<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 31, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
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
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(212) 713-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
THEODORE A. LEVINE
SENIOR VICE PRESIDENT, GENERAL COUNSEL & 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)
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
------------------------
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE
TITLE OF EACH CLASS OF AMOUNT TO BE PRICE PER OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED UNIT PRICE REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1 par value......... 1,200,000 $33.50(1) $40,200,000 $11,859
===========================================================================================================
</TABLE>
(1) Calculated pursuant to Rule 457(c) on the basis of the average of the high
low sales prices for the Common Stock on December 24, 1997, as reported on
the New York Stock Exchange Consolidated Tape. Estimated solely for purposes
of computing the registration fee.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a)OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED DECEMBER 31, 1997
PAINE WEBBER GROUP INC.
(1,200,000) SHARES OF COMMON STOCK
($1 PAR VALUE)
------------------------
The Common Stock of Paine Webber Group Inc. (the "Company") is listed on
the New York Stock Exchange and the Pacific Stock Exchange. The last reported
sale price of the Company's Common Stock on the New York Stock Exchange
Composite Tape on December 30, 1997 was $34 5/8 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This Prospectus relates to the issuance of shares of the Company's Common
Stock to any of the limited partners in PW Partners 1993 Dedicated, L.P. (the
"Partnership") (the "Limited Partners" and, together with the Partnership, the
"Selling Securityholders") upon exercise of an option to purchase 1,440,000
shares of the Company's Common Stock at a per share exercise price of $12.45
held by the Partnership (the "Option"). The Limited Partners are employees or
former employees of the Company, its wholly owned subsidiaries and its
affiliates.
This Prospectus relates to any resale of such shares by the Partnership and
the Limited Partners and any resale by the Partnership and the Limited Partners
of 288,000 shares of Common Stock that were previously issued to the
Partnership. Such resales may be effected from time to time in transactions
(which may include block transactions) on the New York or Pacific Stock
Exchanges, in the over-the-counter market, in negotiated transactions, through
the writing of options, or in a combination of such methods of sale, at fixed
prices which may be changed, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices, or at negotiated prices. The
Selling Securityholders may effect such transactions by selling such shares to
or through dealers, underwriters or agents designated from time to time (which
may include PaineWebber Incorporated). Such dealers, underwriters or agents may
receive compensation in the form of discounts, concessions or commissions from
the Selling Securityholders or the purchasers of such shares for whom they may
act as agent or to whom they may sell as principal, or both (which compensation
as to a particular agent, underwriter or broker might be in excess of customary
commissions).
All expenses incurred in connection with the issuance and the distribution
of the shares offered, other than any underwriting discounts, commissions and
concessions, will be borne by the Company and are estimated to be $22,259.
To the extent required with respect to sales other than direct sales and
customary brokerage transactions with customary commissions, the terms of the
offering and sale by Selling Securityholders of shares of Common Stock in
respect of which this Prospectus is delivered, including any initial public
offering price, any discounts, commissions or concessions allowed, reallowed or
paid to underwriters, dealers or agents and the proceeds to the Selling
Securityholders and any other material terms will be set forth in a Supplement
to this Prospectus.
------------------------
The date of this Prospectus is December , 1997.
<PAGE> 3
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMPANY'S
COMMON SHARES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK AND PACIFIC STOCK
EXCHANGES, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The registration
statement of which this Prospectus forms a part, as well as reports, proxy
statements and other information filed by the Company with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C., 20549; at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and 7
World Trade Center, New York, New York, 10048. In addition, copies of such
material can be obtained upon written request from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Such reports, proxy statements and other information
concerning the Company can also be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005, and the Pacific Stock
Exchange, 301 Pine Street, San Francisco, California 94104. Such material may
also be accessed electronically by means of the Commission's home page on the
Internet at http://www.sec.gov.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the shares of Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is hereby made
to the Registration Statement.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to Section 13 of the Exchange Act are incorporated herein by reference: (i) the
Annual Report on Form 10-K (including the portions of the Company's annual
report to stockholders incorporated by reference therein) for the year ended
December 31, 1996 (the "1996 Form 10-K"); (ii) the Quarterly Reports on Form
10-Q for the quarters ended March 31, 1997, June 30, 1997, September 30, 1997;
(v) the Current Report on Form 8-K dated August 15, 1997; and (vi) the Current
Report on Form 8-K dated December 30, 1997.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering of the securities offered hereby shall
be deemed to be incorporated by reference into this Prospectus and to be part
hereof from the date of filing of such documents.
Any statement contained in the information or any document incorporated by
reference herein shall be deemed to be modified or superseded for the purposes
of this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide, without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, on the written
or oral request of such person, a copy of any or all of the
2
<PAGE> 4
documents referred above which are incorporated by reference into this
Prospectus, other than certain exhibits to such documents. Requests for such
copies should be directed to Assistant Secretary, Paine Webber Group Inc., 1285
Avenue of the Americas, New York, New York 10019 (Telephone: (212) 713-3224).
THE COMPANY
Paine Webber Group Inc. is a holding company which, together with its
operating subsidiaries, forms one of the largest full-service securities and
commodities firms in the industry. Founded in 1879, the Company employs
approximately 16,433 people in 299 offices worldwide.
The Company's principal line of business is to serve the investment and
capital needs of individual, corporate, institutional and public agency clients
through its broker-dealer subsidiary, PaineWebber Incorporated ("PaineWebber"),
and other specialized subsidiaries. The Company holds memberships in all major
securities and commodities exchanges in the United States, and makes a market in
many securities traded on Nasdaq National Market or on other over-the-counter
markets. Additionally, PaineWebber is a primary dealer in U.S. government
securities.
The Company is comprised of interrelated business groups, including
Research, the Private Client Group, the Municipal Securities Group, Investment
Banking, Asset Management, Global Fixed Income and Commercial Real Estate, and
Global Equities and Transaction Services, which utilize common operational and
administrative personnel and facilities.
The Research Group provides investment advice to institutional and
individual investors, and other business areas of the Company, on approximately
846 companies in 55 industry sectors.
The Private Client Group consists primarily of a domestic branch office
system and consumer product groups through which PaineWebber and certain other
subsidiaries provide clients with financial services and products, including the
purchase and sale of securities, option contracts, commodity and financial
futures contracts, fixed income instruments, mutual funds, trusts and selected
insurance products. The Company may act as a principal or agent in providing
these services. Fees charged vary according to the size and complexity of a
transaction, and the activity level of a client's account.
The Municipal Securities Group originates, underwrites, sells and trades
taxable and tax-exempt issues for municipal and public agency clients.
Through the Investment Banking Group, the Company provides financial advice
to, and raises capital for, a broad range of domestic and international
corporate clients. Investment Banking manages and underwrites public and private
offerings, participates as an underwriter in syndicates of public offerings
managed by others, and provides advice in connection with mergers and
acquisitions, restructurings and recapitalizations.
The Asset Management group is comprised of Mitchell Hutchins Asset
Management Inc. ("MHAM"), Mitchell Hutchins Institutional Investors Inc.
("MHII") and Mitchell Hutchins Investment Advisory division ("MHIA"). MHAM and
MHII provide investment advisory and portfolio management services to pension
and endowment funds. MHAM also provides investment advisory and portfolio
management services to individuals and mutual funds. MHIA provides portfolio
management services to individuals, trusts and institutions.
Through the Global Fixed Income and Global Equities Groups, the Company
places securities for, and executes trades on behalf of, institutional clients
both domestically and internationally. In addition, the Company takes positions
in both listed and over-the-counter equity securities and fixed income
securities to facilitate client transactions or for the Company's own account.
The Commercial Real Estate Group provides a full range of capital market
services to real estate clients, including underwriting of debt and equity
securities, principal lending activity, debt restructuring, property sales and
bulk sales services, and a broad range of other advisory services.
The Transaction Services Group includes correspondent services, prime
brokerage and securities lending businesses, and specialist trading. Through
Correspondent Services Corporation, the Company provides
3
<PAGE> 5
execution and clearing services to broker-dealers in the U.S. and overseas. The
Company also acts as a specialist responsible for executing transactions and
maintaining an orderly market in certain securities.
The Company's businesses operate in one of the nation's most highly
regulated industries. Violations of applicable regulations can result in the
revocation of broker-dealer licenses, the imposition of censures or fines, and
the suspension or expulsion of a firm. The Company's businesses are regulated by
various agencies, including the Commission, the NYSE, the Commodity Futures
Trading Commission and the National Association of Securities Dealers, Inc. (the
"NASD").
The Company's principal executive offices are located at 1285 Avenue of the
Americas, New York, New York 10019 (Telephone: (212) 713-2000).
For purposes of the foregoing description, all references to the "Company"
refer collectively to Paine Webber Group Inc. and its operating subsidiaries,
unless the context otherwise requires.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of shares of Common
Stock by the Selling Securityholders.
PLAN OF DISTRIBUTION
The Company has issued 288,000 shares of its Common Stock and an option
(the "Option") to purchase 1,440,000 shares of its Common Stock to a limited
partnership whose limited partners consist of 62 key employees or former key
employees of the Company, its subsidiaries and its affiliates, in transactions
not involving a public offering (such individuals being referred to herein as
the "Limited Partners" and, together with the Partnership, as the "Selling
Securityholders"). The Option is exercisable at the option of the Partnership
into the shares of the Company's Common Stock at a price of $12.45 per share.
This Prospectus relates to the issuance of shares of Common Stock to the
Partnership or any of the Limited Partners upon exercise of the Option. This
Prospectus also relates to any resale of such shares by the Selling
Securityholders and any resale by the Partnership or any of the Limited Partners
of 288,000 shares of Common Stock that were previously issued to the
Partnership. Such resales may be affected from time to time in transactions
(which may include block transactions) on the New York or Pacific Stock
Exchanges, in the over-the-counter market, in negotiated transactions, through
the writing of options, or in a combination of such methods of sale, at fixed
prices which may be changed, at market prices prevailing market prices, or at
negotiated prices. The Selling Securityholders may effect such transactions by
selling such shares to or through dealers, underwriters or agents designated
from time to time (which may include PaineWebber). Such dealers, underwriters or
agents may receive compensation in the form of discounts, concessions or
commissions from the Selling Securityholders or the purchasers of such shares
for whom they may act as agent or to whom they may sell as principal, or both
(which compensation as to a particular agent, underwriter or broker might be in
excess of customary commissions).
In connection with the Selling Securityholders' sale of shares offered
pursuant hereto, the Selling Securityholders and any agents, underwriters or
brokers that participate with the Selling Securityholders in the distribution
thereof may be deemed to be underwriters, and any commission received by them
and any profit recognized by them on the resale of such shares might be deemed
to be underwriting discounts and commissions under the Securities Act.
All expenses incurred in connection with the issuance and the distribution
of the shares offered, other than any underwriting discounts, commissions and
concessions, will be borne by the Company.
4
<PAGE> 6
Neither the delivery of this Prospectus nor any action taken by any Selling
Securityholder shall be deemed or treated as an admission that any of them is an
underwriter within the meaning of the Securities Act.
SELLING SECURITYHOLDERS
The Limited Partners include 62 individuals who are employees or former
employees of the Company, and who may offer and sell an aggregate of 1,200,000
shares pursuant to this Prospectus.
To the extent required with respect to sales other than customary brokerage
transactions by such Selling Securityholders with customary commissions, the
terms of the offering and sale by Selling Securityholders of shares of Common
Stock in respect of which this Prospectus is delivered, including any initial
public offering price, any discounts, commissions or concessions allowed,
reallowed or paid to underwriters, dealers or agents, and the proceeds to the
Selling Securityholders and any other material terms will be set forth in a
Supplement to this Prospectus.
Because the shares of Common Stock may be offered in whole or in part from
time to time by the Selling Securityholders, no estimate can be given as to the
number of shares of Common Stock to be offered for sale or the number that will
be held by the Selling Securityholders upon termination of such offerings.
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
The Company is authorized under its Certificate of Incorporation to issue
200,000,000 shares of Common Stock, par value $1 per share. At the close of
business on December 26, 1997, there were 140,454,000 shares of Common Stock
outstanding. At that date, the Company had reserved authorized shares of Common
Stock as follows: 38,224,000 shares for issuance upon exercise of employee stock
options and stock awards and 1,505,000 shares for issuances upon conversion of
its 6% Convertible Preferred Stock.
The holders of shares of Common Stock are entitled to one vote for each
share on all matters upon which stockholders have the right to vote. Shares of
Common Stock do not have any preemptive rights, are not subject to redemption
and do not have the benefit of any sinking fund. Holders of shares of Common
Stock are not liable for further calls or assessments. They are entitled to
receive such dividends as may be declared by the Board of Directors of the
Company out of funds legally available therefor and to share pro rata in any
distribution to other holders of shares of Common Stock. Shares of Common Stock
are subject to all the preferences, rights and powers of shares of the Series
Preferred Stock set forth in the Company's Certificate of Incorporation or in
any resolution establishing a series of the Series Preferred Stock.
The payment of dividends on the Common Stock is subject to the prior
payment of dividends on any outstanding Series Preferred Stock and is restricted
by covenants in various loan agreements. At December 29, 1997, the Company was
not restricted in the payment of dividends by the provisions of the net capital
rules of the Commission of the New York Stock Exchange. At September 30, 1997,
the equity of the Company's subsidiaries totaled approximately $2.1 billion. Of
this amount approximately $406 million was not available for payment of such
dividends and advances to the Company. Restrictions on other subsidiaries with
respect to the amount of dividends they could declare or advances they could
make to the Company are not material in the aggregate.
The Transfer Agent and Registrar for the Common Stock is Chase Mellon
Shareholders Services, New York, New York.
PREFERRED STOCK
Under the Company's Certificate of Incorporation, the Board of Directors is
authorized to issue up to 20,000,000 shares of Series Preferred Stock (the
"Series Preferred Stock") in one or more series with such rights, restrictions
and qualifications, including any preferences, voting powers, dividend rights,
and redemp-
5
<PAGE> 7
tion, sinking fund and conversion rights, as the Board of Directors may
determine by resolution. In December 1994, the Company issued 2,500,000 shares
of 9% Cumulative Redeemable Preferred Stock (the "Preferred Stock") at $100 per
share. In the event of any liquidation, dissolution or winding up of the
Company, the holders of shares of the Preferred Stock will be entitled to
receive, prior to any distribution to the holders of shares of Common Stock, an
amount equal to $100 per share plus the sum of all accrued and unpaid dividends.
Dividends on the Preferred Stock are cumulative and payable in quarterly
installments at an annual rate of $9.00 per share. The holders of the Preferred
Stock have no general voting rights. The Preferred Stock is redeemable, in whole
or in part, at the option of the Company at $100 per share, on and after
December 16, 1999.
The Company's authorized capital also includes 669,000 shares of 6%
Convertible Preferred Stock, none of which is outstanding.
CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE
OF INCORPORATION AND BY-LAWS
The Company's Restated Certificate of Incorporation and By-Laws contain
certain provisions that are intended to enhance the likelihood of continuity and
stability in the composition of the Company's Board of Directors and in the
policies formulated by the Board and to discourage an unsolicited takeover of
the Company if the Board determines that such takeover is not in the best
interests of the Company and its stockholders. However, these provisions could
have the effect of discouraging certain attempts to acquire the Company or
remove incumbent management even if some or a majority of the Company's
stockholders deemed such an attempt to be in their best interests.
Pursuant to the Restated Certificates of Incorporation, the Board of
Directors of the Company are divided into three classes serving staggered
three-year terms. Directors can be removed from office only for cause (as
defined in the Company's Restated Certificate of Incorporation) and only by the
affirmative vote of the holders of a majority of the voting power of the then
outstanding shares of stock of the Company entitled to vote generally in the
election of the directors (the "Voting Stock"), voting together as a single
class. Vacancies on the Board of Directors may only be filled by the remaining
directors and not by the stockholders, except that in the case of newly created
directorships, if the remaining directors fail to fill any such vacancy, the
stockholders may do so at the next annual or special meeting called for that
purpose.
The By-laws establish an advance notice procedure with regard to the
nomination, other than by or at the direction of the Board of Directors, of
candidates for election as directors and with regard to certain matters to be
brought before an annual meeting of stockholders of the Company. In general,
notice must be received by the Company not less than 90 days prior to the
meeting and must contain certain specified information concerning the person to
be nominated or the matters to be brought before the meeting and concerning the
stockholder submitting the proposal.
Subject to the terms of any Preferred Stock, any action required or
permitted to be taken by the stockholders of the Company must be taken at a duly
called annual or special meeting of stockholders and may not be taken by written
consent. Special meetings may only be called by the Board of Directors.
The Restated Certificate of Incorporation also provides that in the case of
certain mergers, sales of assets, issuances of securities, liquidations or
dissolutions, or reclassifications or recapitalizations involving holders of
stock representing 20% or more of the voting power of the then outstanding
shares of Voting Stock, such transactions must be approved by (i) 80% of the
combined voting power of the then outstanding Voting Stock and (ii) a majority
of the then outstanding shares of Voting Stock held by Disinterested
Stockholders (as defined in the Company's Restated Certificate of
Incorporation), unless such transactions are approved by a majority of the
Disinterested Directors (as defined in the Company's Restated Certificate of
Incorporation) of the Company or unless certain minimum price, form of
consideration and procedural requirements are satisfied.
The affirmative vote of (i) 80% of the Combined voting power of the then
outstanding shares of Voting Stock and (ii) in the case of the provisions
referred to above relating to approvals of certain mergers, business
6
<PAGE> 8
combinations and other similar transactions, a majority of the combined voting
power of the then outstanding shares of Voting Stock held by the Disinterested
Stockholders is required to amend certain provisions of the Company's Restated
Certificate of Incorporation, including the provisions referred to above
relating to the classification of the Board, filling vacancies on the Board,
prohibiting stockholder action by written consent, prohibiting the calling of
special meeting by stockholders, approval of amendments to the Company's By-laws
and approval of certain mergers, business combinations and other similar
transactions.
The requirement of a supermajority vote to approve certain corporate
transactions and certain amendments to the Restated Certificate of Incorporation
and By-laws of the Company could enable a minority of the Company's stockholders
to exercise veto powers over such transactions and amendments.
The Restated Certificate of Incorporation also provides that, to the
fullest extent permitted by the Delaware General Corporation Law, a director of
the Company shall not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director.
LEGAL OPINION
The legality of the shares of Common Stock offered hereby has been passed
upon by Theodore A. Levine, Senior Vice President, General Counsel and Secretary
of the Company who owns beneficially 50,950 shares of Common Stock and has
options to purchase an additional 214,125 shares that are not currently
exercisable.
EXPERTS
The consolidated financial statements of the Company for the year ended
December 31, 1996, incorporated by reference in the Company's Annual Report
(Form 10-K) have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein, and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
7
<PAGE> 9
======================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
REGISTERED SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information.................. 2
Incorporation of Certain Information by
Reference............................ 2
The Company............................ 3
Use of Proceeds........................ 4
Plan of Distribution................... 4
Selling Securityholders................ 5
Description of Capital Stock........... 5
Certain Provisions of the Restated
Certificate of Incorporation and By-
laws................................. 6
Legal Opinion.......................... 7
Experts................................ 7
</TABLE>
======================================================
======================================================
PAINE WEBBER
GROUP INC.
1,200,000 SHARES
COMMON STOCK
($1 PAR VALUE)
------------------------
PROSPECTUS
========================
DECEMBER , 1997
======================================================
<PAGE> 10
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS.
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses payable by the Registrant in
connection with the issuance and distribution of the securities being
registered. All the amounts shown are estimates, except for the registration
fee.
<TABLE>
<S> <C>
Registration Fee............................................... $11,859.00
Fees and Expenses of Accountants............................... $ 2,400.00
Fees and Expenses of Counsel................................... $ 5,000.00
Miscellaneous.................................................. $ 3,000.00
Total................................................ $22,259.00
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the General Corporation Law of the State of Delaware gives
corporations the power to eliminate or limit the personal liability of directors
under certain circumstances. Section 145 of the General Corporation Law of the
State of Delaware gives corporations the power to indemnify directors and
officers under certain circumstances.
Article IX of the Restated Certificate of Incorporation (relating to the
elimination of personal liability of directors of the Company) of Paine Webber
Group Inc. is hereby incorporated by reference to Exhibit 3.1 hereto. Article
VII of Paine Webber Group Inc.'s By-Laws (relating to indemnification of
directors and officers of the Company) is hereby incorporated by reference to
Exhibit 3.2 hereto.
The Company also maintains directors and officers liability and corporate
reimbursement insurance which provides for coverage against loss arising from
claims made against directors and officers in their capacity as such. The
general scope of coverage is any breach of duty, neglect, error, misstatement,
misleading statement or omission. Such policy does not exclude liabilities under
the Securities Act of 1933. The Company also maintains fiduciary liability
insurances for losses in connection with claims made against directors of
officers for violation of any of the responsibilities, obligations or duties
imposed upon fiduciaries under the Employee Retirement Income Security Act of
1974.
ITEM 16. EXHIBITS.
The following Exhibits are filed as part of this Registration Statement:
<TABLE>
<S> <C> <C>
3.1 -- Restated Certificate of Incorporation of the Registrant, as filed with the Office of
the Secretary of State of the State of Delaware on May 4, 1987 (incorporated by
reference to Exhibit 3.1 of Registrant's Registration Statement No. 33-52695 on Form
S-3 filed with the SEC on October 16, 1995).
3.2 -- By-laws of the Registrant as amended March 1, 1988 (incorporated by reference to
Exhibit 3.2 of Registrant's Registration Statement No. 33-52695 on Form S-3 filed
with the SEC on October 16, 1995).
4.4 -- Option Agreement dated as of January 6, 1994 by and between the Registrant and PW
Partners 1993 Dedicated L.P.
5 -- Opinion of Theodore A. Levine, in respect of the legality of the Securities
registered hereunder, containing the consent of such counsel.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Counsel. The consent of Theodore A. Levine is included in his opinion
filed herewith as Exhibit 5.
25 -- Power of Attorney (set forth on the signature pages of this Registration Statement).
</TABLE>
II-1
<PAGE> 11
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement:
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or 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 herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions described under Item 15
above, or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-2
<PAGE> 12
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-3 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 December 29, 1997.
PAINE WEBBER GROUP INC.
(Registrant)
By: /s/ DONALD B. MARRON
--------------------------------------
(Donald B. Marron,
Chairman of the Board and
Chief Executive Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints DONALD B. MARRON, WILLIAM NOLAN and REGINA 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
thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and Power of Attorney have 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 December 29, 1997
- --------------------------------------------- Executive Officer and
(Donald B. Marron) Director (principal
executive officer)
/s/ REGINA DOLAN Senior Vice President and December 29, 1997
- --------------------------------------------- Chief Financial Officer
(Regina Dolan) (principal financial and
accounting officer)
Director December , 1997
- ---------------------------------------------
(T. Stanton Armour)
/s/ E. GARRETT BEWKES, JR. Director December 29, 1997
- ---------------------------------------------
(E. Garrett Bewkes, Jr.)
Director December , 1997
- ---------------------------------------------
(Reto Braun)
</TABLE>
II-3
<PAGE> 13
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------- ------------------
<C> <S> <C>
/s/ JOHN A. BULT Director December 29, 1997
- ---------------------------------------------
(John A. Bult)
/s/ JOSEPH J. GRANO, JR. Director December 29, 1997
- ---------------------------------------------
(Joseph J. Grano, Jr.)
/s/ FRANK P. DOYLE Director December 29, 1997
- ---------------------------------------------
(Frank P. Doyle)
/s/ JAMES W. KINNEAR Director December 29, 1997
- ---------------------------------------------
(James W. Kinnear)
/s/ NAOSHI KIYONO Director December 29, 1997
- ---------------------------------------------
(Naoshi Kiyono)
Director December , 1997
- ---------------------------------------------
(Robert M. Loeffler)
/s/ EDWARD RANDALL, III Director December 29, 1997
- ---------------------------------------------
(Edward Randall, III)
/s/ HENRY ROSOVSKY Director December 29, 1997
- ---------------------------------------------
(Henry Rosovsky)
/s/ YOSHINAO SEKI Director December 29, 1997
- ---------------------------------------------
(Yoshinao Seki)
Director December , 1997
- ---------------------------------------------
(John R. Torell III)
</TABLE>
II-4
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NO. DESCRIPTION NUMBER
- ------ -------------------------------------------------------------------------
<S> <C> <C> <C>
3.1 -- Restated Certificate of Incorporation of the Registrant,
as filed with the Office of the Secretary of State of the
State of Delaware on May 4, 1987 (incorporated by
reference to Exhibit 3.1 of Registrant's Registration
Statement No. 33-52695 on Form S-3 filed with the SEC on
October 16, 1995)........................................
3.2 -- By-laws of the Registrant as amended March 1, 1988
(incorporated by reference to Exhibit 3.2 of Registrant's
Registration Statement No. 33-52695 on Form S-3 filed
with the SEC on October 16, 1995)........................
4.4 -- Option Agreement dated as of January 6, 1994 by and
between the Registrant and PW Partners 1993 Dedicated
L.P. ....................................................
5 -- Opinion of Theodore A. Levine, in respect of the legality
of the Securities registered hereunder, containing the
consent of such counsel..................................
23.1 -- Consent of Ernst & Young LLP.............................
23.2 -- Consent of Counsel. The consent of Theodore A. Levine is
included in his opinion filed herewith as Exhibit 5......
25 -- Power of Attorney (set forth on the signature pages of
this Registration Statement).............................
</TABLE>
<PAGE> 1
Exhibit 4.4
OPTION AGREEMENT
AGREEMENT, dated as of January 6, 1994 (the "Effective Date"), by and
between PAINE WEBBER GROUP INC., a Delaware corporation (the "Company"), and
PW PARTNERS 1993 DEDICATED L.P., a Delaware limited partnership (the
"Partnership").
WHEREAS, it is in the best interests of the Company and its affiliates
to encourage their key employees to become shareholders of the Company:
WHEREAS, the Partnership has been created to offer an opportunity to
certain key employees of the Company and its direct and indirect wholly-owned
subsidiaries as limited partners of the Partnership (together with their
permitted Successors in Interests under the Partnership Agreement (as
hereinafter defined), the "Limited Partners") to acquire shares of the Common
Stock, $1.00 par value per share, of PWG (the "Common Stock"); and
WHEREAS, the Company has authorized the grant to the Partnership of an
option to purchase shares of Common Stock;
NOW, THEREFORE, to effectuate the foregoing, the Company and the
Partnership agree as follows:
1. Definitions.
"General Partner" shall mean PaineWebber Partners Inc.
<PAGE> 2
"Market Price", as of a particular date, shall mean the last sale price
of one share of Common Stock, as officially reported on the composite tape with
respect to the principal national securities exchange on which the Common Stock
is at the time listed or admitted to trading, for such date (or, if there shall
have been no sale on such exchange on such date, on the next preceding date on
which the Common Stock was traded), or if the Common Stock shall not be thus
listed or admitted to trading on any national securities exchange, then the
last sale price of the Common Stock for such date, if it is a national market
issue, or the average of the last bid and asked prices for such date, in either
case as reported by the National Association of Securities Dealers automated
quotation system ("NASDAQ"), or if not traded on NASDAQ by the National
Quotation Bureau, Inc. If at any time the Common Stock is not listed on any
exchange or quoted in the domestic over-the-counter market, the "Market Price"
shall be deemed to be the fair market value thereof as of the date as of which
the determination is to be made, as determined by a nationally recognized
investment banking firm selected by the Company.
"Option" shall have the meaning set forth in Section 2 below.
"Optionholder" means the person or persons who are entitled to
exercise the Option in accordance with this Agreement.
<PAGE> 3
"Partnership Agreement" shall mean the Limited Partnership Agreement
of the Partnership dated as of January 6, 1994 among the General Partner and the
Limited Partners.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Trading Day" shall mean a day on which the principal securities
exchange on which the Common Stock is listed is open for trading or, if the
Common Stock is traded only in the domestic over-the-counter market, a day on
which trading is conducted in such market or, if the Common Stock is not listed
on any exchange or quoted in the domestic over-the-counter market, a day on
which PaineWebber Incorporated is open for business.
2. Grant of Option.
The Company hereby grants to the Partnership (the "Optionholder") an
option to purchase from the Company 1,000,000 shares of Common Stock (the
"Option Shares") at a price of $28.00 per share (as such price may be adjusted
pursuant to the terms of this Agreement, the "Exercise Price"), at any time or
from time to time before the close of business on December 31, 2003; provided,
however, if the Partnership acquires fewer than 200,000 shares of Common Stock
(the "Initial Shares") as of the Effective Date from the Company, the number
of Option Shares shall be reduced so that the ratio of Option Shares to Initial
Shares as of the
<PAGE> 4
4
Effective Date will be five to one, with any fraction Option Share resulting
from such reduction being rounded to one. The option to purchase the Option
Shares and each option to purchase a lesser number of Option Shares that is
transferred pursuant to Section 5 are referred to herein separately or
collectively, as the case may be, as the "Option." The Option shall be evidenced
by a certificate (the "Option Certificate") issued and delivered to the
Optionholder upon the execution and delivery of this Agreement.
3. Exercise of Option.
(a) The Option may be exercised in whole or in part by delivery to
the Secretary of the Company at its principal office (presently 1285 Avenue of
the Americas, New York, New York 10019) of the attached Notice of Election to
Exercise Option (the "Exercise Notice"), duly executed by the Optionholder and
specifying the number of Option Shares as to which the Option is being
exercised (the "Acquired Shares"), and the Option Certificate, subject to
delivery to the Company within five Trading Days thereafter of a certified or
bank cashier's check or wire transfer of funds in the amount of the aggregate
Exercise Price for the Acquired Shares. The exercise of the Option shall be
deemed to have been effected as of the close of business on the date on which
the Exercise Notice is delivered pursuant to this Section 3 (the "Exercise
Date") and title to the Acquired Shares shall be vested in
<PAGE> 5
5
the Optionholder on the Exercise Date, subject to delivery of the amount of the
aggregate Exercise Price for the Acquired Shares within the period specified
above.
(b) Certificates for the Acquired Shares shall be delivered to the
Optionholder within five Trading Days after the Exercise Date, provided that
the Company shall have received the amount of the aggregate Exercise Price. If
the Option is not exercised as to all the Option Shares which may be purchased
thereunder (as adjusted pursuant to Section 7), the Company shall return the
Option Certificate to the Optionholder with an endorsement of the number of
Option Shares purchased.
(c) The Option may be exercised only as to whole shares of Common Stock
unless a fractional share is subject to the Option and the Option is exercised
in full. No certificate shall be delivered to the Optionholder evidencing any
fractional share of Common Stock as to which the Option is exercised. Instead,
the Company shall pay to the Optionholder in cash an amount equal to a
corresponding fraction of the Market Price of one share of Common Stock as of
the Exercise Date.
(d) Unless the Acquired Shares may at the time of acquisition be lawfully
sold to the Optionholder in accordance with a then currently effective
registration statement under the Securities Act, the Optionholder shall
<PAGE> 6
6
provide the Company, as a condition to the delivery of any stock certificates,
with a statement that the Optionholder is acquiring such Acquired Shares for
investment purposes only and not with a view to any distribution or public
offering of such shares. The Acquired Shares may not be sold, transferred or
otherwise disposed of until (i) a registration statement with respect to the
Acquired Shares to be delivered under the Option is declared effective or (ii)
the Company receives an opinion of counsel reasonably satisfactory to the
Company that such transfer will be exempt from registration under the
Securities Act.
(e) Each certificate for Acquired Shares shall, unless such shares are then
the subject of an effective registration statement under the Securities Act,
bear the following legend:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be sold or
transferred except pursuant to an effective registration under such Act or
an exemption from such registration."
Any certificate issued at any time in exchange or substitution for a
certificate for Acquired Shares bearing such legend shall also bear such
legend unless (i) such shares are then the subject of an effective
registration statement under the Securities Act or (ii) in the opinion of
Company counsel or other counsel reasonably satisfactory to
<PAGE> 7
7
the Company, the transfer of such shares is exempt from registration under the
Securities Act.
4. Exercisability; Expiration. The Option shall not be exercisable until
the Applicable Date as determined in accordance with the Partnership Agreement,
except that if the Applicable Date is accelerated (other than pursuant to
Section 7.02(b) of the Partnership Agreement) by the General Partner in
accordance with Section 7.01(a) of the Partnership Agreement, the Option shall
not be exercisable until the later of (i) December 10, 1994 and (ii) the date
to which the Applicable Date is accelerated by the General Partner in
accordance with Section 7.01(a) of the Partnership Agreement. The Option shall
be exercisable on and after any date to which the Applicable Date is
accelerated under Section 7.02(b) of the Partnership Agreement as a result of a
Change in Control and the declaration of the Operative Date (as such terms are
defined in the Partnership Agreement) or as a result of the commencement of a
tender offer described in Section 7.02(b)(ii) of the Partnership Agreement.
Unless previously exercised in full, the Option shall expire at the close of
business on the first to occur of the following:
(a) December 31, 2003;
(b) If the Option is held by the Partnership, the purchase of the interest
of a Limited Partner in the Partnership by the Partnership or the General
Partner,
<PAGE> 8
with respect to the number of shares subject to the Option held by the
Partnership, if any, that are then allocable to such Limited Partner;
(c) If an interest in the Option is held by a Limited Partner, the
purchase of such interest of such Limited Partner by the Partnership or the
General Partner; and
(d) In the event of the liquidation, dissolution or winding-up of
the Company as a result of a sale of all or substantially all of the
Company's assets or otherwise, the record date for determining holders of
Common Stock entitled to receive any distribution upon such liquidation,
dissolution or winding-up.
The Company shall give the Optionholder notice of any such liquidation,
dissolution or winding-up at least 20 days before such record date, but failure
to do so shall not affect the validity of the action taken or extend the right
to exercise the Option.
5. TRANSFER OF OPTION.
(a) An interest in the Option may be transferred at any time, in
whole or in part, to one or more of the Limited Partners, provided that each
such transfer is permitted by and is in accordance with, and subject to, the
Partnership Agreement. Following any such transfer (i) references to the
Optionholder in this Agreement shall be deemed to refer to
<PAGE> 9
9
the Limited Partner to whom such transfer is made, with respect to the number of
shares of Common Stock as to which he is thereafter entitled to exercise the
Option, and (ii) the Option so transferred and any shares of Common Stock
received by a Limited Partner upon exercise thereof shall remain subject to all
applicable provisions of the Partnership Agreement. The Option held by a Limited
Partner shall not be transferable by the Limited Partner in whole or in part
other than by will or the laws of descent and distribution. Any Option
Certificate issued upon transfer of the Option as permitted by this Section 5(a)
shall bear the following legend (appropriately modified if the shares of Common
Stock to be delivered upon exercise of the Option are then the subject of an
effective registration statement under the Securities Act):
"This Option and the shares of common stock
to be delivered upon exercise of this Option
have not been registered under the Securities
Act of 1933 and may be transferred only in
accordance with the provisions of Section 5
of the Option Agreement dated as of January
6, 1994 between Paine Webber Group Inc. and
PW Partners 1993 Dedicated L.P."
(b) Except as expressly provided in Section 5(a), neither the
Option nor any interest in the Option may be transferred by the Optionholder.
(c) The Company shall maintain, at its office at the address
set forth in or subsequently changed pursuant to
<PAGE> 10
10
Section 10(e), records for the registration and registration of transfer of the
Option. Subject to the provisions of Section 5(a), the Option shall be
transferred, in whole or in part, upon the surrender of an Option Certificate,
together with the attached assignment form, duly executed by the registered
holder of the Option or his duly authorized agent or attorney, at such office.
Upon such surrender, the Company shall execute and deliver a new Option
Certificate or Certificates in the name of the assignee or assignees and in the
number of shares specified in such assignment, and the Option Certificate so
surrendered shall be cancelled.
6. Merger or Consolidation.
(a) In the event of (i) a merger or consolidation in which the Company
is not the surviving or continuing corporation, or (ii) a merger or
consolidation in which the Company is the surviving or continuing entity and the
Common Stock is changed into or exchanged for cash or any other property, the
Optionholder shall be entitled to receive, upon exercise of the Option at any
time after the effective date of such merger or consolidation, in lieu of Common
Stock, the stock, other securities, cash or property which a holder of the
number of shares of Common Stock to be delivered upon exercise of the Option
immediately prior to such transaction would have been entitled to receive upon
the effectiveness of such merger or consolidation. The Company shall give the
<PAGE> 11
11
Optionholder notice of any merger or consolidation involving the Company at
least 20 days before the record date for such transaction, but failure to do so
shall not affect the validity of the action taken.
(b) The provisions of this Section 6 shall apply in a similar manner
to any merger or consolidation of a type specified in Section 6(a) involving a
successor corporation to the Company, if immediately prior thereto the
Optionholder is entitled to receive, upon exercise of the Option, stock or other
securities of such corporation.
7. Adjustment of Number of Shares and Exercise Price.
(a) If any of the following events shall occur prior to the exercise
in full or expiration of the Option:
(i) a dividend is paid or any other distribution on the Common Stock
is made in shares of Common Stock;
(ii) the outstanding shares of Common Stock are subdivided into a
greater number of shares;
(iii) the outstanding shares of Common Stock are combined into a smaller
number of shares; or
(iv) the outstanding shares of Common Stock are changed into or
exchanged for a different number or kind of capital stock or other
securities of the Company, through reorganization, merger, consolidation,
recapitalization, reclassification, capital adjustment or otherwise;
<PAGE> 12
12
then the number and kind of shares of capital stock or other securities of the
Company subject to the Option shall be appropriately adjusted so that after the
record date for determination of the holders of Common Stock entitled to
participate in any such event, the Optionholder shall be entitled to receive
upon exercise of the Option such kind and number of shares of stock or
securities as it would have been entitled to receive had it owned the shares of
Common Stock to be delivered upon exercise of the Option on such record date.
The Exercise Price shall be adjusted so that after such record date it equals
(x) the aggregate Exercise Price under the Option, divided by (y) the number of
shares of Common Stock or other securities to be delivered under the Option
immediately after such record date. No such adjustments shall change the
aggregate Exercise Price under the Option.
(b) If the holders of outstanding shares of Common Stock shall at any time
be offered any rights or warrants to subscribe for or purchase additional shares
of Common Stock at a price per share less than the Market Price as of the record
date for determination of stockholders entitled to such rights, the Exercise
Price in effect immediately prior to such record date shall be adjusted by being
multiplied by a fraction of which (i) the numerator is the number of shares of
Common Stock outstanding on such record date plus the
<PAGE> 13
13
number of shares which the aggregate offering price of the total number of
shares so offered would purchase at such Market Price and (ii) the denominator
is the number of shares of Common Stock outstanding on such record date plus
the number of additional shares of Common Stock offered for subscription or
purchase. Such adjustment shall be effective immediately after such record
date.
(c) If securities (other than Common Stock) or assets (other than
cash dividends) of the Company, or rights or warrants to subscribe to
securities of the Company other than Common Stock, are at any time distributed
to the holders of outstanding shares of Common Stock, the Exercise Price in
effect immediately prior to the record date for determination of stockholders
entitled to receive such distribution shall be adjusted by being multiplied by
a fraction of which (i) the numerator is the Market Price as of such record
date less the then fair market value (as determined by the Board of Directors
of the Company, whose determination shall be conclusive) of the securities or
assets so distributed to the holder of one share of Common Stock or of the
subscription rights or warrants applicable to one share of Common Stock and
(ii) the denominator is such Market Price. Such adjustment shall be effective
immediately after such record date.
<PAGE> 14
14
(d) The Company shall give the Optionholder notice of the occurrence of
any of the events specified in Sections 7(a), 7(b) or 7(c) at least 20 days
before the record date for such transaction, but failure to do so shall not
affect the validity of the action taken.
(e) Upon each adjustment of the Exercise Price pursuant to Sections
7(b) or 7(c), the number of shares of Common Stock thereafter to be delivered
upon exercise of the Option shall be equal to the result obtained by dividing
the aggregate Exercise Price under the Option immediately prior to such
adjustment by the Exercise Price in effect immediately after such adjustment.
(f) Upon any adjustment of the number of shares of Common Stock subject
to the Option or the Exercise Price, the Company shall give the Optionholder
prompt written notice of the adjustment, setting forth in detail the method of
calculation and the facts upon which the calculation is based.
(g) The provisions of this Section 7 shall apply in a similar manner to
any of the events specified in Sections 7(a), 7(b) and 7(c) involving stock or
other securities of a successor corporation to the Company, if as of the record
date for such transaction the Optionholder is entitled to receive, upon
exercise of the Option, such stock or other securities.
<PAGE> 15
15
8. Investment Representation. The Optionholder represents to the Company
that it is acquiring the Option for investment purposes only and not with a view
to any distribution or public offering of the Option or the shares of Common
Stock to be delivered upon exercise of the Option.
9. Corporate Proceedings.
(a) The Company has taken all corporate actions necessary to be taken
by it to authorize the execution and delivery of the Option and delivery of the
shares of Common Stock to be delivered thereunder.
(b) All shares of Common Stock delivered upon the exercise of the
Option will be duly and validly issued, fully-paid and nonassessable.
10. Miscellaneous.
(a) Stockholder Rights. Prior to the exercise of the Option, the
Optionholder shall not be entitled to any rights as a stockholder of the Company
with respect to the shares of Common Stock to be delivered under the Option.
(b) Replacement of Option Certificate. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of an Option Certificate and, in the case of such mutilation, upon
surrender or cancellation of such Option Certificate, the Company at its expense
shall execute and deliver in lieu
<PAGE> 16
16
thereof a new Option Certificate of like tenor for the number of shares of
Common Stock then to be delivered under the Option.
(c) Successors and Assigns. The Company may not assign or transfer
its obligations under the Option, except pursuant to a merger or
consolidation in which (i) the Company is not the surviving or continuing
entity and (ii) the surviving or continuing entity assumes such obligations
either contractually or as a matter of law.
(d) Amendment or Waiver. Any amendment or modification of this
Agreement must be in writing and signed by (i) an authorized officer of the
General Partner, if the Partnership is then an Optionholder, (ii) each of
the Limited Partners, if any, who is then an Optionholder and would be
affected by such amendment, and (iii) an authorized officer of the Company.
A waiver of any provision of this Agreement must be in writing and signed
by an authorized officer of the General partner, if the partnership is then
an Optionholder, and each Limited Partner from whom a waiver is sought or
by an authorized officer of the Company, as the case may be.
(e) Notices. Any notice herein required or permitted to be given
shall be in writing and shall be deemed to have been given when delivered
personally or sent by certified or registered mail, postage prepaid, return
receipt
<PAGE> 17
17
requested, duly addressed to the party concerned at the address indicated below
or to such other address as such party may subsequently give notice of:
If to the Company: Paine Webber Group Inc.
1285 Avenue of the Americas
New York, New York 10019
One Copy Attention: Secretary
One Copy Attention: Treasurer
If to the Partnership: PW Partners 1993 Dedicated L.P.
c/o PaineWebber Partners Inc.
1285 Avenue of the Americas
New York, New York 10019
Attention: General Partner
If to a Limited Partner: At the address for such Limited Partner on the
books of the Partnership
(f) Headings. The section headings contained in the Option are for
convenience only and shall not in any way affect the meaning or construction of
this Agreement.
(g) Choice of Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws.
<PAGE> 18
18
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first written above.
PAINE WEBBER GROUP INC.
By: /s/ Pierce R. Smith
-----------------------------
Title:
PW PARTNERS 1993 DEDICATED L.P.
By: PAINEWEBBER PARTNERS INC.
(General Partner)
By: /s/ Donald M. Schwartz
-----------------------------
Title: President
<PAGE> 19
NOTICE OF ELECTION TO EXERCISE OPTION
To: Paine Webber Group Inc.
_______________________, the registered holder of an option granted
under the Option Agreement dated as of December 29, 1993 between you and PW
Partners 1993 Dedicated L.P. (the "Option Agreement") and evidenced by the
attached Option Certificate, hereby elects to exercise its right to purchase
from you _____ shares of common stock, $1.00 par value per share, of
PaineWebber Group Inc.
Payment of the aggregate Exercise Price (as defined in the Option
Agreement) of such shares will be made within the period specified in the
Option Agreement.
___________________________________
(Name of Optionholder)
Dated:
<PAGE> 20
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________ the rights of the undersigned under the Option
Agreement dated as of December 31, 1993 between Paine Webber Group Inc. (the
"Company") and PW Partners 1993 Dedicated L.P. with respect to the purchase of
__________ shares of the Common Stock, $1.00 par value, of Paine Webber Group
Inc., and appoints ______________________________ attorney to transfer said
rights on the books of the Company, with full power of substitution.
_______________________
[Name of Optionholder]
Dated:
<PAGE> 1
EXHIBIT 5
December 29, 1997
Board of Directors
Paine Webber Group Inc.
1285 Avenue of the Americas
New York, New York 10019
1,200,000 SHARES
PAINE WEBBER GROUP INC.
COMMON STOCK
Dear Sirs:
I have examined and am familiar with the Certificate of Incorporation of Paine
Webber Group Inc., a Delaware corporation ("Paine Webber"), and the By-laws of
Paine Webber. I am also familiar with the corporate proceedings taken by Paine
Webber to authorize the issuance and sale of 1,200,000 shares of Common Stock,
par value $1 per share, of Paine Webber (the "Common Stock"). I have also
examined originals, or copies certified or otherwise identified to our
satisfaction, of such documents, corporate records and other instruments as I
have deemed necessary or appropriate for purposes of this opinion.
Based on the foregoing, I am of the opinion that, under the laws of the State of
Delaware, the shares of Common Stock have been duly authorized and, when issued
and sold, in accordance with the corporate proceedings referred to above, will
be legally issued, fully paid and nonassessable.
I know that I am referred to under the heading "Legal Opinion" in the prospectus
forming a part of the Registration Statement on Form S-3 relating to the shares
of Common Stock, and I hereby consent to such use of my name in such
Registration Statement.
Very truly yours,
TAL/mas
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and the related Prospectus of Paine
Webber Group Inc. for the registration of 1,200,000 shares of its Common Stock
and to the incorporation by reference therein of our report dated February 3,
1997, 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, 1996, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
December 31, 1997
