<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 5, 1996
REGISTRATION STATEMENT NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PAINE WEBBER GROUP INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 13-2760086
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
</TABLE>
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)
------------------------
PAINE WEBBER GROUP INC.
1994 STOCK AWARD PLAN
(FULL TITLE OF THE PLAN)
------------------------
THEODORE A. LEVINE
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
PAINE WEBBER GROUP INC.
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(212) 713-2879
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($1 par value)......... 7,500,000 $21.125 $158,437,500 $54,634
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
</TABLE>
(1) The aggregate maximum number of shares of Common Stock which may be granted
or awarded under the Plan during the following three calendar years (or any
part of any such calendar year) during which the Plan is effective. Also
being registered pursuant to Rule 416 are such additional indeterminate
number of shares of Common Stock as may be required to cover possible
antidilution adjustments under the Plan.
(2) The calculation is made solely for the purpose of determining the amount of
the registration fee and is computed upon the basis of the average of the
high and low prices reported in the consolidated reporting system as of June
3, 1996.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Commission by the Registrant are
incorporated by reference in this Prospectus as of its effective date:
a. The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995; filed with the Commission on March 29, 1996;
b. The Registrant's Quarterly Reprt on Form 10-Q for the quarter ended
March 31, 1996;
c. The description of the Common Stock set forth in the Registrant's
registration statement on Form 8 as filed with the Securities and Exchange
Commission, under Section 12 of the Exchange Act, including Amendment No. 4
thereto dated January 30, 1986, and any other amendment or report filed
under the Exchange Act for the purpose of updating such description.
All documents subsequently filed by the Registrant or the Plan pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated herein by reference and to be a part hereof from the date of
filing of such documents.
The consolidated financial statements and schedules of the Registrant
incorporated by reference in the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1995 have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such financial statements are, and audited financial
statements to be included in subsequently filed documents will be, incorporated
herein in reliance upon the reports of Ernst & Young LLP pertaining to such
financial statements to the extent covered by consents filed with the Securities
and Exchange Commission given upon the authority of such firm as experts in
accounting and auditing.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the securities offered hereby has been passed upon for the
Registrant by Theodore A. Levine, Vice President and General Counsel of
Registrant, who owns beneficially 55,888 shares of Registrant's Common Stock (of
which 40,575 are Restricted Stock) and options to purchase 144,000 shares of
Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 145 of the General Corporation Law of the
State of Delaware which provides for indemnification of directors or officers of
a corporation in certain circumstances. Under Article VII of the By-laws of the
registrant, filed as Exhibit 3.2 to the Registrant's Registration Statement No.
33-52695 on Form S-3 filed with the Securities and Exchange Commission on
October 16, 1995, which Exhibit is incorporated herein by reference, the
registrant has the power to and under certain circumstances is required to
indemnify its directors or officers.
The registrant also maintains directors and officers liability and
corporate reimbursement insurance which provides for coverage against loss
arising from claims made against directors and officers in their capacity as
such. The general scope of coverage is any breach of duty, neglect, error,
misstatement, misleading statement or omission. Such policy does not exclude
liabilities under the Securities Act of 1933, as amended. The registrant also
maintains fiduciary liability insurance for losses in connection with claims
made against directors or officers for violation of any of the responsibilities,
obligations or duties imposed upon fiduciaries under the Employee Retirement
Income Act of 1974 ("ERISA").
1
<PAGE> 3
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<C> <S>
4.1 Paine Webber Group Inc. 1994 Stock Award Plan
4.2 Form of Stock Option Agreement
4.3 Form of Restricted Stock Unit Agreement
4.4 Form of Restricted Stock Agreement
5 Opinion of Theodore A. Levine as to Legality of Securities being Registered
23.1 Consent of Ernst & Young LLP
23.2 Consent of Theodore A. Levine (set forth in Exhibit 5 Opinion)
24 Power of Attorney (set forth on the signature pages of this Registration Statement)
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post effective amendment thereof) which, individually or in the
aggregate, represents a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities
2
<PAGE> 4
(other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in The City of New York, State of New York, on May 31, 1996.
PAINE WEBBER GROUP INC.
(Registrant)
By /s/ DONALD B. MARRON
------------------------------------
Donald B. Marron
Chairman of the Board and
Chief Executive Officer
3
<PAGE> 5
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENT, that each person whose signature appears
below constitutes and appoints DONALD B. MARRON, PIERCE R. SMITH and REGINA A.
DOLAN, and each of them (with full power to each of them to act alone), his true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or his or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and Power of Attorney has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ----------------------------------- -------------
<C> <S> <C>
/s/ DONALD B. MARRON Chairman of the Board, Chief May 31, 1996
- ------------------------------------------ Executive Officer and Director
Donald B. Marron (principal executive officer)
/s/ REGINA A. DOLAN Vice President and Chief Financial May 31, 1996
- ------------------------------------------ Officer (principal financial and
Regina A. Dolan accounting officer)
Director May , 1996
- ------------------------------------------
T. Stanton Armour
/s/ E. GARRETT BEWKES, JR. Director May 31, 1996
- ------------------------------------------
E. Garrett Bewkes, Jr.
/s/ JOHN A. BULT Director May 31, 1996
- ------------------------------------------
John A. Bult
/s/ RETO BRAUN Director May 31, 1996
- ------------------------------------------
Reto Braun
/s/ FRANK P. DOYLE Director May 31, 1996
- ------------------------------------------
Frank P. Doyle
/s/ NAOSHI KIYONO Director May 31, 1996
- ------------------------------------------
Naoshi Kiyono
/s/ JOSEPH J. GRANO, JR. Director May 31, 1996
- ------------------------------------------
Joseph J. Grano, Jr.
/s/ JOHN E. KILGORE, JR. Director May 31, 1996
- ------------------------------------------
John E. Kilgore, Jr.
</TABLE>
4
<PAGE> 6
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ----------------------------------- -------------
<C> <S> <C>
/s/ JAMES W. KINNEAR Director May 31, 1996
- ------------------------------------------
James W. Kinnear
/s/ ROBERT M. LOEFFLER Director May 31, 1996
- ------------------------------------------
Robert M. Loeffler
/s/ EDWARD RANDALL, III Director May 31, 1996
- ------------------------------------------
Edward Randall, III
/s/ HENRY ROSOVSKY Director May 31, 1996
- ------------------------------------------
Henry Rosovsky
/s/ YOSHINAO SEKI Director May 31, 1996
- ------------------------------------------
Yoshinao Seki
</TABLE>
5
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------ -------------------------------------------------------------------------- ------------
<C> <S> <C>
4.1 Paine Webber Group Inc. 1994 Stock Award Plan.............................
4.2 Form of Stock Option Agreement............................................
4.3 Form of Restricted Stock Unit Agreement...................................
4.4 Form of Restricted Stock Agreement........................................
5 Opinion of Theodore A. Levine as to Legality of Securities being
Registered................................................................
23.1 Consent of Ernst & Young..................................................
23.2 Consent of Theodore A. Levine (set forth in Exhibit 5 Opinion)............
24 Power of Attorney (set forth on the signature pages of this Registration
Statement)................................................................
</TABLE>
<PAGE> 1
EXHIBIT 4.1
PAINE WEBBER GROUP INC.
1994 STOCK AWARD PLAN
<PAGE> 2
PAINE WEBBER GROUP INC.
1994 STOCK AWARD PLAN
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1. Purpose............................................................................. 1
2. Definitions......................................................................... 1
3. Administration...................................................................... 1
(a) Authority of the Committee.................................................... 1
(b) Manner of Exercise of Committee Authority..................................... 1
(c) Limitation of Liability....................................................... 2
4. Stock Subject to Plan............................................................... 2
5. Eligibility......................................................................... 2
6. Specific Terms of Awards............................................................ 2
(a) General....................................................................... 2
(b) Options....................................................................... 2
(c) Stock Appreciation Rights..................................................... 3
(d) Restricted Stock.............................................................. 3
(e) Restricted Units.............................................................. 4
(f) Bonus Stock and Awards in Lieu of Cash Obligations............................ 4
(g) Dividend Equivalents.......................................................... 5
(h) Other Stock-Based Awards...................................................... 5
7. Certain Provisions Applicable to Awards............................................. 5
(a) Stand-Alone, Additional, Tandem, and Substitute Awards........................ 5
(b) Performance Conditions........................................................ 5
(c) Term of Awards................................................................ 5
(d) Form and Timing of Payment Under Awards; Deferrals............................ 5
8. General Provisions.................................................................. 6
(a) Compliance With Legal and Other Requirements.................................. 6
(b) Limits on Transferability; Beneficiaries...................................... 6
(c) Adjustments................................................................... 6
(d) Taxes......................................................................... 7
(e) Changes to the Plan and Awards................................................ 7
(f) Limitation on Rights Conferred Under Plan..................................... 7
(g) Unfunded Status of Awards; Creation of Trusts................................. 7
(h) Nonexclusivity of the Plan.................................................... 7
(i) Payments in the Event of Forfeitures; Fractional Shares....................... 7
(j) Governing Law................................................................. 8
(k) Effective Date................................................................ 8
</TABLE>
<PAGE> 3
PAINE WEBBER GROUP INC.
1994 STOCK AWARD PLAN
1. Purpose. The purpose of this 1994 Stock Award Plan (the "Plan") is to
assist Paine Webber Group Inc. ("PaineWebber") and its subsidiaries in
attracting, retaining, and rewarding high-quality employees, enabling such
employees to acquire or increase a proprietary interest in PaineWebber in order
to strengthen the mutuality of interests between such employees and
PaineWebber's stockholders, and providing such employees with performance
incentives to expend their maximum efforts in the creation of long-term
stockholder value.
2. Definitions. The definitions of awards under the Plan, including
Options, SARs (including Limited SARS), Restricted Stock, Restricted Units,
Stock granted as a bonus or in lieu of other awards, Dividend Equivalents, and
Other Stock-Based Awards are set forth in Section 6 of the Plan. Such awards,
together with any other right or interest granted to a Participant under the
Plan, are termed "Awards." The following additional terms shall be defined as
set forth below:
(a) "Board" shall mean PaineWebber's Board of Directors.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, including regulations thereunder and successor
provisions and regulations thereto.
(c) "Committee" shall mean the Compensation Committee of the Board of
Directors of PaineWebber or such other Board committee as may be designated
by the Board to administer the Plan.
(d) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, including rules thereunder and successor
provisions and regulations thereto.
(e) "Fair Market Value" shall mean the fair market value of Stock,
Awards, or other property as determined by the Committee or under
procedures established by the Committee. Unless otherwise determined by the
Committee, the Fair Market Value of Stock as of any given date shall be the
mean between the high and low sales prices of Stock on the stock exchange
or market on which Stock is primarily traded on the date as of which such
value is being determined or, if there shall be no sale on that date, then
on the basis of the average of the means between the high and low sales
prices of Stock on the nearest date before and the nearest date after the
date on which such value is being determined.
(f) "ISO" shall mean any Option intended to be and designated as an
incentive stock option within the meaning of Section 422 of the Code.
(g) "Participant" shall mean a person who, as an employee of
PaineWebber or a subsidiary, has been granted an Award under the Plan.
(h) "Stock" shall mean PaineWebber's Common Stock, par value $1.00 per
share, and such other securities as may be substituted (or resubstituted)
for Stock pursuant to Section 4.
(i) "PaineWebber" shall mean Paine Webber Group Inc.
3. Administration.
(a) Authority of the Committee. The Plan shall be administered by the
Committee, no member of which shall be eligible to participate in the Plan.
The Committee shall have full and final authority, in each case subject to
and consistent with the provisions of the Plan, to select Participants,
grant Awards, determine the type, number, and other terms and conditions
of, and all other matters relating to, Awards, prescribe Award agreements
(which need not be identical for each Participant) and rules and
regulations for the administration of the Plan, construe and interpret the
Plan and Award agreements and correct defects, supply omissions, or
reconcile inconsistencies therein, and to make all other decisions and
determinations as the Committee may deem necessary or advisable for the
administration of the Plan.
(b) Manner of Exercise of Committee Authority. Any action of the
Committee shall be final, conclusive, and binding on all persons, including
PaineWebber, its subsidiaries, Participants, persons
<PAGE> 4
claiming rights from or through a Participant, and stockholders. The
express grant of any specific power to the Committee, and the taking of any
action by the Committee, shall not be construed as limiting any power or
authority of the Committee. The Committee may delegate to officers or
managers of PaineWebber or any subsidiary, or committees thereof, the
authority, subject to such terms as the Committee shall determine, to
perform administrative functions and such other functions as the Committee
may determine.
(c) Limitation of Liability. The Committee may appoint agents to
assist it in administering the Plan. The Committee and each member thereof
shall be entitled to, in good faith, rely or act upon any report or other
information furnished to him or her by any officer or employee of
PaineWebber or a subsidiary, PaineWebber's independent certified public
accountants, consultants or any other agent assisting in the administration
of the Plan. Members of the Committee and any officer or employee of
PaineWebber or a subsidiary acting at the direction or on behalf of the
Committee shall not be personally liable for any action or determination
taken or made in good faith with respect to the Plan, and shall, to the
extent permitted by law, be fully indemnified and protected by PaineWebber
with respect to any such action or determination.
4. Stock Subject to Plan. Subject to adjustment as provided in Section
8(c), the total number of shares of Stock reserved and available for issuance in
connection with Awards under the Plan in each calendar year during any part of
which the Plan is in effect shall be 3,750,000; provided that such number shall
be increased in any calendar year by the number of shares of Stock which were
available in such previous calendar years but which are neither subject to
outstanding Awards nor were previously delivered to a Participant in settlement
of Awards. Notwithstanding anything to the contrary, no more than 5,000,000
shares of Stock shall be available for grants of ISOs or Stock Appreciation
Rights in tandem with ISOs. When Awards are granted and while they are
outstanding, shares relating to an Award will be counted against the limitation
set forth in this Section 4. The Committee may adopt reasonable counting
procedures to ensure appropriate counting, avoid double counting (as, for
example, in the case of tandem or substitute awards), and make adjustments if
the number of shares actually distributed differs from the number of shares
previously counted in connection with an Award. Shares subject to an Award that
is forfeited or settled in cash or otherwise terminated without a distribution
of shares to the Participant, including shares withheld in payment of taxes
relating to Awards and the number of shares equal to the number of shares
surrendered in payment of the exercise price of Options (or any other Awards in
the nature of purchase rights) or taxes relating to Awards, will again be
available for Awards under the Plan. Any shares delivered under the Plan may
consist, in whole or in part, of authorized and unissued shares or treasury
shares.
5. Eligibility. All salaried employees of PaineWebber and its subsidiaries
are eligible to be granted Awards under the Plan.
6. Specific Terms of Awards.
(a) General. Awards may be granted on the terms and conditions set
forth in this Section 6. In addition, the Committee may impose on any Award
or the exercise thereof, at the date of grant or thereafter (subject to
Section 8(e)), such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall determine, including
terms requiring forfeiture of Awards in the event of termination of
employment by the Participant. The Committee shall retain full power to
accelerate or waive, at any time, any term or condition of an Award that is
not mandatory under the Plan. Except in cases in which the Committee is
specifically authorized to require other forms of consideration by the
Plan, or to the extent other forms of consideration must be paid to satisfy
the requirements of the Delaware General Corporation Law, only services may
be required as consideration for the grant (but not the exercise) of any
Award.
(b) Options. The Committee is authorized to grant Options to
Participants on the following terms and conditions:
(i) Exercise Price. The exercise price per share of Stock
purchasable under an Option shall be determined by the Committee,
provided that such exercise price shall be not less than the Fair
2
<PAGE> 5
Market Value of a share on the date of grant of such Option except as
provided under Section 7(a) hereof.
(ii) Time and Method of Exercise. The Committee shall, at the date
of grant or thereafter, determine the time or times at which or the
circumstances under which an Option may be exercised in whole or in
part, the methods by which such exercise price may be paid or deemed to
be paid, the form of such payment, including, without limitation, cash,
Stock, other Awards or awards issued under other PaineWebber plans, or
other property (including notes or other contractual obligations of
Participants to make payment on a deferred basis, such as through
"cashless exercise" arrangements, to the extent permitted by applicable
law), and the methods by or forms in which Stock will be delivered or
deemed to be delivered to Participants.
(iii) ISOs. The terms of any ISO granted under the Plan shall
comply in all respects with the provisions of Section 422 of the Code,
including but not limited to the requirements that no ISO shall be
granted more than ten years after the effective date of the Plan, no ISO
shall be exercisable more than ten years after the date of grant, and
ISOs shall not be transferable otherwise than by will or the laws of
descent and distribution and shall be exercisable, during the
Participant's lifetime, only by the Participant.
(c) Stock Appreciation Rights. The Committee is authorized to grant
Stock Appreciation Rights ("SARs") to Participants on the following terms
and conditions:
(i) Right to Payment. An SAR shall confer on the Participant to
whom it is granted a right to receive, upon exercise thereof, the excess
of (A) the Fair Market Value of one share of Stock on the date of
exercise (or, if the Committee shall so determine in the case of any
such right other than one related to an ISO, the Fair Market Value of
one share at any time during a specified period before or after the date
of exercise, or, in the case of a "Limited SAR" the Fair Market Value
determined by reference to amounts paid or payable in connection with a
change in control of PaineWebber, as specified by the Committee), over
(B) the grant price of the SAR as determined by the Committee as of the
date of grant of the SAR.
(ii) Other Terms. The Committee shall, at the date of grant or
thereafter, determine the time or times at which and the circumstances
under which an SAR may be exercised in whole or in part, the method of
exercise, method of settlement, form of consideration payable in
settlement, method by or forms in which Stock will be delivered or
deemed to be delivered to Participants, whether or not an SAR shall be
in tandem or in combination with any other Award, and any other terms
and conditions of any SAR. Limited SARs that may only be exercised in
connection with a change in control or other event as specified by the
Committee may be granted on such terms, not inconsistent with this
Section 6(c), as the Committee may determine. Limited SARs may be either
freestanding or in tandem with other Awards.
(d) Restricted Stock. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and conditions:
(i) Issuance and Restrictions. Restricted Stock shall be subject
to such restrictions on transferability and other restrictions, if any,
as the Committee may impose, which restrictions may lapse separately or
in combination at such times, under such circumstances, in such
installments, or otherwise, as the Committee may determine at the date
of grant or thereafter. Except to the extent restricted under the terms
of the Plan and any Award agreement relating to the Restricted Stock, a
Participant granted Restricted Stock shall have all of the rights of a
stockholder including, without limitation, the right to vote Restricted
Stock and the right to receive dividends thereon. During the restricted
period applicable to the Restricted Stock, subject to Section 8(b)
below, the Restricted Stock may not be sold, transferred, pledged,
margined or otherwise encumbered by the Participant.
(ii) Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment during the applicable restriction period,
Restricted Stock that is at that time subject to restrictions shall be
forfeited and reacquired by PaineWebber; provided that the Committee may
3
<PAGE> 6
provide, by rule or regulation or in any Award agreement, or may
determine in any individual case, that restrictions or forfeiture
conditions relating to Restricted Stock will be waived in whole or in
part in the event of terminations resulting from specified causes, and
the Committee may in other cases waive in whole or in part the
forfeiture of Restricted Stock.
(iii) Certificates for Stock. Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee shall determine.
If certificates representing Restricted Stock are registered in the name
of the Participant, the Committee may require such certificates to bear
an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock, with PaineWebber to
retain physical possession of the certificates and/or the Participant to
deliver a stock power to PaineWebber, endorsed in blank, relating to the
Restricted Stock.
(iv) Dividends. Unless otherwise determined by the Committee,
Stock distributed in connection with a Stock split or Stock dividend,
and other property distributed as a dividend, shall be subject to
restrictions and a risk of forfeiture to the same extent as the
Restricted Stock with respect to which such Stock or other property has
been distributed. As a condition to the grant of an Award of Restricted
Stock, the Committee may require that any cash dividends paid on a share
of Restricted Stock be automatically reinvested in additional shares of
Restricted Stock or applied to the purchase of additional Awards under
the Plan.
(e) Restricted Units. The Committee is authorized to grant Restricted
Units ("RUs") to Participants which are rights to receive stock, cash or a
combination thereof at the end of a specified deferral period, subject to
the following terms and conditions:
(i) Award and Restrictions. Satisfaction of an RU Award will occur
upon expiration of the deferral period specified for an Award of RUs by
the Committee (or, if permitted by the Committee, as elected by the
Participant). In addition, RUs shall be subject to such restrictions as
the Committee may impose, if any, which restrictions may lapse at the
expiration of the deferral period or at earlier specified times,
separately or in combination, in installments, or otherwise, as the
Committee may determine. RU Awards may be satisfied by delivery of
Stock, cash equal in value to the Fair Market Value of Stock covered by
the RU Award, or a combination thereof, as determined by the Committee
at the date of grant or thereafter.
(ii) Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment (as determined under criteria established
by the Committee) during the applicable deferral period or portion
thereof to which forfeiture conditions apply (as provided in the Award
agreement evidencing the RUs), all RUs that are at that time subject to
deferral (other than a deferral at the election of the Participant)
shall be forfeited; provided that the Committee may provide, by rule or
regulation or in any Award agreement, or may determine in any individual
case, that restrictions or forfeiture conditions relating to RUs will be
waived in whole or in part in the event of terminations resulting from
specified causes, and the Committee may in other cases waive in whole or
in part the forfeiture of RUs.
(iii) Dividend Equivalents. Unless otherwise determined by the
Committee at date of grant, Dividend Equivalents on the specified number
of shares of stock covered by the RU Award will be paid with respect to
RU Awards either at the dividend payment date in cash or in shares of
unrestricted Stock having a Fair Market Value equal to the amount of
such dividends, or the payment of such dividends shall be deferred
and/or the amount or value thereof automatically reinvested in
additional RUs, other Awards, or other investment vehicles, as the
Committee shall determine or permit the Participant to elect. Unless
otherwise determined by the Committee, Stock distributed in connection
with a Stock split or Stock dividend, and other property distributed as
a dividend, shall be subject to restrictions, a risk of forfeiture,
and/or deferral to the same extent as the RUs with respect to which such
Stock or other property has been distributed.
(f) Bonus Stock and Awards in Lieu of Cash Obligations. The Committee
is authorized to grant Stock as a bonus, or to grant Stock or other Awards
in lieu of PaineWebber obligations to pay cash or
4
<PAGE> 7
deliver other property under other plans or compensatory arrangements.
Stock or Awards granted hereunder shall be subject to such other terms as
shall be determined by the Committee.
(g) Dividend Equivalents. The Committee is authorized to grant
Dividend Equivalents to a Participant, entitling the Participant to receive
cash, Stock, other Awards, or other property equal in value to dividends
paid with respect to a specified number of shares of Stock, or other
periodic payments. Dividend Equivalents may be awarded on a free-standing
basis or in connection with another Award. The Committee may provide that
Dividend Equivalents will be paid or distributed when accrued or will be
deemed to have been reinvested in additional Stock, Awards, or other
investment vehicles as the Committee may specify.
(h) Other Stock-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to Participants such other
Awards that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Stock, as deemed by the
Committee to be consistent with the purposes of the Plan, including,
without limitation, convertible or exchangeable debt securities, other
rights convertible or exchangeable into Stock, purchase rights for Stock,
Awards with value and payment contingent upon performance of PaineWebber or
any other factors designated by the Committee, and Awards valued by
reference to the book value of Stock or the value of securities of or the
performance of specified subsidiaries. The Committee shall determine the
terms and conditions of such Awards. Stock delivered pursuant to an Award
in the nature of a purchase right granted under this Section 6(h) shall be
purchased for such consideration, paid for at such times, by such methods,
and in such forms, including, without limitation, cash, Stock, other
Awards, or other property, as the Committee shall determine. Cash awards,
as an element of or supplement to any other Award under the Plan, may also
be authorized pursuant to this Section 6(h).
7. Certain Provisions Applicable to Awards.
(a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards
granted under the Plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with, or in substitution or
exchange for, any other Award or award granted under any plan of
PaineWebber, any subsidiary, or any business entity to be acquired by
PaineWebber or a subsidiary, or any other right of a Participant to receive
payment from PaineWebber or any subsidiary. Such additional, tandem, and
substitute or exchange Awards may be granted at any time. If an Award is
granted in substitution or exchange for another Award or award, the
Committee shall require the surrender of such other Award or award in
consideration for the grant of the new Award. In addition, grants of Awards
in lieu of cash compensation, including in lieu of cash amounts payable
under other plans of PaineWebber, in which the value of Stock subject to
the Award is equivalent in value to the cash compensation (for example, RUs
or Restricted Stock), or in which the exercise price, grant price, or
purchase price of the Award in the nature of a right that may be exercised
is equal to Fair Market Value of the underlying Stock minus the value of
the cash compensation surrendered (for example, Options granted with an
exercise price "discounted" by the amount of the cash compensation
surrendered), are specifically authorized.
(b) Performance Conditions. The right of a Participant to exercise or
receive a grant or settlement of any Award, and the timing thereof, may be
subject to such performance conditions as may be specified by the
Committee. Any Award subject to such conditions may be denominated
"performance shares," "performance units," or any other title deemed
appropriate by the Committee.
(c) Term of Awards. The term of each Award shall be for such period
as may be determined by the Committee; provided that in no event shall the
term of any ISO or any SAR granted in tandem thereunder exceed a period of
ten years (or such shorter period as may be required under Section 422 of
the Code).
(d) Form and Timing of Payment Under Awards; Deferrals. Subject to
the terms of the Plan and any applicable Award agreement, payments to be
made by PaineWebber or a subsidiary upon the exercise of an Option or other
Award or settlement of an Award may be made in such forms as the Committee
shall determine, including, without limitation, cash, Stock, other Awards,
or other property,
5
<PAGE> 8
and may be made in a single payment or transfer, in installments, or on a
deferred basis. The settlement of any Award may be accelerated, and cash
paid in lieu of Stock in connection with such settlement, in the discretion
of the Committee or upon occurrence of one or more specified events,
including a change in control as defined by the Committee. Installment or
deferred payments may be required by the Committee (subject to Section 8(e)
of the Plan) or permitted at the election of the Participant. Payments may
include, without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or
crediting of Dividend Equivalents in respect of installment or deferred
payments denominated in Stock.
8. General Provisions.
(a) Compliance With Legal and Other Requirements. PaineWebber may, in
its discretion, postpone the issuance or delivery of Stock under any Award
until completion of such registration or qualification of such Stock or
other required action under any federal or state law, rule, or regulation,
listing or other required action with respect to any stock exchange or
automated quotation system upon which the Stock or other PaineWebber
securities are listed or designated, or compliance with any other
contractual obligation of PaineWebber, as PaineWebber may consider
appropriate, and may require any Participant to make such representations
and furnish such information as it may consider appropriate in connection
with the issuance or delivery of Stock in compliance with applicable laws,
rules, and regulations, listing or designation, or other contractual
obligations.
(b) Limits on Transferability Beneficiaries. No Award or other right
or interest of a Participant under the Plan shall be pledged, encumbered,
or hypothecated to or in favor or subject to any lien, obligation, or
liability of such Participant to any party other than PaineWebber or a
subsidiary, or assigned or transferred by such Participant otherwise than
by will or the laws of descent and distribution, and such Awards and rights
shall be exercisable during the lifetime of the Participant only by the
Participant or his or her guardian or legal representative. Notwithstanding
the foregoing, subject to the transferability restrictions applicable to
derivative securities under Rule 16b-3 of the Exchange Act and the limits
on the transferability of Options under any registration statement in
effect and applicable to the grant and exercise of such Options, the
Committee may, in its sole discretion, provide that Awards or other rights
or interests of a Participant granted pursuant to the Plan be transferable,
without consideration, to immediate family members (i.e., children,
grandchildren or spouse), to trusts for the benefit of such immediate
family members and to partnerships in which such family members are the
only parties. The Committee may attach to such transferability feature such
terms and conditions as it deems advisable. In addition, a Participant may,
in the manner established by the Committee, designate a beneficiary (which
may be a person or a trust) to exercise the rights of the Participant, and
to receive any distribution, with respect to any Award upon the death of
the Participant. A beneficiary, guardian, legal representative, or other
person claiming any rights under the Plan from or through any Participant
shall be subject to all terms and conditions of the Plan and any Award
agreement applicable to such Participant, except as otherwise determined by
the Committee, and to any additional restrictions deemed necessary or
appropriate by the Committee.
(c) Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, Stock, or other property), recapitalization,
forward or reverse split, reorganization, merger, consolidation, spin-off,
combination, repurchase, or share exchange, liquidation, dissolution or
other similar corporate transaction or event, affects the Stock such that
an adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the rights of Participants under the
Plan, then the Committee shall, in such manner as it may deem equitable,
adjust any or all of (i) the number and kind of shares of Stock which may
thereafter be issued in connection with Awards (including the limitations
set forth in Section 4), (ii) the number and kind of shares of Stock issued
or issuable in respect of outstanding Awards, and (iii) the exercise price,
grant price, or purchase price relating to any Award or, if deemed
appropriate, make provision for payment of cash or other property with
respect to any outstanding Award; provided, in each case, that, with
respect to ISOs, no such adjustment shall be authorized or made to the
extent that such authority would cause the Plan or the ISO to violate
Section 422 of the Code. In addition, the Committee is authorized to make
adjustments in the
6
<PAGE> 9
terms and conditions of, and the criteria included in, Awards in
recognition of unusual or nonrecurring events (including, without
limitation, events described in the preceding sentence) affecting
PaineWebber or any subsidiary or the financial statements of PaineWebber or
any subsidiary, or any division or unit, or in response to changes in
applicable laws, regulations, accounting principles, tax rates and
regulations or business conditions in view of the Committee's assessment of
the business strategy of PaineWebber, any subsidiary, division or unit
thereof, performance of comparable organizations, economic and business
conditions, personal performance of a Participant, and any other
circumstances deemed relevant.
(d) Taxes. PaineWebber or any subsidiary is authorized to withhold
from any Award granted, any payment relating to an Award under the Plan,
including from a distribution of Stock, or any payroll or other payment to
a Participant, amounts of withholding and other taxes due in connection
with any transaction involving an Award, and to take such other action as
the Committee may deem advisable to enable PaineWebber and Participants to
satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any Award. This authority shall include authority
for PaineWebber to withhold or receive Stock or other property and to make
cash payments in respect thereof in satisfaction of a Participant's tax
obligations, either on a mandatory or elective basis in the discretion of
the Committee.
(e) Changes to the Plan and Awards. The Board may amend, alter,
suspend, discontinue, or terminate the Plan or the Committee's authority to
grant Awards under the Plan without the consent of stockholders or
Participants, provided that, without the consent of an affected
Participant, no such Board action may materially and adversely affect the
rights of such Participant under any Award theretofore granted to him or
her. The Committee may waive any conditions or rights under, or amend,
alter, suspend, discontinue, or terminate, any Award theretofore granted
and any Award agreement relating thereto; provided that, without the
consent of an affected Participant, no such Committee action may materially
and adversely affect the rights of such Participant under such Award.
(f) Limitation on Rights Conferred Under Plan. Neither the Plan nor
any action taken hereunder shall be construed as (i) giving any Participant
or employee the right to continue as a Participant or employee of
PaineWebber or a subsidiary, (ii) interfering in any way with the right of
PaineWebber or a subsidiary to terminate any Participant's or employee's
employment at any time, (iii) giving a Participant or employee any claim to
be granted any Award under the Plan or to be treated uniformly with other
Participants and employees, or (iv) conferring on a Participant any of the
rights of a stockholder of PaineWebber unless and until the Participant has
validly exercised an Option or Stock is otherwise duly issued or
transferred to the Participant in accordance with the terms of the Award.
(g) Unfunded Status of Awards; Creation of Trusts. The Plan is
intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments payable to a Participant or
obligation to issue Stock pursuant to an Award, nothing contained in the
Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of PaineWebber; provided that the
Committee may authorize the creation of trusts and deposit therein cash,
Stock, other Awards, or other property, or make other arrangements, to meet
PaineWebber's obligations under the Plan. Such trusts or other arrangements
shall be consistent with the "unfunded" status of the Plan unless the
Committee otherwise determines with the consent of each affected
Participant. The trustee of such trusts may be authorized to dispose of
trust assets and reinvest the proceeds in alternative investments, subject
to such terms and conditions as the Committee may specify and in accordance
with applicable law.
(h) Nonexclusivity of the Plan. The adoption of the Plan by the Board
shall not be construed as creating any limitation on the power of the Board
to adopt such other incentive arrangements as it may deem desirable.
(i) Payments In the Event of Forfeitures; Fractional Shares. Unless
otherwise determined by the Committee, in the event of a forfeiture of an
Award with respect to which a Participant paid cash or other consideration,
the Participant shall be repaid the amount of such cash or other
consideration. No fractional shares of Stock shall be issued or delivered
pursuant to the Plan or any Award. The Committee shall determine whether
cash, other Awards, or other property shall be issued or paid in lieu of
such
7
<PAGE> 10
fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.
(j) Governing Law. The validity, construction, and effect of the
Plan, any rules and regulations relating to the Plan, and any Award
agreement shall be determined in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of laws, and
applicable federal law.
(k) Effective Date. The Plan shall become effective on February 22,
1994, and shall remain effective until terminated by the Board.
8
<PAGE> 1
EXHIBIT 4.2
PAINEWEBBER
STOCK OPTION AGREEMENT
UNDER THE
1994 STOCK AWARD PLAN
PAINEWEBBER STOCK OPTION AGREEMENT (the "Agreement"), effective as of
(the "Effective Date"), between Paine Webber Group Inc.
("PaineWebber") and the individual whose signature appears below (the
"Participant").
The Compensation Committee of the Board of Directors of PaineWebber (the
"Committee") has awarded to the Participant the option to purchase the number of
shares of Stock set forth below (the "Option") under the PaineWebber 1994
Executive Stock Award Plan (the "Plan"), subject to the terms and conditions of
the Plan and this Agreement (including the Stock Option Terms and Conditions
attached hereto).
The Option awarded hereby is a non-qualified stock option and not an
"incentive stock option" as defined in Section 422 of the Code. The Option will
first become exercisable at the time or times specified in Section 3 of the
attached Stock Option Terms and Conditions, and will be subject to expiration,
including early expiration (i.e., forfeiture) in the event of the termination of
the Participant's employment in certain circumstances, as specified in Section
2(a) hereof.
1. PARTICIPANT:
Name __________________________________________________________________
Address _______________________________________________________________
Social Security Number ________________________________________________
2. CERTAIN OPTION TERMS:
Total Number of Shares Purchasable Upon Exercise ______________________
Exercise Price Per Share ______________________________________________
Date of Grant _________________________________________________________
IN WITNESS WHEREOF, PaineWebber and the Participant have duly executed this
Agreement, as of the Effective Date stated above.
<TABLE>
<S> <C>
PAINE WEBBER GROUP INC. PARTICIPANT
By _________________________________ By _________________________________
Name _______________________________ Name _______________________________
Title ______________________________
</TABLE>
Enclosures: Stock Option Terms and Conditions for 1994 Stock Award Plan 1994
Stock Award Plan Document
<PAGE> 2
STOCK OPTION TERMS AND CONDITIONS
OF STOCK OPTION AGREEMENT UNDER THE
1994 STOCK AWARD PLAN
1. Acceptance of Option; Incorporation of Plan Provisions. The Participant
hereby accepts the Option subject to the terms and conditions set forth in this
Agreement and consents to and agrees to comply with such terms and conditions.
All of the terms and conditions of the Plan are hereby incorporated by reference
in this Agreement as though fully set forth herein. Terms defined in the Plan
but not in this Agreement shall have the meanings set forth in the Plan. To the
extent of any conflict between the provisions of this Agreement and those of the
Plan, the provisions of the Plan shall govern. Participant acknowledges receipt
of a copy of the Plan. This Option is granted for no consideration other than
the services of Participant and Participant's agreements set forth herein.
2. Expiration of Option.
(a) The Option will expire at the earliest of the following:
(i) Ten years after the Date of Grant (i.e., the close of business on
the day before the tenth anniversary of the Date of Grant);
(ii) One year after the Participant's death;
(iii) One year after the Participant's "Disability" (as defined in the
PaineWebber tax qualified defined benefit pension plan applicable to the
Participant) resulting in a termination of Participant's employment by
PaineWebber;
(iv) One year after the Participant's voluntary retirement from
employment by PaineWebber ("Retirement") on or after his or her "Normal
Retirement Date" (as defined in such pension plan);
(v) One year after the Participant's early retirement with the consent
of the Committee from employment by PaineWebber ("Retirement);
(vi) Immediately upon the termination of Participant's employment by
PaineWebber for "Cause" (as hereinafter defined); and
(vii) Three months after the Participant's termination of employment
by PaineWebber for reasons other than death, Disability, or Retirement.
(b) For purposes of this Agreement, the term "Cause" shall mean (i) the
willful and continued failure by Participant to perform substantially his or her
duties with PaineWebber (other than such failure resulting from the
Participant's incapacity due to physical or mental illness) or (ii) the engaging
by Participant in illegal conduct, including but not limited to the violation,
in the sole opinion of the Committee, of any state or federal securities,
commodities, or insurance statute or regulation, or (iii) the engaging by
Participant in conduct in violation, in the sole opinion of the Committee, of
any provision of the constitution, by-laws, or rules or regulations of any
securities or commodities or insurance exchange or association of which
PaineWebber is now or may later become a member or in violation of the Code of
Conduct or published policies of PaineWebber, or (iv) the willful engaging by
Participant in any act of serious dishonesty which adversely affects, or in the
sole opinion of the Committee, could in the future adversely affect, the value,
reliability or performance of the Participant to PaineWebber (including any
misrepresentations by Participant to PaineWebber of prior production levels or
any prior or existing customer complaint, or regulatory, administrative, civil
or criminal matter affecting Participant's employment). For purposes of this
definition, no act, or failure to act, on the part of the Participant shall be
considered "willful" unless done, or omitted to be done, by the Participant in
bad faith and without reasonable belief that his or her action or omission was
in, or not opposed to, the best interest of PaineWebber.
3. Times at Which Option May be Exercised.
(a) Participant may only exercise the Option to purchase Stock at such
times and to the extent that the Option has become exercisable. Except as
provided in this Section 3(a) and Section 3(b) hereof, the Option
<PAGE> 3
may not be exercised to purchase any Stock until the date one year after the
"Date of Grant" appearing in this Agreement (the "Date of Grant"). On each of
the first, second, and third anniversaries of the Date of Grant, the Option will
become cumulatively exercisable for one-third of the total number of shares of
Stock (rounded to the nearest whole share), subject to accelerated
exercisability as provided in this Section 3(a) and Section 3(b) hereof. The
foregoing notwithstanding, the Option will become immediately exercisable in the
event of a "Change in Control" as hereinafter defined.
(b) The provisions of Section 3(a) notwithstanding, in the event of the
death, Disability, or Retirement of the Participant, the Option may be exercised
immediately in full. In the event of termination of the Participant's employment
by PaineWebber or its subsidiaries for any other reason, the Option may be
exercised prior to its expiration only to the extent that the Option was
exercisable on the date of such termination.
(c) "Change in Control" shall mean the occurrence of any of the following
events:
(i) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than PaineWebber, a subsidiary, any trustee or
other fiduciary holding securities under an employee benefit plan of
PaineWebber or a subsidiary, or any corporation owned, directly or
indirectly, by the stockholders of PaineWebber in substantially the same
proportions as their contemporaneous ownership of voting securities of
PaineWebber, is or becomes a "20% Beneficial Owner." For purposes of this
provision, a "20% Beneficial Owner" shall mean a person who is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of PaineWebber representing 20% or
more of the combined voting power of PaineWebber's then-outstanding voting
securities; provided that (A) the term "20% Beneficial Owner" shall not
include any Beneficial Owner who has crossed such 20% percent threshold
solely as a result of an acquisition of securities directly from
PaineWebber, or solely as a result of an acquisition by PaineWebber of
PaineWebber securities, until such time thereafter as such person acquires
additional voting securities other than directly from PaineWebber and,
after giving effect to such acquisition, such person would constitute a 20%
Beneficial Owner; and (B) with respect to any person who is and remains
eligible to file a Schedule 13G pursuant to Rule 13d-1(b)(1) under the
Exchange Act with respect to PaineWebber securities, there shall be
excluded from the number of securities deemed to be beneficially owned by
such person for purposes of determining whether such person is a 20%
Beneficial Owner a number of securities representing 10% of the combined
voting power of PaineWebber's then-outstanding voting securities;
(ii) During any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of
PaineWebber, together with any new director (other than a director
designated by a person who has entered into an agreement with PaineWebber
to effect a transaction described in paragraph (i), (iii), or (iv) hereof)
whose election by the Board or nomination for election by PaineWebber's
stockholders was approved by a vote of at least two-thirds ( 2/3) of the
directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously
so approved (the "Continuing Directors"), cease for any reason to
constitute at least a majority thereof;
(iii) The stockholders of PaineWebber approve a merger, consolidation,
recapitalization, or reorganization of PaineWebber, or a reverse stock
split of any class of voting securities of PaineWebber, or the consummation
of any such transaction if stockholder approval is not obtained, other than
any such transaction which would result in at least 80% of the total voting
power represented by the voting securities of PaineWebber or the surviving
entity outstanding immediately after such transaction being beneficially
owned by persons who together beneficially owned at least 80% of the
combined voting power of the voting securities of PaineWebber outstanding
immediately prior to such transaction, with the relative voting power of
each such continuing holder compared to the voting power of each other
continuing holder not substantially altered as a result of the transaction;
provided that, for purposes of this paragraph (iii), such continuity of
ownership (and preservation of relative voting power) shall be deemed to be
satisfied if the failure to meet such 80% threshold (or to substantially
preserve such relative voting
2
<PAGE> 4
power) is due solely to the acquisition of voting securities by an employee
benefit plan of PaineWebber or its subsidiaries, such surviving entity, or
of any subsidiary of PaineWebber or such surviving entity;
(iv) The stockholders of PaineWebber approve a plan of complete
liquidation of PaineWebber or an agreement for the sale or disposition by
PaineWebber of all or substantially all of PaineWebber's assets (or any
transaction having a similar effect); or
(v) Any other event which the Board of Directors (or the Committee, if
and to the extent that the Committee must exercise sole discretion over the
matter in order to comply with applicable requirements of Rule 16b-3 under
the Exchange Act), determines shall constitute a Change in Control for
purposes of this Agreement;
provided that a Change in Control shall not be deemed to have occurred under
this Agreement if, prior to the occurrence of a specified event that would
otherwise constitute a Change in Control under paragraphs (i) through (iv)
hereof, the Continuing Directors of PaineWebber then in office, by a majority
vote thereof, determine that the occurrence of such specified event shall not be
deemed to be a Change in Control hereunder or shall not be deemed to be a Change
in Control with respect to a particular Participant under this Agreement if the
Change in Control results from actions or events in which such Participant is a
participant in a capacity other than solely as an officer, employee or director
of PaineWebber or its subsidiaries.
4. Nontransferability. Neither the Option or other right of the
Participant relating thereto shall be pledged, encumbered, or hypothecated to or
in favor or subject to any lien, obligation, or liability of such Participant to
any party other than PaineWebber or a subsidiary, or assigned. Unless otherwise
determined by the Committee in accordance with Section 8(b) of the Plan, the
Option or other right of the Participant relating thereto shall not be
transferred by the Participant otherwise than by will or the laws of descent and
distribution, and such Option and right shall be exercisable during the lifetime
of the Participant only by the Participant or his or her guardian or legal
representative. The Participant shall be entitled to designate a
beneficiary(ies) who may exercise the Option or other right upon the death of
the Participant.
5. Manner of Exercise of Option.
(a) In order to exercise all or any part of the Option, the Participant
must give written notice to PaineWebber, signed by the Participant. That notice
should be sent or delivered to:
Paine Webber Group Inc.
1285 Avenue of the Americas
New York, NY 10019
Attention: Executive Vice President, Administration
The notice should refer to this Option (including the Date of Grant), and the
notice should include the following information:
(i) The number of shares of Stock for which the Option is being
exercised;
(ii) The name or names of the persons in whose names the
certificate(s) for the shares of Stock issuable upon exercise should be
registered; and
(iii) The address to which such certificate(s) should be sent or
delivered.
In addition to such notice, the Participant must include a check payable to
"Paine Webber Group Inc." for the total exercise price of the number of shares
to be purchased upon exercise of the Option, unless an approved alternative
payment method is then permitted under the Plan. An approved alternative payment
method will be for the Participant to pay all or a part of such exercise price
by delivering and transferring to PaineWebber that number of shares of Stock
previously acquired by the Participant (and owned for the period of six months
before the date of exercise) with an aggregate Fair Market Value (determined in
accordance with the Plan) equal to the aggregate exercise price of that number
of shares of Stock for which the Option is being exercised or such lesser
portion of the aggregate purchase price as may be specified by the Participant.
3
<PAGE> 5
Upon satisfaction of all applicable requirements for the exercise of the
Option (including those under Section 6 relating to taxes), a certificate or
certificates for the number of shares of Stock purchased will be issued in the
denominations and registered in the names of the persons set forth by the
Participant on the notice, and such certificate(s) will be delivered to the
Participant or as directed by the Participant.
(b) Unless otherwise determined by the Committee, upon exercise in which
the exercise price is paid by delivering and transferring to PaineWebber
previously acquired Stock, the Participant may defer receipt of Stock pursuant
to a valid election filed under the Deferred Compensation Plan and otherwise in
accordance with such rules as the Committee may from time to time approve.
6. Taxes. Upon the exercise of the Option, PaineWebber shall be entitled
to require as a condition of delivery of Stock that the Participant remit or, in
appropriate cases (including cases in which taxation of the Participant is
deferred), agree to remit when due an amount sufficient to satisfy all federal,
state and local withholding and employment tax requirements relating to such
exercise. Subject to the approval of the Committee, the Participant will be
entitled to elect to have PaineWebber withhold from the Stock to be delivered
upon the exercise of the Option, or to elect to deliver to PaineWebber from
shares of Stock owned separately by the Participant, a sufficient number of such
shares of Stock to satisfy the federal, state and local withholding and
employment tax obligations relating to the Participant's exercise of the Option
(and the Company's withholding obligations) to the extent, if any, permitted
under rules and regulations adopted by the Committee and in effect at the time
of such exercise. In such case, the Shares withheld or the shares surrendered
will be valued at the Fair Market Value determined in accordance with the Plan.
7. Adjustments. The number of shares purchasable upon exercise of the
Option, and other terms hereof, shall be appropriately adjusted, in the
discretion of the Committee, in accordance with Section 8(c) of the Plan.
8. Limitation of Rights Conferred under the Plan. Neither the grant of the
Option nor anything in this Agreement or the Plan shall be construed as (i)
giving the Participant or employee the right to continue as a Participant or
employee of PaineWebber or a subsidiary, (ii) interfering in any way with the
right of PaineWebber or a subsidiary to terminate the Participant's or
employee's employment at any time, (iii) giving the Participant or employee any
claim to be granted any Option or other Award under the Plan or to be treated
uniformly with other Participants and employees, or (iv) conferring on the
Participant any of the rights of a stockholder of PaineWebber unless and until
the Participant has validly exercised an Option.
9. Miscellaneous.
(a) This Agreement shall bind and inure to the benefit of the Participant
and his or her executors or administrators, heirs and personal and legal
representatives, and to PaineWebber and its successors and assigns.
(b) This Agreement shall be construed and enforced in accordance with
Section 8(j) of the Plan.
(c) This Agreement, together with the Plan, sets forth the entire agreement
between the parties with respect to the subject matter hereof, and there are no
agreements, understandings, warranties or representations, written, express or
implied, between them with respect to the Option other than as set forth herein
or therein.
(d) When used herein, "PaineWebber" shall mean Paine Webber Group Inc. and
shall include any corporation which, at the time of reference, is a subsidiary
of Paine Webber Group Inc. within the meaning of Section 424(f) of the Code.
(e) Except as otherwise expressly provided in this Agreement, this
Agreement may not be modified, amended or terminated except by a writing signed
by both parties hereto. No waiver of any provision hereof shall be effective
unless evidenced by a writing signed by the party against whom it is sought to
be enforced. No waiver of any breach of any term hereof shall be construed as a
waiver of any subsequent breach of such term or as a waiver of any other term
hereof.
4
<PAGE> 1
EXHIBIT 4.3
PAINEWEBBER
RESTRICTED STOCK UNIT AGREEMENT
UNDER THE
1994 STOCK AWARD PLAN
PAINEWEBBER RESTRICTED STOCK UNIT AGREEMENT (the "Agreement"), effective as
of (the "Effective Date"), between Paine Webber Group Inc.
("PaineWebber") and the individual whose signature appears below (the
"Participant").
The Compensation Committee of the Board of Directors of PaineWebber (the
"Committee") has awarded to Participant the number of Restricted Stock Units
("RSUs") set forth below under the PaineWebber 1994 Stock Award Plan (the
"Plan"), subject to the terms, definitions, and conditions of the Plan and this
Agreement (including the RSU Terms and Conditions attached hereto).
The RSUs awarded hereby are subject to forfeiture in the event of the
termination of Participant's employment prior to the expiration of the
Restricted Period specified below opposite such number of RSUs, as specified in
Section 4(a) and (b) hereof. Upon expiration of the Restricted Period specified
below opposite RSUs, PaineWebber will distribute to the Participant one share of
Stock for each such RSU, subject to any deferral period mandated by the
Committee and/or elected by the Participant under the PaineWebber Deferred
Compensation Plan. The expiration of the Restricted Period (and any subsequent
deferral period) is subject to acceleration as specified in Section 4(a) hereof.
1. PARTICIPANT:
Name __________________________________________________________________
Address _______________________________________________________________
Social Security Number ________________________________________________
2. TOTAL NUMBER OF RSUs GRANTED:
3. RESTRICTED PERIODS:
NUMBER OF RESTRICTED PERIOD
RSUS END DATE
- --------- -----------------
- --------- -----------------
- --------- -----------------
- --------- -----------------
IN WITNESS WHEREOF, PaineWebber and the Participant have duly executed this
Agreement, as of the Effective Date stated above.
<PAGE> 2
PAINE WEBBER GROUP INC. PARTICIPANT
By _________________________________ By _________________________________
Name _______________________________ Name _______________________________
Title ______________________________
Enclosures: Restricted Stock Unit Terms and Conditions for 1994 Stock Award Plan
1994 Stock Award Plan Document
<PAGE> 3
RESTRICTED STOCK UNIT TERMS AND CONDITIONS
OF THE RESTRICTED STOCK UNIT AGREEMENT UNDER THE
1994 STOCK AWARD PLAN
1. Acceptance of RSUs; Incorporation of Plan Provisions. The Participant
hereby accepts the RSUs subject to the terms and conditions set forth in this
Agreement and consents to and agrees to comply with such terms and conditions.
All of the terms and conditions of the Plan are hereby incorporated by reference
in this Agreement as though fully set forth herein. Terms defined in the Plan
but not in this Agreement shall have the meanings set forth in the Plan. To the
extent of any conflict between the provisions of this Agreement and those of the
Plan, the provisions of the Plan shall govern. Participant acknowledges receipt
of a copy of the Plan.
2. Rights Under RSUs Generally. The RSUs awarded hereunder to the
Participant, together with such additional RSUs (if any) credited to the
Participant pursuant to Section 5 hereof, entitle the Participant to receive,
upon expiration of the Restricted Period applicable to each such RSU (as
specified on the signature page of this Agreement and in Sections 4 and 6
hereof, delivery by PaineWebber of one share of PaineWebber's Stock for each
such RSU not theretofore forfeited, subject to mandatory deferral by the
Committee and/or elective deferral by the Participant under the PaineWebber
Deferred Compensation Plan. Until such Stock is issued or transferred and
delivered in settlement of RSUs, the Participant shall have no rights of a
stockholder (including no rights to vote or receive dividends or distributions)
with respect to RSUs or the Stock that may ultimately be issued or transferred
and delivered in settlement of the RSUs. The Participant will, however, be
entitled to receive payments of dividend equivalents with respect to such RSUs
as provided in Section 5 hereof, subject to elective deferral by the Participant
under the PaineWebber Deferred Compensation Plan.
3. Nontransferability. The rights of the Participant with respect to RSUs
may not be assigned or transferred, otherwise than by will or the laws of
descent and distribution, except that the Participant shall be entitled to
designate in writing the beneficiary to receive distributions, if any, under
this Agreement in the event of the Participant's death.
4. Expiration of Restricted Period.
(a) The Restricted Period will end ("vesting" will occur) with respect the
number of RSUs specified in this Agreement on the date designated as "Restricted
Period End Date" opposite such number of RSUs on the signature page of this
Agreement. The foregoing notwithstanding, the Restricted Period applicable to
all RSUs under this Agreement shall expire on an accelerated basis at the time
the Participant's employment with PaineWebber terminates as a result of his or
her (i) death, (ii) "Disability" (as defined in the PaineWebber tax qualified
defined benefit pension plan applicable to the Participant), or (iii) voluntary
retirement on or after his or her "Normal Retirement Date" (as defined in such
pension plan) or early retirement with the consent of the Committee from
employment by PaineWebber ("Retirement"), and such Restricted Period shall
expire on an accelerated basis upon the occurrence of a Change in Control (as
defined below).
(b) In the event that, prior to the expiration of the Restricted Period
applicable to RSUs, the Participant shall cease to be an employee of PaineWebber
for any reason other than death, Disability, or Retirement, such RSUs shall
automatically be forfeited by the Participant.
(c) "Change in Control" shall mean the occurrence of any of the following
events:
(i) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than PaineWebber, any trustee or other fiduciary
holding securities under an employee benefit plan of PaineWebber, or any
corporation owned, directly or indirectly, by the stockholders of
PaineWebber in substantially the same proportions as their contemporaneous
ownership of voting securities of PaineWebber, is or becomes a "20%
Beneficial Owner." For purposes of this provision, a "20% Beneficial Owner"
shall mean a person who is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of PaineWebber representing 20% or more of the combined voting power of
PaineWebber's then-outstanding voting securities; provided that (A) the
term
<PAGE> 4
"20% Beneficial Owner" shall not include any Beneficial Owner who has
crossed such 20% percent threshold solely as a result of an acquisition of
securities directly from PaineWebber, or solely as a result of an
acquisition by PaineWebber of PaineWebber securities, until such time
thereafter as such person acquires additional voting securities other than
directly from PaineWebber and, after giving effect to such acquisition,
such person would constitute a 20% Beneficial Owner, and (B) with respect
to any person who is and remains eligible to file a Schedule 13G pursuant
to Rule 13d-1(b)(1) under the Exchange Act with respect to PaineWebber
securities, there shall be excluded from the number of securities deemed to
be beneficially owned by such person for purposes of determining whether
such person is a 20% Beneficial Owner a number of securities representing
10% of the combined voting power of PaineWebber's then-outstanding voting
securities;
(ii) During any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of
PaineWebber, together with any new director (other than a director
designated by a person who has entered into an agreement with PaineWebber
to effect a transaction described in paragraph (i), (iii), or (iv) hereof
whose election by the Board or nomination for election by PaineWebber's
stockholders was approved by a vote of at least two-thirds ( 2/3) of the
directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously
so approved (the "Continuing Directors"), cease for any reason to
constitute at least a majority thereof;
(iii) The stockholders of PaineWebber approve a merger, consolidation,
recapitalization, or reorganization of PaineWebber, or a reverse stock
split of any class of voting securities of PaineWebber, or the consummation
of any such transaction if stockholder approval is not obtained, other than
any such transaction which would result in at least 80% of the total voting
power represented by the voting securities of PaineWebber or the surviving
entity outstanding immediately after such transaction being beneficially
owned by persons who together beneficially owned at least 80% of the
combined voting power of the voting securities of PaineWebber outstanding
immediately prior to such transaction, with the relative voting power of
each such continuing holder compared to the voting power of each other
continuing holder not substantially altered as a result of the transaction;
provided that, for purposes of this paragraph (iii), such continuity of
ownership (and preservation of relative voting power) shall be deemed to be
satisfied if the failure to meet such 80% threshold (or to substantially
preserve such relative voting power) is due solely to the acquisition of
voting securities by an employee benefit plan of PaineWebber, such
surviving entity, or of any subsidiary of such surviving entity;
(iv) The stockholders of PaineWebber approve a plan of complete
liquidation of PaineWebber or an agreement for the sale or disposition by
PaineWebber of all or substantially all of PaineWebber's assets (or any
transaction having a similar effect); or
(v) Any other event which the Board of Directors (or the Compensation
Committee of the Board of Directors, if and to the extent that the
Compensation Committee must exercise sole discretion over the matter in
order to comply with applicable requirements of Rule 16b-3 under the
Exchange Act), determines shall constitute a Change in Control for purposes
of this Agreement;
provided that a Change in Control shall not be deemed to have occurred under
this Agreement if, prior to the occurrence of a specified event that would
otherwise constitute a Change in Control under paragraphs (i) through (iv)
hereof, the Continuing Directors of PaineWebber then in office, by a majority
vote thereof, determine that the occurrence of such specified event shall not be
deemed to be a Change in Control hereunder or shall not be deemed to be a Change
in Control with respect to a particular Participant under this Agreement if the
Change in Control results from actions or events in which such Participant is a
participant in a capacity other than solely as an officer, employee or director
of PaineWebber.
(d) The Participant may elect to defer the delivery at the end of the
Restricted Period of PaineWebber Stock representing vested RSUs if and to the
extent permitted by the Committee pursuant to the PaineWebber Deferred
Compensation Plan. The Committee shall, in its sole discretion, have the right
at any time to mandatorily defer such delivery and cause to be deemed credited
an equivalent number of shares of Common Stock to a deferral account of the
Participant under the PaineWebber Deferred Compensation Plan.
2
<PAGE> 5
No action of the Committee under this Section 4(d) shall have the effect of
accelerating or extending the vesting of a Participant's Award hereunder and any
credit to the deferral account of the Participant under the PaineWebber Deferred
Compensation Plan shall be subject to the same terms and conditions with regard
to vesting as set forth in Section 4(a) hereof.
5. Dividend Equivalents.
(a) In the event of an ordinary cash dividend payable on Stock the record
date of which is prior to forfeiture or settlement of RSUs, PaineWebber shall
pay to the Participant an amount equal to the amount of ordinary cash dividends
paid as a dividend on each share of Stock multiplied by the number of such RSUs
credited to the Participant at the record date for such dividend. Such amounts
shall be paid by PaineWebber at the same time that the corresponding cash
dividend on shares of Stock is paid to the PaineWebber stockholders. If so
mandated by the Committee or elected by the Participant under the PaineWebber
Deferred Compensation Plan, such amounts will not be paid to the Participant,
but will instead be deemed to be reinvested in additional RSUs in accordance
with Section 5(d) hereof, which RSUs will be subject to no Restricted Period,
but to the deferral period mandated by the Committee and/or elected by the
Participant under the PaineWebber Deferred Compensation Plan.
(b) In the event of an extraordinary cash dividend or a non-cash dividend
or distribution in the form of property other than Stock payable on Stock the
record date of which is prior to forfeiture or settlement of RSUs, PaineWebber
shall credit to the Participant the amount of such extraordinary cash dividend
or the fair market value at such record date of the property other than Stock
paid as a dividend or distribution on each share of Stock multiplied by the
number of such RSUs credited to the Participant at such record date. Such amount
will be deemed to be reinvested in additional RSUs in accordance with Section
5(d) hereof, which RSUs will be subject to the same Restricted Period (if any)
and to the same mandatory and/or elective deferral period, if any, as applied to
the RSUs with respect to which such payment was credited.
(c) In the event of a dividend or distribution in the form of Stock payable
on Stock the record date of which is prior to forfeiture or settlement of RSUs,
PaineWebber shall credit to the Participant the number of RSUs equal to the
number of whole or fractional shares of Stock paid as a dividend or distribution
on each share of Stock multiplied by the number of such RSUs credited to the
Participant at the record date for such dividend or distribution. Such
additional RSUs will be subject to the same Restricted Period, if any, and to
the same mandatory and/or elective deferral period, if any, as applied to the
RSUs with respect to which such additional RSUs were credited.
(d) Dividend equivalent amounts deemed to be reinvested under Section 5(a)
or 5(b) entitle the Participant to be credited with a number of additional RSUs
at the date any such dividend or distribution is paid on Stock equal to the
per-share amount of the dividend or distribution multiplied by the number of
RSUs credited to the Participant at the record date for such dividend or
distribution divided by the Fair Market Value per share of Stock determined in
accordance with the Plan on the dividend or distribution payment date.
6. Settlement. RSUs not theretofore forfeited under Section 4(b) shall be
settled by delivery as promptly as practicable following the expiration of the
Restricted Period and any mandatory and/or elective deferral period of one share
of Stock for each RSU with respect to which the Restricted Period and any
mandatory and/or elective deferral period has lapsed. Upon settlement of any
RSU, such RSU will be cancelled.
7. Taxes. Upon expiration of the Restricted Period under Section 4(a)
hereof and any mandatory and/or elective deferral period under the PaineWebber
Deferred Compensation Plan, PaineWebber shall be entitled as a condition of the
delivery of Stock representing the RSUs to the Participant that the Participant
remit or, in appropriate cases (including cases in which taxation of the
Participant is deferred), agree to remit when due an amount sufficient to
satisfy all federal, state and local withholding and employment tax requirements
relating to such delivery. Subject to the approval of the Committee, the
Participant will be entitled to elect to have PaineWebber withhold from the
Stock to be delivered or elect to deliver to PaineWebber from shares of Stock
owned separately by the Participant, a sufficient number of such shares of
3
<PAGE> 6
Stock to satisfy the federal, state and local withholding and employment tax
obligations relating to the expiration of the Restricted Period and any deferral
period and the delivery of Stock (and the Company's withholding obligations) to
the extent, if any, permitted under rules and regulations adopted by the
Committee and in effect at the time of such expiration. In such case, the Stock
withheld or the Stock surrendered will be valued at the Fair Market Value
determined in accordance with the Plan.
8. Adjustments. The number of RSUs credited to the Participant, and the
kind of security to be delivered in settlement thereof, shall be appropriately
adjusted, in the discretion of the Committee, to reflect transactions specified
in Section 8(c) of the Plan affecting Stock other than dividends (which result
in payments or crediting of additional RSUs under Section 5 hereof).
9. Employment of Participant. Neither the grant of the RSUs nor anything
in this Agreement or the Plan shall (i) be construed as a commitment, guarantee,
agreement or understanding of any kind that PaineWebber will continue to employ
the Participant or employee, or (b) interfere in any way with the right of
PaineWebber to terminate the Participant's or employee's employment at any time.
10. Miscellaneous.
(a) This Agreement shall bind and inure to the benefit of the Participant
and his or her executors or administrators, heirs and personal and legal
representatives, and to PaineWebber and its successors and assigns.
(b) This Agreement shall be construed and enforced in accordance with
Section 8(j) of the Plan.
(c) This Agreement, together with the Plan, sets forth the entire agreement
between the parties with respect to the subject matter hereof, and there are no
agreements, understandings, warranties or representations, written, express or
implied, between them with respect to the RSUs other than as set forth herein or
therein.
(d) When used herein, "PaineWebber" shall mean Paine Webber Group Inc. and
shall include any corporation which, at the time of reference, is a subsidiary
of PaineWebber within the meaning of Section 424(f) of the Code.
(e) Except as otherwise expressly provided in this Agreement, this
Agreement may not be modified, amended or terminated except by a writing signed
by both parties hereto provided that PaineWebber, upon notice to the
Participant, may unilaterally amend this Agreement in any way that does not
extend the Restricted Period or materially adversely affect the Participant's
rights in or to the RSUs awarded hereunder. No waiver of any provision hereof
shall be effective unless evidenced by a writing signed by the party against
whom it is sought to be enforced. No waiver of any breach of any term hereof
shall be construed as a waiver of any subsequent breach of such term or as a
waiver of any other term hereof.
4
<PAGE> 1
EXHIBIT 4.4
PAINEWEBBER
RESTRICTED STOCK AGREEMENT
UNDER THE
1994 STOCK AWARD PLAN
PAINEWEBBER RESTRICTED STOCK AGREEMENT (the "Agreement"), effective as of
(the "Effective Date"), between Paine Webber Group Inc.
("PaineWebber") and the individual whose signature appears below (the
"Participant").
The Compensation Committee of the Board of Directors of PaineWebber (the
"Committee") has awarded to Participant the number of shares of PaineWebber
Stock (the "Award Shares," which includes any additional Award Shares acquired
under Section 5) set forth below as Restricted Stock under the PaineWebber 1994
Stock Award Plan (the "Plan"), subject to the terms, definitions, and conditions
of the Plan and this Agreement (including the Restricted Stock Terms and
Conditions attached hereto).
The Award Shares of Restricted Stock granted hereby are subject to
forfeiture in the event of the termination of Participant's employment prior to
the expiration of the Restricted Period specified below opposite such number of
Award Shares, as specified in Section 4(a) and (b) hereof. Upon expiration of
the Restricted Period, all restrictions on the Award Shares under the Plan and
this Agreement will lapse, and PaineWebber will cause to be delivered one or
more certificates representing the Award Shares to Participant. The expiration
of the Restricted Periods is subject to acceleration as specified in Section
4(a) hereof.
1. PARTICIPANT:
Name __________________________________________________________________
Address _______________________________________________________________
Social Security Number ________________________________________________
2. TOTAL NUMBER AWARD SHARES GRANTED: ____________________________________
3. RESTRICTED PERIODS:
NUMBER OF RESTRICTED PERIOD
AWARD SHARES END DATE
- ------------ -----------------
- ------------ -----------------
- ------------ -----------------
- ------------ -----------------
<PAGE> 2
IN WITNESS WHEREOF, PaineWebber and the Participant have duly executed this
Agreement, as of the Effective Date stated above.
PAINE WEBBER GROUP INC. PARTICIPANT
By ________________________________ By ________________________________
Name ______________________________ Name ______________________________
Title _____________________________
Enclosures: Restricted Stock Terms and Conditions for 1994 Stock Award Plan 1994
Stock Award Plan Document
<PAGE> 3
RESTRICTED STOCK TERMS AND CONDITIONS
OF THE RESTRICTED STOCK AGREEMENT UNDER THE
1994 STOCK AWARD PLAN
1. Acceptance of Award Shares: Incorporation of Plan Provisions.
(a) The Participant hereby accepts the Award Shares subject to the terms
and conditions set forth in this Agreement and consents to and agrees to comply
with such terms and conditions. All of the terms and conditions of the Plan are
hereby incorporated by reference in this Agreement as though fully set forth
herein. Terms defined in the Plan but not in this Agreement shall have the
meanings set forth in the Plan. To the extent of any conflict between the
provisions of this Agreement and those of the Plan, the provisions of the Plan
shall govern. Participant acknowledges receipt of a copy of the Plan.
(b) To facilitate the operation of the Plan and secure the restrictions
thereof and hereof, PaineWebber has entered into an agreement with Mellon Bank
Corporation (together with its successors and assigns, the "Agent") pursuant to
which the Agent, as custodian, will hold on behalf and for the benefit of the
Participant the certificate(s) representing the Award Shares and deliver them as
provided herein (the "Custodianship Agreement"); and the Participant
acknowledges and consents to the delivery of the certificate(s) representing the
Award Shares to the Agent. Until delivered to the Participant by the Agent, the
Award Shares shall be evidenced by one or more certificates registered in the
name of the Agent or its nominee (which may be held in the form of a single
certificate representing all Award Shares held by the Agent for some or all
recipients of similar awards under the Plan and other plans of PaineWebber). The
Participant agrees to execute such other instruments and documents, and take
such further action, as may be requested from time to time by PaineWebber or the
Agent to maintain such registration or to effectuate or enforce the restrictions
hereunder.
(c) The Award Shares awarded as Restricted Stock to the Participant under
this Agreement are awarded in consideration of past services of the Participant,
and in consideration of the services to be performed by the Participant during
the Restricted Period. The Committee hereby determines that the aggregate value
of such past services of Participant serving as consideration for the Award
Shares is equal to the aggregate par value of the Award Shares.
2. Rights as a Stockholder. Subject to the terms and provisions of the
Delaware General Corporation Law and of this Agreement, the Participant shall
have all of the rights of a beneficial owner of the Award Shares, including the
right to vote or direct the voting of the Award Shares and to receive all
ordinary cash dividends with respect thereto; provided that, if any
extraordinary cash dividend or any non-cash dividend or distribution is made
with respect to Award Shares prior to the expiration of the Restricted Period,
such dividend will not be paid to the Participant directly but instead will be
subject to Section 5 hereof, and in other cases of changes affecting the Award
Shares any property representing the Award Shares will remain subject to Section
7 hereof.
3. Transfer Restrictions. During the applicable Restricted Period, the
Award Shares, the rights of the Participant with respect thereto, and this
Agreement may not be assigned, transferred, sold, margined, optioned, pledged or
otherwise encumbered or disposed of by the Participant or by the Agent on behalf
of the Participant (collectively, a "Transfer") unless otherwise determined by
the Committee. PaineWebber will not be required to recognize or to record any
Transfer or attempted Transfer of any Award Shares in violation of the foregoing
restrictions, and any such Transfer or attempted Transfer shall be null and void
unless otherwise determined by the Committee. The certificate(s) representing
the Award Shares shall bear such restrictive legends as PaineWebber may deem
appropriate to reflect any restrictions applicable to the Award Shares,
including the foregoing and any restrictions on transfer applicable under the
Securities Act of 1933, as amended.
4. Expiration of Restricted Period.
(a) The Restricted Period will expire ("vesting" will occur) with respect
the number of Award Shares specified in this Agreement (and any additional Award
Shares relating thereto acquired under Section 5) on the date designated as
"Restricted Period End Date" opposite such number of Award Shares on the
signature page of this Agreement. The foregoing notwithstanding, the Restricted
Period applicable to all Award Shares
<PAGE> 4
under this Agreement shall expire on an accelerated basis at the time the
Participant's employment with PaineWebber terminates as a result of his or her
(i) death, (ii) "Disability" (as defined in the PaineWebber tax qualified
defined benefit pension plan applicable to the Participant), or (iii) voluntary
retirement on or after his or her "Normal Retirement Date" (as defined in such
pension plan) or early retirement with the consent of the Committee from
employment by PaineWebber or its subsidiaries ("Retirement"), and such
Restricted Period shall expire on an accelerated basis upon the occurrence of a
Change in Control (as defined below). As promptly as practicable following the
expiration of the Restricted Period, PaineWebber shall cause the certificate(s)
representing the Award Shares on which the restrictions have lapsed to be
released by the Agent and transferred and delivered by the Agent to the
Participant free of such restrictions, subject to the terms of Section 6 hereof
and to any restrictions under Section 8(a) of the Plan.
(b) In the event that, prior to the expiration of the Restricted Period
applicable to Award Shares, the Participant shall cease to be an employee of
PaineWebber for any reason other than death, Disability, or Retirement, such
Award Shares (including any additional Award Shares relating thereto acquired
under Section 5 hereof) shall automatically be forfeited by the Participant.
Participant hereby acknowledges and consents that the Agent, upon such a
forfeiture, shall, on behalf of the Participant, relinquish, forfeit and
transfer such Award Shares to PaineWebber without any further action on the part
of the Participant.
(c) "Change in Control" shall mean the occurrence of any of the following
events:
(i) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than PaineWebber, any trustee or other fiduciary
holding securities under an employee benefit plan of PaineWebber, or any
corporation owned, directly or indirectly, by the stockholders of
PaineWebber in substantially the same proportions as their contemporaneous
ownership of voting securities of PaineWebber, is or becomes a "20%
Beneficial Owner." For purposes of this provision, a "20% Beneficial Owner"
shall mean a person who is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of PaineWebber representing 20% or more of the combined voting power of
PaineWebber's then-outstanding voting securities; provided that (A) the
term "20% Beneficial Owner" shall not include any Beneficial Owner who has
crossed such 20% percent threshold solely as a result of an acquisition of
securities directly from PaineWebber, or solely as a result of an
acquisition by PaineWebber of PaineWebber securities, until such time
thereafter as such person acquires additional voting securities other than
directly from PaineWebber and, after giving effect to such acquisition,
such person would constitute a 20% Beneficial Owner, and (B) with respect
to any person who is and remains eligible to file a Schedule 13G pursuant
to Rule 13d-1(b)(1) under the Exchange Act with respect to PaineWebber
securities, there shall be excluded from the number of securities deemed to
be beneficially owned by such person for purposes of determining whether
such person is a 20% Beneficial Owner a number of securities representing
10% of the combined voting power of PaineWebber's then-outstanding voting
securities;
(ii) During any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of
PaineWebber, together with any new director (other than a director
designated by a person who has entered into an agreement with PaineWebber
to effect a transaction described in paragraph (i), (iii), or (iv) hereof)
whose election by the Board or nomination for election by PaineWebber's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously
so approved (the "Continuing Directors"), cease for any reason to
constitute at least a majority thereof;
(iii) The stockholders of PaineWebber approve a merger, consolidation,
recapitalization, or reorganization of PaineWebber, or a reverse stock
split of any class of voting securities of PaineWebber, or the consummation
of any such transaction if stockholder approval is not obtained, other than
any such transaction which would result in at least 80% of the total voting
power represented by the voting securities of PaineWebber or the surviving
entity outstanding immediately after such transaction being beneficially
owned by persons who together beneficially owned at least 80% of the
combined voting power of the voting securities of PaineWebber outstanding
immediately prior to such transaction, with the
2
<PAGE> 5
relative voting power of each such continuing holder compared to the voting
power of each other continuing holder not substantially altered as a result
of the transaction; provided that, for purposes of this paragraph (iii),
such continuity of ownership (and preservation of relative voting power)
shall be deemed to be satisfied if the failure to meet such 80% threshold
(or to substantially preserve such relative voting power) is due solely to
the acquisition of voting securities by an employee benefit plan of
PaineWebber, such surviving entity, or of any subsidiary of such surviving
entity;
(iv) The stockholders of PaineWebber approve a plan of complete
liquidation of PaineWebber or an agreement for the sale or disposition by
PaineWebber of all or substantially all of PaineWebber's assets (or any
transaction having a similar effect); or
(v) Any other event which the Board of Directors (or the Compensation
Committee of the Board of Directors, if and to the extent that the
Compensation Committee must exercise sole discretion over the matter in
order to comply with applicable requirements of Rule 16b-3 under the
Exchange Act), determines shall constitute a Change in Control for purposes
of this Agreement;
provided that a Change in Control shall not be deemed to have occurred under
this Agreement if, prior to the occurrence of a specified event that would
otherwise constitute a Change in Control under paragraphs (i) through (iv)
hereof, the Continuing Directors of PaineWebber then in office, by a majority
vote thereof, determine that the occurrence of such specified event shall not be
deemed to be a Change in Control hereunder or shall not be deemed to be a Change
in Control with respect to a particular Participant under this Agreement if the
Change in Control results from actions or events in which such Participant is a
participant in a capacity other than solely as an officer, employee or director
of PaineWebber.
5. Other Dividends.
(a) In the event of an extraordinary cash dividend or a non-cash dividend
or distribution in the form of property other than Stock payable on Award Shares
the record date of which is prior to the expiration of the Restricted Period
applicable to such Award Shares, PaineWebber shall retain the amount of such
extraordinary cash dividend or such other property and, in lieu of delivery
thereof, shall award to the Participant additional shares of Restricted Stock
having a Fair Market Value at the record date of the dividend or distribution
equal to the amount of cash and fair market value (as determined by the
Committee) of such property paid as a dividend or distribution on each share of
Stock multiplied by the number of Award Shares as to which the Restricted Period
had not expired at the record date thereof. Such additional Award Shares will be
subject to the same Restriction Period and the terms and conditions of this
Agreement as applied to the Award Shares with respect to which such dividend or
distribution was made.
(b) In the event of a dividend or distribution in the form of Stock payable
on Award Shares the record date of which is prior to the expiration of the
Restricted Period applicable to such Award Shares, the Stock issued or delivered
as such dividend or distribution shall be deemed to be additional Award Shares,
and shall be subject to the same Restricted Period and the terms and conditions
of this Agreement as applied to the Award Shares with respect to which such
dividend or distribution was made.
6. Taxes. Upon expiration of the Restricted Period under Section 4(a)
hereof or simultaneously with the filing with the Internal Revenue Service of
the election permitted to be made under Section 83(b) of the Code with respect
to Award Shares, PaineWebber shall be entitled to require as a condition of the
delivery of Stock representing the Award Shares to the Participant that the
Participant remit, or agree to remit when due, an amount sufficient to satisfy
all federal state or local withholding and employment tax requirements relating
to such expiration or filing of such election. Furthermore, PaineWebber shall
have the right to deduct and withhold from any dividends or other distributions
paid with respect to Award Shares any applicable withholding and employment
taxes. Subject to approval of the Committee, the Participant will be entitled to
elect to have PaineWebber withhold from the Stock to be delivered or elect to
deliver to PaineWebber from shares of Stock owned separately by the Participant,
a sufficient number of shares of Stock to satisfy the federal, state and local
withholding and employment tax obligations of the Participant relating to the
expiration of the Restricted Period or filing of an election with the Internal
Revenue Service (and the Company's withholding obligation) to the extent, if
any, permitted under rules and regulations adopted by the
3
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Committee and in effect at the time of such expiration or filing of such
election. In such case, the Stock withheld or Stock surrendered will be valued
at the Fair Market Value determined in accordance with the Plan.
7. Adjustments. In the event of any transaction specified in Section 8(c)
of the Plan affecting Stock other than dividends (which are subject to Section 5
hereof), any property into which the Award Shares are changed or distributed in
additional to Award Shares shall be subject to the same Restricted Period and
the terms and conditions of this Agreement as would have then applied to the
Award Shares.
8. Employment of Participant. Neither the grant of the Award Shares nor
anything in this Agreement or the Plan shall (i) be construed as a commitment,
guarantee, agreement or understanding of any kind that PaineWebber will continue
to employ the Participant or employee, or (b) interfere in any way with the
right of PaineWebber to terminate the Participant's or employee's employment at
any time.
9. Miscellaneous.
(a) This Agreement shall bind and inure to the benefit of the Participant
and his or her executors or administrators, heirs and personal and legal
representatives, and to PaineWebber and its successors and assigns.
(b) This Agreement shall be construed and enforced in accordance with
Section 8(j) of the Plan.
(c) This Agreement, together with the Plan, sets forth the entire agreement
between the parties with respect to the subject matter hereof, and there are no
agreements, understandings, warranties or representations, written, express or
implied, between them with respect to the Award Shares other than as set forth
herein or therein.
(d) When used herein, "PaineWebber" shall mean Paine Webber Group Inc. and
shall include any corporation which, at the time of reference, is a subsidiary
of PaineWebber within the meaning of Section 424(f) of the Code.
(e) Except as otherwise expressly provided in this Agreement, this
Agreement may not be modified, amended or terminated except by a writing signed
by both parties hereto provided that PaineWebber, upon notice to the
Participant, may unilaterally amend this Agreement in any way that does not
extend the Restricted Period or materially adversely affect the Participant's
rights in or to the Award Shares. No waiver of any provision hereof shall be
effective unless evidenced by a writing signed by the party against whom it is
sought to be enforced. No waiver of any breach of any term hereof shall be
construed as a waiver of any subsequent breach of such term or as a waiver of
any other term hereof.
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EXHIBIT 5
June 5, 1996
Board of Directors
Paine Webber Group Inc.
1285 Avenue of the Americas
New York, New York 10019
RE: Registration Statement On Form S-8
1994 Stock Award Plan
Dear Sirs:
In connection with the registration statement on Form S-8 of Paine Webber
Group., a Delaware corporation (the "Company"), being filed with the Securities
and Exchange Commission on about June 5, 1996 and relating to the offering of
shares of the Company's common stock, par value $1 per share (the "Stock"),
under the Company's 1994 Stock Award Plan (the "Plan"), I have examined the
Company's corporate records, certificates and other documents and instruments
and have considered such questions of law as I deemed necessary to render this
opinion.
On the basis of the foregoing, I am of the opinion that, under the laws of
the State of Delaware, the Stock has been duly authorized and, when issued and
paid for pursuant to the Plan, will be legally issued, fully paid and
nonassessable.
I consent to the filing of this opinion as an exhibit to the
above-mentioned registration statement.
Very truly yours,
THEODORE A. LEVINE
General Counsel
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm as experts in "Item 3., Incorporation of
Documents by Reference" of the Registration Statement (Form S-8) pertaining to
the Paine Webber Group Inc. 1994 Stock Award Plan for the registration of
7,500,000 shares of its common stock and to the incorporation by reference
therein of our report dated January 31, 1996, with respect to the consolidated
financial statements and schedules of Paine Webber Group Inc. included or
incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 31, 1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
June 5, 1996
