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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-43585
PROSPECTUS
PAINE WEBBER GROUP INC.
(1,200,000) SHARES OF COMMON STOCK
($1 PAR VALUE)
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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 January 16, 1998 was $30 1/4 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.
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The date of this Prospectus is January 20, 1998.
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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
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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
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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.
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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. Prior to this offering, the limited partners
owned approximately 1,404,000 shares of Common Stock.
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-
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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
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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.
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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.
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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>
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PAINE WEBBER
GROUP INC.
1,200,000 SHARES
COMMON STOCK
($1 PAR VALUE)
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PROSPECTUS
========================
JANUARY 20, 1998
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