<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 9, 1998
REGISTRATION NO. 333-
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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) 713-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------
PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
PETER S. WILSON
CRAVATH, SWAINE & MOORE
WORLDWIDE PLAZA
825 EIGHTH AVENUE
NEW YORK, NEW YORK 10019
(212) 474-1000
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
When market conditions warrant after the effective date of this Registration
Statement.
------------------------
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/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C>
<CAPTION>
PROPOSED
MAXIMUM AMOUNT OF
TITLE OF EACH CLASS AGGREGATE REGISTRATION
OF SECURITIES TO BE REGISTERED OFFERING PRICE(1) FEE
<S> <C> <C>
Debt Securities(2).............................................................. $3,000,000,000 $885,000
</TABLE>
(1) Debt Securities may be denominated in U.S. Dollars or the equivalent in
other currencies or composite currencies.
(2) The Prospectus contained in this Registration Statement also relates to
$353,115,000 in Debt Securities previously registered pursuant to
Registration Statement No. 333-17913. A registration fee of $606,061 was
paid in connection with Registration Statement No. 333-17913, of which
$107,005 related to such Debt Securities.
---------------------
Pursuant to Rule 429 of the rules and regulations of the Commission under
the Securities Act of 1933, the Prospectus contained herein also relates to
Registration Statement No. 333-17913, as to which this constitutes
Post-Effective Amendment No. 1. Such Post-Effective Amendment shall hereafter
become effective concurrently with the effectiveness of this Registration
Statement in accordance with Section 8(c) of the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS SUPPLEMENT DATED SEPTEMBER 9, 1998
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER ,1998)
PAINE WEBBER GROUP INC.
MEDIUM-TERM SENIOR NOTES, SERIES C, AND
MEDIUM-TERM SUBORDINATED NOTES, SERIES D
DUE FROM NINE MONTHS TO 30 YEARS FROM DATE OF ISSUE
----------
Paine Webber Group Inc. (the "Company") may offer from time to time its
Medium-Term Senior Notes, Series C ("Senior Notes"), and Medium-Term
Subordinated Notes, Series D ("Subordinated Notes"). The Senior Notes and
Subordinated Notes offered by this Prospectus Supplement are hereinafter
referred to as the "Notes." The Company may sell up to U.S. $3,353,115,000
aggregate principal amount (or its equivalent in another currency or composite
currency) of Notes, subject to reduction as a result of the sale of other
Securities (as defined in the accompanying Prospectus). The Notes will be due
from nine months to 30 years from the date of issue, as selected by the
purchaser and agreed to by the Company, and may be subject to redemption at the
option of the Company or repayment at the option of the holder. The Notes may be
denominated or payable in U.S. dollars or in such foreign currencies or
composite currencies (each a "Specified Currency") as may be designated by the
Company at the time of offering. The Specified Currency, interest rate or
interest rate formula, issue price and stated maturity ("Stated Maturity") of
any Note and any other terms of such Note not set forth herein or in the
accompanying Prospectus will be set forth in a related Pricing Supplement (the
"Pricing Supplement") to this Prospectus Supplement. Unless otherwise indicated
in the applicable Pricing Supplement, each Note will bear interest at a fixed
rate (a "Fixed Rate Note"), which may be zero in the case of certain Notes
issued at a price representing a discount from the principal amount payable at
Stated Maturity (a "Zero-Coupon Note"), or at a floating rate (a "Floating Rate
Note") determined by reference to the Commercial Paper Rate, the Prime Rate, the
Federal Funds Rate, LIBOR, the Treasury Rate (each as defined under "Description
of Notes") or such other interest rate formula as may be designated in the
applicable Pricing Supplement, as adjusted by the Spread or Spread Multiplier
(each as defined under "Description of Notes"), if any, applicable to such Note.
The Senior Notes will constitute Superior Indebtedness (as defined in the
accompanying Prospectus), and the Subordinated Notes will be subordinated to all
Superior Indebtedness. See "Description of Notes."
Each Note will be represented by either a global security (a "Global Note")
registered in the name of The Depository Trust Company, as Depositary (the
"Depositary"), or its nominee (each such Note represented by a Global Note being
referred to herein as a "Book-Entry Note"), or a certificate issued in
definitive form (a "Certificated Note"), as set forth in the applicable Pricing
Supplement. Interests in Book-Entry Notes will be shown on, and transfers
thereof will be effected only through, the records maintained by the Depositary
and its participants. Except as described in "Description of Notes-- Book-Entry
Notes," owners of beneficial interests in Global Notes will not be entitled to
receive Notes in definitive form and will not be considered the holders thereof.
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
cannot be redeemed or repaid prior to their Stated Maturity and will be issued
only in fully registered form in the denomination of U.S. $100,000 or any larger
amount that is an integral multiple of U.S. $1,000 or, in the case of Notes
denominated in a Specified Currency other than U.S. dollars, in the
denominations set forth in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, interest on
the Fixed Rate Notes will be payable on each March 1 and September 1 and at
maturity. Interest on the Floating Rate Notes will be payable on the dates
specified herein and in the applicable Pricing Supplement. See "Description of
Notes."
Unless otherwise specified in the applicable Pricing Supplement, Notes
denominated or payable in other than U.S. dollars or a composite currency will
not be sold in, or to residents of, a country issuing the Specified Currency.
-------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, ANY
PRICING SUPPLEMENT HERETO OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
<TABLE>
<CAPTION>
CRIMINAL OFFENSE.
<S> <C> <C> <C>
<CAPTION>
PRICE TO PUBLIC(1) AGENT'S COMMISSIONS(2) PROCEEDS TO COMPANY (2)(3)
<S> <C> <C> <C>
Per Note........... 100% .05% to .75% 99.25% to 99.95%
U.S. U.S. $1,676,558 to U.S. $3,327,966,638 to
Total(4)........... $3,353,115,000 $25,148,363 $3,351,438,443
</TABLE>
(1) Unless otherwise specified in the applicable Pricing Supplement, the price
to the public of Notes will be 100% of their principal amount.
(2) The Company will pay PaineWebber Incorporated ("PWI") a commission of from
.05% to .75%, depending on Stated Maturity, of the principal amount of any
Notes sold through PWI as agent (the "Agent") or sold to PWI as principal
under circumstances in which no other discount is agreed upon.
(3) Before deducting estimated expenses of U.S. $ 1,333,500 payable by the
Company, including reimbursement of certain of the Agent's expenses. See
"Plan of Distribution."
(4) Or the equivalent thereof in other currencies or composite currencies.
-------------
Offers to purchase Notes are being solicited on a reasonable efforts basis,
from time to time, by the Agent on behalf of the Company. The Notes are not and
will not be listed on any securities exchange; the Notes do not have an
established trading market; and there can be no assurance that the maximum
amount of the Notes offered by this Prospectus Supplement will be sold or that
there will be a secondary market for the Notes. The Company reserves the right
to sell Notes directly on its own behalf. The Company may use additional agents
as it may designate from time to time to solicit offers to purchase Notes. The
name of any such additional agent and details as to the arrangements between
such agent and the Company will be set forth in the applicable Pricing
Supplement. The Company also may sell Notes at a discount to the Agent for its
own account or for resale to one or more purchasers at varying prices relating
to prevailing market prices at the time of resale or, if set forth in the
applicable Pricing Supplement, at a fixed public offering price, as determined
by the Agent. In addition, the Agent may offer Notes purchased by it as
principal to other dealers. The Company reserves the right to withdraw, cancel
or modify the offering contemplated hereby without notice. The Company or the
Agent may reject any offer to purchase Notes in whole or in part. See "Plan of
Distribution."
This Prospectus Supplement and the accompanying Prospectus may be used by
the Company, PWI (a wholly-owned subsidiary of the Company) or other affiliates
of the Company in connection with offers and sales related to secondary market
transactions in the Notes and in Senior Notes and Subordinated Notes previously
sold at negotiated prices related to prevailing market prices at the time of
sale or otherwise. PWI or such other Company affiliates may act as principal or
agent in such transactions.
-------------
PAINEWEBBER INCORPORATED
-------
The date of this Prospectus Supplement is September , 1998.
<PAGE>
IN CONNECTION WITH THE DISTRIBUTION OF THE NOTES, THE AGENT MAY OVER-ALLOT
OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES
AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF NOTES TO COVER SYNDICATE
SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME. SEE "PLAN OF DISTRIBUTION."
IMPORTANT CURRENCY INFORMATION
Unless otherwise specified in the applicable Pricing Supplement, purchasers
are required to pay for each Note by delivery of the requisite amount of the
Specified Currency in which such Note is denominated. Unless otherwise specified
in the applicable Pricing Supplement and except, under certain circumstances,
for Notes payable in a Specified Currency other than U.S. dollars as described
under "Foreign Currency Risks--Payment Currency", payments of principal of and
premium, if any, and interest on each Note will be made in the Specified
Currency in which such Note is denominated. However, at the election of the
holder of a Note, payments of principal of and premium, if any, and interest on
Notes payable in other than U.S. dollars may be converted into U.S. dollars on
the terms and conditions described below under "Description of Notes--Payment of
Principal and Interest."
References herein to "U.S. dollars," "dollars," "U.S. $" or "$" are to the
lawful currency of the United States.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby (referred to in the accompanying Prospectus as "Offered Securities")
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of Offered Securities set forth in the
Prospectus, to which description reference is hereby made. The following
description will apply to each Note unless otherwise specified in the applicable
Pricing Supplement. The statements under this heading are subject to the
detailed provisions of each Indenture (as defined below). Whenever particular
provisions of an Indenture are referred to, such provisions are incorporated by
reference herein as a part of the statements made and the statements are
qualified in their entirety by such reference.
GENERAL
The Senior Notes offered hereby will be issued under the Senior Indenture
referred to in the accompanying Prospectus with The Chase Manhattan Bank
(formerly known as Chemical Bank), as Trustee ("Senior Trustee"). The
Subordinated Notes offered hereby will be issued under the Subordinated
Indenture referred to in the accompanying Prospectus with Chase Manhattan Bank
Delaware (formerly known as Chemical Bank Delaware), as Trustee ("Subordinated
Trustee"). The Senior Indenture and Subordinated Indenture are herein sometimes
referred to collectively as the "Indentures" and individually as an "Indenture."
The Senior Trustee and Subordinated Trustee are herein sometimes referred to
collectively as the "Trustees" and individually as a "Trustee." The Senior Notes
constitute a single series of Securities under the Senior Indenture and
currently may be issued in an aggregate principal amount of up to an additional
U.S. $3,353,115,000, less an amount equal to the aggregate principal amount of
any other Securities, including any other series of medium-term notes (including
any Subordinated Notes), issued under the accompanying Prospectus. The
Subordinated Notes constitute a single series of Securities under the
Subordinated Indenture and currently may be issued in an aggregate principal
amount of up to an additional U.S. $3,353,115,000, less an amount equal to the
aggregate principal amount of any other Securities, including any other series
of medium-term notes (including any Senior Notes), issued under the accompanying
Prospectus. The foregoing limits may be increased by the Company without the
consent of any of the holders of the Notes if in the future it determines that
it may wish to sell additional Senior Notes or Subordinated Notes. Any Note
denominated in other than U.S. dollars will be treated for purposes of the
foregoing limit as having a principal amount in U.S. dollars determined by
converting the principal
S-2
<PAGE>
amount of such Note into U.S. dollars at the noon buying rate in The City of New
York for cable transfers for the Specified Currency thereof as certified for
customs purposes by the Federal Reserve Bank of New York (the "Exchange Rate")
on the first New York Business Day (as hereinafter defined) next preceding the
date on which the Company accepts the offer to purchase such Note. For a
description of the rights associated with different series of Securities under
the Indentures, see "Description of Securities" in the accompanying Prospectus.
Unless previously redeemed or repaid, a Note offered hereby will mature at
its Stated Maturity, which may be a date from nine months to 30 years from its
date of issue as selected by the purchaser and agreed to by the Company, and may
be subject to redemption at the option of the Company or repayment at the option
of the holder prior to its Stated Maturity as set forth under "Optional
Redemption, Repayment and Repurchase." As used herein, "Maturity" with respect
to a Note shall mean the date on which the principal of such Note or an
installment of principal becomes due, whether at its Stated Maturity, upon
redemption or early repayment or otherwise.
Each Note will be denominated and payable in a Specified Currency as
specified in the applicable Pricing Supplement.
The Notes will be issuable only in fully registered form without coupons.
Each Note will be issued initially as either a Book-Entry Note or a Certificated
Note. See "Book-Entry Notes" below. Currently, only Notes that are denominated
and payable in U.S. dollars may be issued as Book-Entry Notes. Unless otherwise
specified in the applicable Pricing Supplement, the authorized denominations of
any Note denominated in U.S. dollars will be U.S. $100,000 and integral
multiples of U.S. $1,000 in excess thereof. The authorized denominations of
Notes denominated in other than U.S. dollars will be set forth in the applicable
Pricing Supplement.
Certificated Notes may be presented for registration of transfer or exchange
at the Corporate Trust Office of The Chase Manhattan Bank in the Borough of
Manhattan, The City of New York (the "Notes Office"). The Chase Manhattan Bank
will act as Paying Agent (the "Paying Agent") with respect to the Subordinated
Notes.
Certain Notes may be issued which provide for an amount less than the
principal amount thereof to be due and payable in the event of an acceleration
of the maturity thereof (each an "Original Issue Discount Security"), including
by reason of redemption or early repayment. The amount so payable on an Original
Issue Discount Security in the event of such an acceleration will be determined
in accordance with the applicable Pricing Supplement and the terms of such
Original Issue Discount Security. Original Issue Discount Securities may be
Zero-Coupon Notes or may bear interest at a rate which at the time of issuance
is below market rates and will be sold at a discount (which may be substantial)
below their stated principal amount. Certain Original Issue Discount Securities
may be issued with original issue discount for United States Federal income tax
purposes. For a discussion of Federal income tax considerations with respect to
Notes issued with such original issue discount, see "Certain United States
Federal Income Tax Considerations--United States Holders--Original Issue
Discount."
The Company has previously sold Senior Notes and Subordinated Notes and
other series of medium-term notes. As of September 1, 1998, U.S. $1,819,885,000
aggregate principal amount of Senior Notes were outstanding under the Senior
Indenture and U.S. $186,950,000 aggregate principal amount of Subordinated Notes
were outstanding under the Subordinated Indenture.
The Senior Notes will constitute Superior Indebtedness and will rank PARI
PASSU with all other unsecured debt of the Company except subordinated debt. The
Subordinated Notes will be subordinated in right of payment, to the extent and
in the manner set forth in the Subordinated Indenture, to the prior payment in
full of all Superior Indebtedness. As of June 30, 1998, the aggregate
outstanding principal amount of Superior Indebtedness was approximately U.S.
$5.6 billion (including approximately U.S. $10 million of commercial paper and
approximately U.S. $1.0 billion of bank loans, but excluding Superior
Indebtedness consisting of guarantees and other commitments and contingent
liabilities and obligations of the type which are generally described in the
note entitled "Commitments and Contingencies" in the notes
S-3
<PAGE>
to the Company's Consolidated Financial Statements for the quarter ended June
30, 1998, included in the Company's Quarterly Report on Form 10-Q for such
quarter incorporated by reference in the accompanying Prospectus). See
"Description of Securities--Subordination" in the accompanying Prospectus.
PAYMENT OF PRINCIPAL AND INTEREST
Unless otherwise specified in the applicable Pricing Supplement and except,
under certain circumstances, for a Note payable in a Specified Currency other
than U.S. dollars, payments of principal of and premium, if any, and interest on
each Note will be made in the Specified Currency in which such Note is
denominated, provided that holders of Notes payable in other than U.S. dollars
may, by following the procedures described in the next paragraph, elect to have
such payments converted into U.S. dollars. See also "Foreign Currency Risks."
Unless otherwise specified in the applicable Pricing Supplement, a holder of
a Note payable in other than U.S. dollars may elect to receive payment of
principal of and premium, if any, and interest on such Note in U.S. dollars by
transmitting a written request for such payment to the Senior Trustee, in the
case of Senior Notes, or to the Paying Agent, in the case of Subordinated Notes,
at the Notes Office on or prior to the applicable Regular Record Date (as
hereinafter defined) or at least 16 days prior to Maturity, as the case may be.
Such request may be in writing (mailed or hand delivered) or by cable, telex or
other form of facsimile transmission. A holder of a Note payable in other than
U.S. dollars may elect to receive payment in U.S. dollars for all principal,
premium, if any, and interest payments and need not file a separate election for
each payment. Such election will remain in effect until such Note is transferred
or until such election is changed by written notice to the Senior Trustee or the
Paying Agent, as the case may be, but written notice of any such change must be
received by the Senior Trustee or the Paying Agent, as the case may be, on or
prior to the applicable Regular Record Date or at least 16 days prior to
Maturity, as the case may be. Holders of Notes payable in other than U.S.
dollars whose Notes are to be held in the name of a broker or nominee should
contact such broker or nominee to determine whether and how an election to
receive payments in U.S. dollars may be made.
The U.S. dollar amount to be received by a holder of a Note denominated in
other than U.S. dollars who elects to receive payment in U.S. dollars will be
based on the highest bid quotation in The City of New York received by an agent
(which may be The Chase Manhattan Bank or an affiliate thereof) appointed by the
Company for such purpose (the "Exchange Rate Agent") as of 11:00 A.M., New York
City time, on the second Business Day (as hereinafter defined) preceding the
applicable payment date from three recognized foreign exchange dealers (one of
which may be the Exchange Rate Agent) selected by the Exchange Rate Agent for
the purchase by the quoting dealer of the Specified Currency for U.S. dollars
for settlement on such payment date in the aggregate amount of the Specified
Currency payable to all holders of Notes electing to receive U.S. dollar
payments and at which the applicable dealer commits to execute a contract. If
such bid quotations are not available, payments will be made in the Specified
Currency, except as provided below under "Foreign Currency Risks--Payment
Currency." All currency exchange costs will be borne by the holder of the Note
by deductions from such payments.
Interest will be payable to the person in whose name a Note is registered at
the close of business on the Regular Record Date next preceding each Interest
Payment Date (as hereinafter defined) except that, in the case of Notes issued
between a Regular Record Date and an Interest Payment Date, interest payable on
such Interest Payment Date will be paid to the person in whose name such Note
was initially registered; PROVIDED, HOWEVER, that interest payable at Maturity
will be payable to the person to whom principal shall be payable. Unless
otherwise indicated in the applicable Pricing Supplement, the "Regular Record
Date" with respect to any Note shall be the date 15 calendar days prior to each
Interest Payment Date, whether or not such date shall be a Business Day.
Unless otherwise indicated in the applicable Pricing Supplement and except
as provided below, interest will be payable, in the case of Fixed Rate Notes, on
each March 1 and September 1; in the case of Floating Rate Notes which reset
daily, weekly, monthly or quarterly, on the third Wednesday of March, June,
September and December of each year; in the case of Floating Rate Notes which
reset semi-
S-4
<PAGE>
annually, on the third Wednesday of the two months of each year specified in the
applicable Pricing Supplement; and, in the case of Floating Rate Notes which
reset annually, on the third Wednesday of the month specified in the applicable
Pricing Supplement, and, in each case, at Maturity. Each date on which interest
is payable on any Note (other than at Maturity) is referred to in this
Prospectus Supplement as an "Interest Payment Date." Holders of Zero-Coupon
Notes will not receive periodic payments of interest on such Notes.
Unless otherwise specified in the applicable Pricing Supplement, payments of
interest on any Note with respect to any Interest Payment Date or at Maturity
will include interest accrued from and including the later of the date of
issuance of such Note and the most recent Interest Payment Date for such Note to
which interest has been paid or provided for to but excluding such current
Interest Payment Date or Maturity.
With respect to a Floating Rate Note, accrued interest from the date of
issuance or from the last date to which interest has been paid or provided for
is calculated by multiplying the face amount of such Floating Rate Note by an
accrued interest factor. Such accrued interest factor is computed by adding the
interest factor calculated for each day from the date of issuance, or from the
last date to which interest has been paid or provided for, to the date for which
accrued interest is being calculated. Unless otherwise specified in the
applicable Pricing Supplement, the interest factor (expressed as a decimal) for
each such day is computed by dividing the interest rate (expressed as a decimal)
applicable to such date by 360, in the case of Commercial Paper Rate Notes,
Prime Rate Notes, Federal Funds Rate Notes or LIBOR Notes, or by the actual
number of days in the year, in the case of Treasury Rate Notes, or by such
number as may be specified in the applicable Pricing Supplement, in the case of
any Floating Rate Note with another Interest Rate Basis (as such terms are
hereinafter defined). Unless otherwise specified in the applicable Pricing
Supplement, interest on Fixed Rate Notes will be computed on the basis of a
360-day year of twelve 30-day months.
Unless otherwise specified in the applicable Pricing Supplement, any payment
of principal, premium, if any, or interest required to be made on a Note on a
day which is not a Business Day in respect of such Note need not be made on such
day, but may be made on the next day which is such a Business Day with the same
force and effect as if made on such day, and no interest shall accrue as a
result of such delayed payment, except that in connection with any LIBOR Note,
if such next succeeding Business Day is in the next succeeding calendar month,
such payment shall be made on the immediately preceding Business Day. Unless
otherwise specified in the applicable Pricing Supplement, the term "Business
Day" as used herein with respect to any Note means each day, other than a
Saturday or Sunday, that is (i) not a day on which banking institutions in the
Business Day Centers with respect to such Note are authorized or obligated by
law or executive order to close and (ii) if such Note is a LIBOR Note, a London
Banking Day. Unless otherwise specified in the applicable Pricing Supplement,
"Business Day Centers" with respect to any Note shall mean The City of New York
and, in the case of any Note payable in a Specified Currency other than U.S.
dollars or a composite currency, the principal financial center of the country
issuing the Specified Currency. As used herein, "London Banking Day" shall mean
any day on which dealings in deposits in U.S. dollars are transacted in the
London interbank market and "New York Business Day" shall mean each day, other
than a Saturday or Sunday, that is not a day on which banking institutions in
The City of New York are authorized or obligated by law or executive order to
close.
Unless otherwise specified in the applicable Pricing Supplement, payments in
U.S. dollars of interest on Certificated Notes (other than interest payable at
Maturity) will be made by mailing a check to the registered holders of such
Notes entitled thereto at their addresses appearing on the security register for
the Notes. Notwithstanding the foregoing, at the option of the Company, such
payments may be made by wire transfer to an account with a bank located in the
continental United States (or other jurisdiction acceptable to the Company and
the Senior Trustee, in the case of Senior Notes, or the Paying Agent, in the
case of Subordinated Notes), but only if appropriate payment instructions from
the registered holder of a Certificated Note have been received in writing by
the Senior Trustee or the Paying Agent, as the case may be, not less than five
Business Days prior to the applicable Interest Payment Date. Unless otherwise
specified in the applicable Pricing Supplement, payments of principal of and
premium, if any, and interest on the Certificated Notes will be made, if at
Stated Maturity or upon earlier redemption, then on the Stated Maturity or the
date fixed for redemption, as applicable, upon surrender of the Notes at the
Notes
S-5
<PAGE>
Office, and if upon repayment prior to Stated Maturity, then on the applicable
date for repayment, provided the holder shall have complied with the
requirements for repayment set forth herein and in the Notes. See "Optional
Redemption, Repayment and Repurchase" below. All such payments shall be made in
immediately available funds, provided that the Certificated Notes to be paid are
presented to the Notes Office in time for the Senior Trustee or the Paying
Agent, as the case may be, to make such payments in such funds in accordance
with its normal procedures. Beneficial owners of Book-Entry Notes will be paid
in accordance with the Depositary's and its participants' procedures in effect
from time to time as described in the accompanying Prospectus under "Description
of Securities--Global Securities."
Unless otherwise specified in the applicable Pricing Supplement, payments of
principal of and premium, if any, and interest on any Note to be made in other
than U.S. dollars will be made on the date due by wire transfer to such account
with a bank located in a country issuing the Specified Currency (or, with
respect to Notes denominated in a composite currency, the location specified in
the applicable Pricing Supplement) or other jurisdiction acceptable to the
Company and the Senior Trustee, in the case of Senior Notes, or the Paying
Agent, in the case of Subordinated Notes, as shall have been designated at least
15 days prior to the applicable Interest Payment Date or Maturity, as the case
may be, by the registered holder of such Note, provided that, in the case of
payment of principal, premium, if any, and interest due at Maturity, the Note is
presented to the Senior Trustee or the Paying Agent, as the case may be, in time
for the Senior Trustee or the Paying Agent, as the case may be, to make such
payments in such funds in accordance with its normal procedures. Such
designation shall be made by filing the appropriate information with the Senior
Trustee or the Paying Agent, as the case may be, at the Notes Office and, unless
an appropriate revocation is received by the Senior Trustee or the Paying Agent,
as the case may be, any such designation made with respect to any Note by a
registered holder will remain in effect with respect to any further payments
with respect to such Note payable to such holder. If a payment with respect to
any such Note cannot be made by wire transfer because the required designation
has not been received by the Senior Trustee or the Paying Agent, as the case may
be, on or before the requisite date or for any other reason, a notice will be
mailed to the registered holder of such Note at its registered address
requesting a designation pursuant to which such wire transfer can be made and,
upon receipt by the Senior Trustee or the Paying Agent, as the case may be, of
such a designation, such payment will be made within 15 days of such receipt.
The Company will pay any administrative costs imposed by banks in connection
with making payments by wire transfer, but any tax, assessment or governmental
charge imposed upon payments will be borne by the registered holders of the
Notes in respect of which payments are made.
At the option of the Company, payments on a Note may be made for value on
any date on which a payment of principal, premium, if any, or interest is due in
a place other than the United States, even though, as a result of time zone
differences, it may at the time such payment is made to the holder of such Note
be the preceding day in the United States or it may be necessary to make a
payment on the preceding day in the United States in order that such payment be
available to be credited for value on the due date in such place.
If the principal of or premium, if any, or interest on any Note is payable
in a Specified Currency other than U.S. dollars and such Specified Currency is
not available (as determined by the Company) due to the imposition of exchange
controls or other circumstances beyond the control of the Company and in certain
other circumstances, the Company will be entitled to satisfy its obligations to
the holder of such Note by making such payment in U.S. dollars, all as described
under "Foreign Currency Risks--Payment Currency." Any payment made under such
circumstances in U.S. dollars where the required payment is in other than U.S.
dollars will not constitute an Event of Default under the applicable Indenture.
Any such determination by the Company made in good faith will be binding on the
Senior Trustee or the Paying Agent, as the case may be, and such holder.
See "Description of Securities--Payment and Paying Agents" in the
accompanying Prospectus.
S-6
<PAGE>
INTEREST RATE
Each Note will bear interest from its date of issuance until the principal
thereof is paid or made available for payment. Such interest will be payable on
each Interest Payment Date and at Maturity as specified above under "Payment of
Principal and Interest."
Each Fixed Rate Note will bear interest at a fixed rate, which may be zero
in the case of a Zero-Coupon Note. Each Floating Rate Note will bear interest at
a variable rate determined by reference to an interest rate formula, which may
be adjusted by adding or subtracting the Spread or multiplying by the Spread
Multiplier (each term as defined below), if any, unless otherwise specified
therein. A Floating Rate Note may also have either or both of the following: (a)
a maximum numerical interest rate limitation, or ceiling, on the rate of
interest which may accrue during any interest period (a "Maximum Rate"); and (b)
a minimum numerical interest rate limitation, or floor, on the rate of interest
which may accrue during any interest period (a "Minimum Rate"). The "Spread" is
the number of basis points (one basis point equals one-hundredth of a percentage
point) specified in the applicable Pricing Supplement as being applicable to the
interest rate for such Note and the "Spread Multiplier" is the percentage
specified in the applicable Pricing Supplement as being applicable to the
interest rate for such Note. If so specified in the applicable Pricing
Supplement, the fixed rate of interest with respect to a Fixed Rate Note or the
Spread or Spread Multiplier, if any, with respect to a Floating Rate Note may
vary over the term of the Note in the manner and to the extent specified in such
Pricing Supplement. "Index Maturity" means, with respect to a Floating Rate
Note, the period to maturity of the instrument or obligation on which the
interest rate formula is based, as specified in the applicable Pricing
Supplement. Unless otherwise provided in the applicable Pricing Supplement, The
Chase Manhattan Bank will be the calculation agent (the "Calculation Agent")
with respect to the Floating Rate Notes. In any case in which determination of
any interest rate requires the Calculation Agent to obtain quotes of rates from
banks or other sources, any such quote may be given by the Calculation Agent or
an affiliate of the Calculation Agent, provided that the Calculation Agent or
such affiliate satisfies all of the applicable criteria for such a bank or other
source set forth herein or in the applicable Pricing Supplement. Absent manifest
error, any calculation made by the Calculation Agent shall be conclusive and
binding on the Company, the applicable Trustee and the holders of the applicable
Notes.
The applicable Pricing Supplement relating to a Fixed Rate Note will
designate a fixed rate of interest per annum payable on such Fixed Rate Note.
The applicable Pricing Supplement relating to a Floating Rate Note will
designate an interest rate basis (the "Interest Rate Basis") for such Floating
Rate Note. The Interest Rate Basis for each Floating Rate Note will be: (a) the
Commercial Paper Rate, in which case such Note will be a Commercial Paper Rate
Note, (b) the Prime Rate, in which case such Note will be a Prime Rate Note, (c)
the Federal Funds Rate, in which case such Note will be a Federal Funds Rate
Note, (d) LIBOR, in which case such Note will be a LIBOR Note, (e) the Treasury
Rate, in which case such Note will be a Treasury Rate Note, or (f) such other
interest rate formula as is set forth in such Pricing Supplement. The applicable
Pricing Supplement for a Floating Rate Note will specify the Interest Rate Basis
and, if applicable, the Index Maturity, the Spread, the Spread Multiplier, the
Maximum Rate, the Minimum Rate, the Initial Interest Rate, the Interest Payment
Dates, the Regular Record Dates, the Calculation Dates, the Interest
Determination Dates and the Interest Reset Dates (as such terms are hereafter
defined) with respect to such Note.
Unless otherwise specified in the applicable Pricing Supplement, the rate of
interest on each Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semi-annually or annually (each an "Interest Reset Date"), as
specified in the applicable Pricing Supplement. Unless otherwise specified in
the applicable Pricing Supplement, the Interest Reset Date will be, in the case
of Floating Rate Notes which reset daily, each Business Day; in the case of
Floating Rate Notes (other than Treasury Rate Notes) which reset weekly, the
Wednesday of each week; in the case of Treasury Rate Notes which reset weekly,
the Tuesday of each week (except as hereinafter provided); in the case of
Floating Rate Notes which reset monthly, the third Wednesday of each month; in
the case of Floating Rate Notes which reset quarterly, the third Wednesday of
March, June, September and December; in the case of Floating Rate Notes which
reset semi-annually, the third Wednesday of two months of each year as specified
in the applicable Pricing Supplement; and in the case of Floating Rate Notes
which reset annually, the third Wednesday of one month of each year as specified
in the applicable Pricing Supplement. Unless otherwise specified in the
applicable Pricing Supplement, if any Interest Reset Date for any Floating Rate
Note would otherwise be a
S-7
<PAGE>
day that is not a Business Day with respect to such Floating Rate Note, the
Interest Reset Date for such Floating Rate Note shall be postponed to the next
day that is a Business Day with respect to such Floating Rate Note, except that
in the case of a LIBOR Note, if such Business Day is in the next succeeding
calendar month, such Interest Reset Date shall be the immediately preceding
Business Day.
Unless otherwise specified in the applicable Pricing Supplement, the
"Interest Determination Date" pertaining to an Interest Reset Date for a
Commercial Paper Rate Note (the "Commercial Paper Interest Determination Date")
and for a Prime Rate Note (the "Prime Rate Interest Determination Date") will be
the second New York Business Day preceding the Interest Reset Date with respect
to such Note, for a LIBOR Note will be the second London Banking Day (the "LIBOR
Interest Determination Date") preceding the Interest Reset Date with respect to
such Note, for a Federal Funds Rate Note will be the first New York Business Day
(the "Federal Funds Interest Determination Date") preceding the Interest Reset
Date with respect to such Note and for a Treasury Rate Note (the "Treasury
Interest Determination Date") will be the day of the week in which such Interest
Reset Date falls on which Treasury bills would normally be auctioned. Treasury
bills are usually sold at auction on Monday of each week, unless that day is a
legal holiday, in which case the auction is usually held on the following
Tuesday, except that such auction may be held on the preceding Friday. If, as
the result of a legal holiday, an auction is so held on the preceding Friday,
such Friday will be the Treasury Interest Determination Date pertaining to the
Interest Reset Date occurring in the next succeeding week. If an auction date
shall fall on any Interest Reset Date for a Treasury Rate Note, then such
Interest Reset Date shall instead be the first New York Business Day immediately
following such auction date.
All percentages resulting from any calculations will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point (with
five one-millionths of a percentage point being rounded upward) and all currency
or composite currency amounts used in or resulting from such calculation will be
rounded, if necessary, to the nearest one-hundredth of a unit (with .005 of a
unit being rounded upward).
In addition to any Maximum Rate which may be applicable to any Floating Rate
Note, the interest rate on the Notes will in no event be higher than the maximum
rate permitted by New York law, as the same may be modified by United States law
of general application. Under present New York law, the maximum rate of interest
is 25% per annum on a simple interest basis. This limit shall not apply to Notes
in which U.S. $2,500,000 or more has been invested.
Unless otherwise indicated in the applicable Pricing Supplement, the
"Calculation Date" pertaining to any Interest Determination Date will be the
earlier of (i) the tenth day after such Interest Determination Date or, if any
such day is not a New York Business Day, the next succeeding New York Business
Day and (ii) the New York Business Day next preceding the relevant Interest
Payment Date or Maturity, as the case may be.
Upon the request of the holder of any Floating Rate Note, the Calculation
Agent will provide the interest rate then in effect, and, if determined, the
interest rate which will become effective on the next Interest Reset Date with
respect to such Floating Rate Note.
Interest rates or interest rate formulas are subject to change by the
Company from time to time, but no such change will affect any Note already
issued or as to which an offer to purchase has been accepted by the Company.
S-8
<PAGE>
COMMERCIAL PAPER RATE NOTES
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated by the Calculation Agent with reference to the Commercial Paper Rate
and the Spread or Spread Multiplier, if any) specified on the face of the
Commercial Paper Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Commercial Paper Interest Determination
Date, the Money Market Yield (as defined below) of the rate on such date for
commercial paper having the Index Maturity specified in the applicable Pricing
Supplement as published by the Board of Governors of the Federal Reserve System
in "Statistical Release H.15, Selected Interest Rates" or any successor
publication of the Board of Governors of the Federal Reserve System ("H.15")
under the heading "Commercial paper--Nonfinancial." In the event that such rate
is not published prior to 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Commercial Paper Interest Determination Date, then the
Commercial Paper Rate for that Commercial Paper Interest Determination Date
shall be calculated by the Calculation Agent and shall be the Money Market Yield
of the arithmetic mean of the offered rates, as of 11:00 A.M., New York City
time, on that Commercial Paper Interest Determination Date, of three leading
dealers of commercial paper in The City of New York selected by the Calculation
Agent for commercial paper of the Index Maturity specified in the applicable
Pricing Supplement placed for an industrial issuer whose bond rating is "AA", or
the equivalent, from at least one nationally recognized rating agency; PROVIDED,
HOWEVER, that if the dealers selected as aforesaid by the Calculation Agent are
not quoting as mentioned in this sentence, the Commercial Paper Rate will be the
Commercial Paper Rate in effect on such Commercial Paper Interest Determination
Date.
"Money Market Yield" shall be a yield (expressed as a percentage) calculated
in accordance with the following formula:
<TABLE>
<C> <C> <S>
Money Market Yield = D X 360 X 100
-------------
360 - (D X M)
</TABLE>
where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
PRIME RATE NOTES
Prime Rate Notes will bear interest at the interest rates (calculated by the
Calculation Agent with reference to the Prime Rate and the Spread or Spread
Multiplier, if any) specified on the face of the Prime Rate Note and in the
applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Prime Rate Interest Determination Date, the
arithmetic mean of the prime or base rates quoted on the basis of the actual
number of days in the year divided by 360 as of the close of business on such
Prime Rate Interest Determination Date by three major money center banks in The
City of New York selected by the Calculation Agent. If fewer than three such
quotations are provided, the Prime Rate shall be determined on the basis of the
quotations provided, if any, together with the rates furnished on such date in
The City of New York by the appropriate number of substitute banks or trust
companies organized and doing business under the laws of the United States, or
any State thereof, having total equity capital of at least U.S. $750 million and
being subject to supervision or examination by Federal or State authority,
selected by the Calculation Agent to provide such rate or rates; PROVIDED,
HOWEVER, that if the banks or trust companies selected as aforesaid are not
quoting as mentioned in this sentence, the Prime Rate will be the Prime Rate in
effect on such Prime Rate Interest Determination Date.
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<PAGE>
FEDERAL FUNDS RATE NOTES
Federal Funds Rate Notes will bear interest at the interest rates
(calculated by the Calculation Agent with reference to the Federal Funds Rate
and the Spread or Spread Multiplier, if any) specified on the face of the
Federal Funds Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Federal Funds Interest Determination
Date, the rate on such date for Federal Funds as published in H.15 under the
heading "Federal funds (effective)" or, if not so published by 9:00 A.M., New
York City time, on the Calculation Date pertaining to such Federal Funds
Interest Determination Date, the Federal Funds Rate for such Federal Funds
Interest Determination Date will be the rate on such Federal Funds Interest
Determination Date made publicly available by the Federal Reserve Bank of New
York which is equivalent to the rate which appears in H.15 under the heading
"Federal funds (effective)"; PROVIDED, HOWEVER, that if such rate is not made
publicly available by the Federal Reserve Bank of New York by 9:00 A.M., New
York City time, on the Calculation Date, the Federal Funds Rate will be the
Federal Funds Rate in effect on such Federal Funds Interest Determination Date.
LIBOR NOTES
LIBOR Notes will bear interest at the interest rates (calculated by the
Calculation Agent with reference to LIBOR and the Spread or Spread Multiplier,
if any) specified on the face of the LIBOR Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "LIBOR"
will be indexed to the offered rate for U.S. dollar deposits and will be
determined by the Calculation Agent in accordance with the following provisions:
(i) As specified in the applicable Pricing Supplement, with respect to
any LIBOR Interest Determination Date, LIBOR will be determined on the basis
of either (a) the rate for deposits in U.S. dollars having the Index
Maturity specified in the applicable Pricing Supplement, commencing on the
second London Banking Day immediately following such LIBOR Interest
Determination Date, which appears on Telerate Screen Page 3750 (as defined
below) as of 11:00 A.M., London time, on such LIBOR Interest Determination
Date, if such rate appears on Telerate Screen Page 3750, or (b) the
arithmetic mean, as determined by the Calculation Agent, of the offered
rates for deposits in U.S. dollars of not less than $1,000,000 having the
Index Maturity specified in the applicable Pricing Supplement, commencing on
the second London Banking Day immediately following such LIBOR Interest
Determination Date, which appear on the Reuters Screen LIBO Page (as defined
below) as of 11:00 A.M., London time, on such LIBOR Interest Determination
Date, if at least two such offered rates appear on the Reuters Screen LIBO
Page. "Telerate Screen Page 3750" means the display designated as page 3750
on the Dow Jones Market Service (or such other page or pages as may replace
page 3750 on that service for the purpose of displaying London interbank
offered rates of major banks). "Reuters Screen LIBO Page" means the display
designated as page "LIBO" on the Reuters Monitor Money Rates Service (or
such other page or pages as may replace the LIBO page on that service for
the purpose of displaying London interbank offered rates of major banks). If
no rate appears on Telerate Screen Page 3750 or if fewer than two offered
rates appear on the Reuters Screen LIBO Page, as applicable, LIBOR for such
LIBOR Interest Determination Date will be determined as described in (ii)
below. If neither Telerate Screen Page 3750 nor the Reuters Screen LIBO Page
is specified in the applicable Pricing Supplement, LIBOR will be determined
as if Telerate Screen Page 3750 had been specified.
(ii) With respect to a LIBOR Interest Determination Date on which no
rate appears on Telerate Page 3750 as described in (i)(a) above (if LIBOR
determined on the basis of (i)(a) is specified in the applicable Pricing
Supplement) or on which fewer than two offered rates appear on the Reuters
Screen LIBO Page as described in (i)(b) above (if LIBOR determined on the
basis of (i)(b) is specified in the applicable Pricing Supplement), LIBOR
will be determined on the basis of the rates at
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<PAGE>
approximately 11:00 A.M., London time, on such LIBOR Interest Determination
Date at which deposits in U.S. dollars having the Index Maturity specified
in the applicable Pricing Supplement, commencing on the second London
Banking Day immediately following such LIBOR Interest Determination Date and
in a principal amount equal to an amount of not less than U.S. $1,000,000
that in the Calculation Agent's judgment is representative for a single
transaction in such market at such time, are offered to prime banks in the
London interbank market by four major banks in the London interbank market
selected by the Calculation Agent. The Calculation Agent will request the
principal London office of each of such banks to provide a quotation of its
rate. If at least two such quotations are provided, LIBOR for such LIBOR
Interest Determination Date will be the arithmetic mean of such quotations.
If fewer than two quotations are provided, LIBOR for such LIBOR Interest
Determination Date will be the arithmetic mean of the rates quoted at
approximately 11:00 A.M., New York City time, on such LIBOR Interest
Determination Date by three major banks in The City of New York, selected by
the Calculation Agent, for loans in U.S. dollars to leading European banks
having the Index Maturity specified in the applicable Pricing Supplement
commencing on the second London Banking Day immediately following such LIBOR
Interest Determination Date and in a principal amount equal to an amount of
not less than U.S. $1,000,000 that in the Calculation Agent's judgment is
representative for a single transaction in such market at such time;
PROVIDED, HOWEVER, that if the banks selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, LIBOR with
respect to such LIBOR Interest Determination Date will be LIBOR in effect on
such LIBOR Interest Determination Date.
If LIBOR with respect to any LIBOR Note is indexed to the offered rate for
deposits in a Specified Currency other than U.S. dollars, the applicable Pricing
Supplement will set forth the method for determining such rate.
TREASURY RATE NOTES
Treasury Rate Notes will bear interest at the interest rates (calculated by
the Calculation Agent with reference to the Treasury Rate and the Spread or
Spread Multiplier, if any) specified on the face of the Treasury Rate Note and
in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Treasury Interest Determination Date, the rate
for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified in the applicable Pricing
Supplement as published in H.15 under the heading "U.S. Government
securities--Treasury bills--Auction average" or, if not so published by 9:00
A.M., New York City time, on the Calculation Date pertaining to such Treasury
Interest Determination Date, the auction average rate (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) for such auction as otherwise made available by the
United States Department of the Treasury. In the event that the results of the
auction of Treasury bills having the Index Maturity designated in the applicable
Pricing Supplement are not published or made available as provided above by 3:00
P.M., New York City time, on such Calculation Date, or if no such auction is
held in a particular week (or on the preceding Friday, if applicable), then the
Treasury Rate shall be calculated by the Calculation Agent and shall be a yield
to maturity (expressed as a bond equivalent, on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) of the arithmetic mean of
the secondary market bid rates as of approximately 3:30 P.M., New York City
time, on such Treasury Interest Determination Date, of three leading primary
United States government securities dealers selected by the Calculation Agent,
for the issue of Treasury bills with a remaining maturity closest to the
specified Index Maturity; PROVIDED, HOWEVER, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Treasury Rate will be the Treasury Rate in effect on such Treasury
Interest Determination Date.
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<PAGE>
BOOK-ENTRY NOTES
Upon issuance, all Book-Entry Notes having the same Specified Currency,
original issuance date, Stated Maturity, redemption and repayment provisions, if
any, Interest Payment Dates, Regular Record Dates, and, in the case of Fixed
Rate Notes, interest rate, or, in the case of Floating Rate Notes, Interest Rate
Basis, Initial Interest Rate, Index Maturity, Interest Reset Dates, Spread, if
any, Spread Multiplier, if any, Maximum Rate, if any, and Minimum Rate, if any,
will be represented by a single Global Note. Each Global Note representing
Book-Entry Notes will be deposited with, or on behalf of, the Depositary, and
registered in the name of the Depositary or its nominee. Book-Entry Notes will
not be exchangeable at the option of the holder for Certificated Notes and,
except under the circumstances described in the accompanying Prospectus under
"Description of Securities--Global Securities", will not otherwise be issuable
in the form of Certificated Notes.
The Depositary has advised the Company and the Agents as follows: The
Depositary is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. The Depositary holds securities that its participants
("Participants") deposit with the Depositary. The Depositary also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. The Depositary is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the Depositary's system is also available to others such as securities
brokers and dealers, banks and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The Rules applicable to the Depositary and its
Participants are on file with the Securities and Exchange Commission.
A further description of the Depositary's procedures with respect to Global
Notes representing Book-Entry Notes is set forth in the accompanying Prospectus
under "Description of Securities--Global Securities." The Depositary has
confirmed to the Company, the Agents and the Trustees that it intends to follow
such procedures.
OPTIONAL REDEMPTION, REPAYMENT AND REPURCHASE
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be redeemed prior to its Stated Maturity or that such Note will be
redeemable at the option of the Company on a date or dates or under
circumstances (which may include those described under "Payment of Additional
Amounts" below) specified prior to its Stated Maturity at a price or prices set
forth in the applicable Pricing Supplement, together with accrued interest to
the date of redemption. Unless otherwise specified in the applicable Pricing
Supplement, the Notes will not be subject to any sinking fund. The Company may
redeem any of the Notes that are redeemable and remain outstanding either in
whole or, except as otherwise provided under "Payment of Additional Amounts"
below, from time to time in part, upon not less than 30 nor more than 45 days'
notice. If less than all of the Notes having the same terms (except as to
principal amount and date of issuance) are to be redeemed, the Notes to be
redeemed shall be selected by the applicable Trustee by such method as such
Trustee shall deem fair and appropriate and otherwise as provided under the
applicable Indentures.
The Pricing Supplement relating to each Note will indicate either that such
Note cannot be repaid at the option of the holder prior to its Stated Maturity
or that such Note will be repayable at the option of the holder on a date or
dates or under circumstances specified prior to its Stated Maturity at a price
or prices set forth in the applicable Pricing Supplement, together with accrued
interest to the date of repayment.
S-12
<PAGE>
In order for a Note to be repaid, the Senior Trustee, in the case of Senior
Notes, or the Paying Agent, in the case of Subordinated Notes, must receive at
the Notes Office at least 30 days but not more than 45 days prior to the
repayment date (a) appropriate wire instructions and (b) either (i) the Note
with the form entitled "Option to Elect Repayment" on the reverse of the Note
duly completed or (ii) a telegram, telex, facsimile transmission or letter from
a member of a national securities exchange or the National Association of
Securities Dealers, Inc., or a commercial bank or trust company in the United
States or any other "eligible guarantor institution" (as such term in defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended) setting
forth the name of the holder of the Note, the principal amount of the Note, the
portion of the principal amount of the Note to be repaid, the certificate number
or a description of the tenor and terms of the Note, a statement that the option
to elect repayment is being exercised thereby and a guarantee that the Note to
be repaid with the form entitled "Option to Elect Repayment" on the reverse of
the Note duly completed will be received by the Senior Trustee or the Paying
Agent, as the case may be, not later than five Business Days after the date of
such telegram, telex, facsimile transmission or letter and such Note and form
duly completed must be received by the Senior Trustee or the Paying Agent, as
the case may be, by such fifth Business Day. Tender of a Note for repayment
shall be irrevocable. The repayment option may be exercised by the holder of a
Note for less than the entire principal amount of the Note provided that the
principal amount of the Note remaining outstanding after repayment is an
authorized denomination. No transfer or exchange of any Note (or, in the event
that any Note is to be repaid in part, the portion of the Note to be repaid)
will be permitted after exercise of a repayment option. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any Note for
repayment will be determined by the Company, whose determination will be final,
binding and non-appealable.
If a Note is represented by a Global Note, the Depositary's nominee will be
the holder of such Note and therefore will be the only entity that can exercise
a right to repayment. In order to ensure that the Depositary's nominee will
timely exercise a right to repayment with respect to a particular Note, the
beneficial owner of such Note must instruct the broker or other direct or
indirect participant through which it holds an interest in such Note to notify
the Depositary of its desire to exercise a right to repayment. Different firms
have different cutoff times for accepting instructions from their customers and,
accordingly, each beneficial owner should consult the broker or other direct or
indirect participant through which it holds an interest in a Note in order to
ascertain the cutoff time by which such an instruction must be given in order
for timely notice to be delivered to the Depositary.
The Company may at any time repurchase Notes at any price in the open market
or otherwise. Notes so purchased by the Company may, at the discretion of the
Company, be held or resold or surrendered to the applicable Trustee for
cancellation.
PAYMENT OF ADDITIONAL AMOUNTS
If so specified in the applicable Pricing Supplement, the Company will,
subject to the limitations and exceptions set forth below, pay to the holder of
any Note who is a United States Alien (as defined below) such additional amounts
("Additional Amounts") as may be necessary in order that every net payment of
principal of, premium, if any, and interest on such Note, after deduction or
withholding by the Company, any Trustee, the Paying Agent or any of the
Company's other paying agents for or on account of any present or future tax,
assessment or other governmental charge imposed upon such holder with respect to
or as a result of such payment by the United States or any political subdivision
or taxing authority thereof or therein, will not be less than the amount
provided for in such Note to be then due and payable; PROVIDED, HOWEVER, that
the foregoing obligation to pay Additional Amounts shall not apply to any one or
more of the following: (a) any tax, assessment or other governmental charge that
would not have been imposed but for (i) the existence of any present or former
connection between such holder (or between a fiduciary, settlor or beneficiary
of, or person holding a power over, such holder, if such holder is an estate or
a trust, or between a member or shareholder of such holder, if such holder is a
partnership or corporation) and the United States, including, without
limitation, such holder (or such fiduciary, settlor, beneficiary, person
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holding a power, member or shareholder) being or having been a citizen or
resident or treated as a resident thereof or being or having been engaged in a
trade or business therein or being or having been present therein or having or
having had a permanent establishment therein, or (ii) such holder's present or
former status as a domestic or foreign personal holding company, a passive
foreign investment company or a controlled foreign corporation, a private
foundation or other tax-exempt organization for United States Federal income tax
purposes or a corporation that accumulates earnings to avoid United States
Federal income tax; (b) any tax, assessment or other governmental charge that
would not have been so imposed but for the presentation by the holder of such
Note for payment on a date more than 15 days after the date on which such
payment became due and payable or the date on which payment thereof was duly
provided for, whichever occurs later; (c) any estate, inheritance, gift, sales,
transfer, excise or personal property tax or any similar tax, assessment or
other governmental charge; (d) any tax, assessment or other governmental charge
that would not have been imposed but for the failure to comply with
certification, information, documentation or other reporting requirements
concerning the nationality, residence, identity or connection with the United
States of the holder or beneficial owner of such Note, if such compliance is
required by statute or by regulation of the United States or any taxing
authority thereof as a precondition to relief or exemption from such tax,
assessment or other governmental charge; (e) any tax, assessment or other
governmental charge that is (i) payable otherwise than by deduction or
withholding from payments of principal of or premium, if any, or interest on
such Note or (ii) required to be deducted or withheld by any paying agent from
any such payment, if (and only if) such payment can be made without such
deduction or withholding by any other paying agent; (f) any tax, assessment or
other governmental charge imposed on interest received by a person holding,
actually or constructively, 10 percent or more of the total combined voting
power of all classes of stock of the Company entitled to vote (taking into
account the applicable attribution of ownership rules under Section 871(h)(3) of
the Internal Revenue Code of 1986, as amended (the "Code")) or that is a
controlled foreign corporation related to the Company (directly or indirectly)
through stock ownership; or (g) any combination of items (a), (b), (c), (d), (e)
and (f); nor will Additional Amounts be paid with respect to payment of the
principal of or premium, if any, or interest on such Note to any United States
Alien that is a fiduciary or partnership or to a person other than the sole
beneficial owner of such Note to the extent that a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or a beneficial owner
would not have been entitled to the Additional Amounts had such beneficiary,
settlor, member or beneficial owner been the holder of such Note.
If so specified in the applicable Pricing Supplement, any Note registered in
the name of a United States Alien may be redeemed at the option of the Company
in whole, but not in part, at any time, on giving not less than 30 nor more than
45 days' notice in accordance with the provisions described in "Description of
Securities--Notices" in the accompanying Prospectus (which notice shall be
irrevocable), at a redemption price equal to the principal amount thereof (or,
in the case of an Original Issue Discount Security, the amount specified in the
applicable Pricing Supplement), together with accrued interest to the redemption
date, if the Company determines that the Company has or will become obligated to
pay Additional Amounts with respect to such Note on the next succeeding Interest
Payment Date as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting taxation,
or any change in the application or official interpretation of such laws,
regulations or rulings by a taxing authority, court or regulatory agency,
whether or not rendered or taken with respect to the Company, or any action
taken by any taxing authority, court or regulatory agency (including any change
in administrative policy or enforcement practice of such taxing authority),
whether or not taken with respect to the Company, which change or amendment
becomes effective, or action is taken, on or after the original issuance date of
such Note, and such obligation cannot be avoided by the Company taking
reasonable measures available to it. Prior to giving any such notice of
redemption, the Company shall deliver to the applicable Trustee a certificate
stating that the Company is entitled to effect such redemption and setting forth
a statement of such facts showing that the conditions precedent to the right of
the Company so to redeem have occurred, and an opinion of independent legal
counsel addressed to the Company and such Trustee to the effect that the Company
has or will become obligated to pay such Additional Amounts as a result of such
change or
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amendment. Notice of the intention of the Company to redeem any such Note
pursuant to this paragraph shall not be given earlier than 90 days prior to the
earliest date that the obligation to pay Additional Amounts would arise were a
payment in respect of such Note due on such date.
As used herein, "United States Alien" means any person who, for United
States Federal income tax purposes, is a foreign corporation, a nonresident
alien individual, a nonresident alien fiduciary of a foreign estate or trust, or
a foreign partnership, one or more of the members of which is, for United States
Federal income tax purposes, a foreign corporation, a nonresident alien
individual or a nonresident alien fiduciary of a foreign estate or trust.
NOTES LINKED TO COMMODITY PRICES, EQUITY INDICES OR OTHER FACTORS AND OTHER
TERMS OF NOTES
Notes may be issued, from time to time, with the principal amount payable on
any principal payment date, or the amount of interest payable on any Interest
Payment Date or on any principal payment date, to be determined by reference to
one or more commodity prices, equity indices, the rate of exchange between a
Specified Currency and any other currency or composite currency or other factors
or interest rate formulas and on such other terms (which may differ from the
terms set forth herein) as may be set forth in the relevant Pricing Supplement.
FOREIGN CURRENCY RISKS
PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISERS
AS TO THE RISKS ENTAILED BY AN INVESTMENT IN NOTES DENOMINATED OR PAYABLE IN A
CURRENCY OTHER THAN U.S. DOLLARS. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT
FOR PERSONS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY
TRANSACTIONS.
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Notes that are denominated or payable in a Specified
Currency other than U.S. dollars entails significant risks that are not
associated with a similar investment in a security denominated and payable in
U.S. dollars. Such risks include, without limitation, the possibility of
significant changes in rates of exchange between the U.S. dollar and such
Specified Currency and the possibility of the imposition or modification of
foreign exchange controls by either the U.S. or foreign governments. Such risks
generally depend on factors over which the Company has no control, such as
economic and political events and the supply of and demand for the relevant
currencies. In recent years, rates of exchange between the U.S. dollar and
certain foreign currencies have been highly volatile and such volatility may be
expected in the future. Fluctuations in any particular exchange rate that have
occurred in the past are not necessarily indicative, however, of fluctuations in
the rate that may occur during the term of any Note. Depreciation of the
Specified Currency for a Note against the U.S. dollar would result in a decrease
in the effective yield of such Note below its coupon rate and, in certain
circumstances, could result in a loss to the investor on a U.S. dollar basis.
Governments have imposed from time to time, and may in the future impose,
exchange controls which could affect exchange rates as well as the availability
of a Specified Currency for making payments with respect to a Note. There can be
no assurances that exchange controls will not restrict or prohibit payments of
principal or any premium or interest in any Specified Currency. Even if there
are no actual exchange controls, it is possible that, on a payment date with
respect to any particular Note, the Specified Currency in which amounts then due
in respect of such Note are payable would not be available to the Company. In
that event, the Company will make any required payment in the manner set forth
below under "Payment Currency".
Foreign exchange rates can either be fixed by sovereign governments or
float. Exchange rates of most economically developed nations are permitted to
fluctuate in value relative to the U.S. dollar. Sovereign governments, however,
rarely voluntarily allow their currencies to float freely in response to
economic
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forces. Sovereign governments in fact use a variety of techniques, such as
intervention by a country's central bank or imposition of regulatory controls or
taxes, to affect the exchange rate of their currencies. Governments may also
issue a new currency to replace an existing currency or alter the exchange rate
or relative exchange characteristics by devaluation or revaluation of a
currency. Thus, a special risk in purchasing a Note that is denominated or
payable in a foreign currency or composite currency is that its U.S. dollar
equivalent yield could be affected by governmental actions which could change or
interfere with theretofore freely determined currency valuation, fluctuations in
response to other market forces and the movement of currencies across borders.
Currently, there are limited facilities in the United States for conversion
of U.S. dollars into foreign currencies and vice versa, and few banks offer
non-U.S. dollar-denominated checking or savings account facilities in the United
States. Accordingly, unless otherwise specified in the applicable Pricing
Supplement, payment of principal of and premium, if any, and interest on Notes
made in a Specified Currency other than U.S. dollars will be made from an
account with a bank located in a country issuing the Specified Currency (or,
with respect to Notes denominated in a composite currency, the location
specified in the applicable Pricing Supplement).
Unless otherwise specified in the applicable Pricing Supplement, Notes
denominated or payable in a Specified Currency other than U.S. dollars or a
composite currency will not be sold in, or to residents of, a country issuing
such Specified Currency.
The information set forth in this Prospectus Supplement, any Pricing
Supplement and the accompanying Prospectus is directed to prospective purchasers
of Notes who are United States residents, and the Company disclaims any
responsibility to advise prospective purchasers who are residents of countries
other than the United States with respect to any matters that may affect the
purchase or holding of, or receipt of payments of principal of and premium, if
any, and interest on, Notes. Such persons should consult their own legal and
financial advisors with regard to such matters.
Any Pricing Supplement relating to Notes denominated or payable in a
Specified Currency other than U.S. dollars will contain information concerning
historical exchange rates for such Specified Currency against the U.S. dollar, a
description of such Specified Currency, a description of any exchange controls
affecting such Specified Currency and any other required information concerning
such Specified Currency.
GOVERNING LAW AND JUDGMENTS
The Notes will be governed by and construed in accordance with the laws of
the State of New York. Courts in the United States have not customarily rendered
judgments for money damages denominated in any currency other than the U.S.
dollar. The Judiciary Law of the State of New York provides, however, that, in
an action based upon an obligation denominated in a currency other than U.S.
dollars, a court shall render or enter a judgment or decree in the currency of
the underlying obligation and the judgment or decree shall be converted into
U.S. dollars at the rate of exchange prevailing on the date of entry of the
judgment or decree. It is not known whether the foregoing provision would be
applied (a) in any action based on an obligation denominated in a composite
currency or (b) by a Federal court sitting in the State of New York.
PAYMENT CURRENCY
Except as set forth below or in the applicable Pricing Supplement, if
payment in respect of a Note is required to be made in a Specified Currency
other than U.S. dollars and on any date on which a payment is due with respect
to such Note such Specified Currency is not available (as determined by the
Company) due to the imposition of exchange controls or other circumstances
beyond the Company's control, or is no longer used by the government of the
country issuing such Specified Currency or for the settlement of transactions by
public institutions of or within the international banking community, then all
such payments due on such payment date shall be made in U.S. dollars. The amount
so payable on any such payment date in such Specified Currency shall be
converted into U.S. dollars at a rate determined by the
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Exchange Rate Agent as of the second Business Day prior to the date on which
such payment is due on the basis of the most recently available Exchange Rate
for such Specified Currency, or as otherwise specified in the applicable Pricing
Supplement.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
shall be divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as Components shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated component currencies
expressed in such single currency. If any component currency is divided into two
or more currencies, the amount of that currency as a Component shall be replaced
by amounts of such two or more currencies, each of which shall have a value on
the date of division equal to the amount of the former component currency
divided by the number of currencies into which that currency was divided.
All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion (except to the extent expressly provided herein or in
the applicable Pricing Supplement that any determination is subject to approval
by the Company or other persons) and, in the absence of manifest error, shall be
conclusive for all purposes and binding on holders of the Notes and the Company,
and the Exchange Rate Agent shall have no liability therefor.
Unless otherwise specified in the applicable Pricing Supplement, Notes
denominated in a Specified Currency other than U.S. dollars will provide that,
in the event of an official redenomination of the Specified Currency, the
obligations of the Company with respect to payments on such Notes shall, in all
cases, be deemed immediately following such redenomination to provide for
payment of that amount of the redenominated Specified Currency representing the
amount of such obligations immediately before such redenomination.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the principal United States Federal income tax
consequences resulting from the beneficial ownership of Notes by certain
persons. This summary does not purport to consider all the possible United
States Federal income tax consequences of the purchase, ownership or disposition
of Notes and is not intended to reflect the individual tax position of any
beneficial owner. It deals only with Notes and currencies or composite
currencies other than U.S. dollars ("Foreign Currency") held as capital assets.
Moreover, except as expressly indicated, it only addresses initial purchasers
and does not address beneficial owners that may be subject to special tax rules,
such as banks, insurance companies, dealers in securities or currencies,
purchasers that hold Notes (or Foreign Currency) as a hedge against currency
risks or as part of a straddle with other investments or as part of a "synthetic
security" or other integrated investment (including a "conversion transaction")
comprised of a Note and one or more other investments, or purchasers that have a
"functional currency" other than the U.S. dollar. Except to the extent discussed
below under "Non-United States Holders," this summary is not applicable to
holders of Notes other than U.S. Holders (as defined below). This summary is
based upon the United States Federal income tax laws and regulations as now in
effect and as currently interpreted and does not take into account possible
changes in such tax laws or such interpretations, any of which may be applied
retroactively. It does not include any description of the tax laws of any state,
local or foreign governments that may be applicable to Notes or holders thereof,
and it does not discuss the tax treatment of Notes denominated in certain
hyperinflationary currencies or dual currency Notes. Persons considering the
purchase of Notes should consult their own tax advisors concerning the
application of the United States Federal income tax laws to their particular
situations as well as any consequences to them under the laws of any other
taxing jurisdiction.
For purposes of this discussion, a "U.S. Holder" is (i) a citizen or
resident of the United States, (ii) a corporation created or organized under the
laws of the United States or any state thereof (including the District of
Columbia) or (iii) a person otherwise subject to United States Federal income
taxation on its worldwide income.
UNITED STATES HOLDERS
PAYMENTS OF INTEREST
In general, interest on a Note, whether payable in U.S. dollars or a Foreign
Currency (other than certain payments on a Discount Note, as defined and
described below under "Original Issue Discount"), will be taxable to a U.S.
Holder as ordinary income at the time it is received or accrued, depending on
the holder's method of accounting for tax purposes. If an interest payment is
denominated in or determined by reference to a Foreign Currency, then special
rules, described below under "Foreign Currency Notes," apply.
ORIGINAL ISSUE DISCOUNT
The following discussion summarizes the United States Federal income tax
consequences to U.S. Holders of Notes issued with original issue discount for
Federal income tax purposes ("OID"). U.S. Holders of a Note issued with OID
generally will be subject to special tax accounting rules provided in the Code
and the Treasury regulations (the "OID Regulations"), which expand and
illustrate the rules provided by the Code.
Special rules apply to OID on a Discount Note that is denominated in Foreign
Currency. See "Foreign Currency Notes--Foreign Currency Discount Notes."
GENERAL. A Note will be treated as issued with OID (a "Discount Note") if
the excess of the Note's "stated redemption price at maturity" over its issue
price is greater than or equal to a DE MINIMIS amount (set forth in the Code and
the OID Regulations). Generally, the issue price of a Note (or any Note that is
part of an issue of Notes) will be the first price at which a substantial amount
of Notes that are part of such
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issue of Notes are sold to the public (other than to underwriters, placement
agents or wholesalers). Under the OID Regulations, the "stated redemption price
at maturity" of a Note is the sum of all payments made with respect to the Note
that are not payments of "qualified stated interest." A "qualified stated
interest" payment includes any stated interest payment on a Note that is
unconditionally payable at least annually at a single fixed rate (or at certain
floating rates) that appropriately takes into account the length of the interval
between stated interest payments. If a particular issue of Notes will constitute
an issue of Discount Notes, the applicable Pricing Supplement will so state.
In general, if the excess of a Note's stated redemption price at maturity
over its issue price is DE MINIMIS, then such excess constitutes "DE MINIMIS
OID." Under the OID Regulations, unless the election described below under
"Election to Treat All Interest as Original Issue Discount" is made, such a Note
will not be treated as issued with OID (in which case the following paragraphs
under "Original Issue Discount" will not apply) and a U.S. Holder of such a Note
will recognize capital gain with respect to such DE MINIMIS OID as stated
principal payments on the Note are made. The amount of such gain with respect to
each such payment will equal the product of the total amount of the Note's DE
MINIMIS OID and a fraction, the numerator of which is the amount of the
principal payment made and the denominator of which is the stated principal
amount of the Note.
In certain cases, Notes that bear stated interest and are issued at par may
be deemed to bear OID for Federal income tax purposes, with the result that the
inclusion of interest in income for Federal income tax purposes may vary from
the actual cash payments of interest made on such Notes, generally accelerating
income for cash method taxpayers. Under the OID Regulations, a Note may be a
Discount Note where, among other things, (i) a Floating Rate Note provides for a
Maximum Rate or a Minimum Rate that is reasonably expected as of the issue date
to cause the yield on the debt instrument to be significantly less, in the case
of a Maximum Rate, or more, in the case of a Minimum Rate, than the expected
yield determined without the Maximum Rate or Minimum Rate, as the case may be;
(ii) a Floating Rate Note provides for significant front-loading or back-loading
of interest; or (iii) a Note bears interest at a floating rate in combination
with one or more other floating or fixed rates. Unless specified in the
applicable Pricing Supplement, Floating Rate Notes will not be Discount Notes.
The Code and the OID Regulations provide rules that require a U.S. Holder of
a Discount Note having a maturity of more than one year from its date of issue
to include OID in gross income before the receipt of cash attributable to such
income, without regard to the holder's method of accounting for tax purposes.
The amount of OID includible in gross income by a U.S. Holder of a Discount Note
is the sum of the "daily portions" of OID with respect to the Discount Note for
each day during the taxable year or portion of the taxable year in which the
U.S. Holder holds such Discount Note ("accrued OID"). The daily portion is
determined by allocating to each day in any "accrual period" a pro rata portion
of the OID allocable to that accrual period. Under the OID Regulations, accrual
periods with respect to a Note may be any set of periods (which may be of
varying lengths) selected by the U.S. Holder as long as (i) no accrual period is
longer than one year and (ii) each scheduled payment of interest or principal on
the Note occurs on the first day or final day of an accrual period.
The amount of OID allocable to an accrual period equals the excess of (a)
the product of the Discount Note's adjusted issue price at the beginning of the
accrual period and the Discount Note's yield to maturity (determined on the
basis of compounding at the close of each accrual period and properly adjusted
for the length of the accrual period) over (b) the sum of any payments of
qualified stated interest on the Discount Note allocable to the accrual period.
The "adjusted issue price" of a Discount Note at the beginning of the first
accrual period is the issue price and at the beginning of any accrual period
thereafter is (x) the sum of the issue price of such Discount Note, the accrued
OID for each prior accrual period (determined without regard to the amortization
of any acquisition premium or bond premium, which are discussed below), and the
amount of any qualified stated interest on the Note that has accrued prior to
the beginning of the accrual period but is not payable until a later date, less
(y) any prior payments on the Discount Note that were not qualified stated
interest payments. If a payment (other than a payment of qualified stated
interest) is made on the first day of an accrual period, then the adjusted issue
price at the
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beginning of such accrual period is reduced by the amount of the payment. If a
portion of the issue price of a Note is attributable to interest that accrued
prior to the Note's issue date, the first stated interest payment on the Note is
to be made within one year of the Note's issue date and such payment will equal
or exceed the amount of pre-issuance accrued interest, then the issue price will
be decreased by the amount of pre-issuance accrued interest, in which case a
portion of the first stated interest payment will be treated as a return of the
excluded pre-issuance accrued interest and not as an amount payable on the Note.
The OID Regulations contain certain special rules that generally allow any
reasonable method to be used in determining the amount of OID allocable to a
short initial accrual period (if all other accrual periods are of equal length)
and require that the amount of OID allocable to the final accrual period equal
the excess of the amount payable at the maturity of the Discount Note (other
than any payment of qualified stated interest) over the Discount Note's adjusted
issue price as of the beginning of such final accrual period. In addition, if an
interval between payments of qualified stated interest on a Discount Note
contains more than one accrual period, then the amount of qualified stated
interest payable at the end of such interval is allocated PRO RATA (on the basis
of their relative lengths) between the accrual periods contained in the
interval.
U.S. Holders of Discount Notes generally will have to include in income
increasingly greater amounts of OID over the life of the Notes.
ACQUISITION PREMIUM. A U.S. Holder that purchases a Discount Note for an
amount in excess of its adjusted issue price as of the purchase date but less
than its stated redemption price at maturity (any such excess being "acquisition
premium"), and that does not make the election described below under "Election
To Treat All Interest as Original Issue Discount," is permitted to reduce the
amount of OID which must be included in gross income for any taxable year (but
not below zero) by the portion of the acquisition premium properly allocable to
such year. Alternatively, a U.S. Holder may elect to compute OID accruals as
described under "Original Issue Discount--General" above, treating the U.S.
Holder's purchase price as the issue price.
OPTIONAL REDEMPTION. For purposes of detemining whether a Note is a
Discount Note and calculating the amount of OID on such Note, an option to
redeem a Note will be presumed to be exercised if, by utilizing any date on
which such Note may be redeemed or repaid as the maturity date and the amount
payable on such date in accordance with the terms of such Note (the "redemption
price") as the stated redemption price at maturity, the yield on the Note would
be (i) in the case of an option to redeem held by the Company, lower than its
yield to Stated Maturity, or (ii) in the case of an option to redeem held by the
holder, higher than its yield to Stated Maturity. If such option is not in fact
exercised when presumed to be exercised, the Note would be treated solely for
OID purposes as if it were redeemed or repurchased, and a new Note were issued,
on the presumed exercise date for an amount equal to the Discount Note's
adjusted issue price on that date.
SHORT-TERM NOTES. Under the Code, special rules apply with respect to OID
on Notes that mature one year or less from the date of issuance ("Short-Term
Notes"). In general, a cash basis U.S. Holder of a Short-Term Note is not
required to include OID in income as it accrues for United States Federal income
tax purposes unless it elects to do so. Accrual basis U.S. Holders and certain
other U.S. Holders, including banks, regulated investment companies, dealers in
securities and cash basis U.S. Holders who so elect, are required to include OID
in income as it accrues on Short-Term Notes on a straight-line basis or, at the
election of the U.S. Holder, under the constant yield method (based on daily
compounding). In the case of U.S. Holders not required and not electing to
include OID in income currently, any gain realized on the sale or retirement of
Short-Term Notes will be ordinary income to the extent of the OID accrued on a
straight-line basis (unless an election is made to accrue the OID under the
constant yield method) through the date of sale or retirement. U.S. Holders who
are not required and do not elect to include OID on Short-Term Notes in income
as it accrues will be required to defer deductions for interest on borrowings
allocable to Short-Term Notes in an amount not exceeding the deferred income
until the deferred income is realized.
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Any U.S. Holder of a Short-Term Note can elect to apply the rules in the
preceding paragraph taking into account the amount of "acquisition discount," if
any, with respect to the Note (rather than the OID with respect to such Note).
Acquisition discount is the excess of the stated redemption price at maturity of
the Short-Term Note over the U.S. Holder's purchase price therefor. Acquisition
discount will be treated as accruing on a ratable basis or, at the election of
the U.S. Holder, on a constant-yield basis.
For purposes of determining the amount of OID subject to these rules, the
OID Regulations provide that no interest payments on a Short-Term Note are
qualified stated interest, but instead such interest payments are included in
the Short-Term Note's stated redemption price at maturity.
NOTES PURCHASED AT A PREMIUM
Under the Code, a U.S. Holder that purchases a Note for an amount in excess
of its stated redemption price at maturity will not be subject to the OID rules
and may elect to treat such excess as "amortizable bond premium," in which case
the amount of qualified stated interest required to be included in the U.S.
Holder's income each year with respect to interest on the Note will be reduced
by the amount of amortizable bond premium allocable (based on the Note's yield
to maturity) to such year. Any election to amortize bond premium is applicable
to all bonds (other than bonds the interest on which is excludible from gross
income) held by the U.S. Holder at the beginning of the first taxable year to
which the election applies or thereafter acquired by the U.S. Holder, and may
not be revoked without the consent of the Internal Revenue Service ("IRS"). See
also "Election to Treat All Interest as Original Issue Discount."
NOTES PURCHASED AT A MARKET DISCOUNT
A Note, other than a Short-Term Note, will be treated as purchased at a
market discount (a "Market Discount Note") if the amount for which a U.S. Holder
purchased the Note is less than the Note's issue price, subject to a DE MINIMIS
rule similar to the rule relating to DE MINIMIS OID described under "Original
Issue Discount--General."
In general, any gain recognized on the maturity or disposition of a Market
Discount Note will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on the Note. Alternatively, a U.S.
Holder of a Market Discount Note may elect to include market discount in income
currently over the life of the Market Discount Note. Such an election applies to
all debt instruments with market discount acquired by the electing U.S. Holder
on or after the first day of the first taxable year to which the election
applies and may not be revoked without the consent of the IRS.
Market discount accrues on a straight-line basis unless the U.S. Holder
elects to accrue such discount on a constant yield to maturity basis. Such an
election is applicable only to the Market Discount Note with respect to which it
is made and is irrevocable. A U.S. Holder of a Market Discount Note that does
not elect to include market discount in income currently generally will be
required to defer deductions for interest on borrowings allocable to the Note in
an amount not exceeding the accrued market discount on the Note until the
maturity or disposition of the Note.
The market discount rules do not apply to a Short-Term Note.
ELECTION TO TREAT ALL INTEREST AS ORIGINAL ISSUE DISCOUNT
Any U.S. Holder may elect to include in gross income all interest that
accrues on a Note using the constant yield method described above under the
heading "Original Issue Discount--General," with the modifications described
below. For purposes of this election, interest includes stated interest, OID, DE
MINIMIS OID, market discount, acquisition discount, DE MINIMIS market discount
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium.
In applying the constant yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing U.S.
Holder's adjusted basis in the Note immediately after its acquisition, the issue
date of the Note will be the date of its acquisition by the electing U.S.
Holder, and no
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payments on the Note will be treated as payments of qualified stated interest.
This election is generally applicable only to the Note with respect to which it
is made and may not be revoked without the consent of the IRS. If this election
is made with respect to a Note with amortizable bond premium, the electing U.S.
Holder will be deemed to have elected to apply amortizable bond premium against
interest with respect to all debt instruments with amortizable bond premium
(other than debt instruments the interest on which is excludible from gross
income) held by such electing U.S. Holder as of the beginning of the taxable
year in which the election is made or any debt instruments acquired thereafter.
The deemed election with respect to amortizable bond premium may not be revoked
without the consent of the IRS.
If the election described above to apply the constant yield method to all
interest on a Note is made with respect to a Market Discount Note, as defined
above, then the electing U.S. Holder will be treated as having made the election
discussed above under "Notes Purchased at a Market Discount" to include market
discount in income currently over the life of all debt instruments held or
thereafter acquired by such U.S. Holder.
PURCHASE, SALE AND RETIREMENT OF THE NOTES
A U.S. Holder's adjusted tax basis in a Note generally will equal its U.S.
dollar cost (which, in the case of a Note purchased with a Foreign Currency,
will be the U.S. dollar value of the purchase price on the date of purchase),
increased by the amount of any OID or market discount (or acquisition discount,
in the case of a Short-Term Note) included in the U.S. Holder's income with
respect to the Note and the amount, if any, of income attributable to DE MINIMIS
OID included in the U.S. Holder's income with respect to the Note, and reduced
by the sum of (i) the amount of any payments that are not qualified stated
interest payments, and (ii) the amount of any amortizable bond premium applied
to reduce interest on the Note. A U.S. Holder generally will recognize gain or
loss on the sale or retirement of a Note equal to the difference between the
amount realized on the sale or retirement and the U.S. Holder's adjusted tax
basis in the Note. The amount realized on a sale or retirement for an amount in
Foreign Currency will be the U.S. dollar value of such amount on the date of
sale or retirement. Except to the extent described above under "Original Issue
Discount--Short Term Notes" or "Notes Purchased at a Market Discount" or below
under "Foreign Currency Notes--Exchange Gain or Loss," and except to the extent
attributable to accrued but unpaid interest, gain or loss recognized on the sale
or retirement of a Note will be capital gain or loss and will be long-term
capital gain or loss if the Note was held for more than one year.
FOREIGN CURRENCY NOTES
INTEREST PAYMENTS. If an interest payment is denominated in or determined
by reference to a Foreign Currency, the amount of income recognized by a cash
basis U.S. Holder will be the U.S. dollar value of the interest payment, based
on the exchange rate in effect on the date of receipt, regardless of whether the
payment is in fact converted into U.S. dollars. Accrual basis U.S. Holders may
determine the amount of income recognized with respect to such interest payment
in accordance with either of two methods. Under the first method, the amount of
income recognized will be based on the average exchange rate in effect during
the interest accrual period (or, with respect to an accrual period that spans
two taxable years, the partial period within the taxable year). Upon receipt of
an interest payment (including a payment attributable to accrued but unpaid
interest upon the sale or retirement of a Note) determined by reference to a
Foreign Currency, an accrual basis U.S. Holder will recognize ordinary income or
loss measured by the difference between such average exchange rate and the
exchange rate in effect on the date of receipt, regardless of whether the
payment is in fact converted into U.S. dollars. Under the second method, an
accrual basis U.S. Holder may elect to translate interest income into U.S.
dollars at the spot exchange rate in effect on the last day of the accrual
period or, in the case of an accrual period that spans two taxable years, at the
exchange rate in effect on the last day of the partial period within the taxable
year. Additionally, if a payment of interest is actually received within five
business days of the last day of the accrual period or taxable year, an accrual
basis U.S. Holder applying the second method may instead translate such accrued
interest into U.S. dollars at the spot exchange rate in effect on the day of
actual
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receipt (in which case no exchange gain or loss will result). Any election to
apply the second method will apply to all debt instruments held by the U.S.
Holder at the beginning of the first taxable year to which the election applies
or thereafter acquired by the U.S. Holder and may not be revoked without the
consent of the IRS.
EXCHANGE OF AMOUNTS IN OTHER THAN U.S. DOLLARS. Foreign Currency received
as interest on a Note or on the sale or retirement of a Note will have a tax
basis equal to its U.S. dollar value at the time such interest is received or at
the time of such sale or retirement, as the case may be. Foreign Currency that
is purchased will generally have a tax basis equal to the U.S. dollar cost of
the Foreign Currency on the date of purchase. Any gain or loss recognized on a
sale or other disposition of a Foreign Currency (including its use to purchase
Notes or upon exchange for U.S. dollars) will be ordinary income or loss.
FOREIGN CURRENCY DISCOUNT NOTES. OID for any accrual period on a Discount
Note that is denominated in a Foreign Currency will be determined in the Foreign
Currency and then translated into U.S. dollars in the same manner as stated
interest accrued by an accrual basis U.S. Holder. Upon receipt of an amount
attributable to OID (whether in connection with a payment of interest or the
sale or retirement of a Note), a U.S. Holder may recognize ordinary income or
loss.
AMORTIZABLE BOND PREMIUM. In the case of a Note that is denominated in a
Foreign Currency, bond premium will be computed in units of Foreign Currency,
and amortizable bond premium will reduce interest income in units of the Foreign
Currency. At the time amortized bond premium offsets interest income, a U.S.
Holder may realize ordinary income or loss, measured by the difference between
exchange rates at that time and at the time of the acquisition of the Notes.
MARKET DISCOUNT. Market discount is determined in units of the Foreign
Currency, accrued market discount that is required to be taken into account on
the maturity or upon disposition of a Note is translated into U.S. dollars at
the exchange rate on the maturity or the disposition date, as the case may be
(and no part is treated as exchange gain or loss), accrued market discount
currently includible in income by an electing U.S. Holder is translated into
U.S. dollars at the average exchange rate for the accrual period (or the partial
accrual period during which the U.S. Holder held the Note), and exchange gain or
loss is determined on maturity or disposition of the Note (as the case may be)
in the manner described above under "Foreign Currency Notes--Interest Payments"
with respect to the computation of exchange gain or loss on the receipt of
accrued interest by an accrual method holder.
EXCHANGE GAIN OR LOSS. Gain or loss recognized by a U.S. Holder on the sale
or retirement of a Note that is attributable to changes in exchange rates will
be treated as ordinary income or loss. However, exchange gain or loss is taken
into account only to the extent of total gain or loss realized on the
transaction, and such income or loss will not be treated as interest income or
expense.
NOTES LINKED TO COMMODITY PRICES, EQUITY INDICES OR OTHER FACTORS
The applicable Pricing Supplement will contain a discussion of any special
United States Federal income tax rules with respect to Notes described above
under "Description of Notes--Notes Linked to Commodity Prices, Equity Indices or
Other Factors and Other Terms of Notes."
NON-UNITED STATES HOLDERS
Subject to the discussion of backup withholding below, payments of principal
(and premium, if any) and interest (including OID) by the Company or any agent
of the Company (acting in its capacity as such) to any holder of a Note that is
not a U.S. Holder (a "Non-U.S. Holder") will not be subject to United States
Federal withholding tax, provided, in the case of interest (including OID), that
(i) the Non-U.S. Holder does not actually or constructively own 10% or more of
the total combined voting power of all classes of stock of the Company entitled
to vote, (ii) the Non-U.S. Holder is not a controlled foreign corporation for
United States tax purposes that is related to the Company (directly or
indirectly) through stock ownership or a bank receiving interest described in
Section 881(c)(3)(A) of the Code and (iii) either
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(A) the Non-U.S. Holder certifies to the Company or its agent under penalties of
perjury that it is not a United States person and provides its name and address
or (B) a securities clearing organization, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or business
(a "financial institution") and holds the Note certifies to the Company or its
agent under penalties of perjury that such statement has been received from the
Non-U.S. Holder by it or by another financial institution and furnishes the
payor with a copy thereof.
If a Non-U.S. Holder is engaged in a trade or business in the United States
and interest (including OID) on the Note is effectively connected with the
conduct of such trade or business, the Non-U.S. Holder, although exempt from the
withholding tax discussed in the preceding paragraph (provided that such holder
furnishes a properly executed IRS Form 4224 (or a successor form) on or before
any payment date to claim such exemption), may be subject to United Stated
Federal income tax on such interest (or OID) in the same manner as if it were a
U.S. Holder. In addition, if the same Non-U.S. Holder is a foreign corporation,
it may be subject to a branch profits tax equal to 30% of its effectively
connected earnings and profits for the taxable year, subject to certain
adjustments. For purposes of the branch profits tax, interest (including OID) on
a Note will be included in the earnings and profits of such holder if such
interest (or OID) is effectively connected with the conduct by such holder of a
trade or business in the United States. In lieu of the certificate described in
the preceding paragraph, such a holder must provide the payor with a properly
executed IRS Form 4224 (or a successor form) to claim an exemption from United
States Federal withholding tax.
Any capital gain, market discount or exchange gain realized on the sale,
exchange, retirement or other disposition of a Note by a Non-U.S. Holder will
not be subject to United States Federal income or withholding taxes if (i) such
gain is not effectively connected with a United States trade or business of the
Non-U.S. Holder and (ii) in the case of an individual, such Non-U.S. Holder (A)
is not present in the United States for 183 days or more in the taxable year of
the sale, exchange, retirement or other disposition or (B) does not have a tax
home (as defined in Section 911(d)(3) of the Code) in the United States in the
taxable year of the sale, exchange, retirement or other disposition and the gain
is not attributable to an office or other fixed place of business maintained by
such individual in the United States.
Notes held by an individual who is neither a citizen nor a resident of the
United States for United States Federal income tax purposes at the time of such
individual's death will not be subject to United States Federal estate tax,
provided that the income from such Notes was not, or would not have been,
effectively connected with a United States trade or business of such individual
and that such individual qualified for the exemption from United States Federal
withholding tax (without regard to the certification requirements) described
above.
Recently enacted Treasury regulations alter the rules regarding
certification as to non-U.S. status for payments made after December 31, 1999.
Non-U.S. Holders should consult their tax advisor about the effects on them, if
any, of such rules.
PURCHASERS OF NOTES THAT ARE NON-U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE POSSIBLE APPLICABILITY OF UNITED STATES WITHHOLDING
AND OTHER TAXES UPON INCOME REALIZED IN RESPECT OF THE NOTES.
INFORMATION REPORTING AND BACKUP WITHHOLDING
For each calendar year in which Notes are outstanding, the Company is
required to provide the IRS with certain information, including each holder's
name, address and taxpayer identification number (either the holder's Social
Security number or its employer identification number, as the case may be), the
aggregate amount of principal and interest paid (including OID, if any) to that
holder during the calendar year and the amount of tax withheld, if any. This
obligation, however, does not apply with respect to certain U.S. Holders,
including corporations, tax-exempt organizations, qualified pension and profit
sharing trusts and individual retirement accounts.
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In the event that a U.S. Holder subject to the reporting requirements
described above fails to supply its correct taxpayer identification number in
the manner required by applicable law or underreports its tax liability, the
Company, its agents or paying agents or a broker may be required to "backup"
withhold a tax equal to 31% of each payment of interest (including OID) and
principal (and premium if any) on the Notes. This backup withholding is not an
additional tax and may be credited against the U.S. Holder's United States
Federal income tax liability, provided that the required information is
furnished to the IRS.
Under current Treasury Department regulations, backup withholding and
information reporting will not apply to payments made by the Company or any
agent thereof (in its capacity as such) to a Non-U.S. Holder of a Note if such
holder has provided the required certification that it is not a United States
person as set forth in clause (iii) in the first paragraph under "Non-U.S.
Holders" above, or has otherwise established an exemption (provided that neither
the Company nor its agent has actual knowledge that the holder is a United
States person or that the conditions of any exemption are not in fact
satisfied).
Payment of the proceeds from the sale of a Note to or through a foreign
office of a broker will not be subject to information reporting or backup
withholding, except that if the broker is a United States person, a controlled
foreign corporation for United States tax purposes or a foreign person 50
percent or more of whose gross income from all sources for the three-year period
ending with the close of its taxable year preceding the payment was effectively
connected with a United States trade or business, information reporting may
apply to such payments. Payment of the proceeds from a sale of a Note to or
through the United States office of a broker is subject to information reporting
and backup withholding unless the holder or beneficial owner certifies as to its
taxpayer identification number or otherwise establishes an exemption from
information reporting and backup withholding.
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<PAGE>
PLAN OF DISTRIBUTION
The Notes are being offered on a continuing basis by the Company through the
Agent, which has agreed to use its reasonable efforts to solicit offers to
purchase Notes. The Company will have the sole right to accept offers to
purchase Notes and may reject any proposed purchase of Notes in whole or in
part. The Agent shall have the right, in its discretion reasonably exercised, to
reject any offer to purchase Notes received by it, in whole or in part. The
Company will pay the Agent a commission of from .05% to .75% of the principal
amount of any Note, depending upon the Stated Maturity of such Note, for sales
made through the Agent as agent.
The Company also may sell Notes at a discount to the Agent for its own
account or for resale to one or more purchasers at varying prices related to
prevailing market prices at the time of resale or, if set forth in the
applicable Pricing Supplement, at a fixed public offering price, as determined
by the Agent. After any initial public offering of Notes to be resold to
purchasers at a fixed public offering price, the public offering price and any
concession or discount may be changed. In addition, the Agent may offer Notes
purchased by it as principal to other dealers. Notes sold by the Agent to a
dealer may be sold at a discount and, unless otherwise specified in the
applicable Pricing Supplement, such discount allowed will not be in excess of
the discount received by the Agent from the Company. Unless otherwise specified
in the applicable Pricing Supplement, any Note purchased by the Agent as
principal will be purchased at 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of a Note of
identical maturity.
The Company reserves the right to sell Notes directly on its own behalf. No
commission will be payable on any Notes sold directly by the Company. In
addition, the Company may use additional agents as it may designate from time to
time to solicit offers to purchase Notes on terms substantially identical to
those set forth above for the Agent. The name of any such additional agent and
details as to the arrangements between such agent and the Company will be set
forth in the applicable Pricing Supplement.
In connection with the distribution of the Notes, the Agent may purchase and
sell Notes in the open market. These transactions may include overallotment and
stabilizing transactions and purchases to cover short positions created by the
Agent in connection with such distribution. Stabilizing transactions consist of
certain bids or purchases for the purpose of preventing or retarding a decline
in the price of Notes; and short positions created by the Agent involve the sale
by the Agent of a greater aggregate principal amount of Notes than they are
required to purchase from the Company in such distribution. The Agent also may
impose a penalty bid, whereby selling concessions allowed to broker-dealers in
respect of the Notes sold in such distribution may be reclaimed by the Agent if
such Notes are repurchased by the Agent in stabilizing or covering transactions.
These activities may stabilize, maintain or otherwise affect the market price of
Notes, which may be higher than the price that might otherwise prevail in the
open market; and these activities, if commenced, may be discontinued at any
time. These transactions may be effected in the over-the-counter market or
otherwise.
The Agent, whether acting as agent or principal, and any additional agents
appointed from time to time may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933 (the "Act"). The Company has agreed to
indemnify the Agent against certain liabilities, including liabilities under the
Act or to contribute to payments that the Agent may be required to make in
respect thereof. The Company has agreed to reimburse the Agent for all
out-of-pocket expenses (including advertising expenses) incurred by the Agent
with the advance approval of the Company. The estimated maximum amount of such
reimbursable expenses in connection with or related to the distribution of the
Notes is $100,000. In addition, the Company has agreed to reimburse the Agent
for the reasonable fees and disbursements of its counsel incurred in connection
with the distribution agreement between the Company and the Agent. The estimated
maximum amount of such reimbursable fees and disbursements is $150,000.
The Notes do not have an established trading market and will not be listed
on any securities exchange. The Agent may make a market in the Notes, but the
Agent is not obligated to do so and may discontinue
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<PAGE>
any market-making at any time without notice. No assurance can be given as to
the existence or liquidity of any secondary market for the Notes, or that the
maximum amount of the Notes offered hereby will be sold.
In addition to offering Notes through the Agent as described herein, the
Company may sell other Securities offered by the accompanying Prospectus. Such
Securities may include one or more series of medium-term notes other than the
Senior Notes and the Subordinated Notes. Any such Securities so offered and sold
will reduce correspondingly the maximum aggregate principal amount of Notes that
may be offered by this Prospectus Supplement.
PWI is a wholly owned subsidiary of the Company. All distributions of the
Notes will conform to the requirements set forth in Rule 2720 of the Conduct
Rules of the National Association of Securities Dealers, Inc.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED SEPTEMBER 9, 1998
PROSPECTUS
PAINE WEBBER GROUP INC.
DEBT SECURITIES
--------------
Paine Webber Group Inc. (the "Company") intends to issue from time to time
in one or more series senior debt securities (the "Senior Securities") and/or
subordinated debt securities (the "Subordinated Securities") each of which will
be a direct, unsecured obligation of the Company and which will be offered to
the public on terms to be determined at the time of sale (the Senior Securities
and the Subordinated Securities being herein referred to collectively as the
"Securities"). The Securities offered by this Prospectus may be sold for U.S.
dollars, foreign currencies or composite currencies and the principal, premium,
if any, and any interest on the Securities may be payable in U.S. dollars,
foreign currencies or composite currencies. The aggregate initial public
offering price of the Securities to be offered by this Prospectus shall not
exceed $3,353,115,000 (or the equivalent thereof if any of the Securities are
denominated in a foreign currency or a composite currency).
The Securities of a series may be issued in registered form without coupons,
in bearer form with or without coupons attached or in the form of one or more
global securities in registered or bearer form. The classification as Senior
Securities or Subordinated Securities, specific designation, aggregate principal
amount, currency (if other than U.S. dollars) or composite currency in which the
principal, premium, if any, or any interest is payable, authorized
denominations, offering price, maturity, rate (or method of calculation) and
time and place of payment of any interest, any redemption terms or other
specific terms of the Securities in respect of which this Prospectus is being
delivered ("Offered Securities") and any listing on a securities exchange are
set forth in an accompanying supplement to this Prospectus (the "Prospectus
Supplement"), together with the terms of offering of the Offered Securities.
The Securities may be sold (i) directly to purchasers, (ii) through agents
designated from time to time, (iii) to dealers or (iv) through underwriters or a
group of underwriters. If agents of the Company or underwriters are involved in
the sale of the Offered Securities, their names are set forth in the applicable
Prospectus Supplement. If agents of the Company, underwriters or dealers are
involved in the sale of the Offered Securities, descriptions of their
compensation and indemnification arrangements and the net proceeds to the
Company are set forth in the applicable Prospectus Supplement.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
-------------------
This Prospectus and the related Prospectus Supplement may be used by the
Company, PaineWebber Incorporated ("PaineWebber") or PaineWebber International
(U.K.) Ltd. ("PaineWebber International"), each a wholly owned subsidiary of the
Company, or other affiliates of the Company in connection with offers and sales
related to secondary market transactions in the Securities at negotiated prices
related to prevailing market prices at the time of sale or otherwise.
PaineWebber, PaineWebber International or such other Company affiliates may act
as principal or agent in such transactions.
-------------------
The date of this Prospectus is September , 1998
<PAGE>
IN CONNECTION WITH AN OFFERING OR DISTRIBUTION, THE UNDERWRITERS OR, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, THE AGENTS FOR SUCH OFFERING OR DISTRIBUTION
MAY EFFECT TRANSACTIONS WHICH STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE
OF THE OFFERED SECURITIES OR OTHER SECURITIES OF THE COMPANY. ANY SUCH
ACTIVITIES WILL BE DESCRIBED IN THE APPLICABLE PROSPECTUS SUPPLEMENT.
-------------------
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
statements of which this Prospectus forms a part, as well as reports, proxy
statements and other information filed by the Company, may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549; 7 World Trade Center, New York, New
York 10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may be obtained at prescribed rates from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such material may also be accessed electronically by
means of the Commission's home page on the Internet at http://www.sec.gov. In
addition, reports, proxy statements and other information concerning the Company
may be inspected at the offices of the New York Stock Exchange, Inc. (the
"NYSE"), 20 Broad Street, New York, New York, and the Pacific Stock Exchange,
301 Pine Street, San Francisco, California.
This Prospectus constitutes a part of certain Registration Statements on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") filed with the Commission under the Securities Act of 1933 (the
"Securities Act") with respect to the Securities. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. Reference is made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
Securities. Any statements contained herein concerning the provisions of any
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission or incorporated by reference herein are not necessarily
complete, and in each instance reference is made to the copy of such document so
filed for a more complete description of the matter involved. Each such
statement is qualified in its entirety by such reference.
-------------------
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997, the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 1998 and the Company's Current Report on Form 8-K
dated July 15, 1998, as filed with the Commission pursuant to the Exchange Act
(File No. 1-7367), are hereby incorporated by reference in this Prospectus.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities shall be deemed to be
incorporated in this Prospectus by reference and to be a part hereof from the
respective date of filing of each such document. Any statement contained herein,
in any Prospectus Supplement or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement herein, in any
Prospectus Supplement or in any other subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will furnish without charge upon written or oral request by any
person, including any beneficial owner, to whom this Prospectus is delivered, a
copy of any or all of the documents referred to above which have been or may be
incorporated in this Prospectus by reference, other than exhibits to such
documents unless such exhibits are specifically incorporated by reference into
such documents. Requests for such copies should be directed to Assistant
Secretary, Paine Webber Group Inc., 1285 Avenue of the Americas, New York, New
York 10019, telephone (212) 713-3224.
-------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, A
PROSPECTUS SUPPLEMENT OR THE DOCUMENTS INCORPORATED BY REFERENCE AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY PAINE WEBBER GROUP INC. OR ANY AGENT, UNDERWRITER OR DEALER.
NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. THE DELIVERY OF THIS PROSPECTUS AND A
PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION THEY
CONTAIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE DATES.
References herein to "U.S. dollars," "dollar," "U.S. $" or "$" are to the
lawful currency of the United States.
2
<PAGE>
THE COMPANY
Paine Webber Group Inc. is a holding company which, together with its
operating subsidiaries, forms one of the largest full-service securities and
commodities firms in the industry. Founded in 1879, the Company employs
approximately 17,000 people in 291 offices worldwide.
The Company's principal line of business is to serve the investment and
capital needs of individual and institutional clients through its broker-dealer
subsidiary, PaineWebber, and other specialized subsidiaries. These activities
are conducted through interrelated business groups, which utilize common
operational and administrative personnel and facilities. The Company holds
memberships in all major securities and commodities exchanges in the United
States, and makes a market in many securities traded on the National Association
of Securities Dealers Nasdaq Stock Market or in other over-the-counter markets.
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, wrap-free
assets 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. Also,
part of the Private Client Group is the Municipal Securities Group, which
structures, underwrites, sells and trades taxable and tax-exempt issues for
municipal and public agency clients.
Capital Markets is comprised of Research, Global Fixed Income and Commercial
Real Estate, Global Equities and Investment Banking.
The Research Group provides investment advice to institutional and
individual investors, and other business areas of the Company, on approximately
800 companies in 61 industry sectors.
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. To facilitate client transactions or for
the Company's product development efforts, the Company takes positions in fixed
income securities, listed and over-the-counter equity securities and holds
direct equity investments in partnerships and other entities that invest in
fixed income securities, equity securities and other financial instruments.
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, debt restructuring, property sales and bulk sales
services, and a broad range of other advisory services.
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., including Mitchell Hutchins Investment Advisory division,
Mitchell Hutchins Institutional Investors Inc., Financial Counselors Inc. and
NewCrest Advisors Inc. The Asset Management group provides investment advisory
and portfolio management services to mutual funds, institutions, pension funds,
endowment funds, individuals and trusts.
The Transaction Services group includes correspondent services, prime
brokerage and securities lending businesses, and specialist trading. Through
Correspondent Services Corporation, the Company provides execution and clearing
services to broker-dealers in the U.S. and overseas.
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The Company's businesses operate in one of the nation's most highly
regulated industries. Violations of applicable regulations can result in the
revocation of broker-dealer licenses, the imposition of censures or fines, and
the suspension or expulsion of a firm, its officers or employees. The Company's
business is regulated by various agencies, including the Commission, the New
York Stock Exchange, the Commodity Futures Trading Commission, the National
Association of Securities Dealers, Inc. ("NASD") and the Securities and Futures
Authority.
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, and all references to "Paine Webber"
refer to Paine Webber Incorporated.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Securities offered hereby will be used for general corporate purposes,
including, but not limited to, funding investments in or extensions of credit to
subsidiaries, repayments of indebtedness of the Company or its subsidiaries, and
possible acquisitions. The precise amount and timing of the application of the
funds will depend upon future requirements and the availability of other funds
to the Company and its subsidiaries. Management of the Company expects that the
Company and its subsidiaries will engage in additional financings as needs
arise.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for the five-year period ended December 31, 1997, and the six-month
period ended June 30, 1998.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS ENDED
DECEMBER 31 JUNE 30, 1998
- --------------------------------------------------------------- -----------------------
<S> <C> <C> <C> <C> <C>
1993 1994 1995 1996 1997
----- ----- ----- ----- -----
1.3 1.0 1.1 1.3 1.2 1.3
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, "earnings"
consist of income before taxes and fixed charges, "Fixed charges" consist
principally of interest expense incurred on securities sold under repurchase
agreements, short-term and long-term borrowings, debt issued to affiliated
trusts, and that portion of rental expense estimated to be representative of the
interest factor.
DESCRIPTION OF SECURITIES
The Senior Securities are to be issued under an Indenture dated as of March
15, 1988, as amended by a supplemental indenture dated as of September 22, 1989,
and by a supplemental indenture dated as of March 22, 1991, between the Company
and The Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee (the
"Senior Indenture"). The Subordinated Securities are to be issued under an
Indenture dated as of March 15, 1988, as amended by a supplemental indenture
dated as of September 22, 1989, by a supplemental indenture dated as of March
22, 1991, and by a supplemental indenture dated as of November 30, 1993, between
the Company and Chase Manhattan Bank Delaware (formerly known as Chemical Bank
Delaware), as Trustee (the "Subordinated Indenture"). The Senior Indenture and
the Subordinated Indenture (being sometimes referred to herein collectively as
the "Indentures" and individually as an "Indenture") are filed as exhibits to
the Registration Statement. The Company may enter into one or more additional
indentures providing for Senior Securities or Subordinated Securities with one
or more banking institutions organized under the laws of the United States or
any state serving as trustee.
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Reference is made to the Prospectus Supplement for information regarding the
Indenture under which the Offered Securities will be issued.
The statements under this heading are subject to the detailed provisions of
each Indenture. Whenever particular provisions of the Indentures or terms
defined therein are referred to, such provisions or definitions are incorporated
by reference herein as a part of the statements made and the statements are
qualified in their entirety by such reference.
GENERAL
The Securities of a series may be issued in fully registered form without
Coupons ("Registered Securities") or in bearer form with or without Coupons
attached ("Bearer Securities") or both. Securities of a series may also be
issued in whole or in part in the form of one or more global securities (each, a
"Global Security"). Unless otherwise specified in the applicable Prospectus
Supplement, the Securities will be only Registered Securities. Registered
Securities which are book-entry securities ("Book-Entry Securities") may be
issued in the form of registered Global Securities. Securities denominated in
U.S. dollars will be issued, unless otherwise set forth in the applicable
Prospectus Supplement, in denominations of $1,000 or an integral multiple
thereof for Registered Securities, and only in the denomination of $5,000 for
Bearer Securities. (Section 302)
Neither of the Indentures limits the aggregate principal amount of
Securities which may be issued thereunder. The Securities will be direct,
unsecured obligations of the Company. The Subordinated Securities will be
subordinated in right of payment, to the extent and in the manner set forth in
the Subordinated Indenture, to the prior payment in full of all Superior
Indebtedness as described below under "Subordination".
If any of the Securities are sold for any foreign currency or composite
currency or if principal of (or premium, if any) or any interest on any of the
Securities is payable in any foreign currency or composite currency, the
restrictions, elections, Federal income tax consequences, specific terms and
other information with respect to such issue of Securities and such foreign
currency or composite currency will be set forth in the Prospectus Supplement
relating thereto.
If the amount of payments of principal of (or premium, if any) or any
interest on any of the Securities is determined with reference to any type of
index or formula or changes in prices of particular securities, currencies,
intangibles, goods, articles or commodities, the Federal income tax
consequences, specific terms and other information with respect to such issue of
Securities and such index or formula, securities, currencies, intangibles,
goods, articles or commodities will be set forth in the Prospectus Supplement
relating thereto.
The Securities may be issued in one or more series with the same or various
maturities at or above par or with an original issue discount. Certain
Securities may be issued which provide for an amount less than the principal
amount thereof to be due and payable in the event of an acceleration of the
maturity thereof (each an "Original Issue Discount Security"), including by
reason of redemption or early repayment. Original Issue Discount Securities may
bear no interest or may bear interest at a rate which at the time of issuance is
below market rates and will be sold at a discount (which may be substantial)
below their stated principal amount. Certain Original Issue Discount Securities
may be issued with original issue discount for United States Federal income tax
purposes. The Prospectus Supplement with respect to any Offered Securities
issued with such original issue discount will contain a discussion of Federal
income tax considerations with respect thereto.
Reference is made to the Prospectus Supplement for the following terms of
the Offered Securities: (i) the title and any limit on the aggregate principal
amount of the Offered Securities and whether the Offered Securities are Senior
Securities or Subordinated Securities; (ii) the percentage of their principal
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amount at which the Offered Securities will be issued; (iii) the date or dates
on which the Offered Securities will mature; (iv) the rate or rates (which may
be fixed or variable) per annum, if any, at which the Offered Securities will
bear interest or the method of determining such rate or rates; (v) the date or
dates from which such interest, if any, will accrue and the date or dates at
which such interest, if any, will be payable; (vi) the place where the principal
of (and premium, if any) and interest, if any, on the Offered Securities will be
payable; (vii) the terms for redemption or early repayment, if any, including
any mandatory or optional sinking fund or analogous provision; (viii) the terms,
if any, on which the Offered Securities may be converted into or exchanged for
stock or other securities of the Company or other entities, any specific terms
relating to the adjustment therof and the period during which the Offered
Securities may be so converted or exchanged; (ix) the principal amount of any
Offered Securities which are Original Issue Discount Securities that is payable
upon acceleration of the maturity of such Offered Securities; (x) if other than
U.S. dollars, the currency, currencies, composite currency or composite
currencies for which the Offered Securities may be purchased and the currency,
currencies, composite currency or composite currencies in which the payment of
principal of (or premium, if any) or any interest on such Offered Securities
will be made and, if the Company or the Holders of Offered Securities may elect
to receive such payment in a currency, currencies, composite currency or
composite currencies other than that in which the Offered Securities are stated
to be payable, then, the period or periods within which, and the terms and
conditions upon which, such election may be made and, if the amount of such
payments may be determined with reference to an index based on a currency,
currencies, composite currency or composite currencies other than that in which
the Offered Securities are stated to be payable, then the manner in which such
amounts shall be determined; (xi) whether the Offered Securities will be issued
as Registered Securities or Bearer Securities or both and the terms upon which
any Bearer Securities of such series may be exchanged for Registered Securities
of such series; (xii) whether the Offered Securities are to be issued in whole
or in part in the form of one or more Global Securities and, if so, the identity
of the depositary or depositaries for such Global Security or Securities; (xiii)
if a temporary Global Security is to be issued with respect to some of or all
the Offered Securities, any requirements for certification of ownership by
non-United States persons that will apply prior to (a) the issuance of a
definitive Security or (b) the payment of interest on an interest payment date
that occurs before the issuance of a definitive Security; (xiv) if a temporary
Global Security is to be issued with respect to some of or all the Offered
Securities, the terms upon which interests in such temporary Global Security may
be exchanged for interests in a definitive Global Security or for definitive
Securities and the terms upon which interests in a definitive Global Security,
if any, may be exchanged for definitive Securities; (xv) whether and under what
circumstances the Company will pay additional amounts to certain Holders of
Offered Securities in respect of any tax, assessment or governmental charge
required to be withheld or deducted and, if so, whether the Company will have
the option to redeem such Offered Securities rather than pay any additional
amounts; (xvi) if the amount of payments of principal of (or premium, if any) or
any interest on the Offered Securities may be determined with reference to an
index based on the prices, changes in prices, or differences between prices, of
securities, currencies, intangibles, goods, articles or commodities, or
otherwise by application of a formula, the manner in which such amounts shall be
determined; (xvii) any additional Events of Default (as defined below under
"Events of Default, Notice and Waiver") or restrictive covenants provided for
with respect to the Offered Securities; and (xviii) any other terms of the
Offered Securities not inconsistent with the applicable Indenture.
If any Offered Securities are Bearer Securities, the Prospectus Supplement
will describe any applicable restrictions (including, without limitation, any
restrictions required to comply with United States Federal income tax laws and
regulations) on the offer, sale and delivery of such Bearer Securities in
addition to those set forth under "Limitations on Issuance of Bearer
Securities."
Each Indenture provides that, at the option of the Company, interest on the
Registered Securities of any series that bears interest may be paid by mailing a
check to the address of the Person entitled thereto as such address shall appear
in the Security Register. (Section 301)
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The Indentures do not prohibit (i) a consolidation, merger or sale of assets
or other similar transactions that may adversely affect the creditworthiness of
the Company or a successor or combined entity, (ii) a change of control of the
Company or (iii) leveraged transactions involving the Company, whether or not
involving a change of control. In addition, under the terms of the Indentures
the Company is entitled to defease the Offered Securities. As a result, the
Indentures do not protect Holders against a substantial decline in the value of
the Offered Securities which may result from the aforementioned transactions.
EXCHANGE, REGISTRATION AND TRANSFER
Registered Securities (other than a Global Security, except as provided
below) of any series will be exchangeable for other Registered Securities of the
same series and of a like aggregate principal amount and tenor of any authorized
denominations. In addition, if Securities of any series are issuable as both
Registered Securities and Bearer Securities, at the option of the Holder, and
subject to the terms of the applicable Indenture, Bearer Securities (with all
unmatured Coupons, except as provided below, and all matured Coupons in default)
of such series will be exchangeable into Registered Securities of the same
series of any authorized denominations and of a like aggregate principal amount
and tenor. Bearer Securities with Coupons appertaining thereto surrendered in
exchange for Registered Securities between a Regular Record Date or a Special
Record Date and the relevant date for payment of interest shall be surrendered
without the Coupon relating to such date for payment of interest and interest
will not be payable on such date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such Coupon when due in accordance with the terms of the applicable Indenture.
Bearer Securities will not be issued in exchange for Registered Securities.
(Section 305)
No service charge will be made for any transfer or exchange of the
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge in connection therewith. (Section 305)
Securities may be presented for exchange as provided above, and Registered
Securities (other than a Global Security, except as provided below) may be
presented for registration of transfer (duly endorsed, or accompanied by a
satisfactory instrument of transfer), at the office of the Security Registrar or
at the office of any transfer agent designated by the Company for such purpose
with respect to any series of Securities and referred to in an applicable
Prospectus Supplement, without service charge and upon payment of any taxes and
other governmental charges as described in the applicable Indenture. The Company
has appointed The Chase Manhattan Bank as Security Registrar for each Indenture.
(Section 305) If a Prospectus Supplement refers to any transfer agents (in
addition to the Security Registrar) initially designated by the Company with
respect to any series of Securities, the Company may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that, if Securities of a
series are issuable solely as Registered Securities, the Company will be
required to maintain a transfer agent in each Place of Payment for such series
and, if Securities of a series are issuable as Bearer Securities, the Company
will be required to maintain (in addition to the Security Registrar) a transfer
agent in a Place of Payment for such series located outside the United States.
The Company may at any time designate additional transfer agents with respect to
any series of Securities. (Section 1002)
The Company shall not be required to: (i) issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before any selection of Securities of that series to be
redeemed and ending at the close of business on (a) if Securities of the series
are issuable only as Registered Securities, the day of mailing of the relevant
notice of redemption and (b) if Securities of the series are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if Securities of the series are also issuable as Registered
Securities and there is no publication, the day of mailing of the relevant
notice of redemption; (ii) register the transfer of or
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<PAGE>
exchange any Registered Security, or portion thereof, called for redemption,
except the unredeemed portion of any Registered Security being redeemed in part;
or (iii) exchange any Bearer Security called for redemption, except to exchange
such Bearer Security for a Registered Security of that series and like tenor
which is simultaneously surrendered for redemption. (Section 305)
For a discussion of restrictions on the exchange, registration and transfer
of Global Securities, see "Global Securities" below.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of (and premium, if any) and any interest on Bearer Securities will
be payable, subject to any applicable laws and regulations, at the offices of
such Paying Agents outside the United States as the Company may designate from
time to time and payment of interest on Bearer Securities with Coupons
appertaining thereto will be made only against surrender of the Coupon relating
to the applicable Interest Payment Date. (Sections 311 and 1002) Unless
otherwise indicated in an applicable Prospectus Supplement, no payment with
respect to any Bearer Security will be made at any office or agency of the
Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States. Notwithstanding the foregoing, payments of principal of (and premium, if
any) and any interest on Bearer Securities denominated and payable in U.S.
dollars will be made at the office of the Company's Paying Agent in the Borough
of Manhattan, The City of New York, if (but only if) payment of the full amount
thereof in U.S. dollars at all offices or agencies outside the United States is
illegal or effectively precluded by exchange controls or other similar
restrictions. (Section 1002)
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of (and premium, if any) and any interest on Registered Securities
will be made at the office of such Paying Agent or Paying Agents as the Company
may designate from time to time, except that at the option of the Company
payment of any interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register. (Section
301) Unless otherwise indicated in an applicable Prospectus Supplement, payment
of any installment of interest on Registered Securities will be made to the
Person in whose name such Registered Security is registered at the close of
business on the Regular Record Date for such interest. (Section 307)
Unless otherwise indicated in an applicable Prospectus Supplement, the
Corporate Trust Office of The Chase Manhattan Bank in the Borough of Manhattan,
The City of New York, will be designated as the Company's Paying Agent in the
Borough of Manhattan, The City of New York, for payments with respect to Offered
Securities (subject to the limitation described above in the case of Bearer
Securities). Any Paying Agents outside the United States and any other Paying
Agents in the United States initially designated by the Company for the Offered
Securities will be named in an applicable Prospectus Supplement. The Company may
at any time designate additional Paying Agents or rescind the designation of any
Paying Agent or approve a change in the office through which any Paying Agent
acts, except that, if Securities of a series are issuable solely as Registered
Securities, the Company will be required to maintain a Paying Agent in each
Place of Payment for such series and, if Securities of a series are issuable as
Bearer Securities, the Company will be required to maintain (i) a Paying Agent
in the Borough of Manhattan, The City of New York, for payments with respect to
any Registered Securities of the series (and for payments with respect to Bearer
Securities of the series in the circumstances described above, but not
otherwise), and (ii) a Paying Agent in a Place of Payment located outside the
United States where Securities of such series and any Coupons appertaining
thereto may be presented and surrendered for payment; provided that if any of
the Securities of such series are listed on The International Stock Exchange of
the United Kingdom and the Republic of Ireland Limited, the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and such
stock exchange shall so require, the Company will
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maintain a Paying Agent in London, Luxembourg or any other required city located
outside the United States, as the case may be, for the Securities of such
series. (Section 1002)
All money paid by the Company to a Paying Agent for the payment of principal
of (or premium, if any) or any interest on any Security or Coupon that remains
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to the Company and the Holder
of such Security or Coupon will thereafter look only to the Company for payment
thereof. (Section 1003)
If so specified in an applicable Prospectus Supplement, the Company may, at
its option, defer payments of interest otherwise payable on an Interest Payment
Date for a period and upon the terms and conditions described in such Prospectus
Supplement.
GLOBAL SECURITIES
If so specified in an applicable Prospectus Supplement, all or any portion
of the Securities of a series may be issued in the form of one or more Global
Securities that will be deposited with, or on behalf of, a depositary (a
"Depositary") identified in the Prospectus Supplement relating to such series.
Global Securities may be issued in either registered or bearer form and in
either temporary or definitive form. The specific terms of the depositary
arrangement with respect to any Securities of a series will be described in the
Prospectus Supplement relating to such series. Unless otherwise specified in the
applicable Prospectus Supplement, the Company anticipates that the following
provisions will apply to all depositary arrangements.
Securities which are to be represented by a Global Security to be deposited
with or on behalf of a Depositary will be represented by a Global Security
registered in the name of such Depositary or its nominee. Upon the issuance of a
Global Security, the Depositary for such Global Security will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Securities represented by such Global Security to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited shall be designated by the
underwriters of such Securities, by certain agents of the Company or by the
Company, if such Securities are offered and sold directly by the Company.
Ownership of beneficial interests in a Global Security will be limited to
participants or persons that may hold interests through participants in such
Depositary. Ownership of a beneficial interest in such Global Security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the Depositary or its nominee (with respect to
participants' interests) for such Global Security or by participants or persons
that hold through participants. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
owner of such Global Security, such Depositary or such nominee, as the case may
be, will be considered the sole owner or holder of the Securities represented by
such Global Security for all purposes under the Indenture governing such
Securities. Except as set forth below, owners of beneficial interests in a
Global Security will not be entitled to have Securities of the series
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of Securities of such series in
definitive form and will not be considered the owners or holders thereof under
the Indenture governing such Securities. Accordingly, each person owning a
beneficial interest in a Global Security must rely on the procedures of the
Depositary for such Global Security and, if such person is not a participant, on
the procedures of the participant and, if applicable, the indirect participant,
through which such person owns its interest, to exercise any rights of a holder
under such Indenture.
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Subject to the restrictions discussed under "Limitations on Issuance of
Bearer Securities," payment of principal of (and premium, if any) and any
interest on Securities registered in the name of or held by a Depositary or its
nominee will be made to such Depositary or its nominee, as the case may be, as
the registered owner or the holder of the Global Security representing such
Securities. None of the Company, the Trustee for such Securities, any Paying
Agent, any Authenticating Agent or the Security Registrar for such Securities
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in a Global
Security representing such Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests. (Section
307)
The Company expects that the Depositary for Securities, upon receipt of any
payment of principal of (or premium, if any) or any interest on a definitive
Global Security representing such Securities, will credit immediately
participants' accounts with payments in amounts proportionate to their
respective holdings in principal amount of beneficial interest in such Global
Security as shown on the records of such Depositary. The Company also expects
that payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
Such payments will be the responsibility of such participants. Receipt by owners
of beneficial interests in a temporary Global Security of payments of principal
of (or premium, if any) or any interest on such Global Security will be subject
to the restrictions discussed under "Limitation on Issuance of Bearer
Securities."
Unless and until it is exchanged in whole for Securities in definitive form,
a Global Security may not be transferred except as a whole by the Depositary for
such Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor of such Depositary or a nominee of
such successor. (Section 312) If a Depositary for Securities of any series is at
any time unwilling or unable to continue as depositary and a successor
depositary is not appointed by the Company within ninety days, the Company will
issue Securities of such series in like tenor and terms in definitive registered
form in exchange for the Global Security or Global Securities representing all
such Securities. Further, an owner of a beneficial interest in a Global Security
representing Securities of a series may, on terms acceptable to the Company and
the Depositary for such Global Security, receive Securities of such series in
definitive registered form. In addition, the Company may at any time and in its
sole discretion determine not to have any Securities of a series represented by
Global Securities and, in such event, will issue Securities of such series in
like tenor and terms in definitive registered form in exchange for the Global
Security or Global Securities representing all such Securities. In any such
instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery in definitive form of Securities of the series
represented by such Global Security equal in aggregate principal amount to such
beneficial interest and to have such Securities registered in the name of the
owner of such beneficial interest. (Section 312)
If so specified in an applicable Prospectus Supplement, all or any portion
of the Securities of a series that are issuable as Bearer Securities initially
will be represented by one or more temporary Global Securities, with one or more
Coupons or without Coupons, to be deposited with a common depository in London
for Morgan Guaranty Trust Company of New York, Brussels Office, as operator of
the Euroclear System ("Euroclear") and Cedel Bank, societe anonyme ("Cedel"),
for credit to the respective accounts of the beneficial owners of such
Securities (or to such other accounts as they may direct). On and after the
exchange date determined as provided in any such temporary Global Security and
described in an applicable Prospectus Supplement, each such temporary Global
Security will be exchangeable for a like aggregate principal amount of
definitive Securities in like tenor and terms in bearer form, registered form or
definitive global bearer form, or any combination thereof, as specified in an
applicable Prospectus Supplement. No Bearer Security (including a Global
Security in definitive bearer form) delivered in exchange for a portion of a
temporary Global Security shall be mailed or otherwise delivered to any
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location in the United States (as defined under "Limitations on Issuance of
Bearer Securities") in connection with such exchange. (Sections 303 and 304)
Unless otherwise specified in an applicable Prospectus Supplement,
definitive Securities in respect of any portion of a temporary Global Security
will only be delivered, and interest in respect of any portion of a temporary
Global Security payable in respect of an Interest Payment Date occurring prior
to the issuance of definitive Securities will only be paid, upon delivery of a
certificate signed by Euroclear or Cedel, as the case may be, with respect to
the portion of the temporary Global Security held for the account of the
beneficial owner in the form required by the applicable Indenture. Such
certificate must be dated no earlier than the exchange date or such Interest
Payment Date, as the case may be, and must be based on statements provided to
Euroclear or Cedel, as applicable, by its account holders who are beneficial
owners of interests in such temporary Global Security to the effect that such
portion is beneficially owned (i) by a person that is not a United States person
or (ii) by or through a qualifying financial institution in compliance with
applicable Treasury regulations.
If any Securities of a series are issuable in definitive global form, the
applicable Prospectus Supplement will describe the circumstances, if any, under
which beneficial owners of interests in any such definitive Global Security may
exchange such interests for Securities of such series and of like tenor, terms
and principal amount in any authorized form and denomination. No Bearer Security
delivered in exchange for a portion of a definitive Global Security shall be
mailed or otherwise delivered to any location in the United States in connection
with such exchange. (Section 305) A Person having a beneficial interest in a
definitive Global Security, except with respect to payment of principal of (and
premium, if any) and any interest on such definitive Global Security, will be
treated as a Holder of such principal amount of Outstanding Securities
represented by such definitive Global Security as shall be specified in a
written statement of the Holder of such definitive Global Security, or, in the
case of a definitive Global Security in bearer form, of Euroclear or Cedel,
which is produced to the Trustee by such Person. (Section 203) Principal of (and
premium, if any) and any interest on a definitive Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
CERTAIN RESTRICTIVE PROVISIONS
The Senior Indenture relating to Offered Securities to be issued on a parity
with other senior indebtedness of the Company provides that, with certain
limited exceptions, the Company will not, nor will it permit any Restricted
Subsidiary (as defined in the Senior Indenture) to, pledge as security for any
loan the capital stock or indebtedness of any Restricted Subsidiary or create,
incur, assume or permit to exist any lien on any property or asset of the
Company. (Section 1008) Such provisions shall apply to all such Offered
Securities unless the applicable Prospectus Supplement expressly states
otherwise.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Each Indenture provides that the Company, without the consent of any Holders
of Securities, may consolidate with or merge into any other corporation or
transfer or lease its assets substantially as an entirety to any Person or may
acquire or lease the assets of any Person substantially as an entirety or may
permit any corporation to merge into the Company provided that: (i) the
successor is a corporation organized under the laws of any domestic
jurisdiction; (ii) the successor corporation, if other than the Company, assumes
the Company's obligations under such Indenture and the Securities issued
thereunder; (iii) immediately after giving effect to the transaction, no Event
of Default and no event that, after notice or lapse of time, or both, would
become an Event of Default, shall have occurred and be continuing; and (iv)
certain other conditions are met. (Section 801)
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MODIFICATION OF THE INDENTURES
Each Indenture provides that the Company and the Trustee thereunder may,
without the consent of any Holders of Securities, enter into supplemental
indentures for the purposes, among other things, of adding to the Company's
covenants, adding additional Events of Default, establishing the form or terms
of Securities or, provided such action shall not adversely affect the interests
of the Holders of any series of Securities in any material respect, curing
ambiguities or inconsistencies in such Indenture or making other provisions.
(Section 901)
Each Indenture contains provisions permitting the Company, with the consent
of the Holders of not less than 66 2/3% in principal amount of the Outstanding
Securities of each affected series, to execute supplemental indentures adding
any provisions to or changing or eliminating any of the provisions of such
Indenture or modifying the rights of the Holders of the Securities of such
series, except that no such supplemental indenture may, without the consent of
the Holders of all the Outstanding Securities affected thereby, among other
things: (i) change the maturity of the principal of, or any installment of
principal of or interest on, any of the Securities; (ii) reduce the principal
amount thereof (or any premium thereon) or the rate of interest, if any,
thereon; (iii) reduce the amount of the principal of Original Issue Discount
Securities payable on any acceleration of maturity; (iv) change the currency,
currencies, composite currency or composite currencies in which any of the
Securities or any premium or interest thereon is payable; (v) change any
obligation of the Company to maintain an office or agency in the places and for
the purposes required by such Indenture; (vi) impair the right to institute suit
for the enforcement of any payment due on any Securities on or after their
applicable maturity date; (vii) reduce the percentage in principal amount of the
Outstanding Securities of any series the consent of the Holders of which is
required for any such supplemental indenture or for any waiver of compliance
with certain provisions of, or of certain defaults under, such Indenture; or
(viii) with certain exceptions, modify the provisions for the waiver of certain
covenants and defaults and any of the foregoing provisions. (Section 902)
WAIVER OF CERTAIN COVENANTS
The Senior Indenture provides that the Company will not be required to
comply with certain restrictive covenants (including those described above under
"Certain Restrictive Provisions") if the Holders of not less than 66 2/3% in
principal amount of each series of Outstanding Securities affected thereby waive
compliance with such restrictive covenants. (Section 1005)
EVENTS OF DEFAULT, NOTICE AND WAIVER
An Event of Default in respect of any series of Securities (unless it is
either inapplicable to a particular series or has been modified or deleted with
respect to any particular series) is defined in each Indenture to be: (i) a
default for 30 days in the payment of any installment of interest upon any of
the Securities of such series when due; (ii) a default in the payment of
principal of (or premium, if any, on) any of the Securities of such series when
due; (iii) a default in the deposit of any sinking fund payment when the same
becomes due by the terms of the Securities of such series; (iv) a default in the
performance, or breach, of any other covenants or warranties of the Company in
the applicable Indenture which shall not have been remedied for a period of 60
days after notice from the Trustee thereunder or the Holders of not less than
25% in principal amount of the Outstanding Securities of such series; (v)
certain events of bankruptcy, insolvency or reorganization of the Company; and
(vi) such other events as may be specified for such series. (Section 501)
Each Indenture provides that if an Event of Default specified therein in
respect of any series of Outstanding Securities issued under such Indenture
shall have occurred and be continuing, either the Trustee thereunder or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of such series may declare the principal (or, if such Securities are Original
Issue Discount Securities, such portion of the principal amount as may be
specified by the terms of such Securities) of all of the Outstanding Securities
of such series to be immediately due and payable. (Section 502)
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Each Indenture provides that the Holders of not less than a majority in
principal amount of the Outstanding Securities of any series may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee thereunder, or exercising any trust or power conferred on such
Trustee, with respect to the Securities of such series, provided that such
Trustee may act in any way that is not inconsistent with such directions and may
decline to act if any such direction is contrary to law or to such Indenture or
would involve such Trustee in personal liability. (Section 512)
Each Indenture provides that the Holders of not less than a majority in
principal amount of the Outstanding Securities of any series may on behalf of
the Holders of all of the Outstanding Securities of such series waive any past
default under the applicable Indenture with respect to such series and its
consequences, except a default (i) in the payment of the principal of (or
premium, if any) or any interest on any of the Securities of such series or (ii)
in respect of a covenant or provision of such Indenture which, under the terms
of such Indenture, cannot be modified or amended without the consent of the
Holders of all of the Outstanding Securities of such series affected thereby.
(Section 513)
Each Indenture contains provisions entitling the Trustee thereunder, subject
to the duty of such Trustee during an Event of Default in respect of any series
of Securities to act with the required standard of care, to be indemnified by
the Holders of the Securities of such series before proceeding to exercise any
right or power under such Indenture at the request of the Holders of the
Securities of such series. (Sections 601 and 603)
Each Indenture provides that the Trustee thereunder will, within 90 days
after the occurrence of a default in respect of any series of Securities, give
to the Holders of the Securities of such series notice of all uncured and
unwaived defaults known to it; PROVIDED, HOWEVER, that, except in the case of a
default in the payment of the principal of (or premium, if any) or any interest
on, or any sinking fund installment with respect to, any of the Securities of
such series, such Trustee will be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in the interest of
the Holders of the Securities of such series; and PROVIDED, FURTHER, that such
notice shall not be given until at least 30 days after the occurrence of an
Event of Default regarding the performance, or breach, of any covenant or
warranty of the Company under such Indenture other than for the payment of the
principal of (or premium, if any) or any interest on, or any sinking fund
installment with respect to, any of the Securities of such series. The term
default for the purpose of this provision only means any event that is, or after
notice or lapse of time, or both, would become, an Event of Default with respect
to the Securities of such series. (Section 602)
Each Indenture requires the Company to file annually with the Trustee
thereunder a certificate, executed by an officer of the Company, indicating
whether the Company is in default under such Indenture. (Section 1004)
MEETINGS
Each Indenture contains provisions for convening meetings of the Holders of
Securities of a series if Securities of that series are issuable as Bearer
Securities to make, give or take any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by such
Holders pursuant to such Indenture. (Section 1301). A meeting may be called at
any time by the Trustee under the applicable Indenture, and also, upon request,
by the Company or the Holders of at least 10% in principal amount of the
Outstanding Securities of such series, in any such case upon notice given in
accordance with "Notices" below. (Section 1302) Persons entitled to vote a
majority in principal amount of the Outstanding Securities of a series shall
constitute a quorum at a meeting of Holders of Securities of such series;
PROVIDED, HOWEVER, that if any action is to be taken at such meeting with
respect to a consent or waiver which is required to be given by the Holders of
not less than 66 2/3% in principal amount of the Outstanding Securities of a
series, the Persons entitled to vote 66 2/3% in principal amount of the
Outstanding Securities of such series shall constitute a quorum. In the absence
of a quorum, (i) a meeting called by the Company or the Trustee shall be
adjourned for a period of not less than 10 days, and in the absence of a quorum
at any such adjourned meeting, the meeting shall be further adjourned for a
period of not less than 10 days and (ii) a meeting called by the Holders shall
be dissolved. Any resolution with
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respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which may be made, given or taken by the Holders of a
specified percentage in principal amount of Outstanding Securities of a series
may be adopted at a meeting or adjourned meeting duly reconvened at which a
quorum is present by the affirmative vote of the Holders of such specified
percentage in principal amount of the Outstanding Securities of that series. Any
resolution passed or decision taken at any meeting of Holders of Securities of
any series duly held in accordance with the applicable Indenture will be binding
on all Holders of Securities of that series and of the related Coupons whether
or not present or represented at the meeting. With respect to any consent,
waiver or other action which the applicable Indenture expressly provides may be
given by the Holders of a specified percentage of Outstanding Securities of all
series affected thereby (acting as one class), only the principal amount of
Outstanding Securities of any series represented at a meeting or adjourned
meeting duly reconvened at which a quorum is present as aforesaid and voting in
favor of such action shall be counted for purposes of calculating the aggregate
principal amount of Outstanding Securities of all series affected thereby
favoring such action. (Section 1304)
NOTICES
Except as otherwise provided in each Indenture, notices to Holders of Bearer
Securities will be given by publication at least once in a daily newspaper in
The City of New York and London and in such other city or cities as may be
specified in such Bearer Securities and will be mailed to such Persons whose
names and addresses were previously filed with the Trustee under the applicable
Indenture within the two preceding years, within the time prescribed for the
giving of such notice. Notices to Holders of Registered Securities will be given
by mail to the addresses of such Holders as they appear in the Security
Register, within the time prescribed for the giving of such notice. (Section
106)
TITLE
Title to any Bearer Securities (including Bearer Securities that are Global
Securities) and any Coupons appertaining thereto will pass by delivery. The
Company, the appropriate Trustee and any agent of the Company or such Trustee
may treat the Holder of any Bearer Security, the Holder of any Coupon and the
registered owner of any Registered Security as the absolute owner thereof
(whether or not such Security or Coupon shall be overdue and notwithstanding any
notice to the contrary) for the purpose of making payment and for all other
purposes. (Section 308)
REPLACEMENT OF SECURITIES AND COUPONS
Any mutilated Security and any Security with a mutilated Coupon appertaining
thereto will be replaced by the Company at the expense of the Holder upon
surrender of such mutilated Security or Security with a mutilated Coupon to the
appropriate Trustee. Securities or Coupons that become destroyed, stolen or lost
will be replaced by the Company at the expense of the Holder upon delivery to
the appropriate Trustee of evidence of the destruction, loss or theft thereof
satisfactory to the Company and such Trustee; in the case of any Coupon which
becomes destroyed, stolen or lost, such Coupon will be replaced (upon surrender
to the appropriate Trustee of the Security with all appurtenant Coupons not
destroyed, stolen or lost) by issuance of a new Security in exchange for the
Security to which such Coupon appertains. In the case of a destroyed, lost or
stolen Security or Coupon, an indemnity satisfactory to the appropriate Trustee
and the Company may be required at the expense of the Holder of such Security or
Coupon before a replacement Security will be issued. (Section 306)
DEFEASANCE
Unless the Prospectus Supplement relating to the Offered Securities provides
otherwise, the Company at its option (i) will be Discharged (as such term is
defined in the applicable Indenture) from any and all obligations in respect of
the Offered Securities (except for certain obligations to register the transfer
or exchange of Securities, replace stolen, lost or mutilated Securities and
Coupons, maintain paying agencies and hold moneys for payment in trust) or (ii)
need not comply with certain restrictive covenants of the
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applicable Indenture (including those described above under "Certain Restrictive
Provisions"), if there is deposited with the Trustee money and/or (a) in the
case of Securities and Coupons denominated in U.S. dollars, U.S. Government
Obligations (as defined in the applicable Indenture), or (b) in the case of
Securities and Coupons denominated in a foreign currency, Foreign Government
Securities (as defined in the applicable Indenture), which in each case through
the payment of interest thereon and principal thereof in accordance with their
terms will provide money, in an amount sufficient to pay in the currency,
currencies, composite currency or composite currencies in which the Offered
Securities are payable all the principal of, and interest on, the Offered
Securities on the dates such payments are due in accordance with the terms of
the Offered Securities. Among the conditions to the Company's exercising any
such option, the Company is required to deliver to the appropriate Trustee an
opinion of counsel to the effect that the deposit and related defeasance would
not cause the Holders of the Offered Securities to recognize income, gain or
loss for United States Federal income tax purposes and that the Holders will be
subject to United States Federal income tax in the same amounts, in the same
manner and at the same times as would have been the case if such deposit and
related defeasance had not occurred. (Sections 401 and 403)
SUBORDINATION
The payment of the principal of (and premium, if any) and any interest on
the Subordinated Securities, including sinking fund payments, is subordinated in
right of payment, to the extent and in the manner set forth in the Subordinated
Indenture, to the prior payment in full of all Superior Indebtedness. (Section
1401) Superior Indebtedness is defined as (i) the principal of, premium, if any,
and accrued and unpaid interest on (a) indebtedness of the Company for money
borrowed, whether outstanding on the date of execution of the Subordinated
Indenture or thereafter created, incurred or assumed, (b) guarantees by the
Company of indebtedness for money borrowed by any other person, whether
outstanding on the date of execution of the Subordinated Indenture or thereafter
created, incurred or assumed, (c) indebtedness evidenced by notes, debentures,
bonds or other instruments of indebtedness for the payment of which the Company
is responsible or liable, by guarantees or otherwise, whether outstanding on the
date of execution of the Subordinated Indenture or thereafter created, incurred
or assumed, and (d) obligations of the Company under any agreement to lease, or
any lease of, any real or personal property, whether outstanding on the date of
execution of the Subordinated Indenture or thereafter created, incurred or
assumed, (ii) any other indebtedness, liability or obligation, contingent or
otherwise, of the Company and any guarantee, endorsement or other contingent
obligation of the Company in respect of any indebtedness, liability or
obligation, whether outstanding on the date of execution of the Subordinated
Indenture or thereafter created, incurred or assumed, and (iii) modifications,
renewals, extensions and refundings of any such indebtedness, liabilities,
obligations or guarantees; unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
indebtedness, liabilities, obligations or guarantees, or such modification,
renewal, extension or refunding thereof, are not superior in right of payment to
the Subordinated Securities; PROVIDED, HOWEVER, that Superior Indebtedness will
not be deemed to include, and the Subordinated Securities will rank equal in
right of payment to, the Company's 7 3/4% Subordinated Notes due 2002, and all
other such subordinated securities, including but not limited to the Medium-Term
Subordinated Notes, Series D, of the Company, or any obligation of the Company
to any subsidiary; PROVIDED FURTHER, HOWEVER, that, notwithstanding the
foregoing, Superior Indebtedness will not be deemed to include, and the
Subordinated Securities will rank senior in right of payment to, the Company's
unsecured debentures issued under the Indenture dated as of December 9, 1996,
between the Company and The Chase Manhattan Bank, as Trustee, including but not
limited to the Company's 8.30% Junior Subordinated Debentures due 2036 and 8.08%
Junior Subordinated Debentures due 2037. (Sections 101, 1401 and 1408) The
Subordinated Indenture and the Subordinated Securities do not contain any
covenants or other provisions that would limit the issuance of additional
Superior Indebtedness.
No payment by the Company on account of principal of (or premium, if any) or
any interest on the Subordinated Securities, including sinking fund payments,
may be made if any default or event of default with respect to any Superior
Indebtedness shall have occurred and be continuing and written notice
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thereof shall have been given to the Trustee by the Company or to the Company
and the Trustee by the holders of at least 10% in principal amount of any kind
or category of any Superior Indebtedness (or a representative or trustee on
their behalf). Upon any acceleration of the principal due on the Subordinated
Securities or any payment or distribution of assets of the Company to creditors
upon any dissolution, winding up, liquidation or reorganization, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all principal of (and premium, if any) and interest due or to
become due on all Superior Indebtedness must be paid in full before the holders
of Subordinated Securities are entitled to receive or retain any payment (other
than shares of stock or subordinated indebtedness provided by a plan of
reorganization or adjustment which does not alter the rights of holders of
Superior Indebtedness). Subject to the payment in full of all Superior
Indebtedness, the holders of the Subordinated Securities are to be subrogated to
the rights of the holders of Superior Indebtedness to receive payments or
distributions of assets of the Company applicable to Superior Indebtedness until
the Subordinated Securities are paid in full. (Section 1402) By reason of such
subordination, in the event of insolvency, creditors of the Company who are
holders of Superior Indebtedness, as well as certain general creditors of the
Company, may recover more, ratably, than the holders of the Subordinated
Securities.
The Company's rights and the rights of its creditors (including holders of
Senior Securities and Subordinated Securities) to participate in any
distribution of assets of any subsidiary of the Company upon its liquidation or
reorganization or otherwise is necessarily subject to the prior claims of
creditors of the subsidiary, except to the extent that claims of the Company
itself as a creditor of the subsidiary may be recognized. Also, dividend
payments and advances to the Company by PaineWebber are restricted by the
provisions of the net capital rules of the Commission and the NYSE and covenants
in various loan agreements. The operations of the Company are conducted through
its subsidiaries and, therefore, the Company is dependent upon the earnings and
cash flow of its subsidiaries to meet its obligations, including obligations
under the Senior Securities and Subordinated Securities. The Senior Securities
and Subordinated Securities will be effectively subordinated to all indebtedness
of the Company's subsidiaries. As of June 30, 1998, the aggregate amount of
indebtedness of the Company's subsidiaries (such indebtedness consisting of
short-term borrowings and excluding short-term and long-term borrowings owed
directly or indirectly to the Company or another subsidiary) to which holders of
the Senior Securities and Subordinated Securities would have been structurally
subordinated was approximately $660 million.
GOVERNING LAW
The Indenture, the Securities and the Coupons will be governed by, and
construed in accordance with, the laws of the State of New York. (Section 112)
THE TRUSTEES UNDER THE INDENTURES
The Chase Manhattan Bank is the Trustee under the Senior Indenture. The
Chase Manhattan Bank is a depositary for funds and performs other services for,
and transacts other banking business with, the Company in the normal course of
business.
Chase Manhattan Bank Delaware is the Trustee under the Subordinated
Indenture.
ERISA MATTERS
The Company, PaineWebber, PaineWebber International and other affiliates of
the Company may each be considered a "party in interest" (within the meaning of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) or a
"disqualified person" (within the meaning of Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code")) with respect to many employee
benefit plans ("Plans") that are subject to ERISA or discribed in Section 4975
of the Code. The purchase of Securities by a Plan that is subject to the
fiduciary responsibility provisions of ERISA or the prohibited transaction
provisions of Section 4975 of the Code (including individual retirement
arrangements and other plans described in Section 4975(e)(1) of the Code) and
with respect to which the Company, PaineWebber, PaineWebber International or any
other affiliate of the Company is a service provider (or otherwise is a party in
interest or a disqualified person) may constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code, unless such Securities are
acquired pursuant to and in accordance with an
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applicable exemption issued by the U.S. Department of Labor. In addition, ERISA
imposes specific requirements on fiduciaries of Plans subject to ERISA, namely,
that they make prudent investments, diversify investments, make investments in
accordance with the terms of the Plan documents and in the best interests of
Plan participants and beneficiaries. ANY PENSION OR OTHER EMPLOYEE BENEFIT PLAN
PROPOSING TO ACQUIRE ANY SECURITIES SHOULD DETERMINE THAT THE SECURITIES ARE AN
APPROPRIATE INVESTMENT IN LIGHT OF ERISA'S FIDUCIARY STANDARDS AND CONSULT WITH
ITS COUNSEL TO DETERMINE THAT THE INVESTMENT IS NOT OTHERWISE PROHIBITED UNDER
ERISA OR THE CODE.
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PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby (i) directly to one
or more purchasers, (ii) through agents designated from time to time, (iii) to
dealers or (iv) through underwriters or a group of underwriters. The applicable
Prospectus Supplement will set forth the terms of the offering of any Offered
Securities, including the name or names of any underwriters, the purchase price
of the Offered Securities and the proceeds to the Company from such sale, any
underwriting discounts and other items constituting underwriters' compensation,
any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers and any securities exchanges on which the Offered
Securities may be listed. If a bidding or auction process is utilized, it will
be described in the Prospectus Supplement.
If underwriters are used in the sale, Offered Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The Offered
Securities may be offered to the public either through underwriting syndicates
represented by managing underwriters or by underwriters without a syndicate.
Unless otherwise set forth in the applicable Prospectus Supplement, the
obligations of the underwriters to purchase the Offered Securities will be
subject to certain conditions precedent, and the underwriters will be obligated
to purchase all of the Offered Securities if any are purchased. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
Offered Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of Offered Securities will be named, and any commissions payable by the
Company to such agents will be set forth, in the applicable Prospectus
Supplement. Unless otherwise indicated in the applicable Prospectus Supplement,
any such agent will be acting on a best efforts basis for the period of its
appointment.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Offered Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to those conditions set forth in the
applicable Prospectus Supplement and such Prospectus Supplement will set forth
the commission payable for the solicitation of such contracts.
Any underwriters, dealers or agents participating in the distribution of
Securities may be deemed to be underwriters and any discounts or commissions
received by them on the sale or resale of Offered Securities may be deemed to be
underwriting discounts and commissions under the Securities Act. Agents and
underwriters may be entitled under agreements entered into with the Company to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments which the agents or underwriters may be required to make in respect
thereof. Agents and underwriters may be customers of, engage in transactions
with, or perform services for the Company in the ordinary course of business.
Unless otherwise specified in the applicable Prospectus Supplement, the
Company and each underwriter, dealer and agent participating in the distribution
of any Offered Securities which are issuable in bearer form will agree that, in
connection with the original issuance of any Bearer Security and during the
period ending 40 days after the date of original issuance of such Bearer
Security, they will not offer, sell or deliver such Bearer Security, directly or
indirectly, to a United States person or to any person within the United States,
except to the extent permitted under applicable Treasury regulations. Any other
restrictions on the offer or sale of Offered Securities in or from jurisdictions
other than the United States or within the United States will be set forth in
the applicable Prospectus Supplement.
All Offered Securities will be a new issue of securities with no established
trading market. Certain agents through whom, and underwriters to whom, Offered
Securities are sold by the Company for public offering and sale may make a
market in such Offered Securities, but such agents and underwriters will not
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be obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
any Offered Securities.
PaineWebber, PaineWebber International or one or more other affiliates of
the Company may participate in distributions of the Offered Securities. All
distributions of the Offered Securities will conform to the requirements set
forth in Rule 2720 of the Conduct Rules of the NASD.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States Federal income tax laws and regulations, in
general a Bearer Security may not be offered, sold or delivered, directly or
indirectly, to a United States person or to any person within the United States
in connection with the original issuance of such Bearer Security or during the
period ending 40 days after the date of original issuance of such Bearer
Security. However, offers or sales can be made during this period to certain
institutions, including certain international organizations and foreign branches
of U.S. financial institutions (a "qualifying financial institution"), that
satisfy the requirements prescribed by applicable Treasury regulations. In
addition, sales can be made to a United States person acquiring a Bearer
Security through a qualifying financial institution in compliance with
applicable Treasury regulations. Definitive Bearer Securies will not be
delivered to a holder, however, unless the beneficial owner of the Securities
has complied with the certification requirements described above under
"Description of Securities--Global Securities" or, in any event, within the
United States.
Bearer Securities will bear the following legend on their face and on any
Coupons which may be detached therefrom or, if the obligation is evidenced by a
book entry, in the book of record in which the book entry is made: "Any United
States person who holds this obligation will be subject to limitations under the
United States income tax laws, including the limitations provided in Sections
165(j) and 1287(a) of the United States Internal Revenue Code". The Sections
referred to in such legend provide that, with certain exceptions, a United
States taxpayer who holds a Bearer Security will not be allowed to deduct any
loss with respect to, and will not be eligible for capital gain treatment with
respect to any gain realized on, the sale, exchange, redemption or other
disposition of such Bearer Security.
As used herein, "United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or organized
in or under the laws of the United States or any political subdivision thereof,
or any estate or trust the income of which is subject to United States Federal
income taxation regardless of its source, and "United States" means the United
States of America and its possessions (including Puerto Rico, the U.S. Virgin
Islands, Guam, American Samoa and the Northern Mariana Islands).
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for the
Company by its General Counsel, Theodore A. Levine. Mr. Levine beneficially
owns, or has rights to acquire under an employee benefit plan of the Company, an
aggregate of less than 1% of the common stock of the Company. Certain legal
matters relating to the Securities will be passed upon for the agents or
underwriters, if any, by Cravath, Swaine & Moore, 825 Eighth Avenue, New York,
New York. Cravath, Swaine & Moore acts from time to time as legal counsel to the
Company and its subsidiaries on various matters.
EXPERTS
The consolidated financial statements of the Company for the year ended
December 31, 1997, incorporated by reference in the Company's Annual Report on
Form 10-K for the year ended December 31, 1997, 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.
19
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT, THE ACCOMPANYING PROSPECTUS OR ANY PRICING SUPPLEMENT AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY PAINE WEBBER GROUP INC. OR ANY AGENT, UNDERWRITER OR DEALER.
NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE ACCOMPANYING PROSPECTUS NOR ANY
PRICING SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND ANY
PRICING SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION THEY CONTAIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE DATES.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Prospectus Supplement
Important Currency Information............... S-2
Description of Notes......................... S-2
Foreign Currency Risks....................... S-15
Certain United States Federal Income Tax
Considerations............................. S-18
Plan of Distribution......................... S-26
Prospectus
Available Information........................ 2
Documents Incorporated
by Reference............................... 2
The Company.................................. 3
Use of Proceeds.............................. 4
Ratio of Earnings to Fixed Charges........... 4
Description of Securities.................... 4
ERISA Matters................................ 16
Plan of Distribution......................... 18
Limitations on Issuance of Bearer
Securities................................. 19
Legal Matters................................ 19
Experts...................................... 19
</TABLE>
[LOGO]
U.S. $3,353,115,000
PAINE WEBBER GROUP INC.
MEDIUM-TERM SENIOR NOTES, SERIES C, AND
MEDIUM-TERM SUBORDINATED NOTES, SERIES D
DUE FROM NINE MONTHS TO 30 YEARS FROM DATE OF ISSUE
-------------------
PROSPECTUS SUPPLEMENT
-----------------
PAINEWEBBER INCORPORATED
------------
September , 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses payable by the Registrant in
connection with the issuance and distribution of the securities being
registered, other than underwriting discounts and commissions. All the amounts
shown are estimates, except the Securities and Exchange Commission registration
fee and the NASD filing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee..................... $ 885,000
NASD filing fee......................................................... 30,500
Rating agency fees...................................................... 150,000
Fees and expenses of accountants........................................ 40,000
Fees and expenses of counsel............................................ 150,000
Fees and expenses of Trustees........................................... 50,000
Printing and engraving expenses......................................... 18,000
Miscellaneous........................................................... 10,000
---------
Total............................................................. 1,333,500
---------
---------
</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 to the Registrant) of Paine
Webber Group Inc. is hereby incorporated by reference to Exhibit 3.5 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended December 31,
1997. Article VII of Paine Webber Group Inc.'s By-Laws (relating to
indemnification of directors and officers of the Registrant) is hereby
incorporated by reference to Exhibit 3.1 to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1998.
The Registrant also maintains directors' and officers' liability and
corporate reimbursement insurance which provides for coverage against loss
arising from claims made against directors and officers in their capacity as
such. The general scope of coverage is any breach of duty, neglect, error,
misstatement, misleading statement or omission. Such policy does not exclude
liabilities under the Securities Act of 1933. The Registrant also maintains
fiduciary liability insurance for losses in connection with claims made against
directors or officers for violation of any of the responsibilities, obligations
or duties imposed upon fiduciaries under the Employee Retirement Income Security
Act of 1974.
The indemnification provisions (relating to indemnification of, among
others, controlling persons, directors and officers of the Registrant against
certain liabilities) contained in the proposed forms of Underwriting Agreement
and Distribution Agreement are hereby incorporated by reference to Exhibits 1.1
and 1.2 hereto, respectively.
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
1.1* --Form of Underwriting Agreement.
1.2* --Form of Distribution Agreement.
4.1a* --Proposed Form of Debt Securities (Medium-Term Senior Note, Series C, Fixed
Rate).
4.1b* --Proposed Form of Debt Securities (Medium-Term Subordinated Note, Series D,
Fixed Rate).
</TABLE>
II-1
<PAGE>
<TABLE>
<S> <C>
4.1c* --Proposed Form of Debt Securities (Medium-Term Senior Note, Series C,
Floating Rate).
4.1d* --Proposed Form of Debt Securities (Medium-Term Subordinated Note, Series D,
Floating Rate).
4.1e --Proposed form of Debt Securities (Senior Note, Fixed Rate) (incorporated by
reference to Exhibit 4.1e to the Registrant's Registration Statement No.
33-58124 on Form S-3 filed with the Commission on February 10, 1993).
4.1f --Proposed form of Debt Securities (Subordinated Note, Fixed Rate)
(incorporated by reference to Exhibit 4.1f to the Registrant's Registration
Statement No. 33-58124 on Form S-3 filed with the Commission on February 10,
1993).
4.2a --Indenture dated as of March 15, 1988, between the Registrant and The Chase
Manhattan Bank (formerly known as Chemical Bank), as Trustee, relating to
Senior Debt Securities (incorporated by reference to Exhibit No. 4.2a to the
Registrant's Registration Statement No. 33-29253 on Form S-3 filed with the
Commission on June 14, 1989).
4.2b --Supplemental Indenture dated as of September 22, 1989, between the
Registrant and The Chase Manhattan Bank (formerly known as Chemical Bank),
as Trustee, relating to Senior Debt Securities (incorporated by reference to
Exhibit No. 4.2b to the Registrant's Registration Statement No. 33-52695-01
on Form S-3 filed with the Commission on October 16, 1995).
4.2c --Supplemental Indenture dated as of March 22, 1991, between the Registrant
and The Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee,
relating to Senior Debt Securities (incorporated by reference to Exhibit No.
4.2c to the Registrant's Registration Statement No. 33-52695-01 on Form S-3
filed with the Commission on October 16, 1995).
4.2d --Indenture dated as of March 15, 1988, between the Registrant and Chase
Manhattan Bank Delaware (formerly known as Chemical Bank Delaware), as
Trustee, relating to Subordinated Debt Securities (incorporated by reference
to Exhibit No. 4.2b to Registrant's Registration Statement No. 33-29253 on
Form S-3 filed with the Commission on June 14, 1989).
4.2e --Supplemental Indenture dated as of September 22, 1989, between the
Registrant and Chase Manhattan Bank Delaware (formerly known as Chemical
Bank Delaware), as Trustee, relating to Subordinated Debt Securities
(incorporated by reference to Exhibit No. 4.2e to the Registrant's
Registration Statement No. 33-52695-01 on Form S-3 filed with the Commission
on October 16, 1995).
4.2f --Supplemental Indenture dated as of March 22, 1991, between the Registrant
and Chase Manhattan Bank Delaware (formerly known as Chemical Bank
Delaware), as Trustee, relating to Subordinated Debt Securities
(incorporated by reference to Exhibit No. 4.2f to the Registrant's
Registration Statement No. 33-52695-01 on Form S-3 filed with the Commission
on October 16, 1995).
4.2g --Supplemental Indenture dated as of November 30, 1993, between the Registrant
and Chase Manhattan Bank Delaware (formerly known as Chemical Bank
Delaware), as Trustee, relating to Subordinated Debt Securities
(incorporated by reference to Exhibit No. 4.2g to the Registrant's
Registration Statement No. 33-52695-01 on Form S-3 filed with the Commission
on October 16, 1995).
5* --Opinion of Theodore A. Levine in respect of the legality of the Debt
Securities registered hereunder, containing the consent of such counsel.
12 --Computation of Ratios of Earnings to Fixed Charges (incorporated by
reference to Exhibit 12.2 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1998).
23.1* --Consent of Ernst & Young LLP.
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
23.2* --Consent of Counsel (the consent of Theodore A. Levine is included in his
opinion filed herewith as Exhibit 5).
24* --Power of Attorney (set forth on the signature pages of this Registration
Statement).
25.1* --Form T-1 Statement of Eligibility and Qualification Under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank.
25.2* --Form T-1 Statement of Eligibility and Qualification Under the Trust
Indenture Act of 1939 of Chase Manhattan Bank Delaware.
</TABLE>
- ----------
* Filed herewith.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and
II-3
<PAGE>
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, PAINE WEBBER
GROUP INC. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY AND STATE OF NEW YORK, ON SEPTEMBER 9, 1998.
PAINE WEBBER GROUP INC.
(Registrant)
By /s/ Donald B. Marron
...................................
(Donald B. Marron, CHAIRMAN OF THE
BOARD,
CHIEF EXECUTIVE OFFICER AND
DIRECTOR)
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes and appoints
Donald B. Marron, Regina A. Dolan and William J. Nolan or any of them, as his or
her attorney-in-fact, with full power of substitution and resubstitution, to
sign and file on his or her behalf individually and in each capacity stated
below any and all amendments (including post-effective amendments) to this
Registration Statement and any subsequent registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act of 1933, as fully as
such person could do in person, hereby verifying and confirming all that such
attorney-in-fact, or his or her substitutes, may lawfully do or cause to be done
by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------------------------- -------------------------------------------- ----------------------
<C> <S> <C>
/s/ Donald B. Marron Chairman of the Board, Chief Executive September 9, 1998
............................................ Officer, Director (principal executive
(Donald B. Marron) officer)
/s/ Regina A. Dolan Senior Vice President and Chief Financial September 9, 1998
............................................ Officer (principal financial and
(Regina A. Dolan) accounting officer) and Director
/s/ E. Garrett Bewkes, Jr. Director September 9, 1998
............................................
(E. Garrett Bewkes, Jr.)
/s/ Reto Braun Director September 9, 1998
............................................
(Reto Braun)
/s/ Frank P. Doyle Director September 9, 1998
............................................
(Frank P. Doyle)
/s/ Joseph J. Grano, Jr. Director September 9, 1998
............................................
(Joseph J. Grano, Jr.)
/s/ James W. Kinnear Director September 9, 1998
............................................
(James W. Kinnear)
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------------------------- -------------------------------------------- ----------------------
<C> <S> <C>
/s/ Naoshi Kiyono Director September 9, 1998
............................................
(Naoshi Kiyono)
/s/ Robert M. Loeffler Director September 9, 1998
............................................
(Robert M. Loeffler)
/s/ Edward Randall, III Director September 9, 1998
............................................
(Edward Randall, III)
/s/ Henry Rosovsky Director September 9, 1998
............................................
(Henry Rosovsky)
Director
............................................
(Yoshinao Seki)
/s/ John R. Torell, III Director September 9, 1998
............................................
(John R. Torell, III)
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------- -----------------------------------------------------------------------------------------
<S> <C> <C>
1.1* --Form of Underwriting Agreement.
1.2* --Form of Distribution Agreement.
4.1a* --Proposed Form of Debt Securities (Medium-Term Senior Note, Series C, Fixed Rate).
4.1b* --Proposed Form of Debt Securities (Medium-Term Subordinated Note, Series D, Fixed Rate).
4.1c* --Proposed Form of Debt Securities (Medium-Term Senior Note, Series C, Floating Rate).
4.1d* --Proposed Form of Debt Securities (Medium-Term Subordinated Note, Series D, Floating
Rate).
4.1e --Proposed form of Debt Securities (Senior Note, Fixed Rate) (incorporated by reference
to Exhibit 4.1e to the Registrant's Registration Statement No. 33-58124 on Form S-3
filed with the Commission on February 10, 1993).
4.1f --Proposed form of Debt Securities (Subordinated Note, Fixed Rate) (incorporated by
reference to Exhibit 4.1f to the Registrant's Registration Statement No. 33-58124 on
Form S-3 filed with the Commission on February 10, 1993).
4.2a --Indenture dated as of March 15, 1988, between the Registrant and The Chase Manhattan
Bank (formerly known as Chemical Bank), as Trustee, relating to Senior Debt Securities
(incorporated by reference to Exhibit No. 4.2a to the Registrant's Registration
Statement No. 33-29253 on Form S-3 filed with the Commission on June 14, 1989).
4.2b --Supplemental Indenture dated as of September 22, 1989, between the Registrant and The
Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee, relating to Senior
Debt Securities (incorporated by reference to Exhibit No. 4.2b to the Registrant's
Registration Statement No. 33-52695-01 on Form S-3 filed with the Commission on October
16, 1995).
4.2c --Supplemental Indenture dated as of March 22, 1991, between the Registrant and The Chase
Manhattan Bank (formerly known as Chemical Bank), as Trustee, relating to Senior Debt
Securities (incorporated by reference to Exhibit No. 4.2c to the Registrant's
Registration Statement No. 33-52695-01 on Form S-3 filed with the Commission on October
16, 1995).
4.2d --Indenture dated as of March 15, 1988, between the Registrant and Chase Manhattan Bank
Delaware (formerly known as Chemical Bank Delaware), as Trustee, relating to
Subordinated Debt Securities (incorporated by reference to Exhibit No. 4.2b to
Registrant's Registration Statement No. 33-29253 on Form S-3 filed with the Commission
on June 14, 1989).
4.2e --Supplemental Indenture dated as of September 22, 1989, between the Registrant and Chase
Manhattan Bank Delaware (formerly known as Chemical Bank Delaware), as Trustee,
relating to Subordinated Debt Securities (incorporated by reference to Exhibit No. 4.2e
to the Registrant's Registration Statement No. 33-52695-01 on Form S-3 filed with the
Commission on October 16, 1995).
4.2f --Supplemental Indenture dated as of March 22, 1991, between the Registrant and Chase
Manhattan Bank Delaware (formerly known as Chemical Bank Delaware), as Trustee,
relating to Subordinated Debt Securities (incorporated by reference to Exhibit No. 4.2f
to the Registrant's Registration Statement No. 33-52695-01 on Form S-3 filed with the
Commission on October 16, 1995).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------- -----------------------------------------------------------------------------------------
4.2g --Supplemental Indenture dated as of November 30, 1993, between the Registrant and Chase
Manhattan Bank Delaware (formerly known as Chemical Bank Delaware), as Trustee,
relating to Subordinated Debt Securities (incorporated by reference to Exhibit No. 4.2g
to the Registrant's Registration Statement No. 33-52695-01 on Form S-3 filed with the
Commission on October 16, 1995).
<S> <C> <C>
5* --Opinion of Theodore A. Levine in respect of the legality of the Debt Securities
registered hereunder, containing the consent of such counsel.
12 --Computation of Ratios of Earnings to Fixed Charges (incorporated by reference to
Exhibit 12.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998).
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).
24* --Power of Attorney (set forth on the signature pages of this Registration Statement).
25.1* --Form T-1 Statement of Eligibility and Qualification Under the Trust Indenture Act of
1939 of The Chase Manhattan Bank.
25.2* --Form T-1 Statement of Eligibility and Qualification Under the Trust Indenture Act of
1939 of Chase Manhattan Bank Delaware.
</TABLE>
- ----------
* Filed herewith.
<PAGE>
[Draft--9/2/98]
EXHIBIT 1.1
PAINE WEBBER GROUP INC.
Underwriting Agreement
,
To the Representative(s)
named in Schedule I
hereto of the Underwriter
named in Schedule II hereto
Dear Sirs:
Paine Webber Group Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the underwriters, including you,
named in Schedule II hereto (the "Underwriters") for whom (if more than you)
you are acting as representatives (the "Representatives"), the principal
amount of its securities identified in Schedule I hereto to be issued under
an Indenture dated as of March 15, 1988, as supplemented by a First
Supplemental Indenture dated as of September 22, 1989, and by a Second
Supplemental Indenture dated as of March 22, 1991 (as so supplemented, the
"Indenture"), between the Company and , as
trustee (the "Trustee"). All or part, as the context may require, of such
securities are hereinafter called the "Securities". If the firm or firms
listed in Schedule II hereto include only the firm or firms listed in
Schedule I hereto, then the terms "Underwriters" and "Representatives" shall
each be deemed to refer to such firm or firms.
1. Sale and Purchase of the Securities. The Company agrees to
sell to each Underwriter, and each Underwriter, on the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein stated, agrees to purchase from the Company, at the
purchase price set forth in Schedule I hereto the principal amount of Securities
set forth opposite the name of such Underwriter in Schedule II hereto except
that if Schedule I hereto provides for the sale of Securities pursuant to
delayed delivery arrangements, the respective principal amounts of Securities
to be purchased by the Underwriters shall be as set forth in Schedule II hereto,
less the respective amounts of Contract Securities determined as provided
below. Securities to be purchased by the Underwriters are herein sometimes
called the "Underwriters' Securities" and Securities to be purchased pursuant to
Delayed Delivery Contracts (as hereinafter defined) are herein called "Contract
Securities". The obligations of the Underwriters under this Agreement are
several and not joint.
<PAGE>
2
If so provided in Schedule I hereto, the Underwriters are
authorized to solicit offers to purchase Securities from the Company pursuant
to delayed delivery contracts ("Delayed Delivery Contracts"), substantially in
the form of Schedule III hereto, but with such changes therein as the Company
may authorize or approve. The Underwriters will endeavor to make such
arrangements, and, as compensation therefor, the Company will pay to the
Representatives, for the account of the Underwriters, on the Closing Date (as
hereinafter defined), the fee set forth in Schedule I hereto with respect to the
principal amount of Securities for which Delayed Delivery Contracts are made.
Delayed Delivery Contracts are to be with corporations or institutions. The
Company will make Delayed Delivery Contracts in all cases where sales of
Contract Securities arranged by the Underwriters have been approved by the
Company but, except as the Company may otherwise agree, each such Delayed
Delivery Contract must be for not less than the minimum principal amount set
forth in Schedule I hereto and the total principal amount of Contract
Securities may not exceed the maximum principal amount set forth in Schedule I
hereto. The Underwriters will not have any responsibility in respect of the
validity or performance of Delayed Delivery Contracts. The principal amount of
Securities to be purchased by each Underwriter as set forth in Schedule II
hereto shall be reduced by an amount which shall bear the same proportion to the
total principal amount of Contract Securities as the principal amount of
Securities set forth opposite the name of such Underwriter bears to the total
principal amount of Securities set forth in Schedule II hereto, except to the
extent that you determine that such reduction shall be otherwise than in such
proportion and so advise the Company in writing; provided, however, that the
total principal amount of Securities to be purchased by all Underwriters shall
be the total principal amount set forth in Schedule II hereto less the total
principal amount of Contract Securities.
2. Payment and Delivery. Delivery by the Company of the
Underwriters' Securities to the Representatives for the respective accounts of
the several Underwriters and payment by the Underwriters therefor by certified
or official bank check or checks payable in New York Clearing House funds to
the Company shall take place at the office, on the date and at the time
specified in Schedule I hereto, which date and time may be postponed by
agreement between the Representatives and the Company or as provided in
Section 10
<PAGE>
3
hereof (such date and time of delivery and payment for the Underwriters'
Securities being herein called the "Closing Date").
The Underwriters' Securities shall be registered in such names
and shall be in such denominations as the Representatives shall request at least
two full business days prior to the Closing Date and shall be made available to
the Representatives for checking and packaging, at such place as is designated
by the Representatives, at least one full business day prior to the Closing
Date.
3. Registration Statements and Prospectus; Public Offering.
The Company represents and warrants to each Underwriter that the Company meets
the requirements for the use of Form S-3 under the Securities Act of 1933, as
amended, and the rules and regulations adopted thereunder (respectively, the
"Securities Act" and the "Rules"), and has carefully prepared and filed with the
Securities and Exchange Commission (the "Commission") one or more registration
statements on Form S-3 (the file numbers of which are set forth in Schedule I
hereto), which have become effective, for the registration under the Securities
Act of the Securities. Such registration statements, as amended by any amendment
which has become effective at the date of this Agreement, meet the requirements
set forth in Rule 415(a) under the Securities Act and comply in all other
material respects with such Rule. The Company proposes to file with the
Commission pursuant to Rule 424(b) under the Securities Act ("Rule 424(b)") a
supplement to the form of prospectus included in such registration statements
relating to the Securities and the plan of distribution thereof and has
previously advised you of all further information (financial and other) with
respect to the Company to be set forth therein. The registration statements,
each as amended by any amendment which has become effective at the date of this
Agreement, including the exhibits thereto and all documents incorporated therein
by reference pursuant to Item 12 of Form S-3 (the "Incorporated Documents"), are
hereinafter referred to as the "Registration Statements", and the form of
prospectus included in such Registration Statements as then amended, including
the Incorporated Documents, is hereinafter referred to as the "Basic
Prospectus"; and such supplemented form of prospectus, in the form in which it
shall be filed with the Commission pursuant to Rule 424(b) (including the Basic
Prospectus as so supplemented) is hereinafter referred to as the "Final
Prospectus". Any
<PAGE>
4
preliminary form of the Final Prospectus which has heretofore been filed
pursuant to Rule 424(b) is hereinafter called the "Interim Prospectus". Any
reference herein to the Registration Statements, the Basic Prospectus, any
Interim Prospectus or the Final Prospectus shall be deemed to refer to and
include the Incorporated Documents which were filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), on or before the date of
this Agreement or the issue date of the Basic Prospectus, any Interim Prospectus
or the Final Prospectus, as the case may be; and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the Registration
Statements, the Basic Prospectus, any Interim Prospectus or the Final Prospectus
shall be deemed to refer to and include the filing of any Incorporated Documents
under the Exchange Act after the date of this Agreement or the issue date of the
Basic Prospectus, any Interim Prospectus or the Final Prospectus, as the case
may be.
The Company hereby confirms that the Underwriters and dealers
have been authorized to distribute or cause to be distributed any Interim
Prospectus and are authorized to distribute the Final Prospectus (as from time
to time amended or supplemented if the Company furnishes amendments or
supplements thereto to the Underwriters).
4. Representations and Warranties. The Company represents and
warrants to each Underwriter that:
(a) The Commission has not issued an order
preventing or suspending the use of the Basic Prospectus
or any Interim Prospectus.
(b) The Basic Prospectus and any Interim Prospectus have
complied in all material respects with the requirements of the
Securities Act and of the Rules and, as of their respective dates, did
not include any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading.
(c) As of the date hereof, when the Final Prospectus is first
filed with the Commission pursuant to Rule 424(b), when, before the
Closing Date, any amendment to either of the Registration Statements
becomes effective, when, before the Closing Date, any document
incorporated by reference in either of the Registration
<PAGE>
5
Statements is filed with the Commission, when any supplement to the
Final Prospectus is filed with the Commission and on the Closing Date,
the Registration Statements, the Final Prospectus and any such
amendment or supplement will comply in all material respects with the
requirements of the Securities Act and the Rules, the Incorporated
Documents will comply in all material respects with the requirements of
the Exchange Act and the rules and regulations adopted by the
Commission thereunder, and the Registration Statements will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, the Indenture will comply in all
material respects with the requirements of the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules thereunder
and the Final Prospectus (together with any supplement thereto) will
not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty does not apply
to (i) statements or omissions in either of the Registration Statements
or the Final Prospectus (or in amendments or supplements thereto) made
in reliance upon information furnished in writing to the Company by the
Representatives on behalf of any Underwriter expressly for use therein
or (ii) that part of either Registration Statement which shall
constitute the Statement of Eligibility and Qualification of the
Trustee under the Trust Indenture Act on Form T-1, except statements or
omissions therein made in reliance upon information furnished in
writing to the trustee by or on behalf of the Company for use therein.
(d) The certificate delivered pursuant to paragraph (e) of
Section 5 hereof will be on the date on which it is to be delivered in
all material respects true and complete.
(e) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement, except
those which have been obtained or which may be required under the
<PAGE>
6
Securities Act and such qualifications as may be required under state
laws in connection with the purchase and distribution of the Securities
by the Underwriters, and consummation of such transactions will not
result in the breach of any terms of, or constitute a default under,
any other agreement or undertaking of the Company.
5. Conditions of the Underwriters' Obligations.
The obligations of the Underwriters hereunder are subject to
the following conditions:
(a) Pursuant to Rule 424(b), the Final Prospectus shall have
been filed with the Commission no later than the second business day
following the earlier of the date of the determination of the offering
price of the Securities or the date it is first used after
effectiveness in connection with a public offering or sales, or
transmitted by a means reasonably calculated to result in filing with
the Commission by that date.
(b) No order suspending the effectiveness of either of the
Registration Statements, as amended from time to time, shall be in
effect and no proceedings for such purpose shall be pending before or
threatened by the Commission and any requests for additional
information on the part of the Commission (to be included in either of
the Registration Statements or the Final Prospectus or otherwise) shall
have been complied with to the reasonable satisfaction of the
Representatives.
(c) Since the respective dates as of which information is
given in the Registration Statements and the Final Prospectus, (i)
there shall not have been any material change in the capital stock or
long-term debt of the Company and its subsidiaries, (ii) there shall
not have been any material adverse change in the general affairs,
management, financial position or results of operations of the Company
and its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Final Prospectus and (iii)
the Company and its subsidiaries shall not have sustained any material
loss or interference with their business taken as a whole from fire,
explosion, flood or other calamity, whether
<PAGE>
7
or not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree that is not
set forth in the Final Prospectus if, in the judgment of the Repre-
sentatives, any such development referred to in clauses (i), (ii) or
(iii) makes it impracticable or inadvisable to proceed with the
offering and delivery of the Securities as contemplated by the
Registration Statements and the Final Prospectus.
(d) The representations and warranties of the Company
contained herein shall be true and correct as of the date hereof, as of
the date of the effectiveness of any amendment to either of the
Registration Statements filed before the Closing Date, as of the date
of filing of any document incorporated by reference therein before the
Closing Date and on and as of the Closing Date and the Company shall
have performed all covenants and agreements herein contained to be
performed on its part at or prior to the Closing Date.
(e) The Representatives shall have received on the Closing
Date a certificate, dated the Closing Date, of the chief executive
officer or a vice president and of the principal financial or
accounting officer of the Company, which shall certify that (i) no
order suspending the effectiveness of either of the Registration
Statements or prohibiting the sale of the Securities has been issued
and no proceedings for such purpose are pending before or, to the
knowledge of such officers, threatened by the Commission and (ii) the
representations and warranties of the Company contained herein are true
and correct on and as of the Closing Date and the Company has performed
all covenants and agreements herein contained to be performed on its
part at or prior to the Closing Date.
(f) The Representatives shall have received on the Closing
Date a signed letter (which may refer to letters previously delivered
to one or more of the Representatives) from Ernst & Young LLP, dated
the Closing Date, substantially in the form of Exhibit A hereto.
In addition, unless otherwise provided in Schedule I hereto,
at the time this Agreement is executed,
<PAGE>
8
such firm of accountants shall have furnished to the Representatives a letter
or letters, dated the date of this Agreement, in form and substance satisfactory
to the Representatives, to the effect set forth in Schedule I hereto, in the
introductory paragraph to Exhibit A hereto, in clauses (a) and (b)(2) of Exhibit
A hereto and, to the extent referring to information contained in Exchange Act
reports incorporated in the Registration Statements and the Final Prospectus, in
clauses (b)(1) and (c) of Exhibit A hereto.
(g) The Representatives shall have received on the Closing
Date from the General Counsel of the Company, an opinion and a letter,
each dated the Closing Date, substantially identical to the proposed
form of opinion and form of letter set forth in Exhibit B hereto.
(h) The Representatives shall have received on the Closing
Date from Cravath, Swaine & Moore, counsel for the Underwriters, an
opinion and a letter, each dated the Closing Date, with respect to the
Company, the Indenture, the Securities, the Registration Statements,
the Final Prospectus, this Agreement and any Delayed Delivery Contracts
and the form and sufficiency of all proceedings taken in connection
with the authorization, sale and delivery of the Securities. Such
opinion, letter and proceedings shall be reasonably satisfactory in all
respects to the Representatives, and the Company shall have furnished
to counsel for the Underwriters such documents as they may reasonably
request for the purpose of enabling them to render such opinion and
letter.
(i) Subsequent to the execution of this Agreement, there
shall not have been any decrease in the ratings of any of the Company's
debt securities by Moody's Investors Service, Inc. or Standard & Poor's
Rating Services, a Division of the McGraw-Hill Companies, Inc.
(j) The Company shall have accepted Delayed Delivery Contracts
in any case where sales of Contract Securities arranged by the
Underwriters have been approved by the Company.
<PAGE>
9
(k) Subsequent to the execution of this Agreement, the
Company shall not have filed an Incorporated Document under the
Exchange Act unless a copy thereof shall have first been submitted to
the Representatives within a reasonable period of time prior to the
filing thereof and the Representatives shall not have reasonably
objected thereto in writing.
6. Covenants. The Company covenants and agrees as follows:
(a) Before the termination of the offering of the Securities,
not to file any amendment or supplement (including the Final
Prospectus) to either of the Registration Statements relating to the
Securities or the Basic Prospectus (other than an Incorporated Document
filed under the Exchange Act) unless a copy thereof shall have first
been submitted to the Representatives within a reasonable period of
time prior to the filing thereof and the Representatives shall not have
reasonably objected thereto in writing. Subject to the foregoing
sentence, the Company will cause the Final Prospectus to be filed with
the Commission or transmitted for filing with the Commission in
accordance with the requirements of Rule 424(b).
(b) As soon as the Company is advised thereof, to advise the
Representatives (i) when the Final Prospectus shall have been filed
with the Commission or mailed to the Commission for filing pursuant to
Rule 424(b), (ii) when any amendment to either of the Registration
Statements relating to the Securities shall have become effective,
(iii) of the initiation or threatening by the Commission of any
proceedings for the issuance of any order suspending the effectiveness
of either of the Registration Statements, or the qualification of the
Indenture, (iv) of receipt by the Company or any representative of or
attorney for the Company of any other communication from the Commission
relating to the Company (except for routine communications relating to
the broker-dealer business of the Company), either of the Registration
Statements (except for communications relating to securities other than
the Securities), the Basic Prospectus, any Interim Prospectus or the
Final Prospectus and (v) of the receipt by the Company or any
representative of or attorney for the Company of any
<PAGE>
10
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company will make
every reasonable effort to prevent the issuance of an order suspending
the effectiveness of either of the Registration Statements or the
qualification of the Indenture and if any such order is issued to
obtain as soon as possible the lifting thereof.
(c) To deliver to the Representatives, without charge, (i)
upon request and to the extent not previously delivered, signed copies
of the Registration Statements and of any amendments thereto (including
all exhibits filed with, or incorporated by reference in, any such
document) and (ii) as many conformed copies of the Registration
Statements and of any amendments thereto which shall become effective
on or before the Closing Date (excluding exhibits) as the
Representatives may reasonably request.
(d) During such period as a prospectus is required by law to
be delivered by an Underwriter or dealer, to deliver, without charge to
the Representatives and to Underwriters and dealers, at such office or
offices as the Representatives may designate, as many copies of any
Interim Prospectus and the Final Prospectus as the Representatives may
reasonably request.
(e) During the period in which copies of the Final Prospectus
are to be delivered as provided in paragraph (d) above, if any event
occurs as a result of which it shall be necessary to amend or
supplement the Final Prospectus in order to ensure that no part of the
Final Prospectus contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein, in light of the circumstances existing when the Final
Prospectus is to be delivered to a purchaser, not misleading, forthwith
to prepare, submit to the Representatives, file with the Commission and
deliver without charge, to the Underwriters and to dealers (to the
extent requested and at the addresses furnished by the Representatives
to the Company) to whom Securities may have been sold by the
Underwriters, and to other dealers upon request, either amendments or
supplements to the Final Prospec-
<PAGE>
11
tus so that the statements in the Final Prospectus, as so amended
or supplemented, will comply with the standard set forth in this
paragraph (e). Delivery by Underwriters of any such amendments or
supplements to the Final Prospectus shall not constitute a waiver
of any of the conditions set forth in Section 5 hereof.
(f) To make generally available to the Company's security
holders, as soon as practicable but in no event later than 45 days
after the end of the 12-month period beginning at the end of the
current fiscal quarter of the Company, an earnings statement that
satisfies the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder.
(g) To take such action as the Representatives may request in
order to qualify the Securities for offer and sale under the securities
or "blue sky" laws of such jurisdictions as the Representatives may
reasonably request; provided that in no event shall the Company be
obligated to subject itself to taxation or to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action
that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject.
(h) For so long as any of the Securities remain outstanding,
to supply to the Representatives and to each other Underwriter who may
so request in writing copies of such financial statements and other
periodic and special reports as the Company may from time to time
distribute generally to its lenders or to the holders of any class of
its capital stock and to furnish to the Representatives copies of each
annual or other report it shall be required to file with the
Commission.
(i) To pay, or reimburse if paid by the Representatives,
whether or not the transactions contemplated hereby are consummated or
this Agreement is terminated, all costs and expenses incident to the
performance of the obligations of the Company under this Agreement,
including those relating to (i) the preparation, printing and filing of
the Registration Statements and exhibits thereto, the Basic Prospectus,
any Interim
<PAGE>
12
Prospectus and the Final Prospectus, all amendments and supplements to
the Registration Statements, any Interim Prospectus and the Final
Prospectus, and the preparation and printing or other reproduction of
this Agreement, the Indenture and any agreement among underwriters and
agreements with dealers relating to the offering of the Securities,
(ii) the issuance of the Securities and the preparation and delivery of
certificates for the Securities, (iii) the registration or
qualification of the Securities for offer and sale under the securities
or "blue sky" laws of the various jurisdictions referred to in
paragraph (g) above, including the fees and disbursements of counsel
for the Underwriters in connection therewith and the preparation and
printing of "blue sky" memoranda and legal investment memoranda,
(iv) the furnishing to the Representatives and the Underwriters of
copies of any Interim Prospectus and the Final Prospectus and all
amendments or supplements to any Interim Prospectus and the Final
Prospectus, and of the several documents required by this Section 6
to be so furnished, including costs of shipping and mailing,
(v) the filing requirements, if any, of the National Association of
Securities Dealers, Inc., in connection with its review of corporate
financings, (vi) the furnishing to the Representatives and to the
Underwriters of copies of all reports and information required by
paragraph (h) above, including costs of shipping and mailing,
(vii) all transfer taxes, if any, with respect to the sale and
delivery of the Securities by the Company to the several
Underwriters, (viii) the fees charged by rating agencies in
connection with the rating of the Securities, (ix) the fees and
expenses of the Trustee and (ix) the fee, if any, for listing the
Securities on any national securities exchange.
(j) For a period beginning at the time of execution of this
Agreement and ending on the later of the Closing Date or the date on
which any price restrictions on the sale of the Securities are
terminated, without the prior consent of the Underwriters or the
Representatives, not publicly to offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company.
(k) If the Final Prospectus states that the Securities will
be listed on a stock exchange, to use
<PAGE>
13
its best efforts to cause the Securities to be listed on such stock
exchange.
7. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either the Securities Act or the Exchange Act
against any and all losses, claims, damages and liabilities, joint or several
(including any investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claim asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in either of the Registration
Statements, the Basic Prospectus, any Interim Prospectus or the Final
Prospectus, or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as any
such untrue statement or omission or alleged untrue statement or omission was
made in (i) either of the Registration Statements, the Basic Prospectus, any
Interim Prospectus or the Final Prospectus, or such amendment or supplement, in
reliance upon and in conformity with information furnished in writing to the
Company by the Representatives on behalf of any Underwriter expressly for use
therein or (ii) that part of either of the Registration Statements which shall
constitute the Statement of Eligibility and Qualification on Form T-1 of the
Trustee under the Trust Indenture Act, except statements or omissions in such
Registration Statement made in reliance upon information furnished in writing to
the Trustee by or on behalf of the Company for use therein; provided, however,
that such indemnity with respect to the Basic Prospectus or any Interim
Prospectus shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) from whom the person asserting any such loss,
claim, damage or liability purchased Securities that are the subject thereof if
such person did not receive a copy of the Final Prospectus (not including the
Incorporated Documents) at or prior to the confirmation of the sale of such
Securities to such person in any case where such delivery is required by the
Securities Act and the untrue statement or omission of a
<PAGE>
14
material fact contained in the Basic Prospectus or any Interim Prospectus was
corrected in the Final Prospectus, unless such failure to deliver the Final
Prospectus was a result of noncompliance by the Company with Section 6(d)
hereof.
(b) Each Underwriter agrees to indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning of
either the Securities Act or the Exchange Act, each director of the Company and
each officer of the Company who signs either of the Registration Statements to
the same extent as the foregoing indemnity from the Company to each Underwriter,
but only insofar as such losses, claims, damages or liabilities arise out of or
are based upon any untrue statement or omission or alleged untrue statement or
omission that was made in either of the Registration Statements, the Basic
Prospectus, any Interim Prospectus or the Final Prospectus, or any amendment or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to the Company by the Representatives on behalf of such
Underwriter expressly for use therein; provided, however, that the obligation of
each Underwriter to indemnify the Company hereunder shall be limited to the
total price at which the Securities purchased by such Underwriter hereunder were
offered to the public. The Company acknowledges that the statements set forth in
the last paragraph of the cover page, under the headings "Underwriting" and
"Plan of Distribution" and, if Schedule I hereto provides for sales of
Securities pursuant to delayed delivery arrangements, under the heading "Delayed
Delivery Arrangements", in any Interim Prospectus or the Final Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in the documents referred to in the foregoing
indemnity and you, as the Representatives, confirm that such statements are
correct.
(c) Any party that proposes to assert the right to be
indemnified under this Section 7 will, promptly after receipt of notice of
commencement of any action, suit or proceeding against any such party in respect
of which a claim is to be made against an indemnifying party under this Section
7, notify each such indemnifying party of the commencement of such action, suit
or proceeding, enclosing a copy of all papers served, but the omission so to
notify such indemnifying party of any such action, suit or proceeding (i) shall
not relieve it from liability under this
<PAGE>
15
Section 7 unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) shall not relieve it from any liability that it may
have to any indemnified party otherwise than under this Section 7. In case any
such action, suit or proceeding shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, such
indemnifying party or parties shall be entitled to participate in, and, to the
extent that it or they shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party, and after notice from the indemnifying party or parties
to such indemnified party of its or their election so to assume the defense
thereof, the indemnifying party or parties shall not be liable to such
indemnified party for any legal or other expenses, other than reasonable costs
of investigation subsequently incurred by such indemnified party in connection
with the defense thereof. The indemnified party shall have the right to employ
its counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of counsel
by such indemnified party has been authorized by the indemnifying party or
parties, (ii) the indemnified party shall have reasonably concluded that there
may be a conflict of interest between the indemnifying party or parties and the
indemnified party in the conduct of the defense of such action (in which case
the indemnifying party or parties shall not have the right to direct the defense
of such action on behalf of the indemnified party) or (iii) the indemnifying
party or parties shall not in fact have employed counsel to assume the defense
of such action, in each of which cases the fees and expenses of counsel shall be
at the expense of the indemnifying party or parties. An indemnifying party shall
not be liable for any settlement of any action or claim effected without its
written consent.
8. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(a) is applicable but for any reason is held to be unavailable from the
Company, the Company and the Underwriters agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
<PAGE>
16
(collectively "Losses") to which the Company and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company and by the Underwriters from the offering of
the Securities; provided, however, that in no case shall any Underwriter (except
as may be provided in any agreement among underwriters relating to the offering
of the Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Underwriters shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and of the
Underwriters in connection with the statements or omissions which resulted in
such Losses as well as any other relevant equitable considerations. Benefits
received by the Company shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses), and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Final
Prospectus. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company or the Underwriters. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take into account
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 8, no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an
Underwriter within the meaning of either the Securities Act or the Exchange Act
shall have the same rights to contribution as such Underwriter, and each person
who controls the Company within the meaning of either the Securities Act or the
Exchange Act, each officer of the Company who shall have signed the Registration
Statements and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this Section 8. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of
<PAGE>
17
which a claim for contribution may be made against another party or parties
under this Section 8, notify such party or parties from whom contribution may be
sought, but the omission so to notify such party or parties (i) shall not
relieve such party or parties from liability under this Section 8 unless and to
the extent it or they did not otherwise learn of such action and such failure
results in the forfeiture by such party or parties of substantial rights and
defenses and (ii) shall not relieve such party or parties from any other
obligation it or they may have hereunder or otherwise than under this Section 8.
No party shall be liable for contribution with respect to any action or claim
settled without its consent.
9. Termination. This Agreement may be terminated by the
Representatives or by Underwriters who have agreed to purchase in the aggregate
at least 50% of the principal amount of the Securities by notifying the Company
at any time,
(a) prior to the earliest of (i) 5:00 p.m., New York time, on
the day the Final Prospectus is transmitted for filing with the
Commission pursuant to Rule 424(b) (or the actual time of such filing,
if such filing in fact occurs prior to 5:00 p.m., New York time, on
such date), (ii) the time of release by the Representatives for
publication of the first newspaper advertisement that is subsequently
published with respect to the Securities or (iii) the time when the
Securities are first generally offered by the Representatives to
dealers by letter or telegram;
(b) at or prior to the Closing Date if, in the judgment of the
Representatives or in the judgment of such Underwriters, as the case
may be, payment for and delivery of the Securities is rendered
impracticable or inadvisable because (i) additional material govern-
mental restrictions, not in force and effect on the date hereof, shall
have been imposed upon trading in securities generally or minimum or
maximum prices shall have been generally established on the New York
Stock Exchange, or trading in the Company's Common Stock shall have
been suspended by the Commission or the New York Stock Exchange or
trading in securities generally shall have been suspended on such
Exchange or a general banking moratorium shall have been established by
Federal or New York authorities, (ii) any event shall
<PAGE>
18
have occurred or shall exist which makes untrue or incorrect in any
material respect any material statement or information contained in
either of the Registration Statements or the Final Prospectus or which
is not reflected in either of the Registration Statements or the Final
Prospectus but should be reflected therein in order to make the
statements or information contained therein not misleading in any
material respect or (iii) any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or
other calamity or crisis shall have occurred or shall have accelerated
to such an extent as, in the judgment of the Representatives, to affect
adversely the marketability of the Securities; or
(c) at or prior to the Closing Date, if any of the conditions
specified in Section 5 hereof shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of the
provisions hereof, the Company shall not be under any liability (except as
otherwise provided herein) to any Underwriter and no Underwriter shall be under
any liability to the Company, except that (a) if this Agreement is terminated
by the Representatives or the Underwriters because of any failure or refusal on
the part of the Company to comply with the terms or to fulfill any of the
conditions of this Agreement, the Company will reimburse the Underwriters for
all reasonable out-of-pocket expenses (including the fees and disbursements of
their counsel) incurred by them and (b) no Underwriter who shall have failed or
refused to purchase the Securities agreed to be purchased by it hereunder,
without some reason sufficient hereunder to justify its cancelation or
termination of its obligations hereunder, shall be relieved of liability to the
Company or to the other Underwriters for damages occasioned by its default.
10. Default of Underwriters. If one or more of the
Underwriters shall fail (other than for a reason sufficient to justify the
termination of this Agreement) to purchase on the Closing Date the Securities
agreed to be purchased by such Underwriter or Underwriters, the Representatives
may find one or more substitute underwriters to purchase such Securities or make
such other arrangements as the Representatives may deem advisable or one or more
of the
<PAGE>
19
remaining Underwriters may agree to purchase such Securities in such proportions
as may be approved by the Representatives in each case upon the terms herein
set forth. If no such arrangements have been made within 24 hours after the
Closing Date, and
(a) the aggregate principal amount of Securities to be
purchased by the defaulting Underwriters on the Closing Date shall not
exceed 10% of the total principal amount of Securities that the
Underwriters are obligated to purchase on the Closing Date, each of the
nondefaulting Underwriters shall be obligated to purchase such
Securities on the terms herein set forth in proportion to their
respective obligations hereunder; or
(b) the aggregate principal amount of Securities to be
purchased by the defaulting Underwriters on the Closing Date shall
exceed 10% of the total principal amount of Securities that the
Underwriters are obligated to purchase on the Closing Date, the Company
shall be entitled to an additional period of 24 hours within which to
find one or more substitute underwriters satisfactory to the
Representatives to purchase such Securities upon the terms set forth
herein.
In any such case, either the Representatives or the Company
shall have the right to postpone the Closing Date for a period of not more than
five business days in order that the necessary changes and arrangements may be
effected by the Representatives and the Company. If the aggregate principal
amount of Securities to be purchased on the Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the total principal amount of
Securities that the Underwriters are obligated to purchase on the Closing Date,
and neither the nondefaulting Underwriters nor the Company shall make
arrangements pursuant to this Section 10 within the period stated for the
purchase of the Securities that the defaulting Underwriter or Underwriters
agreed to purchase, this Agreement shall terminate without liability on the part
of any nondefaulting Underwriter to the Company and without liability on the
part of the Company except, in both cases, as provided in Sections 6(i) and 9
hereof. The provisions of this Section 10 shall not in any way affect the
liability of any defaulting Underwriter to the Company or the nondefaulting
Underwriters
<PAGE>
20
arising out of such default. A substitute underwriter hereunder shall become
an Underwriter for all purposes of this Agreement.
11. Miscellaneous. The reimbursement, indemnification and
contribution agreements contained in Sections 6(i), 7, 8 and 9 hereof and the
representations, warranties and agreements of the Company in this Agreement
shall remain in full force and effect regardless of (a) any termination of this
Agreement except insofar as such termination renders the performance of such
agreements, other than those in Sections 6(i), 7, 8 and 9, inappropriate, (b)
any investigation made by or on behalf of any Underwriter or controlling person
or by or on behalf of the Company or any controlling person, director or officer
and (c) delivery of and payment for the Securities under this Agreement.
This Agreement has been and is made solely for the benefit of
the Underwriters and the Company, and their respective successors and assigns,
and, to the extent expressed herein, for the benefit of persons controlling any
of the Underwriters or the Company, directors and officers of the Company and
their respective successors and assigns, and no other person, partnership,
association or corporation shall acquire or have any right under or by virtue of
this Agreement. The term "successors and assigns" shall not include any
purchaser of Securities from any Underwriter merely because of such purchase.
This Agreement may be executed in counterparts, all of which, when taken
together, shall constitute one original.
12. Notices. All notices and communications hereunder shall be
in writing and mailed or delivered, or by telephone or telegraph if subsequently
confirmed in writing, to the Representatives at the address specified in
Schedule I hereto and to the Company at 1285 Avenue of the Americas, New York,
New York 10019, attention of the agent for service shown on the cover page of
the most recent Registration Statement.
<PAGE>
21
13. Applicable Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
Please confirm that the foregoing correctly sets forth the
agreement between us.
Very truly yours,
PAINE WEBBER GROUP INC.,
by
---------------------
Name:
Title:
Confirmed:
[name(s) of Representative(s)],
by
------------------------
Name:
Title:
<PAGE>
SCHEDULE I
Underwriting Agreement dated
Registration Statement No[s].
Representative(s):
[include additional address(es) for notices]
Title, Purchase Price and Description of Securities:
Title:
Principal Amount:
Purchase Price (include accrued interest or amortization, if any):
Sinking fund provision:
Redemption provisions:
Other provisions:
Closing Date, Time and Location:
Delayed Delivery Arrangements:
Fee:
Minimum principal amount of each Contract: Maximum aggregate principal
amount of all Contracts:
Modification of items to be covered by the letter from Ernst & Young LLP
delivered pursuant to Section 5(f) at the time this Agreement is executed or
statement that no such letter is to be delivered:
Stock Exchange Listing:
Other Provisions:
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
Principal
Amount
of Securities
to
Underwriter be Purchased
- ----------- -------------
<S> <C>
$
Total.....................................................$
------------
------------
</TABLE>
<PAGE>
SCHEDULE III
Delayed Delivery Contract
,
[Insert name and address of lead Representative]
Dear Sirs:
The undersigned hereby agrees to purchase from Paine Webber
Group Inc. (the "Company"), and the Company agrees to sell to the
undersigned, on , , (the "Delivery Date"), $ principal
amount of the Company's (the "Securities") offered by the Company's
Prospectus dated , , and related Prospectus Supplement dated
, , receipt of a copy of which is hereby acknowledged, at a
purchase price of % of the principal amount thereof, plus [accrued interest
or amortization of original issue discount], if any, thereon from , ,
to the date of payment and delivery, and on the further terms and conditions set
forth in this contract.
Payment for the Securities to be purchased by the undersigned
shall be made on or before 11:00 a.m., New York City time, on the Delivery Date
to or upon the order of the Company in New York Clearing House (next day) funds,
at your office or at such other place as shall be agreed between the Company and
the undersigned upon delivery to the undersigned of the Securities in definitive
fully registered form and in such authorized denominations and registered in
such names as the undersigned may request by written or telegraphic
communication addressed to the Company not less than five full business days
prior to the Delivery Date. If no request is received, the Securities will be
registered in the name of the undersigned and issued in a denomination equal to
the aggregate principal amount of Securities to be purchased by the undersigned
on the Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for Securities on the Delivery Date, and the obligation of the Company
to sell and deliver Securities on the Delivery Date, shall be subject to the
conditions (and neither party shall incur any liability by reason of the failure
thereof) that (1) the purchase of Securities to be made by the undersigned,
which purchase the undersigned represents is not prohibited on the date hereof,
shall not on the Delivery Date be prohibited under the laws of the jurisdiction
to which the undersigned is subject, and (2) the Company, on or before the
Delivery Date, shall have
<PAGE>
2
sold to certain underwriters (the "Underwriters") such principal amount of the
Securities as is to be sold to them pursuant to the Underwriting Agreement
referred to in the Prospectus and Prospectus Supplement mentioned above.
Promptly after completion of such sale to the Underwriters, the Company will
mail or deliver to the undersigned at its address set forth below notice to such
effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith. The obligation of the
undersigned to take delivery of and make payment for the Securities, and the
obligation of the Company to cause the Securities to be sold and delivered,
shall not be affected by the failure of any purchaser to take delivery of and
make payment for the Securities pursuant to other contracts similar to this
contract.
This contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
It is understood that acceptance of this contract and other
similar contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first come, first served basis. If this contract is
acceptable to the Company, it is required that the Company sign the form of
acceptance below and mail or deliver one of the counterparts hereof to the
undersigned at its address set forth below. This will become a binding contract
between the Company and the undersigned, as of the date first above written,
when such counterpart is so mailed or delivered.
<PAGE>
3
This agreement shall be governed by and construed in
accordance with the laws of the State of New York.
Very truly yours,
-----------------------------
(Name of Purchaser)
by
---------------------------
(Signature and Title
of Officer)
---------------------------
(Address)
Accepted:
PAINE WEBBER GROUP INC.
by
-----------------------------
(Authorized Signature)
<PAGE>
EXHIBIT A
At the Closing Date, 1/ Ernst & Young LLP shall furnish to the
Representatives a letter or letters (which may refer to letters previously
delivered to one or more of the Representatives), dated as of the Closing Date,
in form and substance satisfactory to the Representatives, confirming that they
are independent certified public accountants within the meaning of the
Securities Act and the Exchange Act and the respective applicable published
rules and regulations thereunder, that the response to Item 10 of the
Registration Statements is correct insofar as it relates to them and stating in
effect that:
(a) in their opinion the consolidated financial statements and
schedules examined by them and incorporated by reference in the
Registration Statements and the Final Prospectus and reported on by
them comply in form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange Act and
the related published rules and regulations;
(b) on the basis of a reading of the "Selected Financial
Data", if any, included or incorporated in the Registration Statements
and the Final Prospectus and of the latest unaudited consolidated
condensed financial statements made available by the Company and its
consolidated subsidiaries; carrying out certain specified procedures
(but not an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of significance
with respect to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and audit and
executive committees of the Company; and inquiries of certain officials
of the Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions and
events subsequent to the date of the most recent financial statements
included or incorporated in the Registration Statements and the Final
Prospectus, nothing came to their attention which caused them to
believe that:
(1) the amounts in the unaudited "Summary Financial
Information", if any, included in the Final Prospectus, and
the amounts in the "Selected
- ----------
1/ All capitalized terms used herein shall have the meanings ascribed to
them in the Underwriting Agreement of which this Exhibit A is a part.
<PAGE>
2
Financial Data", if any, included or incorporated in the
Registration Statements and the Final Prospectus, do not agree
with the corresponding amounts in the audited financial
statements from which such amounts were derived;
(2) any unaudited financial statements included or
incorporated in the Registration Statements and the Final
Prospectus do not comply as to form in all material respects
with applicable accounting requirements and with the published
rules and regulations of the Commission with respect to
financial statements included or incorporated in quarterly
reports on Form 10-Q under the Exchange Act or any material
modifications should be made to such unaudited financial
statements for them to be presented in conformity with such
generally accepted accounting principles;
(3) with respect to the period subsequent to the date
of the most recent financial statements included or
incorporated in the Registration Statement and the Final
Prospectus, there were any changes, at a specified date not
more than five business days prior to the date of the letter,
in the consolidated long-term debt or non-convertible
redeemable preferred stock of the Company and its subsidiaries
or capital stock of the Company (excluding retained earnings
and foreign currency translation adjustment) as compared with
the amounts shown on the most recent consolidated balance
sheet included or incorporated in the Registration Statements
and the Final Prospectus, except in all instances for changes
disclosed in such letter or letters; or
(4) if any unaudited pro forma financial statements
are included or incorporated in the Registration Statement and
the Final Prospectus, on the basis of a reading of the
unaudited pro forma financial statements, carrying out certain
specified procedures, inquiries of certain officials of the
Company and the acquired company who have responsibility for
financial and accounting matters, and proving the arithmetic
accuracy of the application of the pro forma
<PAGE>
3
adjustments to the historical amounts in the pro forma
financial statements, nothing came to their attention which
caused them to believe that the pro forma financial statements
do not comply in form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of such
statements; and
(c) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company) set forth in the
Registration Statements, and the Final Prospectus, as amended or
supplemented, and in Exhibit 12 to the Registration Statements,
including specified information, if any, included or incorporated from
the Company's Annual Report on Form 10-K incorporated therein or
specified information, if any, included or incorporated from any of the
Company's Quarterly Reports on Form 10-Q incorporated therein, agrees
with the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
<PAGE>
EXHIBIT B
The Company 1/ shall furnish to the Representatives the
opinion of the General Counsel of the Company, dated the Closing Date, to the
effect that:
(i) each of the Company and PaineWebber Incorporated,
Mitchell Hutchins Asset Management Inc., PaineWebber International
(U.K.) Ltd. and PaineWebber Real Estate Securities Inc., wholly owned
subsidiaries (individually a "Subsidiary" and collectively the
"Subsidiaries"), 2/ has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction in
which it is chartered or organized, with full corporate power and
authority to own its properties and conduct its business as described
in the Final Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction in which the failure to qualify and be in good standing
would materially and adversely affect the business or condition of the
Company and its consolidated subsidiaries, considered as a whole;
(ii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and are owned by the Company either
directly or through wholly owned subsidiaries free and clear of any
perfected security interest and, to the knowledge of such counsel,
after due inquiry of appropriate officers of the Company, any other
security interests, claims, liens or encumbrances, except for
restrictions on sales of capital stock contained in debt instruments;
(iii) the Securities conform to the description thereof
contained in the Final Prospectus; and, if the Securities are to be
listed on the New York Stock Exchange, authorization thereof has been
given, subject to official notice of issuance and evidence of satis-
factory distribution, or the Company has filed a preliminary listing
application and all required
- ----------
1/ All capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Underwriting Agreement of which this
Exhibit B is a part.
2/ In the case of PaineWebber International (U.K.) Ltd., an opinion of
counsel from the jurisdiction in which such Subsidiary is organized may be
delivered with respect to the matters covered herein.
<PAGE>
2
supporting documents with respect to the Securities with the New York
Stock Exchange and such counsel has no reason to believe that the
Securities will not be authorized for listing, subject to official
notice of issuance and evidence of satisfactory distribution;
(iv) the Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms (subject
to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws affecting creditors'
rights generally from time to time in effect, and subject, as to
enforceability, to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law);
and the Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters pursuant to the
Underwriting Agreement of which this Exhibit B is a part (the
"Underwriting Agreement"), in the case of the Underwriters' Securities,
or by the purchasers thereof pursuant to Delayed Delivery Contracts, in
the case of any Contract Securities, will constitute legal, valid and
binding obligations of the Company entitled to the benefits of the
Indenture and enforceable in accordance with their terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws affecting creditors' rights generally
from time to time in effect, and subject, as to enforceability, to
general principles of equity, regardless of whether such enforceability
is considered in a proceeding in equity or at law);
(v) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries, of a character required to be dis-
closed in the Registration Statements which are not adequately
disclosed in the Final Prospectus; there is no franchise, contract or
other document of a character required to be described in the
Registration Statements or Final Prospectus, or to be filed as an
exhibit,
<PAGE>
3
which is not described or filed as required; and the statements
included or incorporated in the Final Prospectus describing any legal
proceedings or material contracts or agreements relating to the Company
fairly summarize such matters;
(vi) the Registration Statements and any amendments thereto
relating to the Securities have become effective under the Securities
Act; any required filing of the Basic Prospectus, any Interim
Prospectus and the Final Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); to the best knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statements, as amended, has been issued, no proceedings for that
purpose have been instituted or are pending or contemplated under the
Securities Act;
(vii) the Underwriting Agreement and any Delayed Delivery
Contracts have been duly authorized, executed and delivered by the
Company;
(viii) the information required to be set forth in each of the
Registration Statements in answer to Item 10 (insofar as it relates to
such counsel) of Form S-3, to the best knowledge of such counsel, is
accurately set forth in such Registration Statement in all material
respects or no response is required with respect to such Item; and the
authorized equity capitalization of the Company is as described in the
documents incorporated by reference in the Final Prospectus;
(ix) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by the
Company of the transactions contemplated in the Underwriting Agreement
or in any Delayed Delivery Contract, except such as have been obtained
under the Securities Act and the Trust Indenture Act and such as may
be required under the "blue sky" laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in such opinion) as
have been obtained;
<PAGE>
4
(x) none of the issue and sale of the Securities, the
consummation by the Company of any other of the transactions
contemplated in the Underwriting Agreement or in any Delayed Delivery
Contract or the fulfillment of the terms of the Underwriting Agreement
or of any Delayed Delivery Contract will conflict with, result in a
breach of, or constitute a default under the Restated Certificate of
Incorporation, as amended, or By-laws of the Company or the terms of
any indenture or other agreement or instrument known to such counsel
and to which the Company or any of its subsidiaries is a party or
bound, or any order or regulation known to such counsel to be
applicable to the Company or any of its Subsidiaries of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any of its
Subsidiaries; and
(xi) to the knowledge of such counsel, no holder of securities
of the Company has rights to the registration of such securities under
the Registration Statements.
In rendering such opinion, such counsel may rely as to matters
involving the application of laws of any jurisdiction other than the States of
Delaware and New York or the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel of good standing
believed to be reliable and who are satisfactory to counsel for the
Underwriters.
(B) The Company shall furnish to the Underwriters a letter
from the General Counsel of the Company, dated the Closing Date to the effect
that such counsel has no reason to believe that: (i) either Registration
Statement and the Final Prospectus (except the Statements of Eligibility (Form
T-1) included as exhibits to the Registration Statements, as to which he need
not express any view) were not appropriately responsive in all material respects
to the requirements of the Securities Act and the Trust Indenture Act and the
respective applicable rules and regulations of the Securities and Exchange
Commission thereunder and (ii) the Registration Statements, at the respective
times they became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus, at the date
<PAGE>
5
of the letter, includes an untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
<PAGE>
[Draft -- 9/2/98]
Exhibit 1.2
$[ ] 1/
Medium-Term Senior Notes, Series C, and
Medium-Term Subordinated Notes, Series D,
Due from Nine Months to 30 Years
from Date of Issue
Paine Webber Group Inc.
Distribution Agreement
September [ ], 1998
New York, New York
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Paine Webber Group Inc., a Delaware corporation (the "Company"),
confirms its agreement with you with respect to the issue and sale by the
Company of up to $[ ] 1/ aggregate principal amount of its Medium-Term Senior
Notes, Series C, and Medium-Term Subordinated Notes, Series D, Due from Nine
Months to 30 Years from Date of Issue (the "Notes"). The Notes will be issued
either as subordinated to ("Subordinated Notes") or on a parity with ("Senior
Notes") other unsecured and unsubordinated indebtedness of the Company and will
have the annual interest rates, maturities, redemption provisions, optional
repayment rights and other terms as set forth in a supplement to the Prospectus
referred to below. The Senior Notes will be issued under an Indenture dated as
of March 15, 1988, between the Company and The Chase Manhattan Bank (formerly
known as Chemical Bank), as trustee (the "Senior Note Trustee"), as amended by
the First Supplemental Indenture dated as of September 22, 1989, and by the
Second Supplemental Indenture dated as of March 22, 1991 (such Indenture, as so
supplemented, being hereinafter referred to as the "Senior Note Indenture"),
each between the Company and the Senior Note Trustee. The Subordinated Notes
will be issued under an Indenture dated as of March 15, 1988, between the
Company and Chase Manhattan Bank Delaware (formerly known as Chemical Bank
Delaware), as trustee (the
--------
1/ Or the U.S. dollar equivalent.
<PAGE>
"Subordinated Note Trustee"), as amended by the First Supplemental Indenture
dated as of September 22, 1989, by the Second Supplemental Indenture dated as of
March 22, 1991, and by the Third Supplemental Indenture dated as of November 30,
1993 (such Indenture, as so supplemented, being hereinafter referred to as the
"Subordinated Note Indenture"), each between the Company and the Subordinated
Note Trustee. The Senior Note Indenture and the Subordinated Note Indenture are
hereinafter sometimes referred to as the "Indentures"; and the Senior Note
Trustee and the Subordinated Note Trustee are hereinafter sometimes referred to
as the "Trustees". The Notes will be issued, and the terms thereof established,
in accordance with the Indentures and, in the case of Notes sold pursuant to
Section l(a), the Medium-Term Notes Administrative Procedures attached hereto as
Annex A (the "Procedures"). For the purposes of this Agreement, the term the
"Agent" shall refer to you acting solely in the capacity as agent for the
Company pursuant to Section l(a) and not as principal, the term the "Purchaser"
shall in each instance refer to you acting solely as principal pursuant to
Section l(g) and not as agent, and the term "you" shall refer to you acting in
both such capacities or in either such capacity.
1. Appointment of Agent; Solicitation by the Agent of Offers
to Purchase; Sales of Notes to a Purchaser. (a) Subject to the terms and
conditions set forth herein, the Company hereby appoints the Agent to act as its
agent for the purpose of soliciting offers to purchase all or part of the Notes
from the Company upon the terms set forth in the Prospectus, as amended or
supplemented from time to time, and in the Procedures. The appointment of the
Agent hereunder is not exclusive and the Company may from time to time offer
Notes for sale otherwise than to or through the Agent; provided, however, that
so long as this Agreement is in effect the Company will not solicit offers to
purchase Notes through any agent without amending this Agreement to appoint such
agent an additional Agent hereunder on the same terms and conditions as provided
herein for the Agent and without giving the Agent prior notice of such
appointment. It is understood, however, that if from time to time the Company is
approached by a prospective agent offering to solicit a specific purchase of
Notes, the Company may engage such agent with respect to such specific purchase,
provided that (i) such agent is engaged on terms substantially similar to the
applicable terms of this Agreement and (ii) the Agent is given notice of such
engagement promptly after it is agreed to.
2
<PAGE>
(b) On the basis of the representations and warranties set forth
herein, but subject to the terms and conditions set forth herein, the Agent
agrees to use reasonable efforts, as agent of the Company, to solicit offers to
purchase Notes from the Company upon the terms set forth in the Prospectus, as
amended or supplemented from time to time, and in the Procedures. The Agent
shall make reasonable efforts to assist the Company in obtaining performance by
each purchaser whose offer to purchase Notes has been solicited by the Agent and
accepted by the Company, but the Agent shall not, except as otherwise provided
in this Agreement, be obligated to disclose the identity of any purchaser or
have any liability to the Company in the event any such purchase is not
consummated for any reason. Subject to the provisions of this Section and to the
Procedures, offers for the purchase of Notes may be solicited by the Agent at
such times and in such amounts as the Agent may from time to time deem
advisable.
(c) The Company reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase Senior Notes or Subordinated Notes from the
Company at any time for any period of time or permanently. Upon receipt of
instructions from the Company, the Agent forthwith will suspend its solicitation
of offers to purchase Senior Notes or Subordinated Notes, as the case may be,
from the Company until such time as the Company has advised the Agent that such
solicitation may be resumed.
(d) The Agent will communicate to the Company, orally or in writing,
each offer to purchase Notes from the Company that is received by the Agent as
agent of the Company and that is not rejected by the Agent as provided below.
The Company will have the sole right to accept offers to purchase Notes from the
Company and may reject any such offer, in whole or in part, for any reason. The
Agent may, in its discretion reasonably exercised, reject any offer to purchase
Notes from the Company that is received by the Agent, in whole or in part, and
any such rejection shall not be deemed a breach of the Agent's agreements
contained herein.
(e) The Company agrees to pay the Agent a commission, on the date of
delivery by the Company of any Note sold hereunder (a "Closing Date"), with
respect to each sale of Notes by the Company as a result of a solicitation made
by the Agent, in an amount equal to that percentage specified in Schedule I
hereto of the aggregate principal amount of each Senior Note and each
Subordinated Note sold by the Company. Such commission shall be payable as
specified in the Procedures. The commission rates may be
3
<PAGE>
amended from time to time by written agreement of the Company and the Agent.
(f) The Agent agrees, with respect to any Note denominated in a
currency other than the U.S. dollar or a composite currency, as agent, directly
or indirectly, not to solicit offers to purchase, and as principal under any
Terms Agreement (as hereinafter defined) or otherwise, directly or indirectly,
not to offer, sell or deliver, such Note in, or to residents of, the country
issuing such currency, except as permitted by applicable law.
(g) Subject to the terms and conditions stated herein, whenever the
Company and the Agent determine that the Company shall sell Notes directly to
the Agent as purchaser (the "Purchaser"), each such sale of Notes shall be made
in accordance with the terms of this Agreement and any supplemental agreement
relating thereto between the Company and the Purchaser. Each such supplemental
agreement (which shall be substantially in the form of Annex B) is herein
referred to as a "Terms Agreement". The Purchaser's commitment to purchase Notes
pursuant to any Terms Agreement shall be deemed to have been made on the basis
of the representations and warranties of the Company herein contained and shall
be subject to the terms and conditions herein set forth. Each Terms Agreement
shall describe the Notes to be purchased by the Purchaser pursuant thereto and
shall specify the principal amount of such Notes, the price to be paid to the
Company for such Notes, the rate at which interest will be paid on the Notes,
the Closing Date for such Notes, the place of delivery of the Notes and payment
therefor, the method of payment and any modification of the requirements for the
delivery of the opinions of counsel, the certificates from the Company or its
officers and the letter from the Company's independent public accountants
pursuant to Section 7(c). Such Terms Agreement shall also specify any period of
time referred to in Section 5(l).
Delivery of the Notes sold to the Purchaser pursuant to any Terms
Agreement shall be made as agreed to between the Company and the Purchaser and
set forth in the respective Terms Agreement, not later than the Closing Date set
forth in such Terms Agreement, against payment of funds to the Company in the
net amount due to the Company for such Notes by the method and in the form set
forth in such Terms Agreement.
2. Offering Procedures. The Procedures may be amended only by written
agreement of the Company and the Agent after notice to the Trustees, and, to the
extent any such amendment affects a Trustee, with the approval of such
4
<PAGE>
Trustee. The Company and the Agent agree to perform the respective duties and
obligations specifically provided to be performed by them in the Procedures.
3. Registration Statements and Prospectus. The Company has filed with
the Securities and Exchange Commission (the "Commission"), pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and regulations adopted by the Commission thereunder (the "Rules"), a
registration statement on Form S-3 (No. 333-17913)(the "First Registration
Statement") and a registration statement on Form S-3 (No. 333-[ ]) (the "Second
Registration Statement") (such Second Registration Statement also constituting
Post-Effective Amendment No. 1 to the First Registration Statement), each
including a basic prospectus, which have become effective under the Securities
Act under which the sale of $[ ] aggregate initial public offering price of debt
securities (the "Securities"), including the Notes, remains registered at this
time (the First Registration Statement and the Second Registration Statement,
each including all exhibits thereto and each as amended at the date of this
Agreement, being hereinafter collectively called the "Registration Statements").
The Company has included in the Registration Statements, or has filed or will
file with the Commission pursuant to the applicable paragraph of Rules 424(b)
and 429 under the Securities Act, a supplement to the form of prospectus
included in the Registration Statements relating to the Notes and the plan of
distribution thereof (the "Prospectus Supplement"). In connection with the sale
of the Notes the Company proposes to file with the Commission pursuant to the
applicable paragraph of Rules 424(b) and 429 under the Securities Act further
supplements to the Prospectus Supplement specifying the interest rates, maturity
dates, redemption provisions, if any, optional repayment rights, if any, and
other terms of the Notes sold pursuant hereto or the offering thereof. The
Indentures have been qualified under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). The term "the Effective Date" shall mean, for each
of the Registration Statements, each date (in the case of the First Registration
Statement, on or after the effective date of Post-Effective Amendment No. 1
thereto) that such Registration Statement or any post-effective amendment or
amendments thereto became or become effective. "Basic Prospectus" shall mean the
form of basic prospectus relating to the Securities contained in each
Registration Statement at the Effective Date. The term "Prospectus" means the
Basic Prospectus as supplemented by the Prospectus Supple ment. Any reference
herein to a Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Prospectus
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includes the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 (the "Incorporated Docu ments") which were filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), on or before the
Effective Date of such Registration Statement or the issue date of the Basic
Prospectus, the Prospectus Supplement or the Prospectus, as the case may be, and
any reference herein to "amend", "amendment" or "supplement" with respect to a
Registration Statement, the Basic Prospectus, the Prospectus Supplement or the
Prospectus includes the Incorporated Documents filed under the Exchange Act
after the Effective Date of such Registration Statement or the issue date of the
Basic Prospectus, the Prospectus Supplement or the Prospectus, as the case may
be; and any reference herein to the Registration Statements includes each of the
First Registration Statement and the Second Registration Statement only so long
as Notes may be issued in the future thereunder and shall refer to either one or
both of such Registration Statements, as appropriate.
The Company confirms that you are authorized to distribute the
Prospectus and any amendments or supplements thereto.
4. Representations and Warranties. The Company represents and warrants
to you as follows:
(a) The Company meets the requirements for the use of Form S-3 under
the Securities Act. The Registration Statements meet the requirements set forth
in Rule 415(a)(1)(ix) or (x) of the Rules and comply in all other material
respects with Rule 415 of the Rules.
(b) As of the date hereof, on the Effective Date, when any amendment or
supplement to the Prospectus is filed with the Commission pursuant to Rule 424
or Rule 429 of the Rules, as of the date of any Terms Agreement and on any
Closing Date, (i) the Registration Statements, as amended as of any such time,
the Prospectus, as amended or supplemented as of any such time, and the
Incorporated Documents will comply in all material respects with the applicable
requirements of the Securities Act and the Rules, and the Exchange Act and the
Trust Indenture Act and the respective published rules and regulations adopted
by the Commission thereunder, (ii) the Registration Statements, as amended as of
any such time, did not or will not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading, and (iii) the
Prospectus, as amended or supplemented as of any such time, will not contain any
untrue statement of a material fact or
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omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
except that this representation and warranty does not apply to (x) statements or
omissions made in reliance on and in conformity with information relating to you
furnished in writing to the Company by you expressly for use in the Registration
Statements, the Prospectus or any amendment or supplement thereto or (y) that
part of the Registration Statements that shall constitute the Statements of
Eligibility and Qualification on Form T-1 of the Trustees under the Trust
Indenture Act, except statements or omissions in any such Statement made in
reliance upon information furnished in writing to the applicable Trustee by or
on behalf of the Company for use therein.
(c) As of the time any Notes are issued and sold hereunder, the
Indenture will constitute a legal, valid and binding instrument enforceable
against the Company in accordance with its terms and such Notes will have been
duly authorized, executed, authenticated and, when paid for by the purchasers
thereof, will constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture.
Each acceptance by the Company of an offer to purchase Notes from the
Company and each request by the Company to you that you solicit offers to
purchase Notes from the Company will be deemed to be a representation and
warranty by the Company to you that the representations and warranties of the
Company in this Agreement are true and correct as of the time of such acceptance
and that such representations and warranties will be true and correct as of the
Closing Date for such Notes, in each case as though made at and as of such time;
it being understood that such representations and warranties will relate to the
Registration Statements as amended as of any such time and the Prospectus as
amended or supplemented as of any such time.
5. Agreements. (a) Prior to the termination of the offering of the
Notes, the Company will not file any amendment or supplement to either of the
Registration Statements or the Prospectus (except for (i) periodic or current
reports filed under the Exchange Act, (ii) a supplement relating to any offering
of Notes providing solely for the specification of or a change in the maturity
dates, the interest rates, the issuance prices or other similar terms of any
Notes or (iii) a supplement relating to an offering of Securities other than
Notes) (including any document to be incorporated therein by reference) unless a
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copy thereof has been submitted to you a reasonable period of time before its
filing and you have not reasonably objected thereto within a reasonable period
of time after receiving such copy. Subject to the foregoing sentence, the
Company will cause each amendment or supplement to the Prospectus to be filed
with the Commission as required pursuant to the applicable paragraph of Rules
424(b) and/or 429 of the Rules or, in the case of any document to be
incorporated therein by reference, to be filed with the Commission as required
pursuant to the Exchange Act, within the time period prescribed and will provide
evidence satisfactory to you of such filing.
(b) The Company will advise you promptly (i) when each amendment or
supplement to the Prospectus shall have been filed with the Commission pursuant
to Rules 424(b) and/or 429 or, in the case of any document incorporated therein
by reference, when such document shall have been filed with the Commission
pursuant to the Exchange Act, (ii) when, prior to the termination of the
offering of the Notes, any amendment to either of the Registration Statements
shall have been filed or become effective, (iii) of the initiation or
threatening of any proceedings for, or receipt by the Company of any notice with
respect to, the suspension of the qualification of the Notes for sale in any
jurisdiction or the issuance of any order by the Commission suspending the
effectiveness of either of the Registration Statements and (iv) of the receipt
by the Company or any representative or attorney of the Company of any other
communication from the Commission relating to either of the Registration
Statements, the Prospectus or any amendment or supplement thereto or to the
transactions contemplated by this Agreement. The Company will use its best
efforts to prevent the issuance of an order suspending the effectiveness of
either of the Registration Statements and, if any such order is issued, to
obtain its lifting as soon as possible.
(c) The Company will deliver to you, without charge, two conformed
copies of the Second Registration Statement and each post-effective amendment to
the Registration Statements filed after the date hereof (including all exhibits
filed with any such document) and as many conformed copies of the Registration
Statements and each such amendment (excluding exhibits) and each Indenture as
you may reasonably request.
(d) The Company, during the period when a prospectus relating to the
Notes is required to be delivered under the Act, will deliver, without charge,
to you, at such office or offices as you may designate, as many copies of
8
<PAGE>
the Prospectus or any amendment or supplement thereto as you may reasonably
request, and, if any event occurs during such period as a result of which the
Prospectus, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if during such period it is necessary to amend either
Registration Statement or to amend or supplement the Prospectus to comply with
the Securities Act or the Rules or the Exchange Act or the published rules and
regulations adopted by the Commission thereunder, the Company promptly will (i)
notify you to suspend solicitation of offers to purchase Notes from the Company,
(ii) prepare and file with the Commission, subject to Section 5(a), and deliver,
without charge, to you, an amendment or supplement which will correct such
statement or omission or effect such compliance and (iii) supply any amended or
supplemented Prospectus to you in such quantities as you may reasonably request.
(e) The Company, during the period when a prospectus relating to the
Notes is required to be delivered under the Act, will file promptly all
documents required to be filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act. The Company will make generally
available to its security holders as soon as practicable, but in any event not
later than fifteen months after (i) the Effective Date of the Registration
Statements, (ii) the Effective Date of each post-effective amendment to either
of the Registration Statements and (iii) the date of each filing by the Company
with the Commission of an Annual Report on Form 10-K that is incorporated by
reference in the Registration Statements, an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules.
(f) The Company will take such actions as you designate in order to
qualify the Notes for offer and sale under the securities or "blue sky" laws of
such jurisdictions as you designate, will maintain such qualification in effect
for so long as may be required for the distribution of the Notes and will
arrange for the determination of the legality of the Notes for purchase by
institutional investors.
(g) The Company will supply to you copies of such financial statements
and other periodic and special reports as the Company may from time to time
distribute generally to the holders of any class of its capital stock and of
each annual or other report it is required to file with the
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Commission. The Company shall furnish to you such information, documents,
certificates of officers of the Company and opinions of counsel for the Company
relating to the business, operations and affairs of the Company, the
Registration Statements, the Prospectus, and any amendments thereof or
supplements thereto, the Indenture, the Notes, this Agreement, the Procedures
and the performance by the Company and you of its and your respective
obligations hereunder and thereunder as you may from time to time and at any
time prior to the termination of this Agreement reasonably request.
(h) The Company will, whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, (i) pay, or
reimburse if paid by you, all costs and expenses incident to the performance of
the obligations of the Company under this Agreement, including costs and
expenses relating to (A) the preparation, printing and filing of the
Registration Statements and exhibits thereto, the Prospectus, all amendments and
supplements to either of the Registration Statements and the Prospectus, and the
printing or other reproduction of the Indentures and this Agreement, (B) the
authorization and issuance of the Notes and the preparation and delivery of
certificates for the Notes, (C) the registration or qualification of the Notes
for offer and sale under the securities or "blue sky" laws of the jurisdictions
referred to in paragraph (f) of this Section 5 and the determination of the
legality of the Notes, including the fees and disbursements of Cravath, Swaine &
Moore, your counsel, in that connection, and the preparation and printing of any
preliminary and supplemental "blue sky" memoranda and legal investment
memoranda, (D) the furnishing (including costs of shipping and mailing) to you
of copies of the Prospectus, and all amendments or supplements to the
Prospectus, and of all other documents, reports and other information required
by this Section to be so furnished, (E) all transfer taxes, if any, with respect
to the sale and delivery of the Notes by the Company, (F) the fees and expenses
of the Trustees, (G) all fees charged by the National Association of Securities
Dealers, Inc., in connection with the Notes and (H) the fees charged by rating
agencies in connection with any rating of the Notes, (ii) reimburse you on a
quarterly basis for all out-of-pocket expenses (including advertising expenses)
incurred by you with the advance approval of the Company and (iii) reimburse the
reasonable fees and disbursements of Cravath, Swaine & Moore, your counsel,
incurred in connection with this Agreement.
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<PAGE>
(i) Each time that either of the Registration Statements or the
Prospectus is amended or supplemented (other than by an amendment or supplement
relating to any offering of Securities other than the Notes or providing solely
for the specification of or a change in the maturity dates, the interest rates,
the issuance prices or other similar terms of any Notes sold pursuant hereto),
including by the filing of any document incorporated therein by reference, the
Company will deliver or cause to be delivered forthwith to you a certificate of
the chief executive, operating or financial officer or treasurer and the
secretary or chief financial or accounting officer or treasurer of the Company,
dated the date of the effectiveness of such amendment or the date of filing of
such supplement, in form reasonably satisfactory to you, to the effect that the
statements contained in the certificate that was last furnished to you pursuant
to either Section 6(c) or this paragraph (i) are true and correct at the time of
the effectiveness of such amendment or the filing of such supplement as though
made at and as of such time (except that (i) the last day of the fiscal quarter
for which financial statements of the Company were last filed with the
Commission shall be substituted for the corresponding date in such certificate
and (ii) such statements shall be deemed to relate to the Registration
Statements and the Prospectus as amended or supplemented to the time of the
effectiveness of such amendment or the filing of such supplement) or, in lieu of
such certificate, a certificate of the same tenor as the certificate referred to
in Section 6(c) but modified to relate to the last day of the fiscal quarter for
which financial statements of the Company were last filed with the Commission
and to the Registration Statements and the Prospectus as amended or supplemented
to the time of the effectiveness of such amendment or the filing of such
supplement.
(j) Each time that either of the Registration Statements or the
Prospectus is amended or supplemented (other than by an amendment or supplement
(i) relating to any offering of Securities other than the Notes, (ii) providing
solely for the specification of or a change in the maturity dates, the interest
rates, the issuance prices or other similar terms of any Notes sold pursuant
hereto, or (iii) setting forth or incorporating by reference financial
statements or other information as of and for a fiscal quarter, unless, in the
case of clause (iii) above, in your reasonable judgment, such financial
statements or other information are of such a nature that an opinion of counsel
should be furnished), including by the filing of any document incorporated
therein by reference, the Company will furnish or cause to be furnished
forthwith to you a written
11
<PAGE>
opinion and a written letter of counsel for the Company satisfactory to you,
dated the date of the effectiveness of such amendment or the date of filing of
such supplement, in form satisfactory to you, of the same tenor as the opinion
and letter referred to in Section 6(d) but modified to relate to the
Registration Statements and the Prospectus as amended or supplemented to the
time of the effectiveness of such amendment or the filing of such supplement or,
in lieu of such opinion and letter, counsel last furnishing such an opinion and
letter to you may furnish you with a letter to the effect that you may rely on
such counsel's last opinion and last letter to the same extent as though it were
dated the date of such letter authorizing reliance (except that statements in
such counsel's last opinion and last letter will be deemed to relate to the
Registration Statements and the Prospectus as amended or supplemented to the
time of the effectiveness of such amendment or the filing of such supplement).
(k) Each time that either of the Registration Statements or the
Prospectus is amended or supplemented to set forth amended or supplemental
financial information, including by the filing of any document incorporated
therein by reference, the Company will cause its independent public accountants
forthwith to furnish a letter, dated the date of the effectiveness of such
amendment or the date of filing of such supplement, in form satisfactory to you,
of the same tenor as the letter referred to in Section 6(f) with such changes as
may be necessary to reflect the amended and supplemental financial information
included or incorporated by reference in the Registration Statements and the
Prospectus, as amended or supplemented to the date of such letter, provided that
if either of the Registration Statements or the Prospectus is amended or
supplemented solely to include or incorporate by reference financial information
as of and for a fiscal quarter, the Company's independent public accountants may
limit the scope of such letter, which shall be satisfactory in form to you, to
the unaudited financial statements, the related "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and any other
information of an accounting, financial or statistical nature included in such
amendment or supplement, unless, in your reasonable judgment, such letter should
cover other information or changes in specified financial statement line items.
(l) During the period, if any, specified in any Terms Agreement, the
Company shall not, without the prior consent of the Purchaser, issue or announce
the proposed issuance of any of its debt securities, including Notes,
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<PAGE>
with terms substantially similar to the Notes being purchased pursuant to such
Terms Agreement.
(m) Upon your reasonable request on any Closing Date, the Company will
furnish or cause to be furnished forthwith to you a written opinion of counsel
for the Company satisfactory to you, dated such Closing Date, of the same tenor
as paragraphs 1 and 3 of the opinion referred to in Section 6(d), but modified,
as necessary, to relate to the Prospectus as amended or supplemented at such
Closing Date and except that such opinion shall state that the Notes being sold
by the Company on such Closing Date, when delivered against payment therefor as
provided in the applicable Indenture and this Agreement, will, assuming
performance by the authenticating agent or the applicable Trustee under the
applicable Indenture, have been duly executed, authenticated, issued and
delivered and will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the applicable Indenture and enforceable in
accordance with their terms, subject only to the exceptions as to enforcement
set forth in paragraph 3 of the opinion referred to in Section 6(d), and that
such Notes conform to the description thereof contained in the Prospectus as
amended or supplemented to such Closing Date.
6. Conditions to the Obligations of the Agent. The obligations of the
Agent to solicit offers to purchase Notes from the Company are subject to the
accuracy, on the date of this Agreement, on the Effective Date of each
Registration Statement, when any amendment or supplement to the Prospectus is
filed with the Commission pursuant to the applicable paragraph of Rule 424(b)
and/or 429 of the Rules and on each Closing Date, of the representations and
warranties of the Company in this Agreement, to the accuracy and completeness of
all statements made by the Company or any of its officers in any certificate
delivered to the Agent or the Agent's counsel pursuant to this Agreement, to
performance by the Company of its obligations under this Agreement and to each
of the following additional conditions:
(a) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such
supplement, shall have been filed in the manner and within the time
period required by Rule 424(b); and no order suspending the
effectiveness of either of the Registration Statements, as amended from
time to time, shall be in effect and no proceedings for such purpose
shall be pending before or threatened by the Commission, and any
requests for additional information on the part of the
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<PAGE>
Commission (to be included in either of the Registration Statements or
the Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Agent.
(b) Since the date of the most recent financial statements
included or incorporated by reference in the Prospectus, (i) there must
not have been any change (of the type indicated in paragraph (b)(3) of
Annex D to this Agreement) specified in the most recent letter of the
type referred to in Section 5(k), in paragraph (f) of this Section 6 or
in Section 7(c)(iv), (ii) there must not have been any material adverse
change in the general affairs, prospects, management, business,
properties, financial condition or results of operations of the Company
and its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated by the Prospectus, as then amended or supplemented,
(iii) the Company and its subsidiaries must not have sustained any
material loss or interference with their business or properties from
fire, explosion, earthquake, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree not described
in the Prospectus, as then amended or supplemented, and (iv) there must
not have been any downgrading in the rating of any of the Company's
debt securities by any nationally recognized statistical rating
organization (as defined for purposes of Rule 436(g) of the Rules) or
any public announcement by any such organization of any proposal by it
to downgrade such rating or that it has under surveillance or review
its rating of the Notes or any other debt securities of the Company
(other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such
rating) if, in the judgment of the Agent, any such development referred
to in clause (i), (ii), (iii) or (iv) makes it impracticable or
inadvisable to proceed with the soliciting of offers to purchase Notes
from the Company as contemplated by the Prospectus, as then amended or
supplemented.
(c) The Company shall have furnished to the Agent on the date
of this Agreement a certificate of the Treasurer and the General
Counsel of the Company, dated such date, certifying that (i) the
signers have carefully examined the Registration Statements, the
Prospectus, the Indentures and this Agreement, (ii) the
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representations and warranties of the Company in this Agreement are
accurate on and as of the date of such certificate and the Company has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied as a condition to the obligation
of the Agent to solicit offers to purchase the Notes, (iii) since the
date of the most recent financial statements included or incorporated
by reference in the Prospectus, there has not been any material adverse
change in the general affairs, prospects, management, business,
properties, financial condition or results of operations of the Company
and its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus, as amended or supplemented as of the
date of such certificate, and (iv) to the knowledge of such officers,
no action to suspend the effectiveness of either of the Registration
Statements, as amended as of the date of such certificate, or to
prohibit the sale of the Notes has been taken or threatened by the
Commission.
(d) The Agent shall have received on the date of this
Agreement from the General Counsel of the Company an opinion and a
letter each dated such date substantially identical to the proposed
form of opinion and form of letter set forth in Annex C to this
Agreement.
(e) The Agent shall have received on the date of this
Agreement from Cravath, Swaine & Moore, its counsel, an opinion dated
such date with respect to the Company, the Notes, the Indentures, this
Agreement and the form and sufficiency of all proceedings taken in
connection with the sale and delivery of the Notes and a letter dated
such date with respect to the Registration Statements and the
Prospectus. Such opinion, letter and proceedings shall be satisfactory
in all respects to the Agent. The Company must have furnished to such
counsel such documents as they may reasonably request for the purpose
of enabling them to render such opinion and letter.
(f) The Agent shall have received, at the date of this
Agreement, a signed letter from Ernst & Young LLP, independent
accountants for the Company, substantially in the form of Annex D to
this Agreement.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement will comply
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with this Agreement only if they are in form and scope satisfactory to the Agent
and its counsel.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Agent and its counsel, this Agreement and all obligations
of the Agent hereunder may be canceled at any time by the Agent. Notice of such
cancelation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cravath, Swaine & Moore, counsel for the Agent, at
Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the date of this
Agreement.
7. Conditions to the Obligations of the Pur chaser. The obligations of
the Purchaser to purchase any Notes from the Company are subject to the
accuracy, on the date of any related Terms Agreement and on the Closing Date for
such Notes, of the representations and warranties of the Company in this
Agreement, to the accuracy and completeness of all statements made by the
Company or any of its officers in any certificate delivered to the Purchaser or
its counsel pursuant to this Agreement, to performance by the Company of its
obligations under this Agreement and to each of the following additional
conditions:
(a) No stop order suspending the effectiveness of either of
the Registration Statements shall have been issued and no proceedings
for that purpose shall have been instituted or threatened.
(b) Since the date of the most recent financial statements
included or incorporated by reference in the Prospectus, (i) there must
not have been any change (of the type indicated in paragraph (b)(3) of
Annex D to this Agreement) specified in the most recent letter of the
type referred to in Section 5(k), in Section 6(f) or in paragraph
(c)(iv) of this Section 7, (ii) there must not have been any material
adverse change in the general affairs, prospects, management, business,
properties, financial condition or results of operations of the Company
and its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
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or contemplated by the Prospectus, as then amended or supplemented,
(iii) the Company and its subsidiaries must not have sustained any
material loss or interference with their business or properties from
fire, explosion, earthquake, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree not described
in the Prospectus, as then amended or supplemented, and (iv) there must
not have been any downgrading in the rating of any of the Company's
debt securities by any nationally recognized statistical rating
organization (as defined for purposes of Rule 436(g) of the Rules) or,
if so specified in the applicable Terms Agreement, any public
announcement by any such organization of any proposal by it to
downgrade such rating or that it has under surveillance or review its
rating of the Notes or any other debt securities of the Company (other
than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such
rating) if, in the judgment of the Purchaser, any such development
referred to in clause (i), (ii), (iii) or (iv) makes it impracticable
or inadvisable to consummate the purchase of the Notes.
(c) If specified by any related Terms Agreement and except to
the extent modified by such Terms Agreement, the Purchaser shall have
received, appropriately updated, (i) a certificate of the Company,
dated as of the Closing Date, to the effect set forth in Section 6(c)
(except that references to the Prospectus shall be to the Prospectus as
supplemented at the time of execution of the Terms Agreement), (ii) the
opinion and letter of the General Counsel of the Company, each dated as
of the Closing Date, to the effect set forth in Section 6(d), (iii) the
opinion and letter of Cravath, Swaine & Moore, counsel for the
Purchaser, each dated as of the Closing Date, to the effect set forth
in Section 6(e) and (iv) a letter of Ernst & Young LLP, independent
accountants for the Company, dated as of the Closing Date, to the
effect set forth in Section 6(f).
(d) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information, certificates and
documents as the Purchaser may reasonably request.
If any of the conditions specified in this Section 7 shall not have
been fulfilled in all material respects when and as provided in this Agreement
and any
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Terms Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement or such Terms Agreement shall not be in all material
respects reasonably satisfactory in form and substance to the Purchaser and its
counsel, such Terms Agreement and all obligations of the Purchaser thereunder
and with respect to the Notes subject thereto may be canceled at, or at any time
prior to, the respective Closing Date by the Purchaser. Notice of such
cancelation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
8. Right of Person Who Agreed to Purchase to Refuse to Purchase. The
Company agrees that any person who has agreed to purchase and pay for any Note,
including the Purchaser and any person who purchases pursuant to a solicitation
by the Agent, shall have the right to refuse to purchase such Note if, at the
Closing Date therefor, any condition set forth in Section 6 or 7, as applicable,
shall not be satisfied, it being understood that under no circumstances
whatsoever shall the Agent have any duty or obligation to exercise the judgment
permitted under Section 6(b) or Section 7(b) on behalf of any such person.
9. Indemnification. (a) The Company will indemnify and hold harmless
you, your directors, officers, employees and agents and each person, if any, who
controls you within the meaning of either the Securities Act or the Exchange Act
against any and all losses, claims, damages and liabilities, joint or several
(including any investigation, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they, or any of them, may become
subject under the Securities Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, either Registration Statement or the Prospectus or any
amendment or supplement to any of the foregoing, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
provided that the Company will not be liable to the extent that such loss,
claim, damage or liability arises from the sale of Notes by the Company to any
person in the manner contemplated in the Prospectus, as amended or supplemented
as of the time of the confirmation of such sale, as a result of a solicitation
by you and is based upon an untrue statement or omission or alleged untrue
statement or omission (i) made in reliance upon and in conformity with
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information relating to you furnished in writing to the Company by you expressly
for use in the document or (ii) in a preliminary prospectus if the Prospectus,
as amended or supplemented as of the time of the confirmation of the sale to
such person, corrected the untrue statement or omission or alleged untrue
statement or omission which is the basis of the loss, claim, damage or liability
for which indemnification is sought and a copy of the Prospectus, as so amended
(but excluding any documents incorporated therein by reference), was not sent or
given to such person at or before the confirmation of the sale to such person in
any case where such delivery is required by the Securities Act, unless such
failure to deliver the Prospectus, as so amended, was a result of noncompliance
by the Company with Section 5(d). This indemnity agreement will be in addition
to any liability that the Company might otherwise have.
(b) You will indemnify and hold harmless the Company, each person, if
any, who controls the Company within the meaning of either the Securities Act or
the Exchange Act, each director of the Company and each officer of the Company
who signs either of the Registration Statements to the same extent as the
foregoing indemnity from the Company to you, but only insofar as losses, claims,
damages or liabilities arise from the sale of Notes by the Company to any person
in the manner contemplated in the Prospectus as a result of a solicitation by
you and are based upon any untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus, either Registration
Statement or the Prospectus or any amendment or supplement to any of them in
reliance upon and in conformity with information relating to you furnished in
writing to the Company by you expressly for use in the document. This indemnity
agreement will be in addition to any liability that you might otherwise have.
(c) Any party that proposes to assert the right to be indemnified under
this Section 9 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 9, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party (i) will
not relieve it from liability under this Section 9 unless and to the extent it
did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses and (ii)
will not relieve it from any liability that it may have to any indemnified party
otherwise than under this Section 9. If any such action is brought against any
indemnified party and
19
<PAGE>
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in, and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and, after
notice from the indemnifying party to the indemnified party of its election to
assume the defense, the indemnifying party will not be liable to the indemnified
party for any legal or other expenses except as provided below and except for
the reasonable costs of investigation subsequently incurred by the indemnified
party in connection with the defense. The indemnified party will have the right
to employ its own counsel in any such action, but the fees and expenses of such
counsel will be at the expense of such indemnified party unless (1) the
employment of counsel by the indemnified party has been authorized in writing by
the indemnifying party, (2) the indemnified party has reasonably concluded that
there may be legal defenses available to it or other indemnified parties which
are different from or in addition to those available to the indemnifying party
(in which case the indemnifying party will not have the right to direct the
defense of such action on behalf of the indemnified party) or (3) the
indemnifying party has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, in each of which cases the fees and expenses of such counsel will
be at the expense of the indemnifying party or parties and all such fees and
expenses will be reimbursed promptly as they are incurred. An indemnifying party
will not be liable for any settlement of any action or claim effected without
its written consent or, in connection with any proceeding or related proceedings
in the same jurisdiction, for the fees and expenses of more than one separate
counsel for all indemnified parties.
10. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 9 is applicable in accordance with its terms but for any reason is held
to be unavailable from the Company or you, the Company and you agree to
contribute to the aggregate losses, claims, damages and liabilities (including
any investigation, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claim asserted) (collectively "Losses") to which the Company and you may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company and by you from the offering of the Notes
20
<PAGE>
from which such Losses arise; provided, however, that in no case shall you be
responsible for any amount in excess of the commissions received by you in
connection with the sale of Notes from which such Losses arise (or, in the case
of Notes sold pursuant to a Terms Agreement, the aggregate commissions that
would have been received by you if such commissions had been payable). If the
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company and you shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and you in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) of the
Notes from which such Losses arise, and benefits received by you shall be deemed
to be equal to the total commissions received by you in connection with the sale
of Notes from which such Losses arise (or, in the case of Notes sold pursuant to
a Terms Agreement, the aggregate commissions that would have been received by
you if such commissions had been payable). Relative fault shall be determined by
reference to whether any alleged untrue statement or omission relates to
information provided by the Company or you. The Company and you agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 10, no person found guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 10, any person who controls a
party to this Agreement within the meaning of either the Securities Act or the
Exchange Act will have the same rights to contribution as that party, and each
officer of the Company who signed either of the Registration Statements and each
director of the Company will have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
Section 10. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action against such party in respect of which a
claim for contribution may be made under this Section 10, notify such party or
parties from whom contri bution may be sought, but the omission so to notify (i)
will not relieve such party or parties from liability under this Section 10
unless and to the extent it or they did not otherwise learn of such action and
such failure results in the forfeiture by such party or parties of substantial
21
<PAGE>
rights and defenses and (ii) will not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
otherwise than under this Section 10. No party will be liable for contribution
with respect to any action or claim settled without its written consent.
11. Termination. (a) This Agreement may, as between the Company and
you, be terminated for any reason at any time by either the Company or you
giving written notice of such termination to the other party. If any such notice
is given, this Agreement will terminate, as between the Company and you, at the
close of business on the third business day following the receipt of such notice
by the party to whom such notice is given. In the event of any such termination,
no party shall have any liability to the other party hereto, except as provided
in Sections l(e), 5(h), 9, 10 and 12, and this Agreement shall continue between
the Company and any other party to this Agreement without regard to any such
termination.
(b) Each Terms Agreement shall be subject to termination in the
absolute discretion of the Purchaser by notice given to the Company if, prior to
delivery of any payment for Notes to be purchased thereunder, (1) trading in the
equity securities of the Company is suspended by the Commission, by an exchange
that lists such equity securities of the Company, or by the NASDAQ National
Market, (2) additional material governmental restrictions, not in force on the
date of this Agreement, have been imposed upon trading in securities generally
or minimum or maximum prices have been generally established on the New York
Stock Exchange or on the American Stock Exchange, or trading in securities
generally has been suspended on any such Exchange or a general banking
moratorium has been established by Federal or New York authorities or (3) any
outbreak or material escalation of hostilities or other calamity or crisis
occurs the effect of which is such as to make it, in the judgment of the
Purchaser, impracticable to market such Notes.
12. Miscellaneous. The respective representa tions, warranties and
agreements of the Company and you in this Agreement will remain in full force
and effect regardless of any investigation made by or on behalf of you, the
Company or any person controlling you or the Company and will survive delivery
of and payment for the Notes. The reimbursement, indemnification and
contribution agreements in Sections 1(e), 5(h), 9, 10 and 12 will remain in full
force and effect regardless of any termination of this Agreement.
22
<PAGE>
This Agreement is for the benefit of you and the Company and the
respective successors of you and the Company and, to the extent expressed in
this Agreement, for the benefit of persons controlling you or the Company, and
directors and officers of the Company, and their respective successors, and no
other person, partnership, association or corporation shall acquire or have any
right under or by virtue of this Agreement.
Notwithstanding anything to the contrary contained in the Distribution
Agreement dated December 23, 1996, between the Company and you (the "Prior
Agreement"), the Prior Agreement shall terminate (except with respect to
Sections 1(e), 5(h), 9, 10 and 12 thereof) immediately upon the execution and
delivery of this Agreement.
All notices and communications under this Agreement will be in writing,
effective only on receipt and mailed or delivered by messenger, facsimile
transmission or otherwise to PaineWebber Incorporated at 1285 Avenue of the
Americas, New York, New York 10019, attention of General Counsel and Treasurer
or to the Company at 1285 Avenue of the Americas, New York, New York 10019,
attention of General Counsel and Treasurer.
This Agreement may be signed in multiple counterparts that taken as a
whole constitute one agreement.
This Agreement will be governed by and construed in accordance with the
laws of the State of New York.
Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
PAINE WEBBER GROUP INC.,
by
------------------------
Title:
23
<PAGE>
Confirmed:
PAINEWEBBER INCORPORATED,
by
--------------------
Title:
24
<PAGE>
Schedule I
SENIOR AND SUBORDINATED MEDIUM-TERM NOTE FEES
<TABLE>
<CAPTION>
Maturity Senior Subordinated
- ----------------------------------- ------ ------------
<S> <C> <C>
9 months to less than 12 months .050 .050
12 months to less than 18 months .125 .125
18 months to less than 2 years .150 .150
2 years to less than 3 years .250 .250
3 years to less than 4 years .350 .350
4 years to less than 5 years .450 .450
5 years to less than 7 years .500 .500
7 years to less than 10 years .550 .550
10 years to less than 20 years .600 .600
20 years to 30 years .750 .750
</TABLE>
<PAGE>
Annex A
-------
PAINE WEBBER GROUP INC.
Medium-Term Notes Administrative Procedures
September [ ], 1998
Medium-Term Senior Notes, Series C, and Medium-Term Subordinated Notes,
Series D, Due from Nine Months to 30 Years from Date of Issue (the "Notes") are
to be offered on a continuing basis by Paine Webber Group Inc. (the "Company").
PaineWebber Incorporated, as agent (the "Agent"), has agreed to use reasonable
efforts to solicit offers to purchase Notes from the Company. The Agent will be
obligated to purchase Notes for its own account. The Notes are being sold
pursuant to a Distribution Agreement between the Company and the Agent dated
September [ ], 1998 (the "Distribution Agreement"). The Notes will be issued
either as subordinated to ("Subordinated Notes") or on a parity with ("Senior
Notes") other unsecured and unsubordinated indebtedness of the Company and have
been registered with the Securities and Exchange Commission (the "Commission").
The Chase Manhattan Bank (the "Senior Note Trustee") is the trustee under the
Indenture dated as of March 15, 1988, covering the Senior Notes, as supplemented
by the First Supplemental Indenture dated as of September 22, 1989, and by the
Second Supplemental Indenture dated as of March 22, 1991 (such Indenture, as so
supplemented, being hereinafter referred to as the "Senior Note Indenture"),
each between the Company and the Senior Note Trustee. Chase Manhattan Bank
Delaware (the "Subordinated Note Trustee") is the trustee under the Indenture
dated as of March 15, 1988, covering the Subordinated Notes, as supplemented by
the First Supplemental Indenture dated as of September 22, 1989, by the Second
Supplemental Indenture dated as of March 22, 1991, and by the Third Supplemental
Indenture dated as of November 30, 1993 (such Indenture, as so supplemented,
being hereinafter referred to as the "Subordinated Note Indenture"), each
between the Company and the Subordinated Note Trustee. The Senior Note Indenture
and the Subordinated Note Indenture are hereinafter sometimes called the
"Indentures"; and the Senior Note Trustee and the Subordinated Note Trustee are
hereinafter sometimes called the "Trustees".
Notes may be represented by a Global Note (as hereinafter defined)
delivered to The Chase Manhattan Bank (in such capacity, the "Custodian") as
agent for The Depository Trust Company ("DTC"), with ownership of beneficial
interests in such Global Notes recorded in the book-entry system maintained by
DTC (each such interest in a
<PAGE>
Global Note being referred to herein as a "Book-Entry Note"), or may be
represented by a certificate delivered to the holder thereof or a person
designated by such holder (each a "Certificated Note"). An owner of a Book-Entry
Note will not be entitled to receive a certificate representing such Note. In
connection with the qualification of the Book-Entry Notes for eligibility in the
book-entry system maintained by DTC, The Chase Manhattan Bank will perform the
custodial, document control and administrative functions described in Part II
below, in accordance with its respective obligations under a Letter of
Representations from the Company and The Chase Manhattan Bank to DTC relating to
the Senior Notes and a Letter of Representations from the Company, The Chase
Manhattan Bank and the Subordinated Note Trustee to DTC relating to the
Subordinated Notes (each a "Letter of Representations", and, collectively, the
"Letters of Representations") and a Medium-Term Note Certificate Agreement (the
"Certificate Agreement") between The Chase Manhattan Bank and DTC, and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
system ("SDFS").
Administrative procedures and certain terms of the offering are
explained below. Certain general terms of the offering, applicable to both
Book-Entry Notes and Certificated Notes, are set forth in Part I hereof.
Book-Entry Notes will be issued in accordance with the administrative procedures
set forth in Part II hereof, as adjusted in accordance with changes in DTC's
operating requirements, and Certificated Notes will be issued in accordance with
the administrative procedures set forth in Part III hereof. Unless otherwise
defined herein, terms defined in the Distribution Agreement, the Indentures and
the Notes shall be used herein as therein defined. Notes for which interest is
calculated on the basis of a fixed interest rate, which may be zero, are
referred to herein as "Fixed Rate Notes". Notes for which interest is calculated
on the basis of a floating interest rate are referred to herein as "Floating
Rate Notes". To the extent the procedures set forth below conflict with the
provisions of the Notes, the Indentures, DTC's operating requirements or the
Distribution Agreement, the relevant provisions of the Notes, the Indentures,
DTC's operating requirements and the Distribution Agreement shall control. The
Company will advise the Agent from time to time in writing of those persons with
whom the Agent is to communicate with respect to offers to purchase Notes from
the Company and the details of their delivery. References below to "the Agent"
shall mean the Agent involved in any proposed purchase and sale of any Note or
Notes.
2
<PAGE>
Part I. Certain Terms of the Offering
-----------------------------
Price to Public: Each Note will be issued at the percentage
of its principal amount specified in the
Prospectus Supplement, as then amended or
supplemented, relating to the Notes.
Denominations: Notes denominated in U.S. dollars will be
- -------------- issued in minimum denominations of $100,000
and in denominations exceeding such amount
by integral multiples of $1,000. Book-Entry
Notes will not be denominated in any
currency or composite currency other than
the U.S. dollar. Certificated Notes
denominated in other than U.S. dollars will
be issued in the denominations specified
pursuant to "Settlement Procedures" in Part
III below.
Registration: Notes will be issued only in fully
- ------------- registered form.
Maturities: Each Note will mature on a date selected by
- ----------- the purchaser and agreed to by the Company,
which will be not less than nine months and
not more than 30 years after the date of
issue thereof.
Interest Each Note will bear interest (i) in the case
Payment: of Fixed Rate Notes, at the annual rate
- --------- stated on the face thereof, payable in
arrears on such dates as are specified
therein (each such date of payment other
than the maturity date being an "Interest
Payment Date" with respect to such Fixed
Rate Note) and at maturity and (ii) in the
case of Floating Rate Notes, at a rate
determined pursuant to the formula stated on
the face thereof, payable in arrears on such
dates as
3
<PAGE>
are specified therein (each such date of
payment other than the maturity date being
an "Interest Payment Date" with respect to
such Floating Rate Note) and at maturity.
Unless otherwise specified, each Note will
bear interest from and including the later
of its date of issue and the most recent
date to which interest has been paid or
provided for, to but excluding the current
Interest Payment Date or the maturity date
of such Note. Interest payments for a Note
will include interest accrued to but
excluding the Interest Payment Date;
provided, however, that a Floating Rate Note
which has a rate of interest that is reset
daily or weekly will bear interest from and
including the later of its date of issue and
the day following the most recent Regular
Record Date (as defined below) to which
interest on such Note has been paid or
provided for, to and including the next
preceding Regular Record Date or the
maturity date of such Note, except as
otherwise provided in such Note. Unless
otherwise specified, the "Regular Record
Date" with respect to any Interest Payment
Date for any Note shall be the 15th day
preceding such Interest Payment Date,
whether or not such date shall be a Business
Day.
Unless otherwise specified, interest
(including payments for partial periods)
will be calculated and paid, in the case of
Fixed Rate Notes, on the basis of a 360-day
year of twelve 30-day months and, in the
case of Floating Rate Notes, on the basis of
the actual number of days elapsed over a
year of 360 days, except with respect to
interest on Treasury Rate Notes (as
4
<PAGE>
defined in the Prospectus Supplement
relating to the Notes) which will be
calculated and paid on the basis of the
actual number of days elapsed over a year of
365 or 366 days, as applicable. Interest
will be payable to the person in whose name
the Note is registered at the close of
business on the Regular Record Date next
preceding the Interest Payment Date except
that, in the case of Notes issued between a
Regular Record Date and an Interest Payment
Date, interest payable on such Interest
Payment Date will be paid to the person in
whose name such Note was initially
registered; provided, however, that interest
payable at Maturity (as defined below) will
be payable to the person to whom principal
shall be payable. "Maturity" shall mean the
date on which the principal of a Note or an
installment of principal becomes due,
whether on the Maturity Date specified for
such Note, upon redemption or early
repayment or otherwise.
Procedure for Rate The Company and the Agent will discuss from
Setting and Posting: time to time the interest rates per annum to
- -------------------- be borne by, the issuance price of, the
aggregate principal amount of and maturity
of Notes that may be sold as a result of the
solicitation of offers by the Agent. If the
Company establishes a fixed set of interest
rates and maturities for an offering period
(a "posting"), or if the Company decides to
change already posted rates, it will
promptly advise the Agent of the rates and
maturities to be posted.
If the Company decides to post interest
rates and a decision has been reached to
change the posted interest rates, the
Company will
5
<PAGE>
promptly notify the Agent. The Agent
forthwith will suspend solicitation of
offers to purchase notes from the Company
until such time as the Company has advised
the Agent as to the new rates. Until such
time only "indications of interest" may be
recorded.
Acceptance of Offers: The Agent will communicate to the Company,
- --------------------- orally or in writing, each offer to purchase
Notes from the Company that is received by
the Agent as agent of the Company and that
is not rejected by the Agent as provided
below. The Company will have the sole right
to accept offers to purchase Notes from the
Company and may reject any such offer, in
whole or in part, for any reason. The Agent
may, in its discretion reasonably exercised,
reject any offer to purchase Notes from the
Company that is received by the Agent, in
whole or in part.
The Company will promptly notify the Agent
of its acceptance or rejection of an offer
to purchase Notes. If the Company accepts an
offer to purchase Notes it will confirm such
acceptance in writing to the Agent.
Suspension of As provided in the Distribution Agreement,
Solicitation; the Company may suspend solicitation of
Amendment or offers to purchase at any time and, upon
Supplement: receipt of instructions from the Company,
- ------------ the Agent will forthwith suspend
solicitation until such time as the Company
has advised it that solicitation of offers
to purchase may be resumed.
If the Agent receives the notice from the
Company contemplated by Section 5(d) of the
Distribution Agreement, it will promptly
suspend solicitation and will only resume
solicitation as provided in the
6
<PAGE>
Distribution Agreement. If the Company is
required, pursuant to Section 5(d) of the
Distribution Agreement, to prepare an
amendment or supplement, it will promptly
furnish the Agent with the proposed
amendment or supplement; in all other cases,
if the Company decides to amend or
supplement either of the Registration
Statements or the Prospectus, it will
promptly advise the Agent and will furnish
the Agent with the proposed amendment or
supplement in accordance with the terms of
the Distribution Agreement. The Company will
promptly file such amendment or supplement,
provide the Agent (and Cravath, Swaine &
Moore or such other law firm as may be
counsel to the Agent at the time) with
copies of any such amendment or supplement,
confirm to the Agent that such amendment or
supplement has been filed with the
Commission and advise the Agent that
solicitation may be resumed.
In the event that at any time the Company
suspends solicitation of offers to purchase
Notes from the Company there shall be any
outstanding offers to purchase Notes from
the Company that have been accepted by the
Company but for which settlement has not yet
occurred, the Company will promptly advise
the Agent and the Trustees whether such
sales may be settled and whether copies of
the Prospectus as amended or supplemented to
the time of the suspension may be delivered
in connection with the settlement of such
sales. The Company will have the sole
responsibility for such decision and for any
arrangements which may be made in the event
that the Company determines that such sales
may not be settled or that copies of the
Prospectus as so
7
<PAGE>
amended or supplemented may not be so
delivered.
Delivery of
Prospectus: A copy of the Prospectus, as most recently
- ----------- amended or supplemented on the date of
delivery thereof (except as provided below),
relating to any Note must be delivered to a
purchaser prior to or together with the
earliest of (i) any written offer of such
Note, (ii) the delivery of the written
confirmation provided for below and (iii)
the delivery of any Note purchased by such
purchaser. Subject to the foregoing and to
the procedures described in Part II below,
it is anticipated that delivery of the
Prospectus, confirmation and Notes to the
purchaser will be made simultaneously at
settlement. The Company shall ensure that
the Agent receives copies of the Prospectus
and each amendment or supplement thereto
(including appropriate pricing stickers) in
such quantities and within such time limits
as will enable the Agent to deliver such
confirmation or Note to a Purchaser as
contemplated by these procedures and in
compliance with the preceding sentence. If,
since the date of acceptance of a
purchaser's offer, the Prospectus shall have
been supplemented solely to reflect any sale
of Notes on terms different from those
agreed to between the Company and such
purchaser or a change in posted rates not
applicable to such purchaser, such purchaser
shall not receive the Prospectus as
supplemented by such new supplement, but
shall receive the Prospectus as supplemented
to reflect the terms of the Notes being
purchased by such Purchaser and otherwise as
most recently amended or supplemented on the
date of delivery of the Prospectus.
8
<PAGE>
Confirmation: For each offer to purchase a Note from the
- ------------- Company solicited by the Agent and accepted
by the Company, the Agent will issue a
confirmation to the purchaser, with a copy
to the Company, setting forth the Settlement
Details (as hereinafter defined) and
delivery and payment instructions.
Business Day: "Business Day" with respect to any Note
- ------------- means each day, other than a Saturday or
Sunday, that is (i) not a day on which
banking institutions in the Business Day
Centers with respect to such Note are
authorized or obligated by law or executive
order to close and (ii) if such Note is a
LIBOR Note (as defined in the Prospectus
Supplement), a London Banking Day (as
hereinafter defined). Unless otherwise
specified in the applicable Note, "Business
Day Centers" with respect to any Note shall
mean The City of New York and, in the case
of any Note payable in a Specified Currency
other than U.S. dollars or a composite
currency, the principal financial center of
the country issuing the Specified Currency.
As used herein, "London Banking Day" shall
mean any day on which dealings in deposits
in U.S. dollars are transacted in the London
interbank market.
Advertising Cost: The Company will determine with the Agent
- ----------------- the amount of advertising that may be
appropriate in offering the Notes.
Advertising expenses approved in advance by
the Company will be paid by the Company.
Payment of Expenses: The Agent will forward to the Company,
- -------------------- following the end of each quarter, a
statement of the out-of-pocket expenses
incurred by the Agent during that quarter
which are reimbursable to it pursuant to
the terms of the Distribution
9
<PAGE>
Agreement. The Company will remit payment to
the Agent promptly following the receipt of
each such statement.
Authenticity of
Signatures: The Agent will not have any obligation or
- ---------- liability to the Company or either Trustee
or any Authenticating Agent in respect of
the authenticity of the signature of any
officer, employee or agent of the Company or
either Trustee or such Authenticating Agent
on any Note.
PART II. Administrative Procedures for Book-Entry Notes
----------------------------------------------
Issuance: On any date of settlement (as defined under
- --------- "Settlement" below) for one or more
Book-Entry Notes, the Company will issue a
single global note in fully registered form
without coupons (a "Global Note")
representing up to $200,000,000 principal
amount of all of such Book-Entry Notes that
have the same terms, except as to principal
amount. Each Global Note will be dated and
issued as of the date of its authentication
by the relevant Trustee (or, in the case of
the Subordinated Note Trustee, by The Chase
Manhattan Bank, as the Authenticating
Agent). No Global Note will represent any
Certificated Note.
Identification Numbers: The Company will arrange with the CUSIP
- ----------------------- Service Bureau of Standard & Poor's
Corporation (the "CUSIP Service Bureau")
for the reservation of a series of CUSIP
numbers (including tranche numbers)
consisting of approximately 900 CUSIP
numbers and relating to Global Notes
representing Book-Entry Notes. The
Company will obtain from the CUSIP
Service Bureau a written list of such
series of reserved CUSIP numbers
10
<PAGE>
and will deliver such list to The Chase
Manhattan Bank and DTC. The Company will
assign CUSIP numbers to Global Notes as
described below under Settlement Procedure
"B". DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers
that the Company has assigned to Global
Notes. The Chase Manhattan Bank will notify
the Company at any time when fewer than 100
of the reserved CUSIP numbers remain
unassigned to Global Notes, and if it deems
necessary, the Company will reserve
additional CUSIP numbers for assignment to
Global Notes representing Book-Entry Notes.
Upon obtaining such additional CUSIP
numbers, the Company shall deliver a list
thereof to The Chase Manhattan Bank and DTC.
Registration: Each Global Note will be registered in the
- ------------- name of Cede & Co., as nominee for DTC, on
the Security Register maintained under the
Indenture governing such Global Note. The
beneficial owner of a Book-Entry Note (or
one or more indirect participants in DTC
designated by such owner) will designate one
or more participants in DTC (with respect to
such Note, the "Participants") to act as
agent or agents for such owner in connection
with the book-entry system maintained by
DTC, and DTC will record in book-entry form,
in accordance with instructions provided by
such Participants, a credit balance with
respect to such Note in the account of such
Participants. The ownership interest of such
beneficial owner (or such participant) in
such Note will be recorded through the
records of such Participants or through the
separate records of such Participants and
one or more indirect participants in DTC. So
11
<PAGE>
long as Cede & Co. is the registered owner
of a Global Note, DTC will be considered the
sole owner and holder of the Book-Entry
Notes represented by such Global Note for
all purposes under the Indenture governing
such Global Note.
Transfers: Transfers of a Book-Entry Note will
- ---------- be accomplished by book entries made by
DTC and, in turn, by Participants (and in
certain cases, one or more indirect
participants in DTC) acting on behalf of
beneficial transferors and transferees of
such Note.
Consolidation
and Exchange: The Chase Manhattan Bank may deliver to DTC
- ------------- and the CUSIP Service Bureau at any time a
written notice of consolidation specifying
(i) the CUSIP numbers of two or more
outstanding Global Notes that represent Book
Entry Notes having the same terms other than
principal amount and (for all such Notes
other than zero coupon Notes) for which
interest has been paid to the same date,
(ii) a date, occurring at least 30 days
after such written notice is delivered and
(for all such Notes other than zero coupon
Notes) at least 30 days before the next
Interest Payment Date for such Book-Entry
Notes, on which such Global Notes shall be
exchanged for a single replacement Global
Note and (iii) a new CUSIP number, obtained
from the Company, to be assigned to such
replacement Global Note. Upon receipt of
such a notice, DTC will send to its
participants (including The Chase Manhattan
Bank) a written reorganization notice to the
effect that such exchange will occur on such
date. Prior to the specified exchange date,
The Chase Manhattan Bank will deliver to the
CUSIP Service Bureau a written notice
12
<PAGE>
setting forth such exchange date and the new
CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the
Global Notes to be exchanged will no longer
be valid. On the specified exchange date,
The Chase Manhattan Bank will exchange such
Global Notes for a single Global Note
bearing the new CUSIP number and new
Original Issue Date (determined in
accordance with the Letters of
Representations), and the CUSIP numbers of
the exchanged Global Notes will, in
accordance with CUSIP Service Bureau
procedures, be canceled and not immediately
reassigned. Notwithstanding the foregoing,
if the Global Notes to be exchanged exceed
$200,000,000 in aggregate principal amount,
one Global Note will be authenticated and
issued to represent each $200,000,000 of
principal amount of the exchanged Global
Notes and an additional Global Note will be
authenticated and issued to represent any
remaining principal amount of such Global
Notes (see "Denominations" below).
Denominations: As noted in Part I above, Book-Entry Notes
- -------------- will be issued in minimum denominations of
$100,000 and in denominations exceeding such
amount by integral multiples of $1,000.
Global Notes will be denominated in
principal amounts not in excess of
$200,000,000. If one or more Book-Entry
Notes having an aggregate principal amount
in excess of $200,000,000 would, but for the
preceding sentence, be represented by a
single Global Note, then one Global Note
will be issued to represent each
$200,000,000 principal amount of such
Book-Entry Note or Notes and an additional
Global Note will be issued to represent any
remaining
13
<PAGE>
principal amount of such Book-Entry Note or
Notes. In such a case, each of the Global
Notes representing such Book-Entry Note or
Notes shall be assigned the same CUSIP
number.
Interest: General. Except as set forth below, each
- -------- Book-Entry Note will bear interest as set
forth in "Interest Payment" above, and such
interest shall be payable as set forth
therein.
Standard & Poor's Ratings Services, a
Division of the McGraw-Hill Companies, Inc.
("S&P"), will use the information received
in the pending deposit message described
under Settlement Procedure "C" below in
order to include the amount of any interest
payable and certain other information
regarding the related Global Note in the
appropriate (daily or weekly) bond report
published by S&P.
Payments of Payments of Interest Only. On the fifth
Principal and Business Day immediately preceding each
Interest: Interest Payment Date, The Chase Manhattan
- --------- Bank will deliver to the Company's
Treasurer's Office and DTC a written notice
specifying by CUSIP number the amount of
interest to be paid on each Global Note on
such Interest Payment Date and the total of
such amounts. DTC will confirm the amount
payable on each Global Note on such Interest
Payment Date by reference to the appropriate
(daily or weekly) bond reports published by
S&P. The Company will pay to The Chase
Manhattan Bank, as paying agent, the total
amount of interest due on such Interest
Payment Date and The Chase Manhattan Bank
will pay such amount to DTC at the times and
in the manner set forth below under "Manner
of Payment".
14
<PAGE>
Payments at Maturity. On or about the first
Business Day of each month, The Chase
Manhattan Bank will deliver to the Company
and DTC a written list of principal and
interest to be paid on each Global Note
maturing in the following month. The
Company, The Chase Manhattan Bank and DTC
will confirm the amounts of such principal
and interest payments with respect to each
such Global Note on or about the fifth
Business Day preceding the Maturity of such
Global Note. The Company will pay to The
Chase Manhattan Bank, as paying agent, the
principal amount of such Global Note,
together with interest due at such Maturity
and The Chase Manhattan Bank will pay such
amount to DTC at the times and in the manner
set forth below under "Manner of Payment".
Promptly after payment to DTC of the
principal and interest due at the Maturity
of such Global Note, the Senior Note
Trustee, in the case of Senior Notes, and
the Authenticating Agent, in the case of
Subordinated Notes, will cancel such Global
Note and deliver it to the Company with an
appropriate debit advice. On the first
Business Day of each month, The Chase
Manhattan Bank will deliver to each Trustee
a written statement indicating the total
principal amount of outstanding Global Notes
for which such Trustee serves as trustee as
of the immediately preceding Business Day.
Manner of Payment. The total amount of
any principal and/or interest due on
Global Notes on any Interest Payment Date
or at Maturity shall be paid by the
Company to The Chase Manhattan Bank in
funds available for use by The Chase
Manhattan Bank as of
15
<PAGE>
9:30 a.m. (New York City time) on such date.
The Company will make such payment on such
Global Notes by instructing The Chase
Manhattan Bank to withdraw funds from an
account maintained by the Company at The
Chase Manhattan Bank or by wire transfer to
The Chase Manhattan Bank. The Company will
confirm such instruction in writing to The
Chase Manhattan Bank (with a copy to the
Subordinated Note Trustee if such Global
Notes represent Subordinated Notes). Prior
to 10:00 a.m. (New York City time) on such
date or as soon as possible thereafter, The
Chase Manhattan Bank will pay the foregoing
amounts to DTC in same day funds in
accordance with the payment provisions
contained in the applicable Letter of
Representations. DTC will allocate such
payments to its Participants in accordance
with its existing operating procedures.
NEITHER THE COMPANY, AS ISSUER, THE CHASE
MANHATTAN BANK, THE SENIOR NOTE TRUSTEE NOR
THE SUBORDINATED NOTE TRUSTEE SHALL HAVE ANY
RESPONSIBILITY OR LIABILITY FOR THE PAYMENT
BY DTC TO SUCH PARTICIPANTS OF THE PRINCIPAL
OF, PREMIUM, IF ANY, AND INTEREST ON THE
BOOK-ENTRY NOTES.
Withholding Taxes. The amount of any
taxes required under applicable law to be
withheld from any interest payment on a
Book-Entry Note will be determined and
withheld by the Participant, indirect
participant in DTC or other person
responsible for forwarding payments and
materials directly to the beneficial
owner of such Note.
Settlement: The receipt by the Company of immediately
- ----------- available funds in
16
<PAGE>
payment for a Book-Entry Note and the
authentication and issuance of the Global
Note representing such Note shall constitute
"settlement" with respect to such Book-Entry
Note. All orders accepted by the Company
will be settled on the third Business Day
following the date of acceptance unless
otherwise agreed by the purchaser and the
Company. Such date of acceptance shall be
specified upon acceptance of such offer.
Settlement Procedures: Settlement Procedure with regard to each
- ---------------------- Book-Entry Note sold by the Company through
the Agent, as agent, shall be as follows:
A. The Agent will provide to the Company
(unless provided by the purchaser
directly to the Company) by telephone,
facsimile transmission or other means
agreed upon by the Company and the Agent
the following information (the
"Settlement Details"):
1. Principal amount and issue price.
2. If a Fixed Rate Note, the interest
rate, Regular Record Dates and
Interest Payment Dates, if any.
3. Settlement date (Original Issue
Date).
4. Maturity Date.
5. Type of Note (i.e., Senior Note or
Subordinated Note).
6. Agent's commission (to be paid in the
form of a discount from the issue
price remitted to the Company upon
settlement).
17
<PAGE>
7. Redemption provisions, if any.
8. Repayment provisions, if any.
9. If a Floating Rate Note, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Calculation Date,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates and
(xii) Calculation Agent.
10. All other terms of the Book-Entry
Note and all other items necessary to
complete the applicable Global Note.
Before accepting any offer to
purchase a Book-Entry Note that will
have terms in addition to or
different from the terms set forth on
any form of Note previously delivered
by the Company to, and approved by,
the applicable Trustee, other
18
<PAGE>
than merely as a result of completing
any blanks (other than the "Other
Terms" or equivalent blank) on such
form the Company will provide a
description of the proposed different
or additional terms to the applicable
Trustee and its counsel for the
purpose of determining whether such
terms are consistent with the
applicable Indenture, are
administratively acceptable to such
Trustee and its agents and do not
affect such Trustee's or its agents'
own rights, duties or immunities
under the Notes or the applicable
Indenture or otherwise in a manner
which is not reasonably acceptable to
such Trustee or its agents (all such
terms having been authorized, as of
the date of these Administrative
Procedures, by or pursuant to a Board
Resolution and the applicable Trustee
having received, as of the date of
these Administrative Procedures, all
opinions, certificates and orders
required prior to the authentication
and issuance of a Note containing
such terms). Any offer to purchase
such a Book-Entry Note shall only be
accepted by the Company if such terms
shall not be disapproved by the
applicable Trustee or its counsel on
one of the above-mentioned grounds
after the foregoing review.
In addition, before accepting any
offer to purchase any Note to be
settled in less than three Business
Days, the Company will verify that
the Authenticating Agent will have
adequate time to prepare and
authenticate such Note.
19
<PAGE>
B. The Company will assign a CUSIP
number to the Global Note
representing such Book-Entry Note and
then advise The Chase Manhattan Bank
in writing, including facsimile or
electronic transmission, and, in the
case of Subordinated Notes, the
Subordinated Note Trustee by
telephone (confirmed in writing at
any time on the same date) or
facsimile transmission of the
information set forth in Settlement
Procedure "A" above, such CUSIP
number and the name of the Agent.
Each such communication by the
Company shall constitute a
representation and warranty by the
Company to The Chase Manhattan Bank,
each Trustee and the Agent that (i)
such Book-Entry Note is then, and at
the time of issuance and sale thereof
will be, duly authorized for issuance
and sale by the Company, (ii) such
Book-Entry Note, and the Global Note
representing such Book-Entry Note,
will conform with the terms of the
Indenture pursuant to which such
Book- Entry Note is issued and (iii)
upon authentication and delivery of
such Global Note and any other
Securities to be issued on or prior
to the settlement date for the Book-
Entry Note represented by such Global
Note, the aggregate amount of
Securities which have been issued and
sold by the Company will not exceed
the amount of Securities registered
under the Registration Statements.
C. The Chase Manhattan Bank will enter a
pending deposit message through DTC's
Participant Terminal System,
providing the
20
<PAGE>
following settlement information to
DTC, the Agent, S&P and, upon
request, the Trustee under the
Indenture pursuant to which each
Book-Entry Note which is represented
by the Global Note is to be issued:
1. The information set forth in
Settlement Procedure "A".
2. Initial Interest Payment Date for
each such Book-Entry Note, the
number of days by which such date
succeeds the related Regular
Record Date and the amount of
interest payable on such Interest
Payment Date (to the extent known
at such time).
3. CUSIP number of the Global Note
representing such Book-Entry Note.
4. Whether such Global Note will
represent any other Book-Entry
Note (to the extent known at such
time).
D. Upon receipt of appropriate
documentation and instructions, the
Company will instruct the Senior Note
Trustee to prepare and authenticate
each Senior Global Note and will
instruct the Authenticating Agent to
prepare and authenticate each
Subordinated Global Note by facsimile
transmission or other acceptable
written means.
E. The Chase Manhattan Bank will
complete and the Senior Note Trustee
or the Authenticating Agent, as the
case may be, will authenticate the
Global Note, and The Chase Manhattan
Bank
21
<PAGE>
will register the Global Note in the
name of Cede & Co., as nominee of
DTC, and hold such Global Note for
delivery on the Closing Date therefor
to The Chase Manhattan Bank, as
Custodian.
F. DTC will credit each Book-Entry Note
represented by the Global Note to be
issued to the applicable participant
account at DTC.
G. The Chase Manhattan Bank will enter
an SDFS deliver order through DTC's
Participant Terminal System with
respect to each Book-Entry Note
represented by the Global Note to be
issued instructing DTC to (i) debit
such Book-Entry Note to The Chase
Manhattan Bank's participant account
and credit such Book-Entry Note to
the Agent's participant account and
(ii) debit the Agent's settlement
account and credit The Chase
Manhattan Bank's settlement account
for an amount equal to the price of
such Book-Entry Note less the Agent's
commission. The entry of such a
deliver order shall constitute a
representation and warranty by The
Chase Manhattan Bank to DTC that (i)
the Global Note representing such
Book- Entry Note has been issued and
authenticated and (ii) The Chase
Manhattan Bank is holding such Global
Note pursuant to the Certificate
Agreement.
H. The Agent will enter an SDFS deliver
order through DTC's Participant
Terminal System with respect to each
Book-Entry Note represented by the
Global Note to be issued instructing
DTC (i) to debit such
22
<PAGE>
Book-Entry Note to the Agent's
participant account and credit such
Book-Entry Note to the participant
account of the Participant with
respect to such Book-Entry Note and
(ii) to debit the settlement account
of such Participant and credit the
settlement account of the Agent for
an amount equal to the price of such
Book-Entry Note.
I. Transfers of funds in accor dance
with SDFS deliver orders described in
Settlement Procedures "G" and "H"
will be settled in accordance with
SDFS operating procedures (as
referenced in the Letters of
Representations) in effect on the
settlement date.
J. The Chase Manhattan Bank will credit
to an account of the Company
maintained at The Chase Manhattan
Bank funds available for immediate
use in the amount transferred to The
Chase Manhattan Bank in accordance
with Settlement Procedure "G".
K. The Chase Manhattan Bank, as
Custodian, will hold the Global Note
pursuant to the Certificate
Agreement. Periodically, The Chase
Manhattan Bank will send to the
Company a statement setting forth the
principal amount of Book-Entry Notes
outstanding as of that date under
each Indenture.
L. The Agent will deliver to the
purchaser a copy of the most recent
Prospectus applicable to the Notes
with or prior to the earlier of any
written offer of Notes and the
confirmation and
23
<PAGE>
payment by the purchaser of the Note.
The Agent will confirm the purchase
of each Book-Entry Note to the
purchaser either by transmitting to
the Participant with respect to such
Book-Entry Note a confirmation order
or orders through DTC's institutional
delivery system or by mailing a
written confirmation to such
purchaser.
Settlement
Procedures
Timetable: For orders of Book-Entry Notes solicited by
- ---------- the Agent, as agent, and accepted by the
Company for settlement on the first Business
Day after the sale date, Settlement
Procedures "A" through "L" set forth above
shall be completed as soon as possible but
not later than the respective times (New
York City time) set forth below:
<TABLE>
<CAPTION>
Settlement
Procedure Time
<S> <C> <C>
A-B 11:00 A.M. on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on Business Day
before
settlement date
E 9:00 A.M. on settlement
date
F 10:00 A.M. on settlement
date
G-H 2:00 P.M. on settlement
date
I 4:45 P.M. on settlement
date
J-L 5:00 P.M. on settlement
date
</TABLE>
If a sale is to be settled more than one
Business Day after the sale date, Settlement
Procedures "A", "B" and "C" shall be
completed as soon as practicable but no
later than 11:00 A.M. and 2:00 P.M., as the
case may be, on the first
24
<PAGE>
Business Day after the sale date. Settlement
Procedure "I" is subject to extension in
accordance with any extension of Fedwire
closing deadlines and in other events
specified in the SDFS operating procedures
in effect on the settlement date. Settlement
Procedures "D-H" and "J-L" shall be
completed as soon as practicable but no
later than the respective dates set forth
above.
If settlement of a Book-Entry Note is
rescheduled or canceled, the Company will as
soon as practicable give The Chase Manhattan
Bank notice to such effect. The Chase
Manhattan Bank will deliver to DTC, through
DTC's Participant Terminal System, a
cancelation message to such effect by no
later than 2:00 P.M. on the Business Day
immediately preceding the scheduled
settlement date (provided The Chase
Manhattan Bank has received such notice from
the Company by noon on the Business Day
immediately preceding the settlement date).
Fails: If The Chase Manhattan Bank fails to enter
- ------ an SDFS deliver order with respect to a
Book-Entry Note pursuant to Settlement
Procedure "G", The Chase Manhattan Bank may
deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable a
withdrawal message instructing DTC to debit
such Book-Entry Note to The Chase Manhattan
Bank's participant account. DTC will process
the withdrawal message, provided that The
Chase Manhattan Bank's participant account
contains a principal amount of the Global
Note representing such Book-Entry Note that
is at least equal to the principal amount to
be debited. If a withdrawal message is
processed with respect to all the Book-Entry
25
<PAGE>
Notes represented by a Global Note, the
Senior Note Trustee, in the case of Senior
Notes, or the Authenticating Agent, in the
case of Subordinated Notes, will mark such
Global Note "Canceled", make appropriate
entries in its records and send such
canceled Global Note to the Company. The
CUSIP number assigned to such Global Note
shall, in accordance with CUSIP Service
Bureau procedures, be canceled and not
immediately reassigned. If a withdrawal
message is processed with respect to one or
more, but not all, of the Book-Entry Notes
represented by a Global Note, The Chase
Manhattan Bank and the Senior Note Trustee
or the Authenticating Agent, as the case may
be, will exchange such Global Note for two
Global Notes, one of which shall represent
such Book-Entry Note or Notes and shall be
canceled immediately after issuance and the
other of which shall represent the other
Book-Entry Notes previously represented by
the surrendered Global Note and shall bear
the CUSIP number of the surrendered Global
Note.
If the purchase price for any Book-Entry
Note is not timely paid to the Participant
with respect to such Note by the beneficial
purchaser thereof (or a person, including an
indirect participant in DTC, acting on
behalf of such purchaser), such Participant
and, in turn, the Agent for such Note may
enter SDFS deliver orders through DTC's
Participant Terminal System reversing the
orders entered pursuant to Settlement
Procedures "H" and "G", respectively.
Thereafter, The Chase Manhattan Bank will
deliver the withdrawal message and take the
related actions described in the preceding
paragraph.
26
<PAGE>
Notwithstanding the foregoing, upon any
failure to settle with respect to a
Book-Entry Note, DTC may take any actions in
accordance with its SDFS operating
procedures then in effect. In the event of a
failure to settle with respect to one or
more, but not all, of the Book-Entry Notes
to have been represented by a Global Note,
The Chase Manhattan Bank and the Senior Note
Trustee or the Authenticating Agent, as the
case may be, will provide, in accordance
with Settlement Procedures "D" and "E", for
the authentication and issuance of a Global
Note representing the other Book-Entry Notes
to have been represented by such Global Note
and will make appropriate entries in its
records.
PART III
Administrative Procedures for Certificated Notes
------------------------------------------------
Issuance: Each Certificated Note will be dated and
- --------- issued as of the date of its authentication
by the relevant Trustee (or, in the case of
the Subordinated Note Trustee, by the
Authenticating Agent).
Transfers and A Certificated Note (whether a Senior Note
Exchanges: or a Subordinated Note) may be presented for
- ---------- transfer or exchange at the principal
corporate trust office in New York City of
the Senior Trustee. Certificated Notes will
be exchangeable for other Certificated Notes
having identical terms but different
authorized denominations. Certificated Notes
will not be exchangeable for Book-Entry
Notes.
Payments of On the fifth Business Day immediately
Principal and preceding each Interest Payment Date, The
Interest: Chase Manhattan
- ---------
27
<PAGE>
Bank, as paying agent, will furnish the
Company with the total amount of the
interest payments to be made on such
Interest Payment Date to the extent known.
In addition, on or about the first Business
Day of each month, The Chase Manhattan Bank
will provide to the Company's Treasurer's
Office a list of the principal and interest
to be paid on the respective Notes maturing
in the following month. The Company will
provide to The Chase Manhattan Bank not
later than any payment date sufficient
moneys to pay in full all principal and
interest payments due on such payment date.
The Chase Manhattan Bank shall make all such
payments in accordance with the terms of the
Notes. Notes presented to The Chase
Manhattan Bank at Maturity will be canceled
by The Chase Manhattan Bank.
The Chase Manhattan Bank will be responsible
for withholding taxes on interest paid on
Certificated Notes as required by applicable
law.
Settlement: The receipt by the Company of immediately
- ----------- available funds in exchange for an
authenticated Certificated Note delivered to
the Agent and the Agent's delivery of such
Certificated Note against receipt of
immediately available funds shall, with
respect to such Certificated Note,
constitute "settlement". All orders accepted
by the Company will be settled on the third
Business Day following the date of
acceptance unless otherwise agreed by the
purchaser and the Company. Such date of
settlement shall be specified upon
acceptance of such offer.
Settlement Settlement Procedures with regard to each
Procedures: Certificated Note sold by
- -----------
28
<PAGE>
the Company through the Agent, as agent,
shall be as follows:
A. The Agent will provide to the Company
(unless provided by the purchaser
directly to the Company), by
telephone, facsimile transmission or
other means agreed upon by the
Company and the Agent, the following
information (the "Settlement
Details"):
1. Exact name in which the Note or Notes
are to be registered.
2. Exact address of registered owner
and, if different, address for
payment of principal and interest.
3. Taxpayer identification number of
registered owner.
4. Principal amount and issue price.
5. If a Fixed Rate Note, the interest
rate, Regular Record Dates and
Interest Payment Dates, if any.
6. Settlement date (Original Issue
Date).
7. Maturity Date.
8. Type of Note (i.e., Senior Note or
Subordinated Note).
9. Agent's commission (to be paid in the
form of a discount from the issue
price remitted to the Company upon
settlement).
10. Redemption provisions, if any.
29
<PAGE>
11. Repayment provisions, if any.
12. If a Floating Rate Note, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Date,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent.
13. Authorized denominations of Notes
denominated in other than U.S.
dollars.
14. All other terms of the Note and all
other items necessary to complete the
Note.
Before accepting any offer to
purchase a Certificated Note that
will have terms in addition to or
different from the terms set forth on
any form
30
<PAGE>
of Note previously delivered by the
Company to, and approved by, the
applicable Trustee, other than merely
as a result of completing any blanks
(other than the "Other Terms" or
equivalent blank) on such form, the
Company will provide a description of
the proposed different or additional
terms to the applicable Trustee and
its counsel for the purpose of
determining whether such terms are
consistent with the applicable
Indenture, are administratively
acceptable to such Trustee and its
agents and do not affect such
Trustee's or its agents' own rights,
duties or immunities under the Notes
or the applicable Indenture or
otherwise in a manner which is not
reasonably acceptable to such Trustee
or its agents (all such terms having
been authorized, as of the date of
these Administrative Procedures, by
or pursuant to a Board Resolution and
the applicable Trustee having
received, as of the date of these
Administrative Procedures, all
opinions, certificates and orders
required prior to the authentication
and issuance of a Note containing
such terms). Any offer to purchase
such a Certificated Note shall only
be accepted by the Company if such
terms shall not be disapproved by the
applicable Trustee or its counsel on
one of the above-mentioned grounds
after the foregoing review.
In addition, before accepting any
offer to purchase any Certificated
Note to be settled in fewer than
three Business Days, the Company will
verify
31
<PAGE>
that the Senior Trustee or the
Authenticating Agent, as the case may
be, will have adequate time to
prepare and authenticate such
Certificated Note.
B. The Company will advise the relevant
Trustee (and, in the case of the
Subordinated Note Trustee, the
Authenticating Agent) by telephone
(confirmed in writing at any time on
the next Business Day) or electronic
transmission of the information set
forth in Settlement Procedure "A"
above and the name of the Agent and
shall instruct the relevant Trustee
or the Authenticating Agent, as
applicable, to authenticate the Note.
Each such communication by the
Company shall constitute a
representation and warranty by the
Company to each Trustee and the Agent
that (i) such Certificated Note is
then, and at the time of issuance and
sale thereof will be, duly authorized
for issuance and sale by the Company,
(ii) such Certificated Note will
conform with the terms of the
Indenture pursuant to which such
Certificated Note is issued and (iii)
upon authentication and delivery of
such Certificated Note and any other
Securities to be issued on or prior
to the settlement date for such
Certificated Note, the aggregate
amount of Securities which have been
issued and sold by the Company will
not exceed the amount of Securities
registered under the Registration
Statements.
C. The Company will deliver to The Chase
Manhattan Bank a pre-
<PAGE>
printed five-ply packet for such
Certificated Note, which packet
will contain the following
documents in forms that have been
approved by the Company, the Agent
and the Trustees:
1. Certificated Note with customer
confirmation.
2. Stub One - For Trustee.
3. Stub Two - For Agent.
4. Stub Three - For the Company.
5. Stub Four - For the Authenticating
Agent.
D. The Senior Trustee (or, in the case
of a Subordinated Note, the
Authenticating Agent) will complete
and authenticate such Certificated
Note and deliver it (with the
confirmation) and Stubs One, Two and
Four to the Agent, and the Agent will
acknowledge receipt of the Note by
stamping or otherwise marking Stubs
One and Four and returning Stub One
to the relevant Trustee and Stub Four
to the Authenticating Agent in the
case of Subordinated Notes. Such
delivery will be made only against
such acknowledgment of receipt. Upon
verification by the Agent that a Note
has been properly prepared and
authenticated by the Senior Note
Trustee or the Authenticating Agent,
payment therefor will be made to the
Company by the Agent on the
settlement date in immediately
available funds in an amount equal to
the issue price of such Note less the
Agent's commission. Such payment
shall
33
<PAGE>
be made only upon prior receipt by
the Agent of immediately available
funds from or on behalf of the
purchaser unless the Agent decides,
at its option, to advance its own
funds for such payment against
subsequent receipt of funds from the
purchaser.
In the event that any Certificated
Note is incorrectly prepared, the
applicable Trustee (and, if a
Subordinated Note, the Authenticating
Agent) will promptly issue a
replacement Senior Note or
Subordinated Note, as the case may
be, in exchange for the incorrectly
prepared Certificated Note.
E. The Agent will deliver such
Certificated Note (with the
confirmation) to the customer against
payment in immediately payable funds.
The Agent will obtain the
acknowledgment of receipt of such
Certificated Note by retaining Stub
Two.
F. The applicable Trustee will send Stub
Three to the Company by first-class
mail.
Notwithstanding the foregoing, the
Company, the Agent and the applicable
Trustee and its agents may decide to
issue Certificated Notes which are
printed as separate documents and not as
part of five-ply packets and may decide
to dispense with the delivery of Stubs
and instead to use different forms of
receipt. Any such different arrangements
must be agreed to prior to the
acceptance by the Company of an offer to
purchase Notes.
34
<PAGE>
Settlement For orders of Certificated Notes solicited
Procedures by the Agent, as agent, and accepted by the
Timetable: Company, Settlement Procedures "A" through
- ---------- "F" set forth above shall be completed on or
before the respective times (New York City
time) set forth below:
<TABLE>
<CAPTION>
Settlement
Procedure Time
--------------
<S> <C> <C>
A 2:00 P.M. on the Business
Day before
settlement
B-C 3:00 P.M. on the Business
Day before
settlement
D 2:15 P.M. on settlement
date
E 3:00 P.M. on settlement
date
F 5:00 P.M. on settlement
date
</TABLE>
Notwithstanding the foregoing, if the
settlement date is the date of acceptance of
the offer to purchase the Note, Settlement
Procedures "A" through "C" shall be
completed on or before 11:00 A.M. (New York
City time) on the settlement date.
Fails: In the event that a purchaser shall fail to
- ------ accept delivery of and make payment for a
Note by 3:00 P.M., New York City time, on
the settlement date therefor, the Agent will
notify the relevant Trustee and, if
applicable, the Authenticating Agent and the
Company by telephone, confirmed in writing
(which may be given by telex or telecopy),
and if the Note has been delivered to the
Agent, return the Note to the Senior Note
Trustee or the Authenticating Agent. The
Company will promptly provide such Trustee
or the Authenticating Agent with appropriate
documentation and
35
<PAGE>
instructions to complete the transactions
hereinafter outlined and will remit to the
Agent funds in the amount, if any, it
received with respect to such Note. Such
payment will be made on the settlement date
for such Note, if possible, and in any event
not later than the Business Day following
such settlement date. If such fail shall
have occurred for any reason other than the
failure of the Agent to provide the
Settlement Details to the Company or to
provide a confirmation to the purchaser
within a reasonable period of time as
described above, the Company will reimburse
the Agent on an equitable basis for its loss
of the use of funds during the period when
they were credited to the account of the
Company.
Immediately upon receipt of a Note in
respect of which a fail occurred, the Senior
Note Trustee or Authenticating Agent will
make appropriate entries in its records and
cancel such Note.
36
<PAGE>
Annex B
-------
Paine Webber Group Inc.
Terms Agreement
---------------
, 199[ ]
[PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019]
Dear Sirs:
Paine Webber Group Inc. (the "Company") proposes, subject to the terms
and conditions stated herein and in the Distribution Agreement dated September [
], 1998 (the "Distribution Agreement"), between the Company and PaineWebber
Incorporated, to issue and sell to [PaineWebber Incorporated] (the "Purchaser")
the securities specified in the Schedule hereto (the "Purchased Securities").
Each of the provisions of the Distribution Agreement not specifically related to
the solicitation by the Agent, as the agent of the Company, of offers to
purchase Securities is incorporated herein by reference in its entirety, and
shall be deemed to be part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Nothing contained herein or in the
Distribution Agreement shall make any party hereto an agent of the Company or
make such party subject to the provisions therein relating to the solicitation
of offers to purchase securities from the Company solely by virtue of such
party's execution of this Terms Agreement. Each of the representations and
warranties set forth in the Distribution Agreement shall be deemed to have been
made at and as of the date of this Terms Agreement, except that each
representation and warranty in Section 4 of the Distribution Agreement which
makes reference to the Prospectus shall be deemed to be a representation and
warranty as of the date of the Distribution Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
An amendment to one or both of the Registration Statements (as defined
in the Distribution Agreement), or a supplement to the Prospectus, as the case
may be, relating to the Purchased Securities, in the form heretofore
1
<PAGE>
delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to the Purchaser and the Purchaser agrees to purchase from the
Company the Purchased Securities, at the time and place, in the principal amount
and at the purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please
sign and return to us the counterpart hereof, and upon acceptance hereof by you
this letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
PAINE WEBBER GROUP INC.,
By
------------------------
Title:
Accepted:
[PAINEWEBBER INCORPORATED],
By
-------------------------
Title:
<PAGE>
SCHEDULE TO ANNEX B
Title of Purchased Securities:
[ %] Medium-Term [Senior] [Subordinated] Notes, Series [C]
[D]
Aggregate Principal Amount:
$
[Price to Public:]
Purchase Price by [PaineWebber Incorporated]:
% of the principal amount of the Purchased Securities,
plus accrued interest from
to [and accrued amortization, if any, from
to ]
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order of the
Company, in [[New York] Clearing House] [immediately available] funds]
[By wire transfer to a bank account specified by the
Company in [next day] [immediately available] funds]
Indenture:
[Senior] [Subordinated] Note Indenture, as defined in the
Distribution Agreement
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[ %]
Interest Payment Dates:
<PAGE>
[months and dates]
Other Terms of the Purchased Securities:
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) The officers' certificate referred to in
Section 7(c)(i).]
[(2) The opinion referred to in Section 7(c)(ii).]
[(3) The opinion referred to in Section
7(c)(iii).]
[(4) The accountant's letter referred to in
Section 7(c)(iv).]
Other Provisions (including syndicate provisions or Section 5(l) limitations, if
applicable):
2
<PAGE>
Annex C
-------
(A) The Company 1/ shall furnish to the Agent an opinion of the General
Counsel of the Company 2/ , dated the Closing Date, to the effect that:
(1) each of the Company and its significant United States
subsidiaries listed on Schedule I hereto (individually, a "U.S.
Subsidiary" and collectively, the "U.S. Subsidiaries"), has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and
is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction in which the failure
to qualify and be in good standing would materially and adversely
affect the Company and its subsidiaries, considered as a whole;
(2) all the outstanding shares of capital stock of each U.S.
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and are owned by the Company either
directly or through wholly owned subsidiaries, free and clear of any
perfected security interest and, to the knowledge of such counsel,
after due inquiry of appropriate officers of the Company, any other
security interests, claims, liens or encumbrances, except for
restrictions on sales of capital stock contained in debt instruments;
(3) the Notes conform in all material respects to the
description thereof contained in the Prospectus. The Indentures have
been duly authorized, executed and delivered by the Company, have been
duly qualified under the Trust Indenture Act of 1939 and constitute
legal, valid and binding obligations of the Company
- --------
1/ All capitalized terms used herein and not otherwise defined shall have
the respective meanings ascribed to them in the Distribution Agreement of which
this Annex C is a part.
2/ To the extent any significant subsidiary of the Company is not chartered
or organized under the laws of a State of the United States, counsel qualified
to practice law in the jurisdiction in which such subsidiary is chartered or
organized will furnish an opinion on behalf of the Company with respect to the
matters set forth in paragraphs 1 and 2 below for such subsidiary.
<PAGE>
enforceable against the Company in accordance with their terms (subject
to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws affecting creditors' rights
generally from time to time in effect and to general principles of
equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether
considered in a proceeding in equity or at law). The Notes have been
duly authorized and, when executed and authenticated in accordance with
the provisions of the Indentures and delivered and paid for pursuant to
the Distribution Agreement, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the appropriate
Indenture and enforceable against the Company in accordance with their
terms (subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless of
whether considered in a proceeding in equity or at law). In expressing
the opinion set forth in this paragraph, counsel will, with your
consent, assume that the Notes will conform as to form to the forms of
Notes reviewed by him (with maturity, interest rate and original
issuance date and other data requiring completion appropriately
completed and without any entry having been made on the face of the
Notes under "Other Terms") and that the Notes will be duly
authenticated by the appropriate Trustee.
(4) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries of a character required to be
disclosed in either of the Registration Statements or the Prospectus,
and there is no franchise, contract or other document of a character
required to be described in either of the Registration Statements or
the Prospectus, or to be filed as an exhibit to either of the
Registration Statements or the Prospectus, which is not disclosed,
described or filed as required; and the statements included or
incorporated in the Prospectus describing any legal proceedings or
material contracts or agreements relating to the Company fairly
summarize such matters;
2
<PAGE>
(5) the Registration Statements have become effective under
the Securities Act, and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of either of the Registration
Statements has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Securities
Act;
(6) the Distribution Agreement has been duly
authorized, executed and delivered by the Company;
(7) the information required to be set forth in each of the
Registration Statements in answer to Item 10 (insofar as it relates to
such counsel) of Form S-3, to the best knowledge of such counsel, is
accurately set forth in such Registration Statement in all material
respects or no response is required with respect to such Item; and the
authorized equity capitalization of the Company is as described in the
documents incorporated by reference in the Prospectus;
(8) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated in the Distribution Agreement, except such as
have been obtained under the Securities Act and the Trust Indenture Act
and such as may be required under the "blue sky" laws of any
jurisdiction in connection with the sale of Notes;
(9) none of the issuance and sale of the Notes, the
consummation by the Company of any other of the transactions
contemplated in the Distribution Agreement or the fulfillment of the
terms of the Distribution Agreement will (a) conflict with, result in a
breach of, or constitute a default under (i) the Restated Certificate
of Incorporation, as amended, or By-laws of the Company, or (ii) the
terms of any indenture or other agreement or instrument known to such
counsel and to which the Company or any of its U.S. Subsidiaries or
significant foreign subsidiaries listed on Schedule I hereto (the
"Foreign Subsidiaries" and, together with the U.S. Subsidiaries, the
"Subsidiaries") is a party or bound, or (b) violate any order or
regulation known to such counsel to be applicable to the Company or any
of its subsidiaries, of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over the
Company or any of its subsidiaries except, in the case of clauses
(a)(ii) and (b) above, for conflicts, breaches, defaults or violations
as would not have a material adverse effect
3
<PAGE>
on the Company and its subsidiaries, taken as a whole,
and would not have a material adverse effect on the
issuance or sale of the Notes; and
(10) to the best knowledge of such counsel, no holder of
securities of the Company has rights to the registration of such
securities under either of the Registration Statements.
In rendering such opinion, such counsel may rely as to matters
involving the application of laws of any jurisdiction other than the States of
Delaware and New York or the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel of good standing
believed to be reliable and who are satisfactory to counsel for the Agent.
(B) The Company shall furnish to the Agent a letter from the General
Counsel of the Company, dated the Closing Date, to the effect that such counsel
has no reason to believe that: (i) the Registration Statements and the
Prospectus (except for the financial statements and other information of an
accounting or financial nature included therein, and the Statements of
Eligibility (Form T-1) included as exhibits to the Registration Statements, as
to which he need not express any view) were not appropriately responsive in all
material respects to the requirements of the Securities Act and the Trust
Indenture Act and the respective applicable rules and regulations of the
Commission thereunder and (ii) the First Registration Statement, at the time
Post Effective Amendment No. 1 thereto became effective, or the Second
Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, at the date of the letter, includes an untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (in each case except for the financial statements and other
information of an accounting or financial nature included therein, and the
Statements of Eligibility (Form T-1) included as exhibits to the Registration
Statements, as to which he need not express any view).
4
<PAGE>
SCHEDULE I
Significant U.S. Subsidiaries
-----------------------------
PaineWebber Incorporated
Mitchell Hutchins Assets Management Inc.
Significant U.K. Subsidiary
---------------------------
PaineWebber International (U.K.) Ltd.
<PAGE>
Annex D
-------
Accountant's Comfort Letter
---------------------------
At each Closing Date and at such times as provided in the Distribution
Agreement, 1/ Ernst & Young LLP shall furnish to the Agent or the Purchaser, as
the case may be, a letter or letters (which may refer to letters previously
delivered to the Agent or the Purchaser, as the case may be), dated as of the
Closing Date or such other date, in form and substance satisfactory to the Agent
or the Purchaser, as the case may be, confirming that they are independent
certified public accountants within the meaning of the Securities Act and the
Exchange Act and the respective applicable published rules and regulations
thereunder, that the response to Item 10 of each of the Registration Statements
is correct insofar as it relates to them and stating in effect that:
(a) in their opinion the consolidated financial statements and
schedules audited by them and incorporated by reference in the
Registration Statements and the Prospectus and reported on by them
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange Act and
the related published rules and regulations thereunder;
(b) on the basis of a reading of the "Selected Financial
Data", if any, included or incorporated in the Registration Statements
and the Prospectus and of the latest unaudited consolidated condensed
financial statements made available by the Company and its consolidated
subsidiaries; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and audit and executive
committees of the Company; and inquiries of certain officials of the
Company who have responsibility for financial and accounting matters of
the Company and its subsidiaries as to transactions and events
subsequent to the date of the most recent financial statements included
or incorporated in the Registration Statements
- --------
1/ All capitalized terms used herein shall have the meanings ascribed to
them in the Distribution Agreement of which this Annex D is a part.
<PAGE>
and the Prospectus, nothing came to their attention which caused them
to believe that:
(1) the amounts in the unaudited "Summary Financial
Information", if any, included in the Prospectus, and the
amounts in the "Selected Financial Data", if any, included or
incorporated by reference in the Registration Statements and
the Prospectus, do not agree with the corresponding amounts in
the audited financial statements from which such amounts were
derived;
(2) any unaudited financial statements included or
incorporated in the Registration Statements and the Prospectus
do not comply as to form in all material respects with
applicable accounting requirements and with the published
rules and regulations of the Commission with respect to
financial statements included or incorporated in quarterly
reports on Form 10-Q under the Exchange Act or any material
modifications should be made to the unaudited financial
statements for them to be presented in conformity with such
generally accepted accounting principles;
(3) with respect to the period subsequent to the date
of the most recent financial statements included or
incorporated in the Registration Statements and the
Prospectus, there were any changes, at a specified date not
more than five business days prior to the date of the letter,
in the consolidated long-term debt or non-convertible
redeemable preferred stock of the Company and its subsidiaries
or capital stock of the Company (excluding retained earnings
and foreign currency translation adjustment) as compared with
the amounts shown on the most recent consolidated balance
sheet included or incorporated in the Registration Statements
and the Prospectus, except in all instances for changes
disclosed in such letter or letters; or
(4) if any unaudited pro forma consolidated condensed
financial statements are included or incorporated by reference
in the Registration Statements and the Prospectus, on the
basis of a reading of the unaudited pro forma financial
statements, carrying out certain specified procedures,
inquiries of certain officials of the Company and the acquired
company who have
2
<PAGE>
responsibility for financial and accounting matters, and
proving the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the pro forma
financial statements, nothing came to their attention which
caused them to believe that the pro forma financial statements
do not comply in form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;
(c) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company) set forth in the
Registration Statements, as amended, and the Prospectus, as amended or
supplemented, and in Exhibit 12 to the Registration Statements,
including specified information, if any, included or incorporated from
the Company's Annual Report on Form 10-K incorporated therein or
specified information, if any, included or incorporated from any of the
Company's Quarterly Reports on Form 10-Q incorporated therein, agrees
with the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
3
<PAGE>
Exhibit 4.1a
<TABLE>
<S> <C> <C> <C> <C>
NOTE NUMBER AGENT'S NAME
PAINE WEBBER GROUP INC.
- ---------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT SETTLEMENT DATE TRADE DATE
U.S.$ (ORIGINAL ISSUE DATE)
- -------------------------------------------------------------------------------------------------------------------------------
MATURITY DATE TRUSTEE CUST. NO. INTEREST RATE TAXPAYER ID OR TRANSFERRED
SOC. SEC. NO.
OF PURCHASER
- -------------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS OF REGISTERED OWNER MEDIUM TERM
NOTE
PROGRAM
THE CHASE MANHATTAN BANK
TRUSTEE
- -------------------------------------------------------------------------------------------------------------------------------
CUSTOMER'S RETAIN FOR THE TIME OF THE TRANSACTION PLEASE SIGN AND RETURN SEE REVERSE SIDE
COPY TAX PURPOSES WILL BE FURNISHED UPON ENCLOSED RECEIPT
REQUEST OF THE CUSTOMER
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
REGISTERED REGISTERED
PAINE WEBBER GROUP INC.
MEDIUM-TERM SENIOR NOTE, SERIES C
Due from Nine Months to 30 Years from Date of Issue
(Fixed Rate)
No. U.S.$
CUSIP NO.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID", "YIELD TO MATURITY"
AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) BELOW
WILL BE COMPLETED SOLELY FOR PURPOSES OF APPLYING THE FEDERAL INCOME TAX
ORIGINAL ISSUE DISCOUNT ("OID") RULES.
<TABLE>
<S> <C> <C>
ORIGINAL ISSUE DATE INTEREST RATE: MATURITY DATE:
ISSUE PRICE: ORIGINAL ISSUE BUSINESS DAY CENTERS:
DISCOUNT SECURITY:
[ ] YES [ ] NO
REGULAR RECORD DATES: OPTIONAL REDEMPTION: PAYMENT OF ADDITIONAL
[ ] YES [ ] NO AMOUNTS:
[ ] YES [ ] NO
INTEREST PAYMENT DATES: REDEMPTION DATES: OPTION TO ELECT
REPAYMENT:
[ ] YES [ ] NO
TOTAL AMOUNT OF OID: REDEMPTION PRICES: REPAYMENT DATES:
YIELD TO MATURITY: GLOBAL SECURITY: REPAYMENT PRICES:
[ ] YES [ ] NO
INITIAL ACCRUAL PERIOD DEPOSITARY:
OID:
OTHER TERMS:
</TABLE>
PAINE WEBBER GROUP INC., a Delaware corporation (herein called
the "Company", which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to , or registered assigns, the principal sum of
U.S. DOLLARS, on
the Maturity Date specified above, and to pay interest thereon from and
including the Original Issue Date shown above or from and including the last
date in respect of which interest has been paid or provided for, as the case may
be. Interest will be paid on the Interest Payment Dates shown above, commencing
with the first such Interest Payment Date following the Original Issue Date
shown above, at the Interest Rate per annum specified above until the principal
<PAGE>
2
hereof is paid or made available for payment. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date specified above (whether or not a Business Day) next
preceding such Interest Payment Date, except that in the case of a Security with
an Original Issue Date that is after a Regular Record Date and before the next
following Interest Payment Date, interest payable on such Interest Payment Date
will be paid to the Person in whose name such Security was initially registered
on the Original Issue Date; provided, however, that interest payable at Maturity
shall be payable to the Person to whom principal shall be payable. Except as
otherwise provided in the Indenture, any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof to be given to Holders of Securities of
this series not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsis tent with the requirements
of any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture. If this Security is not a Global Security, payments
of interest on this Security (other than interest payable at Maturity) will be
made by mailing a check to the person entitled thereto at its address appearing
in the Security Register for the Securities on the applicable Regular Record
Date. Notwith standing the foregoing, at the option of the Company such payments
may be made by wire transfer of immediately available funds to an account with a
bank located in the continental United States (or other jurisdiction acceptable
to the Company and the Trustee), but only if appropriate payment instructions
have been received in writing by the Trustee not less than five Business Days
prior to the applicable Interest Payment Date. Payments of principal of,
premium, if any, and interest will be made in immediately available funds, if at
maturity or upon earlier redemption, then on the Maturity Date or the date fixed
for redemption, as applicable, upon surrender of this Security at the principal
corporate trust office of the Trustee in the Borough of Manhattan, The City of
New York, or such other office or agency of the Company as may be designated by
it for such purpose in the Borough of Manhattan, The City of New York (the
"Notes Office"); provided that this Security
<PAGE>
3
is presented to such office in time for the Trustee to make such payments in
such funds in accordance with its normal procedures; and if upon early
repayment, then on the applicable Repayment Date; provided that the Holder
shall have complied with the requirements for repayment set forth on the reverse
hereof. If this Security is a Global Security, the Depositary will be paid as
agreed by the Company, the Trustee and the Depositary and beneficial owners
hereof will be paid in accordance with the Depositary's and its participants'
procedures in effect from time to time. "Maturity" shall mean the date on which
the principal of this Security or an installment of principal becomes due,
whether on the Maturity Date specified above, upon redemption or early repayment
or otherwise.
If the registered owner of this Security (as indicated above)
is the Depositary or a nominee of the Depositary, this Security is a Global
Security and the following legend is applicable: UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE FOR THE INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE
OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
If the registered owner of this Security is The Depository
Trust Company or a nominee of The Depository Trust Company, then unless this
certificate is presented by an authorized representative of The Depository Trust
Company (55 Water Street, New York, New York) to the Company or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of CEDE & CO., or such other name as requested by an
authorized representative of The Depository Trust Company and any payment is
made to CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
CEDE & CO., has an interest herein.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
SECURITY SET FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof, directly or through
an Authenticating Agent, by
<PAGE>
4
manual signature of an authorized officer, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
PAINE WEBBER GROUP INC.
By
-------------------------
Title:
[Seal] Attest:
-------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series designated therein referred to in
the within-mentioned Indenture.
Dated:
THE CHASE MANHATTAN BANK
As Trustee
By
----------------------
Authorized Officer
<PAGE>
PAINE WEBBER GROUP INC.
MEDIUM-TERM SENIOR NOTE, SERIES C
Due from Nine Months to 30 Years
from Date of Issue
(Fixed Rate)
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture dated as of March 15, 1988, as amended by a
First Supplemental Indenture dated as of September 22, 1989, and by a Second
Supplemental Indenture dated as of March 22, 1991 (such Indenture, as so
supplemented, is herein called the "Indenture"), between the Company and The
Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof.
If so specified on the face hereof, the Company will, subject
to the limitations and exceptions set forth below, pay to a Holder of this
Security who is a United States Alien (as defined below) such additional amounts
("Additional Amounts") as may be necessary in order that every net payment of
the principal of, premium, if any, and interest on this Security, after
deduction or withholding by the Company, the Trustee or any of the Company's
paying agents for or on account of any present or future tax, assessment or
other governmental charge imposed upon such Holder with respect to or as a
result of such payment by the United States or any political subdivision or
taxing authority thereof or therein, will not be less than the amount provided
herein to be then due and payable. However, the Company shall not be required to
make any such payment of Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge that
would not have been imposed but for (i) the existence of any present or
former connection between such Holder (or between a fiduciary, settlor
or beneficiary of, or a person holding a power over, such
<PAGE>
2
Holder, if such Holder is an estate or a trust, or between a member or
shareholder of such Holder, if such Holder is a partnership or
corporation) and the United States, including, without limitation, such
Holder (or such fiduciary, settlor, beneficiary, person holding a
power, member or shareholder) being or having been a citizen or
resident or treated as a resident thereof or being or having been
engaged in a trade or business therein or being or having been present
therein or having or having had a permanent establishment therein, or
(ii) such Holder's present or former status as a domestic or foreign
personal holding company, a passive foreign investment company or a
controlled foreign corporation, a private foundation or other
tax-exempt organization for United States Federal income tax purposes
or a corporation that accumulates earnings to avoid United States
Federal income tax;
(b) any tax, assessment or other governmental charge that
would not have been so imposed but for the presentation by the Holder
of this Security for payment on a date more than 15 days after the date
on which such payment became due and payable or the date on which
payment thereof was duly provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, excise or
personal property tax or any similar tax, assessment or other
governmental charge;
(d) any tax, assessment or other governmental charge that
would not have been imposed but for the failure to comply with
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity or
connection with the United States of the Holder or beneficial owner of
this Security, if such compliance is required by statute or by
regulation of the United States or any taxing authority thereof as a
precondition to relief or exemption from such tax, assessment or other
governmental charge;
(e) any tax, assessment or other governmental charge that is
(i) payable otherwise than by deduction or withholding from payments of
principal of or premium, if any, or interest on this Security or (ii)
required to be deducted or withheld by any paying agent from any such
payment, if (and only if) such payment can be made without such
deduction or withholding by any other paying agent;
<PAGE>
3
(f) any tax, assessment or other governmental charge imposed
on interest received by a person holding, actually or constructively,
10 percent or more of the total combined voting power of all classes of
stock of the Company entitled to vote (taking into account the
applicable attribution of ownership rules under Section 871(h)(3) of
the Internal Revenue Code of 1986, as amended (the "Code")) or that is
a controlled foreign corporation related to the Company (directly or
indirectly) through stock ownership; or
(g) any combination of items (a), (b), (c), (d), (e) and (f);
nor will Additional Amounts be paid with respect to payment of the principal of
or premium, if any, or interest on this Security to any United States Alien that
is a fiduciary or partnership or to a person other than the sole beneficial
owner of this Security to the extent that a beneficiary or settlor with respect
to such fiduciary or a member of such partnership or a beneficial owner would
not have been entitled to the Additional Amounts had such beneficiary, settlor,
member or beneficial owner been the Holder of this Security.
The Company, at its option, may redeem this Security as a
whole, but not in part, at any time that this Security is registered in the name
of a United States Alien, on giving not less than 30 nor more than 45 days'
notice to the registered Holder hereof by mail in accordance with the provisions
of the Indenture (which notice shall be irrevocable), at a redemption price
equal to the principal amount hereof (or, in the case of an Original Issue
Discount Security, the amount specified on the face hereof), together with
accrued interest to the redemption date, if the Company determines that the
Company has or will become obligated to pay Additional Amounts on this Security
on the next succeeding Interest Payment Date as a result of any change in, or
amendment to, the laws (or any regulations or rulings promulgated thereunder)
of the United States or any political subdivision or taxing authority thereof or
therein affecting taxation, or any change in the application or official
interpretation of such laws, regulations or rulings by a taxing authority, court
or regulatory agency, whether or not rendered or taken with respect to the
Company, or any action taken by any taxing authority, court or regulatory agency
(including any change in administrative policy or enforcement practice of such
taxing authority), whether or not taken with respect to the Company, which
change or amendment becomes effective, or action is taken, on or after the
Original Issue Date, and such obligation cannot be avoided
<PAGE>
4
by the Company taking reasonable measures available to it. Prior to giving any
notice of redemption pursuant to this paragraph, the Company shall deliver to
the Trustee an Officers' Certificate stating that the Company is entitled to
effect such redemption and setting forth a statement of facts showing that the
conditions precedent to the right of the Company so to redeem have occurred, and
an opinion of independent legal counsel addressed to the Company and the Trustee
to the effect that the Company has or will become obligated to pay such
Additional Amounts as a result of such change or amendment. Notice of the
intention of the Company to redeem this Security shall not be given earlier than
90 days prior to the earliest date that the obligation to pay Additional Amounts
would arise were a payment in respect of this Security due on such date. From
and after any redemption date, if monies for the redemption of this Security
pursuant to this paragraph shall have been made available for redemption on such
redemption date, this Security shall cease to bear interest and the only right
of the Holder of this Security shall be to receive payment of the redemption
price of this Security and all unpaid interest accrued to such redemption date.
For purposes of this paragraph, the Trustee may rely on an Officers' Certificate
as to whether the registered Holder hereof is a United States Alien.
The term "United States Alien" means any person who, for
United States Federal income tax purposes, is a foreign corporation, a
nonresident alien individual, a nonresident alien fiduciary of a foreign estate
or trust, or a foreign partnership, one or more of the members of which is, for
United States Federal income tax purposes, a foreign corporation, a nonresident
alien individual or a nonresident alien fiduciary of a foreign estate or trust.
If so specified on the face hereof, the Company may at its
option redeem this Security in whole or from time to time in part on the date or
dates designated as Redemption Dates on the face hereof at the Redemption Price
or Redemption Prices designated on the face hereof, together with accrued
interest to the date of redemption. The Company may exercise such option by
mailing or causing the Trustee to mail a notice of such redemption at least 30
but not more than 45 days prior to the date of redemption. In the event of
redemption of this Security in part only, a new Security or Securities of like
tenor and with the same terms and conditions for the unredeemed portion hereof
shall be issued in the name of the Holder hereof upon the cancelation hereof. If
less than all of the Securities having the same terms (except as to principal
amount and date of issuance) as this Security are to be redeemed, the Securities
to be
<PAGE>
5
redeemed shall be selected by the Trustee by such method as the Trustee shall
deem fair and appropriate and otherwise as provided under the Indenture.
If so specified on the face hereof, this Security will be
repayable prior to the Maturity Date at the option of the Holder on the date or
dates or under the circumstances designated as Repayment Dates on the face
hereof at the Repayment Price or Repayment Prices designated on the face hereof
together with accrued interest to the date of repayment. In order for this
Security to be repaid, the Trustee must receive at the Notes Office at least 30
but not more than 45 days prior to the applicable Repayment Date (a) appropriate
wire instructions and (b) either (i) this Security with the form below entitled
"Option to Elect Repayment" duly completed or (ii) a telegram, telex, facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc., or a commercial bank or trust
company in the United States or any other "eligible guarantor institution" (as
such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934,
as amended) setting forth the name of the Holder of this Security, the principal
amount of this Security, the portion of the principal amount of this Security to
be repaid, the certificate number or a description of the tenor and terms of
this Security, a statement that the option to elect repayment is being exercised
thereby and a guarantee that this Security with the form below entitled "Option
to Elect Repayment" duly completed will be received by the Trustee not later
than five Business Days after the date of such telegram, telex, facsimile,
transmission or letter. If the procedure described in clause (ii) of the
preceding sentence is followed, this Security with such form duly completed must
be received by the Trustee by such fifth Business Day. Any tender of this
Security for repayment shall be irrevocable. The repayment option may be
exercised by the Holder of this Security for less than the entire principal
amount of this Security provided that the principal amount of the Security
remaining outstanding after repayment is an authorized denomination. Upon such
partial repayment this Security shall be canceled and a new Security or
Securities of like tenor and with the same terms and conditions for the
remaining principal amount hereof shall be issued in the name of the Holder of
this Security or as otherwise specified in the form entitled "Option to Elect
Repayment". After exercise of the repayment option, no transfer or exchange of
this Security (or, if this Security is to be repaid in part, the portion hereof
to be repaid) will be permitted. All questions as to the validity, eligibility
(including time of receipt) and acceptance of this Security
<PAGE>
6
for repayment will be determined by the Company, whose determination will be
final, binding and non-appealable.
The Indenture provides that, with certain limited exceptions,
the Company will not, nor will it permit any Restricted Subsidiary (as defined
in the Indenture), to pledge as security for any loan the capital stock or
indebtedness of any Restricted Subsidiary or create, incur, assume or permit to
exist any Lien on any property or asset of the Company.
Interest payments on each Interest Payment Date for this
Security and at Maturity will include interest accrued from and including the
later of the Original Issue Date or the most recent date to which interest has
been paid or provided for to but excluding such Interest Payment Date or to but
excluding Maturity. Interest payments for this Security shall be computed and
paid on the basis of a 360-day year of twelve 30-day months.
Notwithstanding anything herein to the contrary, the interest
rate on this Security will in no event be higher than the maximum rate permitted
by New York law as the same may be modified by United States law of general
applicability.
Any payment of principal of (and premium, if any) or interest
required to be made on this Security on a day which is not a Business Day need
not be made on such day, but may be made on the next day which is such a
Business Day with the same force and effect as if made on such day, and no
interest shall accrue as a result of such delayed payment. "Business Day" means
each day, other than a Saturday or Sunday, that is not a day on which banking
institutions in the Business Day Centers specified on the face hereof are
authorized or obligated by law or executive order to close.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
Any terms or conditions of this Security ("Other Terms")
specified on the face hereof under "Other Terms" shall apply to this Security.
In the event of any conflict between any Other Terms and any other terms or
conditions of this Security, the Other Terms shall control.
<PAGE>
7
Notwithstanding anything herein to the contrary, if this
Security is an Original Issue Discount Security, the amount payable in the event
of acceleration following an Event of Default prior to the Maturity Date hereof
in lieu of the principal amount due at the Maturity Date hereof shall be the
Amortized Face Amount of this Security as of the date of declaration of
acceleration. The "Amortized Face Amount" of this Security shall be an amount
equal to (a) the Issue Price (as set forth on the face hereof) plus (b) that
portion of the difference between the Issue Price and the principal amount
hereof that has accrued at the Yield to Maturity (as set forth on the face
hereof) (computed in accordance with generally accepted United States bond yield
computation principles) at the date as of which the Amortized Face Amount is
calculated, but in no event shall the Amortized Face Amount of this Security
exceed its principal amount.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of 66-2/3% in principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and to waive
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
As set forth in, and subject to, the provisions of the
Indenture, no Holder of any Security of this series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to this series, the
Holders of not less than 25% in principal amount of the Outstanding Securities
of this series shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee, the Trustee
shall not have received from the Holders of a majority in principal amount of
the Outstanding Securities of this
<PAGE>
8
series a direction inconsistent with such request and the Trustee shall have
failed to institute such proceeding within 60 days; provided, however, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of (and premium, if any) or interest on
this Security on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, places and rates,
and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register upon surrender of this Security for registration of
transfer to the Security Registrar at the Notes Office duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and having the same
terms and conditions and for the same aggregate principal amount, will be issued
to the designated transferee or transferees.
The Securities of this series are issuable only in registered
form, without coupons, in denominations of U.S. $100,000 and any integral
multiple of U.S.$1,000 in excess thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of different authorized denominations and having the same
terms and conditions, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue,
<PAGE>
9
and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
The Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.
All terms used in this Security which are defined in the
Indenture and are not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
<PAGE>
10
OPTION TO ELECT REPAYMENT
The undersigned owner of this Security hereby irrevocably
elects to have the Company repay the principal amount of this Security or
portion hereof below designated at the applicable Repayment Price indicated on
the face hereof plus interest accrued to the applicable Repayment Date.
Dated:
-------------------
- -------------------------
Signature
Sign exactly as name
appears on the front of
this Security [SIGNATURE
GUARANTEE required only if
Securities are to be
issued and delivered to
other than the registered
holder]
Principal amount to be Fill in for
repaid, if amount to be registration of
repaid is less than the Securities if to be
principal amount of this issued otherwise than
Security (principal amount to registered holder:
remaining must be an
authorized denomination)
U.S.$ Name:
------------------ --------------------
Address: -----------------
-------------------
(Please print name
and address
including zip code)
SOCIAL SECURITY OR
OTHER TAXPAYER ID
NUMBER
-------------------
<PAGE>
11
------------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
UNIF GIFT MIN ACT...
TEN COM - as tenants in ........Custodian........
common (Cust) (Minor)
TEN ENT - as tenants by the Under Uniform Gifts to
entireties Minors Act
JT TEN - as joint tenants with
right of
survivorship and .........................
not as tenants in common (State)
Additional abbreviations may also be used though not in the
above list.
----------------------
FOR VALUED RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
Please Insert Social Security
or Other Identifying Number of
Assignee,
------------------------
/ /
/----------------------/ ---------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing ____________________________ attorney to transfer said Security
on the books of the Company, with full power of substitution in the premises.
Dated:
---------------------------- -----------------------------------------
Signature
<PAGE>
Exhibit 4.1b
<TABLE>
<S> <C> <C> <C> <C>
NOTE NUMBER AGENT'S NAME
PAINE WEBBER GROUP INC.
- ---------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT SETTLEMENT DATE TRADE DATE
U.S.$ (ORIGINAL ISSUE DATE)
- -------------------------------------------------------------------------------------------------------------------------------
MATURITY DATE TRUSTEE CUST. NO. INTEREST RATE TAXPAYER ID OR TRANSFERRED
SOC. SEC. NO.
OF PURCHASER
- -------------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS OF REGISTERED OWNER MEDIUM TERM
NOTE
PROGRAM
CHASE MANHATTAN BANK DELAWARE
TRUSTEE
THE CHASE MANHATTAN BANK
AUTHENTICATING AGENT
- -------------------------------------------------------------------------------------------------------------------------------
CUSTOMER'S RETAIN FOR THE TIME OF THE TRANSACTION PLEASE SIGN AND RETURN SEE REVERSE SIDE
COPY TAX PURPOSES WILL BE FURNISHED UPON ENCLOSED RECEIPT
REQUEST OF THE CUSTOMER
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
REGISTERED REGISTERED
PAINE WEBBER GROUP INC.
MEDIUM-TERM SUBORDINATED NOTE, SERIES D
Due from Nine Months to 30 Years from Date of Issue
(Fixed Rate)
No. U.S.$
CUSIP NO.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID", "YIELD TO MATURITY" AND
"INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) BELOW WILL
BE COMPLETED SOLELY FOR PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL
ISSUE DISCOUNT ("OID") RULES.
<TABLE>
<CAPTION>
ORIGINAL ISSUE DATE: INTEREST RATE: MATURITY DATE:
<S> <C> <C>
ISSUE PRICE: ORIGINAL ISSUE BUSINESS DAY CENTERS:
DISCOUNT SECURITY:
[ ] YES [ ] NO
REGULAR RECORD DATES: OPTIONAL REDEMPTION: PAYMENT OF ADDITIONAL
[ ] YES [ ] NO AMOUNTS:
[ ] YES [ ] NO
INTEREST PAYMENT DATES: REDEMPTION DATES: OPTION TO ELECT
REPAYMENT:
[ ] YES [ ] NO
TOTAL AMOUNT OF OID: REDEMPTION PRICES: REPAYMENT DATES:
YIELD TO MATURITY: GLOBAL SECURITY: REPAYMENT PRICES:
[ ] YES [ ] NO
INITIAL ACCRUAL PERIOD DEPOSITARY:
OID:
</TABLE>
OTHER TERMS:
PAINE WEBBER GROUP INC., a Delaware corporation (herein called the
"Company", which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to
pay to ____________________________, or registered assigns, the principal sum
of ________________ U.S. DOLLARS, on the Maturity Date specified above, and
to pay interest thereon from and including the Original Issue Date shown
above or from and including the last date in respect of which interest has
been paid or provided for, as the case may be. Interest will be paid on the
Interest Payment Dates shown above, commencing with the first such Interest
Payment Date following the Original Issue Date shown above, at the Interest
Rate per annum specified above until the principal
<PAGE>
hereof is paid or made available for payment. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date specified above (whether or not a Business Day) next
preceding such Interest Payment Date, except that in the case of a Security with
an Original Issue Date that is after a Regular Record Date and before the next
following Interest Payment Date, interest payable on such Interest Payment Date
will be paid to the Person in whose name such Security was initially registered
on the Original Issue Date; provided, however, that interest pay able at
Maturity shall be payable to the Person to whom principal shall be payable.
Except as otherwise provided in the Indenture, any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof to be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsis tent with
the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture. If this Security is not a Global
Security, payments of interest on this Security (other than interest payable at
Maturity) will be made by mailing a check to the person entitled thereto at its
address appearing in the Security Register for the Securi ties on the applicable
Regular Record Date. Notwithstanding the foregoing, at the option of the Company
such payments may be made by wire transfer of immediately available funds to an
account with a bank located in the continental United States (or other
jurisdiction acceptable to the Company and The Chase Manhattan Bank, as Paying
Agent), but only if appropriate payment instructions have been received in
writing by the Paying Agent not less than five Business Days prior to the
applicable Interest Payment Date. Pay ments of principal of, premium, if any,
and interest will be made in immediately available funds, if at maturity or upon
earlier redemption, then on the Maturity Date or the date fixed for redemption,
as applicable, upon surrender of this Security at the principal corporate trust
office of the Paying Agent in the Borough of Manhattan, The City of New York, or
such other office or agency of the Company as may be designated by it for such
purpose in the Borough of Manhattan, The City of New York (the "Notes Office");
2
<PAGE>
provided that this Security is presented to such office in time for the Paying
Agent to make such payments in such funds in accordance with its normal
procedures; and if upon early repayment, then on the applicable Repayment Date;
provided that the Holder shall have complied with the requirements for repayment
set forth on the reverse hereof. If this Security is a Global Security, the
Depositary will be paid as agreed by the Company, the Trustee, the Paying Agent
and the Depositary and beneficial owners hereof will be paid in accordance with
the Depositary's and its parti cipants' procedures in effect from time to time.
"Maturity" shall mean the date on which the principal of this Security or an
installment of principal becomes due, whether on the Maturity Date specified
above, upon redemption or early repayment or otherwise.
If the registered owner of this Security (as indicated above) is the
Depositary or a nominee of the Depositary, this Security is a Global Security
and the following legend is applicable: UNLESS AND UNTIL IT IS EXCHANGED IN
WHOLE FOR THE INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
If the registered owner of this Security is The Depository Trust
Company or a nominee of The Depository Trust Company, then unless this
certificate is presented by an authorized representative of The Depository Trust
Company (55 Water Street, New York, New York) to the Company or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of CEDE & CO., or such other name as requested by an
authorized repre sentative of The Depository Trust Company and any payment is
made to CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
CEDE & CO., has an interest herein.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by
3
<PAGE>
manual signature of an authorized officer, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: PAINE WEBBER GROUP INC.
By
-----------------------------
Title:
[Seal] Attest:
-----------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series designated therein referred to in
the within-mentioned Indenture.
Dated:
CHASE MANHATTAN BANK CHASE MANHATTAN BANK DELAWARE
DELAWARE As Trustee
As Trustee OR
By The Chase Manhattan Bank
As Authenticating Agent
By
---------------------------
Authorized Officer
By
-----------------------------
Authorized Officer
4
<PAGE>
PAINE WEBBER GROUP INC.
MEDIUM-TERM SUBORDINATED NOTE, SERIES D
Due from Nine Months to 30 Years
from Date of Issue
(Fixed Rate)
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture dated as of March 15, 1988, as amended by a First
Supplemental Indenture dated as of September 22, 1989, by a Second Supplemental
Indenture dated as of March 22, 1991, and by a Third Supplemental Indenture
dated as of November 30, 1993 (such Indenture, as so supplemented, is herein
called the "Indenture"), between the Company and Chase Manhattan Bank Delaware
(formerly known as Chemical Bank Delaware), as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof.
If so specified on the face hereof, the Company will, subject to the
limitations and exceptions set forth below, pay to a Holder of this Security who
is a United States Alien (as defined below) such additional amounts ("Additional
Amounts") as may be necessary in order that every net payment of the principal
of, premium, if any, and interest on this Security, after deduction or with
holding by the Company, the Trustee or any of the Company's paying agents for or
on account of any present or future tax, assessment or other governmental charge
imposed upon such Holder with respect to or as a result of such payment by the
United States or any political subdivision or taxing authority thereof or
therein, will not be less than the amount provided herein to be then due and
payable. However, the Company shall not be required to make any such payment of
Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge that
would not have been imposed but for (i) the existence of any present or
former connection between such Holder (or between a fiduciary, settlor
or bene-
<PAGE>
ficiary of, or a person holding a power over, such Holder, if
such Holder is an estate or a trust, or between a member or shareholder
of such Holder, if such Holder is a partnership or corporation) and the
United States, including, without limitation, such Holder (or such
fiduciary, settlor, beneficiary, person holding a power, member or
shareholder) being or having been a citizen or resident or treated as a
resident thereof or being or having been engaged in a trade or business
therein or being or having been present therein or having or having had
a permanent establishment therein, or (ii) such Holder's present or
former status as a domestic or foreign personal holding company, a
passive foreign investment company or a controlled foreign corporation,
a private foundation or other tax-exempt organization for United States
Federal income tax purposes or a corporation that accumulates earnings
to avoid United States Federal income tax;
(b) any tax, assessment or other governmental charge that
would not have been so imposed but for the presentation by the Holder
of this Security for payment on a date more than 15 days after the date
on which such payment became due and payable or the date on which
payment thereof was duly provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, excise or
personal property tax or any similar tax, assessment or other
governmental charge;
(d) any tax, assessment or other governmental charge that
would not have been imposed but for the failure to comply with
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity or
connection with the United States of the Holder or beneficial owner of
this Security, if such compliance is required by statute or by
regulation of the United States or any taxing authority thereof as a
precondition to relief or exemption from such tax, assessment or other
governmental charge;
(e) any tax, assessment or other governmental charge that is
(i) payable otherwise than by deduction or withholding from payments of
principal of or premium, if any, or interest on this Security or (ii)
required to be deducted or withheld by any paying agent from any such
payment, if (and only if) such payment can be made without such
deduction or withholding by any other paying agent;
2
<PAGE>
(f) any tax, assessment or other governmental charge imposed
on interest received by a person holding, actually or constructively,
10 percent or more of the total combined voting power of all classes of
stock of the Company entitled to vote (taking into account the
applicable attribution of ownership rules under Section 871(h)(3) of
the Internal Revenue Code of 1986, as amended (the "Code")) or that is
a controlled foreign corporation related to the Company (directly or
indirectly) through stock ownership; or
(g) any combination of items (a), (b), (c), (d), (e) and (f);
nor will Additional Amounts be paid with respect to payment of the principal of
or premium, if any, or interest on this Security to any United States Alien that
is a fiduciary or partnership or to a person other than the sole beneficial
owner of this Security to the extent that a beneficiary or settlor with respect
to such fiduciary or a member of such partnership or a beneficial owner would
not have been entitled to the Additional Amounts had such beneficiary, settlor,
member or beneficial owner been the Holder of this Security.
The Company, at its option, may redeem this Security as a whole, but
not in part, at any time that this Security is Registered in the name of a
United States Alien, on giving not less than 30 nor more than 45 days' notice to
the registered Holder hereof by mail in accordance with the provisions of the
Indenture (which notice shall be irrevo cable), at a redemption price equal to
the principal amount hereof (or, in the case of an Original Issue Discount
Security, the amount specified on the face hereof), together with accrued
interest to the redemption date, if the Company determines that the Company has
or will become obligated to pay Additional Amounts on this Security on the next
succee ding Interest Payment Date as a result of any change in, or amendment to,
the laws (or any regulations or rulings promulgated thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, or any change in the application or official interpretation
of such laws, regulations or rulings by a taxing authority, court or regulatory
agency, whether or not rendered or taken with respect to the Company, or any
action taken by any taxing authority, court or regulatory agency (including any
change in administrative policy or enforcement practice of such taxing
authority), whether or not taken with respect to the Company, which change or
amendment becomes effective, or action is taken, on or after the Original Issue
Date, and such obligation cannot be
3
<PAGE>
avoided by the Company taking reasonable measures available to it. Prior to
giving any notice of redemption pursuant to this paragraph, the Company shall
deliver to the Trustee an Officers' Certificate stating that the Company is
entitled to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Company so to redeem
have occurred, and an opinion of independent legal counsel addressed to the
Company and the Trustee to the effect that the Company has or will become
obligated to pay such Additional Amounts as a result of such change or
amendment. Notice of the intention of the Company to redeem this Security shall
not be given earlier than 90 days prior to the earliest date that the obligation
to pay Additional Amounts would arise were a payment in respect of this Security
due on such date. From and after any redemption date, if monies for the
redemption of this Security pursuant to this paragraph shall have been made
available for redemption on such redemption date, this Security shall cease to
bear interest and the only right of the Holder of this Security shall be to
receive payment of the redemption price of this Security and all unpaid interest
accrued to such redemption date. For purposes of this paragraph, the Trustee may
rely on an Officers' Certificate as to whether the registered Holder hereof is a
United States Alien.
The term "United States Alien" means any person who, for United States
Federal income tax purposes, is a foreign corporation, a nonresident alien
individual, a nonresident alien fiduciary of a foreign estate or trust or a
foreign partnership, one or more of the members of which is, for United States
Federal income tax purposes, a foreign corporation, a nonresident alien
individual or a nonresident alien fiduciary of a foreign estate or trust.
If so specified on the face hereof, the Company may at its option
redeem this Security in whole or from time to time in part on the date or dates
designated as Redemp tion Dates on the face hereof at the Redemption Price or
Redemption Prices designated on the face hereof, together with accrued interest
to the date of redemption. The Company may exercise such option by mailing or
causing the Trustee to mail a notice of such redemption at least 30 but not more
than 45 days prior to the date of redemption. In the event of redemption of this
Security in part only, a new Security or Securities of like tenor and with the
same terms and conditions for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the cancelation hereof. If less than all of
the Securities having the same terms (except as to principal amount and date of
issuance) as this Security are to be redeemed, the Securities to be
4
<PAGE>
redeemed shall be selected by the Trustee by such method as the Trustee shall
deem fair and appropriate and otherwise as provided under the Indenture.
If so specified on the face hereof, this Security will be repayable
prior to the Maturity Date at the option of the Holder on the date or dates or
under the circum stances designated as Repayment Dates on the face hereof at the
Repayment Price or Repayment Prices designated on the face hereof together with
accrued interest to the date of repayment. In order for this Security to be
repaid, Chemical Bank, as Paying Agent, must receive at the Notes Office at
least 30 but not more than 45 days prior to the applicable Repayment Date (a)
appropriate wire instructions and (b) either (i) this Security with the form
below entitled "Option to Elect Repayment" duly completed or (ii) a telegram,
telex, facsimile transmission or letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc., or a
commercial bank or trust company in the United States or any other "eligible
guarantor institution" (as such term is defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended) setting forth the name of the
Holder of this Security, the principal amount of this Security, the portion of
the principal amount of this Security to be repaid, the certificate number or a
description of the tenor and terms of this Security, a statement that the option
to elect repayment is being exercised thereby and a guarantee that this Security
with the form below entitled "Option to Elect Repayment" duly completed will be
received by the Paying Agent not later than five Business Days after the date of
such telegram, telex, facsimile transmission or letter. If the procedure
described in clause (ii) of the preceding sentence is followed, this Security
with such form duly completed must be received by the Paying Agent by such fifth
Business Day. Any tender of this Security for repayment shall be irrevocable.
The repayment option may be exercised by the Holder of this Security for less
than the entire principal amount of this Security provided that the principal
amount of the Security remaining outstanding after repayment is an authorized
denomination. Upon such partial repayment this Security shall be canceled and a
new Security or Securities of like tenor and with the same terms and conditions
for the remaining principal amount hereof shall be issued in the name of the
Holder of this Security or as otherwise specified in the form entitled "Option
to Elect Repayment". After exercise of the repayment option, no transfer or
exchange of this Security (or, if this Security is to be repaid in part, the
portion hereof to be repaid) will be permitted. All questions as to the
validity, eligibility (including time of receipt) and acceptance of
5
<PAGE>
this Security for repayment will be determined by the Company, whose
determination will be final, binding and non-appealable.
The indebtedness evidenced by this Security is expressly subordinated
in right of payment, to the extent and in the manner set forth in the Indenture,
to the prior payment in full of all Superior Indebtedness (as defined in the
Indenture) and this Security is issued subject to such provisions of the
Indenture, and each Holder of this Security by accepting the same agrees to and
shall be bound by such provisions and authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appro priate to acknowledge or
effectuate such subordination as provided in the Indenture and appoints the
Trustee his attorney-in-fact for any and all such purposes.
Interest payments on each Interest Payment Date for this Security and
at Maturity will include interest accrued from and including the later of the
Original Issue Date or the most recent date to which interest has been paid or
provided for to but excluding such Interest Payment Date or to but excluding
Maturity. Interest payments for this Security shall be computed and paid on the
basis of a 360-day year of twelve 30-day months.
Notwithstanding anything herein to the contrary, the interest rate on
this Security will in no event be higher than the maximum rate permitted by New
York law as the same may be modified by United States law of general
applicability.
Any payment of principal of (and premium, if any) or interest required
to be made on this Security on a day which is not a Business Day need not be
made on such day, but may be made on the next day which is such a Business Day
with the same force and effect as if made on such day, and no interest shall
accrue as a result of such delayed payment. "Business Day" means each day, other
than a Saturday or Sunday, that is not a day on which banking institutions in
the Business Day Centers specified on the face hereof are authorized or
obligated by law or executive order to close.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
6
<PAGE>
Any terms or conditions of this Security ("Other Terms") specified on
the face hereof under "Other Terms" shall apply to this Security. In the event
of any conflict between any Other Terms and any other terms or conditions of
this Security, the Other Terms shall control.
Notwithstanding anything herein to the contrary, if this Security is an
Original Issue Discount Security, the amount payable in the event of
acceleration following an Event of Default prior to the Maturity Date hereof in
lieu of the principal amount due at the Maturity Date hereof shall be the
Amortized Face Amount of this Security as of the date of declaration of
acceleration. The "Amortized Face Amount" of this Security shall be an amount
equal to (a) the Issue Price (as set forth on the face hereof) plus (b) that
portion of the difference between the Issue Price and the principal amount
hereof that has accrued at the Yield to Maturity (as set forth on the face
hereof) (computed in accordance with generally accepted United States bond yield
computation principles) at the date as of which the Amortized Face Amount is
calculated, but in no event shall the Amortized Face Amount of this Security
exceed its principal amount.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66-2/3% in principal amount of the Securities at the
time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registra
tion of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not less
than 25% in principal amount
7
<PAGE>
of the Outstanding Securities of this series shall have made written request,
and offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, the Trustee shall not have received from the Holders of a majority in
principal amount of the Outstanding Securities of this series a direction
inconsistent with such request and the Trustee shall have failed to institute
such proceeding within 60 days; provided, however, that such limitations do not
apply to a suit instituted by the Holder hereof for the enforcement of payment
of the principal of (and premium, if any) or interest on this Security on or
after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security Register
upon surrender of this Security for registration of transfer to the Security
Registrar at the Notes Office duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and having the same terms and conditions and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Securities of this series are issuable only in registered form,
without coupons, in denominations of U.S.$100,000 and any integral multiple of
U.S.$1,000 in excess thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of different authorized denominations and having the same
terms and conditions, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
8
<PAGE>
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Security which are defined in the Indenture and
are not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
9
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned owner of this Security hereby irrevocably elects to
have the Company repay the principal amount of this Security or portion hereof
below designated at the applicable Repayment Price indicated on the face hereof
plus interest accrued to the applicable Repayment Date.
Dated:
----------------------------
- ----------------------------------
Signature
Sign exactly as name appears on the front of
this Security [SIGNATURE GUARANTEE--
required only if Securities are to be
issued and delivered to other than the
registered holder]
Principal amount to be
repaid, if amount to be Fill In for registration of
repaid is less than the Securities if to be issued otherwise
principal amount of this than to registered holder:
Security (principal amount
remaining must be an
authorized denomination) Name:
------------------------
U.S.$ Address:
-------------------------- ----------------------
-------------------
(Please print name
and address
including zip code)
SOCIAL SECURITY OR OTHER
TAXPAYER ID NUMBER
------------------------------
10
<PAGE>
-------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
UNIF GIFT MIN ACT...
TEN COM - as tenants in common ..........Custodian..........
TEN ENT - as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts to
JT TEN - as joint tenants with Minors Act
right of survivorship
and not as tenants in
common .............................
(State)
Additional abbreviations may also be used though not in the
above list.
FOR VALUED RECEIVED, the undersigned hereby sell(s), assign(s) and
transfers) unto
Please insert Social Security Number
or Other Identifying Number of
Assignee
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing ____________________ attorney to transfer said Security on the
books of the Company, with full power of substitution in the premises.
Dated: ------------------------------
------------------ Signature
11
<PAGE>
Exhibit 4.1c
<TABLE>
<S> <C> <C> <C> <C>
NOTE NUMBER AGENT'S NAME
PAINE WEBBER GROUP INC.
- ---------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT SETTLEMENT DATE TRADE DATE
U.S.$ (ORIGINAL ISSUE DATE)
- -------------------------------------------------------------------------------------------------------------------------------
MATURITY DATE TRUSTEE CUST. NO. INTEREST RATE BASIS TAXPAYER ID OR TRANSFERRED
SOC. SEC. NO.
OF PURCHASER
- -------------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS OF REGISTERED OWNER MEDIUM TERM
NOTE
PROGRAM
THE CHASE MANHATTAN BANK
TRUSTEE
- -------------------------------------------------------------------------------------------------------------------------------
CUSTOMER'S RETAIN FOR THE TIME OF THE TRANSACTION PLEASE SIGN AND RETURN SEE REVERSE SIDE
COPY TAX PURPOSES WILL BE FURNISHED UPON ENCLOSED RECEIPT
REQUEST OF THE CUSTOMER
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
REGISTERED REGISTERED
PAINE WEBBER GROUP INC.
MEDIUM-TERM SENIOR NOTE, SERIES C Due from
Nine Months to 30 Years from Date of Issue
(Floating Rate)
No. U.S.$
CUSIP NO.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID", "YIELD TO MATURITY" AND "INITIAL
ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) BELOW WILL BE
COMPLETED SOLELY FOR PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE
DISCOUNT ("OID") RULES.
<TABLE>
<S> <C> <C>
ORIGINAL ISSUE DATE: INITIAL INTEREST RATE: MATURITY DATE:
ISSUE PRICE: ORIGINAL ISSUE DISCOUNT BUSINESS DAY CENTERS:
SECURITY:
[ ] YES
[ ] NO
REGULAR RECORD DATES: OPTIONAL REDEMPTION: PAYMENT OF ADDITIONAL AMOUNTS:
[ ] YES [ ] YES [ ] NO
[ ] NO
INTEREST PAYMENT DATES: REDEMPTION DATES: OPTION TO ELECT REPAYMENT:
[ ] YES [ ] NO
TOTAL AMOUNT OF OID: REDEMPTION PRICES: REPAYMENT DATES:
YIELD TO MATURITY: GLOBAL SECURITY: REPAYMENT PRICES:
[ ] YES
[ ] NO
INITIAL ACCRUAL PERIOD DEPOSITARY: CALCULATION AGENT:
OID:
INTEREST RATE BASIS: MAXIMUM RATE: MINIMUM RATE:
SPREAD: SPREAD MULTIPLIER: INDEX MATURITY:
INTEREST RESET DATES: INTEREST DETERMINATION LIBOR BASIS:
DATES (IF OTHER THAN AS [ ] Telerate Screen
SPECIFIED ON THE Page 3750
REVERSE HEREOF): [ ] Reuters Screen
LIBO Page
</TABLE>
OTHER TERMS:
PAINE WEBBER GROUP INC., a Delaware corporation (herein called the
"Company", which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to
, or registered assigns, the principal sum of
U.S. DOLLARS,
<PAGE>
2
on the Maturity Date specified above, and to pay interest thereon from and
including the Original Issue Date shown above or from and including the last
date in respect of which interest has been paid or provided for, as the case may
be. Interest will be paid on the Interest Payment Dates shown above, commencing
with the first such Interest Payment Date following the Original Issue Date
shown above, at a rate determined in accordance with the provisions on the
reverse hereof until the principal hereof is paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date specified above
(whether or not a Business Day) next preceding such Interest Payment Date,
except that in the case of a Security with an original Issue Date that is after
a Regular Record Date and before the next following Interest Payment Date,
interest payable on such Interest Payment Date will be paid to the Person in
whose name such Security was initially registered on the Original Issue Date;
provided, however, that interest payable at Maturity shall be payable to the
Person to whom principal shall be payable. Except as otherwise provided in the
Indenture, any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof to be given to Holders of Securities of this series not
less than 10 days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture. If this Security is not a Global Security, payments of interest on
this Security (other than interest payable at Maturity) will be made by mailing
a check to the person entitled thereto at its address appearing in the Security
Register for the Securities on the applicable Regular Record Date.
Notwithstanding the foregoing, at the option of the Company such payments may be
made by wire transfer of immediately available funds to an account with a bank
located in the continental United States (or other jurisdiction acceptable to
the Company and the Trustee), but only if appropriate payment instructions have
been received in writing by the Trustee not less than 5 Business Days prior to
the applicable Interest Payment Date. Payments of principal of,
<PAGE>
3
premium, if any, and interest will be made in immediately available funds, if at
maturity or upon earlier redemption, then on the Maturity Date or the date fixed
for redemption, as applicable, upon surrender of this Security at the principal
corporate trust office of the Trustee in the Borough of Manhattan, The City of
New York, or such other office or agency of the Company as may be designated by
it for such purpose in the Borough of Manhattan, The City of New York (the
"Notes Office"), provided that this Security is presented to such office in time
for the Trustee to make such payments in such funds in accordance with its
normal procedures, and if upon early repayment, then on the applicable Repayment
Date, provided that the Holder shall have complied with the requirements for
repayment set forth on the reverse hereof. If this Security is a Global
Security, the Depositary will be paid as agreed by the Company, the Trustee and
the Depositary and beneficial owners hereof will be paid in accordance with the
Depositary's and its participants' procedures in effect from time to time.
"Maturity" shall mean the date on which the principal of this Security or an
installment of principal becomes due, whether on the Maturity Date specified
above, upon redemption or early repayment or otherwise.
If the registered owner of this Security (as indicated above) is the
Depositary or a nominee of the Depositary, this Security is a Global Security
and the following legend is applicable: UNLESS AND UNTIL IT IS EXCHANGED IN
WHOLE FOR THE INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
If the registered owner of this Security is The Depository Trust Company or
a nominee of The Depository Trust Company, then unless this certificate is
presented by an authorized representative of The Depository Trust Company (55
Water Street, New York, New York) to the Company or its agent for registration
of transfer, exchange or payment, and any certificate issued is registered in
the name of CEDE & CO., or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL since the registered owner hereof, CEDE & CO., has an
interest herein.
<PAGE>
4
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof, directly or through an Authenticating
Agent, by manual signature of an authorized officer, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: PAINE WEBBER GROUP INC.
By
------------------------------
Title:
[Seal] Attest:
------------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series designated therein referred to in
the within-mentioned Indenture.
Dated:
THE CHASE MANHATTAN BANK
As Trustee
By
---------------------
Authorized officer
<PAGE>
PAINE WEBBER GROUP INC.
MEDIUM-TERM SENIOR NOTE, SERIES C
Due from Nine Months to 30 Years
from Date of Issue
(Floating Rate)
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an indenture dated as of March 15, 1988, as amended by a First
Supplemental Indenture dated as of September 22, 1989, and by a Second
Supplemental Indenture dated as of March 22, 1991 (such Indenture, as so
supplemented, is herein called the "Indenture"), between the Company and The
Chase Manhattan Bank (formerly known as Chemical Bank), as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof.
If so specified on the face hereof, the Company will, subject to the
limitations and exceptions set forth below, pay to a Holder of this Security who
is a United States Alien (as defined below) such additional amounts ("Additional
Amounts") as may be necessary in order that every net payment of the principal
of, premium, if any, and interest on this Security, after deduction or with-
holding by the Company, the Trustee or any of the Company's paying agents for or
on account of any present or future tax, assessment or other governmental charge
imposed upon such Holder with respect to or as a result of such payment by the
United States or any political subdivision or taxing authority thereof or
therein, will not be less than the amount provided herein to be then due and
payable. However, the Company shall not be required to make any such payment of
Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge that would not
have been imposed but for (i) the existence of any present or former
connection between such Holder (or between a fiduciary, settlor or bene-
ficiary of, or a person holding a power over, such Holder, if such Holder
is an estate or a trust, or
<PAGE>
2
between a member or shareholder of such Holder, if such Holder is a
partnership or corporation) and the United States, including, without
limitation, such Holder (or such fiduciary, settlor, beneficiary, person
holding a power, member or shareholder) being or having been a citizen or
resident or treated as a resident thereof or being or having been engaged
in a trade or business therein or being or having been present therein or
having or having had a permanent establishment therein, or (ii) such
Holder's present or former status as a domestic or foreign personal holding
company, a passive foreign investment company or a controlled foreign
corporation, a private foundation or other tax-exempt organization for
United States Federal income tax purposes or a corporation that accumulates
earnings to avoid United States Federal income tax;
(b) any tax, assessment or other governmental charge that would not
have been so imposed but for the presentation by the Holder of this
Security for payment on a date more than 15 days after the date on which
such payment became due and payable or the date on which payment thereof
was duly provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, excise or personal
property tax or any similar tax, assessment or other governmental charge;
(d) any tax, assessment or other governmental charge that would not
have been imposed but for the failure to comply with certification,
information, documentation or other reporting requirements concerning the
nationality, residence, identity or connection with the United States of
the Holder or beneficial owner of this Security, if such compliance is
required by statute or by regulation of the United States or any taxing
authority thereof as a precondition to relief or exemption from such tax,
assessment or other governmental charge;
(e) any tax, assessment or other governmental charge that is
(i) payable otherwise than by deduction or withholding from payments of
principal of or premium, if any, or interest on this Security or
(ii) required to be deducted or withheld by any paying agent from any such
payment, if (and only if) such payment can be made without such deduction
or withholding by any other paying agent;
<PAGE>
3
(f) any tax, assessment or other governmental charge imposed on
interest received by a person holding, actually or constructively, 10
percent or more of the total combined voting power of all classes of stock
of the Company entitled to vote (taking into account the applicable
attribution of ownership rules under Section 871(h)(3) of the Internal
Revenue Code of 1986, as amended (the "Code")) or that is a controlled
foreign corporation related to the Company (directly or indirectly) through
stock ownership; or
(g) any combination of items (a), (b), (c), (d), (e) and (f);
nor will Additional Amounts be paid with respect to payment of the principal of
or premium, if any, or interest on this Security to any United States Alien that
is a fiduciary or partnership or to a person other than the sole beneficial
owner of this Security to the extent that a beneficiary or settlor with respect
to such fiduciary or a member of such partnership or a beneficial owner would
not have been entitled to the Additional Amounts had such beneficiary, settlor,
member or beneficial owner been the Holder of this Security.
The Company, at its option, may redeem this Security as a whole, but not in
part, at any time that this Security is registered in the name of a United
States Alien, on giving not less than 30 nor more than 45 days' notice to the
registered Holder hereof by mail in accordance with the provisions of the
Indenture (which notice shall be irrevocable), at a redemption price equal to
the principal amount hereof (or, in the case of an Original Issue Discount
Security, the amount specified on the face hereof), together with accrued
interest to the redemption date, if the Company determines that the Company has
or will become obligated to pay Additional Amounts on this Security on the next
succeeding Interest Payment Date as a result of any change in, or amendment to,
the laws (or any regulations or rulings promulgated thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, or any change in the application or official interpretation
of such laws, regulations or rulings by a taxing authority, court or regulatory
agency, whether or not rendered or taken with respect to the Company, or any
action taken by any taxing authority, court or regulatory agency (including any
change in administrative policy or enforcement practice of such taxing
authority), whether or not taken with respect to the Company, which change or
amendment becomes effective, or action is taken, on or after the Original Issue
Date, and such obligation cannot be
<PAGE>
4
avoided by the Company taking reasonable measures available to it. Prior to
giving any notice of redemption pursuant to this paragraph, the Company shall
deliver to the Trustee an Officers' Certificate stating that the Company is
entitled to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right of the Company so to redeem
have occurred, and an opinion of independent legal counsel addressed to the
Company and the Trustee to the effect that the Company has or will become
obligated to pay such Additional Amounts as a result of such change or
amendment. Notice of the intention of the Company to redeem this Security shall
not be given earlier than 90 days prior to the earliest date that the obligation
to pay Additional Amounts would arise were a payment in respect of this Security
due on such date. From and after any redemption date, if monies for the
redemption of this Security pursuant to this paragraph shall have been made
available for redemption on such redemption date, this Security shall cease to
bear interest and the only right of the Holder of this Security shall be to
receive payment of the redemption price of this Security and all unpaid interest
accrued to such redemption date. For purposes of this paragraph, the Trustee may
rely on an Officers' Certificate as to whether the registered Holder hereof is a
United States Alien.
The term "United States Alien" means any person who, for United States
Federal income tax purposes, is a foreign corporation, a nonresident alien
individual, a nonresident alien fiduciary of a foreign estate or trust, or a
foreign partnership, one or more of the members of which is, for United States
Federal income tax purposes, a foreign corporation, a nonresident alien
individual or a nonresident alien fiduciary of a foreign estate or trust.
If so specified on the face hereof, the Company may at its option redeem
this Security in whole or from time to time in part on the date or dates
designated as Redemption Dates on the face hereof at the Redemption Price or
Redemption Prices designated on the face hereof, together with accrued interest
to the date of redemption. The Company may exercise such option by mailing or
causing the Trustee to mail a notice of such redemption at least 30 but not more
than 45 days prior to the date of redemption. In the event of redemption of this
Security in part only, a new Security or Securities of like tenor and with the
same terms and conditions for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the cancelation hereof. If less than all of
the Securities having the same terms (except as to principal amount and date of
issuance) as this Security are to be redeemed, the Securities to be
<PAGE>
5
redeemed shall be selected by the Trustee by such method as the Trustee shall
deem fair and appropriate and otherwise as provided under the Indenture.
If so specified on the face hereof, this Security will be repayable prior
to the Maturity Date at the option of the Holder on the date or dates or under
the circumstances designated as Repayment Dates on the face hereof at the
Repayment Price or Repayment Prices designated on the face hereof together with
accrued interest to the date of repayment. In order for this Security to be
repaid, the Trustee must receive at the Notes Office at least 30 but not more
than 45 days prior to the applicable Repayment Date (a) appropriate wire
instructions and (b) either (i) this Security with the form below entitled
"Option to Elect Repayment" duly completed or (ii) a telegram, telex, facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc., or a commercial bank or trust
company in the United States or any other "eligible guarantor institution" (as
such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934,
as amended) setting forth the name of the Holder of this Security, the principal
amount of this Security, the portion of the principal amount of this Security to
be repaid, the certificate number or a description of the tenor and terms of
this Security, a statement that the option to elect repayment is being exercised
thereby and a guarantee that this Security with the form below entitled "Option
to Elect Repayment" duly completed will be received by the Trustee not later
than five Business Days after the date of such telegram, telex, facsimile,
transmission or letter. If the procedure described in clause (ii) of the
preceding sentence is followed, this Security with such form duly completed must
be received by the Trustee by such fifth Business Day. Any tender of this
Security for repayment shall be irrevocable. The repayment option may be
exercised by the Holder of this Security for less than the entire principal
amount of this Security provided that the principal amount of the Security
remaining outstanding after repayment is an authorized denomination. Upon such
partial repayment this Security shall he canceled and a new Security or
Securities of like tenor and with the same terms and conditions for the
remaining principal amount hereof shall be issued in the name of the Holder of
this Security or as otherwise specified in the form entitled "Option to Elect
Repayment". After exercise of the repayment option, no transfer or exchange of
this Security (or, if this Security is to be repaid in part, the portion hereof
to be repaid) will be permitted. All questions as to the validity, eligibility
(including time of receipt) and acceptance of this Security
<PAGE>
6
for repayment will be determined by the Company, whose determination will be
final, binding and non-appealable.
The Indenture provides that, with certain limited exceptions, the Company
will not, nor will it permit any Restricted Subsidiary (as defined in the
Indenture) to, pledge as security for any loan the capital stock or indebtedness
of any Restricted Subsidiary or create, incur, assume or permit to exist any
lien on any property or asset of the Company.
The interest rate in effect with respect to this Security from and
including the Original Issue Date to but excluding the first Interest Reset Date
specified on the face hereof following the Original Issue Date will be the
Initial Interest Rate specified on the face hereof. Commencing with the first
Interest Reset Date following the Original Issue Date, the rate at which
interest on this Security is payable shall be adjusted on each Interest Reset
Date. Each such adjusted rate shall be applicable on and after the Interest
Reset Date to which it relates to but excluding the next succeeding Interest
Reset Date or until Maturity. If any Interest Reset Date specified on the face
hereof would otherwise be a day that is not a Business Day (as hereinafter
defined), such Interest Reset Date shall be postponed to the next day that is a
Business Day, except that, if the Interest Rate Basis specified on the face
hereof is LIBOR, then if such next Business Day is in the next succeeding
calendar month, such Interest Reset Date shall be the next preceding Business
Day. Subject to applicable provisions of law and except as specified herein, if
the Interest Rate Basis specified on the face hereof is the Commercial Paper
Rate, Prime Rate, Federal Funds Rate, LIBOR or the Treasury Rate, then the rate
of interest on this Security on and after each Interest Reset Date on which an
adjustment is made shall be the rate determined in accordance with the
provisions of the applicable heading below.
DETERMINATION OF COMMERCIAL PAPER RATE. If the Interest Rate Basis
specified on the face hereof is the Commercial Paper Rate, then the interest
rate on this Security with respect to each Interest Reset Date shall be
calculated by the Calculation Agent and shall be the Commercial Paper Rate on
the Interest Determination Date pertaining to such Interest Reset Date, plus or
minus the Spread, if any, or multiplied by the Spread Multiplier, if any,
specified on the face hereof. "Commercial Paper Rate" means, with respect to
each such Interest Determination Date, the Money Market Yield (calculated as
described below) of the rate on such date for commercial paper having the
<PAGE>
7
Index Maturity specified on the face hereof as published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15, Selected
Interest Rates" or any successor publication of the Board of Governors of the
Federal Reserve System ("H.15") under the heading "Commercial
paper--Nonfinancial". In the event that such rate is not published prior to 9:00
A.M., New York City time, on the Calculation Date (as defined below) pertaining
to such Interest Determination Date, then the Commercial Paper Rate for that
Interest Determination Date shall be calculated by the Calculation Agent and
shall be the Money Market Yield of the arithmetic mean of the offered rates, as
of 11:00 A.M., New York City time, on that Interest Determination Date, of three
leading dealers of commercial paper in The City of New York selected by the
Calculation Agent for commercial paper of the Index Maturity specified on the
face hereof placed for an industrial issuer whose bond rating is "AA", or the
equivalent, from at least one nationally recognized rating agency; provided,
however, that if the dealers selected as aforesaid by the Calculation Agent are
not quoting as mentioned in this sentence, the Commercial Paper Rate will be the
Commercial Paper Rate in effect on such Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage) calculated
in accordance with the following formula:
Money Market Yield = D x 360 x 100
--------------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper, quoted on a
bank discount basis and expressed as a decimal; and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
DETERMINATION OF PRIME RATE. If the Interest Rate Basis specified on the
face hereof is the Prime Rate, then the interest rate on this Security with
respect to each Interest Reset Date shall be calculated by the Calculation Agent
and shall be the Prime Rate on the Interest Determination Date pertaining to
such Interest Reset Date, plus or minus the Spread, if any, or multiplied by the
Spread Multiplier, if any, specified on the face hereof. "Prime Rate" means,
with respect to each such Interest Determina tion Date, the arithmetic mean of
the prime or base rates quoted on the basis of the actual number of days in the
year divided by 360 as of the close of business on such Interest Determination
Date by three major money center banks in The City of New York selected by the
Calculation Agent. If fewer than three such quotations are provided, the Prime
<PAGE>
8
Rate shall be determined on the basis of the quotations provided, if any,
together with the rates furnished on such date in The City of New York by the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of the United States, or any State thereof, having total
equity capital of at least U.S.$750 million and being subject to supervision or
examination by Federal or State authority, selected by the Calculation Agent to
provide such rate or rates; provided, however, that if the banks or trust
companies selected as aforesaid are not quoting as mentioned in this sentence,
the Prime Rate will be the Prime Rate in effect on such Interest Determination
Date.
DETERMINATION OF FEDERAL FUNDS RATE. If the Interest Rate Basis specified
on the face hereof is the Federal Funds Rate, then the interest rate on this
Security with respect to each Interest Reset Date shall be calculated by the
Calculation Agent and shall be the Federal Funds Rate on the Interest
Determination Date Pertaining to such Interest Reset Date, plus or minus the
Spread, if any, or multiplied by the Spread Multiplier, if any, specified on the
face hereof. "Federal Funds Rate" means, with respect to each such Interest
Determination Date, the rate on such date for Federal Funds as published in H.15
under the heading "Federal funds (effective)" or, if not so published by 9:00
A.M., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Federal Funds Rate for such Interest Determination Date
will be the rate on such Interest Determination Date made publicly available by
the Federal Reserve Bank of New York which is equivalent to the rate which
appears in H.15 under the heading "Federal funds (effective)"; provided,
however, that if such rate is not made publicly available by the Federal Reserve
Bank of New York by 9:00 A.M., New York City time, on such Calculation Date, the
Federal Funds Rate will be the Federal Funds Rate in effect on such Interest
Determination Date.
DETERMINATION OF LIBOR. If the Interest Rate Basis specified on the face
hereof is LIBOR, then the interest rate on this Security with respect to each
Interest Reset Date shall be calculated by the Calculation Agent and shall be
LIBOR on the Interest Determination Date pertaining to such Interest Reset Date,
plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if
any, specified on the face hereof. "LIBOR" will be determined with respect to
each such Interest Determination Date by the
<PAGE>
9
Calculation Agent in accordance with the following provisions:
LIBOR will be determined on the basis of either (a) if the LIBOR Basis
specified on the face hereof is Telerate Screen Page 3750, the rate for
deposits in U.S. dollars having the Index Maturity specified on the face
hereof, commencing on the second London Banking Day (as defined below)
immediately following such Interest Determination Date, which appears on
Telerate Screen Page 3750 (as defined below) as of 11:00 A.M., London time,
on such Interest Determination Date, if such rate appears on Telerate
Screen Page 3750, or (b) if the LIBOR Basis specified on the face hereof is
the Reuters Screen LIBO Page, the arithmetic mean, as determined by the
Calculation Agent, of the offered rates for deposits in U.S. dollars of not
less than $1,000,000 having the Index Maturity specified on the face
hereof, commencing on the second London Banking Day immediately following
such Interest Determination Date, which appear on the Reuters Screen LIBO
Page (as defined below) as of 11:00 A.M., London time, on such Interest
Determination Date, if at least two such offered rates appear on the
Reuters Screen LIBO Page. "Telerate Screen Page 3750" means the display
designated as page 3750 on the Dow Jones Market Service (or such other
page or pages as may replace page 3750 on that service for the purpose of
displaying London interbank offered rates of major banks). "Reuters Screen
LIBO Page" means the display designated as page "LIBO" on the Reuters
Monitor Money Rates Service (or such other page or pages as may replace the
LIBO page on that service for the purpose of displaying London interbank
offered rates of major banks). If no rate appears on Telerate Screen Page
3750 or if fewer than two offered rates appear on the Reuters Screen LIBO
Page, as applicable, LIBOR for such Interest Determina tion Date will be
determined as described in the following paragraph. If neither Telerate
Screen Page 3750 nor the Reuters Screen LIBO Page is specified on the face
hereof as the LIBOR Basis, LIBOR will be determined as if Telerate Screen
Page 3750 had been specified.
With respect to an Interest Determination Date on which no rate
appears on Telerate Page 3750 as described in (a) in the preceding
paragraph, if the LIBOR Basis specified on the face hereof is Telerate
Screen Page 3750, or on which fewer than two offered rates appear on the
Reuters Screen LIBO Page as described in (b) in the preceding paragraph, if
the
<PAGE>
10
LIBOR Basis specified on the face hereof is the Reuters Screen LIBO Page,
LIBOR will be determined on the basis of the rates at approximately 11:00
A.M., London time, on such Interest Determination Date at which deposits in
U.S. dollars having the Index Maturity specified on the face hereof
commencing on the second London Banking Day immediately following such
Interest Determination Date and in a principal amount equal to an amount of
not less than U.S.$1,000,000 that in the Calculation Agent's judgment is
representative for a single trans action in such market at such time, are
offered to prime banks in the London interbank market by four major banks
in the London interbank market selected by the Calculation Agent. The
Calculation Agent will request the principal London office of each of such
banks to provide a quotation of its rate. If at least two such quotations
are provided, LIBOR for such Interest Determination Date will be the
arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR for such Interest Determination Date will be the arithmetic
mean of the rates quoted at approximately 11:00 A.M., New York City time,
on such Interest Determination Date by three major banks in The City of New
York, selected by the Calculation Agent, for loans in U.S. dollars to
leading European banks having the specified Index Maturity commencing on
the second London Banking Day immediately following such Interest
Determination Date and in a principal amount equal to an amount of not less
than U.S.$1,000,000 that in the Calculation Agent's judgment is
representative for a single transaction in such market at such time;
provided, however, that if the banks selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, LIBOR with
respect to such Interest Determination Date will be LIBOR in effect on such
Interest Determination Date.
DETERMINATION OF TREASURY RATE. If the Interest Rate Basis specified on the
face hereof is the Treasury Rate, then the interest rate on this Security with
respect to each Interest Reset Date shall be calculated by the Calculation Agent
and shall be the Treasury Rate on the Interest Determination Date pertaining to
such Interest Reset Date, plus or minus the Spread, if any, or multiplied by the
Spread Multiplier, if any, specified on the face hereof. "Treasury Rate", means,
with respect to each such Interest Determination Date, the rate for the most
recent auction of direct obligations of the United States ("Treasury bills")
having the Index Maturity specified on the face hereof as published in H.15
under the heading "U.S. Government securities--Treasury bills--Auction average"
or,
<PAGE>
11
if not so published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the auction average rate
(expressed as a bond equivalent, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) for such auction as otherwise made
available by the United States Department of the Treasury. In the event that the
results of the auction of Treasury bills having the Index Maturity specified on
the face hereof are not published or made available as provided above by 3:00
P.M., New York City time, on such Calculation Date, or if no such auction is
held in a particular week (or on the preceding Friday, if applicable), then the
Treasury Rate shall be calculated by the Calculation Agent and shall be a yield
to maturity (expressed as a bond equivalent, on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) of the arithmetic mean of
the secondary market bid rates as of approximately 3:30 P.M., New York City
time, on such Interest Determination Date, of three leading primary United
States government securities dealers selected by the Calculation Agent, for the
issue of Treasury bills with a remaining maturity closest to the specified Index
Maturity; provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Treasury
Rate will be the Treasury Rate in effect on such Interest Determination Date.
Unless otherwise specified on the face hereof, the Interest Determination
Date pertaining to an Interest Reset Date for this Security will be, if the
Interest Rate Basis for this Security is the Commercial Paper Rate or the Prime
Rate, the second New York Business Day (as defined below) preceding such
Interest Reset Date; if the Interest Rate Basis for this Security is LIBOR, the
second London Banking Day preceding such Interest Reset Date; if the Interest
Rate Basis for this Security is the Federal Funds Rate, the first New York
Business Day preceding such Interest Reset Date; and if the Interest Rate Basis
for this Security is the Treasury Rate, the day of the week in which such
Interest Reset Date falls on which Treasury bills would normally be auctioned.
Treasury bills are usually sold at auction on Monday of each week, unless that
day is a legal holiday, in which case the auction is usually held on the
following Tuesday, except that such auction may be held on the preceding Friday.
If, as the result of a legal holiday, an auction is so held on the preceding
Friday, such Friday will be the Interest Determination Date pertaining to the
Interest Reset Date occurring in the next succeeding week. If an auction date
shall fall on any Interest Reset Date for such a Note, then such Interest Reset
Date shall instead be the first New York Business Day immediately following such
<PAGE>
12
auction date. The "Calculation Date" pertaining to any Interest Determination
Date will be the earlier of (i) the tenth day after such Interest Determination
Date or, if any such day is not a New York Business Day, the next succeeding New
York Business Day and (ii) the New York Business Day next preceding the relevant
interest Payment Date or Maturity, as the case may be.
All percentages resulting from any calculations on this Security will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point (with five one-millionths of a percentage point being rounded upward) and
all currency amounts used in or resulting from such calculations will be
rounded, if necessary, to the nearest one-hundredth of a unit (with .005 of a
unit being rounded upward).
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Rate, if any, or less than the Minimum Rate, if any,
shown on the face hereof. In addition, the interest rate on this Security will
in no event be higher than the maximum rate permitted by New York law as the
same may be modified by United States law of general applicability. The
Calculation Agent shall calculate the interest rate on this Security in
accordance with the foregoing on or before each Calculation Date and shall
promptly thereafter notify the Company and the Trustee of such interest rate.
Any such calculation by the Calculation Agent shall be conclusive and binding
on the Company, the Trustee and the Holder of this Security, absent manifest
error.
The Calculation Agent will, upon the request of the Holder of this
Security, provide to such Holder the interest rate hereon then in effect and, if
determined, the interest rate which will become effective as of the next
Interest Reset Date.
Interest payments on each Interest Payment Date for this Security and at
Maturity will include interest accrued from and including the later of the
Original Issue Date or the most recent date to which interest has been paid or
provided for to but excluding such Interest Payment Date or to but excluding
Maturity. Accrued interest hereon from the Original Issue Date or from the last
date to which interest hereon has been paid or provided for, as the case may be,
shall be an amount calculated by multiplying the face amount hereof by an
accrued interest factor. Such accrued interest factor shall be computed by
adding the interest factor calculated for each day from the Original Issue Date
or from the last date to which interest shall
<PAGE>
13
have been paid or provided for, as the case may be, to the date for which
accrued interest is being calculated. The interest factor (expressed as a
decimal) for each such day shall be computed by dividing the interest rate
(expressed as a decimal) applicable to such day by 360, if the Interest Rate
Basis specified on the face hereof is a Commercial Paper Rate, Prime Rate,
Federal Funds Rate or LIBOR, or the actual number of days in the year, if the
Interest Rate Basis specified on the face hereof is the Treasury Rate.
Any payment of principal, premium, if any, or interest required to be made
on this Security on a day which is not a Business Day need not be made on such
day, but may be made on the next day which is such a Business Day with the same
force and effect as if made on such day, and no interest shall accrue as a
result of such delayed payment, except that, if the Interest Rate Basis
specified on the face hereof is LIBOR, if such next succeeding Business Day is
in the next succeeding calendar month, such payment shall be made on the
immediately preceding Business Day. "Business Day" means each day, other than a
Saturday or Sunday, that is (i) not a day on which banking institutions in the
Business Day Centers specified on the face hereof are authorized or obligated by
law or executive order to close and (ii) if the Interest Rate Basis specified on
the face hereof is LIBOR, a London Banking Day. As used herein, "London Banking
Day" shall mean any day on which dealings in deposits in U.S. dollars are
transacted in the London interbank market. "New York Business Day", as used
herein, shall mean each day, other than a Saturday or Sunday, that is not a day
on which banking institutions in The City of New York are authorized or
obligated by law or executive order to close.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
Any terms or conditions of this Security ("Other Terms") specified on the
face hereof under "Other Terms" shall apply to this Security. In the event of
any conflict between any Other Terms and any other terms or conditions of this
Security, the Other Terms shall control.
Notwithstanding anything herein to the contrary, if this Security is an
Original Issue Discount Security, the amount payable in the event of
acceleration following an Event of Default prior to the Maturity Date hereof in
lieu of the principal amount due at the Maturity Date hereof
<PAGE>
14
shall be the Amortized Face Amount of this Security as of the date of
declaration of acceleration. The "Amortized Face Amount" of this Security shall
be an amount equal to (a) the Issue Price (as set forth on the face hereof) plus
(b) that portion of the difference between the Issue Price and the principal
amount hereof that has accrued at the Yield to Maturity (as set forth on the
face hereof) (computed in accordance with generally accepted United States bond
yield computation principles) at the date as of which the Amortized Face Amount
is calculated, but in no event shall the Amortized Face Amount of this Security
exceed its principal amount.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66-2/3% in principal amount of the Securities at the
time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and to waive certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of the Indenture, no Holder
of any Security of this series will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of a continuing Event
of Default with respect to this series, the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series shall have made
written request, and offered reasonable indemnity, to the Trustee to institute
such proceeding as trustee, the Trustee shall not have received from the Holders
of a majority in principal amount of the Outstanding Securities of this series a
direction inconsistent with such request and the Trustee shall have failed to
institute such proceeding within 60 days; provided, however, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of (and premium, if
<PAGE>
15
any) or interest on this Security on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, places and rates, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register
upon surrender of this Security for registration of transfer to the Security
Registrar at the Notes Office duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and having the same terms and conditions and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Securities of this series are issuable only in fully registered form,
without coupons, in denominations of U.S. $100,000 and integral multiples of
U.S.$1,000 in excess thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of different authorized dominations and having the same terms
and conditions, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
<PAGE>
16
All terms used in this Security which are defined in the Indenture and are
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
<PAGE>
17
OPTION TO ELECT REPAYMENT
The undersigned owner of this Security hereby irrevocably elects to have
the Company repay the principal amount of this Security or portion hereof below
designated at the applicable Repayment Price indicated on the fact hereof plus
interest accrued to the applicable Repayment Date.
Dated:
----------------
- ----------------------
Signature
Sign exactly as name appears on the
front of this Security [SIGNATURE
GUARANTEE - required only if
Securities are to be issued and
delivered to other than the
registered holder]
Principal amount to be Fill in for
repaid, if amount to be registration of
repaid is less than the Securities if to be
principal amount of this issued otherwise than to
Security (principal amount registered holder:
remaining must be an
authorized denomination)
U.S. $ Name:
-------------------- ---------------------
Address:
------------------
------------------
(Please print
name and address
including zip code)
SOCIAL SECURITY OR OTHER
TAXPAYER ID NUMBER
--------------------------
<PAGE>
18
--------------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT...
TEN ENT - as tenants by ..........Custodian..........
the entireties (Cust) (Minor)
JT TEN - as joint tenants with Under Uniform Gifts to
right of survivorship Minors Act
and not as tenants in .............................
common (State)
Additional abbreviations may also be used though not in the
above list.
--------------------
FOR VALUED RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security
or Other Identifying Number of
Assignee
- -------------------------------
- ------------------------------- -------------------------------
- -------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- -------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing ________________________ attorney to transfer said Security on
the books of the Company, with full power of substitution in the premises.
Dated: -----------------------
-------------------- Signature
<PAGE>
Exhibit 4.1d
<TABLE>
<S> <C> <C> <C> <C>
NOTE NUMBER AGENT'S NAME
PAINE WEBBER GROUP INC.
- ---------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT SETTLEMENT DATE TRADE DATE
U.S.$ (ORIGINAL ISSUE DATE)
- -------------------------------------------------------------------------------------------------------------------------------
MATURITY DATE TRUSTEE CUST. NO. INTEREST RATE BASIS TAXPAYER ID OR TRANSFERRED
SOC. SEC. NO.
OF PURCHASER
- -------------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS OF REGISTERED OWNER MEDIUM TERM
NOTE
PROGRAM
CHASE MANHATTAN BANK DELAWARE
TRUSTEE
THE CHASE MANHATTAN BANK
AUTHENTICATING AGENT
- -------------------------------------------------------------------------------------------------------------------------------
CUSTOMER'S RETAIN FOR THE TIME OF THE TRANSACTION PLEASE SIGN AND RETURN SEE REVERSE SIDE
COPY TAX PURPOSES WILL BE FURNISHED UPON ENCLOSED RECEIPT
REQUEST OF THE CUSTOMER
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
REGISTERED REGISTERED
PAINE WEBBER GROUP INC.
MEDIUM-TERM SUBORDINATED NOTE, SERIES D
Due from Nine Months to 30 Years from Date of Issue
(Floating Rate)
No. U.S.$
CUSIP NO.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID", "YIELD TO MATURITY" AND "INITIAL
ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) BELOW WILL BE
COMPLETED SOLELY FOR PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE
DISCOUNT ("OID") RULES.
<TABLE>
<CAPTION>
<S> <C> <C>
ORIGINAL ISSUE DATE: INITIAL INTEREST RATE: MATURITY DATE:
ISSUE PRICE: ORIGINAL ISSUE DISCOUNT SECURITY: BUSINESS DAY CENTERS:
[ ] YES
[ ] NO
REGULAR RECORD DATES: OPTIONAL REDEMPTION: PAYMENT OF ADDITIONAL AMOUNTS:
[ ] YES [ ] YES [ ] NO
[ ] NO
INTEREST PAYMENT DATES: REDEMPTION DATES: OPTION TO ELECT REPAYMENT:
[ ] YES [ ] NO
TOTAL AMOUNT OF OID: REDEMPTION PRICES: REPAYMENT DATES:
YIELD TO MATURITY: GLOBAL SECURITY: REPAYMENT PRICES:
[ ] YES
[ ] NO
INITIAL ACCRUAL PERIOD OID: DEPOSITARY: CALCULATION AGENT:
INTEREST RATE BASIS: MAXIMUM RATE: MINIMUM RATE:
SPREAD: SPREAD MULTIPLIER: INDEX MATURITY:
INTEREST RESET DATES: INTEREST DETERMINATION LIBOR BASIS:
DATES (IF OTHER THAN AS [ ] Telerate Screen Page 3750
SPECIFIED ON THE [ ] Reuters Screen LIBO Page
REVERSE HEREOF):
OTHER TERMS:
</TABLE>
PAINE WEBBER GROUP INC., a Delaware corporation (herein called the
"Company", which term includes any successor corporation under the Indenture
referred to on the
<PAGE>
2
reverse hereof), for value received, hereby promises to pay to
,
or registered assigns, the principal sum of
U.S. DOLLARS, on the Maturity Date specified above, and to pay interest thereon
from and including the Original Issue Date shown above or0 from and including
the last date in respect of which interest has been paid or provided for, as the
case may be. Interest will be paid on the Interest Payment Dates shown above,
commencing with the first such Interest Payment Date following the Original
Issue Date shown above, at a rate determined in accordance with the provisions
on the reverse hereof until the principal hereof is paid or made available for
payment. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date specified above
(whether or not a Business Day) next preceding such Interest Payment Date,
except that in the case of a Security with an Original Issue Date that is after
a Regular Record Date and before the next following interest Payment Date,
interest payable on such Interest Payment Date will be paid to the Person in
whose name such Security was initially registered on the Original Issue Date;
provided, however, that interest payable at Maturity shall be payable to the
Person to whom principal shall be payable. Except as otherwise provided in the
Indenture, any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof to be given to Holders of Securities of this series not
less than 10 days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture. If this Security is not a Global Security, payments of interest on
this Security (other than interest payable at Maturity) will be made by mailing
a check to the person entitled thereto at its address appearing in the Security
Register for the Securities on the applicable Regular Record Date.
Notwithstanding the foregoing, at the option of the Company such payments may be
made by wire transfer of immediately available funds to an account with a bank
located in the
<PAGE>
3
continental United States (or other jurisdiction acceptable to the Company and
The Chase Manhattan Bank, as Paying Agent), but only if appropriate payment
instructions have been received in writing by the Paying Agent not less than 5
Business Days prior to the applicable Interest Payment Date. Payments of
principal of, premium, if any, and interest will be made in immediately
available funds, if at maturity or upon earlier redemption, then on the Maturity
Date or the date fixed for redemption, as applicable, upon surrender of this
Security at the principal corporate trust office of the Paying Agent in the
Borough of Manhattan, The City of New York, or such other office or agency of
the Company as may be designated by it for such purpose in the Borough of
Manhattan, The City of New York (the "Notes Office"), provided that this
Security is presented to such office in time for the Paying Agent to make such
payments in such funds in accordance with its normal procedures, and if upon
early repayment, then on the applicable Repayment Date, provided that the Holder
shall have complied with the requirements for repayment set forth on the reverse
hereof. If this Security is a Global Security, the Depositary will be paid as
agreed by the Company, the Trustee, the Paying Agent and the Depositary and
beneficial owners hereof will be paid in accordance with the Depositary's and
its participants' procedures in effect from time to time. "Maturity" shall mean
the date on which the principal of this Security or an installment of principal
becomes due, whether on the Maturity Date specified above, upon redemption or
early repayment or otherwise.
If the registered owner of this Security (as indicated above) is the
Depositary or a nominee of the Depositary, this Security is a Global Security
and the following legend is applicable: UNLESS AND UNTIL IT IS EXCHANGED IN
WHOLE FOR THE INDIVIDUAL SECURITIES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
If the registered owner of this Security is The Depository Trust Company or
a nominee of The Depository Trust Company, then unless this certificate is
presented by an authorized representative of The Depository Trust Company (55
Water Street, New York, New York) to the Company or its agent for registration
of transfer, exchange or payment, and any certificate issued is
registered in the name of CEDE & CO., or such other name as requested by an
authorized representative of The Depository Trust Company and any
<PAGE>
4
payment is made to CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner
hereof, CEDE & CO., has an interest herein.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH IN FULL ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof, directly or through an Authenticating
Agent, by manual signature of an authorized officer, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: PAINE WEBBER GROUP INC.,
By
--------------------------------
Title:
[Seal] Attest:
--------------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series designated therein referred to in
the within-mentioned Indenture.
Dated:
CHASE MANHATTAN BANK DELAWARE CHASE MANHATTAN BANK
As Trustee DELAWARE
OR As Trustee
By By The Chase Manhattan Bank
-------------------- As Authenticating Agent
Authorized Officer
By
--------------------------------
Authorized Officer
<PAGE>
PAINE WEBBER GROUP INC.
MEDIUM-TERM SUBORDINATED NOTE, SERIES D
Due from Nine Months to 30 Years
from Date of Issue
(Floating Rate)
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture dated as of March 15, 1988, as amended by a First
Supplemental Indenture dated as of September 22, 1989, by a Second Supplemental
Indenture dated as of March 22, 1991, and by a Third Supplemental Indenture
dated as of November 30, 1993 (such Indenture, as so supplemented, is herein
called the "Indenture"), between the Company and Chase Manhattan Bank Delaware
(formerly known as Chemical Bank Delaware), as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof.
If so specified on the face hereof, the Company will, subject to the
limitations and exceptions set forth below, pay to a Holder of this Security who
is a United States Alien (as defined below) such additional amounts ("Additional
Amounts") as may be necessary in order that every net payment of the principal
of, premium, if any, and interest on this Security, after deduction or
withholding by the Company, the Trustee or any of the Company's paying agents
for or on account of any present or future tax, assessment or other governmental
charge imposed upon such Holder with respect to or as a result of such payment
by the United States or any political subdivision or taxing authority thereof or
therein, will not be less than the amount provided herein to be then due and
payable. However, the Company shall not be required to make any such payment of
Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge that would not have
been imposed but for (i) the existence of any present or former connection
between
<PAGE>
2
such Holder (or between a fiduciary, settlor or beneficiary of, or a person
holding a power over, such Holder, if such Holder is an estate or a trust, or
between a member or shareholder of such Holder, if such Holder is a partnership
or corporation) and the United States, including, without limitation, such
Holder (or such fiduciary, settlor, beneficiary, person holding a power, member
or shareholder) being or having been a citizen or resident or treated as a
resident thereof or being or having been engaged in a trade or business therein
or being or having been present therein or having or having had a permanent
establishment therein, or (ii) such Holder's present or former status as a
domestic or foreign personal holding company, a passive foreign investment
company or a controlled foreign corporation, a private foundation or other
tax-exempt organization for United States Federal income tax purposes or a
corporation that accumulates earnings to avoid United States Federal income tax;
(b) any tax, assessment or other governmental charge that would not have
been so imposed but for the presentation by the Holder of this Security for
payment on a date more than 15 days after the date on which such payment became
due and payable or the date on which payment thereof was duly provided for,
whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, excise or personal
property tax or any similar tax, assessment or other governmental charge;
(d) any tax, assessment or other governmental charge that would not have
been imposed but for the failure to comply with certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connection with the United States of the Holder or
beneficial owner of this Security, if such compliance is required by statute or
by regulation of the United States or any taxing authority thereof as a
precondition to relief or exemption from such tax, assessment or other
governmental charge;
(e) any tax, assessment or other governmental charge that is (i) payable
otherwise than by deduction or withholding from payments of principal of or
premium, if any, or interest on this Security or (ii) required to be deducted or
withheld by any paying agent from any such payment, if (and only if) such
payment can be made
<PAGE>
3
without such deduction or withholding by any other paying agent;
(f) any tax, assessment or other governmental charge imposed on interest
received by a person holding, actually or constructively, 10 percent or more of
the total combined voting power of all classes of stock of the Company entitled
to vote (taking into account the applicable attribution of ownership rules under
Section 871(h)(3) of the Internal Revenue Code of 1966, as amended (the "Code"))
or that is a controlled foreign corporation related to the Company (directly or
indirectly) through stock ownership; or
(g) any combination of items (a), (b), (c), (d), (e) and (f); nor will
Additional Amounts be paid with respect to payment of the principal of or
premium, if any, or interest on this Security to any United States Alien that is
a fiduciary or partnership or to a person other than the sole beneficial owner
of this Security to the extent that a beneficiary or settlor with respect to
such fiduciary or a member of such partnership or a beneficial owner would not
have been entitled to the Additional Amounts had such beneficiary, settlor,
member or beneficial owner been the Holder of this Security.
The Company, at its option, may redeem this Security as a whole, but not in
part, at any time that this Security is registered in the name of a United
States Alien, on giving not less than 30 nor more than 45 days' notice to the
registered Holder hereof by mail in accordance with the provisions of the
Indenture (which notice shall be irrevocable), at a redemption price equal to
the principal amount hereof (or, in the case of an Original Issue Discount
Security, the amount specified on the face hereof), together with accrued
interest to the redemption date, if the Company determines that the Company has
or will become obligated to pay Additional Amounts on this Security on the next
succeeding Interest Payment Date as a result of any change in, or amendment to,
the laws (or any regulations or rulings promulgated thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, or any change in the application or official interpretation
of such laws, regulations or rulings by a taxing authority, court or regulatory
agency, whether or not rendered or taken with respect to the Company, or any
action taken by any taxing authority, court or regulatory agency (including any
change in administrative policy or enforcement practice of such taxing
authority), whether or
<PAGE>
4
not taken with respect to the Company, which change or amendment becomes
effective, or action is taken, on or after the Original Issue Date, and such
obligation cannot be avoided by the Company taking reasonable measures available
to it. Prior to giving any notice of redemption pursuant to this paragraph, the
Company shall deliver to the Trustee an Officers' Certificate stating that the
Company is entitled to effect such redemption and setting forth a statement of
facts showing that the conditions precedent to the right of the Company so to
redeem have occurred, and an opinion of independent legal counsel addressed to
the Company and the Trustee to the effect that the Company has or will become
obligated to pay such Additional Amounts as a result of such change or
amendment. Notice of the intention of the Company to redeem this Security shall
not be given earlier than 90 days prior to the earliest date that the obligation
to pay Additional Amounts would arise were a payment in respect of this Security
due on such date. From and after any redemption date, if monies for the
redemption of this Security pursuant to this paragraph shall have been made
available for redemption on such redemption date, this Security shall cease to
bear interest and the only right of the Holder of this Security shall be to
receive payment of the redemption price of this Security and all unpaid interest
accrued to such redemption date. For purposes of this paragraph, the Trustee may
rely on an Officers' Certificate as to whether the registered Holder hereof is a
United States Alien.
The term "United States Alien" means any person who, for United States
Federal income tax purposes, is a foreign corporation, a nonresident alien
individual, a nonresident alien fiduciary of a foreign estate or trust, or a
foreign partnership, one or more of the members of which is, for United States
Federal income tax purposes, a foreign corporation, a nonresident alien
individual or a nonresident alien fiduciary of a foreign estate or trust.
If so specified on the face hereof, the Company may at its option redeem
this Security in whole or from time to time in part on the date or dates
designated as Redemption Dates on the face hereof at the Redemption Price or
Redemption Prices designated on the face hereof, together with accrued interest
to the date of redemption. The Company may exercise such option by mailing or
causing the Trustee to mail a notice of such redemption at least 30 but not more
than 45 days prior to the date of redemption. In the event of redemption of this
Security in part only, a new Security or Securities of like tenor and with the
same terms and conditions for the unredeemed portion hereof shall be issued in
the name of the Holder hereof upon the cancelation
<PAGE>
5
hereof. If less than all of the Securities having the same terms (except as to
principal amount and date of issuance) as this Security are to be redeemed, the
Securities to be redeemed shall be selected by the Trustee by such method as the
Trustee shall deem fair and appropriate and otherwise as provided under the
Indenture.
If so specified on the face hereof, this Security will be repayable prior
to the Maturity Date at the option of the Holder on the date or dates or under
the circumstances designated as Repayment Dates on the face hereof at the
Repayment Price or Repayment Prices designated on the face hereof together with
accrued interest to the date of repayment. In order for this Security to be
repaid, Chemical Bank, as Paying Agent, must receive at the Notes Office at
least 30 but not more than 45 days prior to the applicable Repayment Date (a)
appropriate wire instructions and (b) either (i) this Security with the form
below entitled "Option to Elect Repayment" duly completed or (ii) a telegram,
telex, facsimile transmission or letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc., or a
commercial bank or trust company in the United States or any other "eligible
guarantor institution" (as such term is defined in Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended) setting forth the name of the
Holder of this Security, the principal amount of this Security, the portion of
the principal amount of this Security to be repaid, the certificate number or a
description of the tenor and terms of this Security, a statement that the option
to elect repayment is being exercised thereby and a guarantee that this Security
with the form below entitled "Option to Elect Repayment" duly completed will be
received by the Paying Agent not later than five Business Days after the date of
such telegram, telex, facsimile, transmission or letter. If the procedure
described in clause (ii) of the preceding sentence is followed, this Security
with such form duly completed must be received by the Trustee by such fifth
Business Day. Any tender of this Security for repayment shall be irrevocable.
The repayment option may be exercised by the Holder of this Security for less
than the entire principal amount of this Security provided that the principal
amount of the Security remaining outstanding after repayment is an authorized
denomination. Upon such partial repayment this Security shall be canceled and a
new Security or Securities of like tenor and with the same terms and conditions
for the remaining principal amount hereof shall be issued in the name of the
Holder of this Security or as otherwise specified in the form entitled "Option
to Elect Repayment". After exercise of the repayment option, no transfer or
exchange of this Security (or, if this Security
<PAGE>
6
is to be repaid in part, the portion hereof to be repaid) will be permitted. All
questions as to the validity, eligibility (including time of receipt) and
acceptance of this Security for repayment will be determined by the Company,
whose determination will be final, binding and non-appealable.
The indebtedness evidenced by this Security is expressly subordinated in
right of payment, to the extent and in the manner set forth in the Indenture, to
the prior payment in full of all Superior Indebtedness (as defined in the
Indenture) and this Security is issued subject to such provisions of the
Indenture, and each Holder of this Security by accepting the same agrees to and
shall be bound by such provisions and authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate such subordination as provided in the Indenture and appoints the,
Trustee his attorney-in-fact for any and all such purposes.
The interest rate in effect with respect to this Security from and
including the original Issue Date to but excluding the first Interest Reset Date
specified on the face hereof following the original Issue Date will be the
Initial Interest Rate specified on the face hereof. Commencing with the first
Interest Reset Date following the Original Issue Date, the rate at which
interest on this Security is payable shall be adjusted on each Interest Reset
Date. Each such adjusted rate shall be applicable on and after the Interest
Reset Date to which it relates to but excluding the next succeeding Interest
Reset Date or until Maturity. If any Interest Reset Date specified on the face
hereof would otherwise be a day that is not a Business Day (as hereinafter
defined), such Interest Reset Date shall be postponed to the next day that is a
Business Day, except that, if the Interest Rate Basis specified on the face
hereof is LIBOR, then if such next Business Day is in the next succeeding
calendar month, each Interest Reset Date shall be the next preceding Business
Day. Subject to applicable provisions of law and except as specified herein, if
the Interest Rate Basis specified on the face hereof is the Commercial Paper
Rate, Prime Rate, Federal Funds Rate, LIBOR or the Treasury Rate, then the rate
of interest on this Security on and after such Interest Reset Date on which an
adjustment is made shall be the rate determined in accordance with the
provisions of the applicable heading below.
DETERMINATION OF COMMERCIAL PAPER RATE. If the Interest Rate Basis
specified on the face hereof is the Commercial Paper Rate, then the interest
rate on this
<PAGE>
7
Security with respect to each Interest Reset Date shall be calculated by the
Calculation Agent and shall be the Commercial Paper Rate on the Interest
Determination Date pertaining to such Interest Reset Date, plus or minus the
Spread, if any, or multiplied by the Spread Multiplier, if any, specified on the
face hereof. "Commercial Paper Rate" means, with respect to each such Interest
Determination Date, the Money Market Yield (calculated as described below) of
the rate on such date for commercial paper having the Index Maturity specified
on the face hereof as published by the Board of Governors of the Federal Reserve
System in "Statistical Release H.15, Selected Interest Rates" or any successor
publication of the Board of Governors of the Federal Reserve System ("H.15")
under the heading "Commercial paper--Nonfinancial". In the event that such rate
is not published prior to 9:00 A.M., New York City time, on the Calculation Date
(as defined below) pertaining to such Interest Determination Date, then the
Commercial Paper Rate for that Interest Determination Date shall be calculated
by the Calculation Agent and shall be the Money Market Yield of the arithmetic
mean of the offered rates, as of 11:00 A.M., New York City time, on that
Interest Determination Date, of three leading dealers of commercial paper in The
City of New York selected by the Calculation Agent for commercial paper of the
Index Maturity specified on the face hereof placed for an industrial issuer
whose bond rating is "AA", or the equivalent, from at least one nationally
recognized rating agency; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Commercial Paper Rate will be the Commercial Paper Rate in effect
on such Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage) calculated
in accordance with the following formula:
Money Market Yield = D x 360
------------- x 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
DETERMINATION OF PRIME RATE. If the Interest Rate Basis specified on the
face hereof is the Prime Rate, then the interest rate on this Security with
respect to each Interest Reset Date shall be calculated by the Calculation Agent
and shall be the Prime Rate on the Interest Determination Date pertaining to
such Interest Reset Date, plus or
<PAGE>
8
minus the Spread, if any, or multiplied by the Spread Multiplier, if any,
specified on the face hereof. "Prime Rate" means, with respect to each such
Interest Determination Date, the arithmetic mean of the prime or base rates
quoted on the basis of the actual number of days in the year divided by 360 as
of the close of business on such Interest Determination Date by three major
money center banks in The City of New York selected by the Calculation Agent. If
fewer than three such quotations are provided, the Prime Rate shall be
determined on the basis of the quotations provided, if any, together with the
rates furnished on such date in The City of New York by the appropriate number
of substitute banks or trust companies organized and doing business under the
laws of the United States, or any State thereof, having total equity capital of
at least U.S.$750 million and being subject to supervision or examination by
Federal or State authority, selected by the Calculation Agent to provide such
rate or rates; provided, however, that if the banks or trust companies selected
as aforesaid are not quoting as mentioned in this sentence, the Prime Rate will
be the Prime Rate in effect on such Interest Determination Date.
DETERMINATION OF FEDERAL FUNDS RATE. If the Interest Rate Basis specified
on the face hereof is the Federal Funds Rate, then the interest rate on this
Security with respect to each Interest Reset Date shall be calculated by the
Calculation Agent and shall be the Federal Funds Rate on the Interest
Determination Date pertaining to such Interest Reset Date, plus or minus the
Spread, if any, or multiplied by the Spread Multiplier, if any, specified on the
face hereof. "Federal Funds Rate" means, with respect to each such Interest
Determination Date, the rate on such date for Federal Funds as published in H.15
under the heading "Federal funds (effective)" or, if not so published by 9:00
A.M., New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Federal Funds Rate for such Interest Determination Date
will be the rate on such Interest Determination Date made publicly available by
the Federal Reserve Bank of New York which is equivalent to the rate which
appears in H.15 under the heading "Federal funds (effective)"; provided,
however, that if such rate is not made publicly available by the Federal Reserve
Bank of New York by 9:00 A.M., New York City time, on such Calculation Date, the
Federal Funds Rate will be the Federal Funds Rate in effect on such Interest
Determination Date.
DETERMINATION OF LIBOR. If the Interest Rate Basis specified on the face
hereof is LIBOR, then the interest rate on this Security with respect to each
Interest
<PAGE>
9
Reset Date shall be calculated by the Calculation Agent and shall be
LIBOR on the Interest Determination Date pertaining to such Interest Reset Date,
plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if
any, specified on the face hereof. "LIBOR" will be determined with respect to
each such Interest Determination Date by the Calculation Agent in accordance
with the following provisions:
LIBOR will be determined on the basis of either (a) if the LIBOR Basis
specified on the face hereof is Telerate Screen Page 3750, the rate for deposits
in U.S. dollars having the Index Maturity specified on the face hereof,
commencing on the second London Banking Day (as defined below) immediately
following such Interest Determination Date which appears on Telerate Screen Page
3750 (as defined below) as of 11:00 A.M., London time, on such Interest
Determination Date, if such rate appears on Telerate Screen Page 3750, or (b) if
the LIBOR Basis specified on the face hereof is the Reuters Screen LIBO Page,
the arithmetic mean, as determined by the Calculation Agent, of the offered
rates for deposits in U.S. dollars of not less than $1,000,000 having the Index
Maturity specified on the face hereof, commencing on the second London Banking
Day immediately following such Interest Determination Date, which appear on the
Reuters Screen LIBO Page (as defined below) as of 11:00 A.M., London time, on
such Interest Determination Date, if at least two such offered rates appear on
the Reuters Screen LIBO Page. "Telerate Screen Page 3750" means the display
designated as page 3750 on the Dow Jones Market Service (or such other page or
pages as may replace page 3750 on that service for the purpose of displaying
London interbank offered rates of major banks). "Reuters Screen LIBO Page" means
the display designated as page "LIBO" on the Reuters Monitor Money Rates Service
(or such other page or pages as may replace the LIBO page on that service for
the purpose of displaying London interbank offered rates of major banks). If no
rate appears on Telerate Screen Page 3750 or if fewer than two offered rates
appear on the Reuters Screen LIBO Page, as applicable, LIBOR for such Interest
Determination Date will be determined as described in the following paragraph.
If neither Telerate Screen Page 3750 nor the Reuters Screen LIBO Page is
specified on the face hereof as the LIBOR Basis, LIBOR will be determined as if
Telerate Screen Page 3750 had been specified.
With respect to an Interest Determination Date on which no rate appears on
Telerate Page 3750 as described in (a) in the preceding paragraph, if the LIBOR
Basis
<PAGE>
10
specified on the face hereof is Telerate Screen Page 3750, or on which fewer
than two offered rates appear on the Reuters Screen LIBO Page as described in
(b) in the preceding paragraph, if the LIBOR Basis specified on the face hereof
is the Reuters Screen LIBO Page, LIBOR will be determined on the basis of the
rates at approximately 11:00 A.M., London time, on such Interest Determination
Date at which deposits in U.S. dollars having the Index Maturity specified on
the face hereof commencing on the second London Banking Day immediately
following such interest Determination Date and in a principal amount equal to an
amount of not less than U.S.$1,000,000 that in the Calculation Agent's judgment
is representative for a single transaction in such market at such time, are
offered to prime banks in the London interbank market by four major banks in the
London interbank market selected by the Calculation Agent. The Calculation Agent
will request the principal London office of each of such banks to provide a
quotation of its rate. If at least two such quotations are provided, LIBOR for
such Interest Determination Date will be the arithmetic mean of such quotations.
If fewer than two quotations are provided, LIBOR for such Interest Determination
Date will be the arithmetic mean of the rates quoted at approximately 11:00
A.M., New York City time, on such Interest Determination Date by three major
banks in The City of New York, selected by the Calculation Agent, for loans in
U.S. dollars to leading European banks having the specified Index Maturity
commencing on the second London Banking Day immediately following such Interest
Determination Date and in a principal amount equal to an amount of not less than
U.S.$1,000,000 that in the Calculation Agent's judgment is representative for a
single transaction in such market at such time; provided, however, that if the
banks selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR with respect to such Interest Determination
Date will be LIBOR in effect on such Interest Determination Date.
DETERMINATION OF TREASURY RATE. If the Interest Rate Basis specified on the
face hereof is the Treasury Rate, then the interest rate on this Security with
respect to each Interest Reset Date shall be calculated by the Calculation Agent
and shall be the Treasury Rate on the Interest Determination Date pertaining to
such Interest Reset Date, plus or minus the Spread, if any, or multiplied by the
Spread Multiplier, if any, specified on the face hereof. "Treasury Rate" means,
with respect to each such Interest Determination Date, the rate for the most
recent auction of direct obligations of the United States
<PAGE>
11
("Treasury bills") having the Index Maturity specified on the face hereof as
published in H.15 under the heading "U.S. Government securities--Treasury
bills--Auction average" or, if not so published by 9:00 A.M., New York City
time, on the Calculation Date pertaining to such Interest Determination Date,
the auction average rate (expressed as a bond equivalent, on the basis of a year
of 365 or 366 days, as applicable, and applied on a daily basis) for such
auction as otherwise made available by the United States Department of the
Treasury. In the event that the results of the auction of Treasury bills having
the Index Maturity specified on the face hereof are not published or made
available as provided above by 3:00 P.M., New York City time, on such
Calculation Date, or if no such auction is held in a particular week (or on the
preceding Friday, if applicable), then the Treasury Rate shall be calculated by
the Calculation Agent and shall be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the secondary market bid
rates as of approximately 3:30 P.M., New York City time, on such Interest
Determination Date, of three leading primary United States government securities
dealers selected by the Calculation Agent, for the issue of Treasury bills with
a remaining maturity closest to the specified Index Maturity; provided, however,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, the Treasury Rate will be the Treasury
Rate in effect on such Interest Determination Date.
Unless otherwise specified on the face hereof, the Interest Determination
Date pertaining to an Interest Reset Date for this Security will be, if the
Interest Rate Basis for this Security is the Commercial Paper Rate or the Prime
Rate, the second New York Business Day (as defined below) preceding such
Interest Reset Date; if the Interest Rate Basis for this Security is LIBOR, the
second London Banking Day preceding such Interest Reset Date; if the Interest
Rate Basis for this Security is the Federal Funds Rate, the first New York
Business Day preceding such Interest Reset Date; and if the Interest Rate Basis
for this Security is the Treasury Rate, the day of the week in which such
Interest Reset Date falls on which Treasury bills would normally be auctioned.
Treasury bills are usually sold at auction on Monday of each week, unless that
day is a legal holiday, in which case the auction is usually held on the
following Tuesday, except that such auction may be held on the preceding Friday.
If, as the result of a legal holiday, an auction is so held on the preceding
Friday, such Friday will be the Interest Determination Date pertaining to the
Interest Reset Date occurring in the next succeeding week.
<PAGE>
12
If an auction date shall fall on any Interest Reset Date for such a Note, then
such Interest Reset Date shall instead be the first New York Business Day
immediately following such auction date. The "Calculation Date" pertaining to
any Interest Determination Date will be the earlier of (i) the tenth day after
such Interest Determination Date or, if any such day is not a New York Business
Day, the next succeeding New York Business Day and (ii) the New York Business
Day next preceding the relevant Interest Payment Date or Maturity, as the case
may be.
All percentages resulting from any calculations on this Security will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point (with five one-millionths of a percentage point being rounded upward) and
all currency amounts used in or resulting from such calculations will be
rounded, if necessary, to the nearest one-hundredth of a unit (with .005 of a
unit being rounded upward).
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Rate, if any, or less than the Minimum Rate, if any,
shown on the face hereof. In addition, the interest rate on this Security will
in no event be higher than the maximum rate permitted by New York law as the
same may be modified by United States law of general applicability. The
Calculation Agent shall calculate the interest rate on this Security in
accordance with the foregoing on or before each Calculation Date and shall
promptly thereafter notify the Company and the Trustee of such interest rate.
Any such calculation by the Calculation Agent shall be conclusive and binding on
the Company, the Trustee and the Holder of this Security, absent manifest error.
The Calculation Agent will, upon the request of the Holder of this
Security, provide to such Holder the interest rate hereon then in effect and, if
determined, the interest rate which will become effective as of the next
Interest Reset Date.
Interest payments on each Interest Payment Date for this Security and at
Maturity will include interest accrued from and including the later of the
Original Issue Date or the most recent date to which interest has been paid or
provided for to but excluding such Interest Payment Date or to but excluding
Maturity. Accrued interest hereon from the Original Issue Date or from the last
date to which interest hereon has been paid or provided for, as the case may be,
shall be an amount calculated by multiplying the face amount hereof by an
accrued interest factor. Such
<PAGE>
13
accrued interest factor shall be computed by adding the interest factor
calculated for each day from the Original Issue Date or from the last date to
which interest shall have been paid or provided for, as the case may be, to the
date for which accrued interest is being calculated. The interest factor
(expressed as a decimal) for each such day shall be computed by dividing the
interest rate (expressed as a decimal) applicable to such day by 360, if the
Interest Rate Basis specified on the face hereof is a Commercial Paper Rate,
Prime Rate, Federal Funds Rate or LIBOR, or the actual number of days in the
year, if the Interest Rate Basis specified on the face hereof is the Treasury
Rate.
Any payment of principal, premium, if any, or interest required to be made
on this Security on a day which is not a Business Day need not be made on such
day, but may be made on the next day which is such a Business Day with the same
force and effect as if made on such day, and no interest shall accrue as a
result of such delayed payment, except that, if the Interest Rate Basis
specified on the face hereof is LIBOR, if such next succeeding Business Day is
in the next succeeding calendar month, such payment shall be made on the
immediately preceding Business Day. "Business Day" means each day, other than a
Saturday or Sunday, that is (i) not a day on which banking institutions in the
Business Day Centers specified on the face hereof are authorized or obligated by
law or executive order to close and (ii) if the Interest Rate Basis specified on
the face hereof is LIBOR, a London Banking Day. As used herein, "London Banking
Day" shall mean any day on which dealings in deposits in U.S. dollars are
transacted in the London interbank market. "New York Business Day", as used
herein, shall mean each day, other than a Saturday or Sunday, that is not a day
on which banking institutions in The City of New York are authorized or
obligated by law or executive order to close.
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
Any terms or conditions of this Security ("Other Terms") specified on the
face hereof under "Other Terms" shall apply to this Security. In the event of
any conflict between any Other Terms and any other terms or conditions of this
Security, the Other Terms shall control.
<PAGE>
14
Notwithstanding anything herein to the contrary, if this Security is an
Original Issue Discount Security, the amount payable in the event of
acceleration following an Event of Default prior to the Maturity Date hereof in
lieu of the principal amount due at the Maturity Date hereof shall be the
Amortized Face Amount of this Security as of the date of declaration of
acceleration. The "Amortized Face Amount" of this Security shall be an amount
equal to (a) the Issue Price (as set forth on the face hereof) plus (b) that
portion of the difference between the Issue Price and the principal amount
hereof that has accrued at the Yield to Maturity (as set forth on the face
hereof) (computed in accordance with generally accepted United States bond yield
computation principles) at the date as of which the Amortized Face Amount is
calculated, but in no event shall the Amortized Face Amount of this Security
exceed its principal amount.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66-2/3% in principal amount of the Securities at the
time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of the Indenture, no Holder
of any Security of this series will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of a continuing Event
of Default with respect to this series, the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series shall have made
written request, and offered reasonable indemnity, to the Trustee to institute
such proceeding as trustee, the Trustee shall not have received from the Holders
of a majority in principal amount of the Outstanding Securities of this series a
direction inconsistent with such request and the
<PAGE>
15
Trustee shall have failed to institute such proceeding within 60 days; provided,
however, that such limitations do not apply to a suit instituted by the Holder
hereof for the enforcement of payment of the principal of (and premium, if any)
or interest on this Security on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, places and rates, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register
upon surrender of this Security for registration of transfer to the Security
Registrar at the Notes Office duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and having the same terms and conditions and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Securities of this series are issuable only in fully registered form,
without coupons, in denominations of U.S. $100,000 and integral multiples of
U.S.$1,000 in excess thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of different authorized denominations and having the same
terms and conditions, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
<PAGE>
16
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Security which are defined in the Indenture and are
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
<PAGE>
17
OPTION TO ELECT REPAYMENT
The undersigned owner of this Security hereby irrevocably elects to have
the Company repay the principal amount of this Security or portion hereof below
designated at the applicable Repayment Price indicated on the face hereof plus
interest accrued to the applicable Repayment Date.
Dated:
-------------------
- -------------------------
Signature
Sign exactly as name appears
on the front of this Security
[SIGNATURE GUARANTEE -
required only if Securities
are to be issued and
delivered to other than
the registered holder]
Principal amount to be Fill in for
repaid, if amount to be registration of
repaid is less than the Securities if to be
principal amount of this issued otherwise than
Security (principal amount to registered holder:
remaining must be an
authorized denomination)
U.S.$ Name:
------------------------ ------------------------
Address:
----------------------
----------------------
(Please print name
and address including zip code)
SOCIAL SECURITY OR
OTHER TAXPAYER ID
NUMBER
----------------------
<PAGE>
18
------------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
UNIF GIFT MIN ACT...
TEN COM - as tenants in common ........Custodian........
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with Under Uniform Gifts to
right of survivorship and Minors Act
not as tenants in common
-------------------------
(State)
</TABLE>
Additional abbreviations may also be used though not in the above
list.
----------------------
FOR VALUED RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Security
or Other Identifying Number of
Assignee,
- ------------------------------- ------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing ____________________________ attorney to transfer said Security
on the books of the Company, with full power of substitution in the premises.
Dated:
-------------------------------- -----------------------------------
Signature
<PAGE>
Exhibit 5
PAINE WEBBER GROUP INC.
Paine Webber Group Inc.
1285 Avenue of the Americas
New York, NY 10019
$3,000,000,000
PAINE WEBBER GROUP INC.
DEBT SECURITIES
September 9, 1998
Dear Sirs:
I have examined and am familiar with the Restated Certificate of
Incorporation of Paine Webber Group Inc., a Delaware corporation (the
"Company"), as amended, and the By-Laws of the Company. I am also familiar with
the corporate proceedings taken by the Company to authorize the offering, from
time to time, by the Company of one or more series of senior debt securities
("Senior Debt Securities") to be issued under an Indenture dated as of March 15,
1988, between the Company and The Chase Manhattan Bank (as amended, the "Senior
Indenture") and/or subordinated debt securities ("Subordinated Debt Securities"
and, together with the Senior Debt Securities, "Debt Securities") to be issued
under an Indenture dated as of March 15, 1988, between the Company and Chase
Manhattan Bank Delaware (as amended, the "Subordinated Indenture" and, together
with the Senior Indenture, the "Indentures"), such Debt Securities to be in such
aggregate principal amount as may have an aggregate initial public offering
price of up to $3,000,000,000.
On the basis of the foregoing, I am of opinion that:
1. The Company is a duly organized and validly existing corporation under
the laws of the State of Delaware.
2. The issuance and sale of such Debt Securities have been validly
authorized; and such Debt Securities, when duly executed and authenticated and
issued and sold in accordance with the provisions of the applicable Indenture
and issued and sold in accordance with such corporate
<PAGE>
proceedings, will be validly authorized and issued and will constitute
legal, valid and binding obligations of the Company enforceable against the
Company in accordance with their terms (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and other similar
laws affecting creditors' rights generally from time to time in effect and to
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless of whether
considered in a proceeding in equity or at law).
I know that I am referred to under the heading "Legal Matters" in the
Prospectus forming a part of the Registration Statement on Form S-3 relating to
the Debt Securities, and I hereby consent to such use of my name in the
Registations Statement.
Very truly yours,
/s/ Theodore A. Levine
Theodore A. Levine
Senior Vice President, General
Counsel and Secretary
2
<PAGE>
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 $3,000,000,000 of Debt Securities of Paine
Webber Group Inc., and to the incorporation by reference therein of our
report dated January 30, 1998, which 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,
1997, filed with the Securities and Exchange Commission.
New York, New York
September 9, 1998
<PAGE>
Exhibit 25.1
___________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-2760086
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
____________________________________________
PAINE WEBBER GROUP INC.
(Exact name of obligor as specified in its charter)
DELAWARE 13-2760086
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(Address of principal executive offices) (Zip Code)
____________________________________________
DEBT SECURITIES
(Title of the indenture securities)
______________________________________________________
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September
9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which
is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996,
in connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 1st day of September, 1998.
THE CHASE MANHATTAN BANK
By /s/ L. O'Brien
---------------------------------
L. O'Brien
Senior Trust Officer
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1998, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS
ASSETS IN MILLIONS
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ................................... $ 12,546
Interest-bearing balances ........................... 6,610
Securities: .............................................
Held to maturity securities............................... 2,014
Available for sale securities............................. 46,342
Federal funds sold and securities purchased under
agreements to resell ................................ 27,489
Loans and lease financing receivables:
Loans and leases, net of unearned income $129,281
Less: Allowance for loan and lease losses 2,796
Less: Allocated transfer risk reserve ... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve .............................. 126,485
Trading Assets ........................................... 58,015
Premises and fixed assets (including capitalized
leases).............................................. 3,001
Other real estate owned .................................. 260
Investments in unconsolidated subsidiaries and
associated companies................................. 255
Customers' liability to this bank on acceptances
outstanding ......................................... 1,245
Intangible assets ........................................ 1,492
Other assets ............................................. 16,408
--------
TOTAL ASSETS ............................................. $302,162
========
- 4 -
<PAGE>
LIABILITIES
Deposits
In domestic offices ................................. $ 99,347
Noninterest-bearing ........................$41,566
Interest-bearing ........................... 57,781
-------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's .............................. 80,602
Noninterest-bearing ........................$ 4,109
Interest-bearing ........................... 76,493
Federal funds purchased and securities sold under agree-
ments to repurchase ...................................... 37,760
Demand notes issued to the U.S. Treasury ................. 1,000
Trading liabilities ...................................... 42,941
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less ....... 4,162
With a remaining maturity of more than one year .
through three years............................ 213
With a remaining maturity of more than three years... 106
Bank's liability on acceptances executed and outstanding.. 1,245
Subordinated notes and debentures ........................ 5,408
Other liabilities ........................................ 11,796
TOTAL LIABILITIES ........................................ 284,580
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus............. 0
Common stock ............................................. 1,211
Surplus (exclude all surplus related to preferred stock). 10,441
Undivided profits and capital reserves ................... 5,916
Net unrealized holding gains (losses)
on available-for-sale securities ......................... (2)
Cumulative foreign currency translation adjustments ...... 16
TOTAL EQUITY CAPITAL ..................................... 17,582
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ..................... $302,162
========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named
bank, do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued
by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
- 5 -
<PAGE>
Exhibit 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------
CHASE MANHATTAN BANK DELAWARE
(Exact name of trustee as specified in its charter)
Delaware 51-0266457
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
1201 Market Street,
Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)
David J. Clark
Counsel
1201 Market Street
Wilmington, DE 19801
(302) 428-3330
(Name, address and telephone number
of agent for service)
-------------------
PAINE WEBBER GROUP INC.
(Exact name of obligor as specified in its charter)
Delaware 13-2760086
(State or other jurisdiction of (I.R.S. employer
incorporation or organization identification No.)
1285 Avenue of the Americas
New York, New York 10019
(Address of principal executive offices) (Zip Code)
-------------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Office of The State Bank Commissioner,
555 East Lookerman Street
Suite 210, Dover, DE 19901
Federal Deposit Insurance Corporation,
New York Regional Office
452 Fifth Avenue, 21st Floor, New York, New York 10018-2796
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
<PAGE>
Item 16. List of Exhibits.
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as
now in effect, including the Organization Certificate and the Certificates of
Amendment dated February 25, 1988 and June 22, 1992 (see Exhibit to Form T-1
filed in connection with Registration Statement No. 33-58124, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to
Transact Business (see Exhibit 2 to Form T-1 filed in connection with
Registration Statement No. 333-13525 which is incorporated by reference).
3. None, authorization to exercise corporate trust powers
being contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see
Exhibit 4 to Form T-1 filed in connection with Registration Statement No.
33-58124, which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of
the Act (see Exhibit 6 to Form T-1 filed in connection with Registration
Statement No. 333-13525, which is incorporated by reference).
7. A copy of the latest report of condition of Chase
Manhattan Bank Delaware, published pursuant to law or the requirements of its
supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, Chase Manhattan Bank Delaware, a corporation organized and existing
under the laws of the State of Delaware, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of Wilmington and State of Delaware, on the 1st
day of September, 1998.
Chase Manhattan Bank Delaware
By: /s/ John J. Cashin
------------------
John J. Cashin
Vice President
<PAGE>
REPORT OF CONDITION
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidating domestic subsidiaries of the
CHASE MANHATTAN BANK DELAWARE
IN THE STATE OF DE AT THE CLOSE OF BUSINESS ON JUNE 30, 1998
published in response to call made by (Enter additional information below)
--------------------------------------------------------------------
4769
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4769
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<TABLE>
<CAPTION>
STATEMENT OF RESOURCES AND LIABILITIES
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin................................................... 131,416
-------
Interest-bearing balances............................................................................ 17,233
-------
SECURITIES
Held-to-maturity securities.......................................................................... 39,837
-------
Available-for-sale securities........................................................................ 174,315
-------
Federal funds sold and securities purchased under agreements to resell................................. 475,000
-------
Loans and lease financing receivables:
Loans and leases, net of unearned income..................................... 2,126
-------
LESS: Allowance for loan and lease losses.................................... 2,108
-------
LESS: Allocated transfer risk reserve........................................ 0
-------
Loans and leases, net of unearned income, allowance, and reserve..................................... 18
-------
Trading Assets......................................................................................... 0
-------
Premises and fixed assets (including capitalized leases)............................................... 54,997
-------
Other real estate owned................................................................................ 0
-------
Investments in unconsolidated subsidiaries and associated companies.................................... 2,490
-------
Customers' liability to this bank on acceptances outstanding........................................... 3,493
-------
Intangible assets...................................................................................... 68,252
-------
Other assets........................................................................................... 25,948
-------
Total assets........................................................................................... 992,999
-------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
REPORT OF CONDITION (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIABILITIES
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DEPOSITS:
In domestic offices................................................................................. 424,755
-------
Noninterest-bearing....................................................... 372,360
-------
Interest-bearing.......................................................... 52,395
-------
In foreign offices, Edge and Agreement subsidiaries, and IBFs....................................... 84,665
-------
Noninterest-bearing....................................................... 0
-------
Interest-bearing.......................................................... 84,665
-------
Federal funds purchased and securities sold under agreements to repurchase............................ 0
-------
Demand notes issued to the U.S. Treasury.............................................................. 8,000
-------
Trading liabilities................................................................................... 0
-------
Other borrowed money:
With remaining maturity of one year or less......................................................... 0
-------
With a remaining maturity of more than one year through three years................................. 363
-------
With a remaining maturity of more than three years.................................................. 0
-------
Bank's liability on acceptances executed and outstanding.............................................. 3,493
-------
Subordinated notes and debentures..................................................................... 0
-------
Other liabilities..................................................................................... 143,795
-------
Total liabilities..................................................................................... 665,071
-------
EQUITY CAPITAL
Perpetual preferred stock and related surplus......................................................... 0
-------
Common stock.......................................................................................... 25,000
-------
Surplus............................................................................................... 158,081
-------
Undivided profits and capital reserves................................................................ 142,654
-------
Net unrealized holdings gains (losses) on available-for-sale securities............................... 2,193
-------
Cumulative foreign currency translation adjustments................................................... 0
-------
Total equity capital.................................................................................. 327,928
-------
Total liabilities and equity capital.................................................................. 992,999
-------
I,
-------------------------------------------------
We, the undersigned directors, attest to the 4769
correctness of this statement of resources and -------------------------------------------------
liabilities. We declare that it has been examined (NAME, TITLE
by us, and to the best of our knowledge and of the above named bank do hereby declare
belief has been prepared in conformance that this Report of Condition is true and
with the instructions and is true and correct. correct to the best of my knowledge and belief.
Text
----
4769
------------------------------------------
Director #1
------------------------------------------ -------------------------------------------------
------------------------------------------
Director #2
------------------------------------------ -------------------------------------------------
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Director #3
------------------------------------------ -------------------------------------------------
</TABLE>
