remain unassigned to
Global Notes, and if it deems
necessary, the Company will reserve
additional CUSIP numbers for
assignment to Global Notes
representing Book-Entry Notes.
Upon obtaining such additional
CUSIP numbers, the Company shall
deliver a list thereof to Chemical
Bank and DTC.
Registration: Each Global Note will be registered
------------- in the name of Cede & Co., as
nominee for DTC, on the Security
Register maintained under the
Indenture governing such Global
Note. The beneficial owner of a
Book-Entry Note (or one or more
indirect participants in DTC
designated by such owner) will
designate one or more participants
in DTC (with respect to such Note,
the "Participants") to act as agent
<PAGE>
12
or agents for such owner in connec-
tion with the book-entry system
maintained by DTC, and DTC will
record in book-entry form, in
accordance with instructions
provided by such Participants, a
credit balance with respect to such
Note in the account of such
Participants. The ownership
interest of such beneficial owner
(or such participant) in such Note
will be recorded through the
records of such Participants or
through the separate records of
such Participants and one or more
indirect participants in DTC. So
long as Cede & Co. is the
registered owner of a Global Note,
DTC will be considered the sole
owner and holder of the Book-Entry
Notes represented by such Global
Note for all purposes under the
Indenture governing such Global
Note.
Transfers: Transfers of a Book-Entry Note will
---------- be accomplished by book entries
made by DTC and, in turn, by
Participants (and in certain cases,
one or more indirect participants
in DTC) acting on behalf of
beneficial transferors and
transferees of such Note.
Consolidation
-------------
and Exchange: Chemical Bank may deliver to DTC
------------- and the CUSIP Service Bureau at any
time a written notice of consolida-
tion specifying (i) the CUSIP
numbers of two or more outstanding
Global Notes that represent Book
Entry Notes having the same terms
other than principal amount and
(for all such Notes other than zero
coupon Notes) for which interest
has been paid to the same date,
(ii) a date, occurring at least 30
days after such written notice is
delivered and (for all such Notes
other than zero coupon Notes) at
least 30 days before the next
<PAGE>
13
Interest Payment Date for such
Book-Entry Notes, on which such
Global Notes shall be exchanged for
a single replacement Global Note
and (iii) a new CUSIP number,
obtained from the Company, to be
assigned to such replacement Global
Note. Upon receipt of such a
notice, DTC will send to its
participants (including Chemical
Bank) a written reorganization
notice to the effect that such
exchange will occur on such date.
Prior to the specified exchange
date, Chemical Bank will deliver to
the CUSIP Service Bureau a written
notice setting forth such exchange
date and the new CUSIP number and
stating that, as of such exchange
date, the CUSIP numbers of the
Global Notes to be exchanged will
no longer be valid. On the speci-
fied exchange date, Chemical Bank
will exchange such Global Notes for
a single Global Note bearing the
new CUSIP number and new Original
Issue Date (determined in
accordance with the Letters of
Represent-ations), and the CUSIP
numbers of the exchanged Global
Notes will, in accordance with
CUSIP Service Bureau procedures, be
canceled and not immediately
reassigned. Notwithstanding the
foregoing, if the Global Notes to
be exchanged exceed $150,000,000 in
aggregate principal amount, one
Global Note will be authenticated
and issued to represent each
$150,000,000 of principal amount of
the exchanged Global Notes and an
additional Global Note will be
authenticated and issued to
represent any remaining principal
amount of such Global Notes (see
"Denominations" below).
Denominations: As noted in Part I above, Book-
-------------- Entry Notes will be issued in
minimum denominations of $100,000
and in denominations exceeding such
<PAGE>
14
amount by integral multiples of
$1,000. Global Notes will be
denominated in principal amounts
not in excess of $150,000,000. If
one or more Book-Entry Notes having
an aggregate principal amount in
excess of $150,000,000 would, but
for the preceding sentence, be
represented by a single Global
Note, then one Global Note will be
issued to represent each
$150,000,000 principal amount of
such Book-Entry Note or Notes and
an additional Global Note will be
issued to represent any remaining
principal amount of such Book-Entry
Note or Notes. In such a case,
each of the Global Notes
representing such Book-Entry Note
or Notes shall be assigned the same
CUSIP number.
Interest: General. Except as set forth
--------- --------
below, each Book-Entry Note will
bear interest as set forth in
"Interest Payment" above, and such
interest shall be payable as set
forth therein.
Standard & Poor's Corporation will
use the information received in the
pending deposit message described
under Settlement Procedure "C"
below in order to include the
amount of any interest payable and
certain other information regarding
the related Global Note in the
appropriate (daily or weekly) bond
report published by Standard &
Poor's Corporation.
Payments of
-----------
Principal and
-------------
Interest: Payments of Interest Only. On the
--------- --------------------------
fifth Business Day immediately
preceding each Interest Payment
Date, Chemical Bank will deliver to
the Company's Treasurer's Office
and DTC a written notice specifying
by CUSIP number the amount of
interest to be paid on each Global
<PAGE>
15
Note on such Interest Payment Date
and the total of such amounts. DTC
will confirm the amount payable on
each Global Note on such Interest
Payment Date by reference to the
appropriate (daily or weekly) bond
reports published by Standard &
Poor's Corporation. The Company
will pay to Chemical Bank, as
paying agent, the total amount of
interest due on such Interest
Payment Date and Chemical Bank will
pay such amount to DTC at the times
and in the manner set forth below
under "Manner of Payment".
Payments at Maturity. On or about
---------------------
the first Business Day of each
month, Chemical Bank will deliver
to the Company and DTC a written
list of principal and interest to
be paid on each Global Note
maturing in the following month.
The Company, Chemical Bank and DTC
will confirm the amounts of such
principal and interest payments
with respect to each such Global
Note on or about the fifth Business
Day preceding the Maturity of such
Global Note. The Company will pay
to Chemical Bank, as paying agent,
the principal amount of such Global
Note, together with interest due at
such Maturity and Chemical Bank
will pay such amount to DTC at the
times and in the manner set forth
below under "Manner of Payment".
Promptly after payment to DTC of
the principal and interest due at
the Maturity of such Global Note,
the Senior Note Trustee, in the
case of Senior Notes, and the
Authenticating Agent, in the case
of Subordinated Notes, will cancel
such Global Note and deliver it to
the Company with an appropriate
debit advice. On the first
Business Date of each month,
Chemical Bank will deliver to each
Trustee a written statement
<PAGE>
16
indicating the total principal
amount of outstanding Global Notes
for which such Trustee serves as
trustee as of the immediately
preceding Business Day.
Manner of Payment. The total
------------------
amount of any principal and/or
interest due on Global Notes on any
Interest Payment Date or at
Maturity shall be paid by the
Company to Chemical Bank in funds
available for use by Chemical Bank
as of 9:30 a.m. (New York City
time) on such date. The Company
will make such payment on such
Global Notes by instructing
Chemical Bank to withdraw funds
from an account maintained by the
Company at Chemical Bank or by wire
transfer to Chemical Bank. The
Company will confirm such
instruction in writing to Chemical
Bank (with a copy to the
Subordinated Note Trustee if such
Global Notes represent Subordinated
Note Trustee if such Global Notes
represent Subordinated Notes).
Prior to 10:00 a.m. (New York City
time) on such date or as soon as
possible thereafter, Chemical Bank
will pay the foregoing amounts to
DTC in same day funds in accordance
with the payment provisions
contained in the applicable Letter
of Representations. DTC will
allocate such payments to its
Participants in accordance with its
existing operating procedures.
NEITHER THE COMPANY, AS ISSUER,
CHEMICAL BANK, THE SENIOR NOTE
TRUSTEE NOR THE SUBORDINATED NOTE
TRUSTEE SHALL HAVE ANY
RESPONSIBILITY OR LIABILITY FOR THE
PAYMENT BY DTC TO SUCH PARTICIPANTS
OF THE PRINCIPAL OF, PREMIUM, IF
ANY, AND INTEREST ON THE BOOK-ENTRY
NOTES.
<PAGE>
17
Withholding Taxes. The amount of
------------------
any taxes required under applicable
law to be withheld from any
interest payment on a Book-Entry
Note will be determined and
withheld by the Participant,
indirect participant in DTC or
other person responsible for
forwarding payments and materials
directly to the beneficial owner of
such Note.
Settlement: The receipt by the Company of
----------- immediately available funds in
payment for a Book-Entry Note and
the authentication and issuance of
the Global Note representing such
Note shall constitute "settlement"
with respect to such Book-Entry
Note. All orders accepted by the
Company will be settled on the
third Business Day following the
date of acceptance unless otherwise
agreed by the purchaser and the
Company. Such date of acceptance
shall be specified upon acceptance
of such offer.
Settlement
----------
Procedures: Settlement Procedure with regard to
----------- each Book-Entry Note sold by the
Company through an Agent, as agent,
shall be as follows:
A. Such Agent will provide to the
Company (unless provided by
the purchaser directly to the
Company) by telephone,
facsimile transmission or
other means agreed upon by the
Company and such Agent the
following information (the
"Settlement Details"):
1. Principal amount and
issue price.
2. If a Fixed Rate Note, the
interest rate, Regular
Record Dates and Interest
Payment Dates, if any.
<PAGE>
18
3. Settlement date (Original
Issue Date).
4. Maturity Date.
5. Type of Note (i.e.,
----
Senior Note or
Subordinated Note).
6. Agent's commission (to be
paid in the form of a
discount from the issue
price remitted to the
Company upon settlement).
7. Redemption provisions, if
any.
8. Repayment provisions, if
any.
9. If a Floating Rate Note,
such of the following as
are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread
Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest
Rate,
(vii) Calculation Date,
(ix) Interest
Determination Dates,
(x) Interest Payment
Dates,
(xi) Regular Record Dates
and
(xii) Calculation Agent.
<PAGE>
19
10. All other terms of the
Book-Entry Note and all
other items necessary to
complete the applicable
Global Note.
Before accepting any offer to
purchase a Book-Entry Note that
will have terms in addition to
or different from the terms set
forth on any form of Note
previously delivered by the
Company to, and approved by,
the applicable Trustee, other
than merely as a result of
completing any blanks (other
than the "Other Terms") or
equivalent blank) on such form
the Company will provide a
description of the proposed
different or additional terms
to the applicable Trustee and
its counsel for the purpose of
determining whether such terms
are consistent with the
applicable Trustee and its
counsel for the purpose of
determining whether such terms
are consistent with the
applicable Indenture, are
administratively acceptable to
such Trustee and its agents and
to not affect such Trustee's or
its agents' own rights, duties
or immunities under the Notes
or the applicable Indenture or
otherwise in a manner which is
not reasonably acceptable to
such Trustee or its agents (all
such terms having been
authorized, as of the date of
these administrative
Procedures, by or pursuant to a
Board Resolution and the
applicable Trustee having
received, as of the date of
these Administrative
Procedures, all opinions,
certificates and orders
required prior to the
authentication and issuance of
<PAGE>
20
a Note containing such terms).
Any offer to purchase such a
Book-Entry Note shall only be
accepted by the Company if such
terms shall be disapproved by
the applicable Trustee or its
counsel on one of the above-
mentioned grounds after the
foregoing review.
In addition, before accepting
any offer to purchase any Note
to be settled in less than
three Business Days, the
Company will verify that the
Authenticating Agent will have
adequate time to prepare and
authenticate such Note.
B. The Company will assign a CUSIP
number to the Global Note
representing such Book-Entry
Note and then advise Chemical
Bank in writing, including
facsimile or electronic trans-
mission, and, in the case of
Subordinated Notes, the Subor-
dinated Note Trustee by tele-
phone (confirmed in writing at
any time on the same date) or
facsimile transmission of the
information set forth in
Settlement Procedure "A" above,
such CUSIP number and the name
of the Agent. Each such
communication by the Company
shall constitute a representa-
tion and warranty by the
Company to Chemical Bank, each
Trustee and each Agent that
(i) such Book-Entry Note is
then, and at the time of
issuance and sale thereof will
be, duly authorized for issu-
ance and sale by the Company,
(ii) such Book-Entry Note, and
the Global Note representing
such Book-Entry Note, will
conform with the terms of the
Indenture pursuant to which
such Book-Entry Note is issued
<PAGE>
21
and (iii) upon authentication
and delivery of such Global
Note and any other Securities
to be issued on or prior to the
settlement date for the Book-
Entry Note represented by such
Global Note, the aggregate
amount of Securities which have
been issued and sold by the
Company will not exceed the
amount of Securities registered
under the Registration State-
ments.
C. Chemical Bank will enter a
pending deposit message through
DTC's Participant Terminal
System, providing the following
settlement information to DTC,
such Agent, Standard & Poor's
Corporation and, upon request,
the Trustee under the Indenture
pursuant to which each Book-
Entry Note which is represented
by the Global Note is to be
issued:
1. The information set forth
in Settlement Procedure
"A".
2. Initial Interest Payment
Date for each such
Book-Entry Note, the number
of days by which such date
succeeds the related
Regular Record Date and the
amount of interest payable
on such Interest Payment
Date (to the extent known
at such time).
3. CUSIP number of the Global
Note representing such
Book-Entry Note.
4. Whether such Global Note
will represent any other
Book-Entry Note (to the
extent known at such time).
<PAGE>
22
D. Upon receipt of appropriate
documentation and instructions,
the Company will instruct the
Senior Note Trustee to prepare
and authenticate each Senior
Global Note and will instruct
the Authenticating Agent to
prepare and authenticate each
Subordinated Global Note by
facsimile transmission or other
acceptable written means.
E. Chemical Bank will complete and
the Senior Note Trustee or the
Authenticating Agent, as the
case may be, will authenticate
the Global Note, and Chemical
Bank will register the Global
Note in the name of Cede & Co.,
as nominee of DTC, and hold
such Global Note for delivery
on the Closing Date therefor to
Chemical Bank, as Custodian.
F. DTC will credit each Book-Entry
Note represented by the Global
Note to be issued to the
applicable partici-pant account
at DTC.
G. Chemical Bank will enter an
SDFS deliver order through
DTC's Participant Terminal
System with respect to each
Book-Entry Note represented by
the Global Note to be issued
instructing DTC to (i) debit
such Book-Entry Note to
Chemical Bank's participant
account and credit such Book-
Entry Note to the Agent's
participant account and
(ii) debit such Agent's settle-
ment account and credit
Chemical Bank's settlement
account for an amount equal to
the price of such Book-Entry
Note less such Agent's
commission. The entry of such
a deliver order shall
constitute a representation and
<PAGE>
23
warranty by Chemical Bank to
DTC that (i) the Global Note
representing such Book-Entry
Note has been issued and
authenticated and (ii) Chemical
Bank is holding such Global
Note pursuant to the
Certificate Agreement.
H. The Agent will enter an SDFS
deliver order through DTC's
Participant Terminal System
with respect to each Book-Entry
Note represented by the Global
Note to be issued instructing
DTC (i) to debit such Book-
-Entry Note to such Agent's
participant account and credit
such Book-Entry Note to the
participant account of the
Participant with respect to
such Book-Entry Note and
(ii) to debit the settlement
account of such Participant and
credit the settlement account
of such Agent for an amount
equal to the price of such
Book-Entry Note.
I. Transfers of funds in accor-
dance with SDFS deliver orders
described in Settlement Proce-
dures "G" and "H" will be
settled in accordance with SDFS
operating procedures (as
referenced in the Letters of
Representations) in effect on
the settlement date.
J. Chemical Bank will credit to an
account of the Company main-
tained at Chemical Bank funds
available for immediate use in
the amount transferred to
Chemical Bank in accordance
with Settlement Procedure "G".
K. Chemical Bank, as Custodian,
will hold the Global Note
pursuant to the Certificate
Agreement. Periodically,
<PAGE>
24
Chemical Bank will send to the
Company a statement setting
forth the principal amount of
Book-Entry Notes outstanding as
of that date under each
Indenture.
L. The relevant Agent will deliver
to the purchaser a copy of the
most recent Prospectus applica-
ble to the Notes with or prior
to the earlier of any written
offer of Notes and the confir-
mation and payment by the
purchaser of the Note.
Such Agent will confirm the
purchase of each Book-Entry
Note to the purchaser either by
transmitting to the Participant
with respect to such Book-Entry
Note a confirmation order or
orders through DTC's institu-
tional delivery system or by
mailing a written confirmation
to such purchaser.
Settlement
----------
Procedures
----------
Timetable: For orders of Book-Entry Notes
---------- solicited by an Agent, as agent,
and accepted by the Company for
settlement on the first Business
Day after the sale date, Settlement
Procedures "A" through "L" set
forth above shall be completed as
soon as possible but not later than
the respective times (New York City
time) set forth below:
Settlement
Procedure Time
--------- ----
A-B 11:00 A.M. on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on Business Day
before
settlement date
E 9:00 A.M. on settlement
date
<PAGE>
25
F 10:00 A.M. on settlement
date
G-H 2:00 P.M. on settlement
date
I 4:45 P.M. on settlement
date
J-L 5:00 P.M. on settlement
date
If a sale is to be settled more
than one Business Day after the
sale date, Settlement Procedures
"A", "B" and "C" shall be completed
as soon as practicable but no later
than 11:00 A.M. and 2:00 P.M., as
the case may be, on the first
Business Day after the sale date.
Settlement Procedure "I" is subject
to extension in accordance with any
extension of Fedwire closing
deadlines and in other events
specified in the SDFS operating
procedures in effect on the
settlement date. Settlement
Procedures "D-H" and "J-L" shall be
completed as soon as practicable
but no later than the respective
dates set forth above.
If settlement of a Book-Entry Note
is rescheduled or canceled, the
Company will as soon as practicable
give Chemical Bank notice to such
effect. Chemical Bank will deliver
to DTC, through DTC's Participant
Terminal System, a cancelation
message to such effect by no later
than 2:00 P.M. on the Business Day
immediately preceding the scheduled
settlement date (provided Chemical
Bank has received such notice from
the Company by noon on the Business
Day immediately preceding the
settlement date).
Fails: If Chemical Bank fails to enter an
------ SDFS deliver order with respect to
a Book-Entry Note pursuant to
Settlement Procedure "G", Chemical
Bank may deliver to DTC, through
DTC's Participant Terminal System,
<PAGE>
26
as soon as practicable a withdrawal
message instructing DTC to debit
such Book-Entry Note to Chemical
Bank's participant account. DTC
will process the withdrawal
message, provided that Chemical
Bank's participant account contains
a principal amount of the Global
Note representing such Book-Entry
Note that is at least equal to the
principal amount to be debited. If
a withdrawal message is processed
with respect to all the Book-Entry
Notes represented by a Global Note,
the Senior Note Trustee, in the
case of Senior Notes, or the
Authenticating Agent, in the case
of Subordi-nated Notes, will mark
such Global Note "Canceled", make
appropriate entries in its records
and send such canceled Global Note
to the Company. The CUSIP number
assigned to such Global Note shall,
in accordance with CUSIP Service
Bureau procedures, be canceled and
not immediately reassigned. If a
withdrawal message is processed
with respect to one or more, but
not all, of the Book-Entry Notes
represented by a Global Note,
Chemical Bank and the Senior Note
Trustee or the Authenticating
Agent, as the case may be, will
exchange such Global Note for two
Global Notes, one of which shall
represent such Book-Entry Note or
Notes and shall be canceled
immediately after issuance and the
other of which shall represent the
other Book-Entry Notes previously
represented by the surrendered
Global Note and shall bear the
CUSIP number of the surrendered
Global Note.
If the purchase price for any
Book-Entry Note is not timely paid
to the Participant with respect to
such Note by the beneficial
purchaser thereof (or a person,
including an indirect participant
<PAGE>
27
in DTC, acting on behalf of such
purchaser), such Participant and,
in turn, the Agent for such Note
may enter SDFS deliver orders
through DTC's Participant Terminal
System reversing the orders entered
pursuant to Settlement Procedures
"H" and "G", respectively.
Thereafter, Chemical Bank will
deliver the withdrawal message and
take the related actions described
in the preceding paragraph.
Notwithstanding the foregoing, upon
any failure to settle with respect
to a Book-Entry Note, DTC may take
any actions in accordance with its
SDFS operating procedures then in
effect. In the event of a failure
to settle with respect to one or
more, but not all, of the Book-
Entry Notes to have been
represented by a Global Note,
Chemical Bank and the Senior Note
Trustee or the Authenticating
Agent, as the case may be, will
provide, in accordance with
Settlement Procedures "D" and "E",
for the authentication and issuance
of a Global Note representing the
other Book-Entry Notes to have been
represented by such Global Note and
will make appropriate entries in
its records.
PART III
Administrative Procedures for Certificated Notes
------------------------------------------------
Issuance: Each Certificated Note will be
--------- dated and issued as of the date of
its authentication by the relevant
Trustee (or, in the case of the
Subordinated Note Trustee, by the
Authenticating Agent).
Transfers and
-------------
Exchanges: A Certificated Note (whether a
---------- Senior Note or a Subordinated Note)
<PAGE>
28
may be presented for transfer or
exchange at the principal corporate
trust office in New York City of
the Senior Trustee. Certificated
Notes will be exchangeable for
other Certificated Notes having
identical terms but different
authorized denominations. Cer-
tificated Notes will not be
exchangeable for Book-Entry Notes.
Payments of
-----------
Principal and
-------------
Interest: On the fifth Business Day immedi-
--------- ately preceding each Interest Pay-
ment Date, Chemical Bank, as paying
agent, will furnish the Company
with the total amount of the inter-
est payments to be made on such
Interest Payment Date to the extent
known. In addition, on or about
the first Business Day of each
month, Chemical Bank will provide
to the Company's Treasurer's Office
a list of the principal and
interest to be paid on the respec-
tive Notes maturing in the follow-
ing month. The Company will pro-
vide to Chemical Bank not later
than any payment date sufficient
moneys to pay in full all principal
and interest payments due on such
payment date. Chemical Bank shall
make all such payments in
accordance with the terms of the
Notes. Notes presented to Chemical
Bank at Maturity will be canceled
by Chemical Bank.
Chemical Bank will be responsible
for withholding taxes on interest
paid on Certificated Notes as
required by applicable law.
Settlement: The receipt by the Company of imme-
----------- diately available funds in exchange
for an authenticated Certificated
Note delivered to the Agent and the
Agent's delivery of such Certifi-
cated Note against receipt of imme-
diately available funds shall, with
<PAGE>
29
respect to such Certificated Note,
constitute "settlement". All
orders accepted by the Company will
be settled on the third Business
Day following the date of
acceptance unless otherwise agreed
by the purchaser and the Company.
Such date of settlement shall be
specified upon acceptance of such
offer.
Settlement
----------
Procedures: Settlement Procedures with regard
----------- to each Certificated Note sold by
the Company through an Agent, as
agent, shall be as follows:
A. The Agent will provide to the
Company (unless provided by the
purchaser directly to the
Company), by telephone,
facsimile transmission or other
means agreed upon by the
Company and the Agent, the
following information (the
"Settlement Details"):
1. Exact name in which the
Note or Notes are to be
registered.
2. Exact address of registered
owner and, if different,
address for payment of
principal and interest.
3. Taxpayer identifi-cation
number of registered owner.
4. Principal amount and issue
price.
5. If a Fixed Rate Note, the
interest rate, Regular
Record Dates and Interest
Payment Dates, if any.
6. Settlement date (Original
Issue Date).
7. Maturity Date.
<PAGE>
30
8. Type of Note (i.e., Senior
----
Note or Subordinated Note).
9. Agent's commission (to be
paid in the form of a
discount from the issue
price remitted to the
Company upon settlement).
10. Redemption provisions, if
any.
11. Repayment provisions, if
any.
12. If a Floating Rate Note,
such of the following as
are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread
Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest
Rate,
(vii) Interest Reset
Dates,
(viii) Calculation Date,
(ix) Interest
Determination Dates,
(x) Interest Payment
Dates,
(xi) Regular Record
Dates, and
(xii) Calculation Agent.
<PAGE>
31
13. Authorized denomi-nations
of Notes denominated in
other than U.S. dollars.
14. All other terms of the Note
and all other items
necessary to complete the
Note.
Before accepting any offer to
purchase a Certificated Note
that will have terms in addi-
tion to or different from the
terms set forth on any form of
Note previously delivered by
the Company to, and approved
by, the applicable Trustee,
other than merely as a result
of completing any blanks (other
than the "Other Terms" or
equivalent blank) on such form,
the Company will provide a
description of the proposed
different or additional terms
to the applicable Trustee and
its counsel for the purpose of
determining whether such terms
are consistent with the appli-
cable Indenture, are adminis-
tratively acceptable to such
Trustee and its agents and do
not affect such Trustee's or
its agents' own rights, duties
or immunities under the Notes
or the applicable Indenture or
otherwise in a manner which is
not reasonably acceptable to
such Trustee or its agents (all
such terms having been author-
ized, as of the date of these
Administrative Procedures, by
or pursuant to a Board
Resolution and the applicable
Trustee having received, as of
the date of these
Administrative Procedures, all
opinions, certificates and
orders required prior to the
authentication and issuance of
a Note containing such terms).
Any offer to purchase such a
<PAGE>
32
Certificated Note shall only be
accepted by the Company if such
terms shall not be disapproved
by the applicable Trustee or
its counsel on one of the
above-mentioned grounds after
the foregoing review.
In addition, before accepting
any offer to purchase any
Certificated Note to be settled
in fewer than three Business
Days, the Company will verify
that the Senior Trustee or the
Authenticating Agent, as the
case may be, will have adequate
time to prepare and authenti-
cate such Certificated Note.
B. The Company will advise the
relevant Trustee (and, in the
case of the Subordinated Note
Trustee, the Authenticating
Agent) by telephone (confirmed
in writing at any time on the
next Business Day) or elec-
tronic transmission of the
information set forth in
Settlement Procedure "A" above
and the name of the Agent and
shall instruct the relevant
Trustee or the Authenticating
Agent, as applicable, to
authenticate the Note. Each
such communication by the
Company shall consti-tute a
representation and warranty by
the Company to each Trustee and
each Agent that (i) such
Certificated Note is then, and
at the time of issuance and
sale thereof will be, duly
authorized for issuance and
sale by the Company, (ii) such
Certificated Note will conform
with the terms of the Indenture
pursuant to which such
Certificated Note is issued and
(iii) upon authentication and
delivery of such Certificated
Note and any other Securities
<PAGE>
33
to be issued on or prior to the
settlement date for such
Certificated Note, the aggre-
gate amount of Securities which
have been issued and sold by
the Company will not exceed the
amount of Securities registered
under the Registration
Statements.
C. The Company will deliver to
Chemical Bank a pre-printed
five-ply packet for such
Certificated Note, which packet
will contain the following
documents in forms that have
been approved by the Company,
the Agents and the Trustees:
1. Certificated Note with
customer confirmation.
2. Stub One - For Trustee.
3. Stub Two - For Agent.
4. Stub Three - For the
Company.
5. Stub Four - For the Authen-
ticating Agent.
D. The Senior Trustee (or, in the
case of a Subordinated Note,
the Authenticating Agent) will
complete and authenticate such
Certificated Note and deliver
it (with the confirmation) and
Stubs One, Two and Four to the
Agent, and the Agent will
acknowledge receipt of the Note
by stamping or otherwise
marking Stubs One and Four and
returning Stub One to the
relevant Trustee and Stub Four
to the Authenticating Agent in
the case of Subordinated Notes.
Such delivery will be made only
against such acknowl-edgment of
receipt. Upon verification by
the Agent that a Note has been
<PAGE>
34
properly prepared and authen-
ticated by the Senior Note
Trustee or the Authenticating
Agent, payment therefor will be
made to the Company by the
Agent on the settlement date in
immediately available funds in
an amount equal to the issue
price of such Note less the
Agent's commission. Such
payment shall be made only upon
prior receipt by the Agent of
immediately available funds
from or on behalf of the
purchaser unless the Agent
decides, at its option, to
advance its own funds for such
payment against subsequent
receipt of funds from the
purchaser.
In the event that any
Certificated Note is incor-
rectly prepared, the applicable
Trustee (and, if a Subordinated
Note, the Authenticating Agent)
will promptly issue a replace-
ment Senior Note or
Subordinated Note, as the case
may be, in exchange for the
incorrectly prepared
Certificated Note.
E. The Agent will deliver such
Certificated Note (with the
confirmation) to the customer
against payment in immediately
payable funds. The Agent will
obtain the acknowl-edgment of
receipt of such Certificated
Note by retaining Stub Two.
F. The applicable Trustee will
send Stub Three to the Company
by first-class mail.
Notwithstanding the foregoing, the
Company, the Agent and the applica-
ble Trustee and its agents may
decide to issue Certificated Notes
which are printed as separate
<PAGE>
35
documents and not as part of
five-ply plackets and may decide to
dispense with the delivery of Stubs
and instead to use different forms
of receipt. Any such different
arrangements must be agreed to
prior to the acceptance by the
Company of an offer to purchase
Notes.
Settlement
----------
Procedures
----------
Timetable: For orders of Certificated Notes
---------- solicited by any Agent, as agent,
and accepted by the Company,
Settlement Procedures "A" through
"F" set forth above shall be
completed on or before the
respective times (New York City
time) set forth below:
Settlement
Procedure Time
--------------
A 2:00 P.M. on the Business
Day before
settlement
B-C 3:00 P.M. on the Business
Day before
settlement
D 2:15 P.M. on settlement
date
E 3:00 P.M. on settlement
date
F 5:00 P.M. on settlement
date
Notwithstanding the foregoing, if
the settlement date is the date of
acceptance of the offer to purchase
the Note, Settlement Procedures "A"
through "C" shall be completed on
or before 11:00 A.M. (New York City
time) on the settlement date.
Fails: In the event that a purchaser shall
------ fail to accept delivery of and make
payment for a Note by 3:00 P.M.,
New York City time, on the settle-
ment date therefor, the Agent will
notify the relevant Trustee and, if
<PAGE>
36
applicable, the Authenticating
Agent and the Company by telephone,
confirmed in writing (which may be
given by telex or telecopy), and if
the Note has been delivered to the
Agent, return the Note to the
Senior Note Trustee or the
Authenticating Agent. The Company
will promptly provide such Trustee
or the Authenticating Agent with
appropriate documentation and
instructions to complete the trans-
actions hereinafter outlined and
will remit to the Agent funds in
the amount, if any, it received
with respect to such Note. Such
payment will be made on the settle-
ment date for such Note, if possi-
ble, and in any event not later
than the Business Day following
such settlement date. if such fail
shall have occurred for any reason
other than the failure of the Agent
to provide the Settlement Details
to the Company or to provide a con-
firmation to the purchaser within a
reasonable period of time as
described above, the Company will
reimburse the Agent on an equitable
basis for its loss of the use of
funds during the period when they
were credited to the account of the
Company.
Immediately upon receipt of a Note
in respect of which a fail occur-
red, the Senior Note Trustee or
Authenticating Agent will make
appropriate entries in its records
and cancel such Note.
<PAGE>
[Draft--8/18/95]
Annex B
-------
Paine Webber Group Inc.
Terms Agreement
---------------
, 1995
[PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019]
[CS First Boston Corporation
Park Avenue Plaza
New York, New York 10055]
Dear Sirs:
Paine Webber Group Inc. (the "Company") proposes, subject to
the terms and conditions stated herein and in the Distribution
Agreement dated [ ], 1995 (the "Distribution Agreement"),
among the Company, PaineWebber Incorporated and CS First Boston
Corporation, to issue and sell to [PaineWebber Incorporated] [CS First
Boston Corporation] (the "Purchaser") the securities specified in the
Schedule hereto (the "Purchased Securities"). Each of the provisions
of the Distribution Agreement not specifically related to the
solicitation by the Agents, as the agents of the Company, of offers to
purchase Securities is incorporated herein by reference in its
entirety, and shall be deemed to be part of this Terms Agreement to
the same extent as if such provisions had been set forth in full
herein. Nothing contained herein or in the Distribution Agreement
shall make any party hereto an agent of the Company or make such party
subject to the provisions therein relating to the solicitation of
offers to purchase securities from the Company solely by virtue of
such party's execution of this Terms Agreement. Each of the
representations and warranties set forth in the Distribution Agreement
shall be deemed to have been made at and as of the date of this Terms
Agreement, except that each representation and warranty in Section 4
of the Distribution Agreement which makes reference to the Prospectus
shall be deemed to be a representation and warranty as of the date of
the Distribution Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of
this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
<PAGE>
2
An amendment to one or both of the Registration Statements
(as defined in the Distribution Agreement), or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities,
in the form heretofore delivered to you is now proposed to be filed
with the Commission.
Subject to the terms and conditions set forth herein and in
the Distribution Agreement incorporated herein by reference, the
Company agrees to issue and sell to the Purchaser and the Purchaser
agrees to purchase from the Company the Purchased Securities, at the
time and place, in the principal amount and at the purchase price set
forth in the Schedule hereto.
If the foregoing is in accordance with your understanding,
please sign and return to us the counterparts hereof, and upon
acceptance hereof by you this letter and such acceptance hereof,
including those provisions of the Distribution Agreement incorporated
herein by reference, shall constitute a binding agreement between you
and the Company.
PAINE WEBBER GROUP INC.
By ________________________
Title:
Accepted:
[PAINEWEBBER INCORPORATED]
[CS FIRST BOSTON CORPORATION]
By _________________________
Title:
15N
<PAGE>
[Draft--8/18/95]
SCHEDULE TO ANNEX B
Title of Purchased Securities:
[ %] Medium-Term [Senior] [Subordinated] Notes,
Series [C] [D]
Aggregate Principal Amount:
$
[Price to Public:]
Purchase Price by [PaineWebber Incorporated) [CS First
Boston Corporation]:
% of the principal amount of the Purchased
Securities, plus accrued interest from to
[and accrued amortization, if any, from
to ] Method of and Specified Funds
for Payment of Purchase Price:
[By certified or official bank check or checks, payable
to the order of the Company, in [[New York] Clearing House]
[immediately available] funds]
[By wire transfer to a bank account specified by the
Company in [next day] [immediately available] funds]
Indenture:
[Senior] [Subordinated) Note Indenture, as defined in
the Distribution Agreement
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[ %]
<PAGE>
2
Interest Payment Dates:
[months and dates)
Other Terms of the Purchased Securities:
Documents to be Delivered:
The following documents referred to in the Distribution
Agreement shall be delivered as a condition to the Closing:
[(l) The officers' certificate referred to in Section
7(c)(i).]
[(2) The opinion referred to in Section 7(c)(ii).]
[(3) The opinion referred to in Section 7(c)(iii).]
[(4) The accountants' letter referred to in Section
7(c)(iv).]
Other Provisions (including syndicate provisions or Sec-
tion 5(l) limitations, if applicable):
<PAGE>
Annex C
-------
(A) The Company 1/ shall furnish to the
-
Agents an opinion of the General Counsel of the Company,
dated the Closing Date, to the effect that:
(1) each of the Company and PaineWebber
Incorporated, Mitchell Hutchins Asset Management Inc.
and PaineWebber Real Estate Securities Inc., wholly
owned subsidiaries of the Company (individually a
"Subsidiary" and collectively the "Subsidiaries"), has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized,
with full corporate power and authority to own its
properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the
laws of each jurisdiction in which the failure to
qualify and be in good standing would materially and
adversely affect the business or condition of the
Company and its consolidated Subsidiaries, considered
as a whole;
(2) all of the outstanding shares of capital stock
of each Subsidiary have been duly and validly
authorized and issued and are fully paid and
nonassessable, and are owned by the Company either
directly or through wholly owned subsidiaries, free and
clear of any perfected security interest and, to the
best knowledge of such counsel, after due inquiry of
appropriate officers of the Company, any other security
interests, claims, liens or encumbrances, except for
restrictions on sales of capital stock contained in
debt instruments;
(3) the Notes conform in all material respects to
the description thereof contained in the Prospectus
(subject to the insertion in the Notes of the maturity
dates, the interest rates and other similar terms
thereof which will be described in supplements to the
Prospectus as contemplated by the Distribution
Agreement of which this Annex C is a part (the
"Distribution Assessment"); each of the Indentures has
- --------------------
1/ All capitalized terms used herein and not otherwise
-
defined shall have the respective meanings ascribed to them
in the Distribution Agreement of which this Annex C is a
part.
<PAGE>
2
been duly authorized, executed and delivered by the
Company, has been duly qualified under the Trust
Indenture Act and constitutes a legal, valid and
binding instrument enforceable against the Company in
accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws
affecting creditors' rights generally from time to time
in effect, and subject, as to enforceability, to
general principles of equity, regardless of whether
such enforceability is considered in a proceeding in
equity or at law); and the Notes have been duly
authorized and, when the remaining terms of any Note of
either series have been established in accordance with
the applicable Indenture and such Note has been duly
executed, authenticated, issued and delivered against
payment therefor in accordance with the provisions of
the applicable Indenture and the Distribution
Agreement, will constitute a legal, valid and binding
obligation of the Company entitled to the benefits of
the applicable Indenture, enforceable in accordance
with its terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws affecting creditors'
rights generally from time to time in effect, and
subject, as to enforceability, to general principles of
equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(4) to the best knowledge of such counsel, there
is no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of
its subsidiaries of a character required to be
disclosed in either of the Registration Statements or
the Prospectus; there is no franchise, contract or
other document of a character required to be described
in either of the Registration Statements or the
Prospectus or to be filed as an exhibit which is not
described or filed as required; and the statements
included or incorporated in the Prospectus describing
any legal proceedings or material contracts or
agreements relating to the Company fairly summarize
such matters;
(5) the Registration Statements have become
effective under the Securities Act, and, to the best
knowledge of such counsel, no stop order suspending the
<PAGE>
3
effectiveness of either of the Registration Statements
has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated
under the Securities Act;
(6) the Distribution Agreement has been duly
authorized, executed and delivered by the Company;
(7) the information required to be set forth in
each of the Registration Statements in answer to
Item 10 (insofar as it relates to such counsel) of
Form S-3, to the best knowledge of such counsel, is
accurately set forth in such Registration Statement in
all material respects or no response is required with
respect to such Item; and the authorized equity
capitalization of the Company is as described in the
documents incorporated by reference in the Prospectus;
(8) no consent, approval, authorization or order
of any court or governmental agency or body is required
for the consummation of the transactions contemplated
in the Distribution Agreement, except such as have been
obtained under the Securities Act and the Trust
Indenture Act and such as may be required under the
"blue sky" laws of any jurisdiction in connection with
the sale of Notes;
(9) none of the issue and sale of the Notes, the
consummation by the Company of any other of the
transactions contemplated in the Distribution Agreement
and the fulfillment of the terms of the Distribution
Agreement will conflict with, result in a breach of, or
constitute a default under the Restated Certificate of
Incorporation, as amended, or By-laws of the Company,
or the terms of any indenture or other agreement or
instrument known to such counsel and to which the
Company or any of its subsidiaries is bound, or any
order or regulation known to such counsel to be
applicable to the Company or any of its subsidiaries,
of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction
over the Company or any of its subsidiaries; and
(10) to the best knowledge of such counsel, no
holder of securities of the Company has rights to the
registration of such securities under either of the
Registration Statements.
<PAGE>
4
In rendering such opinion, such counsel may rely
as to matters involving the application of laws of any
jurisdiction other than the States of Delaware and New York
or the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel
of good standing believed to be reliable and who are
satisfactory to counsel for the Agents.
(B) The Company shall furnish to the Agents a
letter from the General Counsel of the Company, dated the
Closing Date, to the effect that such counsel has no reason
to believe that: (i) either Registration Statement and the
Prospectus (except the Statements of Eligibility (Form T-1)
included as exhibits to the Registration Statements, as to
which he need not express any view) were not appropriately
responsive in all material respects to the requirements of
the Securities Act and the Trust Indenture Act and the
respective applicable rules and regulations of the
Commission thereunder and (ii) the Registration Statements,
at the respective times they became effective, contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the
Prospectus, at the date of the letter, includes an untrue
statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made,
not misleading.
<PAGE>
[Draft--8/18/95]
Annex D
-------
Accountants' Comfort Letter
---------------------------
At each Closing Date and at such times as provided
in the Distribution Agreement, 1/ Ernst & Young shall
-
furnish to the Agents or the Purchaser, as the case may be,
a letter or letters (which may refer to letters previously
delivered to the Agents or the Purchaser, as the case may
be), dated as of the Closing Date or such other date, in
form and substance satisfactory to the Agents or the
Purchaser, as the case may be, confirming that they are
independent certified public accountants within the meaning
of the Securities Act and the Exchange Act and the
respective applicable published rules and regulations
thereunder, that the response to Item 10 of each of the
Registration Statements is correct insofar as it relates to
them and stating in effect that:
(a) in their opinion the consolidated financial
statements and schedules audited by them and
incorporated by reference in the Registration
Statements and the Prospectus and reported on by them
comply as to form in all material respects with the
applicable accounting requirements of the Securities
Act and the Exchange Act and the related published
rules and regulations thereunder;
(b) on the basis of a reading of the "Selected
Financial Data", if any, included or incorporated in
the Registration Statements and the Prospectus and of
the latest unaudited consolidated condensed financial
statements made available by the Company and its
consolidated subsidiaries; carrying out certain
specified procedures (but not an examination in
accordance with generally accepted auditing standards)
which would not necessarily reveal matters of
significance with respect to the comments set forth in
such letter; a reading of the minutes of the meetings
of the stockholders, directors and audit and executive
committees of the Company; and inquiries of certain
officials of the Company who have responsibility for
financial and accounting matters of the Company and its
subsidiaries as to transactions and events subsequent
--------------------
1/ All capitalized terms used herein shall have the
-
meanings ascribed to them in the Distribution Agreement of
which this Annex D is a part.
<PAGE>
2
to the date of the most recent financial statements
included or incorporated in the Registration Statements
and the Prospectus, nothing came to their attention
which caused them to believe that:
(1) the amounts in the unaudited "Summary
Financial Information", if any, included in the
Prospectus, and the amounts in the "Selected
Financial Data", if any, included or incorporated
by reference in the Registration Statements and
the Prospectus, do not agree with the
corresponding amounts in the audited financial
statements from which such amounts were derived;
(2) any unaudited financial statements
included or incorporated in the Registration
Statements and the Prospectus do not comply as to
form in all material respects with applicable
accounting requirements and with the published
rules and regulations of the Commission with
respect to financial statements included or
incorporated in quarterly reports on Form 10-Q
under the Exchange Act or any material
modifications should be made to the unaudited
financial statements for them to be presented in
conformity with such generally accepted accounting
principles;
(3) with respect to the period subsequent to
the date of the most recent financial statements
included or incorporated in the Registration
Statements and the Prospectus, there were any
changes, at a specified date not more than five
business days prior to the date of the letter, in
the consolidated long-term debt or non-convertible
redeemable preferred stock of the Company and its
subsidiaries or capital stock of the Company
(excluding retained earnings and foreign currency
translation adjustment) as compared with the
amounts shown on the most recent consolidated
balance sheet included or incorporated in the
Registration Statements and the Prospectus, except
in all instances for changes disclosed in such
letter or letters; or
(4) if any unaudited pro forma consolidated
condensed financial statements are included or
incorporated by reference in the Registration
<PAGE>
3
Statements and the Prospectus, on the basis of a
reading of the unaudited pro forma financial
statements, carrying out certain specified
procedures, inquiries of certain officials of the
Company and the acquired company who have
responsibility for financial and accounting
matters, and proving the arithmetic accuracy of
the application of the pro forma adjustments to
the historical amounts in the pro forma financial
statements, nothing came to their attention which
caused them to believe that the pro forma
financial statements do not comply in form in all
material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been
properly applied to the historical amounts in the
compilation of those statements;
(c) they have performed certain other specified
procedures as a result of which they determined that
certain information of an accounting, financial or
statistical nature (which is limited to accounting,
financial or statistical information derived from the
general accounting records of the Company) set forth in
the Registration Statements, as amended, and the
Prospectus, as amended or supplemented, and in
Exhibit 12 to the Registration Statements, including
specified information, if any, included or incorporated
from the Company's Annual Report on Form 10-K
incorporated therein or specified information, if any,
included or incorporated from any of the Company's
Quarterly Reports on Form 10-Q incorporated therein,
agrees with the accounting records of the Company and
its subsidiaries, excluding any questions of legal
interpretation.
Exhibit 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
PAINE WEBBER GROUP INC.
Paine Webber Group Inc., a corporation organized and
existing under the laws of the State of Delaware, hereby
certifies as follows:
1. The name of the corporation is Paine Webber Group
Inc. The date of the filing of its original Certificate of
Incorporation with the Secretary of State of the State of
Delaware was October 30, 1973, under the name Paine Webber
Incorporated.
2. This Restated Certificate of Incorporation only
restates and integrates and does not further amend the
provisions of the Certificate of Incorporation of this
corporation as heretofore amended or supplemented and there is
no discrepancy between these provisions and the provisions of
this Restated Certificate of Incorporation, except that the
names and places of residence of the original incorporators of
the corporation have, pursuant to Section 245 of the General
Corporation Law of the State of Delaware, been omitted, and,
accordingly, the provisions of the Certificate of Incorporation
have been renumbered.
3. The text of the Certificate of Incorporation as
amended or supplemented heretofore is hereby stated without
further amendments or changes to read as herein set forth in
full:
ARTICLE I
Name
----
The name of the Corporation is:
Paine Webber Group Inc.
ARTICLE II
Registered Office and Registered Agent
--------------------------------------
The registered office of the Corporation in the State of
Delaware is to be located at No. 1209 Orange Street, in the
City of Wilmington, County of New Castle. The name and address
of the Corporation's registered agent is The Corporation Trust
<PAGE>
- 2 -
Company, Corporation Trust Center, No. 1209 Orange Street, in
the City of Wilmington, County of New Castle, State of Delaware.
ARTICLE III
Corporate Purposes and Powers
-----------------------------
The purpose of the Corporation is to engage in any part
of the world in any capacity whether by itself of by or through
any other person, organization, association, partnership,
corporation or other entity in which the Corporation may have
an interest in any lawful act or activity for which
corporations may be organized under the General Corporation Law
of Delaware, and the Corporation shall be authorized to
exercise and enjoy all powers, rights and privileges conferred
upon corporations by the laws of the State of Delaware as in
force from time to time, including without limitation all
powers necessary or appropriate to carry out all those acts and
activities in which it may lawfully engage.
ARTICLE IV
Capital Stock
-------------
SECTION 1. Shares, Classes and Series Authorized. The
-------------------------------------
total number of shares of capital stock which the Corporation
shall have authority to issue is 20,000,000 shares of Series
Preferred Stock of the par value of $20 each and 100,000,000
shares of Common Stock of the par value of $1 each. Such
Series Preferred Stock and Common Stock are sometimes
hereinafter collectively called "capital stock."
SECTION 2. Designations, Powers, Preferences, Rights,
-----------------------------------------
Qualifications, Limitations and Restrictions of Capital Stock.
- -------------------------------------------------------------
The following is a statement of the designations and the
powers, preferences and rights, and the qualifications,
limitations or restrictions thereof, in respect of the classes
of the capital stock, and of the authority with respect thereto
expressly vested in the Board of Directors of the Corporation:
PART I - SERIES PREFERRED STOCK
(a) The Series Preferred Stock may be issued from time
to time in one or more series, the shares of each series to
have such powers, designations, preferences and relative,
participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as are
stated and expressed herein or in a resolution or resolutions
providing for the issue of such series, adopted by the Board of
Directors as hereinafter provided.
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(b) Authority is hereby expressly granted to the Board
of Directors, subject to the provisions of this Section 2, to
authorize the issue of one or more series of Series Preferred
Stock, and with respect to each such series to fix by
resolution or resolutions providing for the issue of such
series:
(i) the maximum number of shares to constitute such
series and the distinctive designation thereof;
(ii) whether the shares of such series shall have
voting rights, in addition to any voting rights provided
by law, and, if so, the terms of such voting rights;
(iii) the dividend rate, if any, on the shares of such
series, the conditions and dates upon which such
dividends shall be payable, the preference or relation
which such dividends shall bear to the dividends payable
on any other class or classes or on any other series of
capital stock, and whether such dividends shall be
cumulative or noncumulative;
(iv) whether the shares of such series shall be
subject to redemption by the Corporation, and, if made
subject to redemption, the times, prices and other terms
and conditions of such redemption;
(v) the rights of the holders of shares of such
series upon the liquidation, dissolution or winding up
of the Corporation;
(vi) whether or not the shares of such series shall be
subject to the operation of a retirement or sinking
fund, and, if so, the extent to and manner in which any
such retirement or sinking fund shall be applied to the
purchase or redemption of the shares of such series for
retirement or to other corporate purposes and the terms
and provisions relative to the operation thereof;
(vii) whether or not the shares of such series shall be
convertible into, or exchangeable for, shares of stock
of any other class or classes, or of any other series of
the same class, and if so convertible or exchangeable,
the price or prices or the rate or rates of conversion
or exchange and the method, if any, of adjusting the
same;
(viii) the limitations and restrictions, if any, to be
effective while any shares of such series are
outstanding upon the payment of dividends or making of
other distributions on, and upon the purchase,
redemption or other acquisition by the Corporation of,
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Common Stock or any other class or classes of stock of
the Corporation ranking junior to the shares of such
series either as to dividends or upon liquidation;
(ix) the conditions or restrictions, if any, upon the
creation of indebtedness of the Corporation or upon the
issue of any additional stock (including additional
shares of such series or of any other series or of any
other class) ranking on a parity with or prior to the
shares of such series as to dividends or distribution of
assets on liquidation, dissolution or winding up; and
(x) any other preference and relative, participating,
optional, or other special rights, and qualifications,
limitations or restrictions thereof as shall not be
inconsistent with this Section 2.
(c) All shares of any one series of Series Preferred
Stock shall be identical with each other in all respects,
except that shares of any one series issued at different times
may differ as to the dates from which dividends, if any,
thereon shall be cumulative; and all series shall rank equally
and be identical in all respects, except as permitted by the
foregoing provisions of Paragraph (b) hereof; and all shares of
Series Preferred Stock shall rank senior to the Common Stock
both as to dividends and upon liquidation.
(d) In the event of any liquidation, dissolution or
winding up of the Corporation, before any payment or
distribution of the assets of the Corporation (whether capital
or surplus) shall be made to or set apart for the holders of
any class or classes of stock of the Corporation ranking junior
to the Series Preferred Stock upon liquidation, the holders of
the shares of the Series Preferred Stock shall be entitled to
receive payment at the rate fixed herein or in the resolution
or resolutions adopted by the Board of Directors providing for
the issue of such series, plus (if dividends on shares of such
series of Series Preferred Stock shall be cumulative) an amount
equal to all dividends (whether or not earned or declared)
accumulated to the date of final distribution to such holders;
but they shall be entitled to no further payment. If, upon any
liquidation, dissolution or winding up of the Corporation, the
assets of the Corporation or proceeds thereof, distributable
among the holders of the shares of the Series Preferred Stock
shall be insufficient to pay in full the preferential amount
aforesaid, then such assets, or the proceeds thereof, shall be
distributed among such holders ratably in accordance with the
respective amounts which would be payable on such shares if all
amounts payable thereon were paid in full. For the purposes of
this Paragraph (d), the voluntary sale, conveyance, exchange or
transfer (for cash, shares of stock, securities, or other
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consideration) of all or substantially all the property or
assets of the Corporation shall be deemed a voluntary
liquidation, dissolution or winding up of the Corporation, but
a consolidation or merger of the Corporation with one or more
other corporations shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary.
(e) Except as shall be otherwise stated and expressed
herein or in the resolution or resolutions of the Board of
Directors providing for the issue of any series and except as
otherwise required by the laws of the State of Delaware, the
holders of shares of Series Preferred Stock shall have, with
respect to such shares, no right or power to vote on any
question or in any proceeding or to be represented at, or to
receive notice of, any meeting of stockholders.
(f) One series of Series Preferred Stock authorized
hereby shall be $1.375 Convertible Exchangeable Preferred Stock
(the "Convertible Preferred Stock"). The number of shares of
Convertible Preferred Stock shall be 4,600,000.
(i) Holders of shares of Convertible Pre-
ferred Stock will be entitled to receive, when and
as declared by the Board of Directors of the
Corporation (the "Board") out of assets of the
Corporation legally available for payment, an
annual cash dividend of $1.375 per share, payable
in quarterly installments on March 15, June 15,
September 15 and December 15, commencing June 15,
1987. Dividends on the Convertible Preferred
Stock will be cumulative from the date of initial
issuance of any shares of Convertible Preferred
Stock. Dividends will be payable to holders of
record as they appear on the stock books of the
Corporation on such record dates, not more than 60
days nor less than 10 days preceding the payment
dates thereof, as shall be fixed by the Board.
When dividends are not paid in full upon the
Convertible Preferred Stock and any other
preferred stock ranking on a parity as to
dividends with the Convertible Preferred Stock (such
other preferred stock and the Convertible Preferred
Stock hereinafter being collectively referred to
as "Parity Preferred Stock"), all dividends
declared upon shares of Parity Preferred Stock
will be declared pro rata so that in all cases the
amount of dividends declared per share on the
Convertible Preferred Stock and such other Parity
Preferred Stock shall bear to each other the same
ratio that accumulated and unpaid dividends per
share on the shares of Convertible Preferred Stock
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and such other Parity Preferred Stock bear to each
other. Except as set forth in the preceding
sentence, unless full cumulative dividends on the
Convertible Preferred Stock have been paid, no
dividends (other than in Common Stock of the
Corporation (as defined in paragraph (iii)(I)
below) or any other stock of the Corporation
ranking junior to the Convertible Preferred Stock
as to dividends) may be paid or declared and set
aside for payment or other distribution made upon the
Common Stock or on any other stock of the Corporation
ranking junior to or on a parity with the Convertible
Preferred Stock as to dividends, nor may any Common
Stock or any other stock of the Corporation ranking
junior to or on a parity with the Convertible
Preferred Stock as to dividends be redeemed,
purchased or otherwise acquired for any consideration
(or any payment made to or available for a sinking
fund for the redemption of any shares of such stock)
by the Corporation (except by conversion into or
exchange for stock of the Corporation ranking junior
to the Convertible Preferred Stock as to dividends).
Dividends payable for any partial dividend period
shall be calculated on the basis of a 360-day year of
12 30-day months.
(ii) The shares of Convertible Preferred
Stock shall rank prior to the shares of Common
Stock and of any other class of stock of the
Corporation ranking junior to the Series Preferred
Stock upon liquidation, so that in the event of
any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the
holders of the Convertible Preferred Stock shall
be entitled to receive out of the assets of the
Corporation available for distribution to its
stockholders, whether from capital, surplus or
earnings, before any distribution is made to
holders of shares of Common Stock or any other
such junior stock, an amount equal to $25 per
share (the "Liquidation Preference" of a share of
Convertible Preferred Stock) plus an amount equal
to all dividends (whether or not earned or declared)
accumulated and unpaid on the shares of Convert-
ible Preferred Stock to the date of final dis-
tribution. If, upon any liquidation, dissolution
or winding up of the Corporation, the assets of
the Corporation, or proceeds thereof, distrib-
able among the holders of shares of Parity
Preferred Stock shall be insufficient to pay in full
the preferential amount aforesaid, then such
assets, or the proceeds thereof, shall be distribut-
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able among such holders ratably in accordance
with the respective amounts which would be payable
on such shares if all amounts payable thereon were
payable in full. For the purposes hereof, the
voluntary sale, conveyance, exchange or transfer
(for cash, shares of stock, securities or-other
consideration) of all or substantially all the
property or assets of the Corporation shall be
deemed a voluntary liquidation, dissolution or
winding up of the Corporation, but a consolidation
or merger of the Corporation with one or more other
corporations shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary.
(iii) (I) Subject to and upon compliance with
the provisions of this paragraph (iii), the holder
of a share of Convertible Preferred Stock shall
have the right, at his option, at any time, except
that, if such share is called for redemption, not
after the close of business on the fifth day next
preceding the date fixed for such redemption, to
convert such share into that number of fully paid
and non-assessable shares of Common Stock (calculated
as to each conversion to the nearest 1/100th
of a share) obtained by dividing the Liquidation
Preference of such share being converted by the
Conversion Price (as defined below) and by surrender
of such share so to be converted, such surrender
to be made in the manner provided in subsec-
tion (II) of this paragraph (iii).
The term "Common Stock" shall mean the Common
Stock, $1 par value, of the Corporation as the
same exists at the date of this Certificate or as
such stock may be constituted from time to time,
except that for the purpose of subsection (V) of
this paragraph (iii) the term "Common Stock" shall
also mean and include stock of the Corporation of
any class, whether now or hereafter authorized,
which shall have the right to participate in the
distribution of either earnings or assets of the
Corporation without limit as to amount or percentage.
The term "Conversion Price" shall mean
$44-1/8, as adjusted in accordance with the provi-
sions of this paragraph (iii).
(II) In order to exercise the conversion
privilege, the holder of each share of Convertible
Preferred Stock to be converted shall surrender
the certificate representing such share at the
office of the conversion agent for the Convertible
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Preferred Stock in the Borough of Manhattan, City
of New York, appointed for such purpose by the
Corporation, with the Notice of Election to Con-
vert on the back of said certificate completed and
signed. Unless the shares issuable on conversion
are to be issued in the same name as the name in
which such share of Convertible Preferred Stock is
registered, each share surrendered for conversion
shall be accompanied by instruments of transfer,
in form satisfactory to the Corporation, duly
executed by the holder or his duly authorized
attorney and an amount sufficient to pay any
transfer or similar tax. No payment or adjustment
shall be made on conversion for dividends accumu-
lated on the Convertible Preferred Stock surren-
dered for conversion or for dividends on Common
Stock delivered on such conversion. As promptly
as practicable after the surrender of the certifi-
cates for shares of Convertible Preferred Stock as
aforesaid, the Corporation shall issue and shall
deliver at such office to such holder, or on his
written order, a certificate or certificates for
the number of full shares of Common Stock issuable
upon the conversion of such shares in accordance
with the provisions of this paragraph (iii), and
any fractional interest in respect of a share of
Common Stock arising upon such conversion shall be
settled as provided in subsection (III) of this
paragraph (iii).
Each conversion shall be deemed to have been
effected immediately prior to the close of business
ness on the date on which the certificates for
shares of Convertible Preferred Stock shall have
been surrendered and such notice received by the
Corporation as aforesaid, and the person or
persons in whose name or names any certificate or
certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to
have become the holder or holders of record of the
shares represented thereby at such time on such
date and such conversion shall be at the Conver-
sion Price in effect at such time on such date,
unless the stock transfer books of the Corporation
shall be closed on that date, in which event such
person or persons shall be deemed to have become
such holder or holders of record at the close of
business on the next succeeding day on which such
stock transfer books are open, but such conversion
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shall be at the Conversion Price in effect on the
date upon which such shares shall have been
surrendered and such notice received by the
Corporation. All shares of Common Stock delivered
upon conversions of the Convertible Preferred
Stock will upon delivery be duly and validly
issued and fully paid and non-assessable, free of
all liens and charges and not subject to any
preemptive rights.
(III) No fractional shares or scrip repre-
senting fractions of shares of Common Stock shall
be issued upon conversion of the Convertible
Preferred Stock. Instead of any fractional interest
in a share of Common Stock which would otherwise
be deliverable upon the conversion of a share of
Convertible Preferred Stock, the Corporation shall
pay to the holder of such share an amount in cash
(computed to the nearest cent) equal to the
current market price (as defined in subsec-
tion (IV)(d) of this paragraph (iii)) thereof at
the close of business on the business day next
preceding the day of conversion. If more than one
share shall be surrendered for conversion at one
time by the same holder, the number of full shares
of Common Stock issuable upon conversion thereof
shall be computed on the basis of the aggregate
Liquidation Preference of the shares of Convert-
ible Preferred Stock so surrendered.
(IV) The Conversion Price shall be adjusted
from time to time as follows:
(a) In case the Corporation shall hereafter
(i) pay a dividend or make a distribution on the
Common Stock in shares of Common Stock, (ii) sub-
divide its outstanding shares of Common Stock into
a greater number of shares, (iii) combine its
outstanding shares of Common Stock into a smaller
number of shares, or (iv) issue by reclassi-
fication of the Common Stock any shares of capital
stock of the Corporation, the Conversion Price in
effect immediately prior to such action shall be
adjusted so that the holder of any share of
Convertible Preferred Stock thereafter surrendered
for conversion shall be entitled to receive the
number of shares of Common Stock or other capital
stock of the Corporation which he would have owned
or been entitled to receive immediately following
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such action had such share been converted immedi-
ately prior thereto. An adjustment made pursuant
to this subdivision (a) shall become effective
immediately after the record date, in the case of
a dividend or distribution, or immediately after
the effective date, in the case of a subdivision,
combination or reclassification. If, as a result
of an adjustment made pursuant to this subdivi-
sion (a), the holder of any share of Convertible
Preferred Stock thereafter surrendered for conver-
sion shall become entitled to receive shares of
two or more classes of capital stock or shares of
Common Stock and other capital stock of the
Corporation, the Board (whose determination shall
be conclusive and shall be described in a state-
ment filed with the conversion agent by the
Corporation as soon as practicable) shall deter-
mine the allocation of the adjusted Conversion
Price between or among shares of such classes of
capital stock or shares of Common Stock and other
capital stock.
(b) In case the Corporation shall hereafter
issue rights or warrants to holders of its out-
standing shares of Common Stock generally enti-
tling them (for a period expiring within 45 days
after the record date mentioned below) to sub-
scribe for or purchase shares of Common Stock at a
price per share less than the current market price
per share (as determined pursuant to subdivi-
sion (d) of this subsection (IV)) of the Common
Stock on the record date mentioned in the next
sentence (other than pursuant to an automatic
dividend reinvestment plan of the Corporation or
any substantially similar plan), the Conversion
Price shall be adjusted so that the same shall
equal the price determined by multiplying the
Conversion Price in effect immediately prior to
the date of issuance of such rights or warrants by
a fraction of which the numerator shall be the
number of shares of Common Stock outstanding on
the date of issuance of such rights or warrants
plus the number of shares which the aggregate
offering price of the total number of shares so
offered would purchase at such current market
price, and of which the denominator shall be the
number of shares of Common Stock outstanding on
the date of issuance of such rights or warrants
plus the number of additional shares of Common
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Stock offered for subscription or purchase. Such
adjustment shall become effective immediately
after the record date for the determination of
stockholders entitled to receive such rights or
warrants.
(c) In case the Corporation shall hereafter
distribute to holders of its outstanding shares of
Common Stock generally evidences of its indebted-
ness or assets (excluding any cash dividend paid
from retained earnings of the Corporation and
dividends or distributions payable in stock for
which adjustment is made pursuant to subdivi-
sion (a) of this subsection (IV)) or rights or
warrants to subscribe to securities of the Corporation
(excluding those referred to in subdivision
(b) of this subsection (IV)), then in each
such case the Conversion Price shall be adjusted
so that the same shall equal the price determined
by multiplying the Conversion Price in effect
immediately prior to the date of such distribution
by a fraction of which the numerator shall be the
current market price per share (determined as
provided in subdivision (d) of this subsec-
tion (IV)) of the Common Stock on the record date
mentioned in the next sentence less the then fair
market value (as determined by the Board, whose
determination shall be conclusive and shall be
described in a statement filed with the conversion
agent by the Corporation as soon as practicable)
of the portion of the evidences of indebtedness or
assets so distributed to the holder of one share
of Common Stock or of such subscription rights or
warrants applicable to one share of Common Stock,
and of which the denominator shall be such current
market price per share of Common Stock. Such
adjustment shall become effective immediately
after the record date for the determination of
stockholders entitled to receive such distribu-
tion.
(d) For the purpose of any computation under
subdivisions (b) and (c) of this subsection (IV),
the current market price per share of Common Stock
on any date shall be deemed to be the average of
the daily market prices for the 30 consecutive
days on which the New York Stock Exchange is open
for trading commencing 45 trading days before the
day in question. The term "daily market price"
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when used with reference to the Common Stock shall
mean the price of a share of Common Stock on the
relevant date, determined on the basis of the last
reported sale price regular way of the Common
Stock as reported on the composite tape, or
similar reporting system, for issues listed on the
New York Stock Exchange (or if the Common Stock is
not then listed on that Exchange, for issues
listed on such other national securities exchange
upon which the Common Stock is listed as may be
designated by the Board for the purposes hereof)
or, if there is no such reported sale on the day
in question, on the basis of the average of the
closing bid and asked quotations as so reported,
or, if the Common Stock is not then listed on any
national securities exchange, on the basis of the
average of the high bid and low asked quotations
on the day in question in the over-the-counter
market as reported by the National Association of
Securities Dealers' Automated Quotations System,
or if not so quoted, as reported by National
Quotation Bureau, Incorporated, or a similar
organization.
(e) In any case in which this paragraph (iii)
shall require that an adjustment be made immedi-
ately following a record date or an effective
date, the Corporation may elect to defer (but only
until five business days following the filing by
the Corporation with the conversion agent of the
certificate of independent public accountants
required by subdivision (g) of this subsec-
tion (IV)) issuing to the holder of any share of
Convertible Preferred Stock converted after such
record date or effective date the additional
shares of Common Stock or other capital stock
issuable upon such conversion over and above the
shares of Common Stock or other capital stock
issuable upon such conversion on the basis of the
Conversion Price prior to adjustment, and paying
to such holder any amount of cash in lieu of a
fractional share.
(f) No adjustment in the Conversion Price
shall be required to be made unless such adjust-
ment would require an increase or decrease of at
least 1% of such price; provided, however, that
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any adjustments which by reason of this subdivi-
sion (f) are not required to be made shall be
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carried forward and taken into account in any
subsequent adjustment. All calculations under
this paragraph (iii) shall be made to the nearest
cent or to the nearest 1/100th of a share, as the
case may be. Anything in this paragraph (iii) to
the contrary notwithstanding, the Corporation
shall be entitled to make such reduction in the
Conversion Price, in addition to those required by
this paragraph (iii), as it in its discretion shall
determine to be advisable in order that any stock
dividend, subdivision of shares, distribution of
rights to purchase stock or securities, or distri-
bution of securities convertible into or exchange-
able for stock hereafter made by the Corporation
to its stockholders shall not be taxable to the
recipients.
(g) Whenever the Conversion Price is adjust-
ed as herein provided, (i) the Corporation shall
promptly file with the conversion agent a certifi-
cate of a firm of independent public accountants
(who may be the regular accountants employed by
the Corporation) setting forth the Conversion
Price after such adjustment and setting forth a
brief statement of the facts requiring such
adjustment and the manner of computing the same,
which certificate shall be conclusive evidence of
the correctness of such adjustment, and (ii) a
notice stating that the Conversion Price has been
adjusted and setting forth the adjusted Conversion
Price shall forthwith be mailed by the Corporation
to the holders of the Convertible Preferred Stock
at their addresses as shown on the stock books of
the Corporation.
(h) In the event that any time as a result
of an adjustment made pursuant to subdivision (a)
of this subsection (IV), the holder of any share
of Convertible Preferred Stock thereafter surren-
dered for conversion shall become entitled to
receive any shares of the Corporation other than
shares of Common Stock, thereafter the Conversion
Price of such other shares so receivable upon
conversion of any share shall be subject to
adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the
provisions with respect to Common Stock contained
in this paragraph (iii).
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(V) In case:
(a) the Corporation shall take any action
which would require any adjustment in the Conversion
Price pursuant to subsection (IV)(c); or
(b) the Corporation shall authorize the
granting to the holders of the Common Stock of
rights or warrants to subscribe for or purchase
any shares of stock of any class or of any other
rights; or
(c) there shall be any capital stock reorgani-
nization or reclassification of the Common Stock
(other than a subdivision or combination of the
outstanding Common Stock and other than a change
in the par value of the Common Stock), or any
consolidation or merger to which the Corporation
is a party or any statutory exchange of securities
with another corporation and for which approval of
any stockholders of the Corporation is required,
or any sale or transfer of all or substantially
all the assets of the Corporation; or
(d) there shall be a voluntary dissolution,
liquidation or winding up of the Corporation; then
the Corporation shall cause to be filed with the
conversion agent, and shall cause to be mailed to
the holders of shares of the Convertible Preferred
Stock at their addresses as shown on the stock
books of the Corporation, at least 10 days prior
to the applicable date hereinafter specified, a
notice stating (i) the date on which a record is
to be taken for the purpose of such distribution
or rights, or, if a record is not to be taken, the
date as of which the holders of Common Stock of
record to be entitled to such distribution or
rights are to be determined, or (ii) the date on
which such reorganization, reclassification,
consolidation, merger, statutory exchange, sale,
transfer, dissolution, liquidation or winding up
is expected to become effective, and the date as
of which it is expected that holders of Common
Stock of record shall be entitled to exchange
their shares of Common Stock for securities or
other property deliverable upon such reorganization,
reclassification, consolidation, merger,
statutory exchange, sale, transfer, dissolution,
liquidation or winding up. Failure to give such
<PAGE>
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notice or any defect therein shall not affect the
legality or validity of the proceedings described
in subdivision (a), (b), (c) or (d) of this
subsection (V).
(VI) The Corporation covenants that it will
at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its
authorized but unissued shares of Common Stock or
its issued shares of Common Stock held in its
treasury, or both, for the purpose of effecting
conversions of the Convertible Preferred Stock,
the full number of shares of Common Stock deliver-
able upon the conversion of all outstanding shares
of Convertible Preferred Stock not theretofore
converted. For purposes of this subsection (VI),
the number of shares of Common Stock which shall
be deliverable upon the conversion of all out-
standing shares of Convertible Preferred Stock
shall be computed as if at the time of computation
all such outstanding shares were held by a single
holder.
Before taking any action which would cause an
adjustment reducing the Conversion Price below the
then par value (if any) of the shares of Common
Stock deliverable upon conversion of the Convert-
ible Preferred Stock, the Corporation will take
any corporate action which may, in the opinion of
its counsel, be necessary in order that the
Corporation may validly and legally issue fully
paid and non-assessable shares of Common Stock at
such adjusted Conversion Price.
The Corporation will endeavor to list the
shares of Common Stock required to be delivered
upon conversion of the Convertible Preferred Stock
prior to such delivery upon each national secu-
rities exchange, if any, upon which the outstand-
ing Common Stock is listed at the time of such
delivery.
Prior to the delivery of any securities which
the Corporation shall be obligated to deliver upon
conversion of the Convertible Preferred Stock, the
Corporation will endeavor to comply with all
Federal and State laws and regulations thereunder
requiring the registration of such securities
<PAGE>
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with, or any approval of or consent to the deliv-
ery thereof by, any governmental authority.
(VII) The Corporation will pay any and all
documentary stamp or similar issue or transfer
taxes payable in respect of the issue or delivery
of shares of Common Stock on conversions of the
Convertible Preferred Stock pursuant hereto;
provided, however, that the Corporation shall not
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be required to pay any tax which may be payable in
respect of any transfer involved in the issue or
delivery of shares of Common Stock in a name other
than that of the holder of the Convertible Pre-
ferred Stock to be converted and no such issue or
delivery shall be made unless and until the person
requesting such issue or delivery has paid to the
Corporation the amount of any such tax or has
established, to the satisfaction of the Corpo-
ration, that such tax has been paid.
(VIII) Notwithstanding any other provision
herein to the contrary, in case of any consolida-
tion or merger to which the Corporation is a party
(other than a merger or consolidation in which the
Corporation is the continuing corporation), or in
case of any sale or conveyance to another corpor-
ation of the property of the Corporation as an
entirety or substantially as an entirety, or in
the case of any statutory exchange of securities
with another corporation (including any exchange
effected in connection with a merger of a third
corporation into the Corporation), the holder of
each share of Convertible Preferred Stock then
outstanding shall have the right thereafter to
convert such share into the kind and amount of
securities, cash or other property receivable upon
such consolidation, merger, statutory exchange,
sale or conveyance by a holder of the number of
shares of Common Stock into which such share of
Convertible Preferred Stock might have been
converted immediately prior to such consolidation,
merger, statutory exchange, sale or conveyance,
assuming such holder of Common Stock failed to
exercise his rights of election, if any, as to the
kind or amount of securities, cash or other
property receivable upon such consolidation,
merger, statutory exchange, sale or conveyance
(provided that if the kind or amount of securi-
ties, cash or other property receivable upon such
<PAGE>
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consolidation, merger, statutory exchange, sale or
conveyance is not the same for each share of
Common Stock in respect of which such rights of
election shall not have been exercised ("non-
electing share"), then for the purpose of this
subsection (VIII) the kind and amount of securities,
cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or
conveyance for each non-electing share shall be
deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares).
Thereafter, the holders of the Convertible Pre-
ferred Stock shall be entitled to appropriate
adjustments with respect to their conversion
rights to the end that the provisions set forth in
this paragraph (iii) shall correspondingly be made
applicable, as nearly as may reasonably be, in
relation to any shares of stock or other securi-
ties or property thereafter deliverable on the
conversion of the Convertible Preferred Stock.
Any such adjustment shall be approved by a firm of
independent public accountants, evidenced by a
certificate to that effect delivered to the
conversion agent; and any adjustment so approved
shall for all purposes hereof conclusively be
deemed to be an appropriate adjustment.
The above provisions of this subsec-
tion (VIII) shall similarly apply to successive
consolidations, mergers, statutory exchanges,
sales or conveyances.
(iv) Upon any conversion or redemption of
shares of Convertible Preferred Stock, the shares
of Convertible Preferred Stock so converted or
redeemed shall have the status of authorized and
unissued shares of Series Preferred Stock, and the
number of shares of Series Preferred Stock which
the Corporation shall have authority to issue
shall not be decreased by the conversion or
redemption of shares of Convertible Preferred
Stock.
(v) The holders of shares of Convertible
Preferred Stock shall have no voting rights
whatsoever, except for any voting rights to which
<PAGE>
- 18 -
they may be entitled under the laws of the State
of Delaware, and except as follows:
(I) If and whenever at any time or times
dividends payable on the Convertible Preferred
Stock or on any other Parity Preferred Stock shall
have been in arrears and unpaid in an aggregate
amount equal to or exceeding the amount of dividends
payable thereon for six quarterly periods,
then the holders of Parity Preferred Stock shall
have, in addition to the other voting rights set
forth herein, the exclusive right, voting sepa-
rately as a class, to elect two directors of the
Corporation, such directors to be in addition to
the number of directors constituting the Board of
Directors immediately prior to the accrual of such
right, the remaining directors to be elected by
the other class or classes of stock entitled to
vote therefor at each meeting of stockholders held
for the purpose of electing directors. Such
voting right shall continue until such time as all
cumulative dividends accumulated on all the Parity
Preferred Stock having cumulative dividends shall
have been paid in full and until any noncumulative
dividends payable on all the Parity Preferred
Stock having noncumulative dividends shall have
been paid regularly for at least one year, at
which time such voting right of the holders of the
Parity Preferred Stock shall terminate, subject to
revesting in the event of each and every subse-
quent event of default of the character indicated
above.
Whenever such voting right shall have vested,
such right may be exercised initially either at a
special meeting of the holders of the Parity
Preferred Stock, called as hereinafter provided,
or at any annual meeting of stockholders held for
the purpose of electing directors, and thereafter
at each successive annual meeting.
At any time when such voting right shall have
vested in the holders of the Parity Preferred
Stock, and if such right shall not already have
been initially exercised, a proper officer of the
Corporation shall, upon the written request of the
holders of record of 10% in number of shares of
the Parity Preferred Stock then outstanding,
addressed to the Secretary of the Corporation,
<PAGE>
- 19 -
call a special meeting of the holders of the
Parity Preferred Stock and of any other class or
classes of stock having voting power with respect
thereto for the purpose of electing directors.
Such meeting shall be held at the earliest practi-
cable date upon the notice required for annual
meetings of stockholders at the place for holding
of annual meetings of stockholders of the Corpora-
tion, or, if none, at a place designated by the
Secretary of the Corporation. If such meeting
shall not be called by the proper officers of the
Corporation within 30 days after the personal
service of such written request upon the Secretary
of the Corporation, or within 30 days after
mailing the same within the United States of
America, by registered mail, addressed to the
Secretary of the Corporation at its principal
office (such mailing to be evidenced by the
registry receipt issued by the postal authori-
ties), then the holders of record of 10% in number
of shares of the Parity Preferred Stock then
outstanding may designate in writing one of their
number to call such meeting at the expense of the
Corporation, and such meeting may be called by
such person so designated upon the notice required
for annual meetings of stockholders and shall be
held at the same place as is elsewhere provided
for in this subsection (I). Any holder of the
Parity Preferred Stock shall have access to the
stock books of the Corporation for the purpose of
causing a meeting of stockholders to be called
pursuant to the provisions of this paragraph.
Notwithstanding the provisions of this paragraph,
however, no such special meeting shall be called
during a period within 90 days immediately preced-
ing the date fixed for the next annual meeting of
stockholders.
At any meeting held for the purpose of
electing directors at which the holders of the
Parity Preferred Stock shall have the right to
elect directors as provided herein, the presence
in person or by proxy of the holders of 33-1/3% of
the then outstanding shares of the Parity Pre-
ferred Stock shall be required and be sufficient
to constitute a quorum of the Parity Preferred
Stock for the election of directors by the Parity
Preferred Stock. At any such meeting or adjourn-
ment thereof (A) the absence of a quorum of the
<PAGE>
- 20 -
holders of the Parity Preferred Stock shall not
prevent the election of directors other than those
to be elected by the holders of the Parity Preferred
Stock and the absence of a quorum or
quorums of the holders of other classes of capital
stock entitled to elect such other directors shall
not prevent the election of directors to be
elected by the holders of the Parity Preferred
Stock and (B) in the absence of a quorum of the
holders of any class of stock entitled to vote for
the election of directors, a majority of the
holders present in person or by proxy of such
class shall have the power to adjourn the meeting
for the election of directors which the holders of
such class are entitled to elect, from time to
time, without notice other than announcement at
the meeting, until a quorum shall be present.
The directors elected pursuant to this
subsection (I) shall serve until the next annual
meeting or until their respective successors shall
be elected and shall qualify; provided, however,
-------- -------
that when the right of the holders of the Parity
Preferred Stock to elect directors as herein
provided shall terminate, the terms of office of
all persons so elected by the holders of the
Parity Preferred Stock shall terminate, and the
number of directors of the Corporation shall
thereupon be such number as may be provided in the
By-Laws of the Corporation irrespective of any
increase made pursuant to this subsection (I).
(II) So long as any shares of the Convertible
Preferred Stock remain outstanding, the Corpora-
tion will not, either directly or indirectly or
through merger or consolidation with any other
corporation:
(a) without the affirmative vote at a meeting
or the written consent with or without a meeting
of the holders of at least 66-2/3% in number of
shares of the Series Preferred Stock of all series
then outstanding, (A) create any class or classes
of stock ranking equal or prior to the Series
Preferred Stock either as to dividends or upon
liquidation or increase the authorized number of
shares of any class or classes of stock ranking
equal or prior to the Series Preferred Stock
either as to dividends or upon liquidation,
<PAGE>
- 21 -
(B) amend, alter or repeal any of the provisions
of the Certificate of Incorporation so as to
affect adversely the preferences, special rights
or powers of the Series Preferred Stock or
(C) authorize any reclassification of the Series
Preferred Stock;
(b) without the affirmative vote at a meeting
or the written consent with or without a meeting
of the holders of at least 66-2/3% in number of
shares of the Convertible Preferred Stock then
outstanding, amend, alter or repeal any of the
provisions hereof so as to affect adversely the
preferences, special rights or powers of the
Convertible Preferred Stock; or
(c) without the affirmative vote at a meeting
or the written consent with or without a meeting
of the holders of at least a majority in number of
shares of the Series Preferred Stock of all series
then outstanding, increase the authorized number
of shares of the Series Preferred Stock.
(vi) The Convertible Preferred Stock is
exchangeable in whole at the option only of the
Corporation on any dividend payment date beginning
June 15, 1989, for the Corporation's 5-1/2%
Convertible Subordinated Debentures due June 15,
2017 (the "Debentures") as described in the
Corporation's Registration Statement on Form S-3
(Registration No. 33-12264), as filed with the
Securities and Exchange Commission. Holders of
outstanding shares of Convertible Preferred Stock
will be entitled to receive $25 principal amount
of Debentures in exchange for each share of
Convertible Preferred Stock held by them at the
time of exchange. The Corporation will mail to
each record holder of the Convertible Preferred
Stock written notice of its intention to exchange
not less than 20 nor more than 60 days prior to
the date of exchange. Prior to giving notice of
intention to exchange, the Corporation shall
execute and deliver with a bank or trust company
selected by the Corporation an Indenture substan-
tially in the form filed as an Exhibit to such
Registration Statement with such changes as may be
required by law, stock exchange rule or usage.
The Corporation will cause the Debentures
<PAGE>
- 22 -
to be authenticated on the dividend payment date
on which the exchange is effective; at such time
the rights of the holders of Convertible Preferred
Stock as stockholders of the Company shall cease
(except the right to receive accumulated and
unpaid dividends to the date of exchange), and the
shares of Convertible Preferred Stock shall no
longer be deemed outstanding and shall represent
only the right to receive the Debentures. The
Debentures will be delivered to the persons
entitled thereto upon surrender to the Corporation
or its agent appointed for that purpose of the
certificates for the shares of Convertible
Preferred Stock being exchanged therefor. If the
Corporation has not paid full cumulative dividends
on the Convertible Preferred Stock to the date of
exchange (or set aside a sum therefor) the Con-
vertible Preferred Stock may not be exchanged for
the Debentures.
(vii) The shares of the Convertible Preferred
Stock may be redeemed at the option of the Corpora-
ration as a whole at any time, or from time to
time in part, upon not less than 25 nor more than
60 days' prior notice mailed to the holders of the
shares to be redeemed at their addresses as shown
on the stock books of the Corporation, at the
following redemption prices, but the shares of the
Convertible Preferred Stock may not be redeemed
before March 15, 1989, unless the daily market
price (as defined in paragraph (iii)(IV)(d)) of the
Common Stock for any 20 trading days during a
period of 30 consecutive trading days ending
within five trading days before the date notice of
redemption is mailed to each holder equals or
exceeds 140% of the Conversion Price then in
effect. If redeemed during the 12-month period
beginning March 15,
Year Price Year Price
1987 $26.38 1993 $25.55
1988 26.24 1994 25.41
1989 26.10 1995 25.28
1990 25.96 1996 25.14
1991 25.83 1997
1992 25.69 and there-
after 25.000
<PAGE>
- 23 -
in each case together with an amount equal to all
dividends (whether or not earned or declared)
accumulated and unpaid to the date fixed for
redemption.
If full cumulative dividends on the Convert-
ible Preferred Stock have not been paid, the
Convertible Preferred Stock may not be redeemed in
part and the Corporation may not purchase or
acquire any shares of the Convertible Preferred
Stock otherwise than pursuant to a purchase or
exchange offer made on the same terms to all
holders of the Convertible Preferred Stock. If
less than all the outstanding shares of Convert-
ible Preferred Stock are to be redeemed, the
Corporation will select those to be redeemed by
lot or a substantially equivalent method. Upon
such redemption date, holders of shares of Con-
vertible Preferred Stock called for redemption
shall cease to be stockholders with respect to
such shares and thereafter such shares shall no
longer be transferable on the books of the Corpo-
ration and such holders shall have no interest or
claim against the Corporation with respect to such
shares except the right to receive payment of the
redemption price upon surrender of their certifi-
cates.
(viii) No consent of the holders of the Con-
vertible Preferred Stock shall be required for
(i) the creation of any indebtedness of any kind
of the Corporation, (ii) the creation of any class
of stock of the Corporation ranking junior as to
dividends or upon liquidation to the Series
Preferred Stock or (iii) any increase or decrease
in the amount of authorized Common Stock or any
increase, decrease or change in the par value
thereof or in any other terms thereof.
(ix) The Board reserves the right by subse-
quent amendment of this resolution from time to
time to increase (subject to the provisions of
paragraph (v)(II)(c)) or decrease the number of
shares which constitute the Convertible Preferred
Stock (but not below the number of shares thereof
then outstanding) and in other respects to amend
<PAGE>
- 24 -
this resolution within the limitations provided by law, this
resolution and the Certificate of Incorporation.
PART II - COMMON STOCK
(g) All shares of Common Stock shall be identical with
each other in every respect. The shares of Common Stock shall
entitle the holders thereof to one vote for each share upon all
matters upon which stockholders have the right to vote.
(h) The Common Stock is subject to all the powers,
rights, privileges, preferences and priorities of the Series
Preferred Stock as are stated and expressed herein and as shall
be stated and expressed in any resolution or resolutions
adopted by the Board of Directors pursuant to authority
expressly granted to and vested in it by the provisions of this
Section 2.
ARTICLE V
Restriction on Dividends
------------------------
No dividend shall be declared or paid which shall impair
the capital of the Corporation nor shall any distribution of
assets be made to any stockholder unless the value of the
assets of the Corporation remaining after such payment or
distribution is at least equal to the aggregate of its debts,
liabilities and capital. A director shall be fully protected
in relying in good faith upon the books of account of the
Corporation or statements prepared by any of its officers or by
independent public accountants as to the value and amount of
the assets, liabilties, net profits, capital stock and surplus
of the Corporation, or any other facts pertinent to the
existence and amount of surplus or other funds from which
dividends might properly be declared and paid.
ARTICLE VI
Board of Directors
------------------
SECTION 1. Powers of the Board of Directors. In
---------------------------------
furtherance and not in limitation of the powers conferred by
statute, the Board of Directors of the Corporation is expressly
authorized:
(a) To authorize and cause to be executed mortgages
and liens upon the real and personal property of the
Corporation.
<PAGE>
- 25 -
(b) To determine the use and disposition of any
surplus and net profits of the Corporation, including the
determination of the amount of working capital required, to
set apart out of any of the funds of the Corporation,
whether or not available for dividends, a reserve or
reserves for any proper purpose and to abolish any such
reserve in the manner in which it was created.
(c) To designate, by resolution passed by a majority
of the whole Board, one or more committees, each committee
to consist of one or more directors of the Corporation,
which, to the extent provided in the resolution designating
the committee or in the By-Laws of the Corporation, shall
have and may exercise subject to the provisions of the
General Corporation Law of Delaware the powers of the Board
of Directors in the management of the business and affairs
of the Corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may require
it. Such committee or committees shall have such name or
names as may be provided in the By-Laws of the Corporation
or as may be determined from time to time by resolution
adopted by the Board of Directors.
(d) To grant rights or options entitling the holders
thereof to purchase from the Corporation shares of its
capital stock of any class or series. The terms upon
which, the time or times at or within which, and the price
or prices at which any such rights or options may be issued
and any such shares may be purchased from the Corporation
upon the exercise of any such right or option, shall be
determined by the Board of Directors. In the absence of
actual fraud in the transaction, the judgment of the Board
of Directors as to the consideration for the issuance of
such rights or options and for the issuance of shares of
capital stock upon exercise thereof and the sufficiency of
such consideration shall be conclusive. No such rights or
options shall be invalidated or in any way affected by the
fact that any director shall be a grantee thereof or shall
vote for the issuance of such rights or options to himself
or for any plan pursuant to which he may receive any such
rights or options.
(e) To adopt or assume such plans as may from time to
time be approved by it for the purchase by officers or
employees of the Corporation of shares of capital stock of
the Corporation of any class or series. The terms upon
which, the time or times at or within which, and the price
or prices at which shares may be purchased from the
Corporation pursuant to such a plan shall be determined by
the Board of Directors in the plan. In the absence of
actual fraud in the transaction, the judgment of the Board
<PAGE>
- 26 -
of Directors as to the consideration for the issuance of
such shares and the sufficiency thereof shall be
conclusive. No such plan which is not at the time of
adoption or assumption unreasonable or unfair shall be
invalidated or in any way affected because any director
shall be entitled to purchase shares of capital stock of
the Corporation thereunder and shall vote for any such plan.
(f) To adopt or assume and carry out such plans as
may from time to time be approved by it for the
distribution among the officers or employees of the
Corporation, or any of them, in addition to their regular
salaries or wages, of part of the earnings of the
Corporation in consideration for or in recognition of the
services rendered by such officers or employees or as an
inducement to future efforts. No such plan which is not at
the time of adoption or assumption unreasonable or unfair
shall be invalidated or in any way affected because any
director shall be a beneficiary thereunder or shall vote
for any plan under which he may benefit or for any
distribution thereunder in which he may participate.
(g) To adopt or assume and carry out such pension,
deferred compensation, profit-sharing or retirement plans
as may from time to time be approved by it, providing for
pensions, deferred compensation, profit-sharing plan
benefits or retirement income for officers or employees of
the Corporation, in consideration for or in recognition of
the services rendered by such officers or employees or as
an inducement to future efforts. No such plan which is not
at the time of adoption or assumption unreasonable or
unfair shall be invalidated or in any way affected because
any director shall be a beneficiary thereunder or shall
vote for any plan under which he may benefit or for any
distribution thereunder in which he may participate.
(h) To exercise, in addition to the powers and
authorities hereinbefore or by law conferred upon it, any
such powers and authorities and do all such acts and things
as may be exercised or done by the Corporation, subject,
nevertheless, to the provisions of the laws of the State of
Delaware and of this Certificate of Incorporation and to
the By-Laws of the Corporation.
SECTION 2. Reliance on Books. A director shall be fully
------------------
protected in relying in good faith upon the books of account of
the Corporation or statements prepared by any of its officers
or by independent public accountants as to the value and amount
of the assets, liabilities and/or net profits of the
Corporation or any facts pertinent to the existence and amount
of surplus or other funds with which the Corporation's capital
stock might properly be purchased or redeemed.
<PAGE>
- 27 -
SECTION 3. Classification of the Board of Directors.
-----------------------------------------
(a) Subject to the rights of the holders of any class
or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, the number of
the directors of the Corporation shall be fixed from time
to time by or pursuant to the By-Laws of the Corporation.
The directors, other than those who may be elected by the
holders of the Preferred Stock or any other class or series
of stock having a preference over the Common Stock as to
dividends or upon liquidation pursuant to the terms of this
Certificate of Incorporation or any resolution or
resolutions providing for the issue of such class or series
of stock adopted by the Board of Directors, shall be
classified, with respect to the time for which they
severally hold office, into three classes, as nearly equal
in number as possible, as shall be provided in the By-Laws
of the Corporation, one class to be originally elected for
a term expiring at the annual meeting of stockholders to be
held in 1988, another class to be originally elected for a
term expiring at the annual meeting of stockholders to be
held in 1989, and another class to be originally elected
for a term expiring at the annual meeting of stockholders
to be held in 1990, with each class to hold office until
its successors are elected and qualified. At each annual
meeting of the stockholders of the Corporation, the date of
which shall be fixed by or pursuant to the By-Laws of the
Corporation, the successors of the class of directors whose
term expires at that meeting shall be elected to hold
office for a term expiring at the annual meeting of
stockholders held in the third year following the year of
their election. Unless and except to the extent that the
By-Laws of the Corporation shall so require, the election
of directors need not be by written ballot. No decrease in
the number of directors constituting the Board of Directors
shall shorten the term of any incumbent director.
(b) Subject to the rights of the holders of any class
or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, newly created
directorships resulting from any increase in the number of
directors may be filled by the Board of Directors, or as
otherwise provided in the By-Laws, and any vacancies on the
Board of Directors resulting from death, resignation,
removal or other cause shall only be filled by the
affirmative vote of a majority of the remaining directors
then in office, even though less than a quorum of the Board
of Directors, or by a sole remaining director, or as
otherwise provided in the By-Laws. Any director elected in
accordance with the preceding sentence of this Paragraph
(b) shall hold office for the remainder of the full term of
<PAGE>
- 28 -
the class of directors in which the new directorship was
created or the vacancy occurred and until such director's
successor shall have been elected and qualified.
(c) Subject to the rights of the holders of any class
or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, any director may
be removed from office only for cause, and in such case,
only by the affirmative vote of the holders of a majority
of the combined voting power of the then outstanding shares
of stock of all classes and series of the Corporation
entitled to vote generally in the election of directors
("Voting Stock"), voting together as a single class. For
purposes of this Paragraph (c), "cause" shall mean the
wilful and continuous failure of a director substantially
to perform such director's duties to the Corporation (other
than any such failure resulting from incapacity due to
physical or mental illness) or the wilful engaging by a
director in gross misconduct materially and demonstrably
injurious to the Corporation. Any officer of the
Corporation may be removed at any time in such manner as
provided in the By-Laws of the Corporation.
(d) In addition to any requirements of law and any
other provisions of this Certificate of Incorporation or
any resolution or resolutions of the Board of Directors
adopted pursuant to Article IV of this Certificate of
Incorporation (and notwithstanding the fact that a lesser
percentage may be specified by law or this Certificate of
Incorporation or any such resolution or resolutions), the
affirmative vote of the holders of 80% or more of the
combined voting power of the then outstanding shares of
Voting Stock, voting together as a single class, shall be
required to amend, alter or repeal, or adopt any provision
inconsistent with, this Section 3.
Article VII
Meetings of Stockholders
------------------------
SECTION 1. Subject to the rights of the holders of any
class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, any action required
or permitted to be taken by the stockholders of the Corporation
must be effected at a duly called annual or special meeting of
stockholders of the Corporation and may not be effected by any
consent in writing by such stockholders. Except as otherwise
required by law and subject to the rights of the holders of the
Preferred Stock or any other class or series of stock having a
preference over the Common Stock as to dividends or upon
<PAGE>
- 29 -
liquidation, special meetings of stockholders of the
Corporation may be called only by the Board of Directors
pursuant to a resolution approved by a majority of the entire
Board of Directors or as otherwise provided in the By-Laws of
the Corporation. .
SECTION 2. In addition to any requirements of law and any
other provisions of this Certificate of Incorporation or any
resolution or resolutions of the Board of Directors adopted
pursuant to Article IV of this Certificate of Incorporation
(and notwithstanding the fact that a lesser percentage may be
specified by law or this Certificate of Incorporation or any
such resolution or resolutions), the affirmative vote of the
holders of 80% or more of the combined voting power of the then
outstanding shares of Voting Stock, voting together as a single
class, shall be required to amend, alter or repeal, or adopt
any provision inconsistent with, this Article VII.
ARTICLE VIII
Transactions with Directors or Officers
---------------------------------------
No contract or transaction between the Corporation and one
or more of its directors or officers, or between the
Corporation and any other corporation, partnership,
association, or other organization in which one or more of its
directors or officers are directors or officers, or have a
financial interest, shall be void or voidable solely for this
reason, or solely because the director or officer is present at
or participates in the meeting of the Board of Directors or
committee thereof which authorizes the contract or transaction,
or solely because his or their votes are counted for such
purpose, if:
(1) The material facts as to his relationship or
interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the
committee, and the Board of Directors or committee in good
faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less
than a quorum; or
(2) The material facts as to his relationship or
interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote
thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(3) The contract or transaction is fair as to the
<PAGE>
- 30 -
Corporation as of the time it is authorized, approved or
ratified, by the Board of Directors, a committee thereof,
or the stockholders.
Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board
of Directors or of a committee which authorizes the contract or
transaction.
ARTICLE IX
Liability of Directors
----------------------
(a) To the fullest extent that the General
Corporation Law of the State of Delaware as it exists on
the date hereof or as it may hereafter be amended permits
the limitation or elimination of the liability of
directors, no director of the Corporation shall be liable
to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director. No amendment
to or repeal of this Article shall apply to or have any
effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts
or omissions of such director occurring prior to such
amendment or repeal.
(b) In addition to any requirements of law and any
other provisions of this Certificate of Incorporation or
any resolution or resolutions of the Board of Directors
adopted pursuant to Article IV of this Certificate of
Incorporation (and notwithstanding the fact that a lesser
percentage may be specified by law or this Certificate of
Incorporation or any such resolution or resolutions), the
affirmative vote of the holders of 80% or more of the
combined voting power of the then outstanding shares of
Voting Stock, voting together as a single class, shall be
required to amend, alter or repeal, or adopt any provision
inconsistent with, this Article IX.
ARTICLE X
Compromise or Arrangement between Corporation
---------------------------------------------
and its Creditors or Stockholders
---------------------------------
Whenever a compromise or arrangement is proposed between
this Corporation and its creditors or any class of them and/or
between this Corporation and its stockholders or any class of
them, any court of equitable jurisdiction within the State of
Delaware may, on the application in a summary way of this
Corporation or of any creditor or stockholder thereof, or on
the application of any receiver or receivers appointed for this
<PAGE>
- 31 -
Corporation under the provisions of Section 291 of Title 8 of
the Delaware Code, or on the application of trustees in
dissolution, or of any receiver or receivers appointed for this
Corporation under the provisions of Section 279 of Title 8 of
the Delaware Code, order a meeting of the creditors or class of
creditors, and/or of the stockholders or class of stockholders,
of this Corporation, as the case may be, to be summoned in such
manner as said court directs. If a majority in number
representing three-fourths in value of the creditors or class
of creditors, and/or of the stockholders or class of
stockholders, of this Corporation as the case may be, agrees to
any compromise or arrangement and to any reorganization of this
Corporation as a consequence of such compromise or arrangement,
the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application
has been made, be binding upon all the creditors or class of
creditors, and/or upon all the stockholders or class of
stockholders, of this Corporation, as the case may be, and also
on this Corporation.
ARTICLE XI
Reservation of Right to Amend
-----------------------------
Certificate of Incorporation
----------------------------
The Corporation reserves the right to amend, alter, change
or repeal any provisions contained in this Certificate of
Incorporation in the manner now or hereafter prescribed by law,
and all the provisions of this Certificate of Incorporation and
all rights and powers conferred in this Certificate of
Incorporation on stockholders, directors and officers are
subject to this reserve power.
ARTICLE XII
Adopting and Amending the By-Laws
---------------------------------
SECTION 1. The Board of Directors may adopt, repeal, alter
or amend the By-Laws of the Corporation by the vote of a
majority of the entire Board of Directors. Without limiting
its authority to adopt, repeal, alter or amend the By-Laws of
the Corporation, the Board of Directors is expressly authorized
to adopt By-Laws which a majority of the entire Board of
Directors may deem necessary or desirable for the efficient
conduct of the affairs of the Corporation, including, without
limitation, provisions governing the conduct of, and the
matters which may properly be brought before, meetings of the
stockholders and provisions specifying the manner and extent to
which prior notice shall be given of the submission of
proposals to be considered at any meeting of stockholders or of
nominations for the election of directors to be held at any
such meeting.
<PAGE>
- 32 -
SECTION 2. In addition to any requirements of law and any
other provisions of this Certificate of Incorporation or any
resolution or resolutions of the Board of Directors adopted
pursuant to Article IV of this Certificate of Incorporation
(and notwithstanding the fact that a lesser percentage may be
specified by law, this Certificate of Incorporation or any such
resolution or resolutions), the stockholders may not adopt,
amend, alter or repeal any provision of the By-Laws of the
Corporation, except by the affirmative vote of the holders of
80% or more of the combined voting power of the then
outstanding shares of Voting Stock, voting together as a single
class, unless recommended to the stockholders for their
approval by two-thirds of the Disinterested Directors as such
term is defined in Article XIII of this Certificate of
Incorporation.
SECTION 3. In addition to any requirements of law and any
other provisions of this Certificate of Incorporation or any
resolution or resolutions of the Board of Directors adopted
pursuant to Article IV of this Certificate of Incorporation
(and notwithstanding the fact that a lesser percentage may be
specified by law or this Certificate of Incorporation or any
such resolution or resolutions), the affirmative vote of the
holders of 80% or more of the combined voting power of the then
outstanding shares of Voting Stock, voting together as a single
class, shall be required to amend, alter or repeal, or adopt
any provision inconsistent with, this Article XII.
ARTICLE XIII
Approval of Business Combinations
---------------------------------
The vote of stockholders of the Corporation required to
approve Business Combinations (as hereinafter defined) shall be
as set forth in this Article XIII.
SECTION 1. In addition to any affirmative vote required by
law or by this Certificate of Incorporation or any resolution
or resolutions of the Board of Directors adopted pursuant to
Article IV of this Certificate of Incorporation, and except as
otherwise expressly provided in Section 3 of this Article XIII:
(a) any merger or consolidation of the Corporation
or any Subsidiary with (i) any Interested Stockholder or
(ii) any other corporation (whether or not itself an
Interested Stockholder) which is, or after such merger or
consolidation would be, an Affiliate or Associate of an
Interested Stockholder; or
(b) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a
series of transactions) to or with any Interested
Stockholder or any Affiliate or Associate of any Interested
<PAGE>
- 33 -
Stockholder of any assets of the Corporation or of any
Subsidiary having an aggregate Fair Market Value equal to
10% or more of the consolidated stockholders' equity of the
Corporation and its subsidiaries as shown in the most
recent audited consolidated balance sheet of the
Corporation and its consolidated subsidiaries; or
(c) the issuance, sale or transfer by the
Corporation or any Subsidiary (in one transaction or a
series of transactions) to any Interested Stockholder or
any Affiliate or Associate of any Interested Stockholder of
any securities of the Corporation or any Subsidiary in
exchange for cash, securities or other property (or a
combination thereof) having an aggregate Fair Market Value
equal to 10% or more of the consolidated stockholders'
equity of the Corporation and its subsidiaries, as shown in
the most recent audited consolidated balance sheet of the
Corporation and its consolidated subsidiaries, other than
the issuance of securities upon the conversion of
convertible securities of the Corporation or any Subsidiary
which were not acquired by such Interested Stockholder (or
such Affiliate or Associate) from the Corporation or a
Subsidiary; or
(d) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by
or on behalf of any Interested Stockholder or any Affiliate
or Associate of any Interested Stockholder; or
(e) any reclassification of securities (including
any reverse stock split) or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries, or any other
transaction (whether or not with or into or otherwise
involving any Interested Stockholder), which in any such
case has the effect, directly or indirectly, of increasing
the proportionate share of the outstanding shares of any
class or series of stock or securities convertible into
stock of the Corporation or any Subsidiary which is
directly or indirectly beneficially owned by any Interested
Stockholder or any Affiliate or Associate of any Interested
Stockholder;
shall not be consummated without (i) the affirmative vote of
the holders of at least 80% of the combined voting power of the
then outstanding shares of Voting Stock and (ii) the
affirmative vote of a majority of the combined voting power of
the then outstanding shares of Voting Stock held by
Disinterested Stockholders, in each case voting together as a
single class. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that
<PAGE>
- 34 -
a lesser percentage may be specified, by law or by this
Certificate of Incorporation or any resolution or resolutions
of the Board of Directors adopted pursuant to Article IV of
this Certificate of Incorporation or in any agreement with any
national securities exchange or otherwise.
SECTION 2. The term "Business Combination" as used in this
Article XIII shall mean any transaction which is referred to in
any one or more of Paragraphs (a) through (e) of Section 1 of
this Article XIII.
SECTION 3. The provisions of Section 1 of this Article
XIII shall not be applicable to any particular Business
Combination, and such Business Combination shall require only
such affirmative vote as is required by law and any other
provision of this Certificate of Incorporation and any
resolution or resolutions of the Board of Directors adopted
pursuant to Article IV of this Certificate of Incorporation, if
all the conditions specified in either of the following
Paragraphs (a) or (b) are met:
(a) such Business Combination shall have been.
approved by a majority of the Disinterested Directors; or
(b) all the six conditions specified in the
following clauses (i) through (vi) shall have been met;
(i) the transaction constituting the Business
Combination shall provide for a consideration to be
received by holders of Common Stock in exchange for all
their shares of Common Stock, and the aggregate amount of
the cash and the Fair Market Value as of the date of the
consummation of the Business Combination of any
consideration other than cash to be received per share by
holders of Common Stock in such Business Combination shall
be at least equal to the higher of the following:
(A) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid in order to acquire any
shares of Common Stock beneficially owned by the Interested
Stockholder which were acquired (i) within the two-year
period immediately prior to the Announcement Date or (ii)
in the transaction in which it became an Interested
Stockholder, whichever is higher; and
(B) the Fair Market Value per share of Common
Stock on the Announcement Date or on the Determination
Date, whichever is higher; and
(ii) if the transaction constituting the Business
Combination shall provide for a consideration to be
<PAGE>
- 35 -
received by holders of any class or series of outstanding
Voting Stock other than Common Stock, the aggregate amount
of the cash and the Fair Market Value as of the date of the
consummation of the Business Combination of any
consideration other than cash to be received per share by
holders of shares of such Voting Stock shall be at least
equal to the highest of the following (it being intended
that the requirements of this clause (ii) shall be required
to be met with respect to every class and series of such
outstanding Voting Stock, whether or not the Interested
Stockholder beneficially owns any shares of a particular
class or series of Voting Stock):
(A) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid in order to acquire any
shares of such class or series of Voting Stock beneficially
owned by the Interested Stockholder which were acquired (i)
within the two-year period immediately prior to the
Announcement Date or (ii) in the transaction in which it
became an Interested Stockholder, whichever is higher;
(B) (if applicable) the highest preferential
amount per share to which the holders of shares of such
class or series of Voting Stock are entitled in the event
of the redemption thereof or of any voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation; and
(C) the Fair Market Value per share of such
class or series of Voting Stock on the Announcement Date or
on the Determination Date, whichever is higher; and
(iii) the consideration to be received by holders of
a particular class or series of outstanding Voting Stock
(including Common Stock) shall be in cash or in the same
form as was previously paid in order to acquire shares of
such class or series of Voting Stock which are beneficially
owned by the Interested Stockholder and, if the Interested
Stockholder beneficially owns shares of any class or series
of Voting Stock which were acquired with varying forms of
consideration, the form of consideration to be received by
holders of such class or series of Voting Stock shall be
either cash or the form used to acquire the largest number
of shares of such class or series of Voting Stock
beneficially owned by it; and
(iv) after such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of
such Business Combination:
<PAGE>
-36 -
(A) except as approved by a majority of the
Disinterested Directors, there shall have been no failure
to declare and pay at the regular dates therefor the full
amount of any dividends (whether or not cumulative) payable
on the Preferred Stock or any class or series of stock
having a preference over the Common Stock as to dividends
or upon liquidation;
(B) there shall have been (x) no reduction in
the annual rate of dividends paid on the Common Stock
(except as necessary to reflect any subdivision of the
Common Stock), except as approved by a majority of the
Disinterested Directors, and (y) an increase in such annual
rate of dividends (as necessary to prevent any such
reduction) in the event of any reclassification (including
any reverse stock split), recapitalization, reorganization
or any similar transaction which has the effect of reducing
the number of outstanding shares of the Common Stock,
unless the failure so to increase such annual rate is
approved by a majority of the Disinterested Directors; and
(C) such Interested Stockholder shall not have
become the beneficial owner of any additional shares of
Voting Stock except as part of the transaction in which it
became an Interested Stockholder; and
(v) after such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall
not have received the benefit, directly or indirectly
(except proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial assistance
provided by the Corporation, whether in anticipation of or
in connection with such Business Combination or otherwise;
and
(vi) a proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall
be mailed to the stockholders of the Corporation at least
30 calendar days prior to the consummation of such Business
Combination (whether or not such proxy or information
statement is required to be mailed pursuant to such Act or
subsequent provisions).
SECTION 4. For the purposes of this Article XIII:
(a) A "person" shall mean any individual, firm,
corporation, partnership, trust or other entity.
<PAGE>
- 37 -
(b) "Interested Stockholder" shall mean any person
(other than the Corporation or any Subsidiary) who or which:
(1) is the beneficial owner, directly or indirectly,
of 20% or more of the combined voting power of the then
outstanding shares of Voting Stock; or
(2) is an Affiliate of the Corporation and at any
time within the two-year period immediately prior to the
date in question was the beneficial owner, directly or
indirectly, of 20% or more of the combined voting power of
the then outstanding shares of Voting Stock; or
(3) is an assignee of or has otherwise succeeded to
the beneficial ownership of any shares of Voting Stock
which were at any time within the two-year period
immediately prior to the date in question beneficially
owned by any Interested Stockholder, if such assignment or
succession, shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the Securities Act of
1933.
(c) "Disinterested Stockholder" shall mean a
stockholder of the Corporation (other than the Corporation
or a Subsidiary) who is not an Interested Stockholder or an
Affiliate or an Associate of an Interested Stockholder.
(d) A person shall be a "beneficial owner" of any
Voting Stock:
(1) which such person or any of its Affiliates
or Associates beneficially owns, directly or indirectly; or
(2) which such person or any of its Affiliates
or Associates has (a) the right to acquire (whether such
right is exercisable immediately or only after the passage
of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (b)
the right to vote or to direct the vote pursuant to any
agreement, arrangement or understanding; or
(3) which are beneficially owned, directly or
indirectly, by any other person with which such person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of Voting Stock.
(e) For the purposes of determining whether a person
is an Interested Stockholder pursuant to Paragraph (b) of
<PAGE>
- 38 -
this Section 4, the number of shares of Voting Stock deemed
to be outstanding shall include shares deemed owned by such
person through application of Paragraph (d) of this Section
4 but shall not include any other shares of Voting Stock
which may be issuable to other persons pursuant to any
agreement, arrangement or understanding or upon-exercise of
conversion rights, exchange rights, warrants or options, or
otherwise.
(f) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on December 16, 1986.
(g) "Subsidiary" shall mean any corporation of which
a majority of the outstanding stock having ordinary voting
power for the election of directors is owned by the
Corporation, by a Subsidiary or by the Corporation and one
or more Subsidiaries, provided, however, that for the
purposes of the definitions set forth in Paragraphs (b) and
(c) of this Section 4, the term "Subsidiary" shall mean
only a corporation of which a majority of each class of
equity security is owned by the Corporation, by a
Subsidiary or by the Corporation and one or more
Subsidiaries.
(h) "Disinterested Director" means any member of the
Board of Directors of the Corporation who is unaffiliated
with, and not a nominee of, the Interested Stockholder and
was a member of the Board of Directors prior to the time
that the Interested Stockholder became an Interested
Stockholder, and any successor of a Disinterested Director
who is unaffiliated with, and not a nominee of, the
Interested Stockholder and who is recommended to succeed a
Disinterested Director by a majority of the Disinterested
Directors then on the Board of Directors.
(i) "Fair Market Value" means: (1) in the case of
stock, the highest closing sale price during the 30
calendar day period immediately preceding the date in
question of a share of such stock on the New York Stock
Exchange Composite Tape, or, if such stock is not quoted on
the Composite Tape, on the New York Stock Exchange, or, if
such stock is not listed on such Exchange, on the principal
United States securities exchange registered under the
Securities Exchange Act of 1934 on which such stock is
listed, or, if such stock is not listed on any such
exchange, the highest closing sales price or bid quotation
with respect to a share of such stock during the 30
calendar day period preceding the date in question on the
<PAGE>
- 39 -
National Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or, if no such
quotations are available, the fair market value on the date
in question of a share of such stock as determined by a
majority of the Disinterested Directors in good faith; and
(2) in the case of stock of any class or series which is
not traded on any securities exchange or in the
over-the-counter market or in the case of property other
than cash or stock, the fair market value of such stock or
property, as the case may be, on the date in question as
determined by a majority of the Disinterested Directors in
good faith.
(j) "Announcement Date" means the date of first public
announcement of the proposed Business Combination.
(k) "Determination Date" means the date on which the
Interested Stockholder became an Interested Stockholder.
SECTION 5. A majority of the Disinterested Directors of
the Corporation shall have the power and duty to determine, on
the basis of information known to them after reasonable
inquiry, all facts necessary to determine compliance with this
Article XIII, including, without limitation, (a) whether a
person is an Interested Stockholder, (b) the number of shares
of Voting Stock beneficially owned by any person, (c) whether a
person is an Affiliate or Associate of another person, (d)
whether the requirements of Section 3 of this Article XIII have
been met with respect to any Business Combination, and (e)
whether the assets which are the subject of any Business
Combination have, or the consideration to be received for the
issuance or transfer of securities by the Corporation or any
Subsidiary in any Business Combination, has an aggregate Fair
Market Value equal to or in excess of 10% of the consolidated
stockholders' equity of the Corporation and its subsidiaries
reflected in the Corporation's most recent audited consolidated
balance sheet; and the good faith determination of a majority
of the Disinterested Directors on such matters shall be
conclusive and binding for all purposes of this Article XIII.
SECTION 6. Nothing contained in this Article XIII shall
be construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
SECTION 7. In addition to any requirements of law and
any other provisions of this Certificate of Incorporation or
any resolution or resolutions of the Board of Directors adopted
pursuant to Article IV of this Certificate of Incorporation
(and notwithstanding the fact that a lesser percentage may be
specified by law, this Certificate of Incorporation or any such
resolution or resolutions), the affirmative vote of the holders
<PAGE>
- 40 -
of 80% or more of the combined voting power of the then
outstanding shares of Voting Stock, voting together as a single
class, shall be required to amend, alter or repeal, or adopt
any provision inconsistent with, this Article XIII; provided,
however, that the affirmative vote of a majority of the
combined voting power of the then outstanding shares of Voting
Stock held by the Disinterested Stockholders (as defined in
Section 4 of Article XIII) voting together as a single class,
shall also be required to amend, alter or repeal, or adopt any
provision inconsistent with, this Article XIII.
4. This Restated Certificate of Incorporation was duly
adopted by the Board of Directors of the Corporation on April
22, 1987 in accordance with Section 245 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Paine Webber Group Inc. has caused
this certificate to be signed by Donald B. Matron, its Chairman
of the Board, President and Chief Executive Officer, and
attested by Sam Scott Miller, its Secretary, this 30th day of
April, 1987.
/s/ Donald B. Marron
--------------------------------------
Donald B. Marron,
Chairman of the Board, President
and Chief Executive Officer
[Seal]
Attest:
/s/ Sam Scott Miller
- ------------------------
Sam Scott Miller: Secretary
5511L
<PAGE>
State of Delaware PAGE 1
Office of the Secretary of State
------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF DESIGNATION OF "PAINE WEBBER GROUP
INC.", FILED IN THIS OFFICE ON THE FIFTEENTH DAY OF DECEMBER,
A.D. 1987, AT 8:30 O'CLOCK A.M.
/s/ Edward J. Freel
--------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION:
0795811 8100 7486524
DATE:
950092621 04-26-95
<PAGE>
CERTIFICATE OF THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS,
AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF,
WHICH HAVE NOT BEEN SET FORTH IN THE RESTATED CERTIFICATE OF
INCORPORATION OR IN ANY AMENDMENT THERETO, OF THE
7% CUMULATIVE CONVERTIBLE
EXCHANGEABLE VOTING PREFERRED
STOCK, SERIES A
($20 Par Value)
PAINE WEBBER GROUP INC.
--------------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
--------------------------------------
The undersigned DOES HEREBY CERTIFY that the fol-
lowing resolution was duly adopted on November 30, 1987, by
the Board of Directors of Paine Webber Group Inc., a Dela-
ware corporation (hereinafter called the "Corporation"),
pursuant to authority conferred upon the Board of Directors
by the provisions of the Restated Certificate of Incorpora-
tion, as amended (the "Certificate of Incorporation"), of
the Corporation;
RESOLVED, that the issuance of a series
of the Series Preferred Stock, par value $20
per share (the "Series Preferred Stock"),
which shall consist of 6,741,574 of the
15,400,000 shares of Series Preferred Stock
which the Corporation now has authority to
issue, be, and the same hereby is, autho-
rized, and this Board of Directors hereby
fixes the powers, designations, preferences
and relative, participating, optional or
other special rights, and the qualifications,
limitations or restrictions thereof, of the
shares of such series (in addition to the
powers, designations, preferences and rela-
tive, participating, optional or other spe-
cial rights, and the qualifications, limita-
tions or restrictions thereof, set forth in
<PAGE>
the Certificate of Incorporation which are
applicable to such series of Series Preferred
Stock) as follows:
(i) Except as otherwise specified
herein, defined terms herein, which may
be identified by the capitalization of
the first letter of each principal word
thereof, have the meanings assigned to
them in the Investment Agreement, by and
between Paine Webber Group Inc. and The
Yasuda Mutual Life Insurance Company,
dated as of November 30, 1987.
(ii) The designation of such series
of the Series Preferred Stock authorized
by this resolution shall be the 7% Cumu-
lative Convertible Exchangeable Voting
Preferred Stock, Series A ("Preferred
Stock"). The number of shares of Pre-
ferred Stock shall be 6,741,574.
(iii) (I) Holders of shares of Pre-
ferred Stock will be entitled to receive,
when and as declared by the Board of
Directors of the Corporation (the
"Board") out of assets of the Corpora-
tion legally available for payment, an
annual cash dividend of $3.115 per
share, payable in equal quarterly install-
ments on March 15, June 15, September 15
and December 15 (or, if any such day is
not a Business Day in New York City,
then on the next succeeding Business
Day) in each year (the "Dividend Payment
Dates") commencing the first Dividend
Payment Date following the Closing Date.
Dividends on the Preferred Stock will be
cumulative from the date of initial
issuance of any shares of Preferred
Stock. Dividends will be payable to
holders of record as they appear on the
stock books of the Corporation on such
record dates, not more than 60 days nor
less than 10 days preceding the payment
dates thereof, as shall be fixed by the
Board or a duly authorized committee
thereof. The Series A Preferred Stock
will rank on a parity as to dividends
with the Corporation's $1.375 Convert-
ible Exchangeable Preferred Stock. When
-2-
<PAGE>
dividends are not paid in full upon the
Preferred Stock and any other preferred
stock ranking on a parity as to divi-
dends with the Preferred Stock (such
other preferred stock and the Preferred
Stock hereinafter being collectively
referred to as "Parity Preferred
Stock"), all dividends declared upon
shares of Parity Preferred Stock will be
declared pro rata so that in all cases
the amount of dividends declared per
share on the Preferred Stock and such
other Parity Preferred Stock shall bear
to each other the same ratio that accu-
mulated and unpaid dividends per share
on the shares of Preferred Stock and
such other Parity Preferred Stock bear
to each other. Except as set forth in
the preceding sentence, unless full
cumulative dividends on the Preferred
Stock have been paid, no dividends (other
than in Common Stock of the Corporation
(as defined in paragraph (v)(I) below)
or any other stock of the Corporation
ranking junior to the Preferred Stock as
to dividends) may be paid or declared
and set aside for payment or other dis-
tribution made upon the Common Stock or
on any other stock of the Corporation
ranking junior to or on a parity with
the Preferred Stock as to dividends, nor
may any Common Stock or any other stock
of the Corporation ranking junior to or
on a parity with the Preferred Stock as
to dividends be redeemed, purchased or
otherwise acquired for any consideration
(or any payment made to or available for
a sinking fund for the redemption of any
shares of such stock) by the Corporation
(except by conversion into or exchange
for stock of the Corporation ranking
junior to the Preferred Stock as to
dividends). Dividends payable for any
partial dividend period shall be calcu-
lated on the basis of a 360-day year of
twelve (12) 30-day months.
(II) In the event that the Company
does not pay the cash dividend provided
for in subsection (I) on any Dividend
Payment Date, the Company shall consult
-3-
<PAGE>
with the holders of the Preferred Stock
to discuss what steps might be taken to
provide holders of the Preferred Stock
with a payment of an equivalent value
otherwise than in cash in lieu of such
cash dividend.
(iv) The shares of Preferred Stock
shall rank prior to the shares of Common
Stock and of any other class of stock of
the Corporation ranking junior to the
Series Preferred Stock upon liquidation,
so that in the event of any liquidation,
dissolution or winding up of the Corpo-
ration, whether voluntary or involun-
tary, the holders of the Preferred Stock
shall be entitled to receive out of the
assets of the Corporation available for
distribution to its stockholders, whether
from capital, surplus or earnings, before
any distribution is made to holders of
shares of Common Stock or any other such
junior stock, an amount equal to $44.50
per share (the "Liquidation Preference"
of a share of Preferred Stock) plus an
amount equal to all dividends (whether
or not earned or declared) accumulated
and unpaid on the shares of Preferred
Stock to the date of final distribution.
If, upon any liquidation, dissolution or
winding up of the Corporation, the assets
of the Corporation, or proceeds thereof,
distributable among the holders of
shares of Parity Preferred Stock shall
be insufficient to pay in full the pref-
erential amount aforesaid, then such
assets, or the proceeds thereof, shall
be distributable among such holders
ratably in accordance with the respec-
tive amounts which would be payable on
such shares if all amounts payable
thereon were payable in full. For the
purposes hereof, the voluntary sale,
conveyance, exchange or transfer (for
cash, shares of stock, securities or
other consideration) of all or substan-
tially all the property or assets of the
Corporation shall be deemed a voluntary
liquidation, dissolution or winding up
of the Corporation, but a consolidation
or merger of the Corporation with one or
-4-
<PAGE>
more other corporations shall not be
deemed to be a liquidation, dissolution
or winding up, voluntary or involuntary.
(v) (I) Shares of the Preferred
Stock shall not be convertible into
Shares of Common Stock prior to the
latest of (x) the expiration or early
termination of the waiting period under
the HSR Act, (y) the earlier of
(A) receipt by the Investor of approval
under the NJ Act and (B) the taking by
the Corporation of such steps as are
necessary to render such approval unnec-
essary, pursuant to Section 5.1(n) of
the Investment Agreement and (z) the
earlier of (A) approval by stockholders
of the Corporation of the convertibility
thereof into Common Stock, (B) the list-
ing of the Common Stock on the American
Stock Exchange, (C) the commencement of
a tender offer or exchange offer or
similar proposal for the Corporation's
Common Stock and (D) June 30, 1988.
Thereafter, subject to and upon compli-
ance with the provisions of this para-
graph (v), the holder of a share of
Preferred Stock shall have the right, at
his option, at any time, except that, if
such share is called for redemption, not
after the close of business on the date
fixed for such redemption, unless default
shall be made in the payment of the
redemption price, to convert such share
into that number of fully paid and
nonassessable shares of Common Stock
(calculated as to each conversion to the
nearest 1/10,000th of a share) obtained
by dividing the Liquidation Preference
of such share being converted by the
Conversion Price (as defined below) and
by surrender of such share so to be
converted, such surrender to be made in
the manner provided in subsection (II)
of this paragraph (v).
The term "Common Stock" shall mean
the Common Stock, $1 par value, of the
Corporation as the same exists at the
date of this Certificate or as such
stock may be constituted from time to
-5-
<PAGE>
time, except that for the purpose of
this paragraph (v), the term "Common
Stock" shall include any stock of any
class of the Corporation which has no
preference in respect of dividends or of
amounts payable in the event of any
voluntary or involuntary liquidation,
dissolution or winding up of the Cor-
poration and which is not subject to
redemption by the Corporation. However,
shares issuable on conversion of shares
of Preferred Stock shall include only
shares of the class designated as Common
Stock of the Corporation as of the Clos-
ing Date, or shares of any class or
classes resulting from any reclassifica-
tion or reclassifications thereof and
which have no preference in respect of
dividends or of amounts payable in the
event of any voluntary or involuntary
liquidation, dissolution or winding up
of the Corporation and which are not
subject to redemption by the Corpora-
tion; provided that if at any time there
--------
shall be more than one such resulting
class, the shares of each such class
then so issuable shall be substantially
in the proportion which the total number
of shares of such class resulting from
all such reclassifications bears to the
total number of shares of all such
classes resulting from all such reclass-
ifications.
The term "Conversion Price" shall
mean the Initial Conversion Price, as
adjusted in accordance with the provi-
sions of this paragraph (v).
(II) In order to exercise the con-
version privilege, the holder of each
share of Preferred Stock to be converted
shall surrender the certificate repre-
senting such share at the office of the
conversion agent for the Preferred Stock
in the Borough of Manhattan, City of New
York, appointed for such purpose by the
Corporation (the "conversion agent"),
with the Notice of Election to Convert
on the back of said certificate completed
and signed. Such notice shall be sub-
stantially in the following form:
-6-
<PAGE>
"NOTICE OF ELECTION TO CONVERT
The undersigned, being a holder of
the 7% Cumulative Convertible Exchange-
able Voting Preferred Stock, Series A
("Preferred Stock") of Paine Webber
Group Inc. irrevocably exercises the
right to convert _________ outstanding
shares of Preferred Stock on ___________,
19__, into shares of Common Stock of
Paine Webber Group Inc. in accordance
with the terms of the Preferred Stock,
and directs that the shares issuable and
deliverable upon the conversion, together
with any check in payment for fractional
shares, be issued and delivered in the
denominations indicated below to the
registered holder hereof unless a dif-
ferent name has been indicated below.
If shares are to be issued in the name
of a person other than the undersigned,
the undersigned will pay all transfer
taxes payable with respect thereto.
Dated:
Fill in for registration of
shares of Common Stock
if to be issued otherwise
than to the registered
holder:
_____________________
Name
_____________________
Address
_____________________ _____________________
(Please print name (Signature)
and address,
including postal
code number)
Denominations:____________________________"
-7-
<PAGE>
Unless the shares issuable on conversion
are to be issued in the same name as the
name in which such share of Preferred
Stock is registered, each share surren-
dered for conversion shall be accompa-
nied by instruments of transfer, in form
satisfactory to the Corporation, duly
executed by the holder or his duly author-
ized attorney and an amount sufficient
to pay any transfer or similar tax. A
payment shall be made on conversion for
dividends accumulated on the Preferred
Stock surrendered for conversion but not
for dividends on Common Stock delivered
on such conversion. As promptly as
practicable after the surrender of the
certificates for shares of Preferred
Stock as aforesaid, the Corporation
shall issue and shall deliver at such
office to such holder, or on his written
order, a certificate or certificates for
the number of full shares of Common
Stock issuable upon the conversion of
such shares in accordance with the pro-
visions of this paragraph (v), and any
fractional interest in respect of a
share of Common Stock arising upon such
conversion shall be settled as provided
in subsection (III) of this para-
graph (v).
Each conversion shall be deemed to
have been effected immediately prior to
the close of business on the date on
which the certificates for shares of
Preferred Stock shall have been surren-
dered and such notice received by the
Corporation as aforesaid, and the person
or persons in whose name or names any
certificate or certificates for shares
of Common Stock shall be issuable upon
such conversion shall be deemed to have
become the holder or holders of record
of the shares represented thereby at
such time on such date and such conver-
sion shall be at the Conversion Price in
effect at such time on such date. All
shares of Common Stock delivered upon
conversions of the Preferred Stock will
upon delivery be duly and validly issued
and fully paid and nonassessable, free
-8-
<PAGE>
of all liens and charges and not subject
to any preemptive rights.
(III) No fractional shares or scrip
representing fractions of shares of
Common Stock shall be issued upon con-
version of the Preferred Stock. Instead
of any fractional interest in a share of
Common Stock which would otherwise be
deliverable upon the conversion of a
share of Preferred Stock, the Corpora-
tion shall pay to the holder of such
share an amount in cash (computed to the
nearest 1/100th of one cent) equal to
the Average Market Price of the Common
Stock at the close of business on the
business day next preceding the day of
conversion. If more than one share
shall be surrendered for conversion at
one time by the same holder, the number
of full shares of Common Stock issuable
upon conversion thereof shall be computed
on the basis of the aggregate Liquida-
tion Preference of the shares of Pre-
ferred Stock so surrendered.
(IV) The Conversion Price shall be
adjusted from time to time as follows:
(a) In case the Corporation shall
hereafter (i) pay a dividend or make a
distribution on the Common Stock in
shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock
into a greater number of shares,
(iii) combine its outstanding shares of
Common Stock into a smaller number of
shares, or (iv) issue by reclassifica-
tion of the Common Stock any shares of
capital stock of the Corporation, the
Conversion Price in effect immediately
prior to such action shall be adjusted
so that the holder of any share of Pre-
ferred Stock thereafter surrendered for
conversion shall be entitled to receive
the number of shares of Common Stock or
other capital stock of the Corporation
which he would have owned or been enti-
tled to receive immediately following
such action had such share been converted
immediately prior thereto. The
-9-
<PAGE>
Corporation shall not pay any dividend
or make any distribution on shares of
Common Stock held in the treasury of the
Corporation. An adjustment made pursu-
ant to this subdivision (a) shall become
effective immediately after the record
date, in the case of a dividend or dis-
tribution, or immediately after the
effective date, in the case of a subdi-
vision, combination or reclassification.
If, as a result of an adjustment made
pursuant to this subdivision (a), the
holder of any share of Preferred Stock
thereafter surrendered for conversion
shall become entitled to receive shares
of two or more classes of capital stock
or shares of Common Stock and other
capital stock of the Corporation, the
Board and the Investor jointly (if the
Investor shall be a holder of any of the
Preferred Stock) or an internationally
recognized investment banking firm
selected by them if they are unable to
reach agreement, or the Board in its
reasonable discretion (if the Investor
shall not be a holder of any of the
Preferred Stock) shall determine the
allocation of the adjusted Conversion
Price between or among shares of such
classes of capital stock or shares of
Common Stock and other capital stock.
Such determination shall be described in
a statement filed with the conversion
agent by the Corporation as soon as
practicable.
(b) In case the Corporation shall
hereafter pay or make a dividend or
other distribution in shares of Common
Stock on any class of capital stock of
the Corporation other than the Common
Stock, the Conversion Price in effect
immediately after the record date men-
tioned in the next sentence shall be
adjusted so that the same shall equal
the price determined by multiplying the
Conversion Price in effect immediately
prior to the record date mentioned in
the next sentence by a fraction of which
the numerator shall be the number of
shares of Common Stock outstanding at
-10-
<PAGE>
the close of business on the record date
mentioned in the next sentence and the
denominator shall be the sum of such
number of shares and the total number of
shares constituting such dividend or
other distribution. Such reduction
shall become effective immediately after
the record date for the determination of
stockholders entitled to receive such
dividend or other distribution. For the
purposes of this subdivision (b), the
number of shares of Common Stock at any
time outstanding shall not include
shares held in the treasury of the Cor-
poration but shall include shares issu-
able in respect of scrip certificates
issued in lieu of fractions of shares of
Common Stock. The Corporation shall not
pay any dividend or make any distribu-
tion on shares of such capital stock
held in the treasury of the Corporation.
(c) In case the Corporation shall
hereafter issue rights or warrants to
holders of its outstanding shares of
Common Stock generally entitling them to
subscribe for or purchase shares of
Common Stock at a price per share less
than the Average Market Price of the
Common Stock on the record date men-
tioned in the next sentence (other than
pursuant to an automatic dividend rein-
vestment plan of the Corporation or any
substantially similar plan), the Conver-
sion Price shall be reduced so that the
same shall equal the price determined by
multiplying the Conversion Price in
effect immediately prior to the record
date mentioned in the next sentence by a
fraction of which the numerator shall be
the number of shares of Common Stock
outstanding on the record date mentioned
in the next sentence plus the number of
shares which the aggregate offering
price of the total number of shares so
offered would purchase at such Average
Market Price, and of which the denomina-
tor shall be the number of shares of
Common Stock outstanding on the record
date mentioned in the next sentence plus
the number of additional shares of
-11-
<PAGE>
Common Stock offered for subscription or
purchase. Such reduction shall become
effective immediately after the record
date for the determination of stock-
holders entitled to receive such rights
or warrants. For the purposes of this
subdivision (c), the number of shares of
Common Stock at any time outstanding
shall not include shares held in the
treasury of the Corporation but shall
include shares issuable in respect of
scrip certificates issued in lieu of
fractions of shares of Common Stock.
The Corporation will not issue any
rights or warrants in respect of shares
of Common Stock held in the treasury of
the Corporation.
(d) In case the Corporation shall,
by dividend or otherwise, hereafter
distribute to holders of its outstanding
shares of Common Stock generally evi-
dences of its indebtedness or assets
(excluding any regular periodic cash
dividend paid from retained earnings of
the Corporation and dividends or distri-
butions payable in stock for which adjust-
ment is made pursuant to subdivision (a)
of this subsection (IV)) or rights or
warrants to subscribe to securities of
the Corporation (excluding those referred
to in subdivision (c) of this subsec-
tion (IV)), then in each such case the
Conversion Price shall be adjusted so
that the same shall equal the price
determined by multiplying the Conversion
Price in effect immediately prior to the
record date mentioned in the next sen-
tence by a fraction of which the numer-
ator shall be the Average Market Price
of the Common Stock on the record date
mentioned in the next sentence less the
then fair market value (as determined by
the Board and the Investor jointly (if
the Investor shall be a holder of any of
the Preferred Stock), or by an interna-
tionally recognized investment banking
firm selected by them if they are unable
to agree or by the Board in its reason-
able discretion (if the Investor shall
not be a holder of any of the Preferred
-12-
<PAGE>
Stock)), of the portion of the evidences
of indebtedness or assets so distributed
to the holder of one share of Common
Stock or of such subscription rights or
warrants applicable to one share of
Common Stock, and of which the denomina-
tor shall be such Average Market Price
of the Common Stock. Such adjustment
shall become effective immediately after
the record date for the determination of
stockholders entitled to receive such
distribution. Such determination of
fair market value shall be described in
a statement filed with the conversion
agent by the Corporation as soon as
practicable.
(e) The reclassification (includ-
ing any reclassification upon a merger
in which the Corporation is the continu-
ing corporation) of Common Stock into
securities including other than Common
Stock shall be deemed to involve (i) a
distribution of such securities other
than Common Stock to all holders of
Common Stock (and the effective date of
such reclassification shall be deemed to
be "the record date for the determi-
nation of stockholders entitled to receive
such distribution" within the meaning of
subdivision (d) of this subsection (IV)),
and (ii) a subdivision or combination,
as the case may be, of the number of
shares of Common Stock outstanding imme-
diately prior to such reclassification
into the number of shares of Common
Stock outstanding immediately there-
after.
(f) In any case in which this
paragraph (v) shall require that an
adjustment be made immediately following
a record date or an effective date, the
Corporation may elect to defer (but only
until five business days following the
filing by the Corporation with the con-
version agent of the certificate of
independent public accountants required
by subdivision (h) of this subsec-
tion (IV)) issuing to the holder of any
share of Preferred Stock converted after
-13-
<PAGE>
such record date or effective date the
additional shares of Common Stock or
other capital stock issuable upon such
conversion over and above the shares of
Common Stock or other capital stock
issuable upon such conversion on the
basis of the Conversion Price prior to
adjustment, and paying to such holder
any amount of cash in lieu of a frac-
tional share.
(g) All calculations under this
paragraph (v) shall be made to the near-
est 1/100 of one cent or to the nearest
1/10,000th of a share, as the case may
be. Anything in this paragraph (v) to
the contrary notwithstanding, the Corpo-
ration shall be entitled to make such
reduction in the Conversion Price, in
addition to those required by this para-
graph (v), as it considers to be advis-
able in order that any stock dividend,
subdivision of shares, distribution of
rights to purchase stock or securities,
or distribution of securities convert-
ible into or exchangeable for stock
hereafter made by the Corporation to its
stockholders shall not be taxable to the
recipients.
(h) Whenever the Conversion Price
is adjusted as herein provided, (i) the
Corporation shall promptly file with the
conversion agent a certificate of a firm
of independent public accountants (who
may be the regular accountants employed
by the Corporation) setting forth the
Conversion Price after such adjustment
and setting forth a brief statement of
the facts requiring such adjustment and
the manner of computing the same, and
(ii) a notice stating that the Conver-
sion Price has been adjusted and setting
forth the adjusted Conversion Price
shall forthwith be airmailed by the
Corporation to the holders of the Pre-
ferred Stock at their addresses as shown
on the stock books of the Corporation.
(i) In the event that any time as
a result of an adjustment made pursuant
-14-
<PAGE>
to subdivision (a) of this subsec-
tion (IV), the holder of any share of
Preferred Stock thereafter surrendered
for conversion shall become entitled to
receive any shares of the Corporation
other than shares of Common Stock,
thereafter the Conversion Price of such
other shares so receivable upon conver-
sion of any share shall be subject to
adjustment from time to time in a manner
and on terms as nearly equivalent as
practicable to the provisions with re-
spect to Common Stock contained in this
paragraph (v).
(V) In case:
(a) the Corporation shall declare
a dividend (or any other distribution)
on its Common Stock other than a regular
periodic cash dividend payable in cash
out of its retained earnings; or
(b) the Corporation shall author-
ize the granting to the holders of the
Common Stock of rights or warrants to
subscribe for or purchase any shares of
stock of any class or of any other
rights; or
(c) there shall be any capital
stock reorganization or reclassification
of the Common Stock (other than a subdi-
vision or combination of the outstanding
Common Stock and other than a change in
the par value of the Common Stock), or
any consolidation or merger to which the
Corporation is a party or any statutory
exchange of securities with another
corporation and for which approval of
any stockholders of the Corporation is
required, or any sale or transfer of all
or substantially all the assets of the
Corporation; or
(d) there shall be a voluntary
dissolution, liquidation or winding up
of the Corporation;
then the Corporation shall cause to be
filed with the conversion agent, and
-15-
<PAGE>
shall cause to be airmailed to the hold-
ers of shares of the Preferred Stock at
their addresses as shown on the stock
books of the Corporation, at least ten
days prior to the applicable date here-
inafter specified, a notice stating
(i) the date on which a record is to be
taken for the purpose of such dividend,
distribution, rights or warrants, or, if
a record is not to be taken, the date as
of which the holders of Common Stock of
record to be entitled to such dividend,
distribution, rights or warrants are to
be determined, or (ii) the date on which
such reorganization, reclassification,
consolidation, merger, statutory exchange,
sale, transfer, dissolution, liquidation
or winding up is expected to become
effective, and the date as of which it
is expected that holders of Common Stock
of record shall be entitled to exchange
their shares of Common Stock for securi-
ties or other property deliverable upon
such reorganization, reclassification,
consolidation, merger, statutory exchange,
sale, transfer, dissolution, liquidation
or winding up.
(VI) The Corporation covenants that
it will at all times reserve and keep
available, free from preemptive rights,
out of the aggregate of its authorized
but unissued shares of Common Stock or
its issued shares of Common Stock held
in its treasury, or both, for the pur-
pose of effecting conversions of the
Preferred Stock, the full number of
shares of Common Stock deliverable upon
the conversion of all outstanding shares
of Preferred Stock not theretofore con-
verted. For purposes of this subsec-
tion (VI), the number of shares of Com-
mon Stock which shall be deliverable
upon the conversion of all outstanding
shares of Preferred Stock shall be compu-
ted as if at the time of computation all
such outstanding shares were held by a
single holder.
Before taking any action which
would cause an adjustment reducing the
-16-
<PAGE>
Conversion Price below the then par
value (if any) of the shares of Common
Stock deliverable upon conversion of the
Preferred Stock, the Corporation will
take any corporate action which may, in
the opinion of its counsel, be necessary
in order that the Corporation may validly
and legally issue fully paid and non-
assessable shares of Common Stock at
such adjusted Conversion Price.
The Corporation shall use its best
efforts to list the shares of Common
Stock required to be delivered upon
conversion of the Preferred Stock prior
to such delivery upon each securities
exchange, if any, upon which the out-
standing Common Stock is listed at the
time of such delivery.
Prior to the delivery of any secu-
rities which the Corporation shall be
obligated to deliver upon conversion of
the Preferred Stock, the Corporation
shall use its best efforts to comply
with all Federal and state laws and
regulations thereunder requiring the
registration of such securities with, or
any approval of or consent to the deliv-
ery thereof by, any governmental author-
ity.
(VII) The Corporation shall pay any
and all documentary stamp or similar
issue or transfer taxes payable in re-
spect of the issue or delivery of shares
of Common Stock on conversions of the
Preferred Stock pursuant hereto; provided,
however, that the Corporation shall not
be required to pay any tax which may be
payable in respect of any transfer involved
in the issue or delivery of shares of
Common Stock in a name other than that
of the holder of the Preferred Stock to
be converted and no such issue or delivery
shall be made unless and until the per-
son requesting such issue or delivery
has paid to the Corporation the amount
of any such tax or has established, to
the satisfaction of the Corporation,
that such tax has been paid.
-17-
<PAGE>
(VIII) In case of any consolidation
or merger in which the Corporation is a
party (other than a merger in which the
Corporation is the continuing corpora-
tion), or in case of any sale or convey-
ance to another corporation of the prop-
erty of the Corporation as an entirety
or substantially as an entirety, or in
the case of any statutory exchange of
securities with another corporation
(including any exchange effected in
connection with a merger of a third
corporation into the Corporation) the
holder of each share of Preferred Stock
then outstanding shall have the right
thereafter to convert such share into
the kind and amount of securities, cash
or other property receivable upon such
consolidation, merger, statutory exchange,
sale or conveyance by a holder of the
number of shares of Common Stock into
which such share of Preferred Stock
might have been converted immediately
prior to such consolidation, merger,
statutory exchange, sale or conveyance,
assuming such holder of Common Stock
failed to exercise his rights of elec-
tion, if any, as to the kind or amount
of securities, cash or other property
receivable upon such consolidation,
merger, statutory exchange, sale or
conveyance (provided that if the kind or
amount of securities, cash or other
property receivable upon such consoli-
dation, merger, statutory exchange, sale
or conveyance is not the same for each
share of Common Stock in respect of
which such rights of election shall not
have been exercised ("non-electing share"),
then for the purpose of this subsec-
tion (VIII) the kind and amount of secu-
rities, cash or other property receiv-
able upon such consolidation, merger,
statutory exchange, sale or conveyance
for each non-electing share shall be
deemed to be the kind and amount so
receivable per share by a plurality of
the non-electing shares). Thereafter,
the holders of the Preferred Stock shall
be entitled to appropriate adjustments
with respect to their conversion rights
-18-
<PAGE>
to the end that the provisions set forth
in this paragraph (v) shall correspond-
ingly be made applicable, as nearly as
may reasonably be, in relation to any
shares of stock or other securities or
property thereafter deliverable on the
conversion of the Preferred Stock. Any
such adjustment shall be approved by a
firm of independent public accountants
(who may be the regular accountants
employed by the Corporation), evidenced
by a certificate to that effect deliv-
ered to the conversion agent.
The above provisions of this sub-
section (VIII) shall similarly apply to
successive consolidations, mergers,
statutory exchanges, sales or convey-
ances.
(vi) Upon any conversion or redemp-
tion of shares of Preferred Stock, the
shares of Preferred Stock so converted
or redeemed shall have the status of
authorized and unissued shares of Series
Preferred Stock, and the number of
shares of Series Preferred Stock which
the Corporation shall have authority to
issue shall not be decreased by the
conversion or redemption of shares of
Preferred Stock.
(vii) (I) The Shares of Preferred
Stock shall not be entitled to vote
pursuant to this subsection (I) until
the expiration or early termination of
the applicable waiting period under the
HSR Act. Thereafter, each share of
Preferred Stock shall be entitled to one
vote (subject to adjustment as provided
in subsection (V) of this para-
graph (vii)) and the shares of Preferred
Stock shall vote together with the
shares of Common Stock (and of any other
class or series which may similarly be
entitled to vote with the shares of
Common Stock) as a single class upon all
matters upon which holders of Common
Stock are entitled to vote.
-19-
<PAGE>
(II) If and whenever at any time or
times dividends payable on the Preferred
Stock or on any other Parity Preferred
Stock shall have been in arrears and
unpaid in an aggregate amount equal to
or exceeding the amount of dividends
payable thereon for six quarterly peri-
ods, then the holders of Parity Pre-
ferred Stock shall have, in addition to
the other voting rights set forth herein,
the exclusive right, voting separately
as a class, to elect two directors of
the Corporation, such directors to be in
addition to the number of directors
constituting the Board of Directors
immediately prior to the accrual of such
right, the remaining directors to be
elected by the other class or classes of
stock entitled to vote therefor at each
meeting of stockholders held for the
purpose of electing directors. Such
voting right shall continue until such
time as all cumulative dividends accumu-
lated on all the Parity Preferred Stock
having cumulative dividends shall have
been paid in full and until any
noncumulative dividends payable on all
the Parity Preferred Stock having
noncumulative dividends shall have been
paid regularly for at least one year, at
which time such voting right of the
holders of the Parity Preferred Stock
shall terminate, subject to revesting in
the event of each and every subsequent
event of default of the character indi-
cated above.
Whenever such voting right shall
have vested, such right may be exercised
initially either at a special meeting of
the holders of the Parity Preferred
Stock, called as hereinafter provided,
or at any annual meeting of stockholders
held for the purpose of electing direc-
tors, and thereafter at each successive
annual meeting.
At any time when such voting right
shall have vested in the holders of the
Parity Preferred Stock, and if such
right shall not already have been
-20-
<PAGE>
initially exercised, a proper officer of
the Corporation shall, upon the written
request of the holders of record of 10%
in number of shares of the Parity Pre-
ferred Stock then outstanding, addressed
to the Secretary of the Corporation,
call a special meeting of the holders of
the Parity Preferred Stock and of any
other class or classes of stock having
voting power with respect thereto for
the purpose of electing directors. Such
meeting shall be held at the earliest
practicable date upon the notice required
for annual meetings of stockholders at
the place for holding of annual meetings
of stockholders of the Corporation, or,
if none, at a place designated by the
Secretary of the Corporation. If such
meeting shall not be called by the proper
officers of the Corporation within 30
days after the personal service of such
written request upon the Secretary of
the Corporation, or within 30 days after
mailing the same within the United
States of America, by registered mail,
addressed to the Secretary of the Corpo-
ration at its principal office (such
mailing to be evidenced by the registry
receipt issued by the postal authori-
ties), then the holders of record of 10%
in number of shares of the Parity Pre-
ferred Stock then outstanding may desig-
nate in writing one of their number to
call such meeting at the expense of the
Corporation, and such meeting may be
called by such person so designated upon
the notice required for annual meetings
of stockholders and shall be held at the
same place as is elsewhere provided for
in this subsection (II). Any holder of
the Parity Preferred Stock shall have
access to the stock books of the Corpo-
ration for the purpose of causing a
meeting of stockholders to be called
pursuant to the provisions of this para-
graph. Notwithstanding the provisions
of this paragraph, however, no such
special meeting shall be called during a
period within 90 days immediately pre-
ceding the date fixed for the next annual
meeting of stockholders.
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<PAGE>
At any meeting held for the purpose
of electing directors at which the hold-
ers of the Parity Preferred Stock shall
have the right to elect directors as
provided herein, the presence in person
or by proxy of the holders of 33-1/3% of
the then outstanding shares of the Parity
Preferred Stock shall be required and be
sufficient to constitute a quorum of the
Parity Preferred Stock for the election
of directors by the Parity Preferred
Stock. At any such meeting or adjourn-
ment thereof (A) the absence of a quorum
of the holders of the Parity Preferred
Stock shall not prevent the election of
directors other than those to be elected
by the holders of the Parity Preferred
Stock and the absence of a quorum or
quorums of the holders of other classes
of capital stock entitled to elect such
other directors shall not prevent the
election of directors to be elected by
the holders of the Parity Preferred
Stock and (B) in the absence of a quorum
of the holders of any class of stock
entitled to vote for the election of
directors, a majority of the holders
present in person or by proxy of such
class shall have the power to adjourn
the meeting for the election of direc-
tors which the holders of such class are
entitled to elect, from time to time,
without notice other than announcement
at the meeting, until a quorum shall be
present.
The directors elected pursuant to
this subsection (II) shall serve until
the next annual meeting or until their
respective successors shall be elected
and shall qualify; provided, however,
that when the right of the holders of
the Parity Preferred Stock to elect
directors as herein provided shall ter-
minate, the terms of office of all per-
sons so elected by the holders of the
Parity Preferred Stock shall terminate,
and the number of directors of the Cor-
poration shall thereupon be such number
as may be provided in the By-laws of the
-22-
<PAGE>
Corporation irrespective of any increase
made pursuant to this subsection (II).
(III) So long as any shares of the
Preferred Stock remain outstanding, the
Corporation will not, either directly or
indirectly or through merger or consoli-
dation with any other corporation:
(a) without the affirmative vote
at a meeting or the written consent with
or without a meeting of the holders of
at least 66-2/3% in number of shares of
the Preferred Stock, (A) create any
class or classes of stock ranking equal
or prior to the Preferred Stock either
as to dividends or upon liquidation or
increase the authorized number of shares
of any class or classes of stock ranking
equal or prior to the Preferred Stock
either as to dividends or upon liquida-
tion, (B) amend, alter or repeal any of
the provisions of the Certificate of
Incorporation so as to affect adversely
the preferences, special rights or pow-
ers of the Preferred Stock or (C) autho-
rize any reclassification of the Pre-
ferred Stock;
(b) without the affirmative vote
at a meeting or the written consent with
or without a meeting of the holders of
at least 66-2/3% in number of shares of
the Preferred Stock then outstanding,
amend, alter or repeal any of the provi-
sions hereof so as to affect adversely
the preferences, special rights or pow-
ers of the Preferred Stock; or
(c) without the affirmative vote
at a meeting or the written consent with
or without a meeting of the holders of
at least a majority in number of shares
of the Series Preferred Stock of all
series then outstanding, increase the
authorized number of shares of the Series
Preferred Stock.
(IV) No consent of the holders of
the Preferred Stock shall be required
for (i) the creation of any indebtedness
-23 -
<PAGE>
of any kind of the Corporation, (ii) the
creation of any class of stock of the
Corporation ranking junior as to divi-
dends or upon liquidation to the Series
Preferred Stock or (iii) any increase or
decrease in the amount of authorized
Common Stock or any increase, decrease
or change in the par value thereof or in
any other terms thereof.
(V) in case the Corporation shall
hereafter (i) pay a dividend or make a
distribution on the Common Stock in
shares of Common Stock, (ii) subdivide
or reclassify its outstanding shares of
Common Stock into a greater number of
shares or (iii) combine or reclassify
its outstanding shares of Common Stock
into a smaller number of shares, then in
each such case the number of votes to
which a holder of a share of Preferred
Stock is entitled pursuant to subsec-
tion (I) of this paragraph (vii) shall
be adjusted so that, after the happening
of any of the events described above,
such holder shall be entitled to a num-
ber of votes equal to the number of
votes to which such holder was entitled
pursuant to subsection (I) immediately
prior to such happening multiplied by a
fraction of which the numerator is the
number of shares of Common Stock into
which one share of Preferred Stock was
convertible immediately after such hap-
pening and the denominator is the number
of shares of Common Stock into which one
share of Preferred Stock was convertible
immediately prior to such happening. An
adjustment made pursuant to this subsec-
tion (V) shall become effective immedi-
ately after the date of payment, in the
case of a dividend or distribution, or
immediately after the effective date, in
the case of a subdivision, combination
or reclassification.
(viii) The Preferred Stock is
exchangeable in whole at the option only
of the Corporation on any Dividend Pay-
ment Date commencing the first Dividend
Payment Date following the Closing Date,
-24-
<PAGE>
for the Corporation's 7% Voting Convert-
ible Subordinated Debentures Due 2007
(the "Debentures") which shall be issued
pursuant to the Indenture and shall be
substantially in the form set forth in
Article Two thereof. Holders of out-
standing shares of Preferred Stock will
be entitled to receive a principal
amount of Debentures equal to the Liqui-
dation Preference in exchange for each
share of Preferred Stock held by them at
the time of exchange. The Corporation
will mail to each record holder of the
Preferred Stock written notice of its
intention to exchange not less than 30
nor more than 60 days prior to the date
of exchange. Prior to giving notice of
intention to exchange, the Corporation
shall execute and deliver the Indenture
substantially in the form set forth in
Exhibit 4 to the Agreement and shall
adopt a Board Resolution (as such term
is defined in the Indenture) incorporat-
ing the terms set forth in Article Two
thereof, in each case with such changes
as may be required by law or usage. The
Corporation will cause the Debentures to
be authenticated on the Dividend Payment
Date on which the exchange is effective;
at such time the rights of the holders
of Preferred Stock as stockholders of
the Company shall cease (except the
right to receive accumulated and unpaid
dividends to the date of exchange), and
the Preferred Stock shall no longer be
deemed outstanding and shall represent
only the right to receive the Deben-
tures. The Debentures will be delivered
to the persons entitled thereto upon
surrender to the Corporation or its
agent appointed for that purpose of the
certificates for the shares of Preferred
Stock being exchanged therefor. If the
Corporation has not paid full cumulative
dividends on the Preferred Stock to the
date of exchange (or set aside a sum
therefor), or if the Corporation has not
obtained any required stockholder
approval in connection with the granting
of voting rights to the holders of
Exchange Debentures as set forth in
-25-
<PAGE>
Article Two of, the Indenture, the Pre-
ferred Stock may not be exchanged for
the Debentures.
(ix) (I) Shares of the Preferred
Stock may not be redeemed on or prior to
the third anniversary of the Closing
Date. Thereafter, the shares of the
Preferred Stock may be redeemed to the
extent specified below, at the option of
the Corporation on any Dividend Payment
Date upon at least 30 days' and not more
than 45 days' prior written notice to
the holders of the shares to be
redeemed, at an amount equal to the sum
of the Liquidation Preference of such
shares plus accumulated and unpaid divi-
dends (whether or not earned or
declared) to the date fixed for redemp-
tion:
Number of Shares Subject
to Redemption
------------------------
to and including the fourth
anniversary of the Closing
Date ............................. up to 25% of the shares of
Preferred Stock initially
issued
thereafter, to and including
the fifth anniversary of the
Closing Date ..................... up to 25% of the shares of
Preferred Stock initially
issued
thereafter, to and including
the sixth anniversary of the
Closing Date .................... up to 50% of the shares of
Preferred Stock
outstanding at the
commencement of such
period (the "Reference
Period")
thereafter, during any 12 month
period ......................... up to 50% of the shares of
Preferred Stock
outstanding at the
commencement of the
Reference Period
-26-
<PAGE>
provided, however, that the shares of
-------- -------
Preferred Stock shall not be redeemable
by the Corporation on or prior to the
fifth anniversary of the Closing Date
unless the Average Market Price of the
Common Stock on the date upon which
notice of redemption is first given is
greater than the product of 1.20 times
-----
the Conversion Price (as defined in
paragraph (v) hereof) then in effect, or
after the fifth anniversary of the
Closing Date, unless the Average Market
Price of the Common Stock on the date
upon which notice of redemption is first
given is greater than the Conversion
Price (as defined in paragraph (v)
hereof) then in effect.
For purposes of this subsection (I), the
number of shares of Preferred Stock at
any time outstanding shall not include
shares held in the treasury of the
Corporation but shall include shares
issuable in respect of scrip certifi-
cates issued in lieu of fractions of
shares of Preferred Stock.
(II) Holders of shares of Preferred
Stock which have been called for redemp-
tion may elect to receive the redemption
price for such shares in the form of
securities which are direct obligations
of the United States of America and have
a fair market value (as determined
jointly by the Board and the Investor
(if the Investor shall be a holder of
any shares of Preferred Stock) on the
date notice of such redemption is given,
or by an internationally recognized
investment banking firm selected by them
if they are unable to agree, or by the
Board in its reasonable discretion (if
the Investor shall not be a holder of
any shares of Preferred Stock on the
date notice of such redemption is
given)) equal to the redemption price
otherwise payable by the Corporation
upon redemption of such shares. Any
such election may specify a requested
-27-
<PAGE>
coupon rate or range of rates, maturity
or range of maturities and denominations
of such securities. Such requests with
respect to coupon rate, maturity and
denomination shall be satisfied by the
Corporation to the extent reasonably
practicable. Any such election shall be
effective upon the giving of receipt of
written notice of such election to the
Corporation not later than 20 days prior
to the date fixed for redemption.
(III) Notice of any proposed redemp-
tion of shares of Preferred Stock shall
be given by the Corporation by airmail-
ing a copy of such notice to holders of
record of the shares of such Preferred
Stock to be redeemed at their respective
addresses appearing on the stock books
of the Corporation. Said notice shall
specify the shares called for redemp-
tion, the redemption price and the price
at which and the date on which the
shares called for redemption will, upon
presentation and surrender of the
certificates of stock evidencing such
shares, be redeemed and the redemption
price therefor paid. From and after the
date fixed in any such notice as the
date of redemption of shares of Pre-
ferred Stock, unless default shall be
made by the Corporation in providing
monies at the time and place specified
for the payment of the redemption price
pursuant to said notice, all dividends
on the Preferred Stock thereby called
for redemption shall cease to accrue and
all rights of the holders thereof as
stockholders of the Corporation, except
the right to receive the redemption
price upon surrender of the certifi-
cates, shall cease and terminate.
(x) The Preferred Stock shall be
subject to the provisions of the Invest-
ment Agreement and may not be sold or
transferred except in accordance there-
with.
(xi) Certificates representing
shares of the Preferred Stock shall be
-28-
<PAGE>
exchangeable, at the option of the
holder, for a new certificate or certif-
icates of the same or different denomi-
nations representing in the aggregate
the same number of shares.
(xii) Subject to conversion as set
forth in paragraph (v), to exchange as
set forth in paragraph (viii) or to
redemption as set forth in para-
graph (ix), and to the respective rights
and obligations of the Investor and the
Company set forth in Sections 5.1(d) and
6.2 of the Investment Agreement (which
provisions are incorporated by reference
herein), the Preferred Stock shall be
perpetual. In the case of exchanges
pursuant to Section 6.2 of the Invest-
ment Agreement, a payment shall be made
upon exchange for dividends accumulated
on the shares of Preferred Stock surren-
dered for exchange but not for dividends
on shares of preferred stock delivered
upon such exchange.
IN WITNESS WHEREOF, Paine Webber Group Inc. has
caused this Certificate to be made under the seal of the
Corporation and signed by Donald B. Marron, its Chairman of
the Board of Directors, President and Chief Executive
Officer, and attested by Dorothy F. Haughey, its Assistant
Secretary, this 11th day of December 1987.
PAINE WEBBER GROUP INC.
/s/ Donald B. Marron
--------------------------------------
Donald B. Marron
Chairman of the Board of
Directors, President and Chief
Executive Officer
[Seal]
Attest:
/s/ Dorothy F. Haughey
- ------------------------------
Dorothy F. Haughey
Assistant Secretary
-29-
<PAGE>
STATE OF NEW YORK, )
) SS.:
COUNTY OF NEW YORK,)
This instrument was acknowledged before me this
11th day of December 1987 by Donald B. Marron, as Chairman
of the Board of Directors, President and Chief Executive
Officer, and Dorothy F. Haughey, as Assistant Secretary,
of Paine Webber Group Inc., a Delaware Corporation, each
being authorized so to do on its behalf.
IN WITNESS WHEREOF, I hereunto set my hand and
official seal.
/s/ John T. Cooper
-----------------------------
Notary Public
JOHN T. COOPER
Notary Public, State of New York
No. 31-4398531
Qualified in New York County
Commission Expires 6/15/89
---------
-30-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
PAINE WEBBER GROUP INC.
Pursuant to Section 242 of the General Corporation Law
------------------------------------------------------
of the State of Delaware
------------------------
Paine Webber Group Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of the
State of Delaware (hereinafter sometimes called the
"Corporation"), DOES HEREBY CERTIFY as follows:
1. At a meeting of the Board of Directors of the Corporation,
duly called and held on February 16, 1988, resolutions were duly
adopted setting forth proposed amendments to the Restated
Certificate of Incorporation of the Corporation, declaring said
amendments to be advisable, and directing that the amendments be
submitted to the stockholders of the Corporation at the next
annual meeting of stockholders for consideration thereof. The
resolutions setting forth the proposed amendments are as follows:
RESOLVED, that each of the proposed amendments to
the Restated Certificate of Incorporation of the corporation
set forth below be, and it hereby is, approved and adopted in
all respects and declared advisable; that such proposed
amendments be submitted to the stockholders of the corporation
for their consideration at the next annual meeting of
stockholders; and that, if such proposed amendments are
approved and adopted by the stockholders of the corporation,
the proper officers of the corporation be, and they hereby are,
authorized to execute and acknowledge and cause to be filed and
recorded in accordance with Section 103 of the General
Corporation Law of the State of Delaware a certificate setting
forth such amendments and certifying that such amendments have
been duly adopted in accordance with the provisions of Section
242 of the General Corporation Law of the State of Delaware:
That Article IV be amended by inserting the following
new Article:
ARTICLE IV(A)
Voting Debentures
The holders of the Corporation's 7% Convertible
Subordinated Voting Debentures Due 2007 ("Exchange Debentures")
which may be issued from time to time pursuant to the
Investment Agreement dated as of November 30, 1987, between the
Corporation and The Yasuda Mutual Life Insurance Company, in
<PAGE>
- 2 -
exchange for the Corporation's 7% Cumulative Convertible
Exchangeable Voting Preferred Stock, Series A, shall be
entitled to vote together with the shares of Common Stock (and
of any other class of series of capital stock which may, now or
in the future, similarly be entitled to vote with shares of
Common Stock) as a single class upon all matters upon which
holders of Common Stock are entitled to vote, as follows: each
$1,000 aggregate principal amount of Exchange Debentures shall
be entitled to a number of votes equal to the product of (x)
the number or votes to which each share of the Series A
Preferred was entitled on the effective date of the exchange of
such share of Series A Preferred for any Exchange Debenture
times (y) the quotient of $1,000 divided by $44.50.
That Article IV, be amended further by inserting the
following new Article:
ARTICLE IV(B)
Preemptive Rights
The Yasuda Mutual Life Insurance Company ("Yasuda")
shall be entitled, subject to the conditions set forth in
Section 5.1(c) of the Investment Agreement dated as of
Novermber 30, 1987, between the Corporation and Yasuda (the
"Investment Agreement"), to (1) equity purchase rights that are
no less favorable than the preemptive or equity purchase
rights, if any, that might be granted by the Corporation to any
other person or (2) if the Corporation has no class or series
of voting securities which is registered under the Securities
Exchange Act of 1934 and broadly held and actively traded or if
permitted by the rules of any national stock exchange on which
any such class or series of voting securities is listed, or the
over-the-counter market in which any such class or series of
voting securities is traded if no longer listed, equity
purchase rights which allow Yasuda a preemptive right to
purchase the amount of voting securities of the Corporation or
any securities convertible into or exchangeable for voting
securities of the Corporation or any options, warrants or
rights exercisable for voting securities of the Corporation
("Equity Purchase Shares") equal to the product of (A) the
quotient of (x) the number of voting securities of the
Corporation owned by Yasuda immediately prior to the issuance
of Equity Purchase Shares divided by (y) the aggregate number
of outstanding voting securities owned by persons other than
Yasuda immediately prior to the issuance of Equity Purchase
Shares (for purposes of this calculation, treating all
securities of the Corporation convertible into voting
securities as though they have been so converted), multiplied
by (B) the aggregate number of Equity Purchase Shares being
issued by the Corporation to persons other than Yasuda, rounded
up to the nearest whole Equity Purchase Share. If, at the time
of the determination of the amount of Equity Purchase Shares
<PAGE>
- 3 -
which Yasuda shall be entitled to purchase, any other person
has preemptive or other equity purchase rights similar to those
granted to Yasuda, the amount Yasuda is entitled to purchase
shall be recalculated to take into account the amount of voting
securities to be sold to such persons, rounding up the amount
of Equity Purchase Shares which Yasuda shall be entitled to
purchase to the nearest whole Equity Purchase Share. The terms
upon which, the time or times at or within which, and the price
or prices at which any such preemptive rights or equity
purchase rights may be exercised shall, if applicable, be as
set forth in the Investment Agreement or, if not applicable, as
determined by the Board of Directors.
2. That, thereafter, at an Annual Meeting of Stockholders
of the Corporation, duly noticed and held on May 3, 1988, the
stockholders of the Corporation voted the necessary number of
shares as required by statute in favor of the amendments.
3. That said amendments were duly adopted in accordance
with the provisions of Section 242 of the General Corporation
Law of the State of Delaware.
IN WITNESS WHEREOF, Paine Webber Group Inc. has caused
this Certificate to be signed by James C. Treadway, Jr., its
Vice President and Secretary and attested by Dorothy F.
Haughey, its Assistant Secretary, this 31st day of May, 1988.
PAINE WEBBER GROUP INC.
/s/ James C. Treadway, Jr.
--------------------------
James C. Treadway, Jr.,
Vice President and Secretary
Attest:
/s/ Dorothy F. Haughey
--------------------------
Dorothy F. Haughey,
Assistant Secretary
7585L
<PAGE>
CERTIFICATE OF THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND
THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF, WHICH
HAVE NOT BEEN SET FORTH IN THE CERTIFICATE OF INCORPORATION OR
IN ANY AMENDMENT THERETO, OF THE
7.5% CONVERTIBLE PREFERRED STOCK
($20 Par Value)
PAINE WEBBER GROUP INC.
------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------------
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted on December 15, 1988, by the
Special Committee of the Board of Directors of Paine Webber
Group Inc., a Delaware corporation (hereinafter called the
"Corporation"), pursuant to provisions of Section 141(c) of the
General Corporation Law of the State of Delaware and
Article IV, Section 1 of the By-laws of the Corporation;
RESOLVED, that pursuant to authority expressly
granted to and vested in the Board of Directors of the
Corporation by provisions of the Certificate of
Incorporation of the Corporation (the "Certificate of
Incorporation"), the issuance of a series of the
Series Preferred Stock, par value $20 per share (the
"Series Preferred Stock"), which shall consist of up
to 2,200,000 of the 20,000,000 shares of Series
Preferred Stock which the Corporation now has
authority to issue, be, and the same hereby is,
authorized, and this Board of Directors hereby fixes
the powers, designations, preferences and relative,
participating, optional or other special rights, and
the qualifications, limitations or restrictions
thereof, of the shares of such series (in addition to
the powers, designations, preferences and relative,
participating, optional or other special rights, and
the qualifications, limitations or restrictions
thereof, set forth in the Certificate of Incorporation
which are applicable to the Series Preferred Stock) as
follows:
The designation of such series of the Series
Preferred Stock authorized by this resolution shall be
the 7.5% Convertible Preferred Stock (the "Convertible
Preferred Stock"). The number of shares of
Convertible Preferred Stock shall be 2,200,000.
<PAGE>
2
(i) Holders of shares of Convertible
Preferred Stock will be entitled to receive, when and
as declared by the Board of Directors (the "Board") of
Paine Webber Group Inc. (the "Corporation") out of
assets of the Corporation legally available for
payment, an annual cash dividend of $1.875 per share,
payable in semi-annual installments on June 30 and
December 31, commencing June 30, 1989. Dividends on
the Convertible Preferred Stock will be cumulative
from the date of initial issuance of any shares of
Convertible Preferred Stock. Dividends will be
payable to holders of record as they appear on the
stock books of the Corporation on such record dates,
not more than 60 days nor less than l0 days preceding
the payment dates thereof, as shall be fixed by the
Board. When dividends are not paid in full upon the
Convertible Preferred Stock and any other preferred
stock ranking on a parity as to dividends with the
Convertible Preferred Stock (such other preferred
stock and the Convertible Preferred Stock hereinafter
being collectively referred to as "Parity Preferred
Stock"), all dividends declared upon shares of Parity
Preferred Stock will be declared pro rata so that in
all cases the amount of dividends declared per share
on the Convertible Preferred Stock and such other
Parity Preferred Stock shall bear to each other the
same ratio that accumulated and unpaid dividends per
share on the shares of Convertible Preferred Stock and
such other Parity Preferred Stock bear to each other.
Except as set forth in the preceding sentence, unless
full cumulative dividends on the Convertible Preferred
Stock have been paid, no dividends (other than in
Common Stock of the Corporation (as defined in
paragraph (iii)(I) below) or any other stock of the
Corporation ranking junior to the Convertible
<PAGE>
3
Preferred Stock as to dividends) may be paid or
declared and set aside for payment or other
distribution made upon the Common Stock or on any
other stock of the Corporation ranking junior to or on
a parity with the Convertible Preferred Stock as to
dividends, nor may any Common Stock or any other stock
of the Corporation ranking junior to or on a parity
with the Convertible Preferred Stock as to dividends
be redeemed, purchased or otherwise acquired for any
consideration (or any payment made to or available for
a sinking fund for the redemption of any shares of
such stock) by the Corporation (except by conversion
into or exchange for stock of the Corporation ranking
junior to the Convertible Preferred Stock as to
dividends). Dividends payable for any partial
dividend period shall be calculated on the basis of a
360-day year of 12 30-day months.
(ii) The shares of Convertible Preferred
Stock shall rank prior to the shares of Common Stock
and of any other class of stock of the Corporation
ranking junior to the Series Preferred Stock upon
liquidation, so that in the event of any liquidation,
dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the
Convertible Preferred Stock shall be entitled to
receive out of the assets of the Corporation available
for distribution to its stockholders, whether from
capital, surplus or earnings, before any distribution
is made to holders of shares of Common Stock or any
other such junior stock, an amount equal to $25 per
share (the "Liquidation Preference" of a share of
Convertible Preferred Stock) plus an amount equal to
all dividends (whether or not earned or declared)
accumulated and unpaid on the shares of Convertible
Preferred Stock to the date of final distribution.
If, upon any liquidation, dissolution or winding up of
the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of
shares of Parity Preferred Stock shall be insufficient
to pay in full the liquidation preference amounts of
the Parity Preferred Stock and all dividends (whether
or not earned or declared) accumulated and unpaid
thereon, then such assets, or the proceeds thereof,
shall be distributable among such holders ratably in
accordance with the respective amounts which would be
payable on such shares, if all amounts payable thereon
were paid in full. For the purposes hereof, the
voluntary sale, conveyance, exchange or transfer (for
cash, shares of stock, securities or other
<PAGE>
4
consideration) of all or substantially all the
property or assets of the Corporation shall be deemed
a voluntary liquidation, dissolution or winding up of
the Corporation, but a consolidation or merger of the
Corporation with one or more other corporations shall
not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary.
(iii) (I) Subject to and upon compliance
with the provisions of this paragraph (iii), the
holder of a share of Convertible Preferred Stock shall
have the right, at his option, at any time, except
that, if such share is called for redemption, not
after the close of business on the fifth day next
preceding the date fixed for such redemption, to
convert such share into that number of fully paid and
nonassessable shares of Common Stock (calculated as to
each conversion to the nearest 1/100th of a share)
obtained by dividing the Liquidation Preference of
such share being converted by the Conversion Price (as
defined below), upon surrender of such share so to be
converted, such surrender to be made in the manner
provided in subsection (II) of this paragraph (iii).
The term "Common Stock" shall mean the Common
Stock, $1 par value, of the Corporation as the same
exists at the date of this Certificate or as such
stock may be constituted from time to time, except
that for the purpose of subsection (V) of this
paragraph (iii) the term "Common Stock" shall also
mean and include stock of the Corporation of any
class, whether now or hereafter authorized, which
shall have the right to participate in the
distribution of either earnings or assets of the
Corporation without limit as to amount or percentage.
The term "Conversion Price" shall mean $20.475,
as adjusted in accordance with the provisions of this
paragraph (iii).
(II) In order to exercise the conversion
privilege, the holder of each share of Convertible
Preferred Stock to be converted shall surrender the
certificate representing such share at the office of
the conversion agent for the Convertible Preferred
Stock in the Borough of Manhattan, City of New York,
appointed for such purpose by the Corporation, with
the Notice of Election to Convert on the back of said
certificate completed and signed. Unless the shares
issuable on conversion are to be issued in the same
<PAGE>
5
name as the name in which such share of Convertible
Preferred Stock is registered, each share surrendered
for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation and
duly executed by the holder or his duly authorized
attorney, and an amount sufficient to pay any transfer
or similar tax. No payment or adjustment shall be
made on conversion for dividends accumulated on the
Convertible Preferred Stock surrendered for conversion
or for dividends on Common Stock delivered on such
conversion. As promptly as practicable after the
surrender of the certificates for shares of
Convertible Preferred Stock as aforesaid, the
Corporation shall issue and shall deliver at such
office to such holder, or on his written order, a
certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of
such shares in accordance with the provisions of this
paragraph (iii), and any fractional interest in
respect of a share of Common Stock arising upon such
conversion shall be settled as provided in subsection
(III) of this paragraph (iii).
Each conversion shall be deemed to have been
effected immediately prior to the close of business on
the date on which the certificates for shares of
Convertible Preferred Stock shall have been
surrendered and such notice received by the
Corporation as aforesaid, and the person or persons in
whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder
or holders of record of the shares represented thereby
at such time on such date and such conversion shall be
at the Conversion Price in effect at such time on such
date, unless the stock transfer books of the
Corporation shall be closed on that date, in which
event such person or persons shall be deemed to have
become such holder or holders of record at the close
of business on the next succeeding day on which such
stock transfer books are open, but such conversion
shall be at the Conversion Price in effect on the date
upon which such shares shall have been surrendered and
such notice received by the Corporation. All shares
of Common Stock delivered upon conversions of the
Convertible Preferred Stock will upon delivery be duly
and validly issued and fully paid and nonassessable,
free of all liens and charges and not subject to any
preemptive rights.
<PAGE>
6
(III) No fractional shares or scrip
representing fractions of shares of Common Stock shall
be issued upon conversion of the Convertible Preferred
Stock. Instead of any fractional interest in a share
of Common Stock which would otherwise be deliverable
upon the conversion of a share of Convertible
Preferred Stock, the Corporation shall pay to the
holder of such share an amount in cash (computed to
the nearest cent) equal to the current market price
(as defined in subsection (IV)(d) of this
paragraph (iii)) thereof at the close of business on
the business day next preceding the day of
conversion. If more than one share shall be
surrendered for conversion at one time by the same
holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on
the basis of the aggregate Liquidation Preference of
the shares of Convertible Preferred Stock so
surrendered.
(IV) The Conversion Price shall be adjusted
from time to time as follows:
(a) In case the Corporation shall hereafter
(i) pay a dividend or make a distribution on the
Common Stock in shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock into a greater
number of shares, (iii) combine its outstanding shares
of Common Stock into a smaller number of shares, or
(iv) issue by reclassification of the Common Stock any
shares of capital stock of the Corporation, the
Conversion Price in effect immediately prior to such
action shall be adjusted so that the holder of any
share of Convertible Preferred Stock thereafter
surrendered for conversion shall be entitled to
receive the number of shares of Common Stock or other
capital stock of the Corporation which he would have
owned or been entitled to receive immediately
following such action had such share been converted
immediately prior thereto. An adjustment made
pursuant to this subdivision (a) shall become
effective immediately after the record date, in the
case of a dividend or distribution, or immediately
after the effective date, in the case of a
subdivision, combination reclassification. If, as
a result of an adjustment made pursuant to this
subdivision (a), the holder of any share of
Convertible Preferred Stock thereafter surrendered for
conversion shall become entitled to receive shares of
two or more classes of capital stock or shares of
<PAGE>
7
Common Stock and other capital stock of the
Corporation, the Board (whose determination shall be
conclusive and shall be described in a statement filed
with the conversion agent by the Corporation as soon
as practicable) shall determine the allocation of the
adjusted Conversion Price between or among shares of
such classes of capital stock or shares of Common
Stock and other capital stock.
(b) In case the Corporation shall hereafter
issue rights or warrants to holders of its outstanding
shares of Common Stock generally entitling them (for a
period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase shares
of Common Stock at a price per share less than the
current market price per share (as determined pursuant
to subdivision (d) of this subsection (IV)) of the
Common Stock on the record date mentioned in the next
sentence (other than pursuant to an automatic dividend
reinvestment plan of the Corporation or any
substantially similar plan), the Conversion Price
shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price
in effect immediately prior to the date of issuance of
such rights or warrants by a fraction of which the
numerator shall be the number of shares of Common
Stock outstanding on the date of issuance of such
rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares
so offered would purchase at such current market
price, and of which the denominator shall be the
number of shares of Common Stock outstanding on the
date of issuance of such rights or warrants plus the
number of additional shares of Common Stock offered
for subscription or purchase. Such adjustment shall
become effective immediately after the record date for
the determination of stockholders entitled to receive
such rights or warrants.
(c) In case the Corporation shall hereafter
distribute to holders of its outstanding shares of
Common Stock generally evidences of its indebtedness
or assets (excluding any cash dividend paid from
retained earnings of the Corporation and dividends or
distributions payable in stock for which adjustment is
made pursuant to subdivision (a) of this
subsection (IV)) or rights or warrants to subscribe to
securities of the Corporation (excluding those
referred to in subdivision (b) of this
subsection (IV)), then in each such case the
<PAGE>
8
Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the
date of such distribution by a fraction of which the
numerator shall be the current market price per share
(determined as provided in subdivision (d) of this
subsection (IV)) of the Common Stock on the record
date mentioned in the next sentence less the then fair
market value (as determined by the Board, whose
determination shall be conclusive and shall be
described in a statement filed with the conversion
agent by the Corporation as soon as practicable) of
the portion of the evidences of indebtedness or assets
so distributed to the holder of one share of Common
Stock or of such subscription rights or warrants
applicable to one share of Common Stock, and of which
the denominator shall be such current market price per
share of Common Stock. Such adjustment shall become
effective immediately after the record date for the
determination of stockholders entitled to receive such
distribution.
(d) For the purpose of subsection (III) and
subdivisions (b) and (c) of this subsection (IV), the
current market price per share of Common Stock on any
date shall be deemed to be the average of the daily
market prices for the 30 consecutive days on which the
New York Stock Exchange is open for trading commencing
45 trading days before the day in question. The term
"daily market price" when used with reference to the
Common Stock shall mean the price of a share of Common
Stock on the relevant date, determined on the basis of
the last reported sale price regular way of the Common
Stock as reported on the composite tape, or similar
reporting system, for issues listed on the New York
Stock Exchange (or if the Common Stock is not then
listed on that Exchange, for issues listed on such
other national securities exchange upon which the
Common Stock is listed as may be designated by the
Board for the purposes hereof) or, if there is no such
reported sale on the day in question, on the basis of
the average of the closing bid and asked quotations as
so reported, or, if the Common Stock is not then
listed on any national securities exchange, on the
basis of the closing price, if the Common Stock is a
national market issue, or the average of the high bid
and low asked quotations on the day in question in the
over-the-counter market as reported by the National
Association of Securities Dealers' Automated
Quotations System, or if not so quoted, as reported by
<PAGE>
9
National Quotation Bureau, Incorporated, or a similar
organization.
(e) In any case in which this paragraph
(iii) shall require that an adjustment be made
immediately following a record date or an effective
date, the Corporation may elect to defer (but only
until five business days following the filing by the
Corporation with the conversion agent of the
certificate of independent public accountants required
by subdivision (g) of this subsection (IV)) issuing to
the holder of any share of Convertible Preferred Stock
converted after such record date or effective date the
additional shares of Common Stock or other capital
stock issuable upon such conversion over and above the
shares of Conmnon Stock or other capital stock issuable
upon such conversion on the basis of the Conversion
Price prior to adjustment, and paying to such holder
any amount of cash in lieu of a fractional share.
(f) No adjustment in the Conversion Price
shall be required to be made unless such adjustment
would require an increase or decrease of at least 1%
of such price; provided, however, that any adjustments
-------- -------
which by reason of this subdivision (f) are not
required to be made shall be carried forward and taken
into account in any subsequent adjustment. All
calculations under this paragraph (iii) shall be made
to the nearest cent or to the nearest 1/100th of a
share, as the case may be. Anything in this paragraph
(iii) to the contrary notwithstanding, the Corporation
shall be entitled to make such reduction in the
Conversion Price, in addition to those required by
this paragraph (iii), as it in its discretion shall
determine to be advisable in order that any stock
dividend, subdivision of shares, distribution of
rights to purchase stock or securities, or
distribution of securities convertible into or
exchangeable for stock hereafter made by the
Corporation to its stockholders shall not be taxable
to the recipients.
(g) Whenever the Conversion Price is
adjusted as herein provided, (i) the Corporation shall
promptly file with the conversion agent a certificate
of a firm of independent public accountants (who may
be the regular accountants employed by the
Corporation) setting forth the Conversion Price after
such adjustment and setting forth a brief statement of
the facts requiring such adjustment and the manner of
<PAGE>
10
computing the same, which certificate shall be
conclusive evidence of the correctness of such
adjustment, and (ii) a notice stating that the
Conversion Price has been adjusted and setting forth
the adjusted Conversion Price shall forthwith be
mailed by the Corporation to the holders of the
Convertible Preferred Stock at their addresses as
shown on the stock books of the Corporation.
(h) In the event that at any time as a
result of an adjustment made pursuant to subdivision
(a) of this subsection (IV), the holder of any share
of Convertible Preferred Stock thereafter surrendered
for conversion shall become entitled to receive any
shares of the Corporation other than shares of Common
Stock, thereafter the Conversion Price of such other
shares so receivable upon conversion of any share
shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common
Stock contained in this paragraph (iii).
(V) In case:
(a) the Corporation shall take any action
which would require any adjustment in the Conversion
Price pursuant to subsection (IV)(c); or
(b) the Corporation shall authorize the
granting to the holders of the Common Stock of rights
or warrants to subscribe for or purchase any shares of
stock of any class or of any other rights; or
(c) there shall be any capital stock
reorganization or reclassification of the Common Stock
(other than a subdivision or combination of the
outstanding Common Stock and other than a change in
the par value of the Common Stock), or any
consolidation or merger to which the Corporation is a
party or any statutory exchange of securities with
another corporation and for which approval of any
stockholders of the Corporation is required, or any
sale or transfer of all or substantially all the
assets of the Corporation; or
(d) there shall be a voluntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed with the
conversion agent, and shall cause to be mailed to the
<PAGE>
11
holders of shares of the Convertible Preferred Stock
at their addresses as shown on the stock books of the
Corporation, at least 10 days prior to the applicable
date hereinafter specified, a notice stating (i) the
date on which a record is to be taken for the purpose
of such distribution or rights, or, if a record is not
to be taken, the date as of which the holders of
Common Stock of record to be entitled to such
distribution or rights are to be determined, or (ii)
the date on which such reorganization,
reclassification, consolidation, merger, statutory
exchange, sale, transfer, dissolution, liquidation or
winding up is expected to become effective, and the
date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other
property deliverable upon such reorganization,
reclassification, consolidation, merger, statutory
exchange, sale, transfer, dissolution, liquidation or
winding up. Failure to give such notice or any defect
therein shall not affect the legality or validity of
the proceedings described in subdivision (a), (b), (c)
or (d) of this subsection (V).
(VI) The Corporation covenants that it will
at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its
authorized but unissued shares of Common Stock or its
issued shares of Common Stock held in its treasury, or
both, for the purpose of effecting conversions of the
Convertible Preferred Stock, the full number of shares
of Common Stock deliverable upon the conversion of all
shares of Convertible Preferred Stock then outstanding
and not theretofore converted or then deliverable upon
conversion of the Corporation's 8% Convertible
Debentures Due 1998 (the "1998 Debentures"). For
purposes of this subsection (VI), the number of shares
of Common Stock which shall be deliverable upon the
conversion of all such shares of Convertible Preferred
Stock shall be computed as if at the time of
computation all such shares were held by a single
holder.
Before taking any action which would cause an
adjustment reducing the Conversion Price below the
then par value (if any) of the shares of Common Stock
deliverable upon conversion of the Convertible
Preferred Stock, the Corporation will take any
corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation
<PAGE>
12
may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted
Conversion Price.
To the extent not already listed, the Corporation
will endeavor to list the shares of Common Stock
required to be delivered upon conversion of the
Convertible Preferred Stock prior to such delivery
upon each national securities exchange, if any, upon
which the outstanding Common Stock is listed at the
time of such delivery.
Prior to the delivery of any securities which the
Corporation shall be obligated to deliver upon
conversion of the Convertible Preferred Stock, the
Corporation will endeavor to comply with all Federal
and state laws and regulations thereunder requiring
the registration of such securities with, or any
approval of or consent to the delivery thereof by, any
governmental authority.
(VII) The Corporation will pay any and all
documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of shares
of Common Stock on conversions of the Convertible
Preferred Stock pursuant hereto; provided, however,
-------- -------
that the Corporation shall not be required to pay any
tax which may be payable in respect of any transfer
involved in the issue or delivery of shares of Common
Stock in a name other than that of the holder of the
Convertible Preferred Stock to be converted and no
such issue or delivery shall be made unless and until
the person requesting such issue or delivery has paid
to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation,
that such tax has been paid.
(VIII) Notwithstanding any other provision
herein to the contrary, in case of any consolidation
or merger to which the Corporation is a party (other
than a merger or consolidation in which the
Corporation is the continuing corporation), or in case
of any statutory exchange of securities with another
corporation (including any exchange effected in
connection with a merger of a third corporation into
the Corporation), the holder of each share of
Convertible Preferred Stock then outstanding shall
have the right thereafter to convert such share into
the kind and amount of securities, cash or other
property receivable upon such consolidation, merger or
<PAGE>
13
statutory exchange by a holder of the number of shares
of Common Stock into which such share of Convertible
Preferred Stock might have been converted immediately
prior to such consolidation, merger or statutory
exchange, assuming such holder of Common Stock failed
to exercise his rights of election, if any, as to the
kind or amount of securities, cash or other property
receivable upon such consolidation, merger or
statutory exchange (provided that if the kind or
amount of securities, cash or other property
receivable upon such consolidation, merger or
statutory exchange is not the same for each share of
Common Stock in respect of which such rights of
election shall not have been exercised ("non-electing
share"), then for the purpose of this subsection
(VIII) the kind and amount of securities, cash or
other property receivable upon such consolidation,
merger or statutory exchange for each non-electing
share shall be deemed to be the kind and amount so
receivable per share by a plurality of the
non-electing shares). Thereafter, the holders of the
Convertible Preferred Stock shall be entitled to
appropriate adjustments with respect to their
conversion rights to the end that the provisions set
forth in this paragraph (iii) shall correspondingly be
made applicable, as nearly as may reasonably be, in
relation to any shares of stock or other securities or
property thereafter deliverable on the conversion of
the Convertible Preferred Stock. Any such adjustment
shall be approved by a firm of independent public
accountants, evidenced by a certificate to that effect
delivered to the conversion agent; and any adjustment
so approved shall for all purposes hereof conclusively
be deemed to be an appropriate adjustment.
The above provisions of this subsection (VIII)
shall similarly apply to successive consolidations,
mergers or statutory exchanges.
(iv) Upon any conversion or redemption of
shares of Convertible Preferred Stock, the shares of
Convertible Preferred Stock so converted or redeemed
shall have the status of authorized and unissued
shares of Series Preferred Stock, and the number of
shares of Series Preferred Stock which the Corporation
shall have authority to issue shall not be decreased
by the conversion or redemption of shares of
Convertible Preferred Stock.
<PAGE>
14
(v) The holders of shares of Convertible
Preferred Stock shall have no voting rights
whatsoever, except for any voting rights to which they
may be entitled under the laws of the State of
Delaware, and except as follows:
(I) If and whenever at any time or times
dividends payable on the Convertible Preferred Stock
or on any other Parity Preferred Stock shall have been
in arrears and unpaid in an aggregate amount equal to
or exceeding the amount of dividends payable thereon
for six quarterly periods or three semi-annual
periods, as the case may be, then the holders of
Parity Preferred Stock shall have, in addition to the
other voting rights set forth herein, the exclusive
right, voting separately as a class, to elect two
directors of the Corporation, such directors to be in
addition to the number of directors constituting the
Board of Directors immediately prior to the accrual of
such right, the remaining directors to be elected by
the other class or classes of stock entitled to vote
therefor at each meeting of stockholders held for the
purpose of electing directors. Such voting right
shall continue until such time as all cumulative
dividends accumulated on all the Parity Preferred
Stock having cumulative dividends shall have been paid
in full and until any noncumulative dividends payable
on all the Parity Preferred Stock having noncumulative
dividends shall have been paid regularly for at least
one year, at which time such voting right of the
holders of the Parity Preferred Stock shall terminate,
subject to revesting in the event of each and every
subsequent event of default of the character indicated
above.
Whenever such voting right shall have vested,
such right may be exercised initially either at a
special meeting of the holders of the Parity Preferred
Stock, called as hereinafter provided, or at any
annual meeting of stockholders held for the purpose of
electing directors, and thereafter at each successive
annual meeting.
At any time when such voting right shall have
vested in the holders of the Parity Preferred Stock,
and if such right shall not already have been
initially exercised, a proper officer of the
Corporation shall, upon the written request of the
holders of record of 10% in number of shares of the
Parity Preferred Stock then outstanding, addressed to
<PAGE>
15
the Secretary of the Corporation, call a special
meeting of the holders of the Parity Preferred Stock
and of any other class or classes of stock having
voting power with respect thereto for the purpose of
electing directors. Such meeting shall be held at the
earliest practicable date upon the notice required for
annual meetings of stockholders at the place for
holding of annual meetings of stockholders of the
Corporation, or, if none, at a place designated by the
Secretary of the Corporation. If such meeting shall
not be called by the proper officers of the
Corporation within 30 days after the personal service
of such written request upon the Secretary of the
Corporation, or within 30 days after mailing the same
within the United States of America, by registered
mail, addressed to the Secretary of the Corporation at
its principal office (such mailing to be evidenced by
the registry receipt issued by the postal
authorities), then the holders of record of 10% in
number of shares of the Parity Preferred Stock then
outstanding may designate in writing one of their
number to call such meeting at the expense of the
Corporation, and such meeting may be called by such
person so designated upon the notice required for
annual meetings of stockholders and shall be held at
the same place as is elsewhere provided for in this
subsection (I). Any holder of the Parity Preferred
Stock shall have access to the stock books of the
Corporation for the purpose of causing a meeting of
stockholders to be called pursuant to the provisions
of this paragraph. Notwithstanding the provisions of
this paragraph, however, no such special meeting shall
be called during a period within 90 days immediately
preceding the date fixed for the next annual meeting
of stockholders.
At any meeting held for the purpose of electing
directors at which the holders of the Parity Preferred
Stock shall have the right to elect directors as
provided herein, the presence in person or by proxy of
the holders of 33-1/3% of the then outstanding shares
of the Parity Preferred Stock shall be required and be
sufficient to constitute a quorum of the Parity
Preferred Stock for the election of directors by the
holders of the Parity Preferred Stock. At any such
meeting or adjournment thereof (A) the absence of a
quorum of the holders of the Parity Preferred Stock
shall not prevent the election of directors other than
those to be elected by the holders of the Parity
Preferred Stock and the absence of a quorum or quorums
<PAGE>
16
of the holders of other classes of capital stock
entitled to elect such other directors shall not
prevent the election of directors to be elected by the
holders of the Parity Preferred Stock and (B) in the
absence of a quorum of the holders of any class of
stock entitled to vote for the election of directors,
a majority of the holders present in person or by
proxy of such class shall have the power to adjourn
the meeting for the election of directors which the
holders of such class are entitled to elect, from time
to time, without notice other than announcement at the
meeting, until a quorum shall be present.
The directors elected pursuant to this subsection
(I) shall serve until the next annual meeting or until
their respective successors shall be elected and shall
qualify; provided, however, that when the right of the
-------- -------
holders of the Parity Preferred Stock to elect
directors as herein provided shall terminate, the
terms of office of all persons so elected by the
holders of the Parity Preferred Stock shall terminate,
and the number of directors of the Corporation shall
thereupon be such number as may be provided in the
By-Laws of the Corporation irrespective of any
increase made pursuant to this subsection (I).
(II) So long as any shares of the
Convertible Preferred Stock remain outstanding, the
Corporation will not, either directly or indirectly or
through merger or consolidation with any other
corporation:
(a) without the affirmative vote at a
meeting or the written consent with or without a
meeting of the holders of at least 66-2/3% in number
of shares of the Series Preferred Stock of all series
then outstanding, (A) create any class or classes of
stock ranking equal or prior to the Series Preferred
Stock either as to dividends or upon liquidation or
increase the authorized number of shares of any class
or classes of stock ranking equal or prior to the
Series Preferred Stock either as to dividends or upon
liquidation, (B) amend, alter or repeal any of the
provisions of the Certificate of Incorporation so as
to affect adversely the preferences, special rights or
powers of the Series Preferred Stock or (C) authorize
any reclassification of the Series Preferred Stock;
<PAGE>
17
(b) without the affirmative vote at a
meeting or the written consent with or without a
meeting of the holders of at least 66-2/3% in number
of shares of the Convertible Preferred Stock then
outstanding, amend, alter or repeal any of the
provisions hereof so as to affect adversely the
preferences, special rights or powers of the
Convertible Preferred Stock; or
(c) without the affirmative vote at a
meeting or the written consent with or without a
meeting of the holders of at least a majority in
number of shares of the Series Preferred Stock of all
series then outstanding, increase the authorized
number of shares of the Series Preferred Stock.
(vi) The shares of the Convertible Preferred
Stock may be redeemed at the option of the Corporation
as a whole at any time, upon not less than 25 nor more
than 60 days' prior notice mailed to the holders of
the shares to be redeemed at their addresses as shown
on the stock books of the Corporation, at a redemption
price of $25.00 per share, together with an amount
equal to all dividends (whether or not earned or
declared) accumulated and unpaid to the date fixed for
redemption. Upon such redemption date, all holders of
shares of Convertible Preferred Stock shall cease to
be stockholders with respect to such shares and
thereafter such shares shall no longer be transferable
on the books of the Corporation and such holders shall
have no interest or claim against the Corporation with
respect to such shares except the right to receive
payment of the redemption price upon surrender of
their certificates.
If full cumulative dividends on the Convertible
Preferred Stock have not been paid, the Corporation
may not purchase or acquire any shares of the
Convertible Preferred Stock otherwise than pursuant to
a purchase or exchange offer made on the same terms to
all holders of the Convertible Preferred Stock.
(vii) No consent of the holders of the
Convertible Preferred Stock shall be required for (i)
the creation of any indebtedness of any kind of the
Corporation, (ii) the creation of any class of stock
of the Corporation ranking junior as to dividends or
upon liquidation to the Series Preferred Stock or
(iii) any increase or decrease in the amount of
authorized Common Stock or any increase, decrease or
<PAGE>
18
change in the par value thereof or in any other terms
thereof.
(viii) The Board reserves the right by
subsequent amendment from time to time to increase
(subject to the provisions of paragraph (v)(II)(c)) or
decrease the number of shares which constitute the
Convertible Preferred Stock (but not below the
aggregate number of shares thereof then outstanding or
then deliverable upon conversion of the 1998
Debentures) and in other respects to amend the terms
of the Convertible Preferred Stock within the
limitations provided by law, resolutions of the Board
and the Certificate of Incorporation.
IN WITNESS WHEREOF, Paine Webber Group Inc. has caused
this Certificate to be made under the seal of the Corporation
and signed by James Treadway, its Vice President, and attested
by Dorothy F. Haughey, its Assistant Secretary, this 14th day
of January, 1992. ----
PAINE WEBBER GROUP INC.
/s/ James Treadway
--------------------------------------
James Treadway
Vice President
[Sea1]
Attest:
/s/ Dorothy F. Haughey
- --------------------------------------
Dorothy F. Haughey
Assistant Secretary
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
This instrument was acknowledged before me this 14th
----
day of January, 1992 by JAMES TREADWAY and DOROTHY F. HAUGHEY,
as Vice President and Assistant Secretary, respectively, of
PAINE WEBBER GROUP INC., a Delaware corporation, being
authorized so to do on its behalf.
IN WITNESS WHEREOF, I hereunto set my hand and
official seal.
ELISA B. BELL
NOTARY PUBLIC, State of New York /s/ Elisa A. Bell
No. 03-4818330 ------------------------------
Qualified in Bronx County Notary Public
Commission Expires June 30 1992
-
<PAGE>
1
CERTIFICATE OF THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND
THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF, WHICH
HAVE NOT BEEN SET FORTH IN THE CERTIFICATE OF INCORPORATION OR
IN ANY AMENDMENT THERETO, OF THE
7.5% CONVERTIBLE PREFERRED STOCK, SERIES B
($20 Par Value)
PAINE WEBBER GROUP INC.
------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------------
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted on February 11, 1991, by the
Special Committee of the Board of Directors of Paine Webber
Group Inc., a Delaware corporation (hereinafter called the
"Corporation"), pursuant to provisions of Section 141(c) of the
General Corporation Law of the State of Delaware and
Article IV, Section 1 of the By-laws of the Corporation;
RESOLVED, that pursuant to authority expressly
granted to and vested in the Board of Directors of the
Corporation by provisions of the Certificate of
Incorporation of the Corporation (the "Certificate of
Incorporation"), the issuance of a series of the
Series Preferred Stock, par value $20 per share (the
"Series Preferred Stock"), which shall consist of up
to 240,000 of the 20,000,000 shares of Series
Preferred Stock which the Corporation now has
authority to issue, be, and the same hereby is,
authorized, and this Board of Directors hereby fixes
the powers, designations, preferences and relative,
participating, optional or other special rights, and
the qualifications, limitations or restrictions
thereof, of the shares of such series (in addition to
the powers, designations, preferences and relative,
participating, optional or other special rights, and
the qualifications, limitations or restrictions
thereof, set forth in the Certificate of Incorporation
which are applicable to the Series Preferred Stock) as
follows:
The designation of such series of the Series
Preferred Stock authorized by this resolution shall be
the 7.5% Convertible Preferred Stock, Series B (the
"Convertible Preferred Stock"). The number of shares
of Convertible Preferred Stock shall be 240,000.
<PAGE>
2
(i) Holders of shares of Convertible
Preferred Stock will be entitled to receive, when and
as declared by, the Board of Directors (the "Board") of
Paine Webber Group Inc. (the "Corporation") out of
assets of the Corporation legally available for
payment, an annual cash dividend of $1.275 per share,
payable in semi-annual installments on June 30 and
December 31, commencing June 30, 1991. Dividends on
the Convertible Preferred Stock will be cumulative
from the date of initial issuance of any shares of
Convertible Preferred Stock. Dividends will be
payable to holders of record as they appear on the
stock books of the Corporation on such record dates,
not more than 60 days nor less than 10 days preceding
the payment dates thereof, as shall be fixed by the
Board. When dividends are not paid in full upon the
Convertible Preferred Stock and any other preferred
stock ranking on a parity as to dividends with the
Convertible Preferred Stock (such other preferred
stock and the Convertible Preferred Stock hereinafter
being collectively referred to as "Parity Preferred
Stock"), all dividends declared upon shares of Parity
Preferred Stock will be declared pro rata so that in
all cases the amount of dividends declared per share
on the Convertible Preferred Stock and such other
Parity Preferred Stock shall bear to each other the
same ratio that accumulated and unpaid dividends per
share on the shares of Convertible Preferred Stock and
such other Parity Preferred Stock bear to each other.
Except as set forth in the preceding sentence, unless
full cumulative dividends on the Convertible Preferred
Stock have been paid, no dividends (other than in
Common Stock of the Corporation (as defined in
paragraph (iii)(I) below) or any other stock of the
Corporation ranking junior to the Convertible
<PAGE>
3
Preferred Stock as to dividends) may be paid or
declared and set aside for payment or other
distribution made upon the Common Stock or on any
other stock of the Corporation ranking junior to or on
a parity with the Convertible Preferred Stock as to
dividends, nor may any Common Stock or any other stock
of the Corporation ranking junior to or on a parity
with the Convertible Preferred Stock as to dividends
be redeemed, purchased or otherwise acquired for any
consideration (or any payment made to or available for
a sinking fund for the redemption of any shares of
such stock) by the Corporation (except by conversion
into or exchange for stock of the Corporation ranking
junior to the Convertible Preferred Stock as to
dividends). Dividends payable for any partial
dividend period shall be calculated on the basis of a
360-day year of 12 30-day months.
(ii) The shares of Convertible Preferred
Stock shall rank prior to the shares of Common Stock
and of any other class of stock of the Corporation
ranking junior to the Series Preferred Stock upon
liquidation, so that in the event of any liquidation,
dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the
Convertible Preferred Stock shall be entitled to
receive out of the assets of the Corporation available
for distribution to its stockholders, whether from
capital, surplus or earnings, before any distribution
is made to holders of shares of Common Stock or any
other such junior stock, an amount equal to $25 per
share (the "Liquidation Preference" of a share of
Convertible Preferred Stock) plus an amount equal to
all dividends (whether or not earned or declared)
accumulated and unpaid on the shares of Convertible
Preferred Stock to the date of final distribution.
If, upon any liquidation, dissolution or winding up of
the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of
shares of Parity Preferred Stock shall be insufficient
to pay in full the liquidation preference amounts of
the Parity Preferred Stock and all dividends (whether
or not earned or declared) accumulated and unpaid
thereon, then such assets, or the proceeds thereof,
shall be distributeble among such holders ratably in
accordance with the respective amounts which would be
payable on such shares if all amounts payable thereon
were paid in full. For the purposes hereof, the
voluntary sale, conveyance, exchange or transfer (for
cash, shares of stock, securities or other
<PAGE>
4
consideration) of all or substantially all the
property or assets of the Corporation shall be deemed
a voluntary liquidation, dissolution or winding up of
the Corporation, but a consolidation or merger of the
Corporation with one or more other corporations shall
not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary.
(iii) (I) Subject to and upon compliance
with the provisions of this paragraph (iii), the
holder of a share of Convertible Preferred Stock shall
have the right, at his option, at any time, except
that, if such share is called for redemption, not
after the close of business on the fifth day next
preceding the date fixed for such redemption, to
convert such share into that number of fully paid and
nonassessable shares of Common Stock (calculated as to
each conversion to the nearest 1/100th of a share)
obtained by dividing the Liquidation Preference of
such share being converted by the Conversion Price (as
defined below), upon surrender of such share so to be
converted, such surrender to be made in the manner
provided in subsection (II) of this paragraph (iii).
The term "Common Stock" shall mean the Common
Stock, $1 par value, of the Corporation as the same
exists at the date of this Certificate or as such
stock may be constituted from time to time, except
that for the purpose of subsection (V) of this
paragraph (iii) the term "Common Stock" shall also
mean and include stock of the Corporation of any
class, whether now or hereafter authorized, which
shall have the right to participate in the
distribution of either earnings or assets of the
Corporation without limit as to amount or percentage.
The term "Conversion Price" shall mean $20.80 as
adjusted in accordance with the provisions of this
paragraph (iii).
(II) In order to exercise the conversion
privilege, the holder of each share of Convertible
Preferred Stock to be converted shall surrender the
certificate representing such share at the office of
the conversion agent for the Convertible Preferred
Stock in the Borough of Manhattan, City of New York,
appointed for such purpose by the Corporation, with
the Notice of Election to Convert on the back of said
certificate completed and signed. Unless the shares
issuable on conversion are to be issued in the same
<PAGE>
5
name as the name in which such share of Convertible
Preferred Stock is registered, each share surrendered
for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation and
duly executed by the holder or his duly authorized
attorney, and an amount sufficient to pay any transfer
or similar tax. No payment or adjustment shall be
made on conversion for dividends accumulated on the
Convertible Preferred Stock surrendered for conversion
or for dividends on Common Stock delivered on such
conversion. As promptly as practicable after the
surrender of the certificates for shares of
Convertible Preferred Stock as aforesaid, the
Corporation shall issue and shall deliver at such
office to such holder, or on his written order, a
certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of
such shares in accordance with the provisions of this
paragraph (iii), and any fractional interest in
respect of a share of Common Stock arising upon such
conversion shall be settled as provided in subsection
(III) of this paragraph (iii).
Each conversion shall be deemed to have been
effected immediately prior to the close of business on
the date on which the certificates for shares of
Convertible Preferred Stock shall have been
surrendered and such notice received by the
Corporation as aforesaid, and the person or persons in
whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder
or holders of record of the shares represented thereby
at such time on such date and such conversion shall be
at the Conversion Price in effect at such time on such
date, unless the stock transfer books of the
Corporation shall be closed on that date, in which
event such person or persons shall be deemed to have
become such holder or holders of record at the close
of business on the next succeeding day on which such
stock transfer books are open, but such conversion
shall be at the Conversion Price in effect on the date
upon which such shares shall have been surrendered and
such notice received by the Corporation. All shares
of Common Stock delivered upon conversion of the
Convertible Preferred Stock will upon delivery be duly
and validly issued and fully paid and nonassessable,
free of all liens and charges and not subject to any
preemptive rights.
<PAGE>
6
(III) No fractional shares or scrip
representing fractions of shares of Common Stock shall
be issued upon conversion of the Convertible Preferred
Stock. Instead of any fractional interest in a share
of Common Stock which would otherwise be deliverable
upon the conversion of a share of Convertible
Preferred Stock, the Corporation shall pay to the
holder of such share an amount in cash (computed to
the nearest cent) equal to the current market price
(as defined in subsection (IV)(d) of this
paragraph (iii)) thereof at the close of business on
the business day next preceding the day of
conversion. If more than one share shall be
surrendered for conversion at one time by the same
holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on
the basis of the aggregate Liquidation Preference of
the shares of Convertible Preferred Stock so
surrendered.
(IV) The Conversion Price shall be adjusted
from time to time as follows:
(a) In case the Corporation shall hereafter
(i) pay a dividend or make a distribution on the
Common Stock in shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock into a greater
number of shares, (iii) combine its outstanding shares
of Common Stock into a smaller number of shares, or
(iv) issue by reclassification of the Common Stock any
shares of capital stock of the Corporation, the
Conversion Price in effect immediately prior to such
action shall be adjusted so that the holder of any
share of Convertible Preferred Stock thereafter
surrendered for conversion shall be entitled to
receive the number of shares of Common Stock or other
capital stock of the Corporation which he would have
owned or been entitled to receive immediately
following such action had such share been converted
immediately prior thereto. An adjustment made
pursuant to this subdivision (a) shall become
effective immediately after the record date, in the
case of a dividend or distribution, or immediately
after the effective date, in the case of a
subdivision, combination or reclassification. If, as
a result of an adjustment made pursuant to this
subdivision (a), the holder of any share of
Convertible Preferred Stock thereafter surrendered for
conversion shall become entitled to receive shares of
two or more classes of capital stock or shares of
<PAGE>
7
Common Stock and other capital stock of the
Corporation, the Board (whose determination shall be
conclusive and shall be described in a statement filed
with the conversion agent by the Corporation as soon
as practicable) shall determine the allocation of the
adjusted Conversion Price between or among shares of
such classes of capital stock or shares of Common
Stock and other capital stock.
(b) In case the Corporation shall hereafter
issue rights or warrants to holders of its outstanding
shares of Common Stock generally entitling them (for a
period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase shares
of Common Stock at a price per share less than the
current market price per share (as determined pursuant
to subdivision (d) of this subsection (IV)) of the
Common Stock on the record date mentioned in the next
sentence (other than pursuant to an automatic dividend
reinvestment plan of the Corporation or any
substantially similar plan), the Conversion Price
shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price
in effect immediately prior to the date of issuance of
such rights or warrants by a fraction of which the
numerator shall be the number of shares of Common
Stock outstanding on the date of issuance of such
rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares
so offered would purchase at such current market
price, and of which the denominator shall be the
number of shares of Common Stock outstanding on the
date of issuance of such rights or warrants plus the
number of additional shares of Common Stock offered
for subscription or purchase. Such adjustment shall
become effective immediately after the record date for
the determination of stockholders entitled to receive
such rights or warrants.
(c) In case the Corporation shall hereafter
distribute to holders of its outstanding shares of
Common Stock generally evidences of its indebtedness
or assets (excluding any cash dividend paid from
retained earnings of the Corporation and dividends or
distributions payable in stock for which adjustment is
made pursuant to subdivision (a) of this
subsection (IV)) or rights or warrants to subscribe to
securities of the Corporation (excluding those
referred to in subdivision (b) of this
subsection (IV)), then in each such case the
<PAGE>
8
Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the
date of such distribution by a fraction of which the
numerator shall be the current market price per share
(determined as provided in subdivision (d) of this
subsection (IV)) of the Common Stock on the record
date mentioned in the next sentence less the then fair
market value (as determined by the Board, whose
determination shall be conclusive and shall be
described in a statement filed with the conversion
agent by the Corporation as soon as practicable) of
the portion of the evidences of indebtedness or assets
so distributed to the holder of one share of Common
Stock or of such subscription rights or warrants
applicable to one share of Common Stock, and of which
the denominator shall be such current market price per
share of Common Stock. Such adjustment shall become
effective immediately after the record date for the
determination of stockholders entitled to receive such
distribution.
(d) For the purpose of subsection (III) and
subdivisions (b) and (c) of this subsection (IV), the
current market price per share of Common Stock on any
date shall be deemed to be the average of the daily
market prices for the 30 consecutive days on which the
New York Stock Exchange is open for trading commencing
45 trading days before the day in question. The term
"daily market price" when used with reference to the
Common Stock shall mean the price of a share of Common
Stock on the relevant date, determined on the basis of
the last reported sale price regular way of the Common
Stock as reported on the composite tape, or similar
reporting system, for issues listed on the New York
Stock Exchange (or if the Common Stock is not then
listed on that Exchange, for issues listed on such
other national securities exchange upon which the
Common Stock is listed as may be designated by the
Board for the purposes hereof) or, if there is no such
reported sale on the day in question, on the basis of
the average of the closing bid and asked quotations as
so reported, or, if the Common Stock is not then
listed on any national securities exchange, on the
basis of the closing price, if the Common Stock is a
national market issue, or the average of the high bid
and low asked quotations on the day in question in the
over-the-counter market as reported by the National
Association of Securities Dealers' Automated
Quotations System, or if not so quoted, as reported by
<PAGE>
9
National Quotation Bureau, Incorporated, or a similar
organization.
(e) In any case in which this paragraph
(iii) shall require that an adjustment be made
immediately following a record date or an effective
date, the Corporation may elect to defer (but only
until five business days following the filing by the
Corporation with the conversion agent of the
certificate of independent public accountants required
by subdivision (g) of this subsection (IV)) issuing to
the holder of any share of Convertible Preferred Stock
converted after such record date or effective date the
additional shares of Common Stock or other capital
stock issuable upon such conversion over and above the
shares of Common Stock or other capital stock issuable
upon such conversion on the basis of the Conversion
Price prior to adjustment, and paying to such holder
any amount of cash in lieu of a fractional share.
(f) No adjustment in the Conversion Price
shall be required to be made unless such adjustment
would require an increase or decrease of at least 1%
of such price; provided, however, that any adjustments
-------- -------
which by reason of this subdivision (f) are not
required to be made shall be carried forward and taken
into account in any subsequent adjustment. All
calculations under this paragraph (iii) shall be made
to the nearest cent or to the nearest 1/100th of a
share, as the case may be. Anything in this paragraph
(iii) to the contrary notwithstanding, the Corporation
shall be entitled to make such reduction in the
Conversion Price, in addition to those required by
this paragraph (iii), as it in its discretion shall
determine to be advisable in order that any stock
dividend, subdivision of shares, distribution of
rights to purchase stock or securities, or
distribution of securities convertible into or
exchangeable for stock hereafter made by the
Corporation to its stockholders shall not be taxable
to the recipients.
(g) Whenever the Conversion Price is
adjusted as herein provided, (i) the Corporation shall
promptly file with the conversion agent a certificate
of a firm of independent public accountants (who may
be the regular accountants employed by the
Corporation) setting forth the Conversion Price after
such adjustment and setting forth a brief statement of
the facts requiring such adjustment and the manner of
<PAGE>
10
computing the same, which certificate shall be
conclusive evidence of the correctness of such
adjustment, and (ii) a notice stating that the
Conversion Price has been adjusted and setting forth
the adjusted Conversion Price shall forthwith be
mailed by the Corporation to the holders of the
Convertible Preferred Stock at their addresses as
shown on the stock books of the Corporation.
(h) In the event that at any time as a
result of an adjustment made pursuant to subdivision
(a) of this subsection (IV), the holder of any share
of Convertible Preferred Stock thereafter surrendered
for conversion shall become entitled to receive any
shares of the Corporation other than shares of Common
Stock, thereafter the Conversion Price of such other
shares so receivable upon conversion of any share
shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common
Stock contained in this paragraph (iii).
(V) In case:
(a) the Corporation shall take any action
which would require any adjustment in the Conversion
Price pursuant to subsection (IV)(c); or
(b) the Corporation shall authorize the
granting to the holders of the Common Stock of rights
or warrants to subscribe for or purchase any shares of
stock of any class or of any other rights; or
(c) there shall be any capital stock
reorganization or reclassification of the Common Stock
(other than a subdivision or combination of the
outstanding Common Stock and other than a change in
the par value of the Common Stock), or any
consolidation or merger to which the Corporation is a
party or any statutory exchange of securities with
another corporation and for which approval of any
stockholders of the Corporation is required, or any
sale or transfer of all or substantially all the
assets of the Corporation; or
(d) there shall be a voluntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed with the
conversion agent, and shall cause to be mailed to the
<PAGE>
11
holders of shares of the Convertible Preferred Stock
at their addresses as shown on the stock books of the
Corporation, at least 10 days prior to the applicable
date hereinafter specified, a notice stating (i) the
date on which a record is to be taken for the purpose
of such distribution or rights, or, if a record is not
to be taken, the date as of which the holders of
Common Stock of record to be entitled to such
distribution or rights are to be determined, or (ii)
the date on which such reorganization,
reclassification, consolidation, merger, statutory
exchange, sale, transfer, dissolution, liquidation or
winding up is expected to become effective, and the
date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other
property deliverable upon such reorganization,
reclassification, consolidation, merger, statutory
exchange, sale, transfer, dissolution, liquidation or
winding up. Failure to give such notice or any defect
therein shall not affect the legality or validity of
the proceedings described in subdivision (a), (b), (c)
or (d) of this subsection (V).
(VI) The Corporation covenants that it will
at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its
authorized but unissued shares of Common Stock or its
issued shares of Common Stock held in its treasury, or
both, for the purpose of effecting conversions of the
Convertible Preferred Stock, the full number of shares
of Common Stock deliverable upon the conversion of all
shares of Convertible Preferred Stock then outstanding
and not theretofore converted or then deliverable upon
conversion of the Corporation's 8% Convertible
Debentures Due 2000 (the "2000 Debentures"). For
purposes of this subsection (VI), the number of shares
of Common Stock which shall be deliverable upon the
conversion of all such shares of Convertible Preferred
Stock shall be computed as if at the time of
computation all such shares were held by a single
holder.
Before taking any action which would cause an
adjustment reducing the Conversion Price below the
then par value (if any) of the shares of Common Stock
deliverable upon conversion of the Convertible
Preferred Stock, the Corporation will take any
corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation
<PAGE>
12
may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted
Conversion Price.
To the extent not already listed, the Corporation
will endeavor to list the shares of Common Stock
required to be delivered upon conversion of the
Convertible Preferred Stock prior to such delivery
upon each national securities exchange, if any, upon
which the outstanding Common Stock is listed at the
time of such delivery.
Prior to the delivery of any securities which the
Corporation shall be obligated to deliver upon
conversion of the Convertible Preferred Stock, the
Corporation will endeavor to comply with all Federal
and state laws and regulations thereunder requiring
the registration of such securities with, or any
approval of or consent to the delivery thereof by, any
governmental authority.
(VII) The Corporation will pay any and all
documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of shares
of Common Stock on conversions of the Convertible
Preferred Stock pursuant hereto; provided, however,
-------- -------
that the Corporation shall not be required to pay any
tax which may be payable in respect of any transfer
involved in the issue or delivery of shares of Common
Stock in a name other than that of the holder of the
Convertible Preferred Stock to be converted and no
such issue or delivery shall be made unless and until
the person requesting such issue or delivery has paid
to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation,
that such tax has been paid.
(VIII) Notwithstanding any other provision
herein to the contrary, in case of any consolidation
or merger to which the Corporation is a party (other
than a merger or consolidation in which the
Corporation is the continuing corporation), or in case
of any statutory exchange of securities with another
corporation (including any exchange effected in
connection with a merger of a third corporation into
the Corporation), the holder of each share of
Convertible Preferred Stock then outstanding shall
have the right thereafter to convert such share into
the kind and amount of securities, cash or other
property receivable upon such consolidation, merger or
<PAGE>
13
statutory exchange by a holder of the number of shares
of Common Stock into which such share of Convertible
Preferred Stock might have been converted immediately
prior to such consolidation, merger or statutory
exchange, assuming such holder of Common Stock failed
to exercise his rights of election, if any, as to the
kind or amount of securities, cash or other property
receivable upon such consolidation, merger or
statutory exchange (provided that if the kind or
amount of securities, cash or other property
receivable upon such consolidation, merger or
statutory exchange is not the same for each share of
Common Stock in respect of which such rights of
election shall not have been exercised ("non-electing
share"), then for the purpose of this subsection
(VIII) the kind and amount of securities, cash or
other property receivable upon such consolidation,
merger or statutory exchange for each non-electing
share shall be deemed to be the kind and amount so
receivable per share by a plurality of the
non-electing shares). Thereafter, the holders of the
Convertible Preferred Stock shall be entitled to
appropriate adjustments with respect to their
conversion rights to the end that the provisions set
forth in this paragraph (iii) shall correspondingly be
made applicable, as nearly as may reasonably be, in
relation to any shares of stock or other securities or
property thereafter deliverable on the conversion of
the Convertible Preferred Stock. Any such adjustment
shall be approved by a firm of independent public
accountants, evidenced by a certificate to that effect
delivered to the conversion agent; and any adjustment
so approved shall for all purposes hereof conclusively
be deemed to be an appropriate adjustment.
The above provisions of this subsection (VIII)
shall similarly apply to successive consolidations,
mergers or statutory exchanges.
(iv) Upon any conversion or redemption of
shares of Convertible Preferred Stock, the shares of
Convertible Preferred Stock so converted or redeemed
shall have the status of authorized and unissued
shares of Series Preferred Stock, and the number of
shares of Series Preferred Stock which the Corporation
shall have authority to issue shall not be decreased
by the conversion or redemption of shares of
Convertible Preferred Stock.
<PAGE>
14
(v) The holders of shares of Convertible
Preferred Stock shall have no voting rights
whatsoever, except for any voting rights to which they
may be entitled under the laws of the State of
Delaware, and except as follows:
(I) If and whenever at any time or times
dividends payable on the Convertible Preferred Stock
or on any other Parity Preferred Stock shall have been
in arrears and unpaid in an aggregate amount equal to
or exceeding the amount of dividends payable thereon
for six quarterly periods or three semi-annual
periods, as the case may be, then the holders of
Parity Preferred Stock shall have, in addition to the
other voting rights set forth herein, the exclusive
right, voting separately as a class, to elect two
directors of the Corporation, such directors to be in
addition to the number of directors constituting the
Board of Directors immediately prior to the accrual of
such right, the remaining directors to be elected by
the other class or classes of stock entitled to vote
therefor at each meeting of stockholders held for the
purpose of electing directors. Such voting right
shall continue until such time as all cumulative
dividends accumulated on all the Parity Preferred
Stock having cumulative dividends shall have been paid
in full and until any noncumulative dividends payable
on all the Parity Preferred Stock having noncumulative
dividends shall have been paid regularly for at least
one year, at which time such voting right of the
holders of the Parity Preferred Stock shall terminate,
subject to revesting in the event of each and every
subsequent event of default of the character indicated
above.
Whenever such voting right shall have vested,
such right may be exercised initially either at a
special meeting of the holders of the Parity Preferred
Stock, called as hereinafter provided, or at any
annual meeting of stockholders held for the purpose of
electing directors, and thereafter at each successive
annual meeting.
At any time when such voting right shall have
vested in the holders of the Parity Preferred Stock,
and if such right shall not already have been
initially exercised, a proper officer of the
Corporation shall, upon the written request of the
holders of record of 10% in number of shares of the
Parity Preferred Stock then outstanding, addressed to
<PAGE>
15
the Secretary of the Corporation, call a special
meeting of the holders of the Parity Preferred Stock
and of any other class or classes of stock having
voting power with respect thereto for the purpose of
electing directors. Such meeting shall be held at the
earliest practicable date upon the notice required for
annual meetings of stockholders at the place for
holding of annual meetings of stockholders of the
Corporation, or, if none, at a place designated by the
Secretary of the Corporation. If such meeting shall
not be called by the proper officers of the
Corporation within 30 days after the personal service
of such written request upon the Secretary of the
Corporation, or within 30 days after mailing the same
within the United States of America, by registered
mail, addressed to the Secretary of the Corporation at
its principal office (such mailing to be evidenced by
the registry receipt issued by the postal
authorities), then the holders of record of 10% in
number of shares of the Parity Preferred Stock then
outstanding may designate in writing one of their
number to call such meeting at the expense of the
Corporation, and such meeting may be called by such
person so designated upon the notice required for
annual meetings of stockholders and shall be held at
the same place as is elsewhere provided for in this
subsection (I). Any holder of the Parity Preferred
Stock shall have access to the stock books of the
Corporation for the purpose of causing a meeting of
stockholders to be called pursuant to the provisions
of this paragraph. Notwithstanding the provisions of
this paragraph, however, no such special meeting shall
be called during a period within 90 days immediately
preceding the date fixed for the next annual meeting
of stockholders.
At any meeting held for the purpose of electing
directors at which the holders of the Parity Preferred
Stock shall have the right to elect directors as
provided herein, the presence in person or by proxy of
the holders of 33-1/3% of the then outstanding shares
of the Parity Preferred Stock shall be required and be
sufficient to constitutes a quorum of the Parity
Preferred Stock for the election of directors by the
holders of the Parity Preferred Stock. At any such
meeting or adjournment thereof (A) the absence of a
quorum of the holders of the Parity Preferred Stock
shall not prevent the election of directors other than
those to be elected by the holders of the Parity
Preferred Stock and the absence of a quorum or quorums
<PAGE>
16
of the holders of other classes of capital stock
entitled to elect such other directors shall not
prevent the election of directors to be elected by the
holders of the Parity Preferred Stock and (B) in the
absence of a quorum of the holders of any class of
stock entitled to vote for the election of directors,
a majority of the holders present in person or by
proxy of such class shall have the power to adjourn
the meeting for the election of directors which the
holders of such class are entitled to elect, from time
to time, without notice other than announcement at the
meeting, until a quorum shall be present.
The directors elected pursuant to this subsection
(I) shall serve until the next annual meeting or until
their respective successors shall be elected and shall
qualify; provided, however, that when the right of the
-------- -------
holders of the Parity Preferred Stock to elect
directors as herein provided shall terminate, the
terms of office of all persons so elected by the
holders of the Parity Preferred Stock shall terminate,
and the number of directors of the Corporation shall
thereupon be such number as may be provided in the
By-Laws of the Corporation irrespective of any
increase made pursuant to this subsection (I).
(II) So long as any shares of the
Convertible Preferred Stock remain outstanding, the
Corporation will not, either directly or indirectly or
through merger or consolidation with any other
corporation:
(a) without the affirmative vote at a
meeting or the written consent with or without a
meeting of the holders of at least 66-2/3% in number
of shares of the Series Preferred Stock of all series
then outstanding, (A) create any class or classes of
stock ranking equal or prior to the Series Preferred
Stock either as to dividends or upon liquidation or
increase the authorized number of shares of any class
or classes of stock ranking equal or prior to the
Series Preferred Stock either as to dividends or upon
liquidation, (B) amend, alter or repeal any of the
provisions of the Certificate of Incorporation so as
to affect adversely the preferences, special rights or
powers of the Series Preferred Stock or (C) authorize
any reclassification of the Series Preferred Stock;
<PAGE>
17
(b) without the affirmative vote at a
meeting or the written consent with or without a
meeting of the holders of at least 66-2/3% in number
of shares of the Convertible Preferred Stock then
outstanding, amend, alter or repeal any of the
provisions hereof so as to affect adverse1y the
preferences, special rights or powers of the
Convertible Preferred Stock; or
(c) without the affirmative vote at a
meeting or the written consent with or without a
meeting of the holders of at least a majority in
number of shares of the Series Preferred Stock of all
series then outstanding, increase the authorized
number of shares of the Series Preferred Stock.
(vi) The shares of the Convertible Preferred
Stock may be redeemed at the option of the Corporation
as a whole at any time, upon not less than 25 nor more
than 60 days' prior notice mailed to the holders of
the shares to be redeemed at their addresses as shown
on the stock books of the Corporation, at a redemption
price of $25.00 per share, together with an amount
equal to all dividends (whether or not earned or
declared) accumulated and unpaid to the date fixed for
redemption. Upon such redemption date, all holders of
shares of Convertible Preferred Stock shall cease to
be stockholders with respect to such shares and
thereafter such shares shall no longer be transferable
on the books of the Corporation and such holders shall
have no interest or claim against the Corporation with
respect to such shares except the right to receive
payment of the redemption price upon surrender of
their certificates.
If full cumulative dividends on the Convertible
Preferred Stock have not been paid, the Corporation
may not purchase or acquire any shares of the
Convertible Preferred Stock otherwise than pursuant to
a purchase or exchange offer made on the same terms to
all holders of the Convertible Preferred Stock.
(vii) No consent of the holders of the
Convertible Preferred Stock shall be required for (i)
the creation of any indebtedness of any kind of the
Corporation, (ii) the creation of any class of stock
of the Corporation ranking junior as to dividends or
upon liquidation to the Series Preferred Stock or
(iii) any increase or decrease in the amount of
authorized Common Stock or any increase, decrease or
<PAGE>
18
change in the par value thereof or in any other terms
thereof.
(viii) The Board reserves the right by
subsequent amendment from time to time to increase
(subject to the provisions of paragraph (v)(II)(c)) or
decrease the number of shares which constitute the
Convertible Preferred Stock (but not below the
aggregate number of shares thereof then outstanding or
then deliverable upon conversion of the 2000
Debentures) and in other respects to amend the terms
of the Convertible Preferred Stock within the
limitations provided by law, resolutions of the Board
and the Certificate of Incorporation.
IN WITNESS WHEREOF, Paine Webber Group Inc. has caused
this Certificate to be made under the seal of the Corporation
and signed by James Treadway, its Vice President, and attested
by Dorothy F. Haughey, its Assistant Secretary, this 14th day
of January, 1992.
PAINE WEBBER GROUP INC.
/s/ James Treadway
--------------------------------------
James Treadway
Vice President
[Sea1]
Attest:
/s/ Dorothy F. Haughey
- --------------------------------------
Dorothy F. Haughey
Assistant Secretary
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
This instrument was acknowledged before me this 14th
----
day of January, 1992 by JAMES TREADWAY and DOROTHY F. HAUGHEY,
as Vice President and Assistant Secretary, respectively, of
PAINE WEBBER GROUP INC., a Delaware corporation, being
authorized so to do on its behalf.
IN WITNESS WHEREOF, I hereunto set my hand and
official seal.
ELISA B. BELL
NOTARY PUBLIC, State of New York /s/ Elisa A. Bell
No. 03-4818330 ------------------------------
Qualified in Bronx County Notary Public
Commission Expires June 30 1992
-
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:30 AM 11/05/1992
722310100 - 795811
CERTIFICATE OF THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS,
AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF,
WHICH HAVE NOT BEEN SET FORTH IN THE RESTATED CERTIFICATE OF
INCORPORATION OR IN ANY AMENDMENT THERETO, OF THE
CUMULATIVE PARTICIPATING CONVERTIBLE
VOTING PREFERRED STOCK, SERIES A
($20 Par Value)
PAINE WEBBER GROUP INC.
--------------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
--------------------------------------
The undersigned DOES HEREBY CERTIFY that the
following resolution was duly adopted on November 5, 1992,
by the Board of Directors of Paine Webber Group Inc., a
Delaware corporation (hereinafter called the "Corporation"),
pursuant to authority conferred upon the Board of Directors
by the provisions of the Restated Certificate of Incorpora-
tion, as amended (the "Certificate of Incorporation"), of
the Corporation;
RESOLVED, that the issuance of a series
of the Series Preferred Stock, par value $20
per share (the "Series Preferred Stock"),
which shall consist of 7,758,632 of the
shares of the Series Preferred Stock which
the Corporation now has authority to issue,
be, and the same hereby is, authorized, and
this Board of Directors hereby fixes the
powers, designations, preferences and
relative, participating, optional or other
special rights, and the qualifications,
limitations or restrictions thereof, of the
shares of such series (in addition to the
powers, designations, preferences and rela-
tive, participating, optional or other
special rights, and the qualifications,
limitations or restrictions thereof, set
forth in the Certificate of Incorporation
which are applicable to such series of Series
Preferred Stock) as follows:
<PAGE>
(i) Except as otherwise specified
herein, defined terms herein, which may
be identified by the capitalization of
the first letter of each principal word
thereof, have the meanings assigned to
them in the Amended and Restated
Investment Agreement, by and between
Paine Webber Group Inc. and The Yasuda
Mutual Life Insurance Company, dated as
of November 5, 1992 (the "Agreement").
(ii) The designation of such series
of the Series Preferred Stock authorized
by this resolution shall be the Cumula-
tive Participating Convertible Voting
Preferred Stock, Series A (the
"Preferred Stock" and sometimes referred
to in the Agreement as the "Participat-
ing Preferred Shares"). The number of
shares of Preferred Stock shall be
7,758,632.
(iii) (I) Holders of shares of
Preferred Stock will be entitled to
receive, when and as declared by the
Board of Directors of the Corporation
(the "Board") out of assets of the
Corporation legally available for pay-
ment, an annual cash dividend of $0.48
per share ("Regular Dividends"), payable
in equal quarterly installments on
March 15, June 15, September 15 and
December 15 (or, if any such day is not
a Business Day in New York City, then on
the next succeeding Business Day) in
each year (the "Dividend Payment Dates")
plus, for any calendar quarter in which
the Board declares a dividend or
dividends on Common Stock of the
Corporation (as defined in para-
graph (v)(I) below) in excess of the
Participation Threshold (as defined in
paragraph (iii)(II) below), an amount
per share equal to the product of
(x) the amount in excess of the
Participation Threshold paid as a
dividend on any share of Common Stock
times (y) the number of shares of Common
Stock into which one share of Preferred
Stock is convertible on the date or
dates, as the case may be, on which such
-2-
<PAGE>
dividend or dividends on Common Stock
are paid ("Participating Dividends").
Concurrently with paying or declaring
and setting aside for payment any
dividend or other distribution in excess
of the Participation Threshold upon any
share of the Common Stock (other than a
dividend or distribution that gives rise
to an adjustment of the Conversion Price
pursuant to paragraph (v)(IV) below) the
Corporation shall pay or declare and set
aside for payment, as the case may be,
an amount per share determined pursuant
to the immediately preceding sentence,
such amount in respect of the Preferred
Stock to be paid in priority to the
payment of any dividend or other
distribution upon the Common Stock.
Except as set forth in the preceding
sentence, payment of dividends on the
Preferred Stock shall commence the first
Dividend Payment Date following the
Closing Date. Regular Dividends will be
cumulative from and including the date
of initial issuance of any shares of
Preferred Stock. Participating
Dividends will be cumulative from the
first dividend payment date for the
Common Stock giving rise to the right of
holders of the Preferred Stock to
receive a Participating Dividend.
Dividends will be payable to holders of
record as they appear on the stock books
of the Corporation on such record dates,
not more than 60 days nor less than 10
days preceding the payment dates
thereof, as shall be fixed by the Board
or a duly authorized committee thereof.
The Preferred Stock will rank on a
parity as to dividends with the Corpora-
tion's $1.375 Convertible Exchangeable
Preferred Stock. When dividends are not
paid in full upon the Preferred Stock
(including any dividends in excess of
the Participation Threshold required to
be paid or declared pursuant to this
paragraph (iii)(I)) and any other
preferred stock ranking on a parity as
to dividends with the Preferred Stock
(such other preferred stock and the
-3-
<PAGE>
Preferred Stock hereinafter being
collectively referred to as "Parity
Preferred Stock"), all dividends
declared upon shares of Parity Preferred
Stock will be declared pro rata so that
in all cases the amount of dividends
declared per share on the Preferred
Stock and such other Parity Preferred
Stock shall bear to each other the same
ratio that accumulated and unpaid divi-
dends per share on the shares of
Preferred Stock and such other Parity
Preferred Stock bear to each other.
Except as set forth in the preceding
sentence, unless full cumulative divi-
dends on the Preferred Stock have been
paid (including any dividends in excess
of the Participation Threshold required
to be paid or declared pursuant to this
paragraph (iii)(I)), no dividends (other
than in Common Stock of the Corporation
(as defined in paragraph (v)(I) below)
or any other stock of the Corporation
ranking junior to the Preferred Stock as
to dividends) may be paid or declared
and set aside for payment or other
distribution made upon the Common Stock
or on any other stock of the Corporation
ranking junior to or on a parity with
the Preferred Stock as to dividends, nor
may any Common Stock or any other stock
of the Corporation ranking junior to or
on a parity with the Preferred Stock as
to dividends be redeemed, purchased or
otherwise acquired for any consideration
(or any payment made to or available for
a sinking fund for the redemption of any
shares of such stock) by the Corporation
(except by conversion into or exchange
for stock of the Corporation ranking
junior to the Preferred Stock as to
dividends). Dividends payable for any
partial dividend period shall be calcu-
lated on the basis of a 360-day year of
twelve (12) 30-day months.
(II) The term "Participation
Threshold" shall mean $0.12, as adjusted
in accordance with this paragraph
(iii)(II). In case the Corporation
shall hereafter (i) pay a dividend or
-4-
<PAGE>
make a distribution on the Common Stock
in shares of Common Stock, (ii) sub-
divide or reclassify its outstanding
shares of Common Stock into a greater
number of shares or (iii) combine or
reclassify its outstanding shares of
Common Stock into a smaller number of
shares, then in each such case the
Participation Threshold then in effect
shall be adjusted so that, after the
happening of any of the events described
above in this sentence the Participation
Threshold shall equal a number equal to
the Participation Threshold in effect
immediately prior to such happening
multiplied by a fraction of which the
numerator is the number of shares of
Common Stock into which one share of
Preferred Stock was convertible
immediately prior to such happening and
the denominator is the number of shares
of Common Stock into which one share of
Preferred Stock was convertible immedi-
ately after such happening. An adjust-
ment to the Participation Threshold made
pursuant to this subsection (II) shall
become effective immediately after the
date of payment, in the case of a
dividend or distribution, or immediately
after the effective date, in the case of
a subdivision, combination or
reclassification.
(III) In the event the Corporation
does not pay the cash dividend provided
for in subsection (I) on any Dividend
Payment Date, the Corporation shall
consult with the holders of the
Preferred Stock to discuss what steps
might be taken to provide holders of the
Preferred Stock with a payment of an
equivalent value otherwise than in cash
in lieu of such cash dividend.
(iv) The shares of Preferred Stock
shall rank prior to the shares of Common
Stock and of any other class of stock of
the Corporation ranking junior to the
Series Preferred Stock upon liquidation,
so that in the event of any liquidation,
dissolution or winding up of the
-5-
<PAGE>
Corporation, whether voluntary or invol-
untary, the holders of the Preferred
Stock shall be entitled to receive out
of the assets of the Corporation avail-
able for distribution to its stock-
holders, whether from capital, surplus
or earnings, before any distribution is
made to holders of shares of Common
Stock or any other such junior stock, an
amount equal to $19.3333 per share (the
"Liquidation Preference" of a share of
Preferred Stock) plus an amount equal to
all dividends (whether or not earned or
declared) accumulated and unpaid on the
shares of Preferred Stock to the date of
final distribution. If, upon any liqui-
ation, dissolution or winding up of the
Corporation, the assets of the Corpora-
tion, or proceeds thereof, distributable
among the holders of shares of Parity
Preferred Stock shall be insufficient to
pay in full the preferential amount
aforesaid, then such assets, or the
proceeds thereof, shall be distributable
among such holders ratably in accordance
with the respective amounts which would
be payable on such shares if all amounts
payable thereon were payable in full.
For the purposes hereof, the voluntary
sale, conveyance, exchange or transfer
(for cash, shares of stock, securities
or other consideration) of all or
substantially all the property or assets
of the Corporation shall be deemed a
voluntary liquidation, dissolution or
winding up of the Corporation, but a
consolidation or merger of the
Corporation with one or more other
corporations shall not be deemed to be a
liquidation, dissolution or winding up,
voluntary or involuntary.
(v) (I) Subject to and upon
compliance with the provisions of this
paragraph (v), the holder of a share of
Preferred Stock shall have the right, at
his option, at any time, except that, if
such share is called for redemption, not
after the close of business on the date
fixed for such redemption, unless
default shall be made in the payment of
-6-
<PAGE>
the redemption price, to convert such
share into that number of fully paid and
nonassessable shares of Common Stock
(calculated as to each conversion to the
nearest 1/10,000th of a share) obtained
by dividing the Liquidation Preference
of such share being converted by the
Conversion Price (as defined below) and
by surrender of such share so to be
converted, such surrender to be made in
the manner provided in subsection (II)
of this paragraph (v).
The term "Common Stock" shall mean
the Common Stock, $1 par value, of the
Corporation as the same exists at the
date of this Certificate or as such
stock may be constituted from time to
time, except that for the purpose of
this paragraph (v), the term "Common
Stock" shall include any stock of any
class of the Corporation which has no
preference in respect of dividends or of
amounts payable in the event of any
voluntary or involuntary liquidation,
dissolution or winding up of the Cor-
poration and which is not subject to
redemption by the Corporation. However,
shares issuable on conversion of shares
of Preferred Stock shall include only
shares of the class designated as Common
Stock of the Corporation as of the
Closing Date, or shares of any class or
classes resulting from any reclassifica-
tion or reclassifications thereof and
which have no preference in respect of
dividends or of amounts payable in the
event of any voluntary or involuntary
liquidation, dissolution or winding up
of the Corporation and which are not
subject to redemption by the Corpora-
tion; provided that if at any time there
--------
shall be more than one such resulting
class, the shares of each such class
then so issuable shall be substantially
in the proportion which the total number
of shares of such class resulting from
all such reclassifications bears to the
total number of shares of all such
classes resulting from all such reclass-
ifications.
-7-
<PAGE>
The term "Conversion Price" shall
mean the Initial Conversion Price, as
adjusted in accordance with the provi-
sions of this paragraph (v).
(II) In order to exercise the
conversion privilege, the holder of each
share of Preferred Stock to be converted
shall surrender the certificate repre-
senting such share at the office of the
conversion agent for the Preferred Stock
in the Borough of Manhattan, City of New
York, appointed for such purpose by the
Corporation (the "conversion agent"),
with the Notice of Election to Convert
on the back of said certificate com-
pleted and signed. Such notice shall be
substantially in the following form:
"NOTICE TO ELECTION TO CONVERT
The undersigned, being a holder of
the Cumulative Participating Convertible
Voting Preferred Stock, Series A ("Pre-
ferred Stock") of Paine Webber Group
Inc. irrevocably exercises the right to
convert outstanding shares of
----------
Preferred Stock on , ,
---------- ----
into shares of Common Stock of Paine
Webber Group Inc. in accordance with the
terms of the Preferred Stock, and
directs that the shares issuable and
deliverable upon the conversion,
together with any check in payment for
fractional shares, be issued and
delivered in the denominations indicated
below to the registered holder hereof
unless a different name has been indi-
cated below. If shares are to be issued
in the name of a person other than the
undersigned, the undersigned will pay
all transfer taxes payable with respect
thereto.
Dated:
-8-
<PAGE>
Fill in for registration of
shares of Common Stock
if to be issued otherwise
than to the registered
holder:
_____________________
Name
_____________________
Address
_____________________ _____________________
(Please print name (Signature)
and address,
including postal
code number)
Denominations:
_____________________________"
-9-
<PAGE>
Unless the shares issuable on conversion
are to be issued in the same name as the
name in which such share of Preferred
Stock is registered, each share
surrendered for conversion shall be
accompanied by instruments of transfer,
in form satisfactory to the Corporation,
duly executed by the holder or his duly
authorized attorney and an amount
sufficient to pay any transfer or
similar tax. A payment shall be made on
conversion for dividends accumulated on
the Preferred Stock surrendered for
conversion but not for dividends on
Common Stock delivered on such conver-
sion. As promptly as practicable after
the surrender of the certificates for
shares of Preferred Stock as aforesaid,
the Corporation shall issue and shall
deliver at such office to such holder,
or on his written order, a certificate
or certificates for the number of full
shares of Common Stock issuable upon the
conversion of such shares in accordance
with the provisions of this para-
graph (v), and any fractional interest
in respect of a share of Common Stock
arising upon such conversion shall be
settled as provided in subsection (III)
of this paragraph (v).
Each conversion shall be deemed to
have been effected immediately prior to
the close of business on the date on
which the certificates for shares of
Preferred Stock shall have been surrend-
ered and such notice received by the
Corporation as aforesaid, and the person
or persons in whose name or names any
certificate or certificates for shares
of Common Stock shall be issuable upon
such conversion shall be deemed to have
become the holder or holders of record
of the shares represented thereby at
such time on such date and such conver-
sion shall be at the Conversion Price in
effect at such time on such date. All
shares of Common Stock delivered upon
conversions of the Preferred Stock will
upon delivery be duly and validly issued
and fully paid and non-assessable, free
-10-
<PAGE>
of all liens and charges and not subject
to any preemptive rights.
(III) No fractional shares or scrip
representing fractions of shares of
Common Stock shall be issued upon con-
version of the Preferred Stock. Instead
of any fractional interest in a share of
Common Stock which would otherwise be
deliverable upon the conversion of a
share of Preferred Stock, the Corpora-
tion shall pay to the holder of such
share an amount in cash (computed to the
nearest 1/100th of one cent) equal to
the Average Market Price of the Common
Stock at the close of business on the
business day next preceding the day of
conversion. If more than one share
shall be surrendered for conversion at
one time by the same holder, the number
of full shares of Common Stock issuable
upon conversion thereof shall be
computed on the basis of the aggregate
Liquidation Preference of the shares of
Preferred Stock so surrendered.
(IV) The Conversion Price shall be
adjusted from time to time as follows:
(a) In case the Corporation shall
hereafter (i) pay a dividend or make a
distribution on the Common Stock in
shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock
into a greater number of shares,
(iii) combine its outstanding shares of
Common Stock into a smaller number of
shares, or (iv) issue by reclassifica-
tion of the Common Stock any shares of
capital stock of the Corporation, the
Conversion Price in effect immediately
prior to such action shall be adjusted
so that the holder of any share of
Preferred Stock thereafter surrendered
for conversion shall be entitled to
receive the number of shares of Common
Stock or other capital stock of the
Corporation which he would have owned or
been entitled to receive immediately
following such action had such share
been converted immediately prior
-11-
<PAGE>
thereto. The Corporation shall not pay
any dividend or make any distribution on
shares of Common Stock held in the
treasury of the Corporation. An
adjustment made pursuant to this sub-
division (a) shall become effective
immediately after the record date, in
the case of a dividend or distribution,
or immediately after the effective date,
in the case of a subdivision, combina-
tion or reclassification. If, as a
result of an adjustment made pursuant to
this subdivision (a), the holder of any
share of Preferred Stock thereafter
surrendered for conversion shall become
entitled to receive shares of two or
more classes of capital stock or shares
of Common Stock and other capital stock
of the Corporation, the Board and the
Investor jointly (if the Investor shall
be a holder of any of the Preferred
Stock) or an internationally recognized
investment banking firm selected by them
if they are unable to reach agreement,
or the Board in its reasonable discre-
tion (if the Investor shall not be a
holder of any of the Preferred Stock)
shall determine the allocation of the
adjusted Conversion Price between or
among shares of such classes of capital
stock or shares of Common Stock and
other capital stock. Such determination
shall be described in a statement filed
with the conversion agent by the
Corporation as soon as practicable.
(b) In case the Corporation shall
hereafter pay or make a dividend or
other distribution in shares of Common
Stock on any class of capital stock of
the Corporation other than the Common
Stock, the Conversion Price in effect
immediately after the record date
mentioned in the next sentence shall be
adjusted so that the same shall equal
the price determined by multiplying the
Conversion Price in effect immediately
prior to the record date mentioned in
the next sentence by a fraction of which
the numerator shall be the number of
shares of Common Stock outstanding at
-12-
<PAGE>
the close of business on the record date
mentioned in the next sentence and the
denominator shall be the sum of such
number of shares and the total number of
shares constituting such dividend or
other distribution. Such reduction
shall become effective immediately after
the record date for the determination of
stockholders entitled to receive such
dividend or other distribution. For the
purposes of this subdivision (b), the
number of shares of Common Stock at any
time outstanding shall not include
shares held in the treasury of the
Corporation but shall include shares
issuable in respect of script certifi-
cates issued in lieu of fractions of
shares of Common Stock. The Corporation
shall not pay any dividend or make any
distribution on shares of such capital
stock held in the treasury of the
Corporation.
(c) In case the Corporation shall
hereafter issue rights or warrants to
holders of its outstanding shares of
Common Stock generally entitling them to
subscribe for or purchase shares of
Common Stock at a price per share less
than the Average Market Price of the
Common Stock on the record date men-
tioned in the next sentence (other than
pursuant to an automatic dividend rein-
vestment plan of the Corporation or any
substantially similar plan), the
Conversion Price shall be reduced so
that the same shall equal the price
determined by multiplying the Conversion
Price in effect immediately prior to the
record date mentioned in the next
sentence by a fraction of which the
numerator shall be the number of shares
of Common Stock outstanding on the
record date mentioned in the next
sentence plus the number of shares which
the aggregate offering price of the
total number of shares so offered would
purchase at such Average Market Price,
and of which the denominator shall be
the number of shares of Common Stock
outstanding on the record date mentioned
-13 -
<PAGE>
in the next sentence plus the number of
additional shares of Common Stock
offered for subscription or purchase.
Such reduction shall become effective
immediately after the record date for
the determination of stockholders
entitled to receive such rights or
warrants. For the purposes of this
subdivision (c), the number of shares of
Common Stock at any time outstanding
shall not include shares held in the
treasury of the Corporation but shall
include shares issuable in respect of
script certificates issued in lieu of
fractions of shares of Common Stock.
The Corporation will not issue any
rights or warrants in respect of shares
of Common Stock held in the treasury of
the Corporation.
(d) In case the Corporation shall,
by dividend or otherwise, hereafter
distribute to holders of its outstanding
shares of Common Stock generally
evidences of its indebtedness or assets
(excluding any regular periodic cash
dividend paid from retained earnings of
the Corporation and dividends or
distributions payable in stock for which
adjustment is made pursuant to
subdivision (a) of this subsection (IV))
or rights or warrants to subscribe to
securities of the Corporation (excluding
those referred to in subdivision (c) of
this subsection (IV)), then in each such
case the Conversion Price shall be
adjusted so that the same shall equal
the price determined by multiplying the
Conversion Price in effect immediately
prior to the record date mentioned in
the next sentence by a fraction of which
the numerator shall be the Average
Market Price of the Common Stock on the
record date mentioned in the next sen-
tence less the then fair market value
(as determined by the Board and the
Investor jointly (if the Investor shall
be a holder of any of the Preferred
Stock), or by an internationally recog-
nized investment banking firm selected
by them if they are unable to agree or
-14-
<PAGE>
by the Board in its reasonable discre-
tion (if the Investor shall not be a
holder of any of the Preferred Stock)),
of the portion of the evidences of
indebtedness or assets so distributed to
the holder of one share of Common Stock
or of such subscription rights or
warrants applicable to one share of
Common Stock, and of which the denomina-
tor shall be such Average Market Price
of the Common Stock. Such adjustment
shall become effective immediately after
the record date for the determination of
stockholders entitled to receive such
distribution. Such determination of
fair market value shall be described in
a statement filed with the conversion
agent by the Corporation as soon as
practicable.
(e) The reclassification
(including any reclassification upon a
merger in which the Corporation is the
continuing corporation) of Common Stock
into securities including other than
Common Stock shall be deemed to involve
(i) a distribution of such securities
other than Common Stock to all holders
of Common Stock (and the effective date
of such reclassification shall be deemed
to be "the record date for the determi-
nation of stockholders entitled to
receive such distribution" within the
meaning of subdivision (d) of this sub-
section (IV)), and (ii) a subdivision or
combination, as the case may be, of the
number of shares of Common Stock out-
standing immediately prior to such
reclassification into the number of
shares of Common Stock outstanding
immediately thereafter.
(f) In any case in which this
paragraph (v) shall require that an
adjustment be made immediately following
a record date or an effective date, the
Corporation may elect to defer (but only
until five business days following the
filing by the Corporation with the
conversion agent of the certificate of
independent public accountants required
-15-
<PAGE>
by subdivision (h) of this subsec-
tion (IV)) issuing to the holder of any
share of Preferred Stock converted after
such record date or effective date the
additional shares of Common Stock or
other capital stock issuable upon such
conversion over and above the shares of
Common Stock or other capital stock
issuable upon such conversion on the
basis of the Conversion Price prior to
adjustment, and paying to such holder
any amount of cash in lieu of a frac-
tional share.
(g) All calculations under this
paragraph (v) shall be made to the near-
est 1/100 of one cent or to the nearest
1/10,000th of a share, as the case may
be. Anything in this paragraph (v) to
the contrary notwithstanding, the
Corporation shall be entitled to make
such reduction in the Conversion Price,
in addition to those required by this
paragraph (v), as it considers to be
advisable in order that any stock
dividend, subdivision of shares, distri-
bution of rights to purchase stock or
securities, or distribution of securi-
ties convertible into or exchangeable
for stock hereafter made by the Corpora-
tion to its stockholders shall not be
taxable to the recipients.
(h) Whenever the Conversion Price
is adjusted as herein provided, (i) the
Corporation shall promptly file with the
conversion agent a certificate of a firm
of independent public accountants (who
may be the regular accountants employed
by the Corporation) setting forth the
Conversion Price after such adjustment
and setting forth a brief statement of
the facts requiring such adjustment and
the manner of computing the same, and
(ii) a notice stating that the
Conversion Price has been adjusted and
setting forth the adjusted Conversion
Price shall forthwith be airmailed by
the Corporation to the holders of the
Preferred Stock at their addresses as
-16-
<PAGE>
shown on the stock books of the
Corporation.
(i) In the event that any time as
a result of an adjustment made pursuant
to subdivision (a) of this subsec-
tion (IV), the holder of any share of
Preferred Stock thereafter surrendered
for conversion shall become entitled to
receive any shares of the Corporation
other than shares of Common Stock, there-
after the Conversion Price of such other
shares so receivable upon conversion of
any share shall be subject to adjustment
from time to time in a manner and on
terms as nearly equivalent as practica-
ble to the provisions with respect to
Common Stock contained in this
paragraph (v).
(V) In case:
(a) the Corporation shall declare
a dividend (or any other distribution)
on its Common Stock other than a regular
periodic cash dividend payable in cash
out of its retained earnings; or
(b) the Corporation shall
authorize the granting to the holders of
the Common Stock of rights or warrants
to subscribe for or purchase any shares
of stock of any class or of any other
rights; or
(c) there shall be any capital
stock reorganization or reclassification
of the Common Stock (other than a
subdivision or combination of the
outstanding Common Stock and other than
a change in the par value of the Common
Stock), or any consolidation or merger
to which the Corporation is a party or
any statutory exchange of securities
with another corporation and for which
approval of any stockholders of the
Corporation is required, or any sale or
transfer of all or substantially all the
assets of the Corporation; or
-17-
<PAGE>
(d) there shall be a voluntary
dissolution, liquidation or winding up
of the Corporation;
then the Corporation shall cause to be
filed with the conversion agent, and
shall cause to be airmailed to the
holders of shares of the Preferred Stock
at their addresses as shown on the stock
books of the Corporation, at least ten
days prior to the applicable date here-
inafter specified, a notice stating
(i) the date on which a record is to be
taken for the purpose of such dividend,
distribution, rights or warrants, or, if
a record is not to be taken, the date as
of which the holders of Common Stock of
record to be entitled to such dividend,
distribution, rights or warrants are to
be determined, or (ii) the date on which
such reorganization, reclassification,
consolidation, merger, statutory
exchange, sale, transfer, dissolution,
liquidation or winding up is expected to
become effective, and the date as of
which it is expected that holders of
Common Stock of record shall be entitled
to exchange their shares of Common Stock
for securities or other property
deliverable upon such reorganization,
reclassification, consolidation, merger,
statutory exchange, sale, transfer,
dissolution, liquidation or winding up.
(VI) The Corporation covenants that
it will at all times reserve and keep
available, free from preemptive rights,
out of the aggregate of its authorized
but unissued shares of Common Stock or
its issued shares of Common Stock held
in its treasury, or both, for the pur-
pose of effecting conversions of the
Preferred Stock, the full number of
shares of Common Stock deliverable upon
the conversion of all outstanding shares
of Preferred Stock not theretofore
converted. For purposes of this sub-
section (VI), the number of shares of
Common Stock which shall be deliverable
upon the conversion of all outstanding
shares of Preferred Stock shall be
-18-
<PAGE>
computed as if at the time of computa-
tion all such outstanding shares were
held by a single holder.
Before taking any action which
would cause an adjustment reducing the
Conversion Price below the then par
value (if any) of the shares of Common
Stock deliverable upon conversion of the
Preferred Stock, the Corporation will
take any corporate action which may, in
the opinion of its counsel, be necessary
in order that the Corporation may
validly and legally issue fully paid and
non-assessable shares of Common Stock at
such adjusted Conversion Price.
The Corporation shall use its best
efforts to list the shares of Common
Stock required to be delivered upon
conversion of the Preferred Stock prior
to such delivery upon each securities
exchange, if any, upon which the
outstanding Common Stock is listed at
the time of such delivery.
Prior to the delivery of any
securities which the Corporation shall
be obligated to deliver upon conversion
of the Preferred Stock, the Corporation
shall use its best efforts to comply
with all Federal and state laws and
regulations thereunder requiring the
registration of such securities with, or
any approval of or consent to the
delivery thereof by, any governmental
authority.
(VII) The Corporation shall pay any
and all documentary stamp or similar
issue or transfer taxes payable in
respect of the issue or delivery of
shares of Common Stock on conversions of
the Preferred Stock pursuant hereto;
provided, however, that the Corporation
-------- -------
shall not be required to pay any tax
which may be payable in respect of any
transfer involved in the issue or
delivery of shares of Common Stock in a
name other than that of the holder of
the Preferred Stock to be converted and
-19-
<PAGE>
no such issue or delivery shall be made
unless and until the person requesting
such issue or delivery has paid to the
Corporation the amount of any such tax
or has established, to the satisfaction
of the Corporation, that such tax has
been paid.
(VIII) In case of any consolidation
or merger in which the Corporation is a
party (other than a merger in which the
Corporation is the continuing cor-
poration), or in case of any sale or
conveyance to another corporation of the
property of the Corporation as an
entirety or substantially as an
entirety, or in the case of any statu-
tory exchange of securities with another
corporation (including any exchange
effected in connection with a merger of
a third corporation into the Corpora-
tion), the holder of each share of
Preferred Stock then outstanding shall
have the right thereafter to convert
such share into the kind and amount of
securities, cash or other property
receivable upon such consolidation,
merger, statutory exchange, sale or
conveyance by a holder of the number of
shares of Common Stock into which such
share of Preferred Stock might have been
converted immediately prior to such
consolidation, merger, statutory
exchange, sale or conveyance, assuming
such holder of Common Stock failed to
exercise his rights of election, if any,
as to the kind or amount of securities,
cash or other property receivable upon
such consolidation, merger, statutory
exchange, sale or conveyance (provided
that if the kind or amount of securi-
ties, cash or other property receivable
upon such consolidation, merger,
statutory exchange, sale or conveyance
is not the same for each share of Common
Stock in respect of which such rights of
election shall not have been exercised
("non-electing share"), then for the
purpose of this subsection (VIII) the
kind and amount of securities, cash or
other property receivable upon such
-20-
<PAGE>
consolidation, merger, statutory
exchange, sale or conveyance for each
non-electing share shall be deemed to be
the kind and amount so receivable per
share by a plurality of the non-electing
shares). Thereafter, the holders of the
Preferred Stock shall be entitled to
appropriate adjustments with respect to
their conversion rights to the end that
the provisions set forth in this para-
graph (v) shall correspondingly be made
applicable, as nearly as may reasonably
be, in relation to any shares of stock
or other securities or property there-
after deliverable on the conversion of
the Preferred Stock. Any such adjust-
ment shall be approved by a firm of
independent public accountants (who may
be the regular accountants employed by
the Corporation), evidenced by a
certificate to that effect delivered to
the conversion agent.
The above provisions of this
subsection (VIII) shall similarly apply
to successive consolidations, mergers,
statutory exchanges, sales or convey-
ances.
(vi) Upon any conversion or redemp-
tion of shares of Preferred Stock, the
shares of Preferred Stock so converted
or redeemed shall have the status of
authorized and unissued shares of Series
Preferred Stock, and the number of
shares of Series Preferred Stock which
the Corporation shall have authority to
issue shall not be decreased by the
conversion or redemption of shares of
Preferred Stock.
(vii) (I) Each holder of shares of
Preferred Stock shall be entitled to one
vote for each share held with respect to
all matters upon which holders of Common
Stock are entitled to vote, voting with
the holders of outstanding shares of
Common Stock (and with any other holders
of any other class or series which may
similarly be entitled to vote with the
shares of Common Stock) as a single class.
-21-
<PAGE>
(II) If and whenever at any time or
times dividends payable on the Preferred
Stock or on any other Parity Preferred
Stock shall have been in arrears and
unpaid in an aggregate amount equal to
or exceeding the amount of dividends
payable thereon for six quarterly
periods, then the holders of Parity
Preferred Stock shall have, in addition
to the other voting rights set forth
herein, the exclusive right, voting
separately as a class, to elect two
directors of the Corporation, such
directors to be in addition to the
number of directors constituting the
Board of Directors immediately prior to
the accrual of such right, the remaining
directors to be elected by the other
class or classes of stock entitled to
vote therefor at each meeting of stock-
holders held for the purpose of electing
directors. Such voting right shall
continue until such time as all cumula-
tive dividends accumulated on all the
Parity Preferred Stock having cumulative
dividends shall have been paid in full
and until any noncumulative dividends
payable on all the Parity Preferred
Stock having noncumulative dividends
shall have been paid regularly for at
least one year, at which time such
voting right of the holders of the
Parity Preferred Stock shall terminate,
subject to revesting in the event of
each and every subsequent event of
default of the character indicated
above.
Whenever such voting right shall
have vested, such right may be exercised
initially either at a special meeting of
the holders of the Parity Preferred
Stock, called as hereinafter provided,
or at any annual meeting of stockholders
held for the purpose of electing direc-
tors, and thereafter at each successive
annual meeting.
At any time when such voting right
shall have vested in the holders of the
Parity Preferred Stock, and if such
-22-
<PAGE>
right shall not already have been ini-
tially exercised, a proper officer of
the Corporation shall, upon the written
request of the holders of record of 10%
in number of shares of the Parity Pre-
ferred Stock then outstanding, addressed
to the Secretary of the Corporation,
call a special meeting of the holders of
the Parity Preferred Stock and of any
other class or classes of stock having
voting power with respect thereto for
the purpose of electing directors. Such
meeting shall be held at the earliest
practicable date upon the notice
required for annual meetings of stock-
holders at the place for holding of
annual meetings of stockholders of the
Corporation, or, if none, at a place
designated by the Secretary of the
Corporation. If such meeting shall not
be called by the proper officers of the
Corporation within 30 days after the
personal service of such written request
upon the Secretary of the Corporation,
or within 30 days after mailing the same
within the United States of America, by
registered mail, addressed to the
Secretary of the Corporation at its
principal office (such mailing to be
evidenced by the registry receipt issued
by the postal authorities), then the
holders of record of 10% in number of
shares of the Parity Preferred Stock
then outstanding may designate in
writing one of their number to call such
meeting at the expense of the Corpora-
tion, and such meeting may be called by
such person so designated upon the
notice required for annual meetings of
stockholders and shall be held at the
same place as is elsewhere provided for
in this subsection (II). Any holder of
the Parity Preferred Stock shall have
access to the stock books of the
Corporation for the purpose of causing a
meeting of stockholders to be called
pursuant to the provisions of this para-
graph. Notwithstanding the provisions
of this paragraph, however, no such
special meeting shall be called during a
period within 90 days immediately
-23-
<PAGE>
preceding the date fixed for the next
annual meeting of stockholders.
At any meeting held for the purpose
of electing directors at which the
holders of the Parity Preferred Stock
shall have the right to elect directors
as provided herein, the presence in
person or by proxy of the holders of
33-1/3% of the then outstanding shares
of the Parity Preferred Stock shall be
required and be sufficient to constitute
a quorum of the Parity Preferred Stock
for the election of directors by the
Parity Preferred Stock. At any such
meeting or adjournment thereof (A) the
absence of a quorum of the holders of
the Parity Preferred Stock shall not
prevent the election of directors other
than those to be elected by the holders
of the Parity Preferred Stock and the
absence of a quorum or quorums of the
holders of other classes of capital
stock entitled to elect such other
directors shall not prevent the election
of directors to be elected by the
holders of the Parity Preferred Stock
and (B) in the absence of a quorum of
the holders of any class of stock
entitled to vote for the election of
directors, a majority of the holders
present in person or by proxy of such
class shall have the power to adjourn
the meeting for the election of direc-
tors which the holders of such class are
entitled to elect, from time to time,
without notice other than announcement
at the meeting, until a quorum shall be
present.
The directors elected pursuant to
this subsection (II) shall serve until
the next annual meeting or until their
respective successors shall be elected
and shall qualify; provided, however,
-------- -------
that when the right of the holders of
the Parity Preferred Stock to elect
directors as herein provided shall
terminate, the terms of office of all
persons so elected by the holders of the
Parity Preferred Stock shall terminate,
-24-
<PAGE>
and the number of directors of the
Corporation shall thereupon be such
number as may be provided in the By-laws
of the Corporation irrespective of any
increase made pursuant to this
subsection (II).
(III) So long as any shares of the
Preferred Stock remain outstanding, the
Corporation will not, either directly or
indirectly or through merger or consoli-
dation with any other corporation:
(a) without the affirmative vote
at a meeting or the written consent with
or without a meeting of the holders of
at least 66-2/3% in number of shares of
the Preferred Stock, (A) create any
class or classes of stock ranking equal
or prior to the Preferred Stock either
as to dividends or upon liquidation or
increase the authorized number of shares
of any class or classes of stock ranking
equal or prior to the Preferred Stock
either as to dividends or upon liquida-
tion, (B) amend, alter or repeal any of
the provisions of the Certificate of
Incorporation so as to affect adversely
the preferences, special rights or
powers of the Preferred Stock or
(C) authorize any reclassification of
the Preferred Stock;
(b) without the affirmative vote
at a meeting or the written consent with
or without a meeting of the holders of
at least 66-2/3% in number of shares of
the Preferred Stock then outstanding,
amend, alter or repeal any of the provi-
sions hereof so as to affect adversely
the preferences, special rights or
powers of the Preferred Stock; or
(c) without the affirmative vote
at a meeting or the written consent with
or without a meeting of the holders of
at least a majority in number of shares
of the Series Preferred Stock of all
series then outstanding, increase the
authorized number of shares of the
Series Preferred Stock.
-25-
<PAGE>
(IV) No consent of the holders of
the Preferred Stock shall be required
for (i) the creation of any indebtedness
of any kind of the Corporation, (ii) the
creation of any class of stock of the
Corporation ranking junior as to
dividends or upon liquidation to the
Series Preferred Stock or (iii) any
increase or decrease in the amount of
authorized Common Stock or any increase,
decrease or change in the par value
thereof or in any other terms thereof.
(V) In case the Corporation shall
hereafter (i) pay a dividend or make a
distribution on the Common Stock in
shares of Common Stock, (ii) subdivide
or reclassify its outstanding shares of
Common Stock into a greater number of
shares or (iii) combine or reclassify
its outstanding shares of Common Stock
into a smaller number of shares, then in
each such case the number of votes to
which a holder of a share of Preferred
Stock is entitled pursuant to subsec-
tion (I) of this paragraph (vii) shall
be adjusted so that, after the happening
of any of the events described above,
such holder shall be entitled to a
number of votes equal to the number of
votes to which such holder was entitled
pursuant to subsection (I) immediately
prior to such happening multiplied by a
fraction of which the numerator is the
number of shares of Common Stock into
which one share of Preferred Stock was
convertible immediately after such hap-
pening and the denominator is the number
of shares of Common Stock into which one
share of Preferred Stock was convertible
immediately prior to such happening. An
adjustment made pursuant to this subsec-
tion (V) shall become effective
immediately after the date of payment,
in the case of a dividend or distribu-
tion, or immediately after the effective
date, in the case of a subdivision,
combination or reclassification.
(viii) (I) The shares of the
Preferred Stock may be redeemed to the
-26-
<PAGE>
extent specified below, at the option of
the Corporation on any date beginning
March 15, 1993 upon at least 30 days'
and not more than 45 days' prior written
notice to the holders of the shares to
be redeemed, at an amount equal to the
sum of the Liquidation Preference of
such shares plus accumulated and unpaid
dividends (whether or not earned or
declared) to the date fixed for redemp-
tion:
Number of Shares Subject
to Redemption
------------------------
to and including
March 31, 1993 . . up to 50% of the shares of
Preferred Stock initially
issued; provided, that on
--------
the date the notice of
redemption is given, the
Average Trading Price of
the Common Stock is
greater than the Trigger
Price;
thereafter, to and
including March 31,
1994 . . . . . . . all of the shares of
Preferred Stock
outstanding; provided,
--------
that on the date the
notice of redemption is
given, the Average Trading
Price of the Common Stock
is greater than the
Trigger Price;
thereafter, . . . . . all of the shares of
Preferred Stock
outstanding; provided,
--------
that on the date notice of
redemption is given, the
Average Trading Price of
the Common Stock is
greater than $24.00.
For purposes of this subsection (I), the
number of shares of Preferred Stock at any
time outstanding shall not include shares
-27-
<PAGE>
held in the treasury of the Corporation but
shall include shares issuable in respect of
scrip certificates issued in lieu of
fractions of shares of Preferred Stock.
(II) Holders of shares of Preferred
Stock which have been called for redemption
may elect to receive the redemption price for
such shares in the form of securities which
are direct obligations of the United States
of America and have a fair market value (as
determined jointly by the Board and the
Investor (if the Investor shall be a holder
of any shares of Preferred Stock) on the date
notice of such redemption is given, or by an
internationally recognized investment banking
firm selected by them if they are unable to
agree, or by the Board in its reasonable
discretion (if the Investor shall not be a
holder of any shares of Preferred Stock on
the date notice of such redemption is given))
equal to the redemption price otherwise
payable by the Corporation upon redemption of
such shares. Any such election may specify a
requested coupon rate or range of rates,
maturity or range of maturities and
denominations of such securities. Such
requests with respect to coupon rate,
maturity and denomination shall be satisfied
by the Corporation to the extent reasonably
practicable. Any such election shall be
effective upon the giving of receipt of
written notice of such election to the
Corporation not later than 20 days prior to
the date fixed for redemption.
(III) Notice of any proposed redemption
of shares of Preferred Stock shall be given
by the Corporation by airmailing a copy of
such notice to holders of record of the
shares of such Preferred Stock to be redeemed
at their respective addresses appearing on
the stock books of the Corporation. Said
notice shall specify the shares called for
redemption, the redemption price and the
price at which and the date on which the
shares called for redemption will, upon
presentation and surrender of the certifi-
cates of stock evidencing such shares, be
redeemed and the redemption price therefor
paid. From and after the date fixed in any
-28-
<PAGE>
such notice as the date of redemption of
shares of Preferred Stock, unless default
shall be made by the Corporation in providing
monies at the time and place specified for
the payment of the redemption price pursuant
to said notice, all dividends on the
Preferred Stock thereby called for redemption
shall cease to accrue and all rights of the
holders thereof as stockholders of the
Corporation, except the right to receive the
redemption price upon surrender of the
certificates, shall cease and terminate.
(ix) The Preferred Stock shall be
subject to the provisions of the Agreement
and may not be sold or transferred except in
accordance therewith.
(x) Certificates representing shares of
the Preferred Stock shall be exchangeable, at
the option of the holder, for a new certifi-
cate or certificates of the same or different
denominations representing in the aggregate
the same number of shares.
(xi) Subject to conversion as set forth
in paragraph (v) and redemption as set forth
-29-
<PAGE>
in paragraph (viii), the Preferred Stock
shall be perpetual.
IN WITNESS WHEREOF, PAINE WEBBER GROUP INC. has
caused this Certificate to be made under the seal of the
Corporation and signed by Donald B. Marron, its Chairman of
the Board and Chief Executive Officer, and attested by
Dorothy F. Haughey, its Assistant Secretary, this 5th day of
November 1992.
PAINE WEBBER GROUP INC.
/s/ Donald B. Marron
-----------------------------
Name: Donald B. Marron
Title: Chairman of the Board
and Chief Executive
Officer
Attest:
/s/ Dorothy F. Haughey
- ---------------------------
Dorothy F. Haughey
Assistant Secretary
-30-
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:31 AM 11/05/1992
722310101 - 795811
CERTIFICATE OF ELIMINATION
of
PAINE WEBBER GROUP INC.
Paine Webber Group Inc., a corporation organized
and existing under the General Corporation Law of the State
of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of
Directors of the Corporation, resolutions were duly adopted
setting forth the proposed elimination of the 7% Cumulative
Convertible Exchangeable Voting Preferred Stock, Series A,
of the Corporation as set forth herein:
RESOLVED, that upon repurchase or replacement by
the Corporation of all shares of the 7% Cumulative
Convertible Exchangeable Voting Preferred Stock,
Series A, of the Corporation in accordance with the
amended and restated investment agreement between the
Corporation and The Yasuda Mutual Life Insurance
Company, such shares shall be cancelled, and, upon
cancellation, none will remain outstanding and none
will be issued;
RESOLVED, that a Certificate of Elimination be
prepared, which shall have the effect when filed with
the Secretary of State of the State of Delaware of
eliminating from the Restated Certificate of
Incorporation of the Corporation all matters set forth
in the Certificate of Designations previously filed
with respect to the 7% Cumulative Convertible
Exchangeable Voting Preferred Stock, Series A, of the
Corporation, and that the appropriate officers of the
Corporation be, and they hereby are, authorized to
execute and file, on behalf of the Corporation and
under its corporate seal, such Certificate of
Elimination with the Secretary of State of the State of
Delaware.
SECOND, That none of the authorized shares of the
7% Cumulative Convertible Exchangeable Voting Preferred
Stock, Series A, of the Corporation remain outstanding and
none will be issued.
<PAGE>
2
THIRD: That in accordance with the provisions of
Section 151 of the General Corporation Law of the State of
Delaware, the Restated Certificate of Incorporation of the
Corporation is hereby amended to eliminate all matters set
forth in the Certificate of Designations previously filed
with respect to the 7% Cumulative Convertible Exchangeable
Voting Preferred Stock, Series A, of the Corporation.
IN WITNESS WHEREOF, the Corporation has caused
this certificate to be signed by Donald B. Marron, its
Chairman of the Board of Directors, President and Chief
Executive Officer, and attested by Dorothy F. Haughey, its
Assistant Secretary, this 5th day of November 1992.
PAINE WEBBER GROUP INC.
/s/ Donald B. Marron
-----------------------------
Donald B. Marron
Chairman of the Board of
Directors, President and Chief
Executive Officer
[SEAL]
Attest:
By /s/ Dorothy F. Haughey
-----------------------------
Dorothy F. Haughey
Assistant Secretary
<PAGE>
CERTIFICATE OF THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND
THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF, WHICH
HAVE NOT BEEN SET FORTH IN THE CERTIFICATE OF INCORPORATION OR
IN ANY AMENDMENT THERETO, OF THE
6% CONVERTIBLE PREFERRED STOCK
($20 Per Value)
PAINE WEBBER GROUP INC.
------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
------------------------------
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted on February 2, 1994 by the
Special Committee of the Board of Directors of Paine Webber
Group Inc., a Delaware corporation (hereinafter called the
"Corporation"), pursuant to provisions of Section 141(c) of the
General Corporation Law of the State of Delaware and
Article IV, Section 1 of the By-laws of the Corporation;
RESOLVED, that pursuant to authority expressly
granted to and vested in the Board of Directors of the
Corporation by provisions of the Certificate of
Incorporation of the Corporation (the "Certificate of
Incorporation"), the issuance of a series of the
Series Preferred Stock, par value $20 per share (the
"Series Preferred Stock"), which shall consist of up
to 2,200,000 of the 20,000,000 shares of Series
Preferred Stock which the Corporation now has
authority to issue, be, and the same hereby is,
authorized, and this Board of Directors hereby fixes
the powers, designations, preferences and relative,
participating, optional or other special rights, and
the qualifications, limitations or restrictions
thereof, of the shares of such series (in addition to
the powers, designations, preferences and relative,
participating, optional or other special rights, and
the qualifications, limitations or restrictions
thereof, set forth in the Certificate of Incorporation
which are applicable to the Series Preferred Stock) as
follows:
The designation of such series of the Series
Preferred Stock authorized by this resolution shall be
the 6% Convertible Preferred Stock (the "Convertible
Preferred Stock"). The number of shares of
Convertible Preferred Stock shall be 2,200,000.
<PAGE>
(i) Holders of shares of Convertible
Preferred Stock will be entitled to receive, when and
as declared by the Board of Directors (the "Board") of
Paine Webber Group Inc. (the "Corporation") out of
assets of the Corporation legally available for
payment, an annual cash dividend of $1.50 per share,
payable in semi-annual installments on June 30 and
December 31, commencing December 31, 1992. Dividends
on the Convertible Preferred Stock will be cumulative
from the date of initial issuance of any shares of
Convertible Preferred Stock. Dividends will be
payable to holders of record as they appear on the
stock books of the Corporation on such record dates,
not more than 60 days nor less than 10 days preceding
the payment dates thereof, as shall be fixed by the
Board. When dividends are not paid in full upon the
Convertible Preferred Stock and any other preferred
stock ranking on a parity as to dividends with the
Convertible Preferred Stock (such other preferred
stock and the Convertible Preferred Stock hereinafter
being collectively referred to as "Parity Preferred
Stock"), all dividends declared upon shares of Parity
Preferred Stock will be declared pro rata so that in
all cases the amount of dividends declared per share
on the Convertible Preferred Stock and such other
Parity Preferred Stock shall bear to each other the
same ratio that accumulated and unpaid dividends per
share on the shares of Convertible Preferred Stock and
such other Parity Preferred Stock bear to each other.
Except as set forth in the preceding sentence, unless
full cumulative dividends on the Convertible Preferred
Stock have been paid, no dividends (other than in
Common Stock of the Corporation (as defined in
paragraph (iii)(I) below) or any other stock of the
Corporation ranking junior to the Convertible
Preferred Stock as to dividends) maybe paid or
<PAGE>
declared and set aside for payment or other
distribution made upon the Common Stock or on any
other stock of the Corporation ranking junior to or on
a parity with the Convertible Preferred Stock as to
dividends, nor may any Common Stock or any other stock
of the Corporation ranking junior to or on a parity
with the Convertible Preferred Stock as to dividends
be redeemed, purchased or otherwise acquired for any
consideration (or any payment made to or available for
a sinking fund for the redemption of any shares of
such stock) by the Corporation (except by conversion
into or exchange for stock of the Corporation ranking
junior to the Convertible Preferred Stock as to
dividends). Dividends payable for any partial
dividend period shall be calculated on the basis of a
360-day year of 12 30-day months.
(ii) The shares of Convertible Preferred
Stock shall rank prior to the shares of Common Stock
and of any other class of stock of the Corporation
ranking junior to the Series Preferred Stock upon
liquidation, so that in the event of any liquidation,
dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the
Convertible Preferred Stock shall be entitled to
receive out of the assets of the Corporation available
for distribution to its stockholders, whether from
capital, surplus or earnings, before any distribution
is made to holders of shares of Common Stock or any
other such junior stock, an amount equal to $25 per
share (the "Liquidation Preference" of a share of
Convertible Preferred Stock) plus an amount equal to
all dividends (whether or not earned or declared)
accumulated and unpaid on the shares of Convertible
Preferred Stock to the date of final distribution.
If, upon any liquidation, dissolution or winding up of
the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of
shares of Parity Preferred Stock shall be insufficient
to pay in full the liquidation preference amounts of
the Parity Preferred Stock and all dividends (whether
or not earned or declared) accumulated and unpaid
thereon, then such assets, or the proceeds thereof,
shall be distributable among such holders ratably in
accordance with the respective amounts which would be
payable on such shares if all amounts payable thereon
were paid in full. For the purposes hereof, the
voluntary sale, conveyance, exchange or transfer (for
cash, shares of stock, securities or other
consideration) of all or substantially all the
property or assets of the Corporation shall be deemed
a voluntary liquidation, dissolution or winding up of
<PAGE>
the Corporation, but a consolidation or merger of the
Corporation with one or more other corporations shall
not be deemed to be a liquidation, dissolution or
winding up. voluntary or involuntary.
(iii) (I) Subject to and upon compliance
with the provisions of this paragraph (iii), the
holder of a share of Convertible Preferred Stock shall
have the right, at his option, at any time, except
that, if such share is called for redemption, not
after the close of business on the fifth day next
preceding the date fixed for such redemption, to
convert such share into that number of fully paid and
nonassessable shares of Common Stock (calculated as to
each conversion to the nearest 1/100th of a share)
obtained by dividing the Liquidation Preference of
such share being converted by the Conversion Price (as
defined below), upon surrender of such share so to be
converted, such surrender to be made in the manner
provided in subsection (II) of this paragraph (iii).
The term "Common Stock" shall mean the Common
Stock, $1 par value, of the Corporation as the same
exists at the date of this Certificate or as such
stock may be constituted from time to time, except
that for the purpose of subsection (V) of this
paragraph (iii) the term "Common Stock" shall also
mean and include stock of the Corporation of any
class, whether now or hereafter authorized, which
shall have the right to participate in the
distribution of either earnings or assets of the
Corporation without limit as to amount or percentage.
The term "Conversion Price" shall mean $22.125 as
adjusted in accordance with the provisions of this
paragraph (iii).
(II) In order to exercise the conversion
privilege, the holder of each share of Convertible
Preferred Stock to be converted shall surrender the
certificate representing such share at the office of
the conversion agent for the Convertible Preferred
Stock in the Borough of Manhattan, City of New York,
appointed for such purpose by the Corporation, with
the Notice of Election to Convert on the back of said
certificate completed and signed. Unless the shares
issuable on conversion are to be issued in the same
name as the name in which such share of Convertible
Preferred Stock is registered, each share surrendered
for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation and
duly executed by the holder or his duly authorized
<PAGE>
attorney, and an amount sufficient to pay any transfer
or similar tax. No payment or adjustment shall be
made on conversion for dividends accumulated on the
Convertible Preferred Stock surrendered for conversion
or for dividends on Common Stock delivered on such
conversion. As promptly as practicable after the
surrender of the certificates for shares of
Convertible Preferred Stock as aforesaid, the
Corporation shall issue and shall deliver at such
office to such holder, or on his written order, a
certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of
such shares in accordance with the provisions of this
paragraph (iii), and any fractional interest in
respect of a share of Common Stock arising upon such
conversion shall be settled as provided in subsection
(III) of this paragraph (iii).
Each conversion shall be deemed to have been
effected immediately prior to the close of business on
the date on which the certificates for shares of
Convertible Preferred Stock shall have been
surrendered and such notice received by the
Corporation as aforesaid, and the person or persons in
whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder
or holders of record of the shares represented thereby
at such time on such date and such conversion shall be
at the Conversion Price in effect at such time on such
date, unless the stock transfer books of the
Corporation shall be closed on that date, in which
event such person or persons shall be deemed to have
become such holder or holders of record at the close
of business on the next succeeding day on which such
stock transfer books are open, but such conversion
shall be at the Conversion Price in effect on the date
upon which such shares shall have been surrendered and
such notice received by the Corporation. All shares
of Common Stock delivered upon conversions of the
Convertible Preferred Stock will upon delivery be duly
and validly issued and fully paid and nonassesable,
free of all liens and charges and not subject to any
preemptive rights.
(III) No fractional shares or scrip
representing fractions of shares of Common Stock shall
be issued upon conversion of the Convertible Preferred
Stock. Instead of any fractional interest in a share
of Common Stock which would otherwise be deliverable
upon the conversion of a share of Convertible
Preferred Stock, the Corporation shall pay to the
<PAGE>
holder of such share an amount in cash (computed to
the nearest cent) equal to the current market price
(as defined in subsection (IV)(d) of this
paragraph (iii)) thereof at the close of business on
the business day next preceding the day of
conversion. If more than one share shall be
surrendered for conversion at one time by the same
holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on
the basis of the aggregate Liquidation Preference of
the shares of Convertible Preferred Stock so
surrendered.
(IV) The Conversion Price shall be adjusted
from time to time as follows:
(a) In case the Corporation shall hereafter
(i) pay a dividend or make a distribution on the
Common Stock in shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock into a greater
number of shares, (iii) combine its outstanding shares
of Common Stock into a smaller number of shares, or
(iv) issue by reclassification of the Common Stock any
shares of capital stock of the Corporation, the
Conversion Price in effect immediately prior to such
action shall be adjusted so that the holder of any
share of Convertible Preferred Stock thereafter
surrendered for conversion shall be entitled to
receive the number of shares of Common Stock or other
capital stock of the Corporation which he would have
owned or been entitled to receive immediately
following such action had such share been converted
immediately prior thereto. An adjustment made
pursuant to this subdivision (a) shall become
effective immediately after the record date, in the
case of a dividend or distribution, or immediately
after the effective date, in the case of a
subdivision, combination or reclassification. If, as
a result of an adjustment made pursuant to this
subdivision (a), the holder of any share of
Convertible Preferred Stock thereafter surrendered for
conversion shall become entitled to receive shares of
two or more classes of capital stock or shares of
Common Stock and other capital stock of the
Corporation, the Board (whose determination shall be
conclusive and shall be described in a statement filed
with the conversion agent by the Corporation as soon
as practicable) shall determine the allocation of the
adjusted Conversion Price between or among shares of
such classes of capital stock or shares of Common
Stock and other capital stock.
<PAGE>
(b) In case the Corporation shall hereafter
issue rights or warrants to holders of its outstanding
shares of Common Stock generally entitling them (for a
period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase shares
of Common Stock at a price per share less than the
current market price per share (as determined pursuant
to subdivision (d) of this subsection (IV)) of the
Common Stock on the record date mentioned in the next
sentence (other than pursuant to an automatic dividend
reinvestment plan of the Corporation or any
substantially similar plan), the Conversion Price
shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price
in effect immediately prior to the date of issuance of
such rights or warrants by a fraction of which the
numerator shall be the number of shares of Common
Stock outstanding on the date of issuance of such
rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares
so offered would purchase at such current market
price, and of which the denominator shall be the
number of shares of Common Stock outstanding on the
date of issuance of such rights or warrants plus the
number of additional shares of Common Stock offered
for subscription or purchase. Such adjustment shall
become effective immediately after the record date for
the determination of stockholders entitled to receive
such rights or warrants.
(c) In case the Corporation shall hereafter
distribute to holders of its outstanding shares of
Common Stock generally evidences of its indebtedness
or assets (excluding any cash dividend paid from
retained earnings of the Corporation and dividends or
distributions payable in stock for which adjustment is
made pursuant to subdivision (a) of this
subsection (IV)) or rights or warrants to subscribe to
securities of the Corporation (excluding those
referred to in subdivision (b) of this
subsection (IV)), then in each such case the
Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the
date of such distribution by a fraction of which the
numerator shall be the current market price per share
(determined as provided in subdivision (d) of this
subsection (IV)) of the Common Stock on the record
date mentioned in the next sentence less the then fair
market value (as determined by the Board, whose
determination shall be conclusive and shall be
described in a statement filed with the conversion
<PAGE>
agent by the Corporation as soon as practicable) of
the portion of the evidences of indebtedness or assets
so distributed to the holder of one share of Common
Stock or of such subscription rights or warrants
applicable to one share of Common Stock, and of which
the denominator shall be such current market price per
share of Common Stock. Such adjustment shall become
effective immediately after the record date for the
determination of stockholders entitled to receive such
distribution.
(d) For the purpose of subsection (III) and
subdivisions (b) and (c) of this subsection (IV), the
current market price per share of Common Stock on any
date shall mean the price of a share of Common Stock
on the relevant date, determined on the basis of the
last reported sale price regular way of the Common
Stock as reported on the composite tape, or similar
reporting system, for issues listed on the New York
Stock Exchange (or if the Common Stock is not then
listed on that Exchange, for issues listed on such
other national securities exchange upon which the
Common Stock is listed as may be designated by the
Board for the purposes hereof) or, if there is no such
reported sale on the day in question, on the basis of
the average of the closing bid and asked quotations as
so reported, or, if the Common Stock is not then
listed on any national securities exchange, on the
basis of the closing price, if the Common Stock is a
national market issue, or the average of the high bid
and low asked quotations on the day in question in the
over-the-counter market as reported by the National
Association of Securities Dealers' Automated
Quotations System, or if not so quoted, as reported by
National Quotation Bureau, Incorporated, or a similar
organization.
(e) In any case in which this paragraph
(iii) shall require that an adjustment be made
immediately following a record date or an effective
date, the Corporation may elect to defer (but only
until five business days following the filing by the
Corporation with the conversion agent of the
certificate of independent public accountants required
by subdivision (g) of this subsection (IV)) issuing to
the holder of any share of Convertible Preferred Stock
converted after such record date or effective date the
additional shares of Common Stock or other capital
stock issuable upon such conversion over and above the
shares of Common Stock or other capital stock issuable
upon such conversion on the basis of the Conversion
<PAGE>
Price prior to adjustment, and paying to such holder
any amount of cash in lieu of a fractional share.
(f) No adjustment in the Conversion Price
shall be required to be made unless such adjustment
would require an increase or decrease of at least 1%
of such priced provided, however, that any adjustments
-------- -------
which by reason of this subdivision (f) are not
required to be made shall be carried forward and taken
into account in any subsequent adjustment. All
calculations under this paragraph (iii) shall be made
to the nearest cent or to the nearest 1/100th of a
share, as the case may be. Anything in this paragraph
(iii) to the contrary notwithstanding, the Corporation
shall be entitled to make such reduction in the
Conversion Price, in addition to those required by
this paragraph (iii), as it in its discretion shall
determine to be advisable in order that any stock
dividend, subdivision of shares, distribution of
rights to purchase stock or securities, or
distribution of securities convertible into or
exchangeable for stock hereafter made by the
Corporation to its stockholders shall not be taxable
to the recipients.
(g) Whenever the Conversion Price is
adjusted as herein provided, (i) the Corporation shall
promptly file with the conversion agent a certificate
of a firm of independent public accountants (who may
be the regular accountants employed by the
Corporation) setting forth the Conversion Price after
such adjustment and setting forth a brief statement of
the facts requiring such adjustment and the manner of
computing the same, which certificate shall be
conclusive evidence of the correctness of such
adjustment, and (ii) a notice stating that the
Conversion Price has been adjusted and setting forth
the adjusted Conversion Price shall forthwith be
mailed by the Corporation to the holders of the
Convertible Preferred Stock at their addresses as
shown on the stock book of the Corporation.
(h) In the event that at any time as a
result of an adjustment made pursuant to subdivision
(a) of this subsection (IV), the holder of any share
of Convertible Preferred Stock thereafter surrendered
for conversion shall become entitled to receive any
shares of the Corporation other than shares of Common
Stock, thereafter the Conversion Price of such other
shares so receivable upon conversion of any share
shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as
<PAGE>
practicable to the provisions with respect to Common
Stock contained in this paragraph (iii).
(V) In case:
(a) the Corporation shall take any action
which would require any adjustment in the Conversion
Price pursuant to subsection (IV)(C); or
(b) the Corporation shall authorize the
granting to the holders of the Common Stock of rights
or warrants to subscribe for or purchase any shares of
stock of any class or of any other rights; or
(c) there shall be any capital stock
reorganization or reclassification of the Common Stock
(other than a subdivision or combination of the
outstanding Common Stock and other than a change in
the par value of the Common Stock), or any
consolidation or merger to which the Corporation is a
party or any statutory exchange of securities with
another corporation and for which approval of any
stockholders of the Corporation is required, or any
sale or transfer of all or substantially all the
assets of the Corporation; or
(d) there shall be a voluntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed with the
conversion agent, and shall cause to be mailed to the
holders of shares of the Convertible Preferred Stock
at their addresses as shown on the stock books of the
Corporation, at least 10 days prior to the applicable
date hereinafter specified, a notice stating (i) the
date on which a record is to be taken for the purpose
of such distribution or rights, or, if a record is not
to be taken, the date as of which the holders of
Common Stock of record to be entitled to such
distribution or rights are to be determined, or (ii)
the date on which such reorganization,
reclassification, consolidation, merger, statutory
exchange, sale, transfer, dissolution, liquidation or
winding up is expected to become effective, and the
date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other
property deliverable upon such reorganization,
reclassification, consolidation, merger, statutory
exchange, sale, transfer, dissolution, liquidation or
winding up. Failure to give such notice or any defect
therein shall not affect the legality or validity of
<PAGE>
the proceedings described in subdivision (a), (b), (c)
or (d) of this subsection (V).
(VI) The Corporation covenants that it will
at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its
authorized but unissued shares of Common Stock or its
issued shares of Common Stock held in its treasure, or
both, for the purpose of effecting conversions of the
Convertible Preferred Stock, the full number of shares
of Common Stock deliverable upon the conversion of all
shares of Convertible Preferred Stock then outstanding
and not theretofore converted or then deliverable upon
conversion of the Corporation's 6.5% Convertible
Debentures Due 2002 (the "2002 Debentures"). For
purposes of this subsection (VI), the number of shares
of Common Stock which shall be deliverable upon the
conversion of all such shares of Convertible Preferred
Stock shall be computed as if at the time of
computation all such shares were held by a single
holder.
Before taking any action which would cause an
adjustment reducing the Conversion Price below the
then per value (if any) of the shares of Common Stock
deliverable upon conversion of the Convertible
Preferred Stock, the Corporation will take any
corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation
may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted
Conversion Price.
To the extent not already listed, the Corporation
will endeavor to list the shares of Common Stock
required to be delivered upon conversion of the
Convertible Preferred Stock prior to such delivery
upon each national securities exchange, if any, upon
which the outstanding Common Stock is listed at the
time of such delivery.
Prior to the delivery of any securities which the
Corporation shall be obligated to deliver upon
conversion of the Convertible Preferred Stock, the
Corporation will endeavor to comply with all Federal
and state laws and regulations thereunder requiring
the registration of such securities with, or any
approval of or consent to the delivery thereof by, any
governmental authority.
(VII) The Corporation will pay any and all
documentary stamp or similar issue or transfer taxes
<PAGE>
payable in respect of the issue or delivery of shares
of Common Stock on conversions of the Convertible
Preferred Stock pursuant hereto; provided, however,
-------- -------
that the Corporation shall not be required to pay any
tax which may be payable in respect of any transfer
involved in the issue or delivery of shares of Common
Stock in a name other than that of the holder of the
Convertible Preferred Stock to be converted and no
such issue or delivery shall be made unless and until
the person requesting such issue or delivery has paid
to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation,
that such tax has been paid.
(VIII) Notwithstanding any other provision
herein to the contrary, in case of any consolidation
or merger to which the Corporation is a party (other
than a merger or consolidation in which the
Corporation is the continuing corporation), or in case
of any statutory exchange of securities with another
corporation (including any exchange effected in
connection with a merger of a third corporation into
the Corporation), the holder of each share of
Convertible Preferred Stock then outstanding shall
have the right thereafter to convert such share into
the kind and amount of securities, cash or other
property receivable upon such consolidation, merger or
statutory exchange by a holder of the number of shares
of Common Stock into which such share of Convertible
Preferred Stock might have been converted immediately
prior to such consolidation, merger or statutory
exchange, assuming such holder of Common Stock failed
to exercise his rights of election, if any, as to the
kind or amount of securities, cash or other property
receivable upon such consolidation, merger or
statutory exchange (provided that if the kind or
amount of securities, cash or other property
receivable upon such consolidation, merger or
statutory exchange is not the same for each share of
Common Stock in respect of which such rights of
election shall not have been exercised ("non-electing
share"), then for the purpose of this subsection
(VIII) the kind and amount of securities, cash or
other property receivable upon such consolidation,
merger or statutory exchange for each non-electing
share shall be deemed to be the kind and amount so
receivable per share by a plurality of the
non-electing shares). Thereafter, the holders of the
Convertible Preferred Stock shall be entitled to
appropriate adjustments with respect to their
conversion rights to the end that the provisions set
forth in this paragraph (iii) shall correspondingly be
<PAGE>
made applicable, as nearly as may reasonably be, in
relation to any shares of stock or other securities or
property thereafter deliverable on the conversion of
the Convertible Preferred Stock. Any such adjustment
shall be approved by a firm of independent public
accountants, evidenced by a certificate to that effect
delivered to the conversion agent; and any adjustment
so approved shall for all purposes hereof conclusively
be deemed to be an appropriate adjustment.
The above provisions of this subsection (VIII)
shall similarly apply to successive consolidations,
mergers or statutory exchanges.
(iv) Upon any conversion or redemption of
shares of Convertible Preferred Stock, the shares of
Convertible Preferred Stock so converted or redeemed
shall have the status of authorized and unissued
shares of Series Preferred Stock, and the number of
shares of Series Preferred Stock which the Corporation
shall have authority to issue shall not be decreased
by the conversion or redemption of shares of
Convertible Preferred Stock.
(v) The holders of shares of Convertible
Preferred Stock shall have no voting rights
whatsoever, except for any voting rights to which they
may be entitled under the laws of the State of
Delaware, and except as follows:
(I) If and whenever at any time or times
dividends payable on the Convertible Preferred Stock
or on any other Parity Preferred Stock shall have been
in arrears and unpaid in an aggregate amount equal to
or exceeding the amount of dividends payable thereon
for six quarterly periods or three semi-annual
periods, as the case may be, then the holders of
Parity Preferred Stock shall have, in addition to the
other voting rights set forth herein, the exclusive
right, voting separately as a class, to elect two
directors of the Corporation, such directors to be in
addition to the number of directors constituting the
Board of Directors immediately prior to the accrual of
such right, the remaining directors to be elected by
the other class or classes of stock entitled to vote
therefor at each meeting of stockholders held for the
purpose of electing directors. Such voting right
shall continue until such time as all cumulative
dividends accumulated on all the Parity Preferred
Stock having cumulative dividends shall have been paid
in full and until any noncumulative dividends payable
on all the Parity Preferred Stock having noncumulative
<PAGE>
dividends shall have been paid regularly for at least
one year, at which time such voting right of the
holders of the Parity Preferred Stock shall terminate,
subject to revesting in the event of each and every
subsequent event of default of the character indicated
above.
Whenever such voting right shall have vested,
such right may be exercised initially either at a
special meeting of the holders of the Parity Preferred
Stock, called as hereinafter provided, or at any
annual meeting of stockholders held for the purpose of
electing directors, and thereafter at each successive
annual meeting.
At any time when such voting right shall have
vested in the holders of the Parity Preferred Stock,
and if such right shall not already have been
initially exercised, a proper officer of the
Corporation shall, upon the written request of the
holders of record of 10% in number of shares of the
Parity Preferred Stock then outstanding, addressed to
the Secretary of the Corporation, call a special
meeting of the holders of the Parity Preferred Stock
and of any other class or classes of stock having
voting power with respect thereto for the purpose of
electing directors. Such meeting shall be held at the
earliest practicable date upon the notice required for
annual meetings of stockholders at the place for
holding of annual meetings of stockholders of the
Corporation, or, if none, at a place designated by the
Secretary of the Corporation. If such meeting shall
not be called by the proper officers of the
Corporation within 30 days after the personal service
of such written request upon the Secretary of the
Corporation, or within 30 days after mailing the same
within the United States of America, by registered
mail, addressed to the Secretary of the Corporation at
its principal office (such mailing to be evidenced by
the registry receipt issued by the postal
authorities), then the holders of record of 10% in
number of shares of the Parity Preferred Stock then
outstanding may designate in writing one of their
number to call such meeting at the expense of the
Corporation, and such meeting may be called by such
person so designated upon the notice required for
annual meetings of stockholders and shall be held at
the same place as is elsewhere provided for in this
subsection (I). Any holder of the Parity Preferred
Stock shall have access to the stock books of the
Corporation for the purpose of causing a meeting of
stockholders to be called pursuant to the provisions
<PAGE>
of this paragraph. Notwithstanding the provisions of
this paragraph, however, no such special meeting shall
be called during a period within 90 days immediately
preceding the date fixed for the next annual meeting
of stockholders.
At any meeting held for the purpose of electing
directors at which the holders of the Parity Preferred
Stock shall have the right to elect directors as
provided herein, the presence in person or by proxy of
the holders of 33-1/3% of the then outstanding shares
of the Parity Preferred Stock shall be required and be
sufficient to constitute a quorum of the Parity
Preferred Stock for the election of directors by the
holders of the Parity Preferred Stock. At any such
meeting or adjournment thereof (A) the absence of a
quorum of the holders of the Parity Preferred Stock
shall not prevent the election of directors other than
those to be elected by the holders of the Parity
Preferred Stock and the absence of a quorum or quorums
of the holders of other classes of capital stock
entitled to elect such other directors shall not
prevent the election of directors to be elected by the
holders of the Parity Preferred Stock and (B) in the
absence of a quorum of the holders of any class of
stock entitled to vote for the election of directors,
a majority of the holders present in person or by
proxy of such class shall have the power to adjourn
the meeting for the election of directors which the
holders of such class are entitled to elect, from time
to time, without notice other than announcement at the
meeting, until a quorum shall be present.
The directors elected pursuant to this subsection
(I) shall serve until the next annual meeting or until
their respective successors shall be elected and shall
qualify; provided, however, that when the right of the
-------- -------
holders of the Parity Preferred Stock to elect
directors as herein provided shall terminate, the
terms of office of all persons so elected by the
holders of the Parity Preferred Stock shall terminate,
and the number of directors of the Corporation shall
thereupon be such number as may be provided in the
By-Laws of the Corporation irrespective of any
increase made pursuant to this subsection (I).
(II) So long as any shares of the
Convertible Preferred Stock remain outstanding, the
Corporation will not, either directly or indirectly or
through merger or consolidation with any other
corporation:
<PAGE>
(a) without the affirmative vote at a
meeting or the written consent with or without a
meeting of the holders of at least 66-2/3% in number
of shares of the Series Preferred Stock of all series
then outstanding, (A) create any class or classes of
stock ranking equal or prior to the Series Preferred
Stock either as to dividends or upon liquidation or
increase the authorized number of shares of any class
or classes of stock ranking equal or prior to the
Series Preferred Stock either as to dividends or upon
liquidation, (B) amend, alter or repeal any of the
provisions of the Certificate of Incorporation so as
to affect adversely the preferences, special rights or
powers of the Series Preferred Stock or (C) authorize
any reclassification of the Series Preferred Stock;
(b) without the affirmative vote at a
meeting or the written consent with or without a
meeting of the holders of at least 66-2/3% in number
of shares of the Convertible Preferred Stock then
outstanding, amend, alter or repeal any of the
provisions hereof so as to affect adversely the
preferences, special rights or powers of the
Convertible Preferred Stock; or
(c) without the affirmative vote at a
meeting or the written consent with or without a
meeting of the holders of at least a majority in
number of shares of the Series Preferred Stock of all
series then outstanding, increase the authorized
number of shares of the Series Preferred Stock.
(vi) The shares of the Convertible Preferred
Stock may be redeemed at the option of the Corporation
as a whole at any time, upon not less than 25 nor more
than 60 days' prior notice mailed to the holders of
the shares to be redeemed at their addresses as shown
on the stock books of the Corporation, at a redemption
price of $25.00 per share, together with an amount
equal to all dividends (whether or not earned or
declared) accumulated and unpaid to the date fixed for
redemption. Upon such redemption date, all holders of
shares of Convertible Preferred Stock shall cease to
be stockholders with respect to such shares and
thereafter such shares shall no longer be transferable
on the books of the Corporation and such holders shall
have no interest or claim against the Corporation with
respect to such shares except the right to receive
payment of the redemption price upon surrender of
their certificates.
<PAGE>
If full cumulative dividends on the Convertible
Preferred Stock have not been paid, the Corporation
may not purchase or acquire any shares of the
Convertible Preferred Stock otherwise than pursuant to
a purchase or exchange offer made on the same terms to
all holders of the Convertible Preferred Stock.
(vii) No consent of the holders of the
Convertible Preferred Stock shall be required for (i)
the creation of any indebtedness of any kind of the
Corporation, (ii) the creation of any class of stock
of the Corporation ranking junior as to dividends or
upon liquidation to the Series Preferred Stock or
(iii) any increase or decrease in the amount of
authorized Common Stock or any increase, decrease or
change in the par value thereof or in any other terms
thereof.
(viii) The Board reserves the right by
subsequent amendment from time to time to increase
(subject to the provisions of paragraph (v)(II)(c)) or
decrease the number of shares which constitute the
Convertible Preferred Stock (but not below the
aggregate number of shares thereof then outstanding or
then deliverable upon conversion of the 2002
Debentures) and in other respects to amend the terms
of the Convertible Preferred Stock within the
limitations provided by law, resolutions of the Board
and the Certificate of Incorporation.
IN WITNESS WHEREOF, Paine Webber Group Inc. has caused
this Certificate to be made under the seal of the
Corporation and signed by Theodore A. Levine, its Vice
President, and attested by Dorothy F. Haughey, its Assistant
Secretary, this 8 day of February, 1994.
---
PAINE WEBBER GROUP INC.
/s/
-----------------------
Vice President
[Seal]
Attest:
/s/ Dorothy F. Haughey
- ----------------------
Dorothy F. Haughey
Assistant Secretary
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
This instrument was acknowledged before me this
8th day of February, 1994 by THEODORE A. LEVINE and
- ---
DOROTHY F. HAUGHEY, as Vice President and Assistant
Secretary, respectively, of PAINE WEBBER GROUP INC.,
a Delaware corporation, being authorized so to do on its
behalf.
IN WITNESS WHEREOF, I hereunto set my hand and official
seal.
---------------------------
Notary Public
ELISA A. BELL
NOTARY PUBLIC, State of New York
No. 03-4818330
Qualified in Bronx County
Commission Expires June 30, 1994
-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PAINE WEBBER GROUP INC.
Pursuant to Section 242 of the General Corporation Law
------------------------------------------------------
of the State of Delaware
------------------------
Paine Webber Group Inc., a Delaware corporation (the "Corporation"),
DOES HEREBY CERTIFY as follows:
1. At a meeting of the Board of Directors of the Corporation duly
called and held on February 22, 1994, a resolution was duly adopted setting
forth a proposed amendment to the Restated Certificate of Incorporation of the
Corporation, declaring such amendment to be advisable and directing that such
amendment be submitted to the stockholders of the Corporation at the next
annual meeting of stockholders for approval thereof. The resolution setting
forth the proposed amendment is as follows:
RESOLVED, that the board of directors deems it
advisable that the restated certificate of incorporation of the
corporation be amended by amending the first sentence of
Section 1 of Article IV to read as follows:
"The total number of shares of capital stock which the
Corporation shall have the authority to issue is 20,000,000
shares of Series Preferred Stock of the par value of
$20 each and 200,000,000 shares of Common Stock of the
par value of $1 each. Such Series Preferred Stock and
Common Stock are sometimes hereinafter collectively called
'capital stock'."
<PAGE>
2
and that such amendment be, and it hereby is, adopted
subject to requisite approval by the stockholders of the
Corporation at the next annual meeting of the Corporation;
and that if such amendment to the restated certificate of
Incorporation shall be approved by the requisite vote of the
stockholders of the Corporation, the chairman of the board,
the president or any vice president of the Corporation be,
and each of them hereby is, authorized to prepare, execute,
file and record in accordance with section 103 of the
General Corporation Law of the State of Delaware such
amendment to the restated certificate of incorporation with
such changes therein as may be approved by the officer
executing the same, the execution and delivery thereof with
such changes to be conclusive evidence of his approval
thereof;
2. Thereafter, at the Annual Meeting of Stockholders of the
Corporation, duly called and held on May 5, 1994, the Stockholders of the
Corporation voted the necessary number of shares, as required by statute,
in favor of the proposed amendment.
3. Said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, this Certificate of Amendment has been made
under the seal of the Corporation and has been signed by the undersigned,
Theodore A. Levine, Vice President of the Corporation, and attested by
<PAGE>
3
Dorothy F. Haughey, Assistant Secretary of the Corporation, this 3rd day of
June, 1994.
PAYNE WEBBER GROUP INC.
By: /s/ Theodore A. Levine
-----------------------------
Theodore A. Levine
Vice President
[Corporate Seal]
Attest:
/s/ Dorothy F. Haughey
- -----------------------
Dorothy F. Haughey
Assistant Secretary
<PAGE>
CERTIFICATE OF THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS,
AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF,
WHICH HAVE NOT BEEN SET FORTH IN THE RESTATED CERTIFICATE OF
INCORPORATION OR IN ANY AMENDMENT THERETO, OF THE
9% CUMULATIVE REDEEMABLE
PREFERRED STOCK, SERIES C
($100 Stated Value)
PAINE WEBBER GROUP INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The undersigned, Theodore A. Levine, Vice
President, of Paine Webber Group Inc., a Delaware
corporation (hereinafter called the "Corporation"), pursuant
to the provisions of Sections 103 and 151 of the General
Corporation Law of the State of Delaware, does hereby make
this Certificate of Designations and does hereby state and
certify that pursuant to the authority expressly vested in
the Board of Directors of the Corporation by the Restated
Certificate of Incorporation, as amended (the "Certificate
of Incorporation"), the Board of Directors duly adopted the
following resolution:
RESOLVED, that, pursuant to Article IV of the
Certificate of Incorporation (which authorizes 20,000,000
shares of preferred stock, $20 par value ("Preferred
Stock"), of which (i) up to 2,200,000 shares of a series of
7.5% Convertible Preferred Stock, (ii) 240,000 shares of a
series of 7.5% Convertible Preferred Stock, Series B and
(iii) up to 2,200,000 shares of a series of 6% Convertible
Preferred Stock have been authorized for issuance, the Board
of Directors hereby fixes the powers, designations,
preferences and relative, participating, optional and other
special rights, and the qualifications, limitations and
restrictions, of a series of Preferred Stock (in addition to
the powers, designations, preferences and relative,
participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, set
forth in the Certificate of Incorporation which are
applicable to such series of Preferred Stock).
<PAGE>
2
RESOLVED, that each share of such series of
Preferred Stock shall rank equally in all respects and shall
be subject to the following provisions:
(1) Number and Designation. 2,500,000 shares of
----------------------
the Preferred Stock of the Corporation shall be designated
as 9% Cumulative Redeemable Preferred Stock, Series C (the
"Series C Preferred Stock").
(2) Rank. The shares of Series C Preferred Stock
----
shall rank prior to the shares of the Corporation's common
stock, $1 par value (the "Common Stock"), and any other
class of stock of the Corporation ranking Junior to the
Series C Preferred Stock (whether with respect to dividends
or upon liquidation, dissolution, winding up or otherwise).
All equity securities of the Corporation to which the
Series C Preferred Stock ranks prior (whether with respect
to dividends or upon liquidation, dissolution, winding up or
otherwise), including the Common Stock, are collectively
referred to herein as the "Junior Securities." All equity
securities of the Corporation with which the Series C
Preferred Stock ranks on a parity (whether with respect to
dividends or upon liquidation, dissolution, winding up or
otherwise), including the Corporation's 7.5% Convertible
Preferred Stock, 7.5% Convertible Preferred Stock, Series B,
6% Convertible Preferred Stock and 6% Cumulative Convertible
Redeemable Preferred Stock, Series A, are collectively
referred to herein as the "Parity Securities." The
respective definitions of Junior Securities and Parity
Securities shall also include any rights or options
exercisable for or convertible into any of the Junior
Securities and Parity Securities, as the case may be.
(3) Dividends. (a) The holders of shares of
---------
Series C Preferred Stock shall be entitled to receive, when,
as and if declared by the Board of Directors, out of funds
legally available for the payment of dividends, cash
dividends at the annual rate of $9 per share. Such
dividends shall be payable in arrears in equal amounts
quarterly on March 15, June 15, September 15 and December 15
of each year (unless such day is not a Business Day, in
which event on the next succeeding Business Day) (each of
such dates being a "Dividend Payment Date" and each such
quarterly period being a "Dividend Period") commencing on
the Dividend Payment Date which next follows the issuance of
such shares of Series C Preferred Stock. Such dividends (i)
shall be cumulative from the date of issue, whether or not
declared and whether or not in any Dividend Period or
Periods there shall be funds of the Corporation legally
<PAGE>
3
available for the payment of such dividends and (ii) shall
compound quarterly, to the extent they are unpaid, at the
rate of 9% per annum computed on the basis of a 360-day year
and twelve 30-day months. Each such dividend shall be
payable to the holders of record of shares of the Series C
Preferred Stock, as they appear on the stock records of the
Corporation at the close of business on such record dates,
not more than 60 days, or less than 10 days, preceding the
payment dates thereof, as shall be fixed by the Board of
Directors or a duly authorized committee thereof. Accrued
and unpaid dividends for any past Dividend Periods may be
declared and paid at any time, without reference to any
Dividend Payment Date, to holders of record on such date,
not more than 45 days preceding the payment date thereof, as
may be fixed by the Board of Directors. As used herein, the
term "Business Day" shall mean any day other than a
Saturday, Sunday, a day on which the New York Stock Exchange
does not conduct regular trading or a day on which is or is
declared a national or New York State holiday.
(b) The amount of dividends payable for each full
Dividend Period for the Series C Preferred Stock shall be
computed by dividing the annual dividend rate by four. The
amount of dividends payable for the initial Dividend Period,
or any other period shorter or longer than a full Dividend
Period, on the Series C Preferred Stock shall be computed on
the basis of twelve 30-day months and a 360-day year.
Holders of shares of Series C Preferred Stock shall not be
entitled to any dividends, whether payable in cash, property
or stock, in excess of cumulative dividends, as herein
provided, on the Series C Preferred Stock.
(c) So long as any shares of the Series C
Preferred Stock are outstanding, no dividends, except as
described in the next succeeding sentence, shall be declared
or paid or set apart for payment on Parity Securities, for
any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for such
payment on the Series C Preferred Stock for all Dividend
Periods terminating on or prior to the date of payment of
the dividend on such class or series of parity stock. When
dividends are not paid in full or a sum sufficient for such
payment is not set apart, as aforesaid, all dividends
declared upon shares of the Series C Preferred Stock and all
dividends declared upon any other Parity Security shall be
declared ratably in proportion to the respective amounts of
dividends accumulated and unpaid on the Series C Preferred
Stock and accumulated and unpaid on such Parity Security.
<PAGE>
4
(d) So long as any shares of the Series C
Preferred Stock are outstanding, no dividends (other than
dividends or distributions paid in shares of, or options,
warrants or rights to subscribe for or purchase shares of,
Junior Securities) shall be declared or paid or set apart
for payment or other distribution declared or made upon
Junior Securities, nor shall any Junior Securities be
redeemed, purchased or otherwise acquired (all such
dividends, distributions, redemptions or purchases being
hereinafter referred to as a "Junior Securities
Distribution") for any consideration (or any moneys be paid
to or made available for a sinking fund for the redemption
of any shares of any such stock) by the Corporation,
directly or indirectly (except by conversion into or
exchange for Junior Securities), unless in each case (i) the
full cumulative dividends on all outstanding shares of the
Series C Preferred Stock and any other Parity Securities
shall have been paid or set apart for payment for all past
Dividend Periods with respect to the Series C Preferred
Stock and all past dividend periods with respect to such
Parity Securities and (ii) sufficient funds shall have been
paid or set apart for the payment of the dividend for the
current Dividend Period with respect to the Series C
Preferred Stock and the current dividend period with respect
to such Parity Securities.
(4) Liquidation Preference. (a) In the event of
----------------------
any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any
payment or distribution of the assets of the Corporation
(whether capital or surplus) shall be made to or set apart
for the holders of Junior Securities, the holders of the
shares of Series C Preferred Stock shall be entitled to
receive $100 per share of Series C Preferred Stock plus an
amount equal to all dividends (whether or not earned or
declared) accrued end unpaid thereon to the date of final
distribution to such holders; but such holders shall not be
entitled to any further payment. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of
the Corporation, or proceeds thereof, distributable among
the holders of the shares of Series C Preferred Stock shall
be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any Parity Securities,
then such assets, or the proceeds thereof, shall be
distributed among the holders of shares of Series C
Preferred Stock and any such other Parity Securities ratably
in accordance with the respective amounts that would be
payable on such shares of Series C Preferred Stock and any
such other stock if all amounts payable thereon were paid in
<PAGE>
5
full. For the purposes of this paragraph (4), a sale or
transfer of all or substantially all of the Corporation's
assets, shall be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Corporation,
but a consolidation or merger of the Corporation with one or
more corporations shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, of the
Corporation.
(b) Subject to the rights of the holders of any
Parity Securities, after payment shall have been made in
full to the holders of the Series C Preferred Stock, as
provided in this paragraph (4), any other series or class or
classes of Junior Securities shall, subject to the
respective terms and provisions (if any) applying thereto,
be entitled to receive any and all assets remaining to be
paid or distributed, and the holders of the Series C
Preferred Stock shall not be entitled to share therein.
(5) Redemption. (a) To the extent the
----------
Corporation shall have funds legally available for such
payment, the Corporation may redeem at its option at any
time on or after December 16, 1999 or from time to time
thereafter, in whole or in part, the shares of Series C
Preferred Stock, at a redemption price of $100 per share in
cash, together with accrued and unpaid dividends thereon to
the date fixed for redemption.
(b) To the extent the Corporation shall have funds
legally available for such payment, on December 15, 2014, if
any shares of the Series C Preferred Stock shall be
outstanding, the Corporation shall redeem all outstanding
shares of the Series C Preferred Stock, at a redemption
price of $100 per share in cash, together with accrued and
unpaid dividends thereon to such date.
(c) Immediately prior to authorizing or making
any redemption pursuant to this paragraph (5) the
Corporation, by resolution of its Board of Directors, shall,
to the extent of any funds legally available therefor,
declare a dividend on the Series C Preferred Stock payable
on the redemption date in an amount equal to any accrued and
unpaid dividends on the Series C Preferred Stock as of such
redemption date.
(d) If the Corporation is unable or shall fail to
discharge its obligation to redeem all outstanding shares of
Series C Preferred Stock pursuant to paragraph (5)(b) (the
"Mandatory Redemption Obligation"), the Mandatory Redemption
<PAGE>
6
Obligation shall be discharged as soon as the Corporation is
able to discharge such Mandatory Redemption Obligation. If
and so long as any Mandatory Redemption Obligation with
respect to the Series C Preferred Stock shall not be fully
discharged, the Corporation shall not (i) directly or
indirectly, redeem, purchase, or otherwise acquire any
Parity Security or discharge any mandatory or optional
redemption, sinking fund or other similar obligation in
respect of any Parity Securities (except in connection with
a redemption, sinking fund or other similar obligation to be
satisfied pro rata with the Series C Preferred Stock) or
(ii) in accordance with paragraph (3)(d), declare or make
any Junior Securities Distribution, or, directly or
indirectly, discharge any mandatory or optional redemption,
sinking fund or other similar obligation in respect of the
Junior Securities.
(e) Shares of Series C Preferred Stock which have
been issued and reacquired in any manner, including shares
purchased or redeemed, shall (upon compliance with any
applicable provisions of the laws of the State of Delaware)
have the status of authorized and unissued shares of the
class of Preferred Stock undesignated as to series and may
be redesignated and reissued as part of any series of the
Preferred Stock; provided that no such issued and reacquired
--------
shares of Series C Preferred Stock shall be reissued or sold
as Series C Preferred Stock.
(6) Procedure for Redemption. (a) In the event
------------------------
that fewer than all the outstanding shares of Series C
Preferred Stock are to be redeemed, the number of shares to
be redeemed shall be determined by the Board of Directors
and the shares to be redeemed shall be selected pro rata
(with any fractional shares being rounded to the nearest
whole share) as nearly as practicable or by lot, or by such
other method as the Board of Directors may determine to be
equitable.
(b) In the event the Corporation shall redeem
shares of Series C Preferred Stock, notice of such
redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 days nor more than 60 days
prior to the redemption date, to each holder of record of
the shares to be redeemed at such holder's address as the
same appears on the stock register of the Corporation;
provided that neither the failure to give such notice nor
- --------
any defect therein shall affect the validity of the giving
of notice for the redemption of any share of Series C
Preferred Stock to be redeemed except as to the holder to
<PAGE>
7
whom the Corporation has failed to give said notice or
except as to the holder whose notice was defective. Each
such notice shall state: (i) the redemption date; (ii) the
number of shares of Series C Preferred Stock to be redeemed
and, if fewer than all the shares held by such holder are to
be redeemed, the number of shares to be redeemed from such
holder; (iii) the redemption price; (iv) the place or places
where certificates for such shares are to be surrendered for
payment of the redemption price; and (v) that dividends on
the shares to be redeemed will cease to accrue on such
redemption date.
(c) Notice having been mailed as aforesaid, from
and after the redemption date (unless default shall be made
by the Corporation in providing money for the payment of the
redemption price of the shares called for redemption),
dividends on the shares of Series C Preferred Stock so
called for redemption shall cease to accrue, and all rights
of the holders thereof as stockholders of the Corporation
(except the right to receive from the Corporation the
redemption price) shall cease. Upon surrender in accordance
with said notice of the certificates for the shares so
redeemed (properly endorsed or assigned for transfer, if the
Board of Directors of the Corporation shall so require and
the notice shall so state), such shares shall be redeemed by
the Corporation at the redemption price aforesaid. In case
fewer than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the
holder thereof.
(7) Voting Rights. (a) The holders of record of
-------------
shares of Series C Preferred Stock shall not be entitled to
any voting rights except as hereinafter provided in this
paragraph (7) or as otherwise provided by law.
(b) If and whenever six quarterly dividends
(whether or not consecutive) payable on the Series C
Preferred Stock have not been paid in full or if the
Corporation shall have failed to discharge its Mandatory
Redemption Obligation, the number of directors then
constituting the Board of Directors shall be increased by
two and the holders of shares of Series C Preferred Stock,
together with the holders of shares of every other series of
preferred stock upon which like rights to vote for the
election of two additional directors have been conferred and
are exercisable (resulting from either the failure to pay
dividends or the failure to redeem)(any such other series is
referred to as the "Preferred Shares"), voting as a single
<PAGE>
8
class regardless of series, shall be entitled to elect the
two additional directors to serve on the Board of Directors
at any annual meeting of stockholders or special meeting
held in place thereof, or at a special meeting of the
holders of the Series C Preferred Stock and the Preferred
Shares called as hereinafter provided. Whenever all arrears
in dividends on the Series C Preferred Stock and the
Preferred Shares then outstanding shall have been paid and
dividends thereon shall have been paid regularly for at
least one year, or the Corporation shall have fulfilled its
Mandatory Redemption Obligation, as the case may be, then
the right of the holders of the Series C Preferred Stock and
the Preferred Shares to elect such additional two directors
shall cease (but subject always to the same provisions for
the vesting of such voting rights in the case of any similar
future arrearages in six quarterly dividends or failure to
fulfill any Mandatory Redemption Obligation), and the terms
of office of all persons elected as directors by the holders
of the Series C Preferred Stock and the Preferred Shares
shall forthwith terminate and the number of the Board of
Directors shall be reduced accordingly. At any time after
such voting power shall have been so vested in the holders
of shares of Series C Preferred Stock and the Preferred
Shares, the secretary of the Corporation may, and upon the
written request of any holder of Series C Preferred Stock
(addressed to the secretary at the principal office of the
Corporation) shall, call a special meeting of the holders of
the Series C Preferred Stock and of the Preferred Shares for
the election of the two directors to be elected by them as
herein provided, such call to be made by notice similar to
that provided in the Bylaws of the Corporation for a special
meeting of the stockholders or as required by law. If any
such special meeting required to be called as above provided
shall not be called by the secretary within 20 days after
receipt of any such request, then any holder of shares of
Series C Preferred Stock may call such meeting, upon the
notice above provided, and for that purpose shall have
access to the stock books of the Corporation. The directors
elected at any such special meeting shall hold office until
the next annual meeting of the stockholders or special
meeting held in lieu thereof if such office shall not have
previously terminated as above provided. If any vacancy
shall occur among the directors elected by the holders of
the Series C Preferred Stock and the Preferred Shares, a
successor shall be elected by the Board of Directors, upon
the nomination of the then-remaining director elected by the
holders of the Series C Preferred Stock and the Preferred
Shares or the successor of such remaining director, to serve
until the next annual meeting of the stockholders or special
<PAGE>
9
meeting held in place thereof if such office shall not have
previously terminated as provided above.
(c) Without the written consent of a majority of
the outstanding shares of Series C Preferred Stock or the
vote of holders of a majority of the outstanding shares of
Series C Preferred Stock at a meeting of the holders of
Series C Preferred Stock called for such purpose, the
Corporation will not (i) amend, alter or repeal any
provision hereof or of the Certificate of Incorporation (by
merger or otherwise) so as to affect the preferences, rights
or powers of the Series C Preferred Stock; provided that any
--------
such amendment that changes the dividend payable on or the
liquidation preference of the Series C Preferred Stock shall
require the affirmative vote at a meeting of holders of
Series C Preferred Stock called for such purpose or written
consent of the holder of each share of Series C Preferred
Stock; or (ii) create any class or classes of stock ranking
equal or prior to the Series C Preferred Stock either as to
dividends or upon liquidation, dissolution or winding up or
increase the number of authorized number of shares of any
class or classes of stock ranking equal or prior to the
Series C Preferred Stock either as to dividends or upon
liquidation, dissolution or winding up. Notwithstanding the
foregoing, no consent of the holders of the Series C
Preferred Stock shall be required for (i) the creation of
any indebtedness of any kind of the Corporation, (ii) the
creation of any class of Junior Securities or (iii) any
increase or decrease in the amount of authorized Common
Stock or any increase, decrease or change in the par value
thereof or in any other terms thereof.
(d) In exercising the voting rights set forth in
this paragraph (7) each share of Series C Preferred Stock
shall have one vote per share, except that when any other
series of preferred stock shall have the right to vote with
the Series C Preferred Stock as a single class on any
matter, then the Series C Preferred Stock and such other
series shall have with respect to such matters one vote per
$100 of stated liquidation preference. Except as set forth
herein, the shares of Series C Preferred Stock shall not
have any relative, participating, optional or other special
voting rights and powers and the consent of the holders
thereof shall not be required for the taking of any
corporate action.
(8) Stockholders Agreement. The Series C
----------------------
Preferred Stock shall be subject to the provisions of the
Stockholders Agreement among the Corporation, Kidder,
<PAGE>
10
Peabody Group Inc. and General Electric Company dated
December 16, 1994.
(9) General Provisions. (a) The term "Person" as
------------------
used herein means any corporation, limited liability
company, partnership, trust, organization, association,
other entity or individual.
(b) The term "outstanding", when used with
reference to shares of stock, shall mean issued shares,
excluding shares held by the Corporation or a subsidiary.
(c) The headings of the paragraphs of this
Certificate of Designations are for convenience of reference
only and shall not define, limit or affect any of the
provisions hereof.
IN WITNESS WHEREOF, Paine Webber Group Inc. has
caused this Certificate of Designations to be signed and
attested by the undersigned this 15th day of December, 1994.
PAINE WEBBER GROUP INC.
By /s/ Theodore A. Levine
------------------------
Name: Theodore A. Levine
Title: Vice President
ATTEST:
/s/ Dorothy F. Haughey
- ---------------------------
Name : Dorothy F. Haughey
Assistant Secretary
<PAGE>
CERTIFICATE OF THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS,
AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF,
WHICH HAVE NOT BEEN SET FORTH IN THE RESTATED CERTIFICATE OF
INCORPORATION OR IN ANY AMENDMENT THERETO, OF THE
6% CUMULATIVE CONVERTIBLE REDEEMABLE
PREFERRED STOCK, SERIES A
($100 Stated Value)
PAINE WEBBER GROUP INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The undersigned, Theodore A. Levine, Vice
President, of Paine Webber Group Inc., a Delaware
corporation (hereinafter called the "Corporation"), pursuant
to the provisions of Sections 103 and 151 of the General
Corporation Law of the State of Delaware, does hereby make
this Certificate of Designations and does hereby state and
certify that pursuant to the authority expressly vested in
the Board of Directors of the Corporation by the Restated
Certificate of Incorporation, as amended (the "Certificate
of Incorporation"), the Board of Directors duly adopted the
following resolution:
RESOLVED, that, pursuant to Article IV of the
Certificate of Incorporation (which authorizes 20,000,000
shares of preferred stock, $20 par value ("Preferred
Stock"), of which (i) up to 2,200,000 shares of a series of
7.5% Convertible Preferred Stock, (ii) 240,000 shares of a
series of 7.5% Convertible Preferred Stock, Series B and
(iii) up to 2,200,000 shares of a series of 6% Convertible
Preferred Stock have been authorized for issuance, the Board
of Directors hereby fixes the powers, designations,
preferences and relative, participating, optional and other
special rights, and the qualifications, limitations and
restrictions, of a series of Preferred Stock (in addition to
the powers, designations, preferences and relative,
participating, optional or other special rights, and the
qualifications, limitations or restrictions thereof, set
forth in the Certificate of Incorporation which are
applicable to such series of Preferred Stock).
<PAGE>
2
RESOLVED, that each share of such series of
Preferred Stock shall rank equally in all respects and shall
be subject to the following provisions:
(1) Number and Designation. 1,000,000 shares of
----------------------
the Preferred Stock of the Corporation shall be designated
as 6% Cumulative Convertible Redeemable Preferred Stock,
Series A (the "Series A Convertible Preferred Stock").
(2) Rank. The shares of Series A Convertible
----
Preferred Stock shall rank prior to the shares of the
Corporation's common stock, $1 par value (the "Common
Stock"), and any other class of stock of the Corporation
ranking junior to the Series A Convertible Preferred Stock
(whether with respect to dividends or upon liquidation,
dissolution, winding up or otherwise). All equity
securities of the Corporation to which the Series A
Convertible Preferred Stock ranks prior (whether with
respect to dividends or upon liquidation, dissolution,
winding up or otherwise), including the Common Stock, are
collectively referred to herein as the "Junior Securities."
All equity securities of the Corporation with which the
Series A Convertible Preferred Stock ranks on a parity
(whether with respect to dividends or upon liquidation,
dissolution, winding up or otherwise), including the
Corporation's 7.5% Convertible Preferred Stock, 7.5%
Convertible Preferred Stock, Series B, 6% Convertible
Preferred Stock and 9% Cumulative Redeemable Preferred
Stock, Series C, are collectively referred to herein as the
"Parity Securities." The respective definitions of Junior
Securities and Parity Securities shall also include any
rights or options exercisable for or convertible into any of
the Junior Securities and Parity Securities, as the case may
be.
(3) Dividends. (a) The holders of shares of
---------
Series A Convertible Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors,
out of funds legally available for the payment of dividends,
cash dividends at the annual rate of $6 per share. Such
dividends shall be payable in arrears in equal amounts
quarterly on March 15, June 15, September 15 and December 15
of each year (unless such day is not a Business Day, in
which event on the next succeeding Business Day) (each of
such dates being a "Dividend Payment Date" and each such
quarterly period being a "Dividend Period") commencing on
the Dividend Payment Date which next follows the issuance of
such shares of Series A Convertible Preferred Stock. Such
dividends (i) shall be cumulative from the date of issue,
<PAGE>
3
whether or not declared end whether or not in any Dividend
Period or Periods there shall be funds of the Corporation
legally available for the payment of such dividends and (ii)
shall compound quarterly, to the extent they are unpaid, at
the rate of 6% per annum computed on the basis of a 360-day
year and twelve 30-day months. Each such dividend shall be
payable to the holders of record of shares of the Series A
Convertible Preferred Stock, as they appear on the stock
records of the Corporation at the close of business on such
record dates, not more than 60 days, or less than 10 days,
preceding the payment dates thereof, as shall be fixed by
the Board of Directors or a duly authorized committee
thereof. Accrued and unpaid dividends for any past Dividend
Periods may be declared and paid at any time, without
reference to any Dividend Payment Date, to holders of record
on such date, not more than 45 days preceding the payment
date thereof, as may be fixed by the Board of Directors. As
used herein, the term "Business Day" shall mean any day
other than a Saturday, Sunday, a day on which the New York
Stock Exchange does not conduct regular trading or a day on
which is or is declared a national or New York State
holiday.
(b) The amount of dividends payable for each full
Dividend Period for the Series A Convertible Preferred Stock
shall be computed by dividing the annual dividend rate by
four. The amount of dividends payable for the initial
Dividend Period, or any other period shorter or longer than
a full Dividend Period, on the Series A Convertible
Preferred Stock shall be computed on the basis of twelve 30-
day months and a 360-day year. Holders of shares of Series
A Convertible Preferred Stock shall not be entitled to any
dividends, whether payable in cash, property or stock, in
excess of cumulative dividends, as herein provided, on the
Series A Convertible Preferred Stock.
(c) So long as any shares of the Series A
Convertible Preferred Stock are outstanding, no dividends,
except as described in the next succeeding sentence, shall
be declared or paid or set apart for payment on Parity
Securities, for any period unless full cumulative dividends
have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set
apart for such payment on the Series A Convertible Preferred
Stock for all Dividend Periods terminating on or prior to
the date of payment of the dividend on such class or series
of parity stock. When dividends are not paid in full or a
sum sufficient for such payment is not set apart, as
aforesaid, all dividends declared upon shares of the Series
<PAGE>
4
A Convertible Preferred Stock and all dividends declared
upon any other Parity Security shall be declared ratably in
proportion to the respective amounts of dividends
accumulated and unpaid on the Series A Convertible Preferred
Stock and accumulated and unpaid on such Parity Security.
(d) So long as any shares of the Series A
Convertible Preferred Stock are outstanding, no dividends
(other than dividends or distributions paid in shares of, or
options, warrants or rights to subscribe for or purchase
shares of, Junior Securities) shall be declared or paid or
set apart for payment or other distribution declared or made
upon Junior Securities, nor shall any Junior Securities be
redeemed, purchased or otherwise acquired (all such
dividends, distributions, redemptions or purchases being
hereinafter referred to as a "Junior Securities
Distribution") for any consideration (or any moneys be paid
to or made available for a sinking fund for the redemption
of any shares of any such stock) by the Corporation,
directly or indirectly (except by conversion into or
exchange for Junior Securities), unless in each case (i) the
full cumulative dividends on all outstanding shares of the
Series A Convertible Preferred Stock and any other Parity
Securities shall have been paid or set apart for payment for
all past Dividend Periods with respect to the Series A
Convertible Preferred Stock and all past dividend periods
with respect to such Parity Securities and (ii) sufficient
funds shall have been paid or set apart for the payment of
the dividend for the current Dividend Period with respect to
the Series A Convertible Preferred Stock and the current
dividend period with respect to such Parity Securities.
(4) Liquidation Preference. (a) In the event of
----------------------
any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any
payment or distribution of the assets of the Corporation
(whether capital or surplus) shall be made to or set apart
for the holders of Junior Securities, the holders of the
shares of Series A Convertible Preferred Stock shall be
entitled to receive $100 per share of Series A Convertible
Preferred Stock plus an amount equal to all dividends
(whether or not earned or declared) accrued and unpaid
thereon to the date of final distribution to such holders;
but such holders shall not be entitled to any further
payment. If, upon any liquidation, dissolution or winding
up of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of the
shares of Series A Convertible Preferred Stock shall be
insufficient to pay in full the preferential amount
<PAGE>
5
aforesaid and liquidating payments on any Parity Securities,
then such assets, or the proceeds thereof, shall be
distributed among the holders of shares of Series A
Convertible Preferred Stock and any such other Parity
Securities ratably in accordance with the respective amounts
that would be payable on such shares of Series A Convertible
Preferred Stock and any such other stock if all amounts
payable thereon were paid in full. For the purposes of this
paragraph (4), a sale or transfer of all or substantially
all of the Corporation's assets, shall be deemed to be a
liquidation, dissolution or winding up, voluntary or
involuntary, of the Corporation, but a consolidation or
merger of the Corporation with one or more corporations
shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Corporation.
(b) Subject to the rights of the holders of any
Parity Securities, after payment shall have been made in
full to the holders of the Series A Convertible Preferred
Stock, as provided in this paragraph (4), any other series
or class or classes of Junior Securities shall, subject to
the respective terms and provisions (if any) applying
thereto, be entitled to receive any and all assets remaining
to be paid or distributed, and the holders of the Series A
Convertible Preferred Stock shall not be entitled to share
therein.
(5) Redemption. (a) To the extent the
----------
Corporation shall have funds legally available for such
payment, at any time or from time to time prior to the fifth
anniversary of the date of issuance of the shares of Series
A Convertible Preferred Stock, the Corporation may redeem at
its option, in whole or in part, shares of Series A
Convertible Preferred Stock at a redemption price per share
in cash equal to the greater of (i) $140 and (ii) the
average of (A) $140 and (B) the Current Market Price Per
Common Share (as defined in paragraph (7) (g) (vi)) as of the
date of notice of redemption multiplied by the number
obtained by dividing 100 by the Conversion Price (as defined
in paragraph 7(a)) then in effect, in each case, together
with any accrued and unpaid dividends thereon to the
redemption date.
(b) To the extent the Corporation shall have
funds legally available for such payment, at any time or
from time to time on or after the fifth anniversary of the
date of issuance of the shares of Series A Convertible
Preferred Stock, the Corporation may redeem at its option,
in whole or in part, shares of Series A Convertible
<PAGE>
6
Preferred Stock at a redemption price in cash (subject to
subparagraph (d) below) equal to the sum of (i) the
redemption price per share indicated below and (ii) any
accrued and unpaid dividends to the redemption date. The
amount of the redemption price per share, if redeemed during-
the 12-month period commencing on the December 16th of the
years indicated below, is:
Year Amount
---- ------
1999 $105
2000 $104
2001 $103
2002 $102
2003 $101
2004 and thereafter $100
(c) To the extent the Corporation shall have
funds legally available for such payment, on December 15,
2014, if any shares of the Series A Convertible Preferred
Stock shall be outstanding, the Corporation shall redeem all
outstanding shares of the Series A Convertible Preferred
Stock, at a redemption price of $100 per share in cash
(subject to paragraph (d) below) together with accrued and
unpaid dividends thereon to such date.
(d) In lieu of a cash payment of the redemption
price per share due upon any redemption of shares of Series
A Convertible Preferred Stock pursuant to paragraph 5(b) or
(c), the Corporation may issue shares of Common Stock to the
holders of record of such shares of Series A Convertible
Preferred Stock in full payment of such amount, by giving
written notice (in the manner described in paragraph (6)) to
such holders. If such notice is so given, the Corporation
shall issue and deliver or cause to be delivered to each
such holder of shares of Series A Convertible Preferred
Stock being redeemed out of its authorized but unissued
Common Stock or Common Stock held in treasury that number of
shares of Common Stock determined by dividing the aggregate
redemption price payable in respect of all such shares of
Series A Convertible Preferred Stock owned by such holder
being redeemed by the Current Market Price Per Common Share
as of the redemption date. The Corporation shall, in lieu
of issuing any fractional shares of Common Stock to any such
holder, pay to such holder cash in an amount equal to such
fractional interest multiplied by the Current Market Price
Per Common Share as of the redemption date.
<PAGE>
7
(e) Immediately prior to authorizing or making
any redemption pursuant to this paragraph (5), the
Corporation, by resolution of its Board of Directors, shall,
to the extent of any funds legally available therefor,
declare a dividend on the Series A Convertible Preferred
Stock payable on the redemption date in an amount equal to
any accrued and unpaid dividends on the Series A Convertible
Preferred Stock as of such redemption date.
(f) If the Corporation is unable or shall fail to
discharge its obligation to redeem all outstanding shares of
Series A Convertible Preferred Stock pursuant to paragraph
(5) (c) (the "Mandatory Redemption Obligation"), the
Mandatory Redemption Obligation shall be discharged as soon
as the Corporation is able to discharge such Mandatory
Redemption Obligation. If and so long as any Mandatory
Redemption Obligation with respect to the Series A
Convertible Preferred Stock shall not be fully discharged,
the Corporation shall not (i) directly or indirectly,
redeem, purchase, or otherwise acquire any Parity Security
or discharge any mandatory or optional redemption, sinking
fund or other similar obligation in respect of any Parity
Securities (except in connection with a redemption, sinking
fund or other similar obligation to be satisfied pro rata
with the Series A Convertible Preferred Stock) or (ii) in
accordance with paragraph (3)(d), declare or make any Junior
Securities Distribution, or, directly or indirectly,
discharge any mandatory or optional redemption, sinking fund
or other similar obligation in respect of the Junior
Securities.
(g) Shares of Series A Convertible Preferred
Stock which have been issued and reacquired in any manner,
including shares purchased or redeemed, shall (upon
compliance with any applicable provisions of the laws of the
State of Delaware) have the status of authorized and
unissued shares of the class of Preferred Stock undesignated
as to series and may be redesignated and reissued as part of
any series of the Preferred Stock; provided that no such
--------
issued and reacquired shares of Series A Convertible
Preferred Stock shall be reissued or sold as Series A
Convertible Preferred Stock.
(6) Procedure for Redemption. (a) In the event
------------------------
that fewer than all the outstanding shares of Series A
Convertible Preferred Stock are to be redeemed, the number
of shares to be redeemed shall be determined by the Board of
Directors and the shares to be redeemed shall be selected
pro rata (with any fractional shares being rounded to the
<PAGE>
8
nearest whole share) as nearly as practicable or by lot, or
by such other method as the Board of Directors may determine
to be equitable.
(b) In the event the Corporation shall redeem
shares of Series A Convertible Preferred Stock, notice of
such redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 days nor more than 60 days
prior to the redemption date, to each holder of record of
the shares to be redeemed at such holder's address as the
same appears on the stock register of the Corporation;
provided that neither the failure to give such notice nor
- --------
any defect therein shall effect the validity of the giving
of notice for the redemption of any share of Series A
Convertible Preferred Stock to be redeemed except as to the
holder to whom the Corporation has failed to give said
notice or except as to the holder whose notice was
defective. Each such notice shall state: (i) the redemption
date; (ii) the number of shares of Series A Convertible
Preferred Stock to be redeemed and, if fewer than all the
shares held by such holder are to be redeemed, the number of
shares to be redeemed from such holder; (iii) the redemption
price; (iv) the place or places where certificates for such
shares are to be surrendered for payment of the redemption
price; (v) that dividends on the shares to be redeemed will
cease to accrue on such redemption date; and (vi) whether
the redemption price will be paid in cash or shares of
Common Stock.
(c) Notice having been mailed as aforesaid, from
and after the redemption date (unless default shall be made
by the Corporation in providing money for the payment of the
redemption price of the shares called for redemption),
dividends on the shares of Series A Convertible Preferred
Stock so called for redemption shall cease to accrue, and
all rights of the holders thereof as stockholders of the
Corporation (except the right to receive from the
Corporation the redemption price) shall cease. Upon
surrender in accordance with said notice of the certificates
for the shares so redeemed (properly endorsed or assigned
for transfer, if the Board of Directors of the Corporation
shall so require and the notice shall so state), such shares
shall be redeemed by the Corporation at the redemption price
aforesaid. In case fewer than all the shares represented by
any such certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares without cost to
the holder thereof.
(d) All shares of Common Stock delivered pursuant
<PAGE>
9
to this paragraph (6) will upon delivery be duly and validly
issued and fully paid and nonassessable, free of all liens
and charges and not subject to any preemptive rights, and
free from all documentary, stamp, transfer or other similar
taxes. If the shares of Common Stock to be delivered
pursuant to this paragraph (6) are to be issued in the name
of a person other than the registered holder of the shares
of Series A Convertible Preferred Stock being redeemed, such
registered holder shall pay all transfer or other similar
taxes with respect thereto.
(7) Conversion. (a)(i) Subject to the
----------
provisions of this paragraph (7), the holders of the shares
of Series A Convertible Preferred Stock shall have the
right, at any time and from time to time, at such holder's
option, to convert any or all outstanding shares (and
fractional shares) of Series A Convertible Preferred Stock,
in whole or in part, into that number of fully paid and
non-assessable shares of Common Stock (calculated as to each
conversion to the nearest 1/10,000th of a share) obtained by
dividing 100 by the Conversion Price (as defined below), and
by surrender of such shares so to be converted, such
surrender to be made in the manner provided in this
paragraph (7). The term "Conversion Price" shall mean
$18.13 per share, as adjusted in accordance with the
provisions of paragraph 7(g).
(ii) Notwithstanding any other provision hereof,
the right to convert shares of Series A Convertible
Preferred Stock called for redemption pursuant to paragraph
(5) shall terminate (A) if the date of redemption is prior
to the fifth anniversary of the date of issuance of the
shares of Series A Convertible Preferred Stock, at the close
of business on the day immediately preceding the date on
which the Corporation gives a notice of redemption with
respect to such shares in accordance with paragraph (6) and
(B) if the date of redemption is on or after the fifth
anniversary of such date of issuance, at the close of
business on the day immediately preceding the redemption
date, in each case, unless the Corporation shall default in
making payment of the amount payable upon such redemption.
(b)(i) In order to exercise the conversion
privilege, the holder of the shares of Series A Convertible
Preferred Stock to be converted shall surrender the
certificate representing such shares at the office of the
Corporation, or at the office of the conversion agent for
the Series A Convertible Preferred Stock appointed for such
purpose by the Corporation, with a written notice of
<PAGE>
10
election to convert completed and signed, specifying the
number of shares to be converted.
Such notice shall be substantially in the
following form:
NOTICE OF ELECTION TO CONVERT
The undersigned, being a holder of the 6%
Cumulative Convertible Redeemable Preferred Stock,
Series A ("Preferred Stock"), of Paine Webber
Group Inc. (the "Corporation"), irrevocably
exercises the right to convert ________
outstanding shares of Preferred Stock on
_________, ____, into shares of Common Stock of
the Corporation in accordance with the terms of
the Preferred Stock, and directs that the shares
issuable and deliverable upon the conversion,
together with any check in payment for fractional
shares, be issued and delivered in the
denominations indicated below to the registered
holder hereof unless a different name has been
indicated below. If shares are to be issued in
the name of a person other than the undersigned,
the undersigned will pay all transfer taxes
payable with respect thereto.
Dated:
Fill in for registration of
shares of Common Stock
if to be issued otherwise
than to the registered holder:
- ---------------------------------
Name
- ---------------------------------
Address
- --------------------------------- ---------------------------------
(Please print name (Signature)
and address,
including postal
code number)
<PAGE>
11
Denominations: _______________________
Unless the shares issuable on conversion are to be issued in
the same name as the name in which such shares of Series A
Convertible Preferred Stock are registered, each share
surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or the holder's
duly authorized attorney and an amount sufficient to pay any
transfer or similar tax.
(ii) As promptly as practicable after the
surrender by the holder of the certificates for shares of
Series A Convertible Preferred Stock as aforesaid, the
Corporation shall issue and shall deliver to such holder, or
on the holder's written order to the holder's transferee, a
certificate or certificates for the whole number of shares
of Common Stock issuable upon the conversion of such shares
in accordance with the provisions of this paragraph (7) and
any fractional interest in respect of a share of Common
Stock arising upon such conversion shall be settled as
provided in paragraph (7)(f).
(iii) Each conversion shall be deemed to have been
effected immediately prior to the close of business on the
date on which the certificates for shares of Series A
Convertible Preferred Stock shall have been surrendered and
such notice received by the Corporation as aforesaid, and
the person in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable
upon such conversion shall be deemed to have become the
holder of record of the shares of Common Stock represented
thereby at such time on such date. All shares of Common
Stock delivered upon conversion of the Series A Convertible
Preferred Stock will upon delivery be duly and validly
issued and fully paid and non-assessable, free of all liens
and charges and not subject to any preemptive rights. Upon
the surrender of certificates representing shares of Series
A Convertible Preferred Stock, such shares shall no longer
be deemed to be outstanding and all rights of a holder with
respect to such shares surrendered for conversion shall
immediately terminate except the right to receive the Common
Stock and other amounts payable pursuant to this paragraph
(7).
(c) (i) Subject to paragraph (7)(a)(ii), upon
delivery to the Corporation by a holder of shares of Series
A Convertible Preferred Stock of a notice of election to
<PAGE>
12
convert, the right of the Corporation to redeem such shares
of Series A Convertible Preferred Stock shall terminate.
(ii) Subject to paragraph (7)(a)(ii), from the
date of delivery by a holder of shares of Series A
Convertible Preferred Stock of such notice of election to
convert, in lieu of dividends on such Series A Convertible
Preferred Stock pursuant to paragraph (3), such Series A
Convertible Preferred Stock shall participate equally and
ratably with the holders of shares of Common Stock in all
dividends paid on the Common Stock as if such shares of
Series A Convertible Preferred Stock had been converted to
shares of Common Stock at the time of such delivery.
(iii) If, after receipt by a holder of shares of
Series A Convertible Preferred Stock of a notice of
redemption pursuant to paragraph (5) with a redemption date
for such shares on or after the fifth anniversary of the
issuance of the Series A Convertible Preferred Stock, such
holder delivers to the Corporation a notice of election to
convert, such Series A Convertible Preferred Stock shall
cease to accrue dividends pursuant to paragraph (3) but such
shares shall continue to be entitled to receive all accrued
dividends which such holder is entitled to receive pursuant
to paragraph (3) through the date of delivery of such notice
of election to convert (including pro rata dividends for the
period from the last Dividend Payment Date to the date of
delivery of the notice of election to convert) in preference
to and in priority over any dividends on the Common Stock.
Such accrued dividends shall be payable to such holder when,
as and if declared by the Board of Directors, out of funds
legally available for the payment of dividends, as provided
in paragraph (3) above.
(iv) Except as provided above and in paragraph
(7)(g), the Corporation shall make no payment or adjustment
for accrued and unpaid dividends on shares of Series A
Convertible Preferred Stock, whether or not in arrears, on
conversion of such shares or for dividends in cash on the
shares of Common Stock issued upon such conversion.
(d) (i) The Corporation covenants that it will at
all times reserve and keep available, free from preemptive
rights, such number of its authorized but unissued shares of
Common Stock as shall be required for the purpose of
effecting conversions of the Series A Convertible Preferred
Stock. For purposes of this paragraph (d)(i), the number of
shares of Common Stock which shall be deliverable upon the
conversion of all outstanding shares of Series A Convertible
<PAGE>
13
Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a
single holder.
(ii) Prior to the delivery of any securities
which the Corporation shall be obligated to deliver upon
conversion of the Series A Convertible Preferred Stock, the
Corporation shall use its best efforts to comply with all
applicable federal and state laws and regulations which
require action to be taken by the Corporation.
(e) The Corporation will pay any and all
documentary stamp or similar issue or transfer taxes payable
in respect of the issue or delivery of shares of Common
Stock on conversion of the Series A Convertible Preferred
Stock pursuant hereto; provided that the Corporation shall
--------
not be required to pay any tax which may be payable in
respect of any transfer involved in the issue or delivery of
shares of Common Stock in a name other than that of the
holder of the Series A Convertible Preferred Stock to be
converted and no such issue or delivery shall be made unless
and until the person requesting such issue or delivery has
paid to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation, that
such tax has been paid.
(f) In connection with the conversion of any
shares of Series A Convertible Preferred Stock, no fractions
of shares of Common Stock shall be issued, but in lieu
thereof the Corporation shall pay a cash adjustment in
respect of such fractional interest in an amount equal to
such fractional interest multiplied by the Current Market
Price Per Common Share on the Business Day on which such
shares of Series A Convertible Preferred Stock are deemed to
have been converted. If more than one share shall be
surrendered for conversion at one time by the same holder,
the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the
aggregate number of the shares of Series A Convertible
Preferred Stock so surrendered. All calculations under this
paragraph (7) shall be made to the nearest 1/100 of one cent
or to the nearest 1/10,000 of a share, as the case may be.
(g) The Conversion Price shall be adjusted from
time to time as follows:
(i) In case the Corporation shall at any time
after the date of issue of the Series A Convertible
Preferred Stock (I) declare a dividend or make a
<PAGE>
14
distribution on Common Stock payable in Common Stock, (II)
subdivide or split the outstanding Common Stock into a
greater number of shares, (III) combine or reclassify the
outstanding Common Stock into a smaller number of shares,
(IV) issue any shares of its capital stock in a
reclassification of Ccmmom Stock (including any such
reclassification in connection with a consolidation or
merger in which the Corporation is the continuing
corporation), or (V) consolidate with, or merge with or
into, any other Person (unless the Corporation shall be the
surviving corporation in such merger and the holders of
Common Stock of the Corporation are not entitled to receive
any consideration in connection therewith), the Conversion
Price in effect at the time of the record date for such
dividend or distribution or of the effective date of such
subdivision, split, combination, consolidation, merger or
reclassification shall be proportionately adjusted so that
the conversion of the Series A Convertible Preferred Stock
after such time shell entitle the holder to receive the
aggregate number of shares of Common Stock or other
securities of the Corporation (or shares of any security
into which such shares of Common Stock have been combined,
consolidated, merged or reclassified pursuant to clause
(III), (IV) or (V) above) which, if this Series A
Convertible Preferred Stock had been converted immediately
prior to such time, such holder would have owned upon such
conversion and been entitled to receive by virtue of such
dividend, distribution, subdivision, split, combination,
consolidation, merger or reclassification, assuming such
holder of Common Stock of the Corporation (x) is not a
Person with which the Corporation consolidated or into which
the Corporation merged or which merged into the Corporation
or to which such recapitalization, sale or transfer was
made, as the case may be ("constituent person"), or an
affiliate of a constituent person and (y) failed to exercise
any rights of election as to the kind or amount of
securities, cash and other property receivable upon such
reclassification, change, consolidation, merger,
recapitalization, sale or transfer (provided, that if the
kind or amount of securities, cash and other property
receivable upon such reclassification, change,
consolidation, merger, recapitalization, sale or transfer is
not the same for each share of Common Stock of the
Corporation held immediately prior to such reclassification,
change, consolidation, merger, recapitalization, sale or
transfer by other than a constituent person or an affiliate
thereof and in respect of which such rights of election
shall not have been exercised ("non-electing share"), then
for the purpose of this paragraph (g) (i) the kind and
<PAGE>
15
amount of securities, Cash and other property receivable
upon such reclassification, change, consolidation, merger,
recapitalization, sale or transfer by each non-electing
share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing
shares). Such adjustment shall be made successively
whenever any event listed above shall occur.
(ii) In case the Corporation shall issue or sell
any Common Stock (other than Excluded Stock (as defined
below)) without consideration or for a consideration per
share less than the then Current Market Price Per Common
Share, the Conversion Price to be in effect after such
issuance or sale shall be determined by multiplying the
Conversion Price in effect immediately prior to such
issuance or sale by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding
immediately prior to such issuance or sale plus the number
of shares which the aggregate offering price of the total
number of shares so issued or sold would purchase at such
Current Market Price Per Common Share, and of which the
denominator shall be the number of shares of Common Stock
outstanding immediately after giving effect to such issuance
or sale. In case any portion of the consideration to be
received by the Corporation shall be in a form other than
cash, the fair market value of such noncash consideration
shall be utilized in the foregoing computation. Such fair
market value shall be determined by the Board of Directors
of the Corporation. Such adjustment shall be made effective
immediately after such issuance or sale. For purposes of
paragraphs (g)(ii), (iii) and (iv), "Excluded Stock" shall
mean any shares of Common Stock, or any shares of stock or
other securities convertible or exercisable into or
exchangeable for shares of Common Stock (such convertible,
exercisable or exchangeable stock or securities being herein
called "Convertible Securities") or any rights to subscribe
for or purchase, or options or warrants for the purchase of
shares of the Common Stock or any Convertible Securities
issued, granted or sold (I) as payment of all or any portion
of the cost of acquiring assets or stock or securities of
any other corporation or of assets of or interests in any
noncorporate entity or in any other transaction (other than
a distribution without consideration to holders of the then
outstanding shares of Common Stock) in which the
consideration for such shares of the Common Stock,
Convertible Securities or rights or options is other than
cash, obligations of the United States Government or Federal
funds; (II) pursuant to any employee plan or employee
contract approved or otherwise authorized by the Board of
<PAGE>
16
Directors of the Corporation, including without limitation,
any employee stock option plan, employee restricted stock
plan or other employee incentive plan or any share purchase
plan; (III) pursuant to any shareholder dividend
reinvestment plan; (IV) upon the conversion or exchange of
any Convertible Securities outstanding on December 16, 1994
or the Series A Convertible Preferred Stock, or pursuant to
any other contractual obligation in existence on such date
or any Convertible Securities issued after such date
provided that the "conversion price" for the Common Stock
underlying such Convertible Security is greater than the
Current Market Price Per Common Share on the date such
Convertible Security is issued, granted or sold; (v) upon
the conversion or exchange of any Convertible Securities, or
the exercise of any rights or options, in either case,
issued, granted or sold in the circumstances described in
any of the foregoing clauses (I) through (IV) or upon the
conversion or exchange of Convertible Securities acquired
upon the exercise of any such rights or options; or (VI)
pursuant to the exercise of any rights or options, or upon
conversion or exchange of any Convertible Securities, if
with respect to such rights, options or Convertible
Securities no adjustment to the Conversion Price was
required pursuant to this paragraph (g)(ii).
(iii) In case the Corporation shall fix a record
date for the issue (other than pursuant to an automatic
dividend reinvestment plan of the Corporation or any similar
plan or any customary shareholders rights plan of the
Corporation) of rights, options or warrants (other than
Excluded Stock) to the holders of its Common Stock or other
securities entitling such holders to subscribe for or
purchase shares of Common Stock (or securities convertible
into shares of Common Stock) at a price per share of Common
Stock (or having a conversion price per share of Common
Stock, if a security convertible into shares of Common
Stock) less than the then Current Market Price Per Common
Share on Such record date, the maximum number of shares of
Common Stock issuable upon exercise of such rights, options
or warrants (or conversion of such convertible securities)
shall be deemed to have been issued and outstanding as of
such record date, and the Conversion Price shall be adjusted
pursuant to paragraph (g)(ii) hereof as though such maximum
number of shares of Common Stock had been so issued for an
aggregate consideration equal to the aggregate consideration
payable for such rights, options, warrants or convertible
securities and the aggregate consideration payable by the
holders of such rights, options, warrants or convertible
securities prior to their receipt of such shares of Common
<PAGE>
17
Stock. In case any portion of such consideration shall be
in a form other than cash, the fair market value of such
noncash consideration shall be determined as set forth in
paragraph (g)(ii) hereof. Such adjustment shall be made
effective on the day immediately after the record date; and
in the event that such rights, options or warrants are not
so issued or expire unexercised or such convertible
securities are redeemed or otherwise retired prior to
conversion thereof, or in the event of a change in the
number of shares of Common Stock to which the holders of
such rights, options, warrants or convertible securities are
entitled (other than pursuant to adjustment provisions
therein comparable to those contained in this paragraph
(g)), the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such
record date had not been fixed, in the former event, or the
Conversion Price which would then be in effect if such
holders had initially been entitled to such changed number
of shares of Common Stock, in the latter event.
(iv) In case the Corporation shall issue rights,
options or warrants (other than Excluded Stock) entitling
the holders thereof to subscribe for or purchase Common
Stock (or securities convertible into shares of Common
Stock) or shall issue convertible securities, at a price per
share of Common Stock (or having a conversion price per
share of Common Stock, if a security convertible into shares
of Common Stock) (including, in the case of rights, options
or warrants, the price at which they may be exercised) is
less than the then Current Market Price Per Common Share,
the maximum number of shares of Common Stock issuable upon
exercise of such rights, options or warrants or upon
conversion of such convertible securities shall be deemed to
have been issued and outstanding as of the date of such sale
or issuance, and the Conversion Price shall be adjusted
pursuant to paragraph (g)(ii) hereof as though such maximum
number of shares of Common Stock had been so issued for an
aggregate consideration equal to the aggregate consideration
paid for such rights, options, warrants or convertible
securities and the aggregate consideration payable by the
holders of such rights, options, warrants or convertible
securities prior to their receipt of such shares of Common
Stock. In case any portion of such consideration shall be
in a form other than cash, the fair market value of such
noncash consideration shall be determined as set forth in
paragraph (g)(ii) hereof. Such adjustment shall be made
effective immediately after such rights, options, warrants
or convertible securities are issued; and in the event that
such rights, options or warrants expire unexercised or such
<PAGE>
18
convertible securities are redeemed or otherwise retired
prior to conversion thereof, or in the event of a change in
the number of shares of Common Stock to which the holders of
such rights, options, warrants or convertible securities are
entitled (other than pursuant to adjustment provisions
therein comparable to those contained in this paragraph
(g)), the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such
rights, options, warrants or convertible securities had not
been issued, in the former event, or the Conversion Price
which would then be in effect if such holders had initially
been entitled to such changed number of shares of Common
Stock, in the latter event. No adjustment of the Conversion
Price shall be made pursuant to this paragraph (g)(iv) to
the extent that the Conversion Price shall have been
adjusted pursuant to paragraph (g)(iii) upon the setting of
any record date relating to such rights, options, warrants
or convertible securities and such adjustment fully reflects
the number of shares of Common Stock to which the holders of
such rights, options, warrants or convertible securities are
entitled and the price payable therefor.
(v) In case the Corporation shall fix a record
date for the making of a distribution to holders of Common
Stock (including any such distribution made in connection
with a consolidation or merger in which the Corporation is
the continuing corporation) of evidences of indebtedness,
assets or other property (other than regular periodic cash
dividends or dividends payable in Common Stock or rights,
options or warrants referred to in, and for which an
adjustment is made pursuant to, paragraph (g)(iii) hereof),
the Conversion Price to be in effect after such record date
shall be determined by multiplying the Conversion Price in
effect immediately prior to such record date by a fraction,
(A) the numerator of which shall be the Current Market Price
Per Common Share on such record date, less the fair market
value (determined as set forth in paragraph (g)(ii) hereof)
of the portion of the assets, other property or evidence of
indebtedness so to be distributed which is applicable to one
share of Common Stock and (B) the denominator of which shall
be the Current Market Price Per Common Share on such record
date. Such adjustments shall be made effective on the day
immediately after the record date; and in the event that
such distribution is not so made, the Conversion Price shall
again be adjusted to be the Conversion Price which would
then be in effect if such record date had not been fixed.
(vi) On any date, the "Current Market Price Per
Common Share" shall be deemed to be the average of the Daily
<PAGE>
19
Prices (as defined below) per share of the applicable class
of Common Stock for the ten consecutive trading days
immediately prior to such date. "Daily Price" means (1) if
the shares of such class of Common Stock then are listed and
traded on the New York Stock Exchange, Inc. ("NYSE"), the
closing price on such day as reported on the NYSE Composite
Transactions Tape; (2) if the shares of such class of Common
Stock then are not listed and traded on the NYSE, the
closing price on such day as reported by the principal
national securities exchange on which the shares are listed
and traded; (3) if the shares of such class of Common Stock
then are not listed and traded on any such securities
exchange, the last reported sale price on such day on the
National Market of the National Association of Securities
Dealers, Inc. Automated Quotation System ( "NASDAQ" ); or (4)
if the shares of such class of Common Stock then are not
traded on the NASDAQ National Market, the average of the
highest reported bid and lowest reported asked price on such
day as reported by NASDAQ. "Trading day" means, with
respect to any exchange or market, each Monday, Tuesday,
Wednesday, Thursday and Friday, other than any day on which
securities are not traded on such exchange or in such
market. For purposes of any computation under this
paragraph (g), the number of shares of Common Stock
outstanding at any given time shall not include shares owned
or held by or for the account of the Corporation.
(vii) To the extent that the Conversion Price
shall have been adjusted pursuant to any of paragraph
(g)(ii), (iii), (iv) or (v) as a result of a particular
event, no additional adjustment shall be made pursuant to
any other of such paragraphs (g)(ii), (iii), (iv) or (v) as
a result of such event. No adjustment to the Conversion
Price pursuant to paragraphs (g)(ii), (iii), (iv) and (v)
above shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Conversion
Price; provided that any adjustments which by reason of this
--------
paragraph (g)(vii) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment. All calculations under this paragraph (g) shall
be made to the nearest four decimal points.
(viii) In the event that, at any time as a result
of the provisions of this paragraph (g), the holder of this
Series A Convertible Preferred Stock upon subsequent
conversion shall become entitled to receive any shares of
capital stock of the Corporation other than Common Stock,
the number of such other shares so receivable upon
conversion of this Series A Convertible Preferred Stock
<PAGE>
20
shall thereafter be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable
to the provisions contained herein.
(h) Whenever the Conversion Price is adjusted
pursuant to this paragraph (7), (i) the Corporation shall
promptly file with the conversion agent a certificate of a
firm of independent public accountants (who may be the
regular accountants employed by the Corporation) setting
forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such
adjustment and the manner of computing the same, and (ii) a
notice stating that the Conversion Price has been adjusted
and setting forth the adjusted Conversion Price shall
promptly be sent by first class mail, postage prepaid, by
the Corporation to the holders of the Series A Convertible
Preferred Stock at their addresses as the same appear on the
stock register of the Corporation.
(i) Notwithstanding any provision of this
paragraph (7), to the extent the Corporation shall have
funds legally available for such purpose, the Corporation
shall have the option, upon receipt from any holder of
notice of election to convert shares of Series A Convertible
Preferred Stock pursuant to paragraph (7)(b), to deliver, in
lieu of the shares of Common Stock into which such shares of
Series A Convertible Preferred Stock would otherwise be
convertible, cash in an amount equal to the product of (A)
such number of shares of Common Stock into which such shares
of Series A Convertible Preferred Stock would otherwise be
convertible multiplied by (B) the Current Market Price Per
Common Share, together with all accrued and unpaid dividends
on such shares of Series A Convertible Preferred Stock;
provided that (i) if the Corporation has not received any
- --------
required approval under the 1986 Supplement to The Banking
Act of 1948 of New Jersey, 17 N.J. Stat. Ann. Sec. 376 et seq.,
-- ---
concerning the change of control of banks, or (ii) if the
shareholders of the Corporation have not voted to approve
the issuance of the Common Stock required to be delivered
upon a conversion of the Series A Convertible Preferred
Stock, in each case, the Corporation shall have the
obligation to deliver cash pursuant to this paragraph (7)(i)
upon any exercise of the conversion privilege.
(8) Voting Rights. (a) The holders of record of
-------------
shares of Series A Convertible Preferred Stock shall not be
entitled to any voting rights except as hereinafter provided
in this paragraph (8} or as otherwise provided by law.
<PAGE>
21
(b) If and whenever six quarterly dividends
(whether or not consecutive) payable on the Series A
Convertible Preferred Stock have not been paid in full or if
the Corporation shall have failed to discharge its Mandatory
Redemption Obligation, the number of directors then
constituting the Board of Directors shall be increased by
two and the holders of shares of Series A Convertible
Preferred Stock, together with the holders of shares of
every other series of preferred stock upon which like rights
to vote for the election of two additional directors have
been conferred and are exercisable (resulting from either
the failure to pay dividends or the failure to redeem) (any
such other series is referred to as the "Preferred Shares"),
voting as a single class regardless of series, shall be
entitled to elect the two additional directors to serve on
the Board of Directors at any annual meeting of stockholders
or special meeting held in place thereof, or at a special
meeting of the holders of the Series A Convertible Preferred
Stock and the Preferred Shares called as hereinafter
provided. Whenever all arrears in dividends on the Series A
Convertible Preferred Stock and the Preferred Shares then
outstanding shall have been paid and dividends thereon shall
have been paid regularly for at least one year, or the
Corporation shall have fulfilled its Mandatory Redemption
Obligation, as the case may be, then the right of the
holders of the Series A Convertible Preferred Stock and the
Preferred Shares to elect such additional two directors
shall cease (but subject always to the same provisions for
the vesting of such voting rights in the case of any similar
future arrearages in six quarterly dividends or failure to
fulfill any Mandatory Redemption Obligation), and the terms
of office of all persons elected as directors by the holders
of the Series A Convertible Preferred Stock and the
Preferred Shares shall forthwith terminate and the number of
the Board of Directors shall be reduced accordingly. At any
time after such voting power shall have been so vested in
the holders of shares of Series A Convertible Preferred
Stock and the Preferred Shares, the secretary of the
Corporation may, and upon the written request of any holder
of Series A Convertible Preferred Stock (addressed to the
secretary at the principal office of the Corporation) shall,
call a special meeting of the holders of the Series A
Convertible Preferred Stock and of the Preferred Shares for
the election of the two directors to be elected by them as
herein provided, such call to be made by notice similar to
that provided in the Bylaws of the Corporation for a special
meeting of the stockholders or as required by law. If any
such special meeting required to be called as above provided
shall not be called by the secretary within 20 days after
<PAGE>
22
receipt of any such request, then any holder of shares of
Series A Convertible Preferred Stock may call such meeting,
upon the notice above provided, and for that purpose shall
have access to the stock books of the Corporation. The
directors elected at any such special meeting shall hold
office until the next annual meeting of the stockholders or
special meeting held in lieu thereof if such office shall
not have previously terminated as above provided. If any
vacancy shall occur among the directors elected by the
holders of the Series A Convertible Preferred Stock and the
Preferred Shares, a successor shall be elected by the Board
of Directors, upon the nomination of the then-remaining
director elected by the holders of the Series A Convertible
Preferred Stock and the Preferred Shares or the successor of
such remaining director, to serve until the next annual
meeting of the stockholders or special meeting held in place
thereof if such office shall not have previously terminated
as provided above.
(c) Without the written consent of a majority of
the outstanding shares of Series A Convertible Preferred
Stock or the vote of holders of a majority of the outstand-
ing shares of Series A Convertible Preferred Stock at a
meeting of the holders of Series A Convertible Preferred
Stock called for such purpose. the Corporation will not (i)
amend, alter or repeal any provision hereof or of the
Certificate of Incorporation (by merger or otherwise) so as
to affect the preferences, rights or powers of the Series A
Convertible Preferred Stock; provided that any such
--------
amendment that changes the dividend payable on or the
liquidation preference of the Series A Convertible Preferred
Stock shall require the affirmative vote at a meeting of
holders of Series A Convertible Preferred Stock called for
such purpose or written consent of the holder of each share
of Series A Convertible Preferred Stock; or (ii) create any
class or classes of stock ranking equal or prior to the
Series A Convertible Preferred Stock either as to dividends
or upon liquidation, dissolution or winding up or increase
the number of authorized number of shares of any class or
classes of stock ranking equal or prior to the Series A
Convertible Preferred Stock either as to dividends or upon
liquidation, dissolution or winding up. Notwithstanding the
foregoing, no consent of the holders of the Series A
Convertible Preferred Stock shall be required for (i) the
creation of any indebtedness of any kind of the Corporation,
(ii) the creation of any class of Junior Securities or (iii)
any increase or decrease in the amount of authorized Common
Stock or any increase, decrease or change in the par value
thereof or in any other terms thereof.
<PAGE>
23
(d) In exercising the voting rights set forth in
this paragraph (8), each share of Series A Convertible
Preferred Stock shall have one vote per share, except that
when any other series of preferred stock shall have the
right to vote with the Series A Convertible Preferred Stock
as a single class on any matter, then the Series A
Convertible Preferred Stock and such other series shall have
with respect to such matters one vote per $100 of stated
liquidation preference. Except as set forth herein, the
shares of Series A Convertible Preferred Stock shall not
have any relative, participating, optional or other special
voting rights and powers and the consent of the holders
thereof shall not be required for the taking of any
corporate action.
(9) Stockholders Agreement. The Series A
----------------------
Convertible Preferred Stock shall be subject to the
provisions of the Stockholders Agreement among the
Corporation, Kidder, Peabody Group Inc. and General Electric
Company dated December 16, 1994.
(10) General Provisions. (a) The term "Person" as
------------------
used herein means any corporation, limited liability
company, partnership, trust, organization, association,
other entity or individual.
(b) The term "outstanding", when used with
reference to shares of stock, shall mean issued shares,
excluding shares held by the Corporation (including treasury
shares) or a subsidiary.
(c) The headings of the paragraphs of this
Certificate of Designations are for convenience of reference
only and shall not define, limit or affect any of the
provisions hereof.
IN WITNESS WHEREOF, Paine Webber Group Inc. has
caused this Certificate of Designations to be signed and
attested by the undersigned this 15th day of December, 1994.
PAINE WEBBER GROUP INC.
By /s/ Theodore A. Levine
--------------------------
Name: Theodore A. Levine
Title: Vice President
<PAGE>
24
ATTEST:
/s/ Dorothy F. Haughey
- ---------------------------
Name: Dorothy F. Haughey
Assistant Secretary
================================================================================
BY-LAWS
OF
PAINE WEBBER GROUP INC.
Incorporated under the laws
of the State of Delaware
As Amended on March 1, 1988
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I -OFFICES ....................................... 1
ARTICLE II -MEETINGS OF STOCKHOLDERS ...................... 1
SECTION 1. Purpose of Annual Meetings ..................... 1
SECTION 2. Special Meetings ............................... 2
SECTION 3. Place of Meetings .............................. 2
SECTION 4. Notice of Meetings ............................. 2
SECTION 5. Waiver of Notice ............................... 2
SECTION 6. Organization ................................... 3
SECTION 7 Stockholders Entitled to Vote .................. 3
SECTION 8. Quorum and Adjournment ......................... 4
SECTION 9. Order of Business ............................. 4
SECTION 10. Vote of Stockholders ........................... 4
SECTION 11. Proxies ........................................ 5
SECTION 12. Attendance at Stockholders' Meetings ........... 5
ARTICLE III -BOARD OF DIRECTORS ............................ 6
SECTION 1. Number, Qualification and Election ............. 6
SECTION 2. Number ......................................... 7
SECTION 3. General Powers ................................. 7
SECTION 4. Place of Meetings .............................. 7
SECTION 5. Organization Meeting ........................... 7
SECTION 6. Regular Meetings ............................... 7
SECTION 7. Special Meetings; Notice and Waiver of
Notice ........................................ 8
SECTION 8. Organization ................................... 8
SECTION 9. Quorum and Adjournment; Manner of Acting ....... 8
<PAGE>
ii
PAGE
SECTION 10. Voting ........................................ 9
SECTION 11. Acting Without a Meeting ...................... 9
SECTION 12. Resignations................................... 9
SECTION 13. Removal of Directors .......................... 9
SECTION 14. Senior Advisor ............................... 10
ARTICLE IV -COMMITTEES OF THE BOARD ....................... 10
SECTION 1. Appointing Committees of the Board ............. 10
SECTION 2. Place and Time of Meetings; Notice and
Waiver of Notice; Records .................... 11
ARTICLE V -THE OFFICERS .................................. 11
SECTION 1. Officers ....................................... 11
SECTION 2. Terms of Office; Vacancies ..................... 12
SECTION 3. Removal of Officers ............................ 12
SECTION 4. Resignations ..... ............................. 12
SECTION 5. Officers Holding More Than One Office .......... 12
SECTION 6. The Chairman of the Board ...................... 12
SECTION 7. The President .................................. 13
SECTION 8. The Vice Presidents ............................ 12
SECTION 9. The Secretary .................................. 13
SECTION 10. The Treasurer .................................. 13
SECTION 11. Additional Powers and Duties ................... 13
ARTICLE VI -STOCK AND TRANSFERS OF STOCK .................. 14
SECTION 1. Stock Certificates ............................. 14
SECTION 2. Registration of Transfers of Stock ............. 14
SECTION 3. Lost Certificates .............................. 15
SECTION 4. Determination of Stockholders of Record for
Certain Purposes ............................. 15
<PAGE>
iii
ARTICLE VII -INDEMNIFICATION ............................... 15
SECTION 1. Right to Indemnification ....................... 15
SECTION 2. Insurance, Contracts and Funding ............... 16
SECTION 3. Indemnification; Not Exclusive
Right ........................................ 16
SECTION 4. Advancement of Expenses; Procedures;
Presumptions and Effect of Certain
Proceedings;
Remedies ..................................... 16
SECTION 5. Severability ................................... 20
SECTION 6. Indemnification of Employees
and Agents ................................... 21
ARTICLE VIII -MISCELLANEOUS ................................. 21
SECTION 1. Seal ........................................... 21
SECTION 2. Fiscal Year .................................... 21
SECTION 3. References to Article and Section Numbers 21
and to the By-Laws and the Certificate of
Incorporation ................................ 21
SECTION 4. Books of the Corporation ...................... 21
ARTICLE IX -AMENDMENTS .................................... 22
<PAGE>
BY-LAWS
of
PAINE WEBBER GROUP INC.
ARTICLE I
Offices
The registered office of Paine Webber Group Inc.
(hereinafter referred to as the "Corporation") in the State of
Delaware shall be located in the City of Wilmington, County of
New Castle. The Corporation's principal place of business
shall be in the City, County and State of New York. The
Corporation may establish and discontinue, from time to time,
such offices and places of business within or without the State
of Delaware as may be deemed proper for the conduct of the
Corporation's business.
ARTICLE IX
Meetings of Stockholders
Section 1. Purpose of Annual Meeting. An annual
meeting of stockholders shall be held on such date and at such
time and place as may be designated by the Board of Directors.
At each annual meeting, the stockholders shall elect the
members of the Board of Directors for the succeeding year. At
any such annual meeting any proper business properly brought
before the meeting may be transacted. To be properly brought
before an annual meeting, business must be (i) specified in the
notice if the meeting (or any supplement thereto) given by or
at the direction of the Board of Directors, (ii) otherwise
properly brought before the meeting by or at the direction of
the Board of Directors or (iii) otherwise properly brought
before the meeting by a stockholder. For business to be
properly brought before an annual meeting by a stockholder, the
stockholder must have given written notice thereof, either by
personal delivery or by United States mail, postage pre-paid,
to the Secretary of the Corporation, not later than 90 days in
advance of such meeting. Any such notice shall set forth as to
each matter the stockholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be
brought before the meeting and the reasons for conducting such
business at the meeting and, in the event that such business
includes a proposal to amend either the Certificate of
Incorporation or By-laws of the Corporation, the language of
the proposed amendment, (ii) the name and address of the
<PAGE>
-2-
stockholder proposing such business, (iii) a representation
that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to propose such
business, and (iv) any material interest of the stockholder in
such business. No business shall be conducted at an annual
meeting of stockholders except in accordance with this
paragraph, and the chairman of any annual meeting of
stockholders may refuse to permit any business to be brought
before an annual meeting without compliance with the foregoing
procedures.
Section 2. Special Meetings. In addition to such
special meetings as are provided for by law or by the
Certificate of Incorporation, special meetings of the holders
of any class or series or of all classes or series of the
Corporation's capital stock may be called at any time by the
Board of Directors. Special meetings shall be called by means
of a notice as provided for in Section 4 of this Article I.
Section 3. Place of Meetings. All meetings of the
stockholders shall be held at such place within or without the
State of Delaware as shall be designated by the Board of
Directors.
Section 4. Notice of Meetings. Whenever stockholders
are required or permitted to take any action at a meeting, a
written notice of the meeting shall be given which shall state
the place, date and hour of the meeting and, in case of a
special meeting, the purpose or purposes for which the meeting
is called. The notice of annual meeting of stockholders shall
identify each matter intended to be acted upon at such
meeting. If mailed, the notice shall be addressed to the
stockholder in a postage-prepaid envelope at his address as it
appears on the records of the Corporation unless, prior to the
time of mailing, the Secretary shall have received from any
such stockholder a written request that notices intended for
him be mailed to some other address, in which case notices
intended for such stockholder shall be mailed to the address
designated in such request. Notice of each meeting of
stockholders shall be delivered personally or mailed not less
than ten nor more than 60 days before the day of the meeting to
each stockholder entitled to vote at such meeting.
Section 5, Waiver of Notice. Whenever notice is
required to be given, a written waiver thereof signed by the
person entitled to notice or by his proxy or attorney duly
authorized, whether before or after the time stated thereon,
shall be deemed equivalent to notice. Attendance of a person
at a meeting of stockholders shall constitute a waiver of
notice of such meeting, except as otherwise provided by law.
<PAGE>
-3-
Neither the business to be transacted at nor the purpose of any
regular or special meeting of the stockholders need be
specified in any written waiver of notice.
Section 6. Organization. The Chairman of the Board
shall act as chairman at all meetings of stockholders at which
he is present, and as such chairman shall call such meetings of
stockholders to order and preside thereat. If the Chairman of
the Board shall be absent from any meeting of stockholders, the
duties otherwise provided in this Section 6 to be performed by
him at such meeting shall be performed at such meeting by the
President. If neither of such officers is present at such
meeting, such duties shall be performed by an officer
designated by the Chairman of the Board. If no such designated
officer is present at such meeting, any stockholder or the
proxy of any stockholder entitled to vote at the meeting may
call the meeting to order and a chairman to preside thereat
shall be elected by a majority of those present and entitled to
vote. The Secretary of the Corporation shall act as secretary
at all meetings of the stockholders, but in his absence the
chairman of the meeting may appoint any person present to act
as secretary of the meeting.
Section 7. Stockholders Entitled to Vote. The Board
of Directors may fix a date not more than 60 nor less than ten
days preceding the date of any meeting of stockholders, or
preceding the last day on which the consent of stockholders may
be effectively expressed for any purpose without a meeting, as
a record date for the determination of the stockholders
entitled (a) to notice of, and to vote at, such meeting and any
adjournment thereof or (b) to express such consent and in such
case such stockholders, and only such stockholders as shall be
stockholders of record on the date so fixed, shall be entitled
to notice of, and to vote at, such meeting and any adjournment
thereof, or to express such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the
Corporation after any such record date fixed as aforesaid. The
Secretary shall prepare and make or cause to be prepared and
made, at least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at such
meeting, arranged in alphabetical order and showing the address
of each such stockholder as it appears on the records of the
Corporation and the number of shares registered in the name of
each such stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at
least ten days prior to the meeting. If the meeting is to be
held in the City of New York, such list will be open to
examination at the principal place of business of the
Corporation, and, unless the meeting is to be held at such
principal place of business, the notice of meeting shall
<PAGE>
-4-
specify that the list is so located. If the meeting is to be
held in a city other than New York, the list shall be open to
examination either at a place, specified in the notice of
meeting, within the city where the meeting is to be held, or,
if not so specified, at the place where the meeting is to be
held, and a duplicate list shall be similarly open to
examination at the principal place of business of the
Corporation. Such list shall be produced and kept at the time
and place of the meeting during the whole time thereof, and may
be inspected by any stockholder who is present.
Section 8. Quorum and Adjournment. Except as
otherwise provided by law, the holders of a majority of the
shares of capital stock entitled to vote at the meeting shall
constitute a quorum at all meetings of the stockholders.
Where more than one class or series of capital stock is
entitled to vote as such class or series at such a meeting, a
majority of the shares of each such class or series of capital
stock entitled to vote at such meeting shall constitute a
quorum at such meeting. In the absence of a quorum, the
holders of a majority of all such shares of capital stock
present in person or by proxy may adjourn any meeting, from
time to time, until a quorum shall attend. At any such
adjourned meeting at which a quorum may be present, any
business may be transacted which might have been transacted at
the meeting as originally called. No notice of any adjourned
meeting need be given if the time and place thereof are
announced at the meeting at which the adjournment is taken. If
the adjournment is for more than 30 days or if after the
adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
Section 9. Order of Business. The order of business
at all meetings of stockholders shall be as determined by the
chairman of the meeting.
Section 10. Vote of Stockholders. Except as
otherwise permitted by law, by the Certificate of Incorporation
or by Section 12 of this Article II, all action by stockholders
shall be taken at a stockholders' meeting. Except as otherwise
provided by law or by the Certificate of Incorporation, every
stockholder of record, as determined pursuant to Section 7 of
this Article II, who is entitled to vote, shall at every
meeting of the stockholders be entitled to one vote for each
share of stock entitled to vote held by such stockholder on the
record date. Every stockholder entitled to vote shall have the
right to vote in person or by proxy. Except as otherwise
provided by law, no vote on any question upon which a vote of
the stockholders may be taken need be by ballot unless the
chairman of the meeting shall determine that it shall be by
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ballot or the holders of a majority of the shares of capital
stock present in person or by proxy and entitled to participate
in such vote shall so demand. In a vote by ballot each ballot
shall state the number of shares voted and the name of the
stockholder or proxy voting. Unless otherwise provided by law
by the Certificate of Incorporation or by Section 13 of Article
III hereof, each director shall be elected and all other
questions shall be decided by the vote of the holders of a
majority of the shares of capital stock present in person or
proxy at the meeting and entitled to vote on the question;
provided, however, that the Board of Directors may require on
any question a vote of a majority of the shares of capital
stock outstanding and entitled to vote thereon.
Section 11. Proxies. Each stockholder entitled to
vote at a meeting of stockholders or to express consent to
corporate action in writing without a meeting may authorize
another person or persons to act for him by proxy. A proxy
acting for any stockholder shall be duly appointed by an
instrument in writing subscribed by such stockholder.
Section 12. Attendance at Stockholders' Meetings.
Any stockholder of the Corporation not entitled to notice of
the meeting or to vote at such meeting shall nevertheless be
entitled to attend any meeting of stockholders of the
Corporation.
ARTICLE III
Board of Directors
Section 1. Number, Qualification and Election.
Subject to the rights of the holders of any class or series of
stock having a preference over the Common Stock of the
Corporation as to dividends or upon liquidation, the number of
directors which shall constitute the whole Board shall be 11,
but by vote of a majority of the entire Board of Directors, the
number thereof may be increased without limit, or decreased to
not less than three, by amendment of this Section 1.
The directors, other than those who may be elected by
the holders of shares of any class or series of stock having a
preference over the Common Stock of the Corporation as to
dividends or upon liquidation pursuant to Article IV of the
Certificate of Incorporation, shall be classified with respect
to the time for which they severally hold office, into three
classes as follows: one class of three directors shall be
originally elected for a term expiring at the annual meeting of
stockholders to be held in 1988, another class of four
directors shall be originally elected for a term expiring at
the annual meeting of stockholders to be held in 1989, and
another class of four directors shall be originally elected for
<PAGE>
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a term expiring at the annual meeting of stockholders to be
held in 1990, with each class to hold office until its
successors are elected and qualified. At each annual meeting
of the stockholders of the Corporation, the successors of the
class of directors whose term expires at that meeting shall be
elected to hold office for a term expiring at the annual
meeting of stockholders held in the third year following the
year of their election.
Subject to the rights of the holders of any class or
series of stock having a preference over the Common Stock of
the Corporation as to dividends or upon liquidation, at each
annual meeting of the stockholders there shall be elected the
directors of the class the term of office of which shall then
expire.
In any election of directors, the persons receiving a
plurality of the votes cast, up to the number of directors to
be elected in such election, shall be deemed elected.
Nominations for the election of directors may be made by
the Board of Directors or by any stockholder entitled to vote
for the election of directors. Any Stockholder entitled to
vote for the election of directors at a meeting may nominate a
person or persons for election as directors only if written
notice of such stockholder's intent to make such nomination is
given, either by personal delivery or by United States mail,
postage prepaid, to the Secretary of the Corporation not later
than (i) with respect to an election to be held at an annual
meeting of stockholders, 90 days in advance of such meeting,
and (ii) with respect to an election to be held at a special
meeting of stockholders for the election of directors, the
close of business on the seventh day following the date on
which notice of such meeting is first given stockholders. Each
such notice shall set forth: (a) the name and address of the
stockholder who intends to make the nomination and the person
or persons to be nominated; (b) a representation that the
stockholder is a holder of record of stock of the Corporation
entitled to vote at the meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements
or understandings between the stockholder and each nominee and
any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made
by the stockholder; (d) such other information regarding each
nominee proposed by the stockholder as would have been required
to be included in a proxy statement filing pursuant to the
proxy rules of the Securities and Exchange Commission had each
nominee been nominated, or intended to be nominated, by the
Board of Directors; and (e) the consent of each nominee to
serve as a Director of the Corporation if so elected. The
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chairman of any meeting of stockholders to elect directors and
the Board of Directors may refuse to acknowledge the nomination
of any person not made in compliance with the foregoing
procedure.
Section 2. Number. The number of directors may be
fixed from time to time by resolution of the Board of Directors
but shall not be less than three.
Section 3. General Powers. The business, properties
and affairs of the Corporation shall be managed by the Board of
Directors which, without limiting the generality of the
foregoing, shall have power to appoint the officers and agents
of the Corporation, to fix and alter the salaries of officers,
employees and agents of the Corporation, to grant general or
limited authority (including authority to delegate and
sub-delegate) to officers, employees and agents of the
Corporation to make, execute, affix the corporate seal to, and
deliver contracts and other instruments and documents,
including bills, notes, checks or other instruments for the
payment of money, in the name and on behalf of the Corporation
without specific authority in each case, and to appoint
committees, in addition to those provided for in Article IV
hereof, with such powers and duties as the Board of Directors
may duly determine. The membership of such committees shall
consist of such persons as are designated by the Board of
Directors whether or not any of such persons is then a director
of the Corporation. In addition, the Board of Directors may
exercise all the powers of the Corporation and do all lawful
acts and things which are not reserved to the stockholders by
law, by the Certificate of Incorporation or by the By-Laws.
Section 4. Place of Meetings. Meetings of the Board
of Directors may be held at the principal place of business of
the Corporation in the City of New York or at any other place,
within or without the State of Delaware, from time to time
designated by the Board of Directors.
Section 5. Organization Meeting. A newly elected
Board of Directors shall meet and organize without notice and
as soon as practicable after each annual meeting of
stockholders, at the place at which such meeting of
stockholders took place. If a quorum is not present, such
organization meeting may be held at any other time or place
which may be specified in a notice given in the manner provided
in Section 7 of this Article III for special meeting of the
Board of Directors, or in a waiver of notice thereof.
Section 6. Regular Meetings. Regular meetings of the
Board of Directors shall be held at such times as may be
determined by resolution of the Board of Directors and no
<PAGE>
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notice shall be required for any regular meeting. Except as
otherwise provided by law, any business may be transacted at
any regular meeting of the Board of Directors.
Section 7. Special Meetings; Notice and Waiver of
Notice. Special meetings of the Board of Directors shall be
called by the Secretary or an Assistant Secretary on the
request of the Chairman of the Board or the President, or on
the request in writing of one-third of the whole Board of
Directors stating the purpose or purposes of such meeting.
Notices of special meetings shall be mailed to each director,
addressed to him at his residence or usual place of business,
not later than three days before the day on which the meeting
is to be held, or shall be sent to him at either of such places
by telegraph, or be communicated to him personally or by
telephone, not later than the day before such day of meeting.
Notice of any meeting of the Board of Directors need not be
given to any director if he shall sign a written waiver thereof
either before or after the time stated therein for such
meeting. Attendance if a person at a meeting shall constitute
a waiver of notice of such meeting, except when the person
attends a meeting for the express purpose if objecting, at the
beginning if the meeting, to the transaction of any business
because the meeting is not lawfully called or covened. Unless
limited by law, the Certificate of Incorporation, the By-Laws,
or by the terms of the notice thereof, any and all business may
be transacted at any special meeting without the notice thereof
having so specifically enumerated the matters to be acted
upon. Only such business as is specified in the notice of any
special meeting of the stockholders shall come before such
meeting.
Section 8. Organization. The Chairman of the Board
shall preside at all meetings of the Board of Directors at
which he is present. If the Chairman of the Board snail be
absent from any meeting of the Board of Directors, the duties
otherwise provided in this Section 8 to be performed by him at
such meeting shall be performed at such meeting by the
President. If neither of such officers is present at such
meeting, such duties shall be performed by a director
designated by the Chairman of the Board. If no such designated
officer or director is present at such meeting, one of the
directors present shall be chosen by the members of the Board
of Directors present to preside at such meeting. The Secretary
of the Corporation shall act as the secretary at all meetings
of the Board of Directors and in his absence a temporary
secretary shall be appointed by the chairman of the meeting.
Section 9. Quorum and Adjournment; Manner of Acting.
Except as otherwise provided by Section 14 of this Article III,
at every meeting of the Board of Directors a majority of the
<PAGE>
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total number of directors shall constitute a quorum but in no
event shall a quorum be constituted by less than two
directors. Except as otherwise provided by law, or by Section
14 of this Article III, by Section 1 of Article IV, or by
Section 3 of Article V, or by Article VIII, the vote of a
majority of the directors present at any such meeting at which
a quorum is present shall be the act of the Board of
Directors. In the absence of a quorum, any meeting may be
adjourned, from time to time, until a quorum is present. No
notice of any adjourned meeting need be given other than by
announcement at the meeting that is being adjourned. Members
of the Board of Directors may participate in a meeting thereof
by means of conference telephone or similar communications
equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a
meeting shall constitute presence in person at such meeting,
Section 10. Voting. On any question on which the
Board of Directors shall vote, the names of those voting and
their votes shall be entered in the minutes of the meeting when
any member of the Board of Directors present at the meeting so
requests.
Section 11. Acting Without a Meeting. Any action
required or permitted to be taken at any meeting of the Board
of Directors may be taken without a meeting, if (a) all members
of the Board of Directors consent thereto in writing and such
written consents are filed with the minutes of proceedings of
the Board of Directors, or (b) a quorum of members of the Board
of Directors participate in such action by means of conference
telephone or similar communications equipment by means of which
all such members participating in such action can hear each
other.
Section 12. Resignations. Any director may resign at
any time either by oral tender of resignation at any meeting of
the Board of Directors or by oral tender to the Chairman of the
Board or the President or by written notice thereof to the
Corporation. Any resignation shall be effective immediately
unless some other time is specified for it to take effect.
Acceptance of any resignation shall not be necessary to make it
effective unless such resignation is tendered subject to such
acceptance.
Section 13. Removal of Directors. Directors may only
be removed as provided in Section 3(c) of Article VI of the
Certificate of Incorporation of the Corporation.
Subject to the rights of the holders of any class or
series of stock having a preference over the Common Stock of
the Corporation as to dividends or upon liquidation, any
vacancies on the Board of Directors resulting from death,
<PAGE>
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resignation, removal or other cause shall only be filled by the
affirmative vote of a majority of the remaining directors then
in office, even though less than a quorum of the Board of
Directors, or by a sole remaining director, and newly created
directorships resulting from any increase in the number of
directors shall be filled by the Board, or if not so filled, by
the stockholders at the next annual meeting thereof or at a
special meeting called for that purpose in accordance with
Section 2 of Article II of these By-Laws. Any director elected
in accordance with the preceding sentence of this paragraph
shall hold office for the remainder of the full term of the
class of directors in which the new directorship was created or
the vacancy occurred and until such director's successor shall
have been elected and qualified.
Section 14. Senior Advisor. The Corporation may
appoint a Senior Advisor to the Board of Directors of the
Corporation. The Senior Advisor shall be entitled, but not
required, to attend all meetings of the Board of Directors of
the Corporation. The Senior Advisor will not have voting
rights on any matters on which the Board of Directors of the
Corporation shall vote.
ARTICLE IV
Committees of the Board
Section 1. Appointing Committees of the Board. The
Board of Directors may from time to time, by resolution adopted
by affirmative vote of a majority of the whole Board of
Directors, appoint committees of the Board of Directors which
shall have such powers of the Board of Directors and such
duties as the Board of Directors may properly determine. The
Board of Directors may designate one or more directors as
alternate members of any such committee who may replace any
absent or disqualified member at any meeting of such
<PAGE>
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committee. In the absence or disqualification of any member of
such committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member
of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member. Except as may be
otherwise provided by the resolution designating any such
committee, at all meetings of any such committee the presence
of members (or alternative members, if any) consisting of a
majority of the total authorized membership of such committee,
but in no event less than two, shall be necessary and
sufficient to constitute a quorum for the transaction of
business, and the act of the majority of the members (or such
alternates) present at any meeting at which a quorum is
present, but in no event less than two, shall be the act of
such committee.
Section 2. Place and Time of Meetings; Notice and
Waiver of Notice; Records. Meetings of such committees of the
Board of Directors may be held at any place, within or without
the State of Delaware, from time to time designated by the
Board of Directors or the committee in question. Regular
meetings of any such committee shall be held at such times as
may be determined by resolution of the Board of Directors or
the committee in question, and no notice shall be required for
any regular meeting. A special meeting of any such committee
shall be called by resolution of the Board of Directors, or by
the Secretary or an Assistant Secretary upon the request of any
member of the committee. The provisions of Section 7 of
Article III with respect to notice and waiver of notice of
special meetings of the Board of Directors shall also apply to
all special meetings, and the provisions of Section 11 of
Article III with respect to action taken without a meeting and
with respect to participation in meetings of the Board of
Directors by means of telephone or similar communications
equipment shall apply to all meetings, of committees of the
Board of Directors. Any such committee may make rules for
holding and conducting its meetings and shall keep minutes of
all meetings.
ARTICLE V
The Officers
Section 1. Officers. The officers of the Corporation
shall be a Chairman of the Board, a President, a Secretary, a
Treasurer and, in the discretion of the Board of Directors, one
or more Vice Presidents. The officers shall be appointed by
the Board of Directors. The Board of Directors may also
appoint one or more Assistant Secretaries, Assistant Treasurers
and other officers and agents as in their judgment may be
<PAGE>
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necessary or desirable. The Board of Directors may appoint
persons as officers of divisions of the Corporation who shall
not for any purpose be considered officers of the Corporation.
The Chairman of the Board and the President shall be selected
from the directors.
Section 2. Terms of Office; Vacancies. So far as is
practicable, all officers shall be appointed at the
organization meeting of the Board of Directors in each year,
and, except as otherwise provided in Sections 3 and 4 of this
Article V, Shall hold office until the organization meeting of
the Board of Directors in the next subsequent year and until
their respective successors are elected and qualify, or until
they sooner die, retire, resign or are removed. If any vacancy
shall occur in any office, the Board of Directors may appoint a
successor to fill such vacancy for the remainder of the term.
Section 3. Removal of Officers. Any officer may be
removed at any time, either for or without cause, by
affirmative vote of a majority of the whole Board of Directors,
at any regular meeting or at any special meeting called for
that purpose.
Section 4. Resignations. Any officer may resign at
any time, either by oral tender of resignation to the Chairman
of the Board or the President or by giving written notice
thereof to the Corporation. Any resignation shall be effective
immediately unless some other time is specified for it to take
effect and acceptance of any resignation shall not be necessa
to make it effective unless such resignation is tendered
subject to such acceptance.
Section 5. Officers Molding More Than One Office.
Any officer may hold two or more offices, the duties of which
can be consistently performed by the same person.
Section 6. The Chairman Of The Board. The Chairman
of the Board shall be a member of the Board of Directors. He
shall be the Chief Executive Officer of the Corporation and,
subject to the control of the Board of Directors, shall have
general and active charge of all the policies and affairs of
the Corporation. As provided in Section 6 of Article II, and
Section 8 of Article III, he shall preside at the various
meetings at which he is present. The Chairman of the Board
shall also perform such other duties and have such other powers
as are described in Section 7 of this Article V and as may from
time to time be assigned to him by the Board of Directors. In
the absence or disability of the Chairman of the Board his
duties shall be performed and his powers may be exercised by
the President. In the absence or disability of both
aforementioned officers, the powers of the Chairman of the
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Board may be exercised by such member of the Board of Directors
as may be designated by the Board of Directors.
Section 7. The President. The President shall be a
member of the Board of Directors. As provided in Section 6 of
Article II, and Section 8 of Article III, the President shall
preside at the various meetings under the circumstances
described in such Sections. If such officer is not available
the duties of the President shall be performed and his powers
may be exercised by such member of the Board of Directors as
may be designated by the Chairman of the Board, and failing
such designation or in the absence of the person so designated,
by such member of the Board of Directors as may be designated
by the Board of Directors. The President shall also perform
such other duties and have such other powers as may from time
to time be assigned to him by the Board of Directors.
Section 8. The Vice Presidents. The Vice Presidents
shall perform such duties and have such powers as may, from
time to time, be assigned to them by the Board of Directors,
the Chairman of the Board or the President.
Section 9. The Secretary. The Secretary shall attend
to the giving of notice of all meetings of stockholders and of
the Board of Directors and committees thereof, and, as provided
in Section 6 of Article II, and Section 8 of Article III, shall
act as secretary at all meetings of stockholders and directors,
and keep minutes of all proceedings at such meetings, as well
as of all proceedings at all meetings of such committees of the
Board of Directors as shall designate him to so serve. The
Secretary shall have charge of the corporate seal and he or any
Assistant Secretary shall have authority to attest any and all
instruments or writings to which the same may be affixed. He
shall keep and account for all books, documents, papers and
records of the Corporation, except those for which some other
officer or agent is properly accountable. He shall generally
perform all the duties usually appertaining to the office of
secretary of a corporation. In the absence of the Secretary
such person as shall be designated by the chairman of any
meeting shall perform his duties.
Section 10. The Treasurer. The Treasurer shall have
the care and custody of all the funds of the Corporation and
shall deposit the same in such banks or other depositories as
the Board of Directors, or any officer or officers thereunto
duly authorized by the Board of Directors, shall, from time to
time, direct or approve. He shall generally perform all the
duties usually appertaining to the affairs of the treasurer of
a corporation. When required by the Board of Directors, he
shall give bonds for the faithful discharge of his duties in
such sums and with such sureties as the Board of Directors
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shall approve. In the absence of the Treasurer, such person as
shall be designated by the Chairman of the Board shall perform
his duties.
Section 11. Additional Powers and Duties. In
addition to the foregoing especially enumerated duties and
powers, the several officers of the Corporation shall perform
such other duties and exercise such further powers as the Board
of Directors may, from time to time, determine, or as may be
assigned to them by any superior officer.
ARTICLE VI
Stock and Transfers of Stock
Section 1. Stock Certificates. The capital stock of
the Corporation shall be represented by certificates signed by
two officers of the Corporation, one being the Chairman of the
Board, the President or a Vice President and the other being
the Secretary or an Assistant Secretary, and sealed with a seal
of the Corporation. Stock certificates may, in the discretion
of the Board of Directors, also be countersigned by a Transfer
Agent or Agents, and registered by a Registrar of transfers, to
be appointed by the Board. Any of or all signatures on a stock
certificate, may, if the Board of Directors so determines, be a
facsimile. The seal may be a facsimile, engraved or printed.
In case any such officer who has signed any such certificate
shall have ceased to be such officer before such certificate is
issued, it may nevertheless be issued by the Corporation with
the same effect as if he were such officer at the date of
issue. The certificates representing the voting capital stock
of the Corporation shall be in such form as shall be approved
by the Board of Directors and shall bear the following legend:
"The Corporation will furnish without charge to each
stockholder who so requests the powers, designations,
preferences and relative participating, optional or
other special rights of each class of stock or series
thereof of the Corporation and the qualifications,
limitations or restrictions of such preference and/or
rights. Such request may be made to the Corporation or
to the Transfer Agent or Registrar."
Section 2. Registration of Transfers of Stock.
Registration of a transfer of stock shall be made on the books
of the Corporation only upon presentation by the person named
in the certificate evidencing such stock, or by an attorney
lawfully constituted in writing, and upon surrender and
cancellation of such certificate, with duly executed assignment
and power of transfer endorsed thereon or attached thereto, and
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with such proof of the authenticity of the signature thereon as
the Corporation or its agents may reasonably require.
Section 3. Lost Certificates. In case any
certificate of stock shall be lost, stolen or destroyed, the
Board of Directors, in its discretion, or any officer or
officers thereunto duly authorized by the Board of Directors,
may authorize the issuance of a substitute certificate in the
place of the certificate so lost, stolen or destroyed;
provided, however, that, in each such case, the Corporation
may require the owner of the lost, stolen or destroyed
certificate, or his legal representative, to give the
Corporation evidence which the Corporation determines in its
discretion is satisfactory of the loss, theft or destruction of
such certificate and of the ownership thereof, and may also
require a bond sufficient to indemnify it against any claim
that may be made against it on account of the alleged loss,
theft or destruction of any such certificate or the issuance of
such new certificate.
Section 4. Determination of Stockholders of Record for
Certain Purposes. In order that the Corporation may determine
the stockholders entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record
date, which shall not be more than 60 or less than ten days
prior to any such action.
ARTICLE VII
Indemnification
Section 1. Right to Indemnification. The Corporation
shall to the fullest extent permitted by applicable law as then
in effect, indemnify any person (the "Indemnitee") who is or
was a director or officer of the Corporation or is or was
involved in any manner (including, without limitation, as a
party or a witness) or is threatened tO be made so involved in
any threatened, pending or completed investigation, claim,
action, suit or proceeding, whether civil, criminal,
administrative or investigative (including, without limitation,
any action, suit or proceeding by or in the right of the
Corporation to procure a judgment in its favor) (a
"Proceeding") by reason of the fact that such person is or was
a director or officer of the Corporation, or is or was serving
at the request of the Corporation as a director or officer of
another corporation, partnership, joint venture, trust or other
enterprise (including, without limitation, any employee benefit
plan) against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
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reasonably incurred by such person in connection with such
Proceeding. Such indemnification shall be a contract right
and shall include the right to receive payment in advance of
any expenses incurred by the Indemnitee in connection with such
Proceeding, consistent with the provisions of applicable law as
then in effect.
Section 2. Insurance, Contracts and Funding. The
Corporation may purchase and maintain insurance to protect
itself and any person entitled to indemnity under this Article
VII against any expenses, judgments, fines and amounts paid in
settlement as specified in the first section of this Article or
incurred by any such person in connection with any Proceeding
referred to in this Article VII, to the fullest extent
permitted by applicable law as then in effect. The Corporation
may enter into contracts with any person entitled to indemnity
under this Article VII in furtherance of the provisions of this
Article VII and may create a trust fund, grant a security
interest or use other means (including, without limitation, a
letter of credit) to ensure the payment of such amounts as may
be necessary to effect indemnification as provided in this
Article.
Section 3. Indemnification; Not Exclusive Right. The
right of indemnification provided in this Article VII shall not
be exclusive of any other rights to which those seeking
indemnification may otherwise be entitled, and the provisions
of this Article VII shall inure to the benefit of the heirs and
legal representatives of any person entitled to indemnity under
this Article VII and shall be applicable to Proceedings
commenced or continuing after the adoption of this Article VII,
whether arising from acts or omissions occurring before or
after such adoption.
Section 4. Advancement of Expenses; Procedures;
Presumptions and Effect of Certain Proceedings; Remedies. In
furtherance, but not in limitation of the foregoing provisions,
the following procedures, presumptions and remedies shall apply
with respect to advancement of expenses and the right to
indemnification under this Article VII:
(a) Advancement of Expenses. All reasonable expenses
incurred by or on behalf of the Indemnitee in connection with
any Proceeding shall be advanced to the Indemnitee by the
Corporation within 20 days after the receipt by the Corporation
of a statement or statements from the Indemnitee requesting
such advance or advances from time to time, whether prior to or
after final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the expenses incurred by
the Indemnitee and, if required by law at the time of such
advance, shall include or be accompanied by an undertaking by
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or on behalf of the Indemnitee to repay the amounts advanced if
it should ultimately be determined that the Indemnitee is not
entitled to be indemnified against such expenses pursuant to
this Article VII.
(b) Procedure for Determination of Entitlement to
Indemnification. (i) to obtain indemnification under this
Article VII, an Indemnitee shall submit to the Secretary of the
Corporation a written request, including such documentation and
information as is reasonably available to the Indemnitee and
reasonably necessary to determine whether and to what extent
the Indemnitee is entitled to indemnification (the "Supporting
Documentation"). The determination of the Indemnitee's
entitlement to indemnification shall be made not later than 60
days after receipt by the Corporation of the written request
for indemnification together with the Supporting
Documentation. The Secretary of the Corporation shall,
promptly upon receipt of such a request for indemnification,
advise the Board of Directors in writing that the Indemnitee
has requested indemnification.
(ii) The Indemnitee's entitlement to indemnification
under this Article VII shall be determined in one of the
following ways: (A) by a majority vote of the Disinterested
Directors (as hereinafter defined), if they constitute a quorum
of the Board of directors; (B) by a written opinion of
Independent Counsel (as hereinafter defined) if (x) a Change of
Control (as hereinafter defined) shall have occurred and the
Indemnitee so requests or (y) a quorum of the Board of
Directors consisting of Disinterested Directors is not
obtainable or, even if obtainable, a majority of such
Disinterested Directors so directs; (C) by the stockholders of
the Corporation (but only if a majority of the Disinterested
Directors, if they constitute a quorum of the Board of
Directors, presents the issue of entitlement to indemnification
to the stockholders for their determination); or (D) as
provided in Section 4(c).
(iii) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant
to Section 4(b)(ii), a majority of the Disinterested Directors
shall select the Independent Counsel, but only an Independent
Counsel to which the Indemnitee does not reasonably object;
provided, however, that if a Change of Control shall have
occurred, the Indemnitee shall select such Independent Counsel,
but only an Independent Counsel to which the Board of Directors
does not reasonable object. If no Independent Counsel is so
selected to act as provided in Section 4(b)(ii), the Indemnitee
shall be entitled to seek adjudication to indemnification in an
appropriate court of the State of Delaware or any other court
of competent jurisdiction.
<PAGE>
- 18 -
(c) Presumptions and Effect of Certain Proceedings.
Except as otherwise expressly provided in this Article VII, if
a Change of Control shall have occurred, the Indemnitee shall
be presumed to be entitled to indemnification under this
Article VII upon submission of a request for indemnification
together with the Supporting Documentation in accordance with
Section 4(b)(i), and thereafter the Corporation shall have the
burden of proof to overcome that presumption in reaching a
contrary determination. In any event, if the person or persons
empowered under Section 4(b) to determine entitlement to
indemnification shall not have been appointed or shall not have
made a determination within 60 days after receipt by the
Corporation of the request therefor together with the
Supporting Documentation, the Indemnitee shall be deemed to be
entitled to indemnification and the Indemnitee shall be
entitled to such indemnification unless (A) the Indemnitee
misrepresented or failed to disclose a material fact in making
the request for indemnification or in the Supporting
Documentation or (B) such indemnification is prohibited by
law. The termination of any Proceeding described in Section 1,
or of any claim, issue or matter therein, by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or
---- ----------
its equivalent, shall not, of itself, adversely affect the
right the Indemnitee to indemnification or create a presumption
that the Indemnitee did not act in good faith and in a manner
which the Indemnitee reasonably believed to be in or not
opposed to the best interests of the Corporation or, with
respect to any criminal Proceeding, that the Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(d) Remedies of Indemnitee. (i) In the event that a
determination is made pursuant to Section 4(b) that the
Indemnitee is not entitled to indemnification under this
Article VII, (A) the Indemnitee shall be entitled to seek an
adjudication of his entitlement to such indemnification either,
at the Indemnitee's sole option, in an appropriate court of the
State of Delaware or any other court of competent jurisdiction;
(B) any such judicial proceeding shall de novo and the
-- ----
Indemnitee shall not be prejudiced by reason of such adverse
determination; and (C) if a Change of Control shall have
occurred, in any such judicial proceeding the Corporation shall
have the burden of proving that the Indemnitee is not entitled
to indemnification under this Article VII.
(ii) If a determination shall have been made or deemed
to have been made, pursuant to Section 4(b) or (c), that the
Indemnitee is entitled to indemnification, the Corporation
shall be obligated to pay the amounts constituting such
indemnification within five days after such determination has
been made or deemed to have been made and shall be conclusively
<PAGE>
- 19 -
bound by such determination unless (A) the Indemnitee
misrepresented or failed to disclose a material fact in making
the request for indemnification or in the Supporting
Documentation or (B) such indemnification is prohibited by
law. In the event that (x) advancement of expenses is not
timely made pursuant to Section 4(a) or (y) payment of
indemnification is not made within five days after a
determination of entitlement to indemnification has been made
or deemed to have been made pursuant to section 4(b) or (c),
the Indemnitee shall be entitled to seek judicial enforcement
of the Corporation's obligation to pay to the Indemnitee such
advancement of expenses or indemnification. Notwithstanding
the foregoing, the Corporation may bring an action, in an
appropriate court in the State of Delaware or any other court
of competent jurisdiction, contesting the right of the
Indemnitee to receive indemnification hereunder due to the
occurrence of an event described in subclause (A) or (B) of
this clause (ii) (a "Disqualifying Event"); provided, however,
that in any such action the Corporation shall have the burden
of proving the occurrence of such Disqualifying Event.
(iii) The Corporation shall be precluded from asserting
in any judicial proceeding commenced pursuant to this Section
4(d) that the procedures and presumptions of this Article VII
are not valid, binding and enforceable and shall stipulate in
any such court that the Corporation is bound by all the
provisions of this Article VII.
(iv) In the event that the Indemnitee, pursuant to this
Section 4(d), seeks a judicial adjudication to enforce his
rights under, or to recover damages for breach of, this Article
VII, the Indemnitee shall be entitled to recover from the
Corporation, and shall be indemnified by the Corporation
against, any expenses actually and reasonably incurred by the
Indemnitee if the Indemnitee prevails in such judicial
adjudication. If it shall be determined in such judicial
adjudication that the Indemnitee is entitled to receive part
but not all of the indemnification or advancement of expenses
sought, the expenses incurred by the Indemnitee in connection
with such judicial adjudication shall be prorated accordingly.
(e) Definitions. For purposes of this Section 4: (i)
"Change in Control" means a change in control of the
Corporation of a nature that would be required to be reported
in response to Item 6(e) (or any successor provision) of
Schedule 14A of Regulation 14A promulgated under the Securities
Exchange ACt of 1934 (the "Act"), whether or not the
Corporation is then subject to such reporting requirement;
provided that, without limitation, such a change in control
shall be deemed to have occurred if (A) any "person" [(as such
term is defined in Sections 4 of Article XIII of the
<PAGE>
- 20 -
Certificate of Incorporation)]* is or becomes an "Interested
Stockholder" [as defined therein)]*; (B) the Corporation is a
party to any merger or consolidation in which the Corporation
is not the continuing or surviving corporation or pursuant to
which shares of the Corporation's Common Stock would be
converted into cash, securities or other property, other than a
merger of the Corporation in which the holders of the
Corporation's Common Stock immediately prior to the merger have
the same proportionate ownership of common stock of the
surviving corporation immediately after the merger; (C) there
is a sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or
substantially all, the assets of the Corporation, or a
liquidation or dissolution of the Corporation; or (D) during
any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors
(including for this purpose any new director whose election or
nomination for election by the Corporation's stockholders was
approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority
of the Board of Directors.
(ii) "Disinterested Director" means a director of the
Corporation who is not or was not a party to the Proceeding in
respect of which indemnification is sought by the Indemnitee.
(iii) "Independent Counsel" means a law firm or a member
of a law firm that neither presently is, nor in the past five
years has been, retained to represent: (i) the Corporation or
the Indemnitee in any matter material to either such party or
(ii) any other party to the Proceeding giving rise to a claim
for indemnification under this Article VII. Notwithstanding
the foregoing, the term "Independent Counsel" shall not include
any person who, under the applicable standards of professional
conduct then prevailing under the,law of the State of Delaware,
would have conflict of interest in representing either the
Corporation or the Indemnitee in an action to determine the
Indemnitee's rights under this Article VII.
Section 5. Severability. If any provision or
provisions of this Article VII shall be held to be invalid,
illegal or unenforceable for any reason whatsoever: (a) the
validity, legality and enforceability of the remaining
provisions of this Article VII containing any such provision
held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby; and (b) to the fullest
extent possible, the provisions of this Article VII (including,
without limitation, all portions of any section of this Article
VII containing any such provision held to be invalid, illegal
<PAGE>
- 21 -
or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal or
unenforceable.
Section 6. Indemnification of Employees and Agents.
Notwithstanding any other provision or provisions of this
Article VII, the Corporation may indemnify (including, without
limitation, by direct payment) any person (other than a
director or officer of the Corporation) who is or was involved
in any manner (including, without limitation, as a party or
witness) or is threatened to be made so involved in any
Proceeding by reason of the fact that such person is or was an
employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, Joint venture,
trust or other enterprise (including, without limitation, any
employee benefit plan), against any or all expenses (including
attorneys' fees), judgments, fines amounts paid in settlement
incurred in connection with such Proceeding.
ARTICLE VIII
Miscellaneous
Section 1. Seal. The Seal of the Corporation shall
have inscribed thereon the name of the Corporation, the year of
its organization and the state of its incorporation.
Section 2. Fiscal Year. The fiscal year of the
Corporation shall be determined by the Board of Directors.
Section 3. References to Article and Section Numbers
and to the By-Laws and the Certificate of Incorporation.
Whenever in the By-Laws reference is made to an Article or
Section number, such reference is to the number of an Article
or Section of the By-Laws. Whenever in the By-Laws reference
is made to the By-Laws, such reference is to these By-Laws of
the Corporation, as the same may from time to time be amended,
and whenever reference is made to the Certificate of
Incorporation, such reference is to the Certificate of
Incorporation of the Corporation, as the same may from time to
time be amended.
Section 4. Books of the Corporation. Except as
otherwise provided by law, the books of the Corporation shall
be kept at the principal place of business of the Corporation
and at such other locations as the Board of Directors may from
time to time determine.
<PAGE>
- 22 -
ARTICLE
Amendments
The By-Laws may be altered, amended or repealed, from
time to time, in accordance with the provisions of Article XII
of the Certificate of Incorporation.
----------
6751L
Exhibit 4.1(a)
NOTE NUMBER AGENT'S NAME
PAINE WEBBER GROUP INC.
_____________________________________________________
PRINCIPAL AMOUNT SETTLEMENT DATE TRADE DATE
U.S.$ (ORIGINAL ISSUE DATE)
________________________________________________________________________________
MATURITY DATE TRUSTEE'S CUST. NO. INTEREST RATE TAXPAYER ID OR TRANSFERRED
SOC. SEC. NO.
OF PURCHASER
________________________________________________________________________________
NAME AND ADDRESS OF REGISTERED OWNER MEDIUM-TERM
NOTE
PROGRAM
CHEMICAL BANK
TRUSTEE
________________________________________________________________________________
CUSTMER'S RETAIN FOR THE TIME OF THE PLEASE SIGN AND SEE
COPY TAX PURPOSES TRANSACTION WILL RETURN ENCLOSED REVERSE SIDE
BE FURNISHED UPON RECEIPT
REQUEST OF THE
CUSTOMER
________________________________________________________________________________
- --------------------------------------------------------------------------------
REGISTERED REGISTERED
PAINE WEBBER GROUP INC.
MEDIUM-TERM SENIOR NOTE, SERIES C
Due from Nine Months to 30 Years from Date of Issue
(Fixed Rate)
No. U.S.$
CUSIP NO.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID", "YIELD
TO MATURITY" AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED
UNDER THE APPROXIMATE METHOD) BELOW WILL BE COMPLETED SOLELY
FOR PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL
ISSUE DISCOUNT ("OID") RULES.
ORIGINAL ISSUE DATE: INTEREST RATE: MATURITY DATE:
ISSUE PRICE: ORIGINAL ISSUE BUSINESS DAY
DISCOUNT SECURITY: CENTERS:
[ ] YES [ ] NO
REGULAR RECORD DATES: OPTIONAL PAYMENT OF
REDEMPTION: ADDITIONAL AMOUNTS:
[ ] YES [ ] NO [ ] YES [ ] NO
<PAGE>
2
INTEREST PAYMENT REDEMPTION DATES: OPTION TO ELECT
DATES: REPAYMENT:
[ ] YES [ ] NO
TOTAL AMOUNT OF OID: REDEMPTION PRICES: REPAYMENT DATES:
YIELD TO MATURITY: GLOBAL SECURITY: REPAYMENT PRICES:
[ ] YES [ ] NO
INITIAL ACCRUAL PERIOD DEPOSITARY:
OID:
OTHER TERMS:
PAINE WEBBER GROUP INC., a Delaware corporation
(herein called the "Company", which term includes any
successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay
to
, or registered assigns, the principal sum of
U.S. DOLLARS,
on the Maturity Date specified above, and to pay interest
thereon from and including the Original Issue Date shown
above or from and including the last date in respect of
which interest has been paid or provided for, as the case
may be. Interest will be paid on the Interest Payment Dates
shown above, commencing with the first such Interest Payment
Date following the Original Issue Date shown above, at the
Interest Rate per annum specified above until the principal
hereof is paid or made available for payment. The interest
so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of
business on the Regular Record Date specified above (whether
or not a Business Day) next preceding such Interest Payment
Date, except that in the case of a Security with an Original
Issue Date that is after a Regular Record Date and before
the next following Interest Payment Date, interest payable
on such Interest Payment Date will be paid to the Person in
whose name such Security was initially registered on the
Original Issue Date; provided, however, that interest
-------- -------
payable at Maturity shall be payable to the Person to whom
principal shall be payable. Except as otherwise provided in
<PAGE>
3
the Indenture, any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to
the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice
whereof to be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or
be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities
exchange on which the Securities of this series may be
listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. If
this Security is not a Global Security, payments of interest
on this Security (other than interest payable at Maturity)
will be made by mailing a check to the person entitled
thereto at its address appearing in the Security Register
for the Securities on the applicable Regular Record Date.
Notwithstanding the foregoing, at the option of the Company
such payments may be made by wire transfer of immediately
available funds to an account with a bank located in the
continental United States (or other jurisdiction acceptable
to the Company and the Trustee), but only if appropriate
payment instructions have been received in writing by the
Trustee not less than 5 Business Days prior to the
applicable Interest Payment Date. Payments of principal of,
premium, if any, and interest will be made in immediately
available funds, if at maturity or upon earlier redemption,
then on the Maturity Date or the date fixed for redemption,
as applicable, upon surrender of this Security at the
principal corporate trust office of the Trustee in the
Borough of Manhattan, The City of New York, or such other
office or agency of the Company as may be designated by it
for such purpose in the Borough of Manhattan, The City of
New York (the "Notes Office"), provided that this Security
is presented to such office in time for the Trustee to make
such payments in such funds in accordance with its normal
procedures, and if upon early repayment, then on the
applicable Repayment Date, provided that the Holder shall
have complied with the requirements for repayment set forth
on the reverse hereof. If this Security is a Global
Security, the Depositary will be paid as agreed by the
Company, the Trustee and the Depositary and beneficial
owners hereof will be paid in accordance with the
Depositary's and its participants' procedures in effect from
time to time. "Maturity" shall mean the date on which the
principal of this Security or an installment of principal
<PAGE>
4
becomes due, whether on the Maturity Date specified above,
upon redemption or early repayment or otherwise.
If the registered owner of this Security (as
indicated above) is the Depositary or a nominee of the
Depositary, this Security is a Global Security and the
following legend is applicable: UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE FOR THE INDIVIDUAL SECURITIES REPRESENTED
HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITARY.
If the registered owner of this Security is The
Depository Trust Company or a nominee of The Depository
Trust Company, then unless this certificate is presented by
an authorized representative of The Depository Trust Company
(55 Water Street, New York, New York) to the Company or its
agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of CEDE &
CO., or such other name as requested by an authorized
representative of The Depository Trust Company and any
payment is made to CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL since the registered owner hereof, CEDE & CO., has
an interest herein.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS
OF THIS SECURITY SET FORTH IN FULL ON THE REVERSE HEREOF,
WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon
has been executed by the Trustee referred to on the reverse
hereof, directly or through an Authenticating Agent, by
manual signature of an authorized officer, this Security
<PAGE>
5
shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated: PAINE WEBBER GROUP INC.
By_________________________
Title:
[Seal] Attest:
________________________
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series designated
therein referred to in the within-mentioned Indenture.
Dated:
CHEMICAL BANK
As Trustee
By_____________________________
Authorized Officer
<PAGE>
6
PAINE WEBBER GROUP, INC.
MEDIUM-TERM SENIOR NOTE, SERIES C
Due from Nine Months to 30 Years
from Date of Issue
(Fixed Rate)
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an
Indenture dated as of March 15, 1988, as amended by a First
Supplemental Indenture dated as of September 22, 1989, and
by a Second Supplemental Indenture dated as of March 22,
1991 (such Indenture, as so supplemented, is herein called
the "Indenture"), between the Company and Chemical Bank, as
Trustee (herein called the "Trustee", which term includes
any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities
and of the terms upon which the Securities are, and are to
be, authenticated and delivered. This Security is one of
the series designated on the face hereof.
If so specified on the face hereof, the Company
will, subject to the limitations and exceptions set forth
below, pay to a Holder of this Security who is a United
States Alien (as defined below) such additional amounts
("Additional Amounts") as may be necessary in order that
every net payment of the principal of, premium, if any, and
interest on this Security, after deduction or withholding by
the Company, the Trustee or any of the Company's paying
agents for or on account of any present or future tax,
assessment or other governmental charge imposed upon such
Holder with respect to or as a result of such payment by the
United States or any political subdivision or taxing
authority thereof or therein, will not be less than the
amount provided herein to be then due and payable. However,
the Company shall not be required to make any such payment
of Additional Amounts for or on account of:
(a) any tax, assessment or other governmental
charge that would not have been imposed but for (i) the
existence of any present or former connection between
such Holder (or between a fiduciary, settlor or
<PAGE>
7
beneficiary of, or a person holding a power over, such
Holder, if such Holder is an estate or a trust, or
between a member or shareholder of such Holder, if such
Holder is a partnership or corporation) and the United
States, including, without limitation, such Holder (or
such fiduciary, settlor, beneficiary, person holding a
power, member or shareholder) being or having been a
citizen or resident or treated as a resident thereof or
being or having been engaged in a trade or business
therein or being or having been present therein or
having or having had a permanent establishment therein,
or (ii) such Holder's present or former status as a
domestic or foreign personal holding company, a passive
foreign investment company or a controlled foreign
corporation, a private foundation or other tax-exempt
organization for United States Federal income tax
purposes or a corporation that accumulates earnings to
avoid United States Federal income tax;
(b) any tax, assessment or other governmental
charge that would not have been so imposed but for the
presentation by the Holder of this Security for payment
on a date more than 15 days after the date on which
such payment became due and payable or the date on
which payment thereof was duly provided for, whichever
occurs later;
(c) any estate, inheritance, gift, sales,
transfer, excise or personal property tax or any
similar tax, assessment or other governmental charge;
(d) any tax, assessment or other governmental
charge that would not have been imposed but for the
failure to comply with certification, information,
documentation or other reporting requirements
concerning the nationality, residence, identity or
connection with the United States of the Holder or
beneficial owner of this Security, if such compliance
is required by statute or by regulation of the United
States or any taxing authority thereof as a
precondition to relief or exemption from such tax,
assessment or other governmental charge;
(e) any tax, assessment or other governmental
charge that is (i) payable otherwise than by deduction
or withholding from payments of principal of or
premium, if any, or interest on this Security or (ii)
required to be deducted or withheld by any paying agent
<PAGE>
8
from any such payment, if (and only if) such payment
can be made without such deduction or withholding by
any other paying agent;
(f) any tax, assessment or other governmental
charge imposed on interest received by a person
holding, actually or constructively, 10 percent or more
of the total combined voting power of all classes of
stock of the Company entitled to vote (taking into
account the applicable attribution of ownership rules
under Section 871(h)(3) of the Internal Revenue Code of
1986, as amended (the "Code")) or that is a controlled
foreign corporation related to the Company (directly or
indirectly) through stock ownership; or
(g) any combination of items (a), (b), (c), (d),
(e) and (f);
nor will Additional Amounts be paid with respect to payment
of the principal of or premium, if any, or interest on this
Security to any United States Alien that is a fiduciary or
partnership or to a person other than the sole beneficial
owner of this Security to the extent that a beneficiary or
settlor with respect to such fiduciary or a member of such
partnership or a beneficial owner would not have been
entitled to the Additional Amounts had such beneficiary,
settlor, member or beneficial owner been the Holder of this
Security.
The Company, at its option, may redeem this
Security as a whole, but not in part, at any time that this
Security is Registered in the name of a United States Alien,
on giving not less than 30 nor more than 45 days' notice to
the registered Holder hereof by mail in accordance with the
provisions of the Indenture (which notice shall be
irrevocable), at a redemption price equal to the principal
amount hereof (or, in the case of an Original Issue Discount
Security, the amount specified on the face hereof), together
with accrued interest to the redemption date, if the Company
determines that the Company has or will become obligated to
pay Additional Amounts on this Security on the next
succeeding Interest Payment Date as a result of any change
in, or amendment to, the laws (or any regulations or rulings
promulgated thereunder) of the United States or any
political subdivision or taxing authority thereof or therein
affecting taxation, or any change in the application or
official interpretation of such laws, regulations or rulings
by a taxing authority, court or regulatory agency, whether
<PAGE>
9
or not rendered or taken with respect to the Company, or any
action taken by any taxing authority, court or regulatory
agency (including any change in administrative policy or
enforcement practice of such taxing authority), whether or
not taken with respect to the Company, which change or
amendment becomes effective, or action is taken, on or after
the Original Issue Date, and such obligation cannot be
avoided by the Company taking reasonable measures available
to it. Prior to giving any notice of redemption pursuant to
this paragraph, the Company shall deliver to the Trustee an
Officers' Certificate stating that the Company is entitled
to effect such redemption and setting forth a statement of
facts showing that the conditions precedent to the right of
the Company so to redeem have occurred, and an opinion of
independent legal counsel addressed to the Company and the
Trustee to the effect that the Company has or will become
obligated to pay such Additional Amounts as a result of such
change or amendment. Notice of the intention of the Company
to redeem this Security shall not be given earlier than 90
days prior to the earliest date that the obligation to pay
Additional Amounts would arise were a payment in respect of
this Security due on such date. From and after any
redemption date, if monies for the redemption of this
Security pursuant to this paragraph shall have been made
available for redemption on such redemption date, this
Security shall cease to bear interest and the only right of
the Holder of this Security shall be to receive payment of
the redemption price of this Security and all unpaid
interest accrued to such redemption date. For purposes of
this paragraph, the Trustee may rely on an Officers'
Certificate as to whether the registered Holder hereof is a
United States Alien.
The term "United States Alien" means any person
who, for United States Federal income tax purposes, is a
foreign corporation, a nonresident alien individual, a
nonresident alien fiduciary of a foreign estate or trust, or
a foreign partnership, one or more of the members of which
is, for United States Federal income tax purposes, a foreign
corporation, a nonresident alien individual or a nonresident
alien fiduciary of a foreign estate or trust.
If so specified on the face hereof, the Company may at
its option redeem this Security in whole or from time to
time in part on the date or dates designated as Redemption
Dates on the face hereof at the Redemption Price or
Redemption Prices designated on the face hereof, together
with accrued interest to the date of redemption. The
<PAGE>
10
Company may exercise such option by mailing or causing the
Trustee to mail a notice of such redemption at least 30 but
not more than 45 days prior to the date of redemption. In
the event of redemption of this Security in part only, a new
Security or Securities of like tenor and with the same terms
and conditions for the unredeemed portion hereof shall be
issued in the name of the Holder hereof upon the
cancellation hereof. If less than all of the Securities
having the same terms (except as to principal amount and
date of issuance) as this Security are to be redeemed, the
Securities to be redeemed shall be selected by the Trustee
by such method as the Trustee shall deem fair and
appropriate and otherwise as provided under the Indenture.
If so specified on the face hereof, this Security
will be repayable prior to the Maturity Date at the option
of the Holder on the date or dates or under the
circumstances designated as Repayment Dates on the face
hereof at the Repayment Price or Repayment Prices designated
on the face hereof together with accrued interest to the
date of repayment. In order for this Security to be repaid,
the Trustee must receive at the Notes Office at least 30 but
not more than 45 days prior to the applicable Repayment Date
(a) appropriate wire instructions and (b) either (i) this
Security with the form below entitled "Option to Elect
Repayment" duly completed or (ii) a telegram, telex,
facsimile transmission or letter from a member of a national
securities exchange or the National Association of
Securities Dealers, Inc., or a commercial bank or trust
company in the United States or any other "eligible
guarantor institution" (as such term is defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended) setting forth the name of the Holder of this
Security, the principal amount of this Security, the portion
of the principal amount of this Security to be repaid, the
certificate number or a description of the tenor and terms
of this Security, a statement that the option to elect
repayment is being exercised thereby and a guarantee that
this Security with the form below entitled "Option to Elect
Repayment" duly completed will be received by the Trustee
not later than five Business Days after the date of such
telegram, telex, facsimile transmission or letter. If the
procedure described in clause (ii) of the preceding sentence
is followed, this Security with such form duly completed
must be received by the Trustee by such fifth Business Day.
Any tender of this Security for repayment shall be
irrevocable. The repayment option may be exercised by the
Holder of this Security for less than the entire principal
<PAGE>
11
amount of this Security provided that the principal amount
of the Security remaining outstanding after repayment is an
authorized denomination. Upon such partial repayment this
Security shall be cancelled and a new Security or Securities
of like tenor and with the same terms and conditions for the
remaining principal amount hereof shall be issued in the
name of the Holder of this Security or as otherwise
specified in the form entitled "Option to Elect Repayment".
After exercise of the repayment option, no transfer or
exchange of this Security (or, if this Security is to be
repaid in part, the portion hereof to be repaid) will be
permitted. All questions as to the validity, eligibility
(including time of receipt) and acceptance of this Security
for repayment will be determined by the Company, whose
determination will be final, binding and non-appealable.
The Indenture provides that, with certain limited
exceptions, the Company will not, nor will it permit any
Restricted Subsidiary (as defined in the 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.
Interest payments on each Interest Payment Date
for this Security and at Maturity will include interest
accrued from and including the later of the Original Issue
Date or the most recent date to which interest has been paid
or provided for to but excluding such Interest Payment Date
or to but excluding Maturity. Interest payments for this
Security shall be computed and paid on the basis of a 360-
day year of twelve 30-day months.
Notwithstanding anything herein to the contrary,
the interest rate on this Security will in no event be
higher than the maximum rate permitted by New York law as
the same may be modified by United States law of general
applicability.
Any payment of principal of (and premium, if any)
or interest required to be made on this Security on a day
which is not a Business Day need not be made on such day,
but may be made on the next day which is such a Business Day
with the same force and effect as if made on such day, and
no interest shall accrue as a result of such delayed
payment. "Business Day" means each day, other than a
Saturday or Sunday, that is not a day on which banking
institutions in the Business Day Centers specified on the
<PAGE>
12
face hereof are authorized or obligated by law or executive
order to close.
If an Event of Default with respect to Securities
of this series shall occur and be continuing, the principal
of the Securities of this series may be declared due and
payable in the manner and with the effect provided in the
Indenture.
Any terms or conditions of this Security ("Other
Terms") specified on the face hereof under "Other Terms"
shall apply to this Security. In the event of any conflict
between any Other Terms and any other terms or conditions of
this Security, the Other Terms shall control.
Notwithstanding anything herein to the contrary,
if this Security is an Original Issue Discount Security, the
amount payable in the event of acceleration following an
Event of Default prior to the Maturity Date hereof in lieu
of the principal amount due at the Maturity Date hereof
shall be the Amortized Face Amount of this Security as of
the date of declaration of acceleration. The "Amortized
Face Amount" of this Security shall be an amount equal to
(a) the Issue Price (as set forth on the face hereof) plus
(b) that portion of the difference between the Issue Price
and the principal amount hereof that has accrued at the
Yield to Maturity (as set forth on the face hereof)
(computed in accordance with generally accepted United
States bond yield computation principles) at the date as of
which the Amortized Face Amount is calculated, but in no
event shall the Amortized Face Amount of this Security
exceed its principal amount.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification
of the rights and obligations of the Company and the rights
of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of 66-2/3% in
principal amount of the Securities at the time Outstanding
of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages
in principal amount of the Securities of each series at the
time Outstanding, on behalf of the Holders of all Securities
of such series, to waive compliance by the Company with
certain provisions of the Indenture and to waive certain
past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security
<PAGE>
13
shall be conclusive and binding upon such Holder and upon
all future Holders of this Security and of any Security
issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of
the Indenture, no Holder of any Security of this series will
have any right to institute any proceeding with respect to
the Indenture or for any remedy thereunder, unless such
Holder shall have previously given to the Trustee written
notice of a continuing Event of Default with respect to this
series, the Holders of not less than 25% in principal amount
of the Outstanding Securities of this series shall have made
written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, the Trustee
shall not have received from the Holders of a majority in
principal amount of the Outstanding Securities of this
series a direction inconsistent with such request and the
Trustee shall have failed to institute such proceeding
within 60 days; provided, however, that such limitations do
-------- -------
not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of (and premium, if
any) or interest on this Security on or after the respective
due dates expressed herein.
No reference herein to the Indenture and no
provision of this Security or of the Indenture shall alter
or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of (and premium, if
any) and interest on this Security at the times, places and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to
certain limitations therein set forth, the transfer of this
Security is registrable in the Security Register upon
surrender of this Security for registration of transfer to
the Security Registrar at the Notes Office duly endorsed by,
or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized
denominations and having the same terms and conditions and
for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
<PAGE>
14
The Securities of this series are issuable only in
registered form, without coupons, in denominations of
U.S.$100,000 and any integral multiple of U.S.$1,000 in
excess thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this
series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of
different authorized denominations and having the same terms
and conditions, as requested by the Holder surrendering the
same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security is overdue,
and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture and the Securities shall be governed
by and construed in accordance with the laws of the State of
New York.
All terms used in this Security which are defined
in the Indenture and are not otherwise defined herein shall
have the meanings assigned to them in the Indenture.
<PAGE>
15
OPTION TO ELECT REPAYMENT
The undersigned owner of this Security hereby
irrevocably elects to have the Company repay the principal
amount of this Security or portion hereof below designated
at the applicable Repayment Price indicated on the face
hereof plus interest accrued to the applicable Repayment
Date.
Dated:______________
____________________
Signature
Sign exactly as name appears
on the front of this Security
[SIGNATURE GUARANTEE -
required only if Securities
are to be issued and delivered
to other than the registered
holder]
Principal amount to be Fill in for
repaid, if amount to be registration of
repaid is less than the Securities if to be
principal amount of this issued otherwise than
Security (principal amount to registered holder:
remaining must be an
authorized denomination)
Name:_________________
U.S.$______________
Address:______________
______________
(Please print
name and address
including zip
code)
SOCIAL SECURITY OR
OTHER TAXPAYER ID
NUMBER
______________________
<PAGE>
16
ABBREVIATIONS
The following abbreviations, when used in the
inscription on the face of this instrument, shall be
construed as though they were written out in full according
to applicable laws or regulations:
UNIF GIFT MIN ACT...
TEN COM - as tenants in .........Custodian..........
common (Cust) (Minor)
TEN ENT - as tenants by Under Uniform Gifts to
the entireties Minors Act
JT TEN - as joint tenants
with right of
survivorship and ............................
not as tenants in (State)
common
Additional abbreviations may also be used though
not in the above list.
____________________
FOR VALUED RECEIVED, the undersigned hereby
sell(s), assign(s) and transfer(s) unto
Please Insert Social Security
or Other Identifying Number of
Assignee
________________________________
/ /
/______________________________ /__________________________
___________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE
<PAGE>
17
____________________________________________________________
the within Security and all rights thereunder, hereby
irrevocably constituting and appointing __________________
_______________________ attorney to transfer said Security
on the books of the Company, with full power of substitution
in the premises.
Dated:______________ ______________________________
Signature
Exhibit 4.1(b)
NOTE NUMBER AGENT'S NAME
PAINE WEBBER GROUP INC.
- ----------------------------------------------------
PRINCIPAL AMOUNT SETTLEMENT DATE TRADE DATE
U.S.$ (ORIGINAL ISSUE DATE)
- --------------------------------------------------------------------------------
MATURITY DATE TRUSTEE'S CUST. NO. INTEREST RATE TAXPAYER ID OR TRANSFERRED
SOC. SEC. NO.
OF PURCHASER
- --------------------------------------------------------------------------------
NAME AND ADDRESS OF REGISTERED OWNER MEDIUM-TERM
NOTE
PROGRAM
CHEMICAL BANK DELAWARE
TRUSTEE
CHEMICAL BANK
AUTHENTICATING
AGENT
<TABLE><CAPTION>
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CUSTOMER'S RETAIN FOR THE TIME OF THE TRANSACTION WILL BE PLEASE SIGN AND RETURN SEE
COPY TAX PURPOSES FURNISHED UPON REQUEST OF THE CUSTOMER ENCLOSED RECEIPT REVERSE SIDE
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
REGISTERED REGISTERED
</TABLE>
PAINE WEBBER GROUP INC.
MEDIUM-TERM SUBORDINATED NOTE, SERIES D
Due from Nine Months to 30 Years from Date of Issue
(Fixed Rate)
No. U.S.$
CUSIP NO.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID", "YIELD
TO MATURITY" AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED
UNDER THE APPROXIMATE METHOD) BELOW WILL BE COMPLETED SOLELY
FOR PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL
ISSUE DISCOUNT ("OID") RULES.
ORIGINAL ISSUE DATE: INTEREST RATE: MATURITY DATE:
ISSUE PRICE: ORIGINAL ISSUE DISCOUNT BUSINESS DAY CENTERS:
SECURITY:
[ ] YES [ ] NO
REGULAR RECORD DATES: OPTIONAL REDEMPTION: PAYMENT OF ADDITIONAL
[ ] YES [ ] NO AMOUNTS:
[ ] YES [ ] NO
<PAGE>
2
INTEREST PAYMENT DATES: REDEMPTION DATES: OPTION TO ELECT
REPAYMENT:
[ ] YES [ ] NO
TOTAL AMOUNT OF OID: REDEMPTION PRICES: REPAYMENT DATES:
YIELD TO MATURITY: GLOBAL SECURITY: REPAYMENT PRICES:
[ ] YES [ ] NO
INITIAL ACCRUAL PERIOD OID: DEPOSITARY:
OTHER TERMS:
PAINE WEBBER GROUP INC., a Delaware corporation
(herein called the "Company", which term includes any
successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay
to
, or registered assigns, the principal sum of
U.S. DOLLARS,
on the Maturity Date specified above, and to pay interest
thereon from and including the Original Issue Date shown
above or from and including the last date in respect of
which interest has been paid or provided for, as the case
may be. Interest will be paid on the Interest Payment Dates
shown above, commencing with the first such Interest Payment
Date following the Original Issue Date shown above, at the
Interest Rate per annum specified above until the principal
hereof is paid or made available for payment. The interest
so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of
business on the Regular Record Date specified above (whether
or not a Business Day) next preceding such Interest Payment
Date, except that in the case of a Security with an Original
Issue Date that is after a Regular Record Date and before
the next following Interest Payment Date, interest payable
on such Interest Payment Date will be paid to the Person in
whose name such Security was initially registered on the
Original Issue Date; provided, however, that interest
-------- -------
payable at Maturity shall be payable to the Person to whom
principal shall be payable. Except as otherwise provided in
the Indenture, any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to
<PAGE>
3
the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice
whereof to be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or
be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities
exchange on which the Securities of this series may be
listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. If
this Security is not a Global Security, payments of interest
on this Security (other than interest payable at Maturity)
will be made by mailing a check to the person entitled
thereto at its address appearing in the Security Register
for the Securities on the applicable Regular Record Date.
Notwithstanding the foregoing, at the option of the Company
such payments may be made by wire transfer of immediately
available funds to an account with a bank located in the
continental United States (or other jurisdiction acceptable
to the Company and Chemical Bank, as Paying Agent), but only
if appropriate payment instructions have been received in
writing by the Paying Agent not less than 5 Business Days
prior to the applicable Interest Payment Date. Payments of
principal of, premium, if any, and interest will be made in
immediately available funds, if at maturity or upon earlier
redemption, then on the Maturity Date or the date fixed for
redemption, as applicable, upon surrender of this Security
at the principal corporate trust office of the Paying Agent
in the Borough of Manhattan, The City of New York, or such
other office or agency of the Company as may be designated
by it for such purpose in the Borough of Manhattan, The City
of New York (the "Notes Office"), provided that this
Security is presented to such office in time for the Paying
Agent to make such payments in such funds in accordance with
its normal procedures, and if upon early repayment, then on
the applicable Repayment Date, provided that the Holder
shall have complied with the requirements for repayment set
forth on the reverse hereof. If this Security is a Global
Security, the Depositary will be paid as agreed by the
Company, the Trustee, the Paying Agent and the Depositary
and beneficial owners hereof will be paid in accordance with
the Depositary's and its participants' procedures in effect
from time to time. "Maturity" shall mean the date on which
the principal of this Security or an installment of
principal becomes due, whether on the Maturity Date
specified above, upon redemption or early repayment or
otherwise.
<PAGE>
If the registered owner of this Security (as
indicated above) is the Depositary or a nominee of the
Depositary, this Security is a Global Security and the
following legend is applicable: UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE FOR THE INDIVIDUAL SECURITIES REPRESENTED
HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITARY.
If the registered owner of this Security is The
Depository Trust Company or a nominee of The Depository
Trust Company, then unless this certificate is presented by
an authorized representative of The Depository Trust Company
(55 Water Street, New York, New York) to the Company or its
agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of CEDE &
CO., or such other name as requested by an authorized
representative of The Depository Trust Company and any
payment is made to CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL since the registered owner hereof, CEDE & CO., has
an interest herein.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS
OF THIS SECURITY SET FORTH IN FULL ON THE REVERSE HEREOF,
WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon
has been executed by the Trustee referred to on the reverse
hereof, directly or through an Authenticating Agent, by
manual signature of an authorized officer, this Security
<PAGE>
shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated:
PAINE WEBBER GROUP INC.
By
-------------------------------
Title:
[Seal] Attest:
-------------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series designated
therein referred to in the within-mentioned Indenture.
Dated:
CHEMICAL BANK DELAWARE CHEMICAL BANK DELAWARE
As Trustee As Trustee
By OR
-------------------------- By Chemical Bank
Authorized Officer As Authenticating Agent
By
--------------------------
Authorized Officer
<PAGE>
PAINE WEBBER GROUP, INC.
MEDIUM-TERM SUBORDINATED NOTE, SERIES D
Due from Nine Months to 30 Years
from Date of Issue
(Fixed Rate)
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an
Indenture dated as of March 15, 1988, as amended by a First
Supplemental Indenture dated as of September 22, 1989, by a
Second Supplemental Indenture dated as of March 22, 1991,
and by a Third Supplemental Indenture dated as of
November 30, 1993 (such Indenture, as so supplemented, is
herein called the "Indenture"), between the Company and
Chemical Bank Delaware, as Trustee (herein called the
"Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee
and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on
the face hereof.
If so specified on the face hereof, the Company
will, subject to the limitations and exceptions set forth
below, pay to a Holder of this Security who is a United
States Alien (as defined below) such additional amounts
("Additional Amounts") as may be necessary in order that
every net payment of the principal of, premium, if any, and
interest on this Security, after deduction or withholding by
the Company, the Trustee or any of the Company's paying
agents for or on account of any present or future tax,
assessment or other governmental charge imposed upon such
Holder with respect to or as a result of such payment by the
United States or any political subdivision or taxing
authority thereof or therein, will not be less than the
amount provided herein to be then due and payable. However,
the Company shall not be required to make any such payment
of Additional Amounts for or on account of:
(a) any tax, assessment or other governmental
charge that would not have been imposed but for (i) the
<PAGE>
7
existence of any present or former connection between
such Holder (or between a fiduciary, settlor or
beneficiary of, or a person holding a power over, such
Holder, if such Holder is an estate or a trust, or
between a member or shareholder of such Holder, if such
Holder is a partnership or corporation) and the United
States, including, without limitation, such Holder (or
such fiduciary, settlor, beneficiary, person holding a
power, member or shareholder) being or having been a
citizen or resident or treated as a resident thereof or
being or having been engaged in a trade or business
therein or being or having been present therein or
having or having had a permanent establishment therein,
or (ii) such Holder's present or former status as a
domestic or foreign personal holding company, a passive
foreign investment company or a controlled foreign
corporation, a private foundation or other tax-exempt
organization for United States Federal income tax
purposes or a corporation that accumulates earnings to
avoid United States Federal income tax;
(b) any tax, assessment or other governmental
charge that would not have been so imposed but for the
presentation by the Holder of this Security for payment
on a date more than 15 days after the date on which
such payment became due and payable or the date on
which payment thereof was duly provided for, whichever
occurs later;
(c) any estate, inheritance, gift, sales,
transfer, excise or personal property tax or any
similar tax, assessment or other governmental charge;
(d) any tax, assessment or other governmental
charge that would not have been imposed but for the
failure to comply with certification, information,
documentation or other reporting requirements
concerning the nationality, residence, identity or
connection with the United States of the Holder or
beneficial owner of this Security, if such compliance
is required by statute or by regulation of the United
States or any taxing authority thereof as a
precondition to relief or exemption from such tax,
assessment or other governmental charge;
(e) any tax, assessment or other governmental
charge that is (i) payable otherwise than by deduction
or withholding from payments of principal of or
<PAGE>
8
premium, if any, or interest on this Security or (ii)
required to be deducted or withheld by any paying agent
from any such payment, if (and only if) such payment
can be made without such deduction or withholding by
any other paying agent;
(f) any tax, assessment or other governmental
charge imposed on interest received by a person
holding, actually or constructively, 10 percent or more
of the total combined voting power of all classes of
stock of the Company entitled to vote (taking into
account the applicable attribution of ownership rules
under Section 871(h)(3) of the Internal Revenue Code of
1986, as amended (the "Code")) or that is a controlled
foreign corporation related to the Company (directly or
indirectly) through stock ownership; or
(g) any combination of items (a), (b), (c), (d),
(e) and (f);
nor will Additional Amounts be paid with respect to payment
of the principal of or premium, if any, or interest on this
Security to any United States Alien that is a fiduciary or
partnership or to a person other than the sole beneficial
owner of this Security to the extent that a beneficiary or
settlor with respect to such fiduciary or a member of such
partnership or a beneficial owner would not have been
entitled to the Additional Amounts had such beneficiary,
settlor, member or beneficial owner been the Holder of this
Security.
The Company, at its option, may redeem this
Security as a whole, but not in part, at any time that this
Security is Registered in the name of a United States Alien,
on giving not less than 30 nor more than 45 days' notice to
the registered Holder hereof by mail in accordance with the
provisions of the Indenture (which notice shall be
irrevocable), at a redemption price equal to the principal
amount hereof (or, in the case of an Original Issue Discount
Security, the amount specified on the face hereof), together
with accrued interest to the redemption date, if the Company
determines that the Company has or will become obligated to
pay Additional Amounts on this Security on the next
succeeding Interest Payment Date as a result of any change
in, or amendment to, the laws (or any regulations or rulings
promulgated thereunder) of the United States or any
political subdivision or taxing authority thereof or therein
affecting taxation, or any change in the application or
<PAGE>
9
official interpretation of such laws, regulations or rulings
by a taxing authority, court or regulatory agency, whether
or not rendered or taken with respect to the Company, or any
action taken by any taxing authority, court or regulatory
agency (including any change in administrative policy or
enforcement practice of such taxing authority), whether or
not taken with respect to the Company, which change or
amendment becomes effective, or action is taken, on or after
the Original Issue Date, and such obligation cannot be
avoided by the Company taking reasonable measures available
to it. Prior to giving any notice of redemption pursuant to
this paragraph, the Company shall deliver to the Trustee an
Officers' Certificate stating that the Company is entitled
to effect such redemption and setting forth a statement of
facts showing that the conditions precedent to the right of
the Company so to redeem have occurred, and an opinion of
independent legal counsel addressed to the Company and the
Trustee to the effect that the Company has or will become
obligated to pay such Additional Amounts as a result of such
change or amendment. Notice of the intention of the Company
to redeem this Security shall not be given earlier than 90
days prior to the earliest date that the obligation to pay
Additional Amounts would arise were a payment in respect of
this Security due on such date. From and after any
redemption date, if monies for the redemption of this
Security pursuant to this paragraph shall have been made
available for redemption on such redemption date, this
Security shall cease to bear interest and the only right of
the Holder of this Security shall be to receive payment of
the redemption price of this Security and all unpaid
interest accrued to such redemption date. For purposes of
this paragraph, the Trustee may rely on an Officers'
Certificate as to whether the registered Holder hereof is a
United States Alien.
The term "United States Alien" means any person
who, for United States Federal income tax purposes, is a
foreign corporation, a nonresident alien individual, a
nonresident alien fiduciary of a foreign estate or trust, or
a foreign partnership, one or more of the members of which
is, for United States Federal income tax purposes, a foreign
corporation, a nonresident alien individual or a nonresident
alien fiduciary of a foreign estate or trust.
If so specified on the face hereof, the Company may at
its option redeem this Security in whole or from time to
time in part on the date or dates designated as Redemption
Dates on the face hereof at the Redemption Price or
<PAGE>
10
Redemption Prices designated on the face hereof, together
with accrued interest to the date of redemption. The
Company may exercise such option by mailing or causing the
Trustee to mail a notice of such redemption at least 30 but
not more than 45 days prior to the date of redemption. In
the event of redemption of this Security in part only, a new
Security or Securities of like tenor and with the same terms
and conditions for the unredeemed portion hereof shall be
issued in the name of the Holder hereof upon the
cancellation hereof. If less than all of the Securities
having the same terms (except as to principal amount and
date of issuance) as this Security are to be redeemed, the
Securities to be redeemed shall be selected by the Trustee
by such method as the Trustee shall deem fair and
appropriate and otherwise as provided under the Indenture.
If so specified on the face hereof, this Security
will be repayable prior to the Maturity Date at the option
of the Holder on the date or dates or under the
circumstances designated as Repayment Dates on the face
hereof at the Repayment Price or Repayment Prices designated
on the face hereof together with accrued interest to the
date of repayment. In order for this Security to be repaid,
Chemical Bank, as Paying Agent, must receive at the Notes
Office at least 30 but not more than 45 days prior to the
applicable Repayment Date (a) appropriate wire instructions
and (b) either (i) this Security with the form below
entitled "Option to Elect Repayment" duly completed or
(ii) a telegram, telex, facsimile transmission or letter
from a member of a national securities exchange or the
National Association of Securities Dealers, Inc., or a
commercial bank or trust company in the United States or any
other "eligible guarantor institution" (as such term is
defined in Rule 17Ad-15 under the Securities Exchange Act of
1934, as amended) setting forth the name of the Holder of
this Security, the principal amount of this Security, the
portion of the principal amount of this Security to be
repaid, the certificate number or a description of the tenor
and terms of this Security, a statement that the option to
elect repayment is being exercised thereby and a guarantee
that this Security with the form below entitled "Option to
Elect Repayment" duly completed will be received by the
Paying Agent not later than five Business Days after the
date of such telegram, telex, facsimile transmission or
letter. If the procedure described in clause (ii) of the
preceding sentence is followed, this Security with such form
duly completed must be received by the Paying Agent by such
fifth Business Day. Any tender of this Security for
<PAGE>
11
repayment shall be irrevocable. The repayment option may be
exercised by the Holder of this Security for less than the
entire principal amount of this Security provided that the
principal amount of the Security remaining outstanding after
repayment is an authorized denomination. Upon such partial
repayment this Security shall be cancelled and a new
Security or Securities of like tenor and with the same terms
and conditions for the remaining principal amount hereof
shall be issued in the name of the Holder of this Security
or as otherwise specified in the form entitled "Option to
Elect Repayment". After exercise of the repayment option,
no transfer or exchange of this Security (or, if this
Security is to be repaid in part, the portion hereof to be
repaid) will be permitted. All questions as to the
validity, eligibility (including time of receipt) and
acceptance of this Security for repayment will be determined
by the Company, whose determination will be final, binding
and non-appealable.
The indebtedness evidenced by this Security is
expressly subordinated in right of payment, to the extent
and in the manner set forth in the Indenture, to the prior
payment in full of all Superior Indebtedness (as defined in
the Indenture) and this Security is issued subject to such
provisions of the Indenture, and each Holder of this
Security by accepting the same agrees to and shall be bound
by such provisions and authorizes and directs the Trustee on
his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate such subordination
as provided in the Indenture and appoints the Trustee his
attorney-in-fact for any and all such purposes.
Interest payments on each Interest Payment Date
for this Security and at Maturity will include interest
accrued from and including the later of the Original Issue
Date or the most recent date to which interest has been paid
or provided for to but excluding such Interest Payment Date
or to but excluding Maturity. Interest payments for this
Security shall be computed and paid on the basis of a 360-
day year of twelve 30-day months.
Notwithstanding anything herein to the contrary,
the interest rate on this Security will in no event be
higher than the maximum rate permitted by New York law as
the same may be modified by United States law of general
applicability.
<PAGE>
12
Any payment of principal of (and premium, if any)
or interest required to be made on this Security on a day
which is not a Business Day need not be made on such day,
but may be made on the next day which is such a Business Day
with the same force and effect as if made on such day, and
no interest shall accrue as a result of such delayed
payment. "Business Day" means each day, other than a
Saturday or Sunday, that is not a day on which banking
institutions in the Business Day Centers specified on the
face hereof are authorized or obligated by law or executive
order to close.
If an Event of Default with respect to Securities
of this series shall occur and be continuing, the principal
of the Securities of this series may be declared due and
payable in the manner and with the effect provided in the
Indenture.
Any terms or conditions of this Security ("Other
Terms") specified on the face hereof under "Other Terms"
shall apply to this Security. In the event of any conflict
between any Other Terms and any other terms or conditions of
this Security, the Other Terms shall control.
Notwithstanding anything herein to the contrary,
if this Security is an Original Issue Discount Security, the
amount payable in the event of acceleration following an
Event of Default prior to the Maturity Date hereof in lieu
of the principal amount due at the Maturity Date hereof
shall be the Amortized Face Amount of this Security as of
the date of declaration of acceleration. The "Amortized
Face Amount" of this Security shall be an amount equal to
(a) the Issue Price (as set forth on the face hereof) plus
(b) that portion of the difference between the Issue Price
and the principal amount hereof that has accrued at the
Yield to Maturity (as set forth on the face hereof)
(computed in accordance with generally accepted United
States bond yield computation principles) at the date as of
which the Amortized Face Amount is calculated, but in no
event shall the Amortized Face Amount of this Security
exceed its principal amount.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification
of the rights and obligations of the Company and the rights
of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of 66-2/3% in
<PAGE>
13
principal amount of the Securities at the time Outstanding
of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages
in principal amount of the Securities of each series at the
time Outstanding, on behalf of the Holders of all Securities
of such series, to waive certain past defaults under the
Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or
waiver is made upon this Security.
As set forth in, and subject to, the provisions of
the Indenture, no Holder of any Security of this series will
have any right to institute any proceeding with respect to
the Indenture or for any remedy thereunder, unless such
Holder shall have previously given to the Trustee written
notice of a continuing Event of Default with respect to this
series, the Holders of not less than 25% in principal amount
of the Outstanding Securities of this series shall have made
written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, the Trustee
shall not have received from the Holders of a majority in
principal amount of the Outstanding Securities of this
series a direction inconsistent with such request and the
Trustee shall have failed to institute such proceeding
within 60 days; provided, however, that such limitations do
-------- -------
not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of (and premium, if
any) or interest on this Security on or after the respective
due dates expressed herein.
No reference herein to the Indenture and no
provision of this Security or of the Indenture shall alter
or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of (and premium, if
any) and interest on this Security at the times, places and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to
certain limitations therein set forth, the transfer of this
Security is registrable in the Security Register upon
surrender of this Security for registration of transfer to
the Security Registrar at the Notes Office duly endorsed by,
or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly
<PAGE>
14
executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized
denominations and having the same terms and conditions and
for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The Securities of this series are issuable only in
registered form, without coupons, in denominations of
U.S.$100,000 and any integral multiple of U.S.$1,000 in
excess thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this
series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of
different authorized denominations and having the same terms
and conditions, as requested by the Holder surrendering the
same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security is overdue,
and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture and the Securities shall be governed
by and construed in accordance with the laws of the State of
New York.
All terms used in this Security which are defined
in the Indenture and are not otherwise defined herein shall
have the meanings assigned to them in the Indenture.
<PAGE>
15
OPTION TO ELECT REPAYMENT
The undersigned owner of this Security hereby
irrevocably elects to have the Company repay the principal
amount of this Security or portion hereof below designated
at the applicable Repayment Price indicated on the face
hereof plus interest accrued to the applicable Repayment
Date.
Dated:
----------------------
- -----------------------------
Signature
Sign exactly as name appears
on the front of this Security
[SIGNATURE GUARANTEE -
required only if Securities
are to be issued and delivered
to other than the registered
holder]
Principal amount to be Fill in for
repaid, if amount to be registration of
repaid is less than the Securities if to be
principal amount of this issued otherwise than
Security (principal amount to registered holder:
remaining must be an
authorized denomination) Name:
---------------------
U.S.$
--------------------- Address:
------------------
------------------
(Please print
name and address
including zip
code)
SOCIAL SECURITY OR
OTHER TAXPAYER ID
NUMBER
---------------------------
<PAGE>
16
---------------------
ABBREVIATIONS
The following abbreviations, when used in the
inscription on the face of this instrument, shall be
construed as though they were written out in full according
to applicable laws or regulations:
UNIF GIFT MIN ACT...
TEN COM - as tenants in ......... Custodian ..........
common (Cust) (Minor)
TEN ENT - as tenants by Under Uniform Gifts to
the entireties Minors Act
JT TEN - as joint tenants
with right of
survivorship and ..............................
not as tenants in (State)
common
Additional abbreviations may also be used though
not in the above list.
---------------------
FOR VALUED RECEIVED, the undersigned hereby
sell(s), assign(s) and transfer(s) unto
Please Insert Social Security
or Other Identifying Number of
Assignee
----------------------------
/ /
----------------------------- -----------------------------
-------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE
<PAGE>
17
- -------------------------------------------------------------
the within Security and all rights thereunder, hereby
irrevocably constituting and appointing
attorney to transfer said Security
- -----------------------
on the books of the Company, with full power of substitution
in the premises.
Dated:
- -------------------------- ----------------------------
Signature
NOTE NUMBER AGENT'S NAME
PAINE WEBBER GROUP INC.
____________________________________________________________
PRINCIPAL AMOUNT SETTLEMENT DATE TRADE DATE
U.S.$ (ORIGINAL ISSUE DATE)
<TABLE><CAPTION>
_______________________________________________________________________________________
<S> <C> <C> <C> <C>
MATURITY DATE TRUSTEE'S CUST. NO. INTEREST RATE BASIS TAXPAYER ID OR TRANSFERRED
SOC. SEC. NO.
OF PURCHASER
</TABLE>
________________________________________________________________________________
NAME AND ADDRESS OF REGISTERED OWNER MEDIUM-TERM
NOTE
PROGRAM
CHEMICAL BANK
TRUSTEE
________________________________________________________________________________
CUSTOMER'S RETAIN FOR THE TIME OF THE PLEASE SIGN AND SEE
COPY TAX PURPOSES TRANSACTION WILL RETURN ENCLOSED REVERSE SIDE
BE FURNISHED UPON RECEIPT
REQUEST OF THE
CUSTOMER
________________________________________________________________________________
- --------------------------------------------------------------------------------
REGISTERED REGISTERED
PAINE WEBBER GROUP INC.
MEDIUM-TERM SENIOR NOTE, SERIES C
Due from Nine Months to 30 Years from Date of Issue
(Floating Rate)
No. U.S.$
CUSIP NO.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID", "YIELD
TO MATURITY" AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED
UNDER THE APPROXIMATE METHOD) BELOW WILL BE COMPLETED SOLELY
FOR PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL
ISSUE DISCOUNT ("OID") RULES.
ORIGINAL ISSUE DATE: INITIAL INTEREST RATE: MATURITY DATE:
ISSUE PRICE: ORIGINAL ISSUE BUSINESS DAY
DISCOUNT SECURITY: CENTERS:
[ ] YES [ ] NO
REGULAR RECORD DATES: OPTIONAL PAYMENT OF
REDEMPTION: ADDITIONAL AMOUNTS:
[ ] YES [ ] NO [ ] YES [ ] NO
<PAGE>
2
INTEREST PAYMENT REDEMPTION DATES: OPTION TO ELECT
DATES: REPAYMENT:
[ ] YES [ ] NO
TOTAL AMOUNT OF OID: REDEMPTION PRICES: REPAYMENT DATES:
YIELD TO MATURITY: GLOBAL SECURITY: REPAYMENT PRICES:
[ ] YES [ ] NO
INITIAL ACCRUAL PERIOD DEPOSITARY: CALCULATION AGENT:
OID:
INTEREST RATE BASIS: MAXIMUM RATE: MINIMUM RATE:
SPREAD: SPREAD MULTIPLIER: INDEX MATURITY:
INTEREST RESET DATES: INTEREST DETERMINA- LIBOR BASIS:
TION DATES (IF OTHER [ ] Telerate Screen
THAN AS SPECIFIED ON Page 3750
THE REVERSE HEREOF): [ ] Reuters Screen
LIBO Page
OTHER TERMS:
PAINE WEBBER GROUP INC., a Delaware corporation
(herein called the "Company", which term includes any
successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay
to
, or registered assigns, the principal sum of
U.S. DOLLARS,
on the Maturity Date specified above, and to pay interest
thereon from and including the Original Issue Date shown
above or from and including the last date in respect of
which interest has been paid or provided for, as the case
may be. Interest will be paid on the Interest Payment Dates
shown above, commencing with the first such Interest Payment
Date following the Original Issue Date shown above, at a
rate determined in accordance with the provisions on the
reverse hereof until the principal hereof is paid or made
available for payment. The interest so payable, and
punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to
the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of
business on the Regular Record Date specified above (whether
or not a Business Day) next preceding such Interest Payment
Date, except that in the case of a Security with an Original
Issue Date that is after a Regular Record Date and before
the next following Interest Payment Date, interest payable
<PAGE>
3
on such Interest Payment Date will be paid to the Person in
whose name such Security was initially registered on the
Original Issue Date; provided, however, that interest
-------- -------
payable at Maturity shall be payable to the Person to whom
principal shall be payable. Except as otherwise provided in
the Indenture, any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to
the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice
whereof to be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or
be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities
exchange on which the Securities of this series may be
listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. If
this Security is not a Global Security, payments of interest
on this Security (other than interest payable at Maturity)
will be made by mailing a check to the person entitled
thereto at its address appearing in the Security Register
for the Securities on the applicable Regular Record Date.
Notwithstanding the foregoing, at the option of the Company
such payments may be made by wire transfer of immediately
available funds to an account with a bank located in the
continental United States (or other jurisdiction acceptable
to the Company and the Trustee), but only if appropriate
payment instructions have been received in writing by the
Trustee not less than 5 Business Days prior to the
applicable Interest Payment Date. Payments of principal of,
premium, if any, and interest will be made in immediately
available funds, if at maturity or upon earlier redemption,
then on the Maturity Date or the date fixed for redemption,
as applicable, upon surrender of this Security at the
principal corporate trust office of the Trustee in the
Borough of Manhattan, The City of New York, or such other
office or agency of the Company as may be designated by it
for such purpose in the Borough of Manhattan, The City of
New York (the "Notes Office"), provided that this Security
is presented to such office in time for the Trustee to make
such payments in such funds in accordance with its normal
procedures, and if upon early repayment, then on the
applicable Repayment Date, provided that the Holder shall
have complied with the requirements for repayment set forth
on the reverse hereof. If this Security is a Global
Security, the Depositary will be paid as agreed by the
<PAGE>
4
Company, the Trustee and the Depositary and beneficial
owners hereof will be paid in accordance with the
Depositary's and its participants' procedures in effect from
time to time. "Maturity" shall mean the date on which the
principal of this Security or an installment of principal
becomes due, whether on the Maturity Date specified above,
upon redemption or early repayment or otherwise.
If the registered owner of this Security (as
indicated above) is the Depositary or a nominee of the
Depositary, this Security is a Global Security and the
following legend is applicable: UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE FOR THE INDIVIDUAL SECURITIES REPRESENTED
HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITARY.
If the registered owner of this Security is The
Depository Trust Company or a nominee of The Depository
Trust Company, then unless this certificate is presented by
an authorized representative of The Depository Trust Company
(55 Water Street, New York, New York) to the Company or its
agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of CEDE &
CO., or such other name as requested by an authorized
representative of The Depository Trust Company and any
payment is made to CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL since the registered owner hereof, CEDE & CO., has
an interest herein.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS
OF THIS SECURITY SET FORTH IN FULL ON THE REVERSE HEREOF,
WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon
has been executed by the Trustee referred to on the reverse
hereof, directly or through an Authenticating Agent, by
manual signature of an authorized officer, this Security
shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
<PAGE>
5
Dated: PAINE WEBBER GROUP INC.
By___________________________
Title:
[Seal] Attest:
________________________
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series designated
therein referred to in the within-mentioned Indenture.
Dated:
CHEMICAL BANK
As Trustee
By_____________________________
Authorized Officer
<PAGE>
6
PAINE WEBBER GROUP INC.
MEDIUM-TERM SENIOR NOTE, SERIES C
Due from Nine Months to 30 Years
from Date of Issue
(Floating Rate)
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an
Indenture dated as of March 15, 1988, as amended by a First
Supplemental Indenture dated as of September 22, 1989, and
by a Second Supplemental Indenture dated as of March 22,
1991 (such Indenture, as so supplemented, is herein called
the "Indenture"), between the Company and Chemical Bank, as
Trustee (herein called the "Trustee", which term includes
any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities
and of the terms upon which the Securities are, and are to
be, authenticated and delivered. This Security is one of
the series designated on the face hereof.
If so specified on the face hereof, the Company
will, subject to the limitations and exceptions set forth
below, pay to a Holder of this Security who is a United
States Alien (as defined below) such additional amounts
("Additional Amounts") as may be necessary in order that
every net payment of the principal of, premium, if any, and
interest on this Security, after deduction or withholding by
the Company, the Trustee or any of the Company's paying
agents for or on account of any present or future tax,
assessment or other governmental charge imposed upon such
Holder with respect to or as a result of such payment by the
United States or any political subdivision or taxing
authority thereof or therein, will not be less than the
amount provided herein to be then due and payable. However,
the Company shall not be required to make any such payment
of Additional Amounts for or on account of:
(a) any tax, assessment or other governmental
charge that would not have been imposed but for (i) the
existence of any present or former connection between
<PAGE>
7
such Holder (or between a fiduciary, settlor or
beneficiary of, or a person holding a power over, such
Holder, if such Holder is an estate or a trust, or
between a member or shareholder of such Holder, if such
Holder is a partnership or corporation) and the United
States, including, without limitation, such Holder (or
such fiduciary, settlor, beneficiary, person holding a
power, member or shareholder) being or having been a
citizen or resident or treated as a resident thereof or
being or having been engaged in a trade or business
therein or being or having been present therein or
having or having had a permanent establishment therein,
or (ii) such Holder's present or former status as a
domestic or foreign personal holding company, a passive
foreign investment company or a controlled foreign
corporation, a private foundation or other tax-exempt
organization for United States Federal income tax
purposes or a corporation that accumulates earnings to
avoid United States Federal income tax;
(b) any tax, assessment or other governmental
charge that would not have been so imposed but for the
presentation by the Holder of this Security for payment
on a date more than 15 days after the date on which
such payment became due and payable or the date on
which payment thereof was duly provided for, whichever
occurs later;
(c) any estate, inheritance, gift, sales,
transfer, excise or personal property tax or any
similar tax, assessment or other governmental charge;
(d) any tax, assessment or other governmental
charge that would not have been imposed but for the
failure to comply with certification, information,
documentation or other reporting requirements
concerning the nationality, residence, identity or
connection with the United States of the Holder or
beneficial owner of this Security, if such compliance
is required by statute or by regulation of the United
States or any taxing authority thereof as a
precondition to relief or exemption from such tax,
assessment or other governmental charge;
(e) any tax, assessment or other governmental
charge that is (i) payable otherwise than by deduction
or withholding from payments of principal of or
premium, if any, or interest on this Security or
<PAGE>
8
(ii) required to be deducted or withheld by any paying
agent from any such payment, if (and only if) such
payment can be made without such deduction or
withholding by any other paying agent;
(f) any tax, assessment or other governmental
charge imposed on interest received by a person
holding, actually or constructively, 10 percent or more
of the total combined voting power of all classes of
stock of the Company entitled to vote (taking into
account the applicable attribution of ownership rules
under Section 871(h)(3) of the Internal Revenue Code of
1986, as amended (the "Code")) or that is a controlled
foreign corporation related to the Company (directly or
indirectly) through stock ownership; or
(g) any combination of items (a), (b), (c), (d),
(e) and (f);
nor will Additional Amounts be paid with respect to payment
of the principal of or premium, if any, or interest on this
Security to any United States Alien that is a fiduciary or
partnership or to a person other than the sole beneficial
owner of this Security to the extent that a beneficiary or
settlor with respect to such fiduciary or a member of such
partnership or a beneficial owner would not have been
entitled to the Additional Amounts had such beneficiary,
settlor, member or beneficial owner been the Holder of this
Security.
The Company, at its option, may redeem this
Security as a whole, but not in part, at any time that this
Security is registered in the name of a United States Alien,
on giving not less than 30 nor more than 45 days' notice to
the registered Holder hereof by mail in accordance with the
provisions of the Indenture (which notice shall be
irrevocable), at a redemption price equal to the principal
amount hereof (or, in the case of an Original Issue Discount
Security, the amount specified on the face hereof), together
with accrued interest to the redemption date, if the Company
determines that the Company has or will become obligated to
pay Additional Amounts on this Security on the next
succeeding Interest Payment Date as a result of any change
in, or amendment to, the laws (or any regulations or rulings
promulgated thereunder) of the United States or any
political subdivision or taxing authority thereof or therein
affecting taxation, or any change in the application or
official interpretation of such laws, regulations or rulings
<PAGE>
9
by a taxing authority, court or regulatory agency, whether
or not rendered or taken with respect to the Company, or any
action taken by any taxing authority, court or regulatory
agency (including any change in administrative policy or
enforcement practice of such taxing authority), whether or
not taken with respect to the Company, which change or
amendment becomes effective, or action is taken, on or after
the Original Issue Date, and such obligation cannot be
avoided by the Company taking reasonable measures available
to it. Prior to giving any notice of redemption pursuant to
this paragraph, the Company shall deliver to the Trustee an
Officers' Certificate stating that the Company is entitled
to effect such redemption and setting forth a statement of
facts showing that the conditions precedent to the right of
the Company so to redeem have occurred, and an opinion of
independent legal counsel addressed to the Company and the
Trustee to the effect that the Company has or will become
obligated to pay such Additional Amounts as a result of such
change or amendment. Notice of the intention of the Company
to redeem this Security shall not be given earlier than 90
days prior to the earliest date that the obligation to pay
Additional Amounts would arise were a payment in respect of
this Security due on such date. From and after any
redemption date, if monies for the redemption of this
Security pursuant to this paragraph shall have been made
available for redemption on such redemption date, this
Security shall cease to bear interest and the only right of
the Holder of this Security shall be to receive payment of
the redemption price of this Security and all unpaid
interest accrued to such redemption date. For purposes of
this paragraph, the Trustee may rely on an Officers'
Certificate as to whether the registered Holder hereof is a
United States Alien.
The term "United States Alien" means any person
who, for United States Federal income tax purposes, is a
foreign corporation, a nonresident alien individual, a
nonresident alien fiduciary of a foreign estate or trust, or
a foreign partnership, one or more of the members of which
is, for United States Federal income tax purposes, a foreign
corporation, a nonresident alien individual or a nonresident
alien fiduciary of a foreign estate or trust.
If so specified on the face hereof, the Company
may at its option redeem this Security in whole or from time
to time in part on the date or dates designated as
Redemption Dates on the face hereof at the Redemption Price
or Redemption Prices designated on the face hereof, together
<PAGE>
10
with accrued interest to the date of redemption. The
Company may exercise such option by mailing or causing the
Trustee to mail a notice of such redemption at least 30 but
not more than 45 days prior to the date of redemption. In
the event of redemption of this Security in part only, a new
Security or Securities of like tenor and with the same terms
and conditions for the unredeemed portion hereof shall be
issued in the name of the Holder hereof upon the
cancellation hereof. If less than all of the Securities
having the same terms (except as to principal amount and
date of issuance) as this Security are to be redeemed, the
Securities to be redeemed shall be selected by the Trustee
by such method as the Trustee shall deem fair and
appropriate and otherwise as provided under the Indenture.
If so specified on the face hereof, this Security
will be repayable prior to the Maturity Date at the option
of the Holder on the date or dates or under the
circumstances designated as Repayment Dates on the face
hereof at the Repayment Price or Repayment Prices designated
on the face hereof together with accrued interest to the
date of repayment. In order for this Security to be repaid,
the Trustee must receive at the Notes Office at least 30 but
not more than 45 days prior to the applicable Repayment Date
(a) appropriate wire instructions and (b) either (i) this
Security with the form below entitled "Option to Elect
Repayment" duly completed or (ii) a telegram, telex,
facsimile transmission or letter from a member of a national
securities exchange or the National Association of
Securities Dealers, Inc., or a commercial bank or trust
company in the United States or any other "eligible
guarantor institution" (as such term is defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended) setting forth the name of the Holder of this
Security, the principal amount of this Security, the portion
of the principal amount of this Security to be repaid, the
certificate number or a description of the tenor and terms
of this Security, a statement that the option to elect
repayment is being exercised thereby and a guarantee that
this Security with the form below entitled "Option to Elect
Repayment" duly completed will be received by the Trustee
not later than five Business Days after the date of such
telegram, telex, facsimile, transmission or letter. If the
procedure described in clause (ii) of the preceding sentence
is followed, this Security with such form duly completed
must be received by the Trustee by such fifth Business Day.
Any tender of this Security for repayment shall be
irrevocable. The repayment option may be exercised by the
<PAGE>
11
Holder of this Security for less than the entire principal
amount of this Security provided that the principal amount
of the Security remaining outstanding after repayment is an
authorized denomination. Upon such partial repayment this
Security shall be cancelled and a new Security or Securities
of like tenor and with the same terms and conditions for the
remaining principal amount hereof shall be issued in the
name of the Holder of this Security or as otherwise
specified in the form entitled "Option to Elect Repayment".
After exercise of the repayment option, no transfer or
exchange of this Security (or, if this Security is to be
repaid in part, the portion hereof to be repaid) will be
permitted. All questions as to the validity, eligibility
(including time of receipt) and acceptance of this Security
for repayment will be determined by the Company, whose
determination will be final, binding and non-appealable.
The Indenture provides that, with certain limited
exceptions, the Company will not, nor will it permit any
Restricted Subsidiary (as defined in the 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.
The interest rate in effect with respect to this
Security from and including the Original Issue Date to but
excluding the first Interest Reset Date specified on the
face hereof following the Original Issue Date will be the
Initial Interest Rate specified on the fact hereof;
provided, however, that if the interest rate hereon is reset
- -------- -------
daily or weekly and this Security was originally issued
between a Regular Record Date and an Interest Payment Date,
the Initial Interest Rate shall be the rate for the period
from and including the Original Issue Date to but excluding
the first Interest Reset Date on or after the first Interest
Payment Date specified above following the Original Issue
Date. Commencing with the first Interest Reset Date
following the Original Issue Date or the first Interest
Reset Date on or after the first Interest Payment Date, as
applicable, the rate at which interest on this Security is
payable shall be adjusted on each Interest Reset Date;
provided, however, that the interest rate in effect hereon
- -------- -------
for the 10 days immediately prior to Maturity shall be that
in effect on the 10th day preceding such Maturity. Each
such adjusted rate shall be applicable on and after the
Interest Reset Date to which it relates to but excluding the
next succeeding Interest Reset Date or until Maturity. If
<PAGE>
12
any Interest Reset Date specified on the face hereof would
otherwise be a day that is not a Business Day (as
hereinafter defined), such Interest Reset Date shall be
postponed to the next day that is a Business Day, except
that, if the Interest Rate Basis specified on the face
hereof is LIBOR, then if such next Business Day is in the
next succeeding calendar month, such Interest Reset Date
shall be the next preceding Business Day. Subject to
applicable provisions of law and except as specified herein,
if the Interest Rate Basis specified on the face hereof is
the Commercial Paper Rate, Prime Rate, Federal Funds Rate,
LIBOR or the Treasury Rate, then the rate of interest on
this Security on and after each Interest Reset Date on which
an adjustment is made shall be the rate determined in
accordance with the provisions of the applicable heading
below.
DETERMINATION OF COMMERCIAL PAPER RATE. If the
Interest Rate Basis specified on the face hereof is the
Commercial Paper Rate, then the interest rate on this
Security with respect to each Interest Reset Date shall be
calculated by the Calculation Agent and shall be the
Commercial Paper Rate on the Interest Determination Date
pertaining to such Interest Reset Date, plus or minus the
Spread, if any, or multiplied by the Spread Multiplier, if
any, specified on the face hereof. "Commercial Paper Rate"
means, with respect to each such Interest Determination
Date, the Money Market Yield (calculated as described below)
of the rate on such date for commercial paper having the
Index Maturity specified on the face hereof as published by
the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates" or
any successor publication of the Board of Governors of the
Federal Reserve System ("H.15(519)") under the heading
"Commercial Paper". In the event that such rate is not
published prior to 9:00 A.M., New York City time, on the
Calculation Date (as defined below) pertaining to such
Interest Determination Date, then the Commercial Paper Rate
shall be the Money Market Yield of the rate on such Interest
Determination Date for commercial paper having the Index
Maturity specified on the face hereof as published by the
Federal Reserve Bank of New York in its daily statistical
release, "Composite 3:30 P.M. Quotations for U.S. Government
Securities" or any successor publication of the Federal
Reserve Bank of New York ("Composite Quotations") under the
heading "Commercial Paper". If by 3:00 P.M., New York City
time, on such Calculation Date such rate is not yet
published in Composite Quotations, the rate for that
<PAGE>
13
Interest Determination Date shall be calculated by the
Calculation Agent and shall be the Money Market Yield of the
arithmetic mean of the offered rates, as of 11:00 A.M., New
York City time, on that Interest Determination Date, of
three leading dealers of commercial paper in The City of New
York selected by the Calculation Agent for commercial paper
of the Index Maturity specified on the face hereof placed
for an industrial issuer whose bond rating is "AA", or the
equivalent, from at least one nationally recognized rating
agency; provided, however, that if the dealers selected as
-------- -------
aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Commercial Paper Rate will
be the Commercial Paper Rate in effect on such Interest
Determination Date.
"Money Market Yield" means a yield (expressed as a
percentage) calculated in accordance with the following
formula:
D x 360
Money Market Yield = ------------- x 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper,
quoted on a bank discount basis and expressed as a decimal;
and "M" refers to the actual number of days in the interest
period for which interest is being calculated.
DETERMINATION OF PRIME RATE. If the Interest Rate
Basis specified on the face hereof is the Prime Rate, then
the interest rate on this Security with respect to each
Interest Reset Date shall be calculated by the Calculation
Agent and shall be the Prime Rate on the Interest
Determination Date pertaining to such Interest Reset Date,
plus or minus the Spread, if any, or multiplied by the
Spread Multiplier, if any, specified on the face hereof.
"Prime Rate" means, with respect to each such Interest
Determination Date, the arithmetic mean of the prime or base
rates quoted on the basis of the actual number of days in
the year divided by 360 as of the close of business on such
Interest Determination Date by three major money center
banks in The City of New York selected by the Calculation
Agent. If fewer than three such quotations are provided,
the Prime Rate shall be determined on the basis of the
quotations provided, if any, together with the rates
furnished on such date in The City of New York by the
appropriate number of substitute banks or trust companies
organized and doing business under the laws of the United
States, or any State thereof, having total equity capital of
<PAGE>
14
at least U.S.$750 million and being subject to supervision
or examination by Federal or State authority, selected by
the Calculation Agent to provide such rate or rates;
provided, however, that if the banks or trust companies
- -------- -------
selected as aforesaid are not quoting as mentioned in this
sentence, the Prime Rate will be the Prime Rate in effect on
such Interest Determination Date.
DETERMINATION OF FEDERAL FUNDS RATE. If the
Interest Rate Basis specified on the face hereof is the
Federal Funds Rate, then the interest rate on this Security
with respect to each Interest Reset Date shall be calculated
by the Calculation Agent and shall be the Federal Funds Rate
on the Interest Determination Date pertaining to such
Interest Reset Date, plus or minus the Spread, if any, or
multiplied by the Spread Multiplier, if any, specified on
the face hereof. "Federal Funds Rate" means, with respect
to each such Interest Determination Date, the rate on such
date for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)" or, if not so published
by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the Federal
Funds Rate will be the interest rate on such Interest
Determination Date as published in Composite Quotations
under the heading "Federal Funds/Effective Rate". If such
rate is not yet published in Composite Quotations by 3:00
P.M., New York City time, on such Calculation Date, the
Federal Funds Rate for such Interest Determination Date will
be the rate on such date made publicly available by the
Federal Reserve Bank of New York which is equivalent to the
rate which appears in H.15(519) under the heading "Federal
Funds (Effective)"; provided, however, that if such rate is
-------- -------
not made publicly available by the Federal Reserve Bank of
New York by 9:00 A.M., New York City time, on such
Calculation Date, the Federal Funds Rate will be the Federal
Funds Rate in effect on such Interest Determination Date.
DETERMINATION OF LIBOR. If the Interest Rate
Basis specified on the face hereof is LIBOR, then the
interest rate on this Security with respect to each Interest
Reset Date shall be calculated by the Calculation Agent and
shall be LIBOR on the Interest Determination Date pertaining
to such Interest Reset Date, plus or minus the Spread, if
any, or multiplied by the Spread Multiplier, if any,
specified on the face hereof. "LIBOR" will be determined
with respect to each such Interest Determination Date by the
Calculation Agent in accordance with the following
provisions:
<PAGE>
15
LIBOR will be determined on the basis of either
(a) if the LIBOR Basis specified on the face hereof is
Telerate Screen Page 3750, the rate for deposits in
U.S. dollars having the Index Maturity specified on the
face hereof, commencing on the second London Banking
Day (as defined below) immediately following such
Interest Determination Date, which appears on Telerate
Screen Page 3750 (as defined below) as of 11:00 A.M.,
London time, on such Interest Determination Date, if
such rate appears on Telerate Screen Page 3750, or
(b) if the LIBOR Basis specified on the face hereof is
the Reuters Screen LIBO Page, the arithmetic mean, as
determined by the Calculation Agent, of the offered
rates for deposits in U.S. dollars of not less than
$1,000,000 having the Index Maturity specified on the
face hereof, commencing on the second London Banking
Day immediately following such Interest Determination
Date, which appear on the Reuters Screen LIBO Page (as
defined below) as of 11:00 A.M., London time, on such
Interest Determination Date, if at least two such
offered rates appear on the Reuters Screen LIBO Page.
"Telerate Screen Page 3750" means the display
designated as page "British Bankers Assoc. Interest
Settlement Rates" on the Telerate system, page 3750 (or
such other page or pages as may replace such page on
the system for the purpose of displaying such rates).
"Reuters Screen LIBO Page" means the display designated
as page "LIBO" on the Reuters Monitor Money Rates
Service (or such other page or pages as may replace the
LIBO page on that service for the purpose of displaying
London interbank offered rates of major banks). If no
rate appears on Telerate Page 3750 or if fewer than two
offered rates appear on the Reuters Screen LIBO Page,
as applicable, LIBOR for such Interest Determination
Date will be determined as described in the following
paragraph. If neither Telerate Screen Page 3750 nor
the Reuters Screen LIBO Page is specified on the face
hereof as the LIBOR Basis, LIBOR will be determined as
if Telerate Screen Page 3750 had been specified.
With respect to an Interest Determination Date on
which no rate appears on Telerate Page 3750 as
described in (a) in the preceding paragraph, if the
LIBOR Basis specified on the face hereof is Telerate
Screen Page 3750, or on which fewer than two offered
rates appear on the Reuters Screen LIBO Page as
described in (b) in the preceding paragraph, if the
LIBOR Basis specified on the face hereof is the Reuters
<PAGE>
16
Screen LIBO Page, LIBOR will be determined on the basis
of the rates at approximately 11:00 A.M., London time,
on such Interest Determination Date at which deposits
in U.S. dollars having the Index Maturity specified on
the face hereof commencing on the second London Banking
Day immediately following such Interest Determination
Date and in a principal amount equal to an amount of
not less than U.S.$1,000,000 that in the Calculation
Agent's judgment is representative for a single
transaction in such market at such time, are offered to
prime banks in the London interbank market by four
major banks in the London interbank market selected by
the Calculation Agent. The Calculation Agent will
request the principal London office of each of such
banks to provide a quotation of its rate. If at least
two such quotations are provided, LIBOR for such
Interest Determination Date will be the arithmetic mean
of such quotations. If fewer than two quotations are
provided, LIBOR for such Interest Determination Date
will be the arithmetic mean of the rates quoted at
approximately 11:00 A.M., New York City time, on such
Interest Determination Date by three major banks in The
City of New York, selected by the Calculation Agent,
for loans in U.S. dollars to leading European banks
having the specified Index Maturity commencing on the
second London Banking Day immediately following such
Interest Determination Date and in a principal amount
equal to an amount of not less than U.S.$1,000,000 that
in the Calculation Agent's judgment is representative
for a single transaction in such market at such time;
provided, however, that if the banks selected as
-------- -------
aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR with respect to such
Interest Determination Date will be LIBOR in effect on
such Interest Determination Date.
DETERMINATION OF TREASURY RATE. If the Interest
Rate Basis specified on the face hereof is the Treasury
Rate, then the interest rate on this Security with respect
to each Interest Reset Date shall be calculated by the
Calculation Agent and shall be the Treasury Rate on the
Interest Determination Date pertaining to such Interest
Reset Date, plus or minus the Spread, if any, or multiplied
by the Spread Multiplier, if any, specified on the face
hereof. "Treasury Rate" means, with respect to each such
Interest Determination Date, the rate for the most recent
auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified on
<PAGE>
17
the face hereof as published in H.15(519) under the heading
"U.S. Government Securities--Treasury Bills--Auction Average
(Investment)" or, if not so published by 9:00 A.M., New York
City time, on the Calculation Date pertaining to such
Interest Determination Date, the auction average rate
(expressed as a bond equivalent, on the basis of a year of
365 or 366 days, as applicable, and applied on a daily
basis) for such auction as otherwise made available by the
United States Department of the Treasury. In the event that
the results of the auction of Treasury bills having the
Index Maturity specified on the face hereof are not
published or made available as provided above by 3:00 P.M.,
New York City time, on such Calculation Date, or if no such
auction is held in a particular week (or on the preceding
Friday, if applicable), then the Treasury Rate shall be
calculated by the Calculation Agent and shall be a yield to
maturity (expressed as a bond equivalent, on the basis of a
year of 365 or 366 days, as applicable, and applied on a
daily basis) of the arithmetic mean of the secondary market
bid rates as of approximately 3:30 P.M., New York City time,
on such Interest Determination Date, of three leading
primary United States government securities dealers selected
by the Calculation Agent, for the issue of Treasury bills
with a remaining maturity closest to the specified Index
Maturity; provided, however, that if the dealers selected as
-------- -------
aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Treasury Rate will be the
Treasury Rate in effect on such Interest Determination Date.
Unless otherwise specified on the face hereof, the
Interest Determination Date pertaining to an Interest Reset
Date for this Security will be, if the Interest Rate Basis
for this Security is the Commercial Paper Rate or the Prime
Rate, the second New York Business Day (as defined below)
preceding such Interest Reset Date; if the Interest Rate
Basis for this Security is LIBOR, the second London Banking
Day preceding such Interest Reset Date; if the Interest Rate
Basis for this Security is the Federal Funds Rate, the first
New York Business Day preceding such Interest Reset Date;
and if the Interest Rate Basis for this Security is the
Treasury Rate, the day of the week in which such Interest
Reset Date falls on which Treasury bills would normally be
auctioned. Treasury bills are usually sold at auction on
Monday of each week, unless that day is a legal holiday, in
which case the auction is usually held on the following
Tuesday, except that such auction may be held on the
preceding Friday. If, as the result of a legal holiday, an
auction is so held on the preceding Friday, such Friday will
<PAGE>
18
be the Interest Determination Date pertaining to the
Interest Reset Date occurring in the next succeeding week.
If an auction date shall fall on any Interest Reset Date for
such a Note, then such Interest Reset Date shall instead be
the first New York Business Day immediately following such
auction date. The "Calculation Date" pertaining to any
Interest Determination Date will be the earlier of (i) the
tenth day after such Interest Determination Date or, if any
such day is not a New York Business Day, the next succeeding
New York Business Day and (ii) the New York Business Day
next preceding the relevant Interest Payment Date or
Maturity, as the case may be.
All percentages resulting from any calculations on
this Security will be rounded, if necessary, to the nearest
one hundred-thousandth of a percentage point (with five one-
millionths of a percentage point being rounded upward) and
all currency amounts used in or resulting from such
calculations will be rounded, if necessary, to the nearest
one-hundredth of a unit (with .005 of a unit being rounded
upward).
Notwithstanding the foregoing, the interest rate
hereon shall not be greater than the Maximum Rate, if any,
or less than the Minimum Rate, if any, shown on the face
hereof. In addition, the interest rate on this Security
will in no event be higher than the maximum rate permitted
by New York law as the same may be modified by United States
law of general applicability. The Calculation Agent shall
calculate the interest rate on this Security in accordance
with the foregoing on or before each Calculation Date and
shall promptly thereafter notify the Company and the Trustee
of such interest rate. Any such calculation by the
Calculation Agent shall be conclusive and binding on the
Company, the Trustee and the Holder of this Security, absent
manifest error.
The Calculation Agent will, upon the request of
the Holder of this Security, provide to such Holder the
interest rate hereon then in effect and, if determined, the
interest rate which will become effective as of the next
Interest Reset Date.
Interest payments on each Interest Payment Date
for this Security and at Maturity will include interest
accrued from and including the later of the Original Issue
Date or the most recent date to which interest has been paid
or provided for to but excluding such Interest Payment Date
<PAGE>
19
or to but excluding Maturity. Notwithstanding the
foregoing, if the interest rate hereon is reset daily or
weekly, interest payable on any Interest Payment Date or at
Maturity will include interest accrued from and including
the later of the Original Issue Date hereof and the day
following the most recent Regular Record Date to which
interest hereon has been paid or provided for to and
including the next preceding Regular Record Date or Maturity
except that, if this Security was issued between a Regular
Record Date and the next succeeding Interest Payment Date,
interest paid on such Interest Payment Date will include
interest accrued from and including such Original Issue Date
to but excluding such Interest Payment Date, and interest
paid on the Interest Payment Date following such Interest
Payment Date will include interest accrued from and
including such Interest Payment Date (or from and including
such Original Issue Date, if interest was not paid or
provided for on such Interest Payment Date) to and including
the Regular Record Date following such Interest Payment
Date. Accrued interest hereon from the Original Issue Date
or from the last date to which interest hereon has been paid
or provided for, as the case may be, shall be an amount
calculated by multiplying the face amount hereof by an
accrued interest factor. Such accrued interest factor shall
be computed by adding the interest factor calculated for
each day from the Original Issue Date or from the last date
to which interest shall have been paid or provided for, as
the case may be, to the date for which accrued interest is
being calculated. The interest factor (expressed as a
decimal) for each such day shall be computed by dividing the
interest rate (expressed as a decimal) applicable to such
day by 360, if the Interest Rate Basis specified on the face
hereof is a Commercial Paper Rate, Prime Rate, Federal Funds
Rate or LIBOR, or the actual number of days in the year, if
the Interest Rate Basis specified on the face hereof is the
Treasury Rate.
Any payment of principal of (and premium, if any)
or interest required to be made on this Security on a day
which is not a Business Day need not be made on such day,
but may be made on the next day which is such a Business Day
with the same force and effect as if made on such day, and
no interest shall accrue as a result of such delayed
payment, except that, if the Interest Rate Basis specified
on the face hereof is LIBOR, then if such next Business Day
is in the next succeeding calendar month, such payment shall
be made on the immediately preceding Business Day.
"Business Day" means each day, other than a Saturday or
<PAGE>
2O
Sunday, that is (i) not a day on which banking institutions
in the Business Day Centers specified on the face hereof are
authorized or obligated by law or executive order to close
and (ii) if the Interest Rate Basis specified on the face
hereof is LIBOR, a London Banking Day. As used herein,
"London Banking Day" shall mean any day on which dealings in
deposits in U.S. dollars are transacted in the London
interbank market. "New York Business Day", as used herein,
shall mean each day, other than a Saturday or Sunday, that
is not a day on which banking institutions in The City of
New York are authorized or obligated by law or executive
order to close.
If an Event of Default with respect to Securities
of this series shall occur and be continuing, the principal
of the Securities of this series may be declared due and
payable in the manner and with the effect provided in the
Indenture.
Any terms or conditions of this Security ("Other
Terms") specified on the face hereof under "Other Terms"
shall apply to this Security. In the event of any conflict
between any Other Terms and any other terms or conditions of
this Security, the Other Terms shall control.
Notwithstanding anything herein to the contrary,
if this Security is an Original Issue Discount Security, the
amount payable in the event of acceleration following an
Event of Default prior to the Maturity Date hereof in lieu
of the principal amount due at the Maturity Date hereof
shall be the Amortized Face Amount of this Security as of
the date of declaration of acceleration. The "Amortized
Face Amount" of this Security shall be an amount equal to
(a) the Issue Price (as set forth on the face hereof) plus
(b) that portion of the difference between the Issue Price
and the principal amount hereof that has accrued at the
Yield to Maturity (as set forth on the face hereof)
(computed in accordance with generally accepted United
States bond yield computation principles) at the date as of
which the Amortized Face Amount is calculated, but in no
event shall the Amortized Face Amount of this Security
exceed its principal amount.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification
of the rights and obligations of the Company and the rights
of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and
<PAGE>
21
the Trustee with the consent of the Holders of 66-2/3% in
principal amount of the Securities at the time Outstanding
of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages
in principal amount of the Securities of each series at the
time Outstanding, on behalf of the Holders of all Securities
of such series, to waive compliance by the Company with
certain provisions of the Indenture and to waive certain
past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon
all future Holders of this Security and of any Security
issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of
the Indenture, no Holder of any Security of this series will
have any right to institute any proceeding with respect to
the Indenture or for any remedy thereunder, unless such
Holder shall have previously given to the Trustee written
notice of a continuing Event of Default with respect to this
series, the Holders of not less than 25% in principal amount
of the Outstanding Securities of this series shall have made
written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, the Trustee
shall not have received from the Holders of a majority in
principal amount of the Outstanding Securities of this
series a direction inconsistent with such request and the
Trustee shall have failed to institute such proceeding
within 60 days; provided, however, that such limitations do
-------- -------
not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of (and premium, if
any) or interest on this Security on or after the respective
due dates expressed herein.
No reference herein to the Indenture and no
provision of this Security or of the Indenture shall alter
or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of (and premium, if
any) and interest on this Security at the times, places and
rates, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to
certain limitations therein set forth, the transfer of this
Security is registrable in the Security Register upon
surrender of this Security for registration of transfer to
the Security Registrar at the Notes Office duly endorsed by,
<PAGE>
22
or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized
denominations and having the same terms and conditions and
for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The Securities of this series are issuable only in
registered form, without coupons, in denominations of U.S.
$100,000 and any integral multiple of U.S.$1,000 in excess
thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this
series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of
different authorized dominations and having the same terms
and conditions, as requested by the Holder surrendering the
same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security is overdue,
and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture and the Securities shall be governed
by and construed in accordance with the laws of the State of
New York.
All terms used in this Security which are defined
in the Indenture and are not otherwise defined herein shall
have the meanings assigned to them in the Indenture.
<PAGE>
23
OPTION TO ELECT REPAYMENT
The undersigned owner of this Security hereby
irrevocably elects to have the Company repay the principal
amount of this Security or portion hereof below designated
at the applicable Repayment Price indicated on the face
hereof plus interest accrued to the applicable Repayment
Date.
Dated:______________
____________________
Signature
Sign exactly as name appears
on the front of this Security
[SIGNATURE GUARANTEE -
required only if Securities
are to be issued and delivered
to other than the registered
holder]
Principal amount to be Fill in for
repaid, if amount to be registration of
repaid is less than the Securities if to be
principal amount of this issued otherwise than
Security (principal amount to registered holder:
remaining must be an
authorized denomination)
Name:_________________
U.S.$______________
Address:______________
______________
(Please print
name and address
including zip
code)
SOCIAL SECURITY OR
OTHER TAXPAYER ID
NUMBER
______________________
<PAGE>
24
---------------------
ABBREVIATIONS
The following abbreviations, when used in the
inscription on the face of this instrument, shall be
construed as though they were written out in full according
to applicable laws or regulations:
UNIF GIFT MIN ACT...
TEN COM - as tenants in .........Custodian..........
common (Cust) (Minor)
TEN ENT - as tenants by Under Uniform Gifts to
the entireties Minors Act
JT TEN - as joint tenants
with right of
survivorship and ............................
not as tenants in (State)
common
Additional abbreviations may also be used though
not in the above list.
____________________
FOR VALUED RECEIVED, the undersigned hereby
sell(s), assign(s) and transfer(s) unto
Please Insert Social Security
or Other Identifying Number of
Assignee
________________________________
/ /
/______________________________ /__________________________
___________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE
<PAGE>
25
____________________________________________________________
the within Security and all rights thereunder, hereby
irrevocably constituting and appointing
_______________________ attorney to transfer said Security
on the books of the Company, with full power of substitution
in the premises.
Dated:______________ ______________________________
Signature
NOTE NUMBER AGENT'S NAME
PAINE WEBBER GROUP INC.
- ----------------------------------------------------
PRINCIPAL AMOUNT SETTLEMENT DATE TRADE DATE
U.S.$ (ORIGINAL ISSUE DATE)
- --------------------------------------------------------------------------------
MATURITY DATE TRUSTEE'S CUST. NO. INTEREST RATE TAXPAYER ID OR TRANSFERRED
BASIS SOC. SEC. NO.
OF PURCHASER
- --------------------------------------------------------------------------------
NAME AND ADDRESS OF REGISTERED OWNER MEDIUM-TERM
NOTE
PROGRAM
CHEMICAL BANK DELAWARE
TRUSTEE
CHEMICAL BANK
AUTHENTICATING AGENT
<TABLE><CAPTION>
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CUSTOMER'S RETAIN FOR THE TIME OF THE TRANSACTION WILL BE PLEASE SIGN AND RETURN SEE
COPY TAX PURPOSES FURNISHED UPON REQUEST OF THE CUSTOMER ENCLOSED RECEIPT REVERSE SIDE
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
REGISTERED REGISTERED
</TABLE>
PAINE WEBBER GROUP INC.
MEDIUM-TERM SUBORDINATED NOTE, SERIES D
Due from Nine Months to 30 Years from Date of Issue
(Floating Rate)
No. U.S.$
CUSIP NO.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID", "YIELD
TO MATURITY" AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED
UNDER THE APPROXIMATE METHOD) BELOW WILL BE COMPLETED SOLELY
FOR PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL
ISSUE DISCOUNT ("OID") RULES.
ORIGINAL ISSUE DATE: INITIAL INTEREST MATURITY DATE:
RATE:
ISSUE PRICE: ORIGINAL ISSUE BUSINESS DAY
DISCOUNT SECURITY: CENTERS:
[ ] YES [ ] NO
<PAGE>
2
REGULAR RECORD DATES: OPTIONAL PAYMENT OF
REDEMPTION: ADDITIONAL AMOUNTS:
[ ] YES [ ] NO [ ] YES [ ] NO
INTEREST PAYMENT DATES: REDEMPTION DATES: OPTION TO ELECT
REPAYMENT:
[ ] YES [ ] NO
TOTAL AMOUNT OF OID: REDEMPTION PRICES: REPAYMENT DATES:
YIELD TO MATURITY: GLOBAL SECURITY: REPAYMENT PRICES:
[ ] YES [ ] NO
INITIAL ACCRUAL DEPOSITARY: CALCULATION AGENT:
PERIOD OID:
INTEREST RATE BASIS: MAXIMUM RATE: MINIMUM RATE:
SPREAD: SPREAD MULTIPLIER: INDEX MATURITY:
INTEREST RESET DATES: INTEREST LIBOR BASIS:
DETERMINATION DATES [ ] Telerate
(IF OTHER THAN AS Screen
SPECIFIED ON THE Page 3750
REVERSE HEREOF): [ ] Reuters Screen
LIBO Page
OTHER TERMS:
PAINE WEBBER GROUP INC., a Delaware corporation
(herein called the "Company", which term includes any
successor corporation under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay
to
, or registered assigns, the principal sum of
U.S. DOLLARS,
on the Maturity Date specified above, and to pay interest
thereon from and including the Original Issue Date shown
above or from and including the last date in respect of
which interest has been paid or provided for, as the case
may be. Interest will be paid on the Interest Payment Dates
shown above, commencing with the first such Interest Payment
Date following the Original Issue Date shown above, at a
rate determined in accordance with the provisions on the
reverse hereof until the principal hereof is paid or made
available for payment. The interest so payable, and
punctually paid or duly provided for, on any Interest
<PAGE>
3
Payment Date will, as provided in such Indenture, be paid to
the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of
business on the Regular Record Date specified above (whether
or not a Business Day) next preceding such Interest Payment
Date, except that in the case of a Security with an Original
Issue Date that is after a Regular Record Date and before
the next following Interest Payment Date, interest payable
on such Interest Payment Date will be paid to the Person in
whose name such Security was initially registered on the
Original Issue Date; provided, however, that interest
-------- -------
payable at Maturity shall be payable to the Person to whom
principal shall be payable. Except as otherwise provided in
the Indenture, any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to
the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice
whereof to be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or
be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities
exchange on which the Securities of this series may be
listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. If
this Security is not a Global Security, payments of interest
on this Security (other than interest payable at Maturity)
will be made by mailing a check to the person entitled
thereto at its address appearing in the Security Register
for the Securities on the applicable Regular Record Date.
Notwithstanding the foregoing, at the option of the Company
such payments may be made by wire transfer of immediately
available funds to an account with a bank located in the
continental United States (or other jurisdiction acceptable
to the Company and Chemical Bank, as Paying Agent), but only
if appropriate payment instructions have been received in
writing by the Paying Agent not less than 5 Business Days
prior to the applicable Interest Payment Date. Payments of
principal of, premium, if any, and interest will be made in
immediately available funds, if at maturity or upon earlier
redemption, then on the Maturity Date or the date fixed for
redemption, as applicable, upon surrender of this Security
at the principal corporate trust office of the Paying Agent
in the Borough of Manhattan, The City of New York, or such
other office or agency of the Company as may be designated
by it for such purpose in the Borough of Manhattan, The City
<PAGE>
4
of New York (the "Notes Office"), provided that this
Security is presented to such office in time for the Paying
Agent to make such payments in such funds in accordance with
its normal procedures, and if upon early repayment, then on
the applicable Repayment Date, provided that the Holder
shall have complied with the requirements for repayment set
forth on the reverse hereof. If this Security is a Global
Security, the Depositary will be paid as agreed by the
Company, the Trustee, the Paying Agent and the Depositary
and beneficial owners hereof will be paid in accordance with
the Depositary's and its participants' procedures in effect
from time to time. "Maturity" shall mean the date on which
the principal of this Security or an installment of
principal becomes due, whether on the Maturity Date
specified above, upon redemption or early repayment or
otherwise.
If the registered owner of this Security (as
indicated above) is the Depositary or a nominee of the
Depositary, this Security is a Global Security and the
following legend is applicable: UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE FOR THE INDIVIDUAL SECURITIES REPRESENTED
HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITARY.
If the registered owner of this Security is The
Depository Trust Company or a nominee of The Depository
Trust Company, then unless this certificate is presented by
an authorized representative of The Depository Trust Company
(55 Water Street, New York, New York) to the Company or its
agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of CEDE &
CO., or such other name as requested by an authorized
representative of The Depository Trust Company and any
payment is made to CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL since the registered owner hereof, CEDE & CO., has
an interest herein.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS
OF THIS SECURITY SET FORTH IN FULL ON THE REVERSE HEREOF,
WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
<PAGE>
5
Unless the certificate of authentication hereon
has been executed by the Trustee referred to on the reverse
hereof, directly or through an Authenticating Agent, by
manual signature of an authorized officer, this Security
shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated: PAINE WEBBER GROUP INC.
By
-------------------------
Title:
[Seal] Attest:
-------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series designated
therein referred to in the within-mentioned Indenture.
Dated:
CHEMICAL BANK DELAWARE OR CHEMICAL BANK DELAWARE
As Trustee As Trustee
By
-------------------------- By Chemical Bank
Authorized Officer As Authenticating Agent
By
--------------------------
Authorized Officer
<PAGE>
6
PAINE WEBBER GROUP INC.
MEDIUM-TERM SUBORDINATED NOTE, SERIES D
Due from Nine Months to 30 Years
from Date of Issue
(Floating Rate)
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an
Indenture dated as of March 15, 1988, as amended by a First
Supplemental Indenture dated as of September 22, 1989, by a
Second Supplemental Indenture dated as of March 22, 1991,
and by a Third Supplemental Indenture dated as of November
30, 1993 (such Indenture, as so supplemented, is herein
called the "Indenture"), between the Company and Chemical
Bank Delaware, as Trustee (herein called the "Trustee",
which term includes any successor trustee under the
Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee
and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on
the face hereof.
If so specified on the face hereof, the Company
will, subject to the limitations and exceptions set forth
below, pay to a Holder of this Security who is a United
States Alien (as defined below) such additional amounts
("Additional Amounts") as may be necessary in order that
every net payment of the principal of, premium, if any, and
interest on this Security, after deduction or withholding by
the Company, the Trustee or any of the Company's paying
agents for or on account of any present or future tax,
assessment or other governmental charge imposed upon such
Holder with respect to or as a result of such payment by the
United States or any political subdivision or taxing
authority thereof or therein, will not be less than the
amount provided herein to be then due and payable. However,
the Company shall not be required to make any such payment
of Additional Amounts for or on account of:
<PAGE>
7
(a) any tax, assessment or other governmental
charge that would not have been imposed but for (i) the
existence of any present or former connection between
such Holder (or between a fiduciary, settlor or
beneficiary of, or a person holding a power over, such
Holder, if such Holder is an estate or a trust, or
between a member or shareholder of such Holder, if such
Holder is a partnership or corporation) and the United
States, including, without limitation, such Holder (or
such fiduciary, settlor, beneficiary, person holding a
power, member or shareholder) being or having been a
citizen or resident or treated as a resident thereof or
being or having been engaged in a trade or business
therein or being or having been present therein or
having or having had a permanent establishment therein
or (ii) such Holder's present or former status as a
domestic or foreign personal holding company, a passive
foreign investment company or a controlled foreign
corporation, a private foundation or other tax-exempt
organization for United States Federal income tax
purposes or a corporation that accumulates earnings to
avoid United States Federal income tax;
(b) any tax, assessment or other governmental
charge that would not have been so imposed but for the
presentation by the Holder of this Security for payment
on a date more than 15 days after the date on which
such payment became due and payable or the date on
which payment thereof was duly provided for, whichever
occurs later;
(c) any estate, inheritance, gift, sales,
transfer, excise or personal property tax or any
similar tax, assessment or other governmental charge;
(d) any tax, assessment or other governmental
charge that would not have been imposed but for the
failure to comply with certification, information,
documentation or other reporting requirements
concerning the nationality, residence, identity or
connection with the United States of the Holder or
beneficial owner of this Security, if such compliance
is required by statute or by regulation of the United
States or any taxing authority thereof as a
precondition to relief or exemption from such tax,
assessment or other governmental charge;
<PAGE>
8
(e) any tax, assessment or other governmental
charge that is (i) payable otherwise than by deduction
or withholding from payments of principal of or
premium, if any, or interest on this Security or
(ii) required to be deducted or withheld by any paying
agent from any such payment, if (and only if) such
payment can be made without such deduction or
withholding by any other paying agent;
(f) any tax, assessment or other governmental
charge imposed on interest received by a person
holding, actually or constructively, 10 percent or more
of the total combined voting power of all classes of
stock of the Company entitled to vote (taking into
account the applicable attribution of ownership rules
under Section 871(h)(3) of the Internal Revenue Code of
1986, as amended (the "Code")) or that is a controlled
foreign corporation related to the Company (directly or
indirectly) through stock ownership; or
(g) any combination of items (a), (b), (c), (d),
(e) and (f);
nor will Additional Amounts be paid with respect to payment
of the principal of or premium, if any, or interest on this
Security to any United States Alien that is a fiduciary or
partnership or to a person other than the sole beneficial
owner of this Security to the extent that a beneficiary or
settlor with respect to such fiduciary or a member of such
partnership or a beneficial owner would not have been
entitled to the Additional Amounts had such beneficiary,
settlor, member or beneficial owner been the Holder of this
Security.
The Company, at its option, may redeem this
Security as a whole, but not in part, at any time that this
Security is registered in the name of a United States Alien,
on giving not less than 30 nor more than 45 days' notice to
the registered Holder hereof by mail in accordance with the
provisions of the Indenture (which notice shall be
irrevocable), at a redemption price equal to the principal
amount hereof (or, in the case of an Original Issue Discount
Security, the amount specified on the face hereof), together
with accrued interest to the redemption date, if the Company
determines that the Company has or will become obligated to
pay Additional Amounts on this Security on the next
succeeding Interest Payment Date as a result of any change
in, or amendment to, the laws (or any regulations or rulings
<PAGE>
9
promulgated thereunder) of the United States or any
political subdivision or taxing authority thereof or therein
affecting taxation, or any change in the application or
official interpretation of such laws, regulations or rulings
by a taxing authority, court or regulatory agency, whether
or not rendered or taken with respect to the Company, or any
action taken by any taxing authority, court or regulatory
agency (including any change in administrative policy or
enforcement practice of such taxing authority), whether or
not taken with respect to the Company, which change or
amendment becomes effective, or action is taken, on or after
the Original Issue Date, and such obligation cannot be
avoided by the Company taking reasonable measures available
to it. Prior to giving any notice of redemption pursuant to
this paragraph, the Company shall deliver to the Trustee an
Officers' Certificate stating that the Company is entitled
to effect such redemption and setting forth a statement of
facts showing that the conditions precedent to the right of
the Company so to redeem have occurred, and an opinion of
independent legal counsel addressed to the Company and the
Trustee to the effect that the Company has or will become
obligated to pay such Additional Amounts as a result of such
change or amendment. Notice of the intention of the Company
to redeem this Security shall not be given earlier than 90
days prior to the earliest date that the obligation to pay
Additional Amounts would arise were a payment in respect of
this Security due on such date. From and after any
redemption date, if monies for the redemption of this
Security pursuant to this paragraph shall have been made
available for redemption on such redemption date, this
Security shall cease to bear interest and the only right of
the Holder of this Security shall be to receive payment of
the redemption price of this Security and all unpaid
interest accrued to such redemption date. For purposes of
this paragraph, the Trustee may rely on an Officers'
Certificate as to whether the registered Holder hereof is a
United States Alien.
The term "United States Alien" means any person
who, for United States Federal income tax purposes, is a
foreign corporation, a nonresident alien individual, a
nonresident alien fiduciary of a foreign estate or trust, or
a foreign partnership, one or more of the members of which
is, for United States Federal income tax purposes, a foreign
corporation, a nonresident alien individual or a nonresident
alien fiduciary of a foreign estate or trust.
<PAGE>
10
If so specified on the face hereof, the Company
may at its option redeem this Security in whole or from time
to time in part on the date or dates designated as
Redemption Dates on the face hereof at the Redemption Price
or Redemption Prices designated on the face hereof, together
with accrued interest to the date of redemption. The
Company may exercise such option by mailing or causing the
Trustee to mail a notice of such redemption at least 30 but
not more than 45 days prior to the date of redemption. In
the event of redemption of this Security in part only, a new
Security or Securities of like tenor and with the same terms
and conditions for the unredeemed portion hereof shall be
issued in the name of the Holder hereof upon the
cancellation hereof. If less than all of the Securities
having the same terms (except as to principal amount and
date of issuance) as this Security are to be redeemed, the
Securities to be redeemed shall be selected by the Trustee
by such method as the Trustee shall deem fair and
appropriate and otherwise as provided under the Indenture.
If so specified on the face hereof, this Security
will be repayable prior to the Maturity Date at the option
of the Holder on the date or dates or under the
circumstances designated as Repayment Dates on the face
hereof at the Repayment Price or Repayment Prices designated
on the face hereof together with accrued interest to the
date of repayment. In order for this Security to be repaid,
Chemical Bank, as Paying Agent, must receive at the Notes
Office at least 30 but not more than 45 days prior to the
applicable Repayment Date (a) appropriate wire instructions
and (b) either (i) this Security with the form below
entitled "Option to Elect Repayment" duly completed or
(ii) a telegram, telex, facsimile transmission or letter
from a member of a national securities exchange or the
National Association of Securities Dealers, Inc., or a
commercial bank or trust company in the United States or any
other "eligible guarantor institution" (as such term is
defined in Rule 17Ad-15 under the Securities Exchange Act of
1934, as amended) setting forth the name of the Holder of
this Security, the principal amount of this Security, the
portion of the principal amount of this Security to be
repaid, the certificate number or a description of the tenor
and terms of this Security, a statement that the option to
elect repayment is being exercised thereby and a guarantee
that this Security with the form below entitled "Option to
Elect Repayment" duly completed will be received by the
Paying Agent not later than five Business Days after the
date of such telegram, telex, facsimile, transmission or
<PAGE>
11
letter. If the procedure described in clause (ii) of the
preceding sentence is followed, this Security with such form
duly completed must be received by the Paying Agent by such
fifth Business Day. Any tender of this Security for
repayment shall be irrevocable. The repayment option may be
exercised by the Holder of this Security for less than the
entire principal amount of this Security provided that the
principal amount of the Security remaining outstanding after
repayment is an authorized denomination. Upon such partial
repayment this Security shall be cancelled and a new
Security or Securities of like tenor and with the same terms
and conditions for the remaining principal amount hereof
shall be issued in the name of the Holder of this Security
or as otherwise specified in the form entitled "Option to
Elect Repayment". After exercise of the repayment option,
no transfer or exchange of this Security (or, if this
Security is to be repaid in part, the portion hereof to be
repaid) will be permitted. All questions as to the
validity, eligibility (including time of receipt) and
acceptance of this Security for repayment will be determined
by the Company, whose determination will be final, binding
and non-appealable.
The indebtedness evidenced by this Security is
expressly subordinated in right of payment, to the extent
and in the manner set forth in the Indenture, to the prior
payment in full of all Superior Indebtedness (as defined in
the Indenture) and this Security is issued subject to such
provisions of the Indenture, and each Holder of this
Security by accepting the same agrees to and shall be bound
by such provisions and authorizes and directs the Trustee on
his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate such subordination
as provided in the Indenture and appoints the Trustee his
attorney-in-fact for any and all such purposes.
The interest rate in effect with respect to this
Security from and including the Original Issue Date to but
excluding the first Interest Reset Date specified on the
face hereof following the Original Issue Date will be the
Initial Interest Rate specified on the face hereof;
provided, however, that if the interest rate hereon is reset
- -------- -------
daily or weekly and this Security was originally issued
between a Regular Record Date and an Interest Payment Date,
the Initial Interest Rate shall be the rate for the period
from and including the Original Issue Date to but excluding
the first Interest Reset Date on or after the first Interest
Payment Date specified above following the Original Issue
<PAGE>
12
Date. Commencing with the first Interest Reset Date
following the Original Issue Date or the first Interest
Reset Date on or after the first Interest Payment Date, as
applicable, the rate at which interest on this Security is
payable shall be adjusted on each Interest Reset Date;
provided, however, that the interest rate in effect hereon
- -------- -------
for the 10 days immediately prior to Maturity shall be that
in effect on the 10th day preceding such Maturity. Each
such adjusted rate shall be applicable on and after the
Interest Reset Date to which it relates to but excluding the
next succeeding Interest Reset Date or until Maturity. If
any Interest Reset Date specified on the face hereof would
otherwise be a day that is not a Business Day (as
hereinafter defined), such Interest Reset Date shall be
postponed to the next day that is a Business Day, except
that, if the Interest Rate Basis specified on the face
hereof is LIBOR, then if such next Business Day is in the
next succeeding calendar month, each Interest Reset Date
shall be the next preceding Business Day. Subject to
applicable provisions of law and except as specified herein,
if the Interest Rate Basis specified on the face hereof is
the Commercial Paper Rate, Prime Rate, Federal Funds Rate,
LIBOR or the Treasury Rate, then the rate of interest on
this Security on and after such Interest Reset Date on which
an adjustment is made shall be the rate determined in
accordance with the provisions of the applicable heading
below.
DETERMINATION OF COMMERCIAL PAPER RATE. If the
Interest Rate Basis specified on the face hereof is the
Commercial Paper Rate, then the interest rate on this
Security with respect to each Interest Reset Date shall be
calculated by the Calculation Agent and shall be the
Commercial Paper Rate on the Interest Determination Date
pertaining to such Interest Reset Date, plus or minus the
Spread, if any, or multiplied by the Spread Multiplier, if
any, specified on the face hereof. "Commercial Paper Rate"
means, with respect to each such Interest Determination
Date, the Money Market Yield (calculated as described below)
of the rate on such date for commercial paper having the
Index Maturity specified on the face hereof as published by
the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates" or
any successor publication of the Board of Governors of the
Federal Reserve System ("H.15(519)") under the heading
"Commercial Paper". In the event that such rate is not
published prior to 9:00 A.M., New York City time, on the
Calculation Date (as defined below) pertaining to such
<PAGE>
13
Interest Determination Date, then the Commercial Paper Rate
shall be the Money Market Yield of the rate on such Interest
Determination Date for commercial paper having the Index
Maturity specified on the face hereof as published by the
Federal Reserve Bank of New York in its daily statistical
release, "Composite 3:30 P.M. Quotations for U.S. Government
Securities" or any successor publication of the Federal
Reserve Bank of New York ("Composite Quotations") under the
heading "Commercial Paper". If by 3:00 P.M., New York City
time, on such Calculation Date such rate is not yet
published in Composite Quotations, the rate for that
Interest Determination Date shall be calculated by the
Calculation Agent and shall be the Money Market Yield of the
arithmetic mean of the offered rates, as of 11:00 A.M., New
York City time, on that Interest Determination Date, of
three leading dealers of commercial paper in The City of New
York selected by the Calculation Agent for commercial paper
of the Index Maturity specified on the face hereof placed
for an industrial issuer whose bond rating is "AA", or the
equivalent, from at least one nationally recognized rating
agency; provided, however, that if the dealers selected as
-------- -------
aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Commercial Paper Rate will
be the Commercial Paper Rate in effect on such Interest
Determination Date.
"Money Market Yield" means a yield (expressed as a
percentage) calculated in accordance with the following
formula:
Money Market Yield = D x 360 x 100
-------------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper,
quoted on a bank discount basis and expressed as a decimal;
and "M" refers to the actual number of days in the interest
period for which interest is being calculated.
DETERMINATION OF PRIME RATE. If the Interest Rate
Basis specified on the face hereof is the Prime Rate, then
the interest rate on this Security with respect to each
Interest Reset Date shall be calculated by the Calculation
Agent and shall be the Prime Rate on the Interest
Determination Date pertaining to such Interest Reset Date,
plus or minus the Spread, if any, or multiplied by the
Spread Multiplier, if any, specified on the face hereof.
"Prime Rate" means, with respect to each such Interest
Determination Date, the arithmetic mean of the prime or base
<PAGE>
14
rates quoted on the basis of the actual number of days in
the year divided by 360 as of the close of business on such
Interest Determination Date by three major money center
banks in The City of New York selected by the Calculation
Agent. If fewer than three such quotations are provided,
the Prime Rate shall be determined on the basis of the
quotations provided, if any, together with the rates
furnished on such date in The City of New York by the
appropriate number of substitute banks or trust companies
organized and doing business under the laws of the United
States, or any State thereof, having total equity capital of
at least U.S.$750 million and being subject to supervision
or examination by Federal or State authority, selected by
the Calculation Agent to provide such rate or rates;
provided, however, that if the banks or trust companies
- -------- -------
selected as aforesaid are not quoting as mentioned in this
sentence, the Prime Rate will be the Prime Rate in effect on
such Interest Determination Date.
DETERMINATION OF FEDERAL FUNDS RATE. If the
Interest Rate Basis specified on the face hereof is the
Federal Funds Rate, then the interest rate on this Security
with respect to each Interest Reset Date shall be calculated
by the Calculation Agent and shall be the Federal Funds Rate
on the Interest Determination Date pertaining to such
Interest Reset Date, plus or minus the Spread, if any, or
multiplied by the Spread Multiplier, if any, specified on
the face hereof. "Federal Funds Rate" means, with respect
to each such Interest Determination Date, the rate on such
date for Federal Funds as published in H.15(519) under the
heading "Federal Funds (Effective)" or, if not so published
by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the Federal
Funds Rate will be the interest rate on such Interest
Determination Date as published in Composite Quotations
under the heading "Federal Funds/Effective Rate". If such
rate is not yet published in Composite Quotations by 3:00
P.M., New York City time, on such Calculation Date, the
Federal Funds Rate for such Interest Determination Date will
be the rate on such date made publicly available by the
Federal Reserve Bank of New York which is equivalent to the
rate which appears in H.15(519) under the heading "Federal
Funds (Effective)"; provided, however, that if such rate is
-------- -------
not made publicly available by the Federal Reserve Bank of
New York by 9:00 A.M., New York City time, on such
Calculation Date, the Federal Funds Rate will be the Federal
Funds Rate in effect on such Interest Determination Date.
<PAGE>
15
DETERMINATION OF LIBOR. If the Interest Rate
Basis specified on the face hereof is LIBOR, then the
interest rate on this Security with respect to each Interest
Reset Date shall be calculated by the Calculation Agent and
shall be LIBOR on the Interest Determination Date pertaining
to such Interest Reset Date, plus or minus the Spread, if
any, or multiplied by the Spread Multiplier, if any,
specified on the face hereof. "LIBOR" will be determined
with respect to each such Interest Determination Date by the
Calculation Agent in accordance with the following
provisions:
LIBOR will be determined on the basis of either
(a) if the LIBOR Basis specified on the face hereof is
Telerate Screen Page 3750, the rate for deposits in
U.S. dollars having the Index Maturity specified on the
face hereof, commencing on the second London Banking
Day (as defined below) immediately following such
Interest Determination Date, which appears on Telerate
Screen Page 3750 (as defined below) as of 11:00 A.M.,
London time, on such Interest Determination Date, if
such rate appears on Telerate Screen Page 3750, or
(b) if the LIBOR Basis specified on the face hereof is
the Reuters Screen LIBO Page, the arithmetic mean, as
determined by the Calculation Agent, of the offered
rates for deposits in U.S. dollars of not less than
$1,000,000 having the Index Maturity specified on the
face hereof, commencing on the second London Banking
Day immediately following such Interest Determination
Date, which appear on the Reuters Screen LIBO Page (as
defined below) as of 11:00 A.M., London time, on such
Interest Determination Date, if at least two such
offered rates appear on the Reuters Screen LIBO Page.
"Telerate Screen Page 3750" means the display
designated as page "British Bankers Assoc. Interest
Settlement Rates" on the Telerate system, page 3750 (or
such other page or pages as may replace such page on
the system for the purpose of displaying such rates).
"Reuters Screen LIBO Page" means the display designated
as page "LIBO" on the Reuters Monitor Money Rates
Service (or such other page or pages as may replace the
LIBO page on that service for the purpose of displaying
London interbank offered rates of major banks). If no
rate appears on Telerate Page 3750 or if fewer than two
offered rates appear on the Reuters Screen LIBO Page,
as applicable, LIBOR for such Interest Determination
Date will be determined as described in the following
paragraph. If neither Telerate Screen Page 3750 nor
<PAGE>
16
the Reuters Screen LIBO Page is specified on the face
hereof as the LIBOR Basis, LIBOR will be determined as
if Telerate Screen Page 3750 had been specified.
With respect to an Interest Determination Date on
which no rate appears on Telerate Page 3750 as
described in (a) in the preceding paragraph, if the
LIBOR Basis specified on the face hereof is Telerate
Screen Page 3750, or on which fewer than two offered
rates appear on the Reuters Screen LIBO Page as
described in (b) in the preceding paragraph, if the
LIBOR Basis specified on the face hereof is the Reuters
Screen LIBO Page, LIBOR will be determined on the basis
of the rates at approximately 11:00 A.M., London time,
on such Interest Determination Date at which deposits
in U.S. dollars having the Index Maturity specified on
the face hereof commencing on the second London Banking
Day immediately following such Interest Determination
Date and in a principal amount equal to an amount of
not less than U.S.$1,000,000 that in the Calculation
Agent's judgment is representative for a single
transaction in such market at such time, are offered to
prime banks in the London interbank market by four
major banks in the London interbank market selected by
the Calculation Agent. The Calculation Agent will
request the principal London office of each of such
banks to provide a quotation of its rate. If at least
two such quotations are provided, LIBOR for such
Interest Determination Date will be the arithmetic mean
of such quotations. If fewer than two quotations are
provided, LIBOR for such Interest Determination Date
will be the arithmetic mean of the rates quoted at
approximately 11:00 A.M., New York City time, on such
Interest Determination Date by three major banks in The
City of New York, selected by the Calculation Agent,
for loans in U.S. dollars to leading European banks
having the specified Index Maturity commencing on the
second London Banking Day immediately following such
Interest Determination Date and in a principal amount
equal to an amount of not less than U.S.$1,000,000 that
in the Calculation Agent's judgment is representative
for a single transaction in such market at such time;
provided, however, that if the banks selected as
-------- -------
aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR with respect to such
Interest Determination Date will be LIBOR in effect on
such Interest Determination Date.
<PAGE>
17
DETERMINATION OF TREASURY RATE. If the Interest
Rate Basis specified on the face hereof is the Treasury
Rate, then the interest rate on this Security with respect
to each Interest Reset Date shall be calculated by the
Calculation Agent and shall be the Treasury Rate on the
Interest Determination Date pertaining to such Interest
Reset Date, plus or minus the Spread, if any, or multiplied
by the Spread Multiplier, if any, specified on the face
hereof. "Treasury Rate" means, with respect to each such
Interest Determination Date, the rate for the most recent
auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified on
the face hereof as published in H.15(519) under the heading
"U.S. Government Securities--Treasury Bills--Auction Average
(Investment)" or, if not so published by 9:00 A.M., New York
City time, on the Calculation Date pertaining to such
Interest Determination Date, the auction average rate
(expressed as a bond equivalent, on the basis of a year of
365 or 366 days, as applicable, and applied on a daily
basis) for such auction as otherwise made available by the
United States Department of the Treasury. In the event that
the results of the auction of Treasury bills having the
Index Maturity specified on the face hereof are not
published or made available as provided above by 3:00 P.M.,
New York City time, on such Calculation Date, or if no such
auction is held in a particular week (or on the preceding
Friday, if applicable), then the Treasury Rate shall be
calculated by the Calculation Agent and shall be a yield to
maturity (expressed as a bond equivalent, on the basis of a
year of 365 or 366 days, as applicable, and applied on a
daily basis) of the arithmetic mean of the secondary market
bid rates as of approximately 3:30 P.M., New York City time,
on such Interest Determination Date, of three leading
primary United States government securities dealers selected
by the Calculation Agent, for the issue of Treasury bills
with a remaining maturity closest to the specified Index
Maturity; provided, however, that if the dealers selected as
-------- -------
aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, the Treasury Rate will be the
Treasury Rate in effect on such Interest Determination Date.
Unless otherwise specified on the face hereof, the
Interest Determination Date pertaining to an Interest Reset
Date for this Security will be, if the Interest Rate Basis
for this Security is the Commercial Paper Rate or the Prime
Rate, the second New York Business Day (as defined below)
preceding such Interest Reset Date; if the Interest Rate
Basis for this Security is LIBOR, the second London Banking
<PAGE>
18
Day preceding such Interest Reset Date; if the Interest Rate
Basis for this Security is the Federal Funds Rate, the first
New York Business Day preceding such Interest Reset Date;
and if the Interest Rate Basis for this Security is the
Treasury Rate, the day of the week in which such Interest
Reset Date falls on which Treasury bills would normally be
auctioned. Treasury bills are usually sold at auction on
Monday of each week, unless that day is a legal holiday, in
which case the auction is usually held on the following
Tuesday, except that such auction may be held on the
preceding Friday. If, as the result of a legal holiday, an
auction is so held on the preceding Friday, such Friday will
be the Interest Determination Date pertaining to the
Interest Reset Date occurring in the next succeeding week.
If an auction date shall fall on any Interest Reset Date for
such a Note, then such Interest Reset Date shall instead be
the first New York Business Day immediately following such
auction date. The "Calculation Date" pertaining to any
Interest Determination Date will be the earlier of (i) the
tenth day after such Interest Determination Date or, if any
such day is not a New York Business Day, the next succeeding
New York Business Day and (ii) the New York Business Day
next preceding the relevant Interest Payment Date or
Maturity, as the case may be.
All percentages resulting from any calculations on
this Security will be rounded, if necessary, to the nearest
one hundred-thousandth of a percentage point (with five one-
millionths of a percentage point being rounded upward) and
all currency amounts used in or resulting from such
calculations will be rounded, if necessary, to the nearest
one-hundredth of a unit (with .005 of a unit being rounded
upward).
Notwithstanding the foregoing, the interest rate
hereon shall not be greater than the Maximum Rate, if any,
or less than the Minimum Rate, if any, shown on the face
hereof. In addition, the interest rate on this Security
will in no event be higher than the maximum rate permitted
by New York law as the same may be modified by United States
law of general applicability. The Calculation Agent shall
calculate the interest rate on this Security in accordance
with the foregoing on or before each Calculation Date and
shall promptly thereafter notify the Company and the Trustee
of such interest rate. Any such calculation by the
Calculation Agent shall be conclusive and binding on the
Company, the Trustee and the Holder of this Security, absent
manifest error.
<PAGE>
19
The Calculation Agent will, upon the request of
the Holder of this Security, provide to such Holder the
interest rate hereon then in effect and, if determined, the
interest rate which will become effective as of the next
Interest Reset Date.
Interest payments on each Interest Payment Date
for this Security and at Maturity will include interest
accrued from and including the later of the Original Issue
Date or the most recent date to which interest has been paid
or provided for to but excluding such Interest Payment Date
or to but excluding Maturity. Notwithstanding the
foregoing, if the interest rate hereon is reset daily or
weekly, interest payable on any Interest Payment Date or at
Maturity will include interest accrued from and including
the later of the Original Issue Date hereof and the day
following the most recent Regular Record Date to which
interest hereon has been paid or provided for to and
including the next preceding Regular Record Date or Maturity
except that, if this Security was issued between a Regular
Record Date and the next succeeding Interest Payment Date,
interest paid on such Interest Payment Date will include
interest accrued from and including such Original Issue Date
to but excluding such Interest Payment Date, and interest
paid on the Interest Payment Date following such Interest
Payment Date will include interest accrued from and
including such Interest Payment Date (or from and including
such Original Issue Date, if interest was not paid or
provided for on such Interest Payment Date) to and including
the Regular Record Date following such Interest Payment
Date. Accrued interest hereon from the Original Issue Date
or from the last date to which interest hereon has been paid
or provided for, as the case may be, shall be an amount
calculated by multiplying the face amount hereof by an
accrued interest factor. Such accrued interest factor shall
be computed by adding the interest factor calculated for
each day from the Original Issue Date or from the last date
to which interest shall have been paid or provided for, as
the case may be, to the date for which accrued interest is
being calculated. The interest factor (expressed as a
decimal) for each such day shall be computed by dividing the
interest rate (expressed as a decimal) applicable to such
day by 360, if the Interest Rate Basis specified on the face
hereof is a Commercial Paper Rate, Prime Rate, Federal Funds
Rate or LIBOR, or the actual number of days in the year, if
the Interest Rate Basis specified on the face hereof is the
Treasury Rate.
<PAGE>
20
Any payment of principal of (and premium, if any)
or interest required to be made on this Security on a day
which is not a Business Day need not be made on such day,
but may be made on the next day which is such a Business Day
with the same force and effect as if made on such day, and
no interest shall accrue as a result of such delayed
payment, except that, if the Interest Rate Basis specified
on the face hereof is LIBOR, then if such next Business Day
is in the next succeeding calendar month, such payment shall
be made on the immediately preceding Business Day.
"Business Day" means each day, other than a Saturday or
Sunday, that is (i) not a day on which banking institutions
in the Business Day Centers specified on the face hereof are
authorized or obligated by law or executive order to close
and (ii) if the Interest Rate Basis specified on the face
hereof is LIBOR, a London Banking Day. As used herein,
"London Banking Day" shall mean any day on which dealings in
deposits in U.S. dollars are transacted in the London
interbank market. "New York Business Day", as used herein,
shall mean each day, other than a Saturday or Sunday, that
is not a day on which banking institutions in The City of
New York are authorized or obligated by law or executive
order to close.
If an Event of Default with respect to Securities
of this series shall occur and be continuing, the principal
of the Securities of this series may be declared due and
payable in the manner and with the effect provided in the
Indenture.
Any terms or conditions of this Security ("Other
Terms") specified on the face hereof under "Other Terms"
shall apply to this Security. In the event of any conflict
between any Other Terms and any other terms or conditions of
this Security, the Other Terms shall control.
Notwithstanding anything herein to the contrary,
if this Security is an Original Issue Discount Security, the
amount payable in the event of acceleration following an
Event of Default prior to the Maturity Date hereof in lieu
of the principal amount due at the Maturity Date hereof
shall be the Amortized Face Amount of this Security as of
the date of declaration of acceleration. The "Amortized
Face Amount" of this Security shall be an amount equal to
(a) the Issue Price (as set forth on the face hereof) plus
(b) that portion of the difference between the Issue Price
and the principal amount hereof that has accrued at the
Yield to Maturity (as set forth on the face hereof)
<PAGE>
21
(computed in accordance with generally accepted United
States bond yield computation principles) at the date as of
which the Amortized Face Amount is calculated, but in no
event shall the Amortized Face Amount of this Security
exceed its principal amount.
The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification
of the rights and obligations of the Company and the rights
of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of 66-2/3% in
principal amount of the Securities at the time Outstanding
of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages
in principal amount of the Securities of each series at the
time Outstanding, on behalf of the Holders of all Securities
of such series, to waive certain past defaults under the
Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or
waiver is made upon this Security.
As set forth in, and subject to, the provisions of
the Indenture, no Holder of any Security of this series will
have any right to institute any proceeding with respect to
the Indenture or for any remedy thereunder, unless such
Holder shall have previously given to the Trustee written
notice of a continuing Event of Default with respect to this
series, the Holders of not less than 25% in principal amount
of the Outstanding Securities of this series shall have made
written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, the Trustee
shall not have received from the Holders of a majority in
principal amount of the Outstanding Securities of this
series a direction inconsistent with such request and the
Trustee shall have failed to institute such proceeding
within 60 days; provided, however, that such limitations do
-------- -------
not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of (and premium, if
any) or interest on this Security on or after the respective
due dates expressed herein.
No reference herein to the Indenture and no
provision of this Security or of the Indenture shall alter
<PAGE>
22
or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of (and premium, if
any) and interest on this Security at the times, places and
rates, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to
certain limitations therein set forth, the transfer of this
Security is registrable in the Security Register upon
surrender of this Security for registration of transfer to
the Security Registrar at the Notes Office duly endorsed by,
or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized
denominations and having the same terms and conditions and
for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The Securities of this series are issuable only in
registered form, without coupons, in denominations of U.S.
$100,000 and any integral multiple of U.S.$1,000 in excess
thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this
series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of
different authorized dominations and having the same terms
and conditions, as requested by the Holder surrendering the
same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security is overdue,
and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture and the Securities shall be governed
by and construed in accordance with the laws of the State of
New York.
<PAGE>
23
All terms used in this Security which are defined
in the Indenture and are not otherwise defined herein shall
have the meanings assigned to them in the Indenture.
<PAGE>
24
OPTION TO ELECT REPAYMENT
The undersigned owner of this Security hereby
irrevocably elects to have the Company repay the principal
amount of this Security or portion hereof below designated
at the applicable Repayment Price indicated on the face
hereof plus interest accrued to the applicable Repayment
Date.
Dated:
-------------------
- --------------------------
Signature
Sign exactly as name appears
on the front of this Security
[SIGNATURE GUARANTEE -
required only if Securities
are to be issued and delivered
to other than the registered
holder]
Principal amount to be Fill in for
repaid, if amount to be registration of
repaid is less than the Securities if to be
principal amount of this issued otherwise than
Security (principal amount to registered holder:
remaining must be an
authorized denomination) Name:
---------------------
U.S.$
--------------------- Address:
------------------
------------------
(Please print
name and address
including zip
code)
SOCIAL SECURITY OR
OTHER TAXPAYER ID
NUMBER
---------------------------
<PAGE>
25
---------------------
ABBREVIATIONS
The following abbreviations, when used in the
inscription on the face of this instrument, shall be
construed as though they were written out in full according
to applicable laws or regulations:
UNIF GIFT MIN ACT...
TEN COM - as tenants in ......... Custodian ..........
common (Cust) (Minor)
TEN ENT - as tenants by Under Uniform Gifts to
the entireties Minors Act
JT TEN - as joint tenants
with right of
survivorship and ..............................
not as tenants in (State)
common
Additional abbreviations may also be used though
not in the above list.
-------------------
FOR VALUED RECEIVED, the undersigned hereby
sell(s), assign(s) and transfer(s) unto
Please Insert Social Security
or Other Identifying Number of
Assignee
------------------------------
/ /
/ /
- ------------------------------- -----------------------------------
-------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE
<PAGE>
26
-------------------------------------------------------------------
the within Security and all rights thereunder, hereby
irrevocably constituting and appointing
attorney to transfer said Security
--------------------------
on the books of the Company, with full power of substitution
in the premises.
Dated:
------------------------------ --------------------------------
Signature
========================================================================
PAINE WEBBER GROUP INC.
to
CHEMICAL BANK
----------------
Senior Debt Securities
----------------
First Supplemental Indenture
----------------
Dated as of September 22, 1989
Supplementing the Indenture
Dated as of March 15, 1988
----------------
========================================================================
<PAGE>
1
FIRST SUPPLEMENTAL INDENTURE dated as of
September 22, 1989, between PAINE WEBBER
GROUP INC., a corporation duly organized and
existing under the laws of Delaware (herein
called the "Company"), having its principal
office at 1285 Avenue Of the Americas, New
York, New York 10019, and Chemical Bank a
corporation duly organized and existing under
the laws of the State of New York, as Trustee
(herein called the "Trustee").
RECITALS
The Company and the Trustee are parties to an
Indenture dated as of March 15, 1988 (the "Indenture")
relating to the issuance from time to time by the Company of
its Securities. Capitalized terms used herein, not other-
wise defined, shall have the same meanings given them in the
Indenture.
The Company has requested the Trustee to join with
it in the execution and delivery of this first supplemental
indenture (the "First Supplemental Indenture") in order to
supplement and amend the Indenture, by amending and adding
certain provisions thereof, to permit the Company to re-
quire, if it shall so elect, that Registered Securities of
any series be issued, in whole or in part, in the form of
one or more Global Securities (as defined herein).
Section 901 of the Indenture provides that a
supplemental indenture may be entered into by the Company
and the Trustee, without the consent of any Holders of the
Securities, to make any provisions with respect to matters
or questions arising under the Indenture, provided such
action shall not adversely affect the interests of the
Holders of Securities of any series in any material respect.
The Company has determined that this First Supple-
mental Indenture complies with said Section 901 and does not
require the consent of any Holders of Securities.
At the request of the Trustee, the Company has
furnished the Trustee with an Opinion of Counsel complying
with the requirements of Section 903 of the Indenture,
stating, among other things, that the execution of this
First Supplemental Indenture is authorized or permitted by
the Indenture, and an Officers' Certificate and Opinion of
Counsel complying with the requirements of Section 102 of
<PAGE>
2
the Indenture, and has delivered to the Trustee a Board
Resolution as required by Section 901 of the Indenture
authorizing the execution by the Company of this First
Supplemental Indenture and its delivery by the Company to
the Trustee.
All things necessary to make this First Supplemen-
tal Indenture a valid agreement of the Company and the
Trustee, in accordance with the terms of the Indenture, and
a valid amendment of and supplement to the Indenture have
been done.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is
mutually agreed, for the equal and proportionate benefit of
all Holders of the Securities or of series thereof, as
follows:
I. AMENDMENTS TO THE INDENTURE
A. Section 101 of the Indenture is amended (i) to
add new definitions thereto in the appropriate alphabetical
sequence, as follows:
"Depositary" means, unless otherwise specified by
the Company pursuant to either Section 301 or 312, with
respect to the Securities of any series issuable or
issued in whole or in part as one or more Global
Security, The Depository Trust Company, New York, New
York, or any successor thereto registered as a clearing
agency under the Securities and Exchange Act Of 1934,
as amended, and any other applicable statute or regula-
tion.
"Global Security" means, unless otherwise speci-
fied by the Company pursuant to either Section 301 or
312, with respect to any series of Securities issued
hereunder, a Registered Security which is executed by
the Company and authenticated and delivered by the
Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with this
Indenture and an indenture supplemental hereto, if any,
or a Board Resolution and pursuant to a Company Order,
which shall be registered in the name of the Depositary
or its nominee and which shall represent, and shall be
<PAGE>
3
denominated in an amount equal to the aggregate princi-
pal amount of, all the Outstanding Securities of such
series or any portion thereof, in either case having
the same terms, including, without limitation, the same
original issue date, date or dates on which principal
is due, and interest rate or method of determining
interest. The term "global form" or "definitive global
registered form" when used in this Indenture shall
include Global Securities.
and (ii) to delete the word "Fully" from the phrase "Fully
Registered Securities" in the definition of "Regular Record
Date".
B. Section 301 of the Indenture is amended to
(i) add Section 312 to the sections referred to in the
parenthetical exception to subparagraph (2) of the second
paragraph of Section 301, (ii) redesignate subparagraph
(18) as subparagraph (19) and subparagraph (19) as subpara-
graph (20) and (iii) add a new subparagraph (18) which reads
as follows:
"(18) whether the Securities of the series shall
be issued in whole or in part in the form of a Global
Security or Securities; the terms and conditions, if
any, upon which such Global Security or Securities may
be exchanged in whole or in part for other individual
Securities, and the Depositary for such Global Security
or Securities;"
C. Each of the second paragraph and the third
paragraph of Section 305 of the Indenture is amended to add
the words "Subject to Section 312," before the first word cf
the first sentence of such paragraph.
D. A new paragraph is added at the end of
Section 307 of the Indenture, which reads in its entirety as
follows:
"None of the Company, the Trustee, any Paying
Agent, any Authenticating Agent Or the Security Regis-
trar will have any responsibility or liability for any
aspect of the records relating to or payments made on
account of any beneficial ownership interest in a
Global Security or any other Security issued in global
form or for maintaining, supervising or reviewing any
records relating to such beneficial ownership inter-
est."
<PAGE>
4
E. Article Three of the Indenture is amended to
add a new Section 312, which reads in its entirety as
follows:
"Section 312. Certain Provisions Relating to
Global Securities. If the Company shall establish
pursuant to subparagraph (18) of Section 301 that the
Registered Securities of a particular series are to be
issued in whole or in part in the form of one or more
Global Securities, then the Company shall execute and
the Trustee shall, in accordance with Section 303 and
the Company Order delivered to the Trustee thereunder
with respect to such series, authenticate and deliver
such Global Security or Securities, which (i) shall
represent and shall be denominated in an aggregate
amount equal to the aggregate principal amount of the
Outstanding Securities of such series to be represented
by such Global Security or Securities, (ii) shall be
registered in the name of the Depositary for such
Global Security or Securities or its nominee,
(iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instruction
and (iv) unless otherwise specified by the Company
pursuant to Section 301, shall bear a legend substan-
tially to the following effect: 'Unless and until it
is exchanged in whole or in part for the individual
Securities represented hereby, this Global Security may
not be transferred except as a whole by the Depositary
to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to
a successor Depositary or a nominee of such successor
Depositary.'
Notwithstanding any other provision of
Section 203, of Section 305 or of this Section 312,
subject to the provisions of the following paragraph,
unless otherwise specified by the Company pursuant to
Section 301 or unless the terms of a Global Security
expressly permit such Global Security to be exchanged
in whole or in part for individual Securities, a Global
Security may be transferred, in whole but not in part
in the manner provided in Section 305, only to a
nominee of the Depositary for such Global Security, or
to the Depositary, or to a successor Depositary for
such Global Security selected or approved by the
Company, or to a nominee of such successor Depositary.
<PAGE>
5
If at any time the Depositary for the Global
Securities of a series notifies the Company that it is
unwilling or unable to continue as Depositary for the
Global Securities of such series or if at any time the
Depositary for the Global Securities of such series
shall no longer be eligible or in good standing under
the Securities Exchange Act of 1934, as amended, or any
other applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to
such Global Security. If a successor Depositary for
the Global Securities of such series is not appointed
by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligi-
bility, the Company's election pursuant to Section 301
shall no longer be effective with respect to the Global
Securities of such series and the Company will execute,
and the Trustee, upon receipt of a Company Order for
the authentication and delivery of individual Securi-
ties of such series in exchange for the Global Securi-
ties of such series, will authenticate and deliver
individual Securities of such series of like tenor and
terms in definitive form in an aggregate principal
amount equal to the principal amount of the Global
Security or Global Securities of such series in
exchange for such Global Security or Global Securities.
The Company may at any time and in its sole
discretion determine that the Securities of any series
issued or issuable in the form of one or more Global
Securities shall no longer be represented by such
Global Security or Securities. In such event the
Company will execute, and the Trustee, upon receipt of
a Company Request for the authentication and delivery
of individual Securities of such series in exchange in
whole or in part for such Global Security, will authen-
ticate and deliver individual Securities of such series
of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal
amount of such Global Security Or Securities of such
series in exchange for such Global Security or Securi-
ties.
If specified by the Company pursuant to Sec-
tion 301 with respect to a series of Securities issued
or issuable in the form of one or more Global Securi-
ties, the Depositary for any such Global Security may
at its option surrender such Global Security in
exchange in whole or in part for individual Securities
of such series of like tenor and terms in definitive
<PAGE>
6
form on such terms as are acceptable to the Company and
such Depositary. Thereupon the Company shall execute,
and the Trustee shall authenticate and deliver, without
service charge, (A) to each Person specified by such
Depositary a new Security or Securities of the same
series of like tenor and terms and of any authorized
denomination as requested by such Person in aggregate
principal amount equal to and in exchange for such
Person's beneficial interest in the Global Security;
and (B) to such Depositary a new Global Security of
like tenor and terms and in an authorized denomination
equal to the difference, if any, between the principal
amount of the surrendered Global Security and the
aggregate principal amount of Securities delivered to
Holders thereof.
In any exchange provided for in any of the preced-
ing three paragraphs, the Company will execute and the
Trustee will authenticate and deliver individual
Securities in definitive registered form in authorized
denominations. Upon the exchange of the entire princi-
pal amount of a Global Security for individual Securi-
ties, such Global Security shall be cancelled by the
Trustee. Securities issued in exchange for a Global
Security pursuant to this Section shall be registered
in such names and in such authorized denominations as
the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee or the
Security Registrar. Provided that the Company and the
Trustee or the Security Registrar have so agreed, the
Trustee shall deliver such Registered Securities to the
persons in whose names the Registered Securities are
registered.
Until such time as the Depositary notifies the
Company that it is willing and able to make any elec-
tion on behalf of the Persons with a beneficial inter-
est in a Security entitled to be made by the Holder of
such Security relating to the payment of principal and
interest, Securities denominated in a Foreign Currency
will not be issued in the form of a Global Security.
Notwithstanding the provisions of Section 203 and
of Article XIII, with respect to any Global Security,
nothing herein shall prevent the Company, the Trustee,
or any agent of the Company or the Trustee, from giving
effect to any written certification, proxy or other
authorization furnished by a Depositary or impair, as
<PAGE>
7
between a Depositary and holders of beneficial inter-
ests in any Global Security, the operation of customary
practices governing the exercise of the rights of the
Depositary as Holder of such Global Security."
II. GENERAL PROVISIONS
A. The recitals contained herein shall be taken
as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of same. The Trustee
makes no representation as to the validity of this First
Supplemental Indenture. The Indenture, as supplemented and
amended by this First Supplemental Indenture, is in all
respects hereby adopted, ratified and confirmed.
B. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed
to be an original, but all such counterparts shall together
constitute but one and the same instrument.
C. This First Supplemental Indenture shall be
governed by and construed in accordance with the laws of the
State of New York.
IN WITNESS WHEREOF the parties hereto have caused
this First Supplemental Indenture to be duly executed, and
<PAGE>
8
their corporate seals to be hereunto affixed and attested,
all as of the day and year first above written.
PAINE WEBBER GROUP INC.
by /s/
-----------------------
Title: Attorney-in-Fact
(SEAL)
Attest:
/s/ Dorothy Haughey
- -----------------------
CHEMICAL BANK,
as Trustee
by /s/
---------------------------
Title: Senior Trust Officer
(SEAL)
Attest:
/s/
- -----------------------
EXECUTION COPY
============================================================
PAINE WEBBER GROUP INC.
to
CHEMICAL BANK
________________
Senior Debt Securities
________________
Second Supplemental Indenture
________________
Dated as of March 22, 1991
Supplementing the Indenture
Dated as of March 15, 1988
and Supplemented as of
September 22, 1989
________________
============================================================
<PAGE>
SECOND SUPPLEMENTAL INDENTURE dated as
of March 22, 1991, between PAINE WEBBER GROUP
INC., a corporation duly organized and
existing under the laws of Delaware (herein
called the "Company"), having its principal
office at 1285 Avenue of the Americas, New
York, New York 10019, and CHEMICAL BANK, a
corporation duly organized and existing under
the laws of the State of New York, as Trustee
(herein called the "Trustee").
RECITALS
The Company and the Trustee are parties to an
Indenture dated as of March 15, 1988, as supplemented as of
September 22, 1989 (the "Indenture"), relating to the issu-
ance from time to time by the Company of its Securities.
Capitalized terms used herein and not otherwise defined
shall have the meanings given them in the Indenture.
The Company has requested the Trustee to join with
it in the execution and delivery of this second supplemental
indenture (the "Second Supplemental Indenture") in order to
supplement and amend the Indenture by amending and restating
certain provisions thereof to cause the Indenture to comply
with amendments to the Trust Indenture Act of 1939 effected
by the Trust Indenture Reform Act of 1990 and to take
account of recent changes in United States tax rules as a
result of the promulgation of Treasury Regula-
tion 1.163-5(c)(2)(i)(D) (the "D Rules").
Section 901 of the Indenture provides that a
supplemental indenture may be entered into by the Company
and the Trustee, without the consent of any Holders of the
Securities, to cure any ambiguity, to correct or supplement
any provision therein which may be defective or inconsistent
with any other provision therein, or to make any other
provisions with respect to matters or questions arising
under the Indenture, provided such action shall not
adversely affect the interests of the Holders of Securities
of any series in any material respect.
Section 107 of the Indenture provides that if any
provision thereof limits, qualifies or conflicts with
another provision thereof which is required to be included
therein by the Trust Indenture Act, such required provision
shall control.
<PAGE>
2
The Company has determined that this Second
Supplemental Indenture complies with said Section 901 and
does not require the consent of any Holders of Securities.
At the request of the Trustee, the Company has
furnished the Trustee with an Opinion of Counsel complying
with the requirements of Section 903 of the Indenture,
stating, among other things, that the execution of this
Second Supplemental Indenture is authorized or permitted by
the Indenture, and an Officers' Certificate and Opinion of
Counsel complying with the requirements of Section 102 of
the Indenture, and has delivered to the Trustee a Board
Resolution as required by Section 901 of the Indenture
authorizing the execution by the Company of this Second
Supplemental Indenture and its delivery by the Company to
the Trustee.
All things necessary to make this Second Supple-
mental Indenture a valid agreement of the Company and the
Trustee, in accordance with the terms of the Indenture, and
a valid amendment of and supplement to the Indenture have
been done.
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises, it is
mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as
follows:
I. AMENDMENTS TO THE INDENTURE TO INCORPORATE CHANGES UNDER
THE TRUST INDENTURE REFORM ACT OF 1990
A. The definition of "Trust Indenture Act" in
Section 101 of the Indenture is amended to add to such
definition the phrase ", as amended by the Trust Indenture
Reform Act of 1990 and" after the date "1939" in the second
line of such definition.
B. Section 102 of the Indenture is amended to add
to such Section:
(i) the parenthetical phrase "(including any
covenants compliance with which constitutes a condition
precedent)" following the words "precedent" in each of
the sixth and tenth lines, respectively, of the first
paragraph of such Section; and
<PAGE> 3
(ii) the parenthetical phrase "(other than annual
certificates provided pursuant to Section 1004)"
following the word "Indenture" in the third line of the
second paragraph of such Section.
C. Section 104(g) of the Indenture is amended to
read in its entirety as follows:
"If the Company shall solicit from the Holders any
request, demand, authorization, direction, notice,
consent, waiver or other Act, or for the purpose of
determining the identity of Holders entitled to vote or
consent to any action authorized or permitted by
Sections 512 or 513 of this Indenture, the Company may,
at its option, by or pursuant to a Board Resolution,
fix in advance a record date for the determination of
Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or
other Act, but the Company shall have no obligation to
do so. For the purpose of determining the identity of
Holders entitled to vote or consent to any action
authorized or permitted by Sections 512 or 513 of this
Indenture, the record date shall be the later of 15
days prior to the first solicitation of such consent or
the date of the most recent list of Holders furnished
to the Trustee pursuant to Section 701 of this
Indenture prior to such solicitation. If such a record
date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the
Holders of record at the close of business on such
record date shall be deemed to be Holders for the
purposes of determining whether Holders of the
requisite proportion of Outstanding Securities have
authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the
Outstanding Securities shall be computed as of such
record date; provided that no such authorization,
--------
agreement or consent by the holders on such record date
shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture
not later than six months after the record date."
D. Section 107 of the Indenture is amended to
read in its entirety as follows:
"If any provision hereof limits, qualifies or conflicts
with the duties imposed by any of Sections 310
<PAGE>
4
through 317, inclusive, of the Trust Indenture Act
through the operation of Section 318(c) thereof, such
imposed duties shall control."
E. Section 608 of the Indenture is amended to
read in its entirety as follows:
"The Trustee for the Securities of any series issued
hereunder shall be subject to the provisions of Sec-
tion 310(b) of the Trust Indenture Act during the
period of time provided for therein. In determining
whether the Trustee has a conflicting interest as
defined in Section 310(b) of the Trust Indenture Act
with respect to the Securities of any series, there
shall be excluded this Indenture with respect to
Securities of any particular series of Securities other
than that series. Nothing herein shall prevent the
Trustee from filing with the Commission the application
referred to in the penultimate paragraph of Sec-
tion 310(b) of the Trust Indenture Act."
F. Section 609 of the Indenture is amended to
read in its entirety as follows:
"There shall at all times be a Trustee hereunder for
each series of Securities, which shall be at all times
either
(i) a corporation organized and doing business
under the laws of the United States of America or
of any State or the District of Columbia,
authorized under such laws to exercise corporate
trust powers and subject to supervision or
examination by Federal, State or District of
Columbia authority, or
(ii) a corporation or other Person organized and
doing business under the laws of a foreign govern-
ment that is permitted to act as Trustee pursuant
to a rule, regulation or order of the Commission,
authorized under such laws to exercise corporate
trust powers, and subject to supervision or
examination by authority of such foreign govern-
ment or a political subdivision thereof substan-
tially equivalent to supervision or examination
applicable to United States institutional
trustees,
<PAGE>
5
in either case having a combined capital and surplus of at
least $50,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or to require-
ments of the aforesaid supervising or examining authority,
then for the purposes of this Section 609, the combined
capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most
recent report of condition so published. Neither the
Company nor any Person directly or indirectly controlling,
controlled by, or under common control with the Company
shall serve as Trustee for the Securities of any series
issued hereunder. If at any time the Trustee for the
Securities of any series shall cease to be eligible in
accordance with the provisions of this Section 609, it shall
resign immediately in the manner and with the effect
hereinafter specified in this Article Six."
G. Section 610(d)(1) of the Indenture is amended
to:
(i) delete the phrase "Section 608(a)" after the
word "with" in the first line thereof and to add the
phrase "Section 310(b) of the Trust Indenture Act" in
substitution for such deleted phrase; and
(ii) to add immediately after the word "months" in
the fourth line thereof the phrase ", unless the
Trustee's duty to resign is stayed in accordance with
the provisions of Section 310(b) of the Trust Indenture
Act".
H. Section 613 of the Indenture is hereby amended
to:
(i) substitute the word "three" for the word
"four" in the fourth line of subsection (a) thereof;
(ii) substitute the word "three" for the word
"four" in the fourth line of subsection (a)(1) thereof;
(iii) substitute the word "three" for the word
"four" in the fifth line of subsection (a)(2) thereof;
(iv) substitute the word "three" for the word
"four" in the fourth line of paragraph (B) thereof;
(v) substitute the word "three" for the word
"four" in the fifth and eleventh lines, respectively,
of paragraph (C) thereof;
<PAGE>
6
(vi) substitute the word "three" for the word
"four" in the second line of the first full paragraph
immediately after paragraph (D) thereof;
(vii) substitute the word "three" for the word
"four" in the second and sixth lines, respectively, of
the third full paragraph after paragraph (D) thereof;
and
(viii) substitute the word "three" for the word
"four" in subparagraphs (i) and (ii) of the third full
paragraph after paragraph (D) thereof.
I. Section 703(a) of the Indenture is amended to:
(i) add the phrase "any of the following events
which may have occurred during the twelve months
preceding the date of such report (but if no such event
has occurred within such period, no report need be
transmitted)" immediately after the word "to" on the
fifth line of subsection (a) of Section 703;
(ii) add the phrase "any change to" immediately
after (1) of Section 703(a)(1) and delete from
Section 703(a)(1) the phrase ", or in lieu thereof, if
to the best of its knowledge it has continued to be
eligible and qualified under said Sections, a written
statement to such effect";
(iii) add a new subsection (2) thereto, which will
read in its entirety as follows:
"(2) the creation of or any material change to a
relationship specified in Section 310(b)(1)
through Section 310(b)(10) of the Trust Indenture
Act;"
(iv) change subsection number "(2)" to "(3)";
(v) change subsection numbers "(3)" and "(4)" to
"(4)" and "(5)", respectively, and add the phrase "any
change to" immediately after such subsection numbers;
and
(vi) change subsection numbers "(5)" and "(6)" to
"(6)" and "(7)", respectively.
<PAGE>
7
J. Section 1004 of the Indenture is amended to
read in its entirety as follows:
"The Company will furnish to the Trustee, within
120 days after the end of each fiscal year of the
Company (which as of the date hereof ends on
December 31 of each year) ending after the date hereof
so long as any Security is Outstanding hereunder, a
certificate of the principal executive officer, the
principal financial officer or the principal accounting
officer of the Company, stating that in the course of
the performance by the signer of his or her duties as
such officer of the Company he or she would normally
obtain knowledge of any default by the Company in the
performance, observance or fulfillment of any covenant,
agreement or condition contained in this Indenture, and
stating whether or not, to the knowledge of the signer,
the Company has complied with all conditions,
agreements and covenants on its part contained in this
Indenture, and if the signer has obtained knowledge of
any default by the Company in the performance,
observance or fulfillment of any such condition,
agreement or covenant, specifying each such default and
the nature thereof (provided that, for purposes of this
--------
Section 1004, compliance shall be determined without
regard to any grace period or requirement of notice
provided pursuant to the terms of this Indenture)."
K. The Table of Contents of the Indenture is
amended to reflect the additions and deletions described in
this Second Supplemental Indenture.
II. AMENDMENTS TO THE INDENTURE AS A RESULT OF THE ADOPTION
OF THE D RULES
A. Section 303 of the Indenture is amended to
replace the third paragraph of such Section with the follow-
ing paragraph:
"At any time and from time to time after the
execution and delivery of this Indenture, the Company may
deliver Securities of any series, together with any Coupons
appertaining thereto, executed by the Company to the Trustee
for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authen-
ticate and deliver such Securities; provided, however, that,
-------- -------
in connection with its original issuance, no Bearer Security
<PAGE>
8
(including any temporary Bearer Security issued pursuant to
Section 304 which is not a global Security) shall be mailed
or otherwise delivered to any location in the United States;
and provided further that a Bearer Security may be delivered
----------------
outside the United States in connection with its original
issuance only if the Person entitled to receive such Bearer
Security (including any temporary Bearer Security issued
pursuant to Section 304 which is not a global Security)
shall have furnished a certificate in the form set forth in
Exhibit A.1 to this Indenture, dated the date of delivery of
such Bearer Security or, in the case of a Bearer Security to
be received in exchange for all or a portion of a temporary
global Security, no earlier than 15 days prior to the date
on which Euroclear or CEDEL S.A., as the case may be,
furnishes to the Common Depositary (as defined in
Section 304), in accordance with the procedures set forth in
Section 304, a certificate in the form set forth in
Exhibit A.2 to this Indenture relating to all or such
portion of such temporary global Security. If any Security
shall be represented by a definitive global Security in
bearer form, then, for purposes of this Section and Sec-
tion 304, the notation of a beneficial owner's interest
therein upon original issuance of such Security or upon
exchange of a portion of a temporary global Security shall
be deemed to be delivery in connection with its original
issuance of such beneficial owner's interest in such defini-
tive global Security in bearer form. Except as permitted by
Section 306, the Trustee shall not authenticate and deliver
any Bearer Security unless all appurtenant Coupons for
interest then matured have been detached and canceled."
B. Section 304 of the Indenture is amended to
read in its entirety as follows:
"Pending the preparation of definitive Securities
of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued, in registered
form or, if authorized, in bearer form with one or more
Coupons or without Coupons, and with such appropriate
insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as
evidenced conclusively by their execution of such
Securities. Such temporary Securities may be in global
form.
<PAGE>
9
Except in the case of temporary global Securities
in bearer form (which shall be exchanged in accordance with
the provisions of the following two paragraphs), if
temporary Securities of any series are issued, the Company
will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation
of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency
of the Company maintained pursuant to Section 1002 in a
Place of Payment for such series for the purpose of
exchanges of Securities of such series, without charge to
the Holder. Upon surrender for cancellation of any one or
more temporary Securities of any series (accompanied by any
unmatured Coupons appertaining thereto) the Company shall
execute and the Trustee shall authenticate and deliver in
exchange therefor a like aggregate principal amount of
definitive Securities of the same series and of like tenor
or authorized denominations and having the same terms and
conditions; provided, however, that no definitive Bearer
-------- -------
Security shall be delivered in exchange for a temporary
Registered Security; and provided further that a definitive
----------------
Bearer Security shall be delivered in exchange for a
temporary Bearer Security only in compliance with the
conditions set forth in Section 303.
If temporary global Securities of any series are
issued in bearer form, any such temporary global Securities
in bearer form shall, unless otherwise provided therein, be
delivered to the London office of a depositary or common
depositary (the "Common Depositary"), for the benefit of
Euroclear and CEDEL S.A., for credit to the respective
accounts of the beneficial owners of such Securities (or to
such other accounts as they may direct). Without
unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any
such temporary global Security in bearer form (the "Exchange
Date"), the Company shall deliver to the Trustee definitive
Securities, in aggregate principal amount equal to the
principal amount of such temporary global Security, executed
by the Company. On or after the Exchange Date such
temporary global Security shall be surrendered by the Common
Depositary to the Trustee or an Authenticating Agent, as the
Company's agent for such purpose, to be exchanged, in whole or
from time to time in part, for definitive Securities without
charge and the Trustee shall authenticate and deliver, in
exchange for each portion of such temporary global Security,
an equal aggregate
<PAGE>
10
principal amount of definitive Securities of the same
series of authorized denominations and of like tenor
as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in
exchange for any such temporary global Security in bearer
form shall be in bearer form, registered form, definitive
global form (registered or bearer), or any combination
thereof, as specified as contemplated by Section 301, and,
if any combination thereof is so specified, as requested by
the beneficial owner thereof; provided, however, that,
-------- -------
unless otherwise specified in such temporary global Security
in bearer form, upon such presentation by the Common Deposi-
tary, such temporary global Security in bearer form shall be
accompanied by a certificate dated the Exchange Date or a
subsequent date and signed by Euroclear as to the portion of
such temporary global Security in bearer form held for its
account then to be exchanged and a certificate dated the
Exchange Date or a subsequent date and signed by CEDEL S.A.
as to the portion of such temporary global Security in
bearer form held for its account then to be exchanged, each
in the form set forth in Exhibit A.2 to this Indenture; and
provided further that definitive Bearer Securities shall be
- ----------------
delivered in exchange for a portion of a temporary global
Security in bearer form only in compliance with the require-
ments of Section 303.
Unless otherwise specified in such temporary
global Security in bearer form, the interest of a beneficial
owner of Securities of a series in a temporary global
Security in bearer form shall be exchanged for definitive
Securities of the same series and of like tenor following
the Exchange Date when the beneficial owner instructs
Euroclear or CEDEL S.A., as the case may be, to request such
exchange on his behalf and delivers to Euroclear or CEDEL
S.A., as the case may be, a certificate in the form set
forth in Exhibit A.1 to this Indenture, dated no earlier
than 15 days prior to the date on which Euroclear or
CEDEL S.A., as the case may be, furnishes to the Common
Depositary in accordance with the preceding paragraph a
certificate in the form set forth in Exhibit A.2 to this
Indenture that relates to the interest to be exchanged for
definitive Securities. Copies of the certificate in the
form set forth in Exhibit A.1 to this Indenture in blank
shall be available from the offices of Euroclear, CEDEL
S.A., the Trustee, any Authenticating Agent appointed for
such series of Securities and any Paying Agent appointed for
such series of Securities. Unless otherwise specified in
such temporary global Security in bearer form, any such
exchange shall be made free of charge to the beneficial
<PAGE>
11
owners of such temporary global Security in bearer form,
except that a Person receiving definitive Securities must
bear the cost of insurance, postage, transportation and the
like in the event that such Person does not take delivery of
such definitive Securities in person at the offices of
Euroclear or CEDEL S.A. The definitive Securities in bearer
form to be delivered in exchange for any portion of a
temporary global Security in bearer form shall be delivered
only outside the United States.
Until exchanged in full as hereinabove provided,
the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as
definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless
otherwise specified as contemplated by Section 301, no
interest shall be payable on a temporary global Security in
bearer form on an Interest Payment Date occurring after the
applicable Exchange Date, and any interest payable on a
temporary global Security in bearer form on an Interest
Payment Date for Securities of such series occurring prior
to the applicable Exchange Date shall be payable to
Euroclear and CEDEL S.A. on such Interest Payment Date only
upon delivery by Euroclear and CEDEL S.A. to the Trustee of
a certificate or certificates in the form set forth in
Exhibit A.3 to this Indenture, for credit without further
interest on or after such Interest Payment Date to the
respective accounts of the Persons who are the beneficial
owners of such temporary global Security in bearer form (or
to such other accounts as they may direct) on such Interest
Payment Date and who have each delivered to Euroclear or
CEDEL S.A., as the case may be, a certificate in the form
set forth in Exhibit A.4 to this Indenture. Any interest so
received by Euroclear and CEDEL S.A. and not paid as herein
provided shall be returned to the Trustee immediately prior
to the expiration of two years after such Interest Payment
Date in order to be repaid to the Company in accordance with
Section 1003."
C. Exhibit A.1 to this Second Supplemental
Indenture replaces Exhibit A.1 to the Indenture.
D. Exhibit A.4 to this Second Supplemental
Indenture replaces Exhibit A.4 to the Indenture.
<PAGE>
12
III. GENERAL PROVISIONS
A. The recitals contained herein shall be taken
as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of same. The Trustee
makes no representation as to the validity of this Second
Supplemental Indenture. The Indenture, as supplemented and
amended by this Second Supplemental Indenture, is in all
respects hereby adopted, ratified and confirmed.
B. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed
to be an original, but all such counterparts shall together
constitute but one and the same instrument.
C. This Second Supplemental Indenture shall be
deemed to be a contract under the laws of the State of New
York and for all purposes shall be governed by and construed
in accordance with the laws of said State.
IN WITNESS WHEREOF, the parties hereto have caused
this Second Supplemental Indenture to be duly executed, and
their corporate seals to be hereunto affixed and attested,
all as of the day and year first above written.
PAINE WEBBER GROUP INC.,
by /s/
---------------------------
Title: By Power of Attorney
(SEAL)
Attest:
/s/
- ---------------------
CHEMICAL BANK,
as Trustee
by
---------------------------
Title: Senior Trust Officer
(SEAL)
Attest:
/s/
- ---------------------
<PAGE>
EXHIBIT A
[FORMS OF CERTIFICATION]
EXHIBIT A.1
[FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY]
CERTIFICATE
PAINE WEBBER GROUP INC.
[Insert title or sufficient description
of Securities to be delivered]
This is to certify that as of the date hereof, and
except as set forth below, the above-captioned Securities
(i) are owned by a person that is not a United States
person, (ii) are owned by a United States person that is
(A) the foreign branch of a United States financial institu-
tion (as defined in U.S. Treasury Regulations Sec-
tion 1.165-12(c)(1)(v)) (a "financial institution") purchas-
ing for its own account or for resale, or (B) a United
States person who acquired the Securities through the
foreign branch of a United States financial institution and
who holds the Securities through the financial institution
on the date hereof (and in either case (A) or (B), the
financial institution hereby agrees to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the
Internal Revenue Code of 1986, as amended, and the regula-
tions thereunder), or (iii) are owned by a financial insti-
tution for purposes of resale during the Restricted Period
(as defined in U.S. Treasury Regulations Sec-
tion 1.163-5(c)(2)(i)(D)(7)). In addition, financial
institutions described in clause (iii) of the preceding
sentence (whether or not also described in clause (i) or
(ii)) certify that they have not acquired the Securities for
purposes of resale directly or indirectly to a United States
person or to a person within the United States or its
possessions.
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 (including the States and the District of
<PAGE>
2
Columbia), its territories, its possessions, the
Commonwealth of Puerto Rico and other areas subject to its
jurisdiction.
We undertake to advise you by telex if the above
statement as to beneficial ownership is not correct on the
date of delivery of the above-captioned Securities in bearer
form as to all of such Securities.
We understand that this certificate may be
required in connection with certain tax legislation in the
United States. If administrative or legal proceedings are
commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably author-
ize you to produce this certificate or a copy thereof to any
interested party in such proceedings.
Dated: ___________ 19__
[To be dated on or after the
date determined as provided in
the Indenture]
[Name of Person Entitled to
Receive Bearer Security]
______________________________
(Authorized Signature)
Name:
Title:
<PAGE>
EXHIBIT A.4
[FORM OF CERTIFICATE TO BE GIVEN BY BENEFICIAL OWNERS
TO OBTAIN INTEREST PRIOR TO AN EXCHANGE DATE]
CERTIFICATE
PAINE WEBBER GROUP INC.
[Insert title or sufficient
description of Securities]
This is to certify that as of the Interest Payment
Date on [Insert Date] and except as provided in the third
paragraph hereof, the above-captioned Securities held by you
for our account are beneficially owned by (i) a person that
is not a United States person, (ii) a United States person
that is (A) the foreign branch of a United States financial
institution (as defined in U.S. Treasury Regulations Sec-
tion 1.165-12(c)(1)(v)) (a "financial institution") purchas-
ing for its own account or for resale, or (B) a United States
person who acquired the Securities through the foreign branch
of a United States financial institution and who holds the
Securities through the financial institution on the date
hereof (and in either case (A) or (B), the financial insti-
tution hereby agrees to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue
Code of 1986, as amended, and the regulations thereunder),
or (iii) a financial institution for purposes of resale
during the Restricted Period (as defined in U.S. Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)). In addition, if
the beneficial owner is a financial institution described in
clause (iii) of the preceding sentence (whether or not also
described in clause (i) or (ii)) it certifies that it has
not acquired the Securities for purposes of resale directly
or indirectly to a United States person or to a person
within the United States or its possessions.
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 (including the States and the District of Colum-
bia), its territories, its possessions, the Commonwealth of
Puerto Rico and other areas subject to its jurisdiction.
<PAGE>
2
This certificate excepts and does not relate to
U.S. $___________ principal amount of the above-captioned
Securities appearing in your books as being held for our
account as to which we are not yet able to certify and as to
which we understand interest cannot be credited unless and
until we are able to so certify.
We understand that this certificate may be
required in connection with certain tax legislation in the
United States. If administrative or legal proceedings are
commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably author-
ize you to produce this certificate or a copy thereof to any
interested party in such proceedings.
Dated: ___________ 19__
[To be dated on or after
the 15th day before the
relevant Interest Payment Date]
[Name of Person Entitled to
Receive interest]
______________________________
(Authorized Signature)
Name:
Title:
============================================================
PAINE WEBBER GROUP INC.
to
CHEMICAL BANK DELAWARE
________________
Subordinated Debt Securities
________________
First Supplemental Indenture
________________
Dated as of September 22, 1989
Supplementing the Indenture
Dated as of March 15, 1988
________________
============================================================
<PAGE>
FIRST SUPPLEMENTAL INDENTURE dated as of
September 22, 1989, between PAINE WEBBER
GROUP INC., a corporation duly organized and
existing under the laws of Delaware (herein
called the "Company"), having its principal
office at 1285 Avenue of the Americas, New
York, New York 10019, and Chemical Bank
Delaware, a corporation duly organized and
existing under the laws of the State of
Delaware, as Trustee (herein called the
"Trustee").
RECITALS
The Company and the Trustee are parties to an
Indenture dated as of March 15, 1988 (the "Indenture")
relating to the issuance from time to time by the Company of
its Securities. Capitalized terms used herein, not other-
wise defined, shall have the same meanings given them in the
Indenture.
The Company has requested the Trustee to join with
it in the execution and delivery of this first supplemental
indenture (the "First Supplemental Indenture") in order to
supplement and amend the Indenture, by amending and adding
certain provisions thereof, to permit the Company to re-
quire, if it shall so elect, that Registered Securities of
any series be issued, in whole or in part, in the form of
one or more Global Securities (as defined herein).
Section 901 of the Indenture provides that a
supplemental indenture may be entered into by the Company
and the Trustee, without the consent of any Holders of the
Securities, to make any provisions with respect to matters
or questions arising under the Indenture, provided such
action shall not adversely affect the interests of the
Holders of Securities of any series in any material respect.
The Company has determined that this First Supple-
mental Indenture complies with said Section 901 and does not
require the consent of any Holders of Securities.
At the request of the Trustee, the Company has
furnished the Trustee with an Opinion of Counsel complying
with the requirements of Section 903 of the Indenture,
stating, among other things, that the execution of this
<PAGE>
2
First Supplemental Indenture is authorized or permitted by
the Indenture, and an Officers' Certificate and Opinion of
Counsel complying with the requirements of Section 102 of
the Indenture, and has delivered to the Trustee a Board
Resolution as required by Section 901 of the Indenture
authorizing the execution by the Company of this First
Supplemental Indenture and its delivery by the Company to
the Trustee.
All things necessary to make this First Supplemen-
tal Indenture a valid agreement of the Company and the
Trustee, in accordance with the terms of the Indenture, and
a valid amendment of and supplement to the Indenture have
been done.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is
mutually agreed, for the equal and proportionate benefit of
all Holders of the Securities or of series thereof, as
follows:
I. AMENDMENTS TO THE INDENTURE
A. Section 101 of the Indenture is amended (i) to
add new definitions thereto in the appropriate alphabetical
sequence, as follows:
"Depositary" means, unless otherwise specified by
the Company pursuant to either Section 301 or 312, with
respect to the Securities of any series issuable or
issued in whole or in part as one or more Global
Security, The Depository Trust Company, New York, New
York, or any successor thereto registered as a clearing
agency under the Securities and Exchange Act of 1934,
as amended, and any other applicable statute or regula-
tion.
"Global Security" means, unless otherwise speci-
fied by the Company pursuant to either Section 301 or
312, with respect to any series of Securities issued
hereunder, a Registered Security which is executed by
the Company and authenticated and delivered by the
Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with this
Indenture and an indenture supplemental hereto, if any,
<PAGE>
3
or a Board Resolution and pursuant to a Company Order,
which shall be registered in the name of the Depositary
or its nominee and which shall represent, and shall be
denominated in an amount equal to the aggregate princi-
pal amount of, all the Outstanding Securities of such
series or any portion thereof, in either case having
the same terms, including, without limitation, the same
original issue date, date or dates on which principal
is due, and interest rate or method of determining
interest. The term "global form" or "definitive global
registered form" when used in this Indenture shall
include Global Securities.
and (ii) to delete the word "Fully" from the phrase "Fully
Registered Securities" in the definition of "Regular Record
Date".
B. Section 301 of the Indenture is amended to
(i) add Section 312 to the sections referred to in the
parenthetical exception to subparagraph (2) of the second
paragraph of Section 301, (ii) redesignate subparagraph
(18) as subparagraph (19) and subparagraph (19) as
subparagraph (20) and (iii) add a new subparagraph (18)
which reads as follows:
"(18) whether the Securities of the series shall
be issued in whole or in part in the form of a Global
Security or Securities; the terms and conditions, if
any, upon which such Global Security or Securities may
be exchanged in whole or in part for other individual
Securities, and the Depositary for such Global Security
or Securities;"
C. Each of the second paragraph and the third
paragraph of Section 305 of the Indenture is amended to add
the words "Subject to Section 312," before the first word of
the first sentence of such paragraph.
D. A new paragraph is added at the end of Section
307 of the Indenture, which reads in its entirety as
follows:
"None of the Company, the Trustee, any Paying
Agent, any Authenticating Agent or the Security Regis-
trar will have any responsibility or liability for any
aspect of the records relating to or payments made on
account of any beneficial ownership interest in a
Global Security or any other Security issued in global
form or for maintaining, supervising or reviewing any
<PAGE>
4
records relating to such beneficial ownership inter-
est."
E. Article Three of the Indenture is amended to
add a new Section 312, which reads in its entirety as
follows:
"Section 312. Certain Provisions Relating to
------------------------------
Global Securities. If the Company shall establish
-----------------
pursuant to subparagraph (18) of Section 301 that the
Registered Securities of a particular series are to be
issued in whole or in part in the form of one or more
Global Securities, then the Company shall execute and
the Trustee shall, in accordance with Section 303 and
the Company Order delivered to the Trustee thereunder
with respect to such series, authenticate and deliver
such Global Security or Securities, which (i) shall
represent and shall be denominated in an aggregate
amount equal to the aggregate principal amount of the
Outstanding Securities of such series to be represented
by such Global Security or Securities, (ii) shall be
registered in the name of the Depositary for such
Global Security or Securities or its nominee,
(iii) shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instruction
and (iv) unless otherwise specified by the Company
pursuant to Section 301, shall bear a legend substan-
tially to the following effect: 'Unless and until it
is exchanged in whole or in part for the individual
Securities represented hereby, this Global SeCurity may
not be transferred except as a whole by the Depositary
to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to
a successor Depositary or a nominee of such successor
Depositary.'
Notwithstanding any other provision of Section
203, of Section 305 or of this Section 312,
subject to the provisions of the following paragraph,
unless otherwise specified by the Company pursuant to
Section 301 or unless the terms of a Global Security
expressly permit such Global Security to be exchanged
in whole or in part for individual Securities, a Global
Security may be transferred, in whole but not in part
in the manner provided in Section 305, only to a
nominee of the Depositary for such Global Security, or
to the Depositary, or to a successor Depositary for
<PAGE>
5
such Global Security selected or approved by the
Company, or to a nominee of such successor Depositary.
If at any time the Depositary for the Global
Securities of a series notifies the Company that it is
unwilling or unable to continue as Depositary for the
Global Securities of such series or if at any time the
Depositary for the Global Securities of such series
shall no longer be eligible or in good standing under
the Securities Exchange Act of 1934, as amended, or any
other applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to
such Global Security. If a successor Depositary for
the Global Securities of such series is not appointed
by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligi-
bility, the Company's election pursuant to Section 301
shall no longer be effective with respect to the Global
Securities of such series and the Company will execute,
and the Trustee, upon receipt of a Company Order for
the authentication and delivery of individual Securi-
ties of such series in exchange for the Global Securi-
ties of such series, will authenticate and deliver
individual Securities of such series of like tenor and
terms in definitive form in an aggregate principal
amount equal to the principal amount of the Global
Security or Global Securities of such series in
exchange for such Global Security or Global Securities.
The Company may at any time and in its sole
discretion determine that the Securities of any series
issued or issuable in the form of one or more Global
Securities shall no longer be represented by such
Global Security or Securities. In such event the
Company will execute, and the Trustee, upon receipt of
a Company Request for the authentication and delivery
of individual Securities of such series in exchange in
whole or in part for such Global Security, will authen-
ticate and deliver individual Securities of such series
of like tenor and terms in definitive form in an
aggregate principal amount equal to the principal
amount of such Global Security or Securities of such
series in exchange for such Global Security or Securi-
ties.
If specified by the Company pursuant to Section
301 with respect to a series of Securities issued
or issuable in the form of one or more Global Securi-
ties, the Depositary for any such Global Security may
<PAGE>
6
at its option surrender such Global Security in
exchange in whole or in part for individual Securities
of such series of like tenor and terms in definitive
form on such terms as are acceptable to the Company and
such Depositary. Thereupon the Company shall execute,
and the Trustee shall authenticate and deliver, without
service charge, (A) to each Person specified by such
Depositary a new Security or Securities of the same
series of like tenor and terms and of any authorized
denomination as requested by such Person in aggregate
principal amount equal to and in exchange for such
Person's beneficial interest in the Global Security;
and (B) to such Depositary a new Global Security of
like tenor and terms and in an authorized denomination
equal to the difference, if any, between the principal
amount of the surrendered Global Security and the
aggregate principal amount of Securities delivered to
Holders thereof.
In any exchange provided for in any of the preced-
ing three paragraphs, the Company will execute and the
Trustee will authenticate and deliver individual
Securities in definitive registered form in authorized
denominations. Upon the exchange of the entire
principal amount of a Global Security for individual
Securities, such Global Security shall be cancelled by
the Trustee. Securities issued in exchange for a
Global Security pursuant to this Section shall be
registered in such names and in such authorized
denominations as the Depositary for such Global
Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the
Trustee or the Security Registrar. Provided that the
Company and the Trustee or the Security Registrar have
so agreed, the Trustee shall deliver such Registered
Securities to the persons in whose names the Registered
Securities are registered.
Until such time as the Depositary notifies the
Company that it is willing and able to make any elec-
tion on behalf of the Persons with a beneficial inter-
est in a Security entitled to be made by the Holder of
such Security relating to the payment of principal and
interest, Securities denominated in a Foreign Currency
will not be issued in the form of a Global Security.
Notwithstanding the provisions of Section 203 and
of Article XIII, with respect to any Global Security,
<PAGE>
7
nothing herein shall prevent the Company, the Trustee,
or any agent of the Company or the Trustee, from giving
effect to any written certification, proxy or other
authorization furnished by a Depositary or impair, as
between a Depositary and holders of beneficial inter-
ests in any Global Security, the operation of customary
practices governing the exercise of the rights of the
Depositary as Holder of such Global Security."
II. GENERAL PROVISIONS
A. The recitals contained herein shall be taken
as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of same. The Trustee
makes no representation as to the validity of this First
Supplemental Indenture. The Indenture, as supplemented and
amended by this First Supplemental Indenture, is in all
respects hereby adopted, ratified and confirmed.
B. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed
to be an original, but all such counterparts shall together
constitute but one and the same instrument.
C. This First Supplemental Indenture shall be
governed by and construed in accordance with the laws of the
State of New York.
IN WITNESS WHEREOF, the parties hereto have caused
this First Supplemental Indenture to be duly executed, and
<PAGE>
8
their corporate seals to be hereunto affixed and attested, all as of the
day and year first above written.
PAINE WEBBER GROUP INC.
by /s/
------------------------
Title: Attorney-in-Fact
(SEAL)
Attest:
/s/
- -----------------------
CHEMICAL BANK DELAWARE,
as Trustee
by /s/
------------------------
Title: SENIOR TRUST OFFICER
(SEAL)
Attest:
/s/
- -----------------------
Assistant Secretary
EXECUTION COPY
========================================================================
PAINE WEBBER GROUP INC.
to
CHEMICAL BANK DELAWARE
----------------
Subordinated Debt Securities
----------------
Second Supplemental Indenture
----------------
Dated as of March 22, 1991
Supplementing the Indenture
Dated as of March 15, 1988
and Supplemented as of
September 22, 1989
----------------
========================================================================
<PAGE>
SECOND SUPPLEMENTAL INDENTURE dated as
of March 22, 1991, between PAINE WEBBER GROUP
INC., a corporation duly organized and
existing under the laws of Delaware (herein
called the "Company"), having its principal
office at 1285 Avenue of the Americas, New
York, New York 10019, and CHEMICAL BANK, a
corporation duly organized and existing under
the laws of the State of Delaware, as Trustee
(herein called the "Trustee").
RECITALS
The Company and the Trustee are parties to an
Indenture dated as of March 15, 1988, as supplemented as of
September 22, 1989 (the "Indenture"), relating to the issu-
ance from time to time by the Company of its Securities.
Capitalized terms used herein and not otherwise defined
shall have the meanings given them in the Indenture.
The Company has requested the Trustee to join with
it in the execution and delivery of this second supplemental
indenture (the "Second Supplemental Indenture") in order to
supplement and amend the Indenture by amending and restating
certain provisions thereof to cause the Indenture to comply
with amendments to the Trust Indenture Act of 1939 effected
by the Trust Indenture Reform Act of 1990 and to take
account of recent changes in United States tax rules as a
result of the promulgation of Treasury Regula-
tion 1.163-5(c)(2)(i)(D) (the "D Rules").
Section 901 of the Indenture provides that a
supplemental indenture may be entered into by the Company
and the Trustee, without the consent of any Holders of the
Securities, to cure any ambiguity, to correct or supplement
any provision therein which may be defective or inconsistent
with any other provision therein, or to make any other
provisions with respect to matters or questions arising
under the Indenture, provided such action shall not
adversely affect the interests of the Holders of Securities
of any series in any material respect.
Section 107 of the Indenture provides that if any
provision thereof limits, qualifies or conflicts with
another provision thereof which is required to be included
therein by the Trust Indenture Act, such required provision
shall control.
<PAGE>
2
The Company has determined that this Second
Supplemental Indenture complies with said Section 901 and
does not require the consent of any Holders of Securities.
At the request of the Trustee, the Company has
furnished the Trustee with an Opinion of Counsel complying
with the requirements of Section 903 of the Indenture,
stating, among other things, that the execution of this
Second Supplemental Indenture is authorized or permitted by
the Indenture, and an Officers' Certificate and Opinion of
Counsel complying with the requirements of Section 102 of
the Indenture, and has delivered to the Trustee a Board
Resolution as required by Section 901 of the Indenture
authorizing the execution by the Company of this Second
Supplemental Indenture and its delivery by the Company to
the Trustee.
All things necessary to make this Second Supple-
mental Indenture a valid agreement of the Company and the
Trustee, in accordance with the terms of the Indenture, and
a valid amendment of and supplement to the Indenture have
been done.
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises, it is
mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as
follows:
I. AMENDMENTS TO THE INDENTURE TO INCORPORATE CHANGES UNDER
THE TRUST INDENTURE REFORM ACT OF 1990
A. The definition of "Trust Indenture Act" in
Section 101 of the Indenture is amended to add to such
definition the phrase ", as amended by the Trust Indenture
Reform Act of 1990 and" after the date "1939" in the second
line of such definition.
B. Section 102 of the Indenture is amended to add
to such Section:
(i) the parenthetical phrase "(including any
covenants compliance with which constitutes a condition
precedent)" following the words "precedent" in each of
the sixth and tenth lines, respectively, of the first
paragraph of such Section; and
<PAGE>
3
(ii) the parenthetical phrase "(other than annual
certificates provided pursuant to Section 1004)"
following the word "Indenture" in the third line of the
second paragraph of such Section.
C. Section 104(g) of the Indenture is amended to
read in its entirety as follows:
"If the Company shall solicit from the Holders any
request, demand, authorization, direction, notice,
consent, waiver or other Act, or for the purpose of
determining the identity of Holders entitled to vote or
consent to any action authorized or permitted by
Sections 512 or 513 of this Indenture, the Company may,
at its option, by or pursuant to a Board Resolution,
fix in advance a record date for the determination of
Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or
other Act, but the Company shall have no obligation to
do so. For the purpose of determining the identity of
Holders entitled to vote or consent to any action
authorized or permitted by Sections 512 or 513 of this
Indenture, the record date shall be the later of
15 days prior to the first solicitation of such consent
or the date of the most recent list of Holders
furnished to the Trustee pursuant to Section 701 of
this Indenture prior to such solicitation. If such a
record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or
other Act may be given before or after such record
date, but only the Holders of record at the close of
business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders
of the requisite proportion of Outstanding Securities
have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the
Outstanding Securities shall be computed as of such
record date; provided that no such authorization,
--------
agreement or consent by the holders on such record date
shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture
not later than six months after the record date."
D. Section 107 of the Indenture is amended to
read in its entirety as follows:
"If any provision hereof limits, qualifies or conflicts
with the duties imposed by any of Sections 310
<PAGE>
4
through 317, inclusive, of the Trust Indenture Act
through the operation of Section 318(c) thereof, such
imposed duties shall control."
E. Section 608 of the Indenture is amended to
read in its entirety as follows:
"The Trustee for the Securities of any series issued
hereunder shall be subject to the provisions of Sec-
tion 310(b) of the Trust Indenture Act during the
period of time provided for therein. In determining
whether the Trustee has a conflicting interest as
defined in Section 310(b) of the Trust Indenture Act
with respect to the Securities of any series, there
shall be excluded this Indenture with respect to
Securities of any particular series of Securities other
than that series. Nothing herein shall prevent the
Trustee from filing with the Commission the application
referred to in the penultimate paragraph of Sec-
tion 310(b) of the Trust Indenture Act."
F. Section 609 of the Indenture is amended to
read in its entirety as follows:
"There shall at all times be a Trustee hereunder for
each series of Securities, which shall be at all times
either
(i) a corporation organized and doing business
under the laws of the United States of America or
of any State or the District of Columbia,
authorized under such laws to exercise corporate
trust powers and subject to supervision or
examination by Federal, State or District of
Columbia authority, or
(ii) a corporation or other Person organized and
doing business under the laws of a foreign govern-
ment that is permitted to act as Trustee pursuant
to a rule, regulation or order of the Commission,
authorized under such laws to exercise corporate
trust powers, and subject to supervision or
examination by authority of such foreign govern-
ment or a political subdivision thereof substan-
tially equivalent to supervision or examination
applicable to United States institutional
trustees,
<PAGE>
5
in either case having a combined capital and surplus of at
least $50,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or to require-
ments of the aforesaid supervising or examining authority,
then for the purposes of this Section 609, the combined
capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most
recent report of condition so published. Neither the
Company nor any Person directly or indirectly controlling,
controlled by, or under common control with the Company
shall serve as Trustee for the Securities of any series
issued hereunder. If at any time the Trustee for the
Securities of any series shall cease to be eligible in
accordance with the provisions of this Section 609, it shall
resign immediately in the manner and with the effect
hereinafter specified in this Article Six."
G. Section 610(d)(1) of the Indenture is amended
to:
(i) delete the phrase "Section 608(a)" after the
word "with" in the first line thereof and to add the
phrase "Section 310(b) of the Trust Indenture Act" in
substitution for such deleted phrase; and
(ii) to add immediately after the word "months" in
the fourth line thereof the phrase ", unless the
Trustee's duty to resign is stayed in accordance with
the provisions of Section 310(b) of the Trust Indenture
Act".
H. Section 613 of the Indenture is hereby amended
to:
(i) substitute the word "three" for the word
"four" in the fourth line of subsection (a) thereof;
(ii) substitute the word "three" for the word
"four" in the fourth line of subsection (a)(1) thereof:
(iii) substitute the word "three" for the word
"four" in the fifth line of subsection (a)(2) thereof;
(iv) substitute the word "three" for the word
"four" in the fourth line of paragraph (B) thereof;
(v) substitute the word "three" for the word
"four" in the fifth and eleventh lines, respectively,
of paragraph (C) thereof;
<PAGE>
6
(vi) substitute the word "three" for the word
"four" in the second line of the first full paragraph
immediately after paragraph (D) thereof;
(vii) substitute the word "three" for the word
"four" in the second and sixth lines, respectively, of
the third full paragraph after paragraph (D) thereof;
and
(viii) substitute the word "three" for the word
"four" in subparagraphs (i) and (ii) of the third full
paragraph after paragraph (D) thereof.
I. Section 703(a) of the Indenture is amended to:
(i) add the phrase "any of the following events
which may have occurred during the twelve months
preceding the date of such report (but if no such event
has occurred within such period, no report need be
transmitted)" immediately after the word "to" on the
fifth line of subsection (a) of Section 703;
(ii) add the phrase "any change to" immediately
after (1) of Section 703(a)(1) and delete from
Section 703(a)(1) the phrase ", or in lieu thereof, if
to the best of its knowledge it has continued to be
eligible and qualified under said Sections, a written
statement to such effect";
(iii) add a new subsection (2) thereto, which will
read in its entirety as follows:
"(2) the creation of or any material change to a
relationship specified in Section 310(b)(1)
through Section 310(b)(10) of the Trust Indenture
Act;"
(iv) change subsection number "(2)" to "(3)";
(v) change subsection numbers "(3)" and "(4)" to
"(4)" and "(5)", respectively, and add the phrase "any
change to" immediately after such subsection numbers;
and
(vi) change subsection numbers "(5)" and "(6)" to
"(6)" and "(7)", respectively.
<PAGE>
7
J. Section 1004 of the Indenture is amended to
read in its entirety as follows:
"The Company will furnish to the Trustee, within
120 days after the end of each fiscal year of the
Company (which as of the date hereof ends on
December 31 of each year) ending after the date hereof
so long as any Security is Outstanding hereunder, a
certificate of the principal executive officer, the
principal financial officer or the principal accounting
officer of the Company, stating that in the course of
the performance by the signer of his or her duties as
such officer of the Company he or she would normally
obtain knowledge of any default by the Company in the
performance, observance or fulfillment of any covenant,
agreement or condition contained in this Indenture, and
stating whether or not, to the knowledge of the signer,
the Company has complied with all conditions,
agreements and covenants on its part contained in this
Indenture, and if the signer has obtained knowledge of
any default by the Company in the performance,
observance or fulfillment of any such condition,
agreement or covenant, specifying each such default and
the nature thereof (provided that, for purposes of this
--------
Section 1004, compliance shall be determined without
regard to any grace period or requirement of notice
provided pursuant to the terms of this Indenture)."
K. The Table of Contents of the Indenture is
amended to reflect the additions and deletions described in
this Second Supplemental Indenture.
II. AMENDMENTS TO THE INDENTURE AS A RESULT OF THE ADOPTION
OF THE D RULES
A. Section 303 of the Indenture is amended to
replace the third paragraph of such Section with the follow-
ing paragraph:
"At any time and from time to time after the
execution and delivery of this Indenture, the Company may
deliver Securities of any series, together with any Coupons
appertaining thereto, executed by the Company to the Trustee
for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authen-
ticate and deliver such Securities; provided, however, that,
-------- -------
in connection with its original issuance, no Bearer Security
<PAGE>
8
(including any temporary Bearer Security issued pursuant to
Section 304 which is not a global Security) shall be mailed
or otherwise delivered to any location in the United States;
and provided further that a Bearer Security may be delivered
----------------
outside the United States in connection with its original
issuance only if the Person entitled to receive such Bearer
Security (including any temporary Bearer Security issued
pursuant to Section 304 which is not a global Security)
shall have furnished a certificate in the form set forth in
Exhibit A.1 to this Indenture, dated the date of delivery of
such Bearer Security or, in the case of a Bearer Security to
be received in exchange for all or a portion of a temporary
global Security, no earlier than 15 days prior to the date
on which Euroclear or CEDEL S.A., as the case may be,
furnishes to the Common Depositary (as defined in
Section 304), in accordance with the procedures set forth in
Section 304, a certificate in the form set forth in
Exhibit A.2 to this Indenture relating to all or such
portion of such temporary global Security. If any Security
shall be represented by a definitive global Security in
bearer form, then, for purposes of this Section and Sec-
tion 304, the notation of a beneficial owner's interest
therein upon original issuance of such Security or upon
exchange of a portion of a temporary global Security shall
be deemed to be delivery in connection with its original
issuance of such beneficial owner's interest in such defini-
tive global Security in bearer form. Except as permitted by
Section 306, the Trustee shall not authenticate and deliver
any Bearer Security unless all appurtenant Coupons for
interest then matured have been detached and canceled."
B. Section 304 of the Indenture is amended to
read in its entirety as follows:
"Pending the preparation of definitive Securities
of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued, in registered
form or, if authorized, in bearer form with one or more
Coupons or without Coupons, and with such appropriate
insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as
evidenced conclusively by their execution of such
Securities. Such temporary Securities may be in global
form.
<PAGE>
9
Except in the case of temporary global Securities
in bearer form (which shall be exchanged in accordance with
the provisions of the following two paragraphs), if
temporary Securities of any series are issued, the Company
will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation
of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency
of the Company maintained pursuant to Section 1002 in a
Place of Payment for such series for the purpose of
exchanges of Securities of such series, without charge to
the Holder. Upon surrender for cancelation of any one or
more temporary Securities of any series (accompanied by any
unmatured Coupons appertaining thereto) the Company shall
execute and the Trustee shall authenticate and deliver in
exchange therefor a like aggregate principal amount of
definitive Securities of the same series and of like tenor
or authorized denominations and having the same terms and
conditions; provided, however, that no definitive Bearer
-------- -------
Security shall be delivered in exchange for a temporary
Registered Security; and provided further that a definitive
----------------
Bearer Security shall be delivered in exchange for a
temporary Bearer Security only in compliance with the
conditions set forth in Section 303.
If temporary global Securities of any series are
issued in bearer form, any such temporary global Securities
in bearer form shall, unless otherwise provided therein, be
delivered to the London office of a depositary or common
depositary (the "Common Depositary"), for the benefit of
Euroclear and CEDEL S.A., for credit to the respective
accounts of the beneficial owners of such Securities (or to
such other accounts as they may direct). Without
unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any
such temporary global Security in bearer form (the "Exchange
Date"), the Company shall deliver to the Trustee definitive
Securities, in aggregate principal amount equal to the
principal amount of such temporary global Security, executed
by the Company. On or after the Exchange Date such
temporary global Security shall be surrendered by the Common
Depositary to the Trustee or an Authenticating Agent, as the
Company's agent for such purpose, to be exchanged, in whole
or from time to time in part, for definitive Securities
without charge and the Trustee or an Authenticating Agent
shall authenticate and deliver, in exchange for each portion
of such temporary global Security, an equal aggregate
principal amount of definitive Securities of the
<PAGE>
10
same series of authorized denominations and of like tenor as the
portion of such temporary global Security to be exchanged. The
definitive Securities to be delivered in exchange for any
such temporary global Security in bearer form shall be in
bearer form, registered form, definitive global form
(registered or bearer), or any combination thereof, as
specified as contemplated by Section 301, and, if any
combination thereof is so specified, as requested by the
beneficial owner thereof; provided, however, that, unless
-------- -------
otherwise specified in such temporary global Security in
bearer form, upon such presentation by the Common Deposi-
tary, such temporary global Security in bearer form shall be
accompanied by a certificate dated the Exchange Date or a
subsequent date and signed by Euroclear as to the portion of
such temporary global Security in bearer form held for its
account then to be exchanged and a certificate dated the
Exchange Date or a subsequent date and signed by CEDEL S.A.
as to the portion of such temporary global Security in
bearer form held for its account then to be exchanged, each
in the form set forth in Exhibit A.2 to this Indenture; and
provided further that definitive Bearer Securities shall be
----------------
delivered in exchange for a portion of a temporary global
Security in bearer form only in compliance with the require-
ments of Section 303.
Unless otherwise specified in such temporary
global Security in bearer form, the interest of a beneficial
owner of Securities of a series in a temporary global
Security in bearer form shall be exchanged for definitive
Securities of the same series and of like tenor following
the Exchange Date when the beneficial owner instructs
Euroclear or CEDEL S.A., as the case may be, to request such
exchange on his behalf and delivers to Euroclear or CEDEL
S.A., as the case may be, a certificate in the form set
forth in Exhibit A.1 to this Indenture, dated no earlier
than 15 days prior to the date on which Euroclear or
CEDEL S.A., as the case may be, furnishes to the Common
Depositary in accordance with the preceding paragraph a
certificate in the form set forth in Exhibit A.2 to this
Indenture that relates to the interest to be exchanged for
definitive Securities. Copies of the certificate in the
form set forth in Exhibit A.1 to this Indenture in blank
shall be available from the offices of Euroclear, CEDEL
S.A., the Trustee, any Authenticating Agent appointed for
such series of Securities and any Paying Agent appointed for
such series of Securities. Unless otherwise specified in
such temporary global Security in bearer form, any such
exchange shall be made free of charge to the beneficial
owners of such temporary global Security in bearer form,
<PAGE>
11
except that a Person receiving definitive Securities must
bear the cost of insurance, postage, transportation and the
like in the event that such Person does not take delivery of
such definitive Securities in person at the offices of
Euroclear or CEDEL S.A. The definitive Securities in bearer
form to be delivered in exchange for any portion of a
temporary global Security in bearer form shall be delivered
only outside the United States.
Until exchanged in full as hereinabove provided,
the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as
definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless
otherwise specified as contemplated by Section 301, no
interest shall be payable on a temporary global Security in
bearer form on an Interest Payment Date occurring after the
applicable Exchange Date, and any interest payable on a
temporary global Security in bearer form on an Interest
Payment Date for Securities of such series occurring prior
to the applicable Exchange Date shall be payable to
Euroclear and CEDEL S.A. on such Interest Payment Date only
upon delivery by Euroclear and CEDEL S.A. to the Trustee or
principal Paying Agent and Authenticating Agent of a
certificate or certificates in the form set forth in
Exhibit A.3 to this Indenture, for credit without further
interest on or after such Interest Payment Date to the
respective accounts of the Persons who are the beneficial
owners of such temporary global Security in bearer form (or
to such other accounts as they may direct) on such Interest
Payment Date and who have each delivered to Euroclear or
CEDEL S.A., as the case may be, a certificate in the form
set forth in Exhibit A.4 to this Indenture. Any interest so
received by Euroclear and CEDEL S.A. and not paid as herein
provided shall be returned to the Trustee or principal
Paying Agent immediately prior to the expiration of two
years after such Interest Payment Date in order to be repaid
to the Company in accordance with Section 1003."
C. Exhibit A.1 to this Second Supplemental
Indenture replaces Exhibit A.1 to the Indenture.
D. Exhibit A.4 to this Second Supplemental
Indenture replaces Exhibit A.4 to the Indenture.
III. GENERAL PROVISIONS
A. The recitals contained herein shall be taken
as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of same. The Trustee
<PAGE>
12
makes no representation as to the validity of this Second
Supplemental Indenture. The Indenture, as supplemented and
amended by this Second Supplemental Indenture, is in all
respects hereby adopted, ratified and confirmed.
B. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed
to be an original, but all such counterparts shall together
constitute but one and the same instrument.
C. This Second Supplemental Indenture shall be
deemed to be a contract under the laws of the State of New
York and for all purposes shall be governed by and construed
in accordance with the laws of said State.
IN WITNESS WHEREOF, the parties hereto have caused
this Second Supplemental Indenture to be duly executed, and
their corporate seals to be hereunto affixed and attested,
all as of the day and year first above written.
PAINE WEBBER GROUP INC.
by /s/
------------------
Title:
(SEAL)
Attest:
/s/ Dorothy F. Haughey
- ----------------------
CHEMICAL BANK DELAWARE,
as Trustee
by /s/
------------------------
Senior Trust Officer
(SEAL)
Attest:
/s/
- --------------------------
Assistant Secretary
<PAGE>
EXHIBIT A
[FORMS OF CERTIFICATION]
EXHIBIT A.1
[FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY]
CERTIFICATE
PAINE WEBBER GROUP INC.
[Insert title or sufficient description
of Securities to be delivered]
This is to certify that as of the date hereof, and
except as set forth below, the above-captioned Securities
(i) are owned by a person that is not a United States
person, (ii) are owned by a United States person that is
(A) the foreign branch of a United States financial institu-
tion (as defined in U.S. Treasury Regulations Sec-
tion 1.165-12(c)(1)(v)) (a "financial institution") purchas-
ing for its own account or for resale, or (B) a United
States person who acquired the Securities through the
foreign branch of a United States financial institution and
who holds the Securities through the financial institution
on the date hereof (and in either case (A) or (B), the
financial institution hereby agrees to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the
Internal Revenue Code of 1986, as amended, and the regula-
tions thereunder), or (iii) are owned by a financial insti-
tution for purposes of resale during the Restricted Period
(as defined in U.S. Treasury Regulations Sec-
tion 1.163-5(c)(2)(i)(D)(7)). In addition, financial
institutions described in clause (iii) of the preceding
sentence (whether or not also described in clause (i) or
(ii)) certify that they have not acquired the Securities for
purposes of resale directly or indirectly to a United States
person or to a person within the United States or its
possessions.
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 (including the States and the District of
<PAGE>
2
Columbia), its territories, its possessions, the
Commonwealth of Puerto Rico and other areas subject to its
jurisdiction.
We undertake to advise you by telex if the above
statement as to beneficial ownership is not correct on the
date of delivery of the above-captioned Securities in bearer
form as to all of such Securities.
We understand that this certificate may be
required in connection with certain tax legislation in the
United States. If administrative or legal proceedings are
commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably author-
ize you to produce this certificate or a copy thereof to any
interested party in such proceedings.
Dated: 19
----------- --
[To be dated on or after the
- ----------------------------
date determined as provided in
- ------------------------------
the Indenture]
- -------------
[Name of Person Entitled to
Receive Bearer Security]
--------------------------------
(Authorized Signature)
Name:
Title:
<PAGE>
EXHIBIT A.4
[FORM OF CERTIFICATE TO BE GIVEN BY BENEFICIAL OWNERS
TO OBTAIN INTEREST PRIOR TO AN EXCHANGE DATE]
CERTIFICATE
PAINE WEBBER GROUP INC.
[Insert title or sufficient
---------------------------
description of Securities]
--------------------------
This is to certify that as of the Interest Payment
Date on [Insert Date] and except as provided in the third
paragraph hereof, the above-captioned Securities held by you
for our account are beneficially owned by (i) a person that
is not a United States person, (ii) a United States person
that is (A) the foreign branch of a United States financial
institution (as defined in U.S. Treasury Regulations Sec-
tion 1.165-12(c)(1)(v)) (a "financial institution") purchas-
ing for its own account or for resale, or (B) a United States
person who acquired the Securities through the foreign branch
of a United States financial institution and who holds the
Securities through the financial institution on the date
hereof (and in either case (A) or (B), the financial insti-
tution hereby agrees to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue
Code of 1986, as amended, and the regulations thereunder),
or (iii) a financial institution for purposes of resale
during the Restricted Period (as defined in U.S. Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)). In addition, if
the beneficial owner is a financial institution described in
clause (iii) of the preceding sentence (whether or not also
described in clause (i) or (ii)) it certifies that it has
not acquired the Securities for purposes of resale directly
or indirectly to a United States person or to a person
within the United States or its possessions.
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 (including the States and the District of Colum-
bia), its territories, its possessions, the Commonwealth of
Puerto Rico and other areas subject to its jurisdiction.
<PAGE>
2
This certificate excepts and does not relate to
U.S. $ principal amount of the above-captioned
Securities appearing in your books as being held for our
account as to which we are not yet able to certify and as to
which we understand interest cannot be credited unless and
until we are able to so certify.
We understand that this certificate may be
required in connection with certain tax legislation in the
United States. If administrative or legal proceedings are
commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably author-
ize you to produce this certificate or a copy thereof to any
interested party in such proceedings.
Date: 19
--------- --
[To be dated on or after
- ------------------------
the 15th day before the
- -----------------------
relevant Interest Payment Date]
- -------------------------------
[Name of Person Entitled to
Receive interest]
-------------------------------
(Authorized Signature)
Name:
Title:
===========================================================================
PAINE WEBBER GROUP INC.
to
CHEMICAL BANK DELAWARE
------------------
Subordinated Debt Securities
------------------
Third Supplemental Indenture
------------------
Dated as of November 30, 1993
Supplementing the Indenture
Dated as of March 15, 1988
------------------
===========================================================================
<PAGE>
THIRD SUPPLEMENTAL INDENTURE dated as of
November 30, 1993, between PAINE WEBBER GROUP
INC., a corporation duly organized and
existing under the laws of Delaware (herein
called the "Company"), having its principal
office at 1285 Avenue of the Americas, New
York, New York 10019, and CHEMICAL BANK
DELAWARE, a corporation duly organized and
existing under the laws of the State of
Delaware, as Trustee (herein called the
"Trustee").
RECITALS
The Company and the Trustee are parties to an
Indenture dated as of March 15, 1988, as supplemented by a
First Supplemental Indenture dated as of September 22, 1989,
and by a Second Supplemental Indenture dated as of March 22,
1991 (the "Indenture"), relating to the issuance from time
to time by the Company of its Securities. Capitalized terms
used herein and not otherwise defined shall have the
meanings given them in the Indenture.
The Company has requested the Trustee to join with
it in the execution and delivery of this third supplemental
indenture (the "Third Supplemental Indenture") in order to
supplement and amend the Indenture by amending and restating
certain provisions thereof for the purpose of redesignating
the officers authorized and required to execute the
Securities on behalf of the Company.
Section 901 of the Indenture provides that a
supplemental indenture may be entered into by the Company
and the Trustee, without the consent of any Holders of the
Securities, to cure any ambiguity, to correct or supplement
any provision therein which may be defective or inconsistent
with any other provision therein, or to make any other
provisions with respect to matters or questions arising
under the Indenture, provided such action shall not
adversely affect the interests of the Holders of Securities
of any series in any material respect.
The Company has determined that this Third
Supplemental Indenture complies with said Section 901 and
does not require the consent of any Holders of Securities.
<PAGE>
2
At the request of the Trustee, the Company has
furnished the Trustee with an Opinion of Counsel complying
with the requirements of Section 903 of the Indenture,
stating, among other things, that the execution of this
Third Supplemental Indenture is authorized or permitted by
the Indenture, and an Officers' Certificate and Opinion of
Counsel complying with the requirements of Section 102 of
the Indenture, and has delivered to the Trustee a Board
Resolution as required by Section 901 of the Indenture
authorizing the execution by the Company of this Third
Supplemental Indenture and its delivery by the Company to
the Trustee.
All things necessary to make this Third
Supplemental Indenture a valid agreement of the Company and
the Trustee, in accordance with the terms of the Indenture,
and a valid amendment of and supplement to the Indenture
have been done.
NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises, it is
mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as
follows:
I. AMENDMENT TO THE INDENTURE
The first sentence of Section 303 of the Indenture
is amended to read in its entirety as follows:
"The Securities shall be executed on behalf of the Company
by manual or facsimile signatures of its Chairman, its
President or any of its Vice Presidents or its Treasurer,
under its corporate seal reproduced thereon attested by the
manual or facsimile signature of its Secretary or one of its
Assistant Secretaries."
II. GENERAL PROVISIONS
A. The recitals contained herein shall be taken
as the statements of the Company, and the Trustee assumes no
responsibility for the correcthess of the same. The Trustee
makes no representation as to the validity of this Third
Supplemental Indenture. The Indenture, as supplemented and
<PAGE>
3
amended by this Third Supplemental Indenture, is in all
respects hereby adopted, ratified and confirmed.
B. This instrument may be executed in any number
of counterparts, each of which when so executed shall be
deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
C. This Third Supplemental Indenture shall be
deemed to be a contract under the laws of the State of New
York and for all purposes shall be governed by and construed
in accordance with the laws of said State.
IN WITNESS WHEREOF, the parties hereto have caused
this Third Supplemental Indenture to be duly executed, and
their corporate seals to be hereunto affixed and attested,
all as of the day and year first above written.
PAINE WEBBER GROUP INC.,
by
-------------------------
Name:
Title:
[Seal]
Attest:
- --------------------
CHEMICAL BANK DELAWARE,
as Trustee,
by
-------------------------
Name:
Title:
[Seal]
Attest:
- -------------------------
<PAGE>
4
amended by this Third Supplemental Indenture, is in all
respects hereby adopted, ratified and confirmed.
B. This instrument may be executed in any number
of counterparts, each of which when so executed shall be
deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
C. This Third Supplemental Indenture shall be
deemed to be a contract under the laws of the State of New
York and for all purposes shall be governed by and construed
in accordance with the laws of said State.
IN WITNESS WHEREOF, the parties hereto have caused
this Third Supplemental Indenture to be duly executed, and
their corporate seals to be hereunto affixed and attested,
all as of the day and year first above written.
PAINE WEBBER GROUP INC.,
by
-------------------------
Name:
Title:
[Seal]
Attest:
- ----------------------------
CHEMICAL BANK DELAWARE,
as Trustee,
by
-------------------------
Name:
Title:
[Seal]
Attest:
- ----------------------------
EXHIBIT 5
____________, 1995
Paine Webber Group Inc.
1285 Avenue of the Americas
New York, NY 10019
$400,000,000
------------
Paine Webber Group Inc.
-----------------------
Debt Securities
---------------
Dear Sirs:
I have examined and am familiar with the Certificate of Incorporation
of Paine Webber Group Inc., a Delaware corporation (the "Company"), and the
By-Laws of the Company. I am also familiar with the corporate proceedings
taken by the Company to authorize the issuance by the Company of additional
debt securities in an aggregate principal amount of up to $400,000,000 (the
"Debt Securities") or higher if original issue discount. I have examined
copies of the proposed forms of Debt Securities filed with the Registration
Statement (the "Registration Statement") on Form S-3 relating to the Debt
Securities. I have also examined originals, or copies certified or
otherwise identified to my satisfaction, of such documents, corporate
records and other instruments as I have deemed necessary or appropriate for
the purposes of this opinion.
On the basis of the foregoing, I am of opinion that:
1. The Company is a duly organized and validly existing corporation
under the laws of the State of Delaware.
2. The issuance and sale of the Debt Securities have been validly
authorized; and such principal amount of Debt Securities, when duly
executed and authenticated on behalf of the Company and issued and sold in
accordance with such corporate proceedings, will be validly authorized and
issued and will constitute legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their terms
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws affecting creditors' rights
generally from time to time and subject, as to enforceability, to general
principles of equity, regardless of whether such enforceability is considered
in a proceeding in equity or at law).
I know that I am referred to under the heading "Legal Matters" in the
Prospectus forming a part of the Registration Statement on Form S-3
relating to the Debt Securities and I hereby consent to such use of my name
in the Registration Statement.
Very truly yours
/s/ Theodore A. Levine
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3) and related
Prospectus of Paine Webber Group Inc. for the registration of $400,000,000
of debt securities and to the incorporation by reference therein of our
reports dated January 31, 1995, with respect to the consolidated financial
statements of Paine Webber Group Inc. incorporated by reference in its
Annual Report (Form 10-K) for the year ended December 31, 1994 and the
related financial statement schedules included therein, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
October 13, 1995
The Board of Directors
Paine Webber Group, Inc.
We consent to the incorporation by reference in the registration statement dated
October 13, 1995 (Nos. 33-52695-0 and 33-52695) on Amendment No. 1 to Form S-3
filed by Paine Webber Group Inc. to the use of our report dated February 8,
1995, with respect to the combined statement of assets acquired and liabilities
assumed of the Real Estate, Eurobond, Retail Brokerage and Asset Management
Businesses ("Purchased Businesses") of Kidder, Peabody Group Inc. as of December
26, 1994 or date prior to transfer (the Real Estate and Eurobond Businesses are
combined on their respective closing dates - December 9 and December 16, 1994),
and with respect to the combined statement of operations of the Purchased
Businesses for the years ended December 27, 1993, December 28, 1992 and December
30, 1991, which report appears in the Form 8-K/A of Paine Webber Group Inc.
dated February 22, 1995.
/s/ KPMG Peat Marwick LLP
New York, New York
October 13, 1995
_______________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
PAINE WEBBER GROUP INC.
(Exact name of obligor as specified in its charter)
Delaware 13-2760086
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1285 Avenue of the Americas
New York, New York 10019
(Address of principal executive offices) (Zip Code)
___________________________________________
Debt Securities
(Title of the indenture securities)
_____________________________________________________
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
New York State Banking Department, State House, Albany,
New York 12110.
Board of Governors of the Federal Reserve System,
Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33
Liberty Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C.,
20429.
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement
of Eligibility.
1. A copy of the Articles of Association of the Trustee
as now in effect, including the Organization Certificate and
the Certificates of Amendment dated February 17, 1969, August
31, 1977, December 31, 1980, September 9, 1982, February 28,
1985 and December 2, 1991 (see Exhibit 1 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee
to Commence Business (see Exhibit 2 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is
incorporated by reference).
3. None, authorization to exercise corporate trust
powers being contained in the documents identified above as
Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see
Exhibit 4 to Form T-1 filed in connection with Registration
Statement No. 33-84460, which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b)
of the Act (see Exhibit 6 to Form T-1 filed in connection with
Registration Statement No. 33-50010, which is incorporated by
reference).
7. A copy of the latest report of condition of the
Trustee, published pursuant to law or the requirements of its
supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939 the Trustee, Chemical Bank, a corporation organized and
existing under the laws of the State of New York, has duly
caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in the City
of New York and State of New York, on the 2nd day of October,
1995.
CHEMICAL BANK
By /s/ Gregory McFarlane
---------------------------
Gregory McFarlane
Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1995, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Millions
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .................................. $ 5,573
Interest-bearing balances .......................... 2,681
Securities: ............................................
Held to maturity securities............................. 6,027
Available for sale securities........................... 18,304
Federal Funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold ................................. 1,516
Securities purchased under agreements to resell .... 287
Loans and lease financing receivables:
Loans and leases, net of unearned income $73,829
Less: Allowance for loan and lease losses 1,885
Less: Allocated transfer risk reserve ... 104
-------
Loans and leases, net of unearned income,
allowance, and reserve ............................. 71,840
Trading Assets ......................................... 25,315
Premises and fixed assets (including capitalized
leases)............................................. 1,395
Other real estate owned ................................ 69
Investments in unconsolidated subsidiaries and
associated companies................................ 158
Customer's liability to this bank on acceptances
outstanding ........................................ 1,120
Intangible assets ...................................... 484
Other assets ........................................... 7,254
-------
TOTAL ASSETS ........................................... $142,023
=========
- 4 -
<PAGE>
LIABILITIES
Deposits
In domestic offices ................................ $46,128
Noninterest-bearing .........................$16,282
Interest-bearing ............................ 29,846
-------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's .......................................... 30,833
Noninterest-bearing ............................. $ 199
Interest-bearing ............................ 30,634
------
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBF's
Federal funds purchased ............................. 16,779
Securities sold under agreements to repurchase ...... 810
Demand notes issued to the U.S. Treasury ................ 1,001
Trading liabilities ..................................... 20,888
Other Borrowed money:
With original maturity of one year or less .......... 6,505
With original maturity of more than one year ........ 602
Mortgage indebtedness and obligations under capitalized
leases .............................................. 18
Bank's liability on acceptances executed and outstanding 1,126
Subordinated notes and debentures ...................... 3,411
Other liabilities ...................................... 6,287
TOTAL LIABILITIES ...................................... 134,388
-------
EQUITY CAPITAL
Common stock ............................................ 620
Surplus ................................................. 4,524
Undivided profits and capital reserves .................. 2,724
Net unrealized holding gains (Losses)
on available-for-sale securities ........................ (241)
Cumulative foreign currency translation adjustments ..... 8
TOTAL EQUITY CAPITAL .................................... 7,635
______
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ............................ $142,023
==========
I, Joseph L. Sclafani, S.V.P. & Controller of the
above-named bank, do hereby declare that this Report of
Condition has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true to the best of my knowledge and
belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
WILLIAM B. HARRISON )
- 5 -
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________________________
CHEMICAL BANK DELAWARE
(Exact name of trustee as specified in its charter)
DELAWARE 51-0266457
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
1201 Market Street,
Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)
David J. Clark
Counsel
1201 Market Street
Wilmington, DE 19801
(302) 428-3330
(Name, address and telephone number of agent for service)
_____________________________________________
PAINE WEBBER GROUP INC.
(Exact name of obligor as specified in its charter)
Delaware 13-2760086
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1285 Avenue of the Americas
New York, New York 10019
(Address of principal executive offices) (Zip Code)
___________________________________________
Subordinated Debt Securities
(Title of the indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Office of The State Bank Commissioner, 555 East Lockerman Street
Suite 210, Dover, DE 19901
Federal Deposit Insurance Corporation,
New York Regional Office
452 Fifth Avenue, 21st Floor, New York, New York 10018-2796
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
<PAGE>
Item 16. List of Exhibits.
List below all exhibits filed as a part of this Statement
of Eligibility.
1. A copy of the Articles of Association of the Trustee
as now in effect, including the Organization Certificate and
the Certificates of Amendment dated February 25, 1988 and June 22, 1992 (see
Exhibit to Form T-1 filed in connection with Registration Statement No.
33-58124, which is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee
to Transact Business (see Exhibit 2 to Form T-1 filed in connection with
Registration Statement No. 33-33595, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 33-58124, which
is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-33595, which is incorporated by reference).
7. A copy of the latest report of condition of Chemical Bank Delaware,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Chemical Bank Delaware, a corporation organized and existing under
the laws of the State of Delaware, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all
in The City of Wilmington and State of Delaware, on the 2nd day of October,
1995.
Chemical Bank Delaware
By: John J. Cashin
---------------------
John J. Cashin
Senior Trust Officer
<PAGE>
Exhibit 7
REPORT OF CONDITION
Consolidated Report of Condition of CHEMICAL BANK DELAWARE of Wilmington,
Delaware and Foreign and Domestic Subsidiaries, at the close of business on
June 30, 1995, published in accordance with a call made by the State Bank
Commissioner under Title 5, Delaware Code, Section 904.
Statement of Resources and Liabilities
Thousands of Dollars
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . $ 15,670
Interest-bearing balances .......................... 162,627
Securities:
Held to maturity securities............................. 55,422
Federal funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBFS:
Federal funds sold ................................. 178,500
Loans and lease financing receivables:
Loans and leases, net of unearned income 8,185
Less: Allowance for loan and lease losses 6,487
Loans and leases, net of unearned income,
allowance, and reserve ........................... 1,698
Premises and fixed assets (including capitalized
leases)............................................. 39,039
Customers' liability to this bank on acceptances
outstanding ........................................ 2,758
Other assets ........................................... 18,115
---------
TOTAL ASSETS ........................................... $473,829
=========
LIABILITIES
Deposits
In domestic offices ................................... $259,768
Noninterest-bearing ..........................47,516
Interest-bearing ............................212,252
In foreign offices, Edge and Agreement subsidiaries,
and IBF's .......................................... 53,296
Interest-bearing ............................ 53,296
Federal funds purchased and securities sold under agree-
ments to repurchase in domestic offices of the bank and
of its Edge and Agreement subsidiaries, and in IBFS:
Federal funds purchased ............................. 4
Demand notes issued to the U.S. Treasury ................ 5,337
Other borrowed money:
With original maturity of one year or less .......... 267
Mortgage indebtedness and obligations under capitalized
leases .............................................. 845
Bank's liability on acceptances executed and outstanding 2,758
Other liabilities ...................................... 32,545
--------
TOTAL LIABILITIES ...................................... $354,822
--------
EQUITY CAPITAL
Common stock ............................................ $ 25,000
Surplus ................................................. 51,002
Undivided profits and capital reserves .................. 43,005
--------
Total equity capital .................................... 119,007
--------
Total liabilities, limited-life preferred stock, and
equity capital ...................................... $473,829
========
I, Christopher M. Marini, Controller, of the above-named
bank do hereby declare that this Report of Condition
has been prepared in conformance with the instructions
issued by the appropriate Federal Regulatory authority and
is true and correct to the best of my knowledge and belief.
Christopher M. Marini
July 31, 1995
