<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 1998
REGISTRATION NO.: 333-
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C> <C>
PAINE WEBBER GROUP INC. DELAWARE 13-2760086
PWG CAPITAL TRUST III DELAWARE 13-7099830
PWG CAPITAL TRUST IV DELAWARE 13-7099831
PWG CAPITAL TRUST V DELAWARE APPLICATION PENDING
(EXACT NAME OF
REGISTRANT AS
SPECIFIED IN ITS (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
CHARTER) 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 AND 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)
Copies to:
<TABLE>
<S> <C>
PETER S. WILSON MICHAEL L. FITZGERALD
CRAVATH, SWAINE & MOORE BROWN & WOOD LLP
825 8TH AVENUE ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10019 NEW YORK, NEW YORK 10048
(212) 474-1767 (212) 839-5300
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
WHEN MARKET CONDITIONS WARRANT FROM TIME TO TIME AFTER THIS REGISTRATION
STATEMENT BECOMES EFFECTIVE.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 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. [ ]
(Cover continued on following page)
<PAGE> 2
(Cover continued from previous page)
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE(2)
<S> <C> <C>
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Senior Debt Securities, Subordinated Debt
Securities and Junior Subordinated Debt
Securities (collectively, "Debt Securities") of
Paine Webber Group Inc..........................
Preferred Securities of PWG Capital Trusts III,
IV and V, severally ("Preferred
Securities").................................. $600,000,000(3)(4)(5) $166,800
Guarantees (the "Preferred Securities
Guarantees") of Preferred Securities of PWG
Capital Trusts III, IV and V by, and certain
back-up obligations of, Paine Webber Group
Inc.(6).......................................
</TABLE>
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(1) Estimated solely for purposes of calculating the registration fee.
(2) Calculated pursuant to Rule 457(o). The prospectuses included in this
Registration Statement also relate to $106,250,000 in Debt Securities,
Preferred Securities, certain backup obligations of Paine Webber Group, Inc.
and Preferred Securities Guarantees previously registered pursuant to
Registration Statement No. 333-13831. A registration fee of $151,515 was
paid in connection with Registration Statement No. 333-13831, of which
$32,197 related to such securities. In the event that any such previously
registered securities are offered and sold prior to the effective date of
this Registration Statement, the amount of such securities so offered and
sold will not be included in any prospectus hereunder.
(3) Such indeterminable number or amount of (i) Debt Securities of Paine Webber
Group Inc. as may from time to time be issued at indeterminate prices or
upon conversion or exchange of securities so issued and (ii) Preferred
Securities of PWG Capital Trusts III, IV and V (individually, a "Trust"),
severally, as may from time to time be issued at indeterminate prices.
Junior Subordinated Debt Securities may be issued and sold to PWG Capital
Trusts III, IV and V, severally, in which event such Junior Subordinated
Debt Securities may later be distributed to the holders of Preferred
Securities upon a dissolution of such Trust and the distribution of the
assets thereof.
(4) Such amount in U.S. dollars or the equivalent in foreign denominated
currency units or composite currency units.
(5) This Registration Statement also relates to offers and sales of Debt
Securities, Preferred Securities, Preferred Securities Guarantees and
certain other back-up obligations in connection with market-making
transactions by and through affiliates of the registrants, including
PaineWebber Incorporated.
(6) In addition to the Preferred Securities Guarantees and the Junior
Subordinated Debt Securities, Paine Webber Group Inc. is also registering
under this Registration Statement certain other back-up obligations of Paine
Webber Group Inc. Such back-up obligations include its obligations under the
Indenture (as defined) and under the Amended and Restated Declaration of
Trust of each Trust pursuant to which Paine Webber Group Inc. will agree,
among other things, to pay all debts and obligations (other than with
respect to the Trust Securities (as defined)) of the relevant Trust, and all
costs or expenses of the relevant Trust, including all fees, expenses and
taxes of such Trust. No separate consideration will be received by Paine
Webber Group Inc. for the Preferred Securities Guarantees or such other
back-up obligations. See "Relationship between the Preferred Securities, the
Junior Subordinated Debentures and the Preferred Securities Guarantee" in
the form of prospectus supplement included herein.
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, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION
8(a), MAY DETERMINE.
PURSUANT TO RULE 429 OF THE RULES AND REGULATIONS OF THE COMMISSION UNDER THE
SECURITIES ACT OF 1933, EACH OF THE PROSPECTUSES INCLUDED IN THIS REGISTRATION
STATEMENT IS A COMBINED PROSPECTUS AND RELATES TO THE REGISTRATION STATEMENT ON
FORM S-3 NO. 333-13831 THAT WAS PREVIOUSLY FILED BY PAINE WEBBER GROUP INC., PWG
CAPITAL TRUST I, PWG CAPITAL TRUST II, PWG CAPITAL TRUST III AND PWG CAPITAL
TRUST IV.
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<PAGE> 3
EXPLANATORY NOTE
This Registration Statement includes (i) a prospectus to be used in
connection with offerings of (a) Preferred Securities issued by PWG Capital
Trusts III, IV and V, severally, (b) Junior Subordinated Debt Securities issued
by Paine Webber Group Inc. and (c) guarantees by Paine Webber Group Inc. of the
Preferred Securities issued severally by PWG Capital Trusts III, IV and V and
(ii) a prospectus to be used in connection with offerings of Debt Securities
(both senior and subordinated) issued by Paine Webber Group Inc. Each offering
of securities made under this Registration Statement will be made pursuant to
one of these prospectuses, with the specifications of the securities offered
thereby set forth in an accompanying prospectus supplement. Neither prospectus
may be used to consummate sales of securities unless accompanied by a prospectus
supplement.
The prospectus supplement for the offering of Preferred Securities to be
issued by PWG Capital Trust III follows immediately after this Explanatory Note
which is then followed immediately by the related prospectus for the offering of
(a) the Preferred Securities issued by PWG Capital Trusts III, IV and V,
severally, (b) the Junior Subordinated Debt Securities issued by Paine Webber
Group Inc. and (c) the guarantees of the Preferred Securities issued severally
by PWG Capital Trusts III and IV by, and certain back-up obligations of, Paine
Webber Group Inc. Such prospectus is then followed immediately by the prospectus
for the offering of Debt Securities (both senior and subordinated) issued by
Paine Webber Group Inc. It is anticipated that the prospectus supplement for the
offering of Preferred Securities issued by PWG Capital Trusts IV and V will be
substantially in the form of the prospectus supplement for the offering of
Preferred Securities to be issued by PWG Capital Trust III included in this
Registration Statement.
<PAGE> 4
The information in this preliminary prospectus supplement is not complete and
may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
preliminary prospectus supplement is not an offer to sell these securities and
it is not soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED NOVEMBER 12, 1998
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1998)
PREFERRED SECURITIES
PWG CAPITAL TRUST III
% PREFERRED TRUST SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED BY
PAINE WEBBER GROUP INC.
---------------------
A brief description of the preferred securities can be found under
"Summary" in this prospectus supplement.
WE URGE YOU TO CAREFULLY READ THE "RISK FACTORS" SECTION BEGINNING ON PAGE
S-5, WHERE WE DESCRIBE SPECIFIC RISKS ASSOCIATED WITH THESE PREFERRED
SECURITIES, ALONG WITH THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS, BEFORE YOU
MAKE YOUR INVESTMENT DECISION.
We plan to list the preferred securities on the New York Stock Exchange
under the trading symbol . We expect that the preferred securities will begin
trading on the New York Stock Exchange within 30 days after they are first
issued.
<TABLE>
<CAPTION>
PER PREFERRED
SECURITY TOTAL
<S> <C> <C>
Public Offering Price(1)......................... $25.00 $
Underwriting Discount............................ (2) (2)
Proceeds, before expenses, to the Trust.......... $25.00 $
</TABLE>
(1) Purchasers will also be required to pay accrued distributions from
, 1998, if settlement occurs after that date.
(2) Underwriting commissions of $ per preferred security (or $ for all
preferred securities) will be paid by Paine Webber Group Inc.
The underwriters may also purchase up to an additional preferred
securities at $25 per preferred security within 30 days from the date of this
prospectus supplement to cover over-allotments. Paine Webber Group Inc. will pay
an underwriting commission of $ for each such preferred security purchased.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
We expect the preferred securities will be ready for delivery in book-entry
form only through The Depository Trust Company on or about , 1998.
Our affiliates, including Paine Webber Incorporated and Paine Webber
International (U.K.) Ltd., may use this prospectus and the related prospectus
supplement in connection with offers and sales of the offered securities in the
secondary market. These affiliates may act as principal or agent in those
transactions. Secondary market sales will be made at negotiated prices related
to market prices at the time of sale.
---------------------
PAINEWEBBER INCORPORATED
---------------------
The date of this prospectus supplement is , 1998.
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Summary............................... S-3
Risk Factors.......................... S-6
Selected Consolidated Financial
Data................................ S-10
The Company........................... S-11
PWG Capital Trust III................. S-12
Capitalization of the Company......... S-13
Accounting Treatment.................. S-14
Use of Proceeds....................... S-14
Description of the Preferred
Securities.......................... S-14
Description of the Junior Subordinated
Debentures.......................... S-26
Relationship Between the Preferred
Securities, the Junior Subordinated
Debentures and the Preferred
Securities Guarantee................ S-30
Taxation.............................. S-32
Underwriting.......................... S-36
</TABLE>
<TABLE>
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PAGE
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<S> <C>
PROSPECTUS
Where You Can Find More Information... 2
Documents Incorporated by Reference... 2
Use of Proceeds....................... 3
Ratios of Earnings to Fixed Charges
and Earnings to Combined Fixed
Charges and Preferred Stock
Dividends........................... 3
The Company........................... 4
The PWG Trusts........................ 5
Description of the Preferred
Securities.......................... 9
Description of the Preferred
Securities Guarantees............... 10
Description of the Junior Subordinated
Debt Securities..................... 14
ERISA Matters......................... 20
Plan of Distribution.................. 20
Legal Matters......................... 22
Experts............................... 22
</TABLE>
---------------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement or the prospectus. We have not, and the
underwriters have not, authorized any other person to provide you with different
information. If anyone provides you with different or inconsistent information,
you should not rely on it. We are not, and the underwriters are not, making an
offer to sell these securities in any jurisdiction where the offer or sale is
not permitted. You should assume that the information appearing in this
prospectus supplement or the prospectus, as well as information we previously
filed with the Securities and Exchange Commission and incorporated by reference,
is accurate as of the date on the front cover of those documents only. Our
business, financial condition, results of operations and prospects may have
changed since that date.
The following information concerning the Company, the Trust, the Preferred
Securities, the Preferred Securities Guarantee and the Junior Subordinated
Debentures supplements, and should be read in conjunction with, the information
contained in the accompanying prospectus. Capitalized terms used in this
prospectus supplement have the same meaning as in the accompanying prospectus.
Except as otherwise noted, all information in this prospectus supplement assumes
no exercise of the Underwriters' over-allotment option.
S-2
<PAGE> 6
SUMMARY
PAINE WEBBER GROUP
Paine Webber Group Inc., also referred to as "Paine Webber Group" or the
"Company," is located at 1285 Avenue of the Americas, New York, New York 10019,
and its telephone number is (212) 713-2000.
SECURITIES OFFERED
PWG Capital Trust III (the "Trust") will sell its preferred securities (the
"Preferred Securities") to the public and its common securities (the "Common
Securities") to Paine Webber Group. Together, the Preferred Securities and the
Common Securities are referred to as the "Trust Securities." The Trust will use
the proceeds from these sales to buy a series of % Junior Subordinated
Debentures due , 2038 ("Junior Subordinated Debentures") from Paine
Webber Group with the same payment terms as the Preferred Securities.
DISTRIBUTIONS
If you purchase the Preferred Securities, you are entitled to receive
cumulative cash distributions at an annual rate of % of the liquidation
amount of $25 per Preferred Security. Distributions will accumulate from the
date the Trust issues the Preferred Securities and will be paid quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year,
beginning on March 31, 1999.
DEFERRAL OF DISTRIBUTIONS
So long as no event of default under the Junior Subordinated Debentures has
occurred and is continuing, Paine Webber Group has the right, at one or more
times, to defer interest payments on the Junior Subordinated Debentures for up
to 20 consecutive quarters, but not beyond the maturity date of the Junior
Subordinated Debentures. See "Description of Junior Subordinated
Debentures -- Option to Extend Interest Payment Period" in this prospectus
supplement. If Paine Webber Group defers interest payments on the Junior
Subordinated Debentures, the Trust will also defer distributions on the
Preferred Securities. During this deferral period, you will still accumulate
distributions at the annual rate of % of the liquidation amount of $25 per
Preferred Security, plus you will earn interest at the annual rate of %,
compounded quarterly, on any unpaid distributions (to the extent permitted by
law). You will also be required to accrue interest income and include it in your
gross income for United States federal income tax purposes, even if you are a
cash basis taxpayer.
MATURITY AND REDEMPTION
The Junior Subordinated Debentures mature on , 2038. The Trust
must redeem the Preferred Securities when the Junior Subordinated Debentures are
paid at maturity or upon any earlier redemption. Paine Webber Group has the
option at any time on or after , 2003 to redeem the Junior
Subordinated Debentures, in whole or in part. In addition, Paine Webber Group
may redeem the Junior Subordinated Debentures at its option, in whole or in
part, if certain tax events occur. Upon any redemption, you will receive the
liquidation amount of $25 per Preferred Security plus any accrued and unpaid
distributions to the date of redemption (the "Redemption Price").
DISTRIBUTION AT COMPANY'S OPTION OR UPON SPECIAL EVENT
Subject to the receipt of an opinion that you will not have to recognize
any gain or loss for tax purposes, Paine Webber Group may, at any time, cause
the Trust to be terminated and liquidated and the Junior Subordinated Debentures
to be distributed to the holders of the Trust Securities. If there is a change
in the Investment Company Act of 1940 that requires the Trust to register under
such law or if certain tax events occur, the Trust will be terminated and the
Junior Subordinated Debentures will be distributed to the holders of the Trust
Securities in liquidation of the Trust unless, in the case of certain tax
events, Paine Webber Group redeems the Junior Subordinated Debentures as
described above.
S-3
<PAGE> 7
If the Junior Subordinated Debentures are distributed, Paine Webber Group
will use its best efforts to list them on the New York Stock Exchange in place
of the Preferred Securities.
PAINE WEBBER GROUP'S GUARANTEE OF THE PREFERRED SECURITIES
Paine Webber Group will fully and unconditionally guarantee the Preferred
Securities based on:
- its obligations to make payments on the Junior Subordinated Debentures;
- its obligations under the preferred securities guarantee (the "Preferred
Securities Guarantee"); and
- its obligations under the Declaration (as that term is defined under "PWG
Capital Trust III").
For discussion of Paine Webber Group's obligations listed above, see
"Relationship between the Preferred Securities, the Junior Subordinated
Debentures and the Preferred Securities Guarantee" in this prospectus supplement
and "Description of the Preferred Securities Guarantee" in the accompanying
prospectus.
If Paine Webber Group does not make a payment on the Junior Subordinated
Debentures, the Trust will not have sufficient funds to make payments on the
Preferred Securities. The Preferred Securities Guarantee does not cover payments
when the Trust does not have sufficient funds.
Paine Webber Group's obligations under the Preferred Securities Guarantee
are unsecured and will rank in priority of payment:
- junior to all of Paine Webber Group's other indebtedness, liabilities and
obligations, including the Junior Subordinated Debentures;
- equal with Paine Webber Group's obligations under similar preferred
securities guarantees; and
- senior to Paine Webber Group's common stock and preferred stock.
Paine Webber Group's obligations under the Junior Subordinated Debentures
are subject to payment on its Senior Indebtedness (as defined in the
accompanying prospectus). As of September 30, 1998, the aggregate amount of
Senior Indebtedness of Paine Webber Group was approximately $6.5 billion. Paine
Webber Group's obligations under the Junior Subordinated Debentures will also be
effectively subordinated to all existing and future liabilities and obligations
of Paine Webber Group's subsidiaries.
LIQUIDATION OF THE TRUST
In the event of the voluntary or involuntary liquidation, dissolution,
winding up or termination of the Trust, the holders of the Preferred Securities
will be entitled to receive for each Preferred Security a liquidation amount of
$25 plus accrued and unpaid distributions thereon (including interest thereon)
to the date of payment, unless, in connection with such dissolution, the Junior
Subordinated Debentures are distributed to the holders of the Preferred
Securities.
If the Junior Subordinated Debentures are distributed, Paine Webber Group
will use its best efforts to list them on the New York Stock Exchange in place
of the Preferred Securities.
VOTING RIGHTS
Holders of Preferred Securities have limited voting rights and will not be
able to appoint, remove or replace any of the trustees, or to increase or
decrease the number of trustees. In general, only Paine Webber Group has these
rights.
S-4
<PAGE> 8
BOOK ENTRY
The Preferred Securities will be represented by a global security that will
be deposited with and registered in the name of The Depository Trust Company,
New York, New York ("DTC") or its nominee. This means that you will not receive
a certificate for the Preferred Securities.
LISTING
We plan to list the Preferred Securities on the New York Stock Exchange
under the trading symbol " ".
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED
STOCK DIVIDENDS
The following table sets forth the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred stock dividends for Paine
Webber Group Inc. for the periods indicated.
<TABLE>
<CAPTION>
NINE MONTHS
YEARS ENDED DECEMBER 31 ENDED
------------------------------------ SEPTEMBER 30,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- -------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges.......... 1.3 1.0 1.1 1.3 1.2 1.2
Ratio of earnings to combined fixed charges
and preferred stock dividends............. 1.3 1.0 1.0 1.2 1.2 1.2
</TABLE>
For purposes of computing the ratio of earnings to fixed charges and the
ratio of earnings to combined fixed charges and preferred stock dividends,
"earnings" consist of earnings before taxes on income and fixed charges and
"fixed charges" consist of interest expense incurred on securities sold under
repurchase agreements, short-term and long-term borrowings, preferred trust
securities and that portion of rental expense estimated to be representative of
the interest factor.
S-5
<PAGE> 9
RISK FACTORS
You should carefully read the following risk factors and the other sections
of this prospectus supplement and the accompanying prospectus before purchasing
any Preferred Securities.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE PREFERRED SECURITIES GUARANTEE AND
JUNIOR SUBORDINATED DEBENTURES; DEPENDENCE ON THE COMPANY
Paine Webber Group's obligations under the Preferred Securities Guarantee
are unsecured and will rank in priority of payment:
- junior to all of Paine Webber Group's other indebtedness, liabilities and
obligations, including the Junior Subordinated Debentures;
- equal with Paine Webber Group's obligations under similar preferred
securities guarantees; and
- senior to Paine Webber Group's common stock and preferred stock.
Paine Webber Group's obligations under the Junior Subordinated Debentures
are unsecured and will rank junior in priority of payment to Paine Webber
Group's Senior Indebtedness (defined generally to be indebtedness, liabilities
or obligations of Paine Webber Group, contingent or otherwise) At September 30,
1998, the aggregate amount of Senior Indebtedness was approximately $6.5
billion. Paine Webber Group's obligations under the Junior Subordinated
Debentures will also be effectively subordinated to all existing and future
liabilities and obligations of Paine Webber Group's Subsidiaries. The Preferred
Securities, the Junior Subordinated Debentures and the Preferred Securities
Guarantee do not limit the ability of the Company or any of its subsidiaries to
incur additional liabilities and obligations, including liabilities and
obligations that ranks senior to the Junior Subordinated Debentures and the
Preferred Securities Guarantee.
The ability of the Trust to timely pay distributions on the Preferred
Securities and the liquidation amount of $25 per Preferred Security is solely
dependent upon the ability of Paine Webber Group to make the related payments on
the Junior Subordinated Debentures when due. If Paine Webber Group defaults on
its obligation to pay principal of or interest on the Junior Subordinated
Debentures, the Trust will not have sufficient funds to pay distributions or the
$25 per Preferred Security liquidation amount. As a result, you will not be able
to rely upon the Preferred Securities Guarantee for payment of these amounts
since the Preferred Securities Guarantee only applies if Paine Webber Group
makes a payment of principal or interest on the Junior Subordinated Debentures.
Instead, you or the Property Trustee may enforce the rights of the Trust under
the Junior Subordinated Debentures directly against Paine Webber Group. See
"Enforcement of Certain Rights by Holders of the Preferred Securities" in this
prospectus supplement. Paine Webber Group is responsible for certain debts and
expenses of the Trust. There is no assurance that Paine Webber Group will be
able to pay such amounts.
For more information please refer to "Description of the Preferred
Securities Guarantees -- Status of the Preferred Securities Guarantees" and
"Description of the Junior Subordinated Debentures -- Subordination" in the
accompanying prospectus.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF THE PREFERRED SECURITIES
If an event of default under the Junior Subordinated Debentures occurs and
is continuing, such event will also be an event of default under the Preferred
Securities. In that case, the holders of the Preferred Securities would rely on
the enforcement by the Property Trustee of its rights as holder of the Junior
Subordinated Debentures against Paine Webber Group. The holders of a majority in
liquidation amount of the Preferred Securities will have the right to direct the
Property Trustee to enforce its rights, and if the Property Trustee does not
enforce its rights any record holder may take action directly against Paine
Webber Group to enforce the Property Trustee's rights. If an event of default
under the Preferred
S-6
<PAGE> 10
Securities occurs that is attributable to Paine Webber Group's failure to pay
interest or principal on the Junior Subordinated Debentures, a record holder of
the Preferred Securities may proceed directly against Paine Webber Group. The
holders of Preferred Securities will not be able to exercise directly any other
remedies available to the holders of the Junior Subordinated Debentures unless
the Property Trustee fails to do so. See "Description of the Preferred
Securities -- Declaration Events of Default" in this prospectus supplement and
"Description of the Junior Subordinated Debt Securities -- Indenture Events of
Default" in the accompanying prospectus.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TRADING CHARACTERISTICS; TAX IMPACT OF
EXTENSION
So long as no event of default under the Junior Subordinated Debentures has
occurred and is continuing, Paine Webber Group has the right, at one or more
times, to defer interest payments on the Junior Subordinated Debentures for up
to 20 consecutive quarters, but not beyond the maturity date of the Junior
Subordinated Debentures.
As a consequence, the Trust would defer distributions on the Preferred
Securities during any deferral period. However, you would still accumulate
distributions at the annual rate of % of the liquidation amount of $25 per
Preferred Security, plus you will earn interest at the annual rate of %,
compounded quarterly, on any unpaid distributions, to the extent permitted by
law. During a deferral period, the Preferred Securities may trade at a price
that does not fully reflect the value of accrued but unpaid interest on the
Junior Subordinated Debentures.
During a deferral period, you will be required to accrue interest income
(as original issue discount) for United States federal income tax purposes in
respect of your pro-rata share of the Junior Subordinated Debentures held by the
Trust. As a result, you must include the accrued interest in your gross income
for United States federal income tax purposes prior to your receiving cash. You
will also not receive the cash distribution related to any accrued and unpaid
interest from the Trust if you sell the Preferred Securities before the end of
any deferral period. While Paine Webber Group will take the position that
original issue discount will not arise before any first deferral period, it is
possible that all income on the Junior Subordinated Debentures would be required
to be accounted for as original issue discount. Under such circumstances, stated
interest would not separately be reported as taxable income.
During a deferral period, accrued but unpaid distributions will increase
your tax basis in the Preferred Securities. If you sell the Preferred Securities
during a deferral period, your increased tax basis will decrease the amount of
any capital gain or increase the amount of any capital loss that you may have
otherwise realized on the sale. A capital loss, except in certain limited
circumstances, cannot be applied to offset ordinary income.
Paine Webber Group has no current intention of exercising its right to
defer interest payments on the Junior Subordinated Debentures. However, if Paine
Webber Group exercises its right in the future, the market price of the
Preferred Securities is likely to be affected. If you sell the Preferred
Securities during an interest deferral period, you may not receive the same
return on investment as someone else who continues to hold the Preferred
Securities.
See "Taxation" in this prospectus supplement for more information regarding
the tax consequences of purchasing the Preferred Securities.
DISTRIBUTION AT PAINE WEBBER GROUP'S OPTION OR UPON SPECIAL EVENT; TAX EVENT
REDEMPTION
Subject to the receipt of an opinion that you will not have to recognize
any gain or loss for tax purposes, Paine Webber Group may, at any time, cause
the Trust to be terminated and liquidated and the Junior Subordinated Debentures
to be distributed to the holders of the Trust Securities. In addition, the Trust
will be terminated before its expiration on , 2038 if a Tax Event or
Investment Company Event (as each term is defined under "Description of the
Preferred Securities -- Distribution at Company's Option or Upon Special Event;
Tax Event Redemption") occurs and is continuing unless, in the case of a Tax
Event, the Junior Subordinated Debentures are redeemed as described below. As a
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<PAGE> 11
result of such termination, Paine Webber Group will cause the Junior
Subordinated Debentures to be distributed to the holders of the Trust Securities
in liquidation of the Trust. If a Tax Event occurs, Paine Webber Group may
redeem the Junior Subordinated Debentures in a limited set of circumstances. The
redemption of the Junior Subordinated Debentures will cause a mandatory
redemption of the Preferred Securities and the Common Securities at a redemption
price equal to the liquidation amount of $25 per security plus any unpaid
distributions. See "Description of the Preferred Securities -- Distribution at
Company's Option or Upon Special Event; Tax Event Redemption" for more
information.
DISTRIBUTION OF THE JUNIOR SUBORDINATED DEBENTURES; POSSIBLE ADVERSE EFFECT ON
MARKET PRICE
Although Paine Webber Group has agreed to use its best efforts to list the
Junior Subordinated Debentures on the New York Stock Exchange if the Trust is
liquidated and the Junior Subordinated Debentures are distributed, there can be
no assurance that the Junior Subordinated Debentures will be approved for
listing or that a trading market will exist for the Junior Subordinated
Debentures.
Paine Webber Group cannot predict the market prices for the Junior
Subordinated Debentures that may be distributed. Accordingly, the Junior
Subordinated Debentures that you receive upon a distribution, or the Preferred
Securities you hold pending such a distribution, may trade at a discount to the
price that you paid to purchase the Preferred Securities.
Because you may receive Junior Subordinated Debentures, you must also make
an investment decision with regard to the Junior Subordinated Debentures. You
should carefully review all the information regarding the Junior Subordinated
Debentures contained in this prospectus supplement and the accompanying
prospectus.
See "Taxation -- Distribution of Junior Subordinated Debentures to Holders
of Preferred Securities" where we discuss applicable United States federal
income tax consequences.
PREPAYMENT CONSIDERATIONS
At the option of the Company, the Junior Subordinated Debentures may be
redeemed, in whole or in part, at any time on or after , 2003, at
a redemption price equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest to the redemption date. See "Description of the
Junior Subordinated Debentures -- Optional Redemption" in this prospectus
supplement. You should assume that the Company will exercise its redemption
option if the Company is able to refinance at a lower interest rate or it is
otherwise in the interest of the Company to redeem Junior Subordinated
Debentures. If Junior Subordinated Debentures are redeemed, the Trust must
redeem Trust Securities having an aggregate liquidation amount equal to the
aggregate principal amount of Junior Subordinated Debentures so redeemed. See
"Description of the Preferred Securities -- Mandatory Redemption" in this
prospectus supplement.
LIMITED VOTING RIGHTS
Holders of Preferred Securities have limited voting rights and will not be
able to appoint, remove or replace any of the trustees, or to increase or
decrease the number of trustees. In general, only Paine Webber Group has these
rights.
See "Description of the Preferred Securities -- Voting Rights" in this
prospectus supplement for more information.
POSSIBLE TAX LAW CHANGES
From time to time, the Clinton Administration has proposed certain tax law
changes that would, among other things, generally deny interest deductions to a
corporate issuer if the debt instrument has a term exceeding 15 years (certain
proposed tax law changes would have denied interest deductions if the debt
instrument had a term exceeding 20 years) and if such debt instrument is not
reflected as indebtedness on such issuer's consolidated balance sheet. Although
there can be no assurance as to future proposals, prior proposals if enacted
into law would not have applied to securities with characteristics
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<PAGE> 12
similar to the Junior Subordinated Debentures which were already issued and
outstanding at the time such legislation was proposed. However, if a future
proposal of this sort were to become effective in a form applicable to already
issued and outstanding securities, the Company could be precluded from deducting
interest on the Junior Subordinated Debentures. Enactment of any such proposal
might in turn give rise to a Tax Event which, if the Company were to exercise
its optional right to redeem the Junior Subordinated Debentures, would thereby
result in a mandatory redemption of the Preferred Securities, as described under
"Description of the Preferred Securities -- Mandatory Redemption."
Prospective investors should also be aware that a petition was recently
filed in the United States Tax Court as a result of a challenge by the Internal
Revenue Service ("IRS") of a taxpayer's treatment as indebtedness of a security
issued with characteristics similar to the Junior Subordinated Debentures. If
this matter is litigated to a conclusion and the IRS's position on this matter
is sustained, such a judicial determination could constitute a Tax Event which
could result in an early redemption of the Preferred Securities. See
"Description of the Preferred Securities -- Distribution at Company's Option or
Upon Special Event; Tax Event Redemption."
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<PAGE> 13
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial information is qualified by
reference to, and should be read in conjunction with, the Company's consolidated
financial statements and notes thereto and "Management's Discussion and Analysis
of Financial Condition and Results of Operations," included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (the
"Form 10-K"), which is incorporated by reference in the accompanying prospectus.
The selected consolidated statement of income data for the years ended December
31, 1995, 1996 and 1997 and the selected consolidated statement of financial
condition data as of December 31, 1996 and 1997 are derived from the Company's
audited consolidated financial statements which are incorporated by reference in
the accompanying prospectus. The selected unaudited financial information as of
and for the nine months ended September 30, 1997 and 1998 should be read in
conjunction with the Company's audited consolidated financial statements and
notes thereto contained in the Form 10-K and the Company's unaudited
consolidated financial statements and notes thereto contained in the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 (the
"Form 10-Q"), which is also incorporated by reference in the accompanying
prospectus. Such unaudited information reflects, in the opinion of management,
all adjustments, consisting of normal recurring adjustments, which the Company
considers necessary for a fair presentation of its financial position and
results of operations for these periods. Operating results for the nine months
ended September 30, 1998 are not necessarily indicative of the results that may
be expected for the entire year ending December 31, 1998. The selected
consolidated statement of financial condition data as of December 31, 1993,
1994, 1995 and the selected consolidated statement of income data for the years
ended December 31, 1993 and 1994 are derived from audited consolidated financial
statements of the Company which are not included or incorporated by reference in
the accompanying prospectus.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
------------------------- -------------------------------------------------------------------
1998 1997 1997 1996 1995(1) 1994(2) 1993
----------- ----------- ----------- ----------- ----------- ----------- -----------
(IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS
Total revenues................ $ 5,514,541 $ 4,911,916 $ 6,656,952 $ 5,705,966 $ 5,320,090 $ 3,964,077 $ 4,004,717
Net revenues (including net
interest)................... 3,308,621 3,042,717 4,112,402 3,735,212 3,350,279 2,535,424 2,874,005
Net earnings before taxes and
minority interest........... 548,793 497,803 673,107 560,033 102,677 44,385 407,576
Net earnings.................. 333,128 306,741 415,449 364,350 80,750 31,631 246,183
Earnings per share:(3)(4)
Basic....................... 2.25 2.09 2.84 2.55 0.37 0.28 2.36
Diluted..................... 2.10 1.88 2.56 2.24 0.35 0.26 1.95
FINANCIAL CONDITION
Total assets.................. $62,900,916 $58,925,521 $57,065,033 $52,513,500 $45,671,294 $35,856,125 $37,026,909
Long-term borrowings,
redeemable preferred stock
and preferred trust
securities.................. 4,379,925 3,877,284 3,980,379 3,164,349 2,622,797 2,501,384 1,936,082
Stockholders' equity.......... 2,264,327 1,857,015 1,930,963 1,730,425 1,552,288 1,630,499 1,195,047
Total capitalization.......... 6,644,252 5,734,299 5,911,342 4,894,774 4,175,085 4,131,883 3,131,129
OTHER FINANCIAL DATA(3)
Dividends declared per
share....................... $ 0.33 $ 0.30 $ 0.41 $ 0.32 $ 0.32 $ 0.32 $ 0.25
Book value per share.......... 15.86 13.28 13.80 12.19 10.41 10.64 10.86
</TABLE>
- ---------------
(1) The 1995 results include after-tax charges of $125.9 million ($200 million
before income taxes) and $20.1 million ($30 million before income taxes) in
the second and fourth quarters, respectively, related to the resolution of
the issues arising from the Company's sale of public proprietary limited
partnerships.
(2) The 1994 results include after-tax costs of $36 million ($50 million before
taxes) and $34 million ($57 million before income taxes) related to the
purchase of certain net assets and specific businesses of Kidder, Peabody
Group Inc. and a nonrecurring mutual fund charge, respectively.
(3) All per share data have been restated to reflect three-for-two Common Stock
splits in November 1997 and March 1994.
(4) Earnings per share have been restated as required to comply with Statement
of Financial Accounting Standards No. 128.
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<PAGE> 14
THE FOLLOWING INFORMATION CONCERNING THE COMPANY, PWG CAPITAL TRUST III, THE
PREFERRED SECURITIES, THE PREFERRED SECURITIES GUARANTEE AND THE JUNIOR
SUBORDINATED DEBENTURES IS IN ADDITION TO, AND SHOULD BE READ IN CONJUNCTION
WITH, THE INFORMATION CONTAINED IN THE ACCOMPANYING PROSPECTUS. CAPITALIZED
TERMS USED BUT NOT OTHERWISE DEFINED IN THIS PROSPECTUS SUPPLEMENT HAVE THE SAME
MEANINGS AS IN THE ACCOMPANYING PROSPECTUS.
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 17,424 people in 299 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 Incorporated, 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 National 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-fee
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
850 companies in 61 industries.
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 activity, 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.
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<PAGE> 15
The Transaction Services group includes correspondent services, prime
brokerage and securities lending businesses. Through Correspondent Services
Corporation, the Company provides execution and clearing services to
broker-dealers in the U.S. and overseas.
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
businesses are regulated by various agencies, including the Securities and
Exchange Commission (the "Commission"), the New York Stock Exchange (the
"NYSE"), the Commodity Futures Trading Commission, the National Association of
Securities Dealers, Inc. (the "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.
PWG CAPITAL TRUST III
PWG Capital Trust III is a business trust formed on October 7, 1996, under
the Delaware Business Trust Act (the "Business Trust Act") pursuant to a
declaration of trust among the Trustees and the Company and the filing of a
certificate of trust with the Secretary of State of the State of Delaware. Such
declaration will be amended and restated in its entirety (as so amended and
restated, the "Declaration") substantially in the form filed as an exhibit to
the Registration Statement of which this prospectus supplement and the
accompanying prospectus form a part, as of the date the Preferred Securities are
initially issued. The Declaration is qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). Upon issuance of the Preferred
Securities, the holders thereof will own all the issued and outstanding
Preferred Securities. The Company will acquire Common Securities in an amount
equal to at least 3% of the total capital of the Trust and will own, directly or
indirectly, all the issued and outstanding Common Securities. The Trust exists
for the purpose of (a) issuing its Trust Securities for cash and investing the
proceeds thereof in an equivalent amount of Junior Subordinated Debentures and
(b) engaging in such other activities as are necessary, convenient or incidental
thereto. The rights of the holders of the Trust Securities, including economic
rights, rights to information and voting rights, are as set forth in the
Declaration, the Business Trust Act and the Trust Indenture Act. The Declaration
does not permit the incurrence by the Trust of any indebtedness for borrowed
money or the making of any investment other than in the Junior Subordinated
Debentures. In the Declaration, the Company has agreed to pay for all debts and
obligations (other than with respect to the Trust Securities) and all costs and
expenses of the Trust, including the fees and expenses of the Trustees and any
taxes and all costs and expenses with respect thereto, to which the Trust may
become subject, except for United States withholding taxes.
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<PAGE> 16
CAPITALIZATION OF THE COMPANY
The following table sets forth the unaudited consolidated capitalization of
the Company at September 30, 1998, and as adjusted to reflect the issuance and
sale of the Preferred Securities (assuming no exercise of the Underwriters'
over-allotment option), and the application of the estimated proceeds therefrom.
See "Use of Proceeds." The table should be read in conjunction with the
Company's consolidated financial statements and notes thereto included in the
documents incorporated by reference in the accompanying prospectus. See
"Documents Incorporated by Reference" in the accompanying prospectus.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
-----------------------------
ACTUAL AS ADJUSTED
------------ -------------
(IN THOUSANDS EXCEPT SHARES)
<S> <C> <C>
Long-Term Debt(1):
Medium-Term Senior Notes.................................. $1,814,285 $1,814,285
Medium-Term Subordinated Notes............................ 186,950 186,950
7% Notes Due March 1, 2000................................ 199,889 199,889
6 1/2% Notes Due November 1, 2005......................... 199,564 199,564
7 5/8% Notes Due February 15, 2014........................ 199,377 199,377
7 3/4% Subordinated Notes Due September 1, 2002........... 174,655 174,655
9 1/4% Notes Due December 15, 2001........................ 150,000 150,000
8 7/8% Notes Due March 15, 2005........................... 124,669 124,669
7 7/8% Notes Due February 15, 2003........................ 99,981 99,981
Convertible Debentures.................................... 398 398
Zero Coupon Bonds......................................... 24,883 24,883
8 1/4% Notes Due May 1, 2002.............................. 125,000 125,000
6 3/4% Notes Due February 1, 2006......................... 99,726 99,726
7 5/8% Notes Due October 15, 2008......................... 147,881 147,881
6.55% Notes Due April 15, 2008............................ 249,389 249,389
Company-obligated 8.30% Mandatorily Redeemable Preferred
Securities of Subsidiary Trust............................ 195,000 195,000
Company-obligated 8.08% Mandatorily Redeemable Preferred
Securities of Subsidiary Trust............................ 198,750 198,750
Company-obligated % Mandatorily Redeemable Preferred
Securities of Subsidiary Trust (2)........................ --
Redeemable Preferred Stock.................................. 189,528 189,528
Stockholders' Equity:
Common Stock, $1 par value, 400,000,000 shares authorized;
190,767,103 shares issued at September 30, 1998........ 190,767 190,767
Additional Paid-in Capital................................ 1,481,359 1,481,359
Retained Earnings......................................... 1,609,899 1,609,899
Common Stock held in Treasury, at cost: 47,959,342 shares
at September 30, 1998.................................. (1,014,087) (1,014,087)
Foreign Currency Translation Adjustment................... (3,611) (3,611)
---------- ----------
Total Capitalization........................................ $6,644,252 $
========== ==========
</TABLE>
- ---------------
(1) In addition to the indebtedness shown in the foregoing table, the Company
and its consolidated subsidiaries had outstanding at September 30, 1998,
short-term bank loans totalling $1,037,279, commercial paper totalling
$988,462, and short-term medium-term notes totalling $292,000.
(2) As described in this prospectus supplement, the sole asset of the Trust will
be the Junior Subordinated Debentures.
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<PAGE> 17
ACCOUNTING TREATMENT
The financial statements of the Trust will be consolidated with the
Company's financial statements, with the Preferred Securities shown as
Company-obligated mandatorily redeemable preferred securities of a subsidiary
trust holding solely Company guaranteed related subordinated debt.
USE OF PROCEEDS
The proceeds of the sale of the Preferred Securities will be invested by
the Trust in Junior Subordinated Debentures of the Company. The proceeds from
the issuance of such Junior Subordinated Debentures will be used by the Company
for general corporate purposes.
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration which is qualified under the Trust Indenture Act. The Property
Trustee, The Chase Manhattan Bank, but not the other Trustees of the Trust, will
act as the indenture trustee for purposes of the Trust Indenture Act. The terms
of the Preferred Securities and the Declaration include those stated in the
Declaration and those made part of the Declaration by the Trust Indenture Act
and the Business Trust Act. The following summarizes the material terms and
provisions of the Preferred Securities and is qualified in its entirety by
reference to the Declaration, which has been filed as an exhibit to the
Registration Statement of which this prospectus supplement forms a part, the
Business Trust Act and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Trust to issue the Preferred Securities,
which represent preferred undivided beneficial interests in the assets of the
Trust, and the Common Securities, which represent common undivided beneficial
interests in the assets of the Trust. All the Common Securities will be owned,
directly or indirectly, by the Company. The Common Securities and the Preferred
Securities rank pari passu with each other and will have equivalent terms except
that (i) if an Event of Default under the Declaration occurs and is continuing,
the holders of Preferred Securities will have a priority over holders of the
Common Securities with respect to distributions and payments upon liquidation,
redemption or otherwise and (ii) holders of Common Securities have the exclusive
right (subject to the terms of the Declaration) to appoint, remove or replace
Trustees and to increase or decrease the number of Trustees. The Declaration
does not permit the issuance by the Trust of any securities or other evidences
of beneficial ownership of, or beneficial interests in, the Trust other than the
Preferred Securities and the Common Securities, the incurrence of any
indebtedness for borrowed money by the Trust or the making of any investment
other than in the Junior Subordinated Debentures. Pursuant to the Declaration,
the Property Trustee will have legal title to, and will hold, the Junior
Subordinated Debentures as trust assets for the benefit of the holders of the
Preferred Securities and the Common Securities. The payment of distributions out
of moneys held by the Property Trustee and payments on redemption of the
Preferred Securities or liquidation of the Trust are guaranteed by the Company
on a subordinated basis as and to the extent described under "Description of the
Preferred Securities Guarantees" in the accompanying prospectus. The Property
Trustee will hold the Preferred Securities Guarantee for the benefit of holders
of the Preferred Securities. The Preferred Securities Guarantee is a full and
unconditional guarantee from the time of issuance of the Preferred Securities,
but the Preferred Securities Guarantee covers distributions and other payments
on the Preferred Securities only if and to the extent that the Company has made
a payment to the Property Trustee of interest or principal on the Junior
Subordinated Debentures deposited in the Trust as trust assets. See "-- Voting
Rights" in this prospectus supplement.
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per annum
of % of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears for more than one quarter will
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<PAGE> 18
bear interest thereon at the rate per annum of % of the stated liquidation
amount of $25 per Preferred Security (to the extent permitted by law),
compounded quarterly. The term "distributions" as used herein includes any such
interest payable unless otherwise stated. The amount of distributions payable
for any period will be computed on the basis of a 360-day year of twelve 30-day
months, and for any period shorter than a 30-day period on the basis of the
actual number of days elapsed.
Distributions on the Preferred Securities will be cumulative, will accrue
from the original date of issuance and, except as otherwise described below,
will be payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing on March 31, 1999, but only if, and to the
extent that, interest payments are made in respect of Junior Subordinated
Debentures held by the Property Trustee.
So long as the Company shall not be in default in the payment of interest
on the Junior Subordinated Debentures, the Company has the right under the
Indenture to defer payments of interest on the Junior Subordinated Debentures by
extending the interest payment period from time to time on the Junior
Subordinated Debentures for a period not exceeding 20 consecutive quarterly
interest periods and, as a consequence, the Trust would defer quarterly
distributions on the Preferred Securities (though such distributions would
continue to accrue with interest thereon at the rate of % per annum,
compounded quarterly) during any such Extension Period. If the Company exercises
the right to extend an interest payment period, the Company may not declare or
pay dividends on, or redeem, purchase, acquire or make a distribution or
liquidation payment with respect to, any of its common stock or preferred stock
during such Extension Period or make any guarantee payments with respect
thereto; provided, however, that the foregoing restrictions shall not apply to
(i) dividends, redemptions, purchases, acquisitions, distributions or payments
made by the Company by way of issuance of shares of its capital stock, (ii)
payments of accrued dividends by the Company upon the redemption, exchange or
conversion of any preferred stock of the Company as may be outstanding from time
to time in accordance with the terms of such preferred stock or (iii) cash
payments made by the Company in lieu of delivering fractional shares upon the
redemption, exchange or conversion of any preferred stock of the Company as may
be outstanding from time to time in accordance with the terms of such preferred
stock. Prior to the termination of any such Extension Period, the Company may
further extend such Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarterly interest periods and may not extend beyond the maturity of
the Junior Subordinated Debentures. Upon the termination of any Extension Period
and the payment of all amounts then due, the Company may commence a new
Extension Period, subject to the above requirements. The Company may also prepay
at any time all or any portion of the interest accrued during an Extension
Period. Consequently, there could be multiple Extension Periods of varying
lengths throughout the term of the Junior Subordinated Debentures, each not to
exceed 20 consecutive quarterly interest periods or to cause any extension
beyond the maturity of the Junior Subordinated Debentures. See "Risk
Factors -- Option to Extend Interest Payment Period; Trading Characteristics;
Tax Impact of Extension;" "Description of the Junior Subordinated
Debentures -- Interest" and "-- Option to Extend Interest Payment Period" in
this prospectus supplement. Subject to prepayments as described above, payments
of accrued distributions will be payable to holders of Preferred Securities as
they appear on the books and records of the Trust on the first record date after
the end of an Extension Period.
Distributions on the Preferred Securities must be paid on the dates payable
to the extent that the Property Trustee has cash on hand in the Property Account
to permit such payment. The funds available for distribution to the holders of
the Preferred Securities will be limited to payments received by the Property
Trustee in respect of the Junior Subordinated Debentures that are deposited in
the Trust as trust assets. See "Description of the Junior Subordinated
Debentures" in this prospectus supplement. If the Company does not make interest
payments on the Junior Subordinated Debentures, the Property Trustee will not
make distributions on the Preferred Securities. Under the Declaration, if and to
the extent the Company does make interest payments on the Junior Subordinated
Debentures deposited in the Trust as trust assets, the Property Trustee is
obligated to make distributions on the Trust Securities on a pro rata basis. The
payment of distributions on the Preferred Securities is guaranteed by the
Company on a
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<PAGE> 19
subordinated basis as and to the extent set forth under "Description of the
Preferred Securities Guarantees" in the accompanying prospectus. The Preferred
Securities Guarantee is a full and unconditional guarantee from the time of
issuance of the Preferred Securities, but the Preferred Securities Guarantee
covers distributions and other payments on the Preferred Securities only if and
to the extent that the Company has made a payment to the Property Trustee of
interest or principal on the Junior Subordinated Debentures deposited in the
Trust as trust assets.
Distributions on the Preferred Securities will be made to the holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which, as long as the Preferred Securities remain in book-entry
only form, will be one Business Day (as defined herein) prior to the relevant
distribution payment date. Distributions payable on any Preferred Securities
that are not punctually paid on any distribution payment date as a result of the
Company having failed to make the corresponding interest payment on the Junior
Subordinated Debentures will forthwith cease to be payable to the person in
whose name such Preferred Security is registered on the relevant record date,
and such defaulted distribution will instead be payable to the person in whose
name such Preferred Security is registered on the special record date
established by the Regular Trustees (as defined in the accompanying prospectus),
which record date shall correspond to the special record date or other specified
date determined in accordance with the Indenture; provided, however, that
distributions shall not be considered payable on any distribution payment date
falling within an Extension Period unless the Company has elected to make a full
or partial payment of interest accrued on the Junior Subordinated Debentures on
such distribution payment date. Distributions on the Preferred Securities will
be paid through the Property Trustee who will hold amounts received in respect
of the Junior Subordinated Debentures in the Property Account (as defined in the
accompanying prospectus) for the benefit of the holders of the Preferred
Securities and the Common Securities. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such payment will be
made as described under "Book-Entry Only Issuance; The Depository Trust Company"
below. In the event that the Preferred Securities do not continue to remain in
book-entry only form, the relevant record dates for the Preferred Securities
shall conform to the rules of any securities exchange on which the Preferred
Securities are listed and, if none, shall be selected by the Regular Trustees,
which dates shall be at least one Business Day but less than 60 Business Days
prior to the relevant payment dates. The Declaration provides that the payment
dates or record dates for the Preferred Securities shall be the same as the
payment dates and record dates for the Junior Subordinated Debentures. All
distributions paid with respect to the Trust Securities shall be paid on a pro
rata basis to the holders thereof entitled thereto. If any date on which
distributions are to be made on the Preferred Securities is not a Business Day,
then payment of the distribution to be made on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. "Business Day" shall mean any day other than Saturday, Sunday or
any other day on which banking institutions in the City of New York in the State
of New York are authorized or required by law to close.
DISTRIBUTION AT COMPANY'S OPTION OR UPON SPECIAL EVENT; TAX EVENT REDEMPTION
The Company will have the right at any time to elect to distribute the
Junior Subordinated Debentures to the holders of the Trust Securities and cause
the dissolution of the Trust. As a condition of such dissolution and
distribution, the Regular Trustees shall have received an opinion of nationally
recognized independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on any then applicable published
revenue rulings of the IRS, to the effect that the holders of the Preferred
Securities will not recognize any gain or loss for United States Federal income
tax purposes as a result of such dissolution and distribution of Junior
Subordinated Debentures. Upon such election and receipt of a No Recognition
Opinion, the Trust shall be dissolved with the result that, after satisfaction
of creditors of the Trust, Junior Subordinated Debentures with an aggregate
principal amount equal to the aggregate stated liquidation amount of the
Preferred Securities and the Common Securities would be distributed on a pro
rata basis to the holders of the Preferred Securities and the Common
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Securities in liquidation of such holders' interests in the Trust, within 90
days following the occurrence of such events.
In addition, if, at any time, a Tax Event or an Investment Company Event
(each as defined herein and each, a "Special Event") shall occur and be
continuing, the Trust shall, unless the Junior Subordinated Debentures are
redeemed in the limited circumstances described below, be dissolved with the
result that, after satisfaction of creditors of the Trust, Junior Subordinated
Debentures with an aggregate principal amount equal to the aggregate stated
liquidation amount of the Preferred Securities and the Common Securities would
be distributed on a pro rata basis to the holders of the Preferred Securities
and the Common Securities in liquidation of such holders' interests in the
Trust, within 90 days following the occurrence of such Special Event; provided,
however, that in the case of the occurrence of a Tax Event, as a condition of
such dissolution and distribution, the Regular Trustees shall have received a No
Recognition Opinion; and, provided further, that, if at the time there is
available to the Company or the Regular Trustees, on behalf of the Trust, the
opportunity to eliminate, within such 90-day period, the Special Event by taking
some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure, which has no adverse effect on
the Trust or the Company or the holders of the Preferred Securities, the Company
or the Regular Trustees, on behalf of the Trust, will pursue such measure in
lieu of dissolution. Furthermore, if in the case of the occurrence of a Tax
Event, (i) the Regular Trustees have received an opinion (a "Redemption Tax
Opinion") of nationally recognized independent tax counsel experienced in such
matters that, as a result of such Tax Event, there is more than an insubstantial
risk that the Company would be precluded from deducting the interest on the
Junior Subordinated Debentures for United States Federal income tax purposes
even if the Junior Subordinated Debentures were distributed to the holders of
Trust Securities in liquidation of such holders' interests in the Trust as
described above or (ii) the Regular Trustees shall have been informed by such
tax counsel that a No Recognition Opinion cannot be delivered to the Trust, the
Company shall have the right at any time, upon not less than 30 nor more than 60
days notice, to redeem the Junior Subordinated Debentures in whole or in part
for cash within 90 days following the occurrence of such Tax Event, and promptly
following such redemption Preferred Securities and Common Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Junior Subordinated Debentures so redeemed will be redeemed by the Trust at the
Redemption Price on a pro rata basis; provided, however, that if at the time
there is available to the Company or the Regular Trustees, on behalf of the
Trust, the opportunity to eliminate, within such 90-day period, such Tax Event
by taking some ministerial action, such as filing a form or making an election,
or pursuing some other similar reasonable measure, which has no adverse effect
on the Trust, the Company or the holders of the Preferred Securities, the
Company or the Regular Trustees, on behalf of the Trust, will pursue such
measure in lieu of redemption and provided further that the Company shall have
no right to redeem the Junior Subordinated Debentures while the Regular
Trustees, on behalf of the Trust, are pursuing any such ministerial action. The
Common Securities will be redeemed on a pro rata basis with the Preferred
Securities, except that if an Event of Default under the Declaration has
occurred and is continuing, the Preferred Securities will have a priority over
the Common Securities with respect to payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have obtained an opinion
of nationally recognized independent tax counsel experienced in such matters (a
"Dissolution Tax Opinion") to the effect that on or after the date of this
prospectus supplement as a result of (a) any amendment to, or change in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change (including any announced prospective change) in, an interpretation or
application of any such laws or regulations by any legislative body, court,
governmental agency or regulatory authority (including the enactment of any
legislation and the publication of any judicial decision or regulatory
determination), (c) any interpretation or pronouncement that provides for a
position with respect to such laws or regulations that differs from the
theretofore generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or effective or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after the date of this prospectus supplement, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the date
thereof,
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subject to United States Federal income tax with respect to income accrued or
received on the Junior Subordinated Debentures, (ii) the Trust is, or will be
within 90 days of the date thereof, subject to more than a de minimis amount of
other taxes, duties or other governmental charges or (iii) interest payable by
the Company to the Trust on the Junior Subordinated Debentures is not, or within
90 days of the date thereof will not be, deductible by the Company for United
States Federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced in
practice under the Investment Company Act of 1940, as amended (the "1940 Act"),
that, as a result of the occurrence of a change in law or regulation or a change
in interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),
there is more than an insubstantial risk that the Trust is or will be considered
an "investment company" which is required to be registered under the 1940 Act,
which Change in 1940 Act Law becomes effective on or after the date of this
prospectus supplement.
On the date fixed for any distribution of Junior Subordinated Debentures,
upon dissolution of the Trust, (i) the Preferred Securities and the Common
Securities will no longer be deemed to be outstanding, (ii) DTC or its nominee,
as the record holder of the Preferred Securities, will receive a registered
global certificate or certificates representing the Junior Subordinated
Debentures to be delivered upon such distribution and (iii) any certificates
representing Preferred Securities not held by DTC or its nominee will be deemed
to represent Junior Subordinated Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, such Preferred
Securities, until such certificates are presented to the Company or its agent
for transfer or reissuance.
There can be no assurance as to the market price for the Junior
Subordinated Debentures which may be distributed in exchange for Preferred
Securities if a dissolution and liquidation of the Trust were to occur.
Accordingly, the Junior Subordinated Debentures which a holder of Preferred
Securities may subsequently receive upon the dissolution of the Trust may trade
at a discount to the price of the Preferred Securities exchanged. If the Junior
Subordinated Debentures are distributed to the holders of Preferred Securities
upon the dissolution of the Trust, the Company will use its best efforts to list
the Junior Subordinated Debentures on the NYSE or on such other exchange on
which the Preferred Securities are then listed.
MANDATORY REDEMPTION
Upon the repayment of the Junior Subordinated Debentures, whether at
maturity, upon redemption or otherwise, the proceeds from such repayment will be
promptly applied to redeem Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the Junior Subordinated Debentures so
repaid, upon not less than 30 nor more than 60 days' notice, at the Redemption
Price. The Common Securities will be entitled to be redeemed on a pro rata basis
with the Preferred Securities, except that if an Event of Default under the
Declaration has occurred and is continuing, the Preferred Securities will have a
priority over the Common Securities with respect to payment of the Redemption
Price. Subject to the foregoing, if fewer than all outstanding Preferred
Securities and Common Securities are to be redeemed, the Preferred Securities
and Common Securities will be redeemed on a pro rata basis. In the event fewer
than all outstanding Preferred Securities are to be redeemed, Preferred
Securities registered in the name of and held by DTC or its nominee will be
redeemed as described under "Book-Entry Only Issuance; The Depository Trust
Company" below.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
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If the Trust gives a notice of redemption in respect of Preferred
Securities (which notice will be irrevocable) then, by 12:00 noon, New York City
time, on the redemption date and provided that the Company has paid to the
Property Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Junior Subordinated Debentures, the Trust will
irrevocably deposit with DTC funds sufficient to pay the applicable Redemption
Price and will give DTC irrevocable instructions and authority to pay the
Redemption Price to the holders of the Preferred Securities. See "Book-Entry
Only Issuance; The Depository Trust Company" below. If notice of redemption
shall have been given and funds deposited as required, then, immediately prior
to the close of business on the redemption date, distributions will cease to
accrue on the Preferred Securities called for redemption, such Preferred
Securities shall no longer be deemed to be outstanding and all rights of holders
of such Preferred Securities so called for redemption will cease, except the
right of the holders of such Preferred Securities to receive the Redemption
Price, but without interest on such Redemption Price. Neither the Trustees nor
the Trust shall be required to register or cause to be registered the transfer
of any Preferred Securities which have been so called for redemption. If any
date fixed for redemption of Preferred Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. If the Company fails to repay Junior Subordinated
Debentures on maturity or on the date fixed for redemption or if payment of the
Redemption Price in respect of Preferred Securities is improperly withheld or
refused and not paid by the Property Trustee or by the Company pursuant to the
Preferred Securities Guarantee described under "Description of the Preferred
Securities Guarantees" in the accompanying prospectus, distributions on the
Preferred Securities will continue to accrue from the original redemption date
of the Preferred Securities to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
In the event that fewer than all the outstanding Preferred Securities are
to be redeemed, the Preferred Securities will be redeemed pro rata as described
below under "Book-Entry Only Issuance; The Depository Trust Company" below.
If a partial redemption of the Preferred Securities would result in the
delisting of the Preferred Securities by any national securities exchange or
other organization on which the Preferred Securities are then listed, the
Company, pursuant to the Indenture, will only redeem Junior Subordinated
Debentures in whole and, as a result, the Trust may only redeem the Preferred
Securities in whole.
Subject to the foregoing and applicable law (including, without limitation,
United States Federal securities laws), the Company or any of its subsidiaries
may at any time and from time to time purchase outstanding Preferred Securities
by tender, in the open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary dissolution, winding-up or
termination of the Trust, the holders of the Preferred Securities and the Common
Securities at the date of dissolution, winding-up or termination of the Trust
will be entitled to receive on a pro rata basis solely out of the assets of the
Trust, after satisfaction of liabilities to creditors, an amount equal to the
aggregate of the stated liquidation amount of $25 per Trust Security plus
accrued and unpaid distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution, winding-up or termination, and after satisfaction of liabilities to
creditors, Junior Subordinated Debentures in an aggregate principal amount equal
to the aggregate stated liquidation amount of such Trust Securities and bearing
accrued and unpaid interest in an amount equal to the accrued and unpaid
distributions on such Trust Securities shall be distributed on a pro rata basis
to the holders of the Preferred Securities and the Common Securities in exchange
therefor.
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If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Preferred Securities and the Common Securities shall be paid,
subject to the following sentence, on a pro rata basis. The holders of the
Common Securities will be entitled to receive distributions upon any such
dissolution on a pro rata basis with the holders of the Preferred Securities,
except that if an Event of Default under the Declaration has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to payment of the Liquidation Distribution.
Pursuant to the Declaration, the Trust shall terminate: (i) on ,
2038; (ii) when all the Trust Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to the
holders of Trust Securities in accordance with the terms of the Trust
Securities; or (iii) when all the Junior Subordinated Debentures shall have been
distributed to the holders of Trust Securities in exchange for all the Trust
Securities in accordance with the terms of the Trust Securities.
NO MERGER, CONSOLIDATION OR SALE OF ASSETS OF THE TRUST
The Trust may not merge or consolidate with or into, or be replaced by, or
sell, transfer or lease all or substantially all its properties and assets to,
any corporation or other entity or, except as expressly permitted hereby, sell
or transfer any Junior Subordinated Debentures to any corporation or other
entity.
DECLARATION EVENTS OF DEFAULT
An Indenture Event of Default (as defined in the accompanying prospectus)
will constitute an event of default under the Declaration with respect to the
Trust Securities (an "Event of Default"); provided that pursuant to the
Declaration, the holder of the Common Securities will be deemed to have waived
any such Event of Default with respect to the Common Securities until all Events
of Default with respect to the Preferred Securities have been cured or waived.
Until all such Events of Default with respect to the Preferred Securities have
been so cured or waived, the Property Trustee will be deemed to be acting solely
on behalf of the holders of the Preferred Securities, and only the holders of
the Preferred Securities will have the right to direct the Property Trustee with
respect to certain matters under the Declaration and consequently under the
Indenture. In the event that any Event of Default with respect to the Preferred
Securities is waived by the holders of the Preferred Securities as provided in
the Declaration, the holders of Common Securities pursuant to the Declaration
have agreed that such waiver also constitutes a waiver of such Event of Default
with respect to the Common Securities for all purposes under the Declaration
without any further act, vote or consent of the holders of the Common
Securities. See "-- Voting Rights" in this prospectus supplement.
Upon the occurrence of an Event of Default, the Property Trustee as the
holder of all the Junior Subordinated Debentures will have the right under the
Indenture to declare the principal of, and interest on, the Junior Subordinated
Debentures to be immediately due and payable. In addition, the Property Trustee
will have the power to exercise all rights, powers and privileges under the
Indenture. If the Property Trustee fails to enforce its rights under the
Declaration (including, without limitation, its rights, powers and privileges as
a holder of the Junior Subordinated Debentures under the Indenture), any holder
of Preferred Securities may, to the extent permitted by applicable law, after a
period of 30 days has elapsed from such holder's written request to the Property
Trustee to enforce such rights, institute a legal proceeding against the Company
to enforce the Property Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Property Trustee or any other person.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal on the Junior Subordinated Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption, the
redemption date), then a holder of Preferred Securities may directly institute
suit against the Company for enforcement of payment to such holder of the
principal of or interest on Junior Subordinated Debentures having a principal
amount equal to the aggregate liquidation amount of the Preferred Securities
held by such holder on or after the respective due date specified in the Junior
Subordinated Debentures. The holders of Preferred Securities
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will not be able to exercise directly against the Company any other remedy
available to the holders of the Junior Subordinated Debentures unless the
Property Trustee first fails to do so. See "Description of the Junior
Subordinated Debentures" in this prospectus supplement.
VOTING RIGHTS
Except as provided below, under "Modification and Amendment of the
Declaration" and "Description of the Preferred Securities
Guarantees -- Amendments and Assignment" in the accompanying prospectus and as
otherwise required by the Business Trust Act, the Trust Indenture Act or the
Declaration, the holders of the Preferred Securities will have no voting rights.
Subject to the requirements of the last sentence of this paragraph, the
holders of a majority in aggregate liquidation amount of the Preferred
Securities have the right (i) on behalf of all holders of Preferred Securities,
to waive any past default that is waivable under the Declaration and (ii) to
direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under the Declaration, including the right to direct
the Property Trustee, as the holder of the Junior Subordinated Debentures, to
(A) direct the time, method and place of conducting any proceeding for any
remedy available to the Indenture Trustee (as defined in the accompanying
prospectus), or executing any trust or power conferred on the Indenture Trustee
with respect to the Junior Subordinated Debentures, (B) waive any past default
that is waivable under Section 6.06 of the Indenture, or (C) exercise any right
to rescind or annul a declaration that the principal of all the Junior
Subordinated Debentures shall be due and payable; provided, however, that where
the taking of any action under the Indenture would require the consent or vote
of (a) holders of Junior Subordinated Debentures representing a specified
percentage greater than a majority in principal amount of the Junior
Subordinated Debentures or (b) each holder of Junior Subordinated Debentures
affected thereby, no such consent or vote shall be given by the Property Trustee
without the prior consent or vote of, in the case of clause (a) above, holders
of Preferred Securities representing such specified percentage of the aggregate
liquidation amount of the Preferred Securities or, in the case of clause (b)
above, each holder of Preferred Securities affected thereby. The Property
Trustee shall not revoke any action previously authorized or approved by a vote
of the holders of Preferred Securities. The Property Trustee shall notify all
holders of record of Preferred Securities of any notice of default received from
the Indenture Trustee with respect to the Junior Subordinated Debentures. Other
than with respect to directing the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee or the Indenture
Trustee as set forth above, the Property Trustee shall be under no obligation to
take any of the foregoing actions at the direction of the holders of the
Preferred Securities unless the Property Trustee shall have obtained an opinion
of nationally recognized independent tax counsel recognized as expert in such
matters to the effect that the Trust will not be classified for United States
Federal income tax purposes as an association taxable as a corporation or a
partnership on account of such action and will be treated as a grantor trust for
United States Federal income tax purposes following such action.
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of holders of the Preferred Securities will constitute a waiver of the
corresponding Event of Default under the Declaration in respect of the Trust
Securities.
In the event the consent of the Property Trustee as the holder of the
Junior Subordinated Debentures is required under the Indenture with respect to
any amendment, modification or termination of the Indenture or the Junior
Subordinated Debentures, the Property Trustee shall request the direction of the
holders of the Trust Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a majority in liquidation amount of the Trust
Securities voting together as a single class; provided, however, that where any
such amendment, modification or termination under the Indenture would require
the consent or vote of (1) holders of Junior Subordinated Debentures
representing a specified percentage greater than a majority in principal amount
of the Junior Subordinated Debentures or (2) each holder of Junior Subordinated
Debentures affected thereby, the Property Trustee may only give such consent or
vote, in the case of
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clause (1), at the direction of the holders of Trust Securities representing
such specified percentage of the aggregate liquidation amount of the Trust
Securities or, in the case of clause (2), as directed by each holder of Trust
Securities affected thereby; and, provided further, however, that the Property
Trustee shall be under no obligation to take any such action in accordance with
the directions of the holders of the Trust Securities unless the Property
Trustee has obtained an opinion of nationally recognized independent tax counsel
recognized as expert in such matters to the effect that the Trust will not be
classified for United States Federal income tax purposes as an association
taxable as a corporation or a partnership on account of such action and will be
treated as a grantor trust for United States Federal income tax purposes
following such action.
Any required approval or direction of holders of Preferred Securities may
be given at a separate meeting of holders of Preferred Securities convened for
such purpose, at a meeting of all the holders of Trust Securities or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Preferred Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken; (ii) a description of any resolution proposed
for adoption at such meeting on which such holders are entitled to vote or of
such matter upon which written consent is sought; and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the holders of Preferred Securities will be required
for the Trust to redeem and cancel Preferred Securities or distribute Junior
Subordinated Debentures in accordance with the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities at such time that are owned by the Company or by any entity directly
or indirectly controlling or controlled by or under direct or indirect common
control with the Company shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
The procedures by which persons owning Preferred Securities registered in
the name of and held by DTC or its nominee may exercise their voting rights are
described under "Book-Entry Only Issuance; The Depository Trust Company" below.
Holders of the Preferred Securities will have no rights to increase or
decrease the number of Trustees or to appoint, remove or replace a Trustee,
which rights are vested exclusively in the holders of the Common Securities.
MODIFICATION AND AMENDMENT OF THE DECLARATION
The Declaration may be modified and amended with the approval of a majority
of the Regular Trustees, provided that, if any proposed modification or
amendment provides for, or the Regular Trustees otherwise propose to effect, (a)
any action that would adversely affect the powers, preferences or special rights
of the Trust Securities, whether by way of amendment to the Declaration or
otherwise, or (b) the dissolution, winding-up or termination of the Trust other
than pursuant to the terms of the Declaration, then the holders of the
outstanding Trust Securities as a class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of at least 66 2/3% in liquidation amount of the Trust
Securities, provided that if any amendment or proposal referred to above would
adversely affect only the Preferred Securities or the Common Securities, then
only the affected class will be entitled to vote on such amendment or proposal
and such amendment or proposal shall not be effective except with the approval
of 66 2/3% in liquidation amount of such class of Trust Securities.
Notwithstanding the foregoing, (i) no amendment or modification may be made
to the Declaration unless the Regular Trustees shall have obtained (a) either a
ruling from the Internal Revenue Service or a written unqualified opinion of
nationally recognized independent tax counsel experienced in such matters to
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<PAGE> 26
the effect that such amendment will not cause the Trust to be classified for
United States Federal income tax purposes as an association taxable as a
corporation or a partnership and to the effect that the Trust will continue to
be treated as a grantor trust for purposes of United States Federal income
taxation and (b) a written unqualified opinion of nationally recognized
independent counsel experienced in such matters to the effect that such
amendment will not cause the Trust to be an "investment company" which is
required to be registered under the 1940 Act; (ii) certain specified provisions
of the Declaration may not be amended without the consent of all the holders of
the Trust Securities; (iii) no amendment which adversely affects the rights,
powers and privileges of the Property Trustee or the Delaware Trustee shall be
made without the consent of the Property Trustee or the Delaware Trustee, as the
case may be; (iv) Article IV of the Declaration relating to the obligation of
the Company to purchase the Common Securities and to pay certain obligations and
expenses of the Trust as described under "The PWG Trusts" in the accompanying
prospectus may not be amended without the consent of the Company; and (v) the
rights of holders of Common Securities under Article V of the Declaration to
increase or decrease the number of, and to appoint, replace or remove, Trustees
shall not be amended without the consent of each holder of Common Securities.
The Declaration further provides that it may be amended without the consent
of the holders of the Trust Securities to (i) cure any ambiguity; (ii) correct
or supplement any provision in the Declaration that may be defective or
inconsistent with any other provision of the Declaration; (iii) to add to the
covenants, restrictions or obligations of the Company; and (iv) to conform to
changes in, or a change in interpretation or application of, certain 1940 Act
requirements by the Commission, which amendment does not adversely affect the
rights, preferences or privileges of the holders.
BOOK-ENTRY ONLY ISSUANCE; THE DEPOSITORY TRUST COMPANY
DTC will act as securities depositary for the Preferred Securities. The
Preferred Securities will be issued only as fully registered securities
registered in the name of DTC or its nominee. One or more fully-registered
global Preferred Securities certificates (each a "Preferred Securities Global
Certificate"), representing the total aggregate number of Preferred Securities,
will be issued and will be deposited with DTC.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in a global Preferred
Security.
DTC 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. DTC holds securities that its participants ("Participants") deposit
with DTC. DTC 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 ("Direct Participants").
DTC is owned by a number of its Direct Participants and by the NYSE, the
American Stock Exchange, Inc., and the NASD. Access to the DTC 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 DTC and its Participants are on file with the Commission.
Upon issuance of a Preferred Securities Global Certificate, DTC will credit
on its book-entry registration and transfer system the number of Preferred
Securities represented by such Preferred Securities Global Certificate to the
accounts of institutions that have accounts with DTC. Ownership of beneficial
interests in a Preferred Securities Global Certificate will be limited to
Participants or persons that may hold interests through Participants. The
ownership interest of each actual purchaser of each
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Preferred Security ("Beneficial Owner") is in turn to be recorded on the Direct
Participants' and the Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchases, but Beneficial Owners
are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the Direct
Participants or the Indirect Participants through which the Beneficial Owners
purchased Preferred Securities. Transfers of ownership interests in the
Preferred Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers. So long as DTC, or its
nominee, is the owner of a Preferred Securities Global Certificate, DTC or such
nominee, as the case may be, will be considered the sole owner and holder of
record of the Preferred Securities represented by such Preferred Securities
Global Certificate for all purposes.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all the
Preferred Securities are being redeemed, DTC will reduce pro rata (subject to
adjustment to eliminate fractional Preferred Securities) the amount of interest
of each Direct Participant in the Preferred Securities to be redeemed.
Although voting with respect to the Preferred Securities is limited, in
those instances in which a vote is required, neither DTC nor Cede & Co. itself
will consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an omnibus proxy to the Trust as soon as possible
after the record date. The omnibus proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the Preferred
Securities are credited on the record date (identified in a listing attached to
the omnibus proxy).
Distribution payments on the Preferred Securities represented by a
Preferred Securities Global Certificate will be made by the Property Trustee to
DTC. DTC's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payments on such
payment date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices and will be the responsibility of
such Participants and not of DTC, the Trust or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of distributions to DTC is the responsibility of the Trust, disbursement
of such payments to Direct Participants is the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners is the responsibility of
Direct Participants and Indirect Participants.
Except as provided herein, a Beneficial Owner in a Preferred Securities
Global Certificate will not be entitled to receive physical delivery of
Preferred Securities. Accordingly, each Beneficial Owner must rely on the
procedures of DTC to exercise any rights under the Preferred Securities.
DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
the Trust. Under such circumstances, if a successor securities depositary is not
appointed, Preferred Security certificates will be required to be printed and
delivered. Additionally, the Trust may decide to discontinue use of the system
of book-entry transfers through DTC (or a successor depositary). In that event,
certificates for the Preferred Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Trust and the Company believe to be
reliable, but the Trust and the Company take no responsibility for the accuracy
thereof.
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REGISTRAR, TRANSFER AGENT AND PAYING AGENT
In the event the Preferred Securities do not remain in book-entry only
form, the following provisions will apply:
Payment of distributions and payments on redemption of the Preferred
Securities will be payable, the transfer of the Preferred Securities will be
registrable and Preferred Securities will be exchangeable for Preferred
Securities of other denominations of a like aggregate liquidation amount at the
principal corporate trust office of the Property Trustee in The City of New
York; provided that payment of distributions may be made at the option of the
Regular Trustees on behalf of the Trust by check mailed to the address of the
persons entitled thereto and that the payment on redemption of any Preferred
Security will be made only upon surrender of such Preferred Security to the
Property Trustee.
The Chase Manhattan Bank or one of its affiliates will act as registrar and
transfer agent for the Preferred Securities. The Chase Manhattan Bank will also
act as paying agent and, with the consent of the Regular Trustees, may designate
additional paying agents.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of the Trust, but upon payment (with the giving of such
indemnity as the Trust or the Company may require) in respect of any tax or
other governmental charges that may be imposed in relation to it.
The Trust will not be required to register or cause to be registered the
transfer of Preferred Securities after such Preferred Securities have been
called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to an Event of Default, undertakes to perform
only such duties as are specifically set forth in the Declaration and, during an
Event of Default, shall exercise and use the same degree of care and skill as a
prudent individual would exercise or use under the circumstances in the conduct
of his or her own affairs. Subject to such provision, the Property Trustee is
under no obligation to exercise any of the powers vested in it by the
Declaration at the request of any holder of Preferred Securities, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Property Trustee is not required to expend
or risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Property Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
The Property Trustee is a depositary for funds and performs other services
for, and transacts other banking business with, the Company in the normal course
of business.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to take such action as
they deem reasonable in order that the Trust will not be deemed to be an
"investment company" required to be registered under the 1940 Act or that the
Trust will not be classified for United States Federal income tax purposes as an
association taxable as a corporation or a partnership and will be treated as a
grantor trust for United States Federal income tax purposes. In this connection,
the Regular Trustees are authorized to take any action, not inconsistent with
applicable law, the certificate of trust of the Trust or the Declaration, that
the Regular Trustees determine in their discretion to be reasonable and
necessary or desirable for such purposes, as long as such action does not
adversely affect the interests of holders of the Trust Securities.
The Company and the Regular Trustees on behalf of the Trust will be
required to provide to the Property Trustee annually a certificate as to whether
or not the Company and the Trust, respectively, is in compliance with all the
conditions and covenants under the Declaration.
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DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
Set forth below is a description of the Junior Subordinated Debentures in
which the Trust will invest the proceeds from the issuance and sale of the Trust
Securities and which will be deposited in the Trust as trust assets. The terms
of the Junior Subordinated Debentures include those stated in the Indenture
dated as of December 9, 1996, between the Company and The Chase Manhattan Bank,
as trustee (the "Indenture Trustee"), as supplemented by the Third Supplemental
Indenture dated as of , 1998, between the Company and the Indenture
Trustee (as so supplemented, the "Indenture"), forms of which have been filed as
exhibits to the Registration Statement of which this prospectus supplement forms
a part, and those made part of the Indenture by the Trust Indenture Act. This
description supplements the description of the general terms and provisions of
the Junior Subordinated Debt Securities set forth in the accompanying prospectus
under the caption "Description of the Junior Subordinated Debt Securities." The
following description does not purport to be complete and is qualified in its
entirety by reference to the Indenture and the Trust Indenture Act. Whenever
particular provisions or defined terms in the Indenture are referred to herein,
such provisions or defined terms are incorporated by reference herein. Section
references used herein are references to provisions of the Indenture.
The Indenture does not limit the aggregate principal amount of indebtedness
which may be issued thereunder and provides that junior subordinated debentures
may be issued thereunder from time to time in one or more series (collectively,
together with the Junior Subordinated Debentures, the "Subordinated
Debentures"). The Junior Subordinated Debentures constitute a separate series
under the Indenture.
Under certain circumstances involving the dissolution of the Trust at the
Company's option or following the occurrence of a Special Event, Junior
Subordinated Debentures may be distributed to the holders of the Trust
Securities upon dissolution of the Trust. See "Description of the Preferred
Securities -- Distribution at Company's Option or Upon Special Event; Tax Event
Redemption."
GENERAL
The Junior Subordinated Debentures are unsecured, subordinated obligations
of the Company, limited in aggregate principal amount to an amount equal to the
sum of (i) the stated liquidation amount of the Preferred Securities issued by
the Trust and (ii) the proceeds received by the Trust upon issuance of the
Common Securities to the Company (which proceeds will be used to purchase an
equal principal amount of Junior Subordinated Debentures). The Junior
Subordinated Debentures will rank pari passu with the junior subordinated debt
securities issued by the Company and sold to PWG Capital Trusts I and II.
The entire principal amount of the Junior Subordinated Debentures will
become due and payable, together with any accrued and unpaid interest thereon,
on , 2038. The Junior Subordinated Debentures are not subject to any
sinking fund.
If Junior Subordinated Debentures are distributed to holders of Preferred
Securities upon dissolution of the Trust, such Junior Subordinated Debentures
will initially be issued as a Global Security (as defined below). As described
herein, under certain limited circumstances, Junior Subordinated Debentures may
be issued in certificated form in exchange for a Global Security. See
"Book-Entry and Settlement" below. In the event that Junior Subordinated
Debentures are issued in certificated form, such Junior Subordinated Debentures
will be in denominations of $25 and integral multiples thereof and may be
transferred or exchanged at the offices described below. Payments on Junior
Subordinated Debentures issued as a Global Security will be made to DTC, a
successor depositary or, in the event that no depositary is used, to a paying
agent for the Junior Subordinated Debentures.
In the event that Junior Subordinated Debentures are issued in certificated
form, payments of principal and interest will be payable, the transfer of the
Junior Subordinated Debentures will be registrable and Junior Subordinated
Debentures will be exchangeable for Junior Subordinated Debentures of other
denominations of a like aggregate principal amount at the corporate trust office
of the Indenture Trustee in The City of New York; provided that payment of
interest may be made at the option of the Company by check mailed to the address
of the persons entitled thereto and that the payment of principal
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with respect to any Junior Subordinated Debenture will be made only upon
surrender of such Junior Subordinated Debenture to the Indenture Trustee.
If the Junior Subordinated Debentures are distributed to the holders of
Preferred Securities upon dissolution of the Trust, the Company will use its
best efforts to list the Junior Subordinated Debentures on the NYSE or on such
other exchange on which the Preferred Securities are then listed.
OPTIONAL REDEMPTION
Except as provided below, the Junior Subordinated Debentures may not be
redeemed prior to , 2003. The Company shall have the right to redeem
the Junior Subordinated Debentures, in whole or in part, from time to time, on
or after , 2003, upon not less than 30 nor more than 60 days notice,
at a redemption price equal to 100% of the principal amount to be redeemed, plus
any accrued and unpaid interest to the redemption date, including interest
accrued during an Extension Period. The Company will also have the right to
redeem the Junior Subordinated Debentures upon the occurrence of a Tax Event if
certain conditions are met as described under "Description of the Preferred
Securities -- Distribution at Company's Option or Upon Special Event; Tax Event
Redemption."
If the Company gives a notice of redemption in respect of Junior
Subordinated Debentures (which notice will be irrevocable) then, by 12:00 noon,
New York City time, on the redemption date, the Company will deposit irrevocably
with the Indenture Trustee funds sufficient to pay the applicable redemption
price and will give irrevocable instructions and authority to pay such
redemption price to the holders of the Junior Subordinated Debentures. If notice
of redemption shall have been given and funds deposited as required, then, upon
the date of such deposit, interest will cease to accrue on the Junior
Subordinated Debentures called for redemption, such Junior Subordinated
Debentures will no longer be deemed to be outstanding and all rights of holders
of such Junior Subordinated Debentures so called for redemption will cease,
except the right of the holders of such Junior Subordinated Debentures to
receive the applicable redemption price, but without interest on such redemption
price. If any date fixed for redemption of Junior Subordinated Debentures is not
a Business Day, then payment of the redemption price payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If the redemption price in respect
of Junior Subordinated Debentures is not paid by the Company, interest on such
Junior Subordinated Debentures will continue to accrue, from the original
redemption date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating the
applicable redemption price. If fewer than all the Junior Subordinated
Debentures are to be redeemed, the Junior Subordinated Debentures to be redeemed
shall be selected by lot or pro rata or in some other equitable manner
determined by the Indenture Trustee.
The Company shall not be required to (i) issue, register the transfer of or
exchange any Junior Subordinated Debentures during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of all or less than all of the Junior Subordinated Debentures and
ending at the close of business on the day of such mailing and (ii) register the
transfer of or exchange any Junior Subordinated Debentures so selected for
redemption, in whole or in part, except the unredeemed portion of any Junior
Subordinated Debentures being redeemed in part.
INTEREST
The Junior Subordinated Debentures will bear interest at the rate of %
per annum from , 1998. Interest will be payable quarterly in arrears
on March 31, June 30, September 30 and December 31 of each year (each, an
"Interest Payment Date"), commencing on March 31, 1999, to the person in whose
name such Junior Subordinated Debenture is registered, subject to certain
exceptions, at the close of business on the Business Day next preceding such
Interest Payment Date. In the event (i) the Preferred Securities shall not
continue to remain in book-entry only form or (ii) if, following distribution
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of the Junior Subordinated Debentures to holders of Trust Securities upon
dissolution of the Trust as described under "Description of the Preferred
Securities," the Junior Subordinated Debentures shall not continue to remain in
book-entry only form, the relevant record date will be the fifteenth day of the
month in which the relevant Interest Payment Date occurs. Interest payable on
any Junior Subordinated Debenture that is not punctually paid or duly provided
for on any interest payment date will forthwith cease to be payable to the
person in whose name such Junior Subordinated Debenture is registered on the
relevant record date, and such defaulted interest will instead be payable to the
person in whose name such Junior Subordinated Debenture is registered on the
special record date or other specified date determined in accordance with the
Indenture; provided, however, that interest, shall not be considered payable by
the Company on any Interest Payment Date falling within an Extension Period
unless the Company has elected to make a full or partial payment of interest
accrued on the Junior Subordinated Debentures on such Interest Payment Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months and for any period shorter than a
30-day period for which interest is computed, the amount of interest payable
will be computed on the basis of the actual number of days elapsed. If any date
on which interest is payable on the Junior Subordinated Debentures is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as the Company is not in default in the payment of interest on the
Junior Subordinated Debentures, the Company shall have the right to extend the
interest payment period from time to time for a period not exceeding 20
consecutive quarterly interest periods. The Company has no current intention of
exercising its right to extend an interest payment period. No interest shall be
due and payable during an Extension Period, except at the end thereof. During
any Extension Period, the Company shall not declare or pay any dividends on, or
redeem, purchase, acquire or make a distribution or liquidation payment with
respect to, any of its common stock or preferred stock or make any guarantee
payments with respect thereto; provided, however, that the foregoing
restrictions shall not apply to (i) dividends, redemptions, purchases,
acquisitions, distributions or payments made by the Company by way of issuance
of shares of its capital stock, (ii) payments of accrued dividends by the
Company upon the redemption, exchange or conversion of any preferred stock of
the Company as may be outstanding from time to time in accordance with the terms
of such preferred stock or (iii) cash payments made by the Company in lieu of
delivering fractional shares upon the redemption, exchange or conversion of any
preferred stock of the Company as may be outstanding from time to time in
accordance with the terms of such preferred stock.
The Company's outstanding preferred stock consists of $250 million stated
value of 9% Cumulative Redeemable Preferred Stock, Series C (the "Redeemable
Preferred Stock"). The Redeemable Preferred Stock is redeemable, at the option
of the Company, at any time after December 15, 1999, in whole or in part, at a
price of $100 per share, together with accrued but unpaid dividends. The
Redeemable Preferred Stock is subject to mandatory redemption on December 15,
2014.
Prior to the termination of any such Extension Period, the Company may
further extend the interest payment period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarterly interest periods and may not extend beyond the maturity of
the Junior Subordinated Debentures. On the first Interest Payment Date occurring
at or after the end of each Extension Period, the Company shall pay to the
holders of Junior Subordinated Debentures of record on the record date for such
Interest Payment Date (regardless of who the holders of record may have been on
other dates during the Extension Period) all accrued and unpaid interest on the
Junior Subordinated Debentures, together with interest thereon at the rate
specified for the Junior Subordinated Debentures to the extent permitted by
applicable law, compounded quarterly ("Compounded Interest"). Upon the
termination of any Extension Period and the payment of all amounts then due, the
Company may
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commence a new Extension Period, subject to the above requirements. The Company
may also prepay at any time all or any portion of the interest accrued during an
Extension Period. Consequently, there could be multiple Extension Periods of
varying lengths throughout the term of the Junior Subordinated Debentures, each
not to exceed 20 consecutive quarterly interest periods or to cause any
extension beyond maturity of the Junior Subordinated Debentures. The failure by
the Company to make interest payments during an Extension Period would not
constitute a default or an event of default under the Indenture or the Company's
currently outstanding indebtedness.
If the Property Trustee shall be the sole holder of the Junior Subordinated
Debentures, the Company shall give the Property Trustee notice of its selection
of such Extension Period one Business Day prior to the earlier of (i) the next
succeeding date on which the distributions on the Preferred Securities are
payable or (ii) the date the Trust is required to give notice to the NYSE (if
the Preferred Securities are then listed thereon) or other applicable
self-regulatory organization or to holders of the Preferred Securities of the
record date or payment date for such distribution. The Trust shall give notice
of the Company's selection of such Extension Period to the holders of the
Preferred Securities.
If Junior Subordinated Debentures have been distributed to holders of Trust
Securities, the Company shall give the holders of the Junior Subordinated
Debentures notice of its selection of such Extension Period ten Business Days
prior to the earlier of (i) the next succeeding Interest Payment Date or (ii)
the date the Company is required to give notice to the NYSE (if the Junior
Subordinated Debentures are then listed thereon) or other applicable
self-regulatory organization or to holders of the Junior Subordinated Debentures
of the record or payment date for such related interest payment.
COMPOUNDED INTEREST
Payments of Compounded Interest on the Junior Subordinated Debentures held
by the Trust will make funds available to pay any interest on distributions in
arrears in respect of the Preferred Securities pursuant to the terms thereof.
BOOK-ENTRY AND SETTLEMENT
If any Junior Subordinated Debentures are distributed to holders of
Preferred Securities (see "Description of the Preferred Securities"), such
Junior Subordinated Debentures will be issued in the form of one or more global
certificates (each a "Global Security") registered in the name of the depositary
or its nominee. Except under the limited circumstances described below, Junior
Subordinated Debentures represented by the Global Security will not be
exchangeable for, and will not otherwise be issuable as, Junior Subordinated
Debentures in definitive form. The Global Securities described above may not be
transferred except 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 to a successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in such a Global
Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Junior
Subordinated Debentures in definitive form and will not be considered the
holders (as defined in the Indenture) thereof for any purpose under the
Indenture, and no Global Security representing Junior Subordinated Debentures
shall be exchangeable, except for another Global Security of like denomination
and tenor to be registered in the name of the depositary or its nominee or of a
successor depositary or its nominee. Accordingly, each Beneficial Owner must
rely on the procedures of the depositary or if such person is not a Participant,
on the procedures of the Participant through which such person owns its interest
to exercise any rights of a Holder under the Indenture. If Junior Subordinated
Debentures are distributed to holders of Preferred Securities, DTC will act as
securities depositary for the Junior Subordinated Debentures.
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For a description of DTC and DTC's book-entry system, see "Description of
Preferred Securities -- Book-Entry Only Issuance; The Depository Trust Company."
As of the date of this prospectus supplement, the description herein of DTC's
book-entry system and DTC's practices as they relate to purchases, transfers,
notices and payments with respect to the Preferred Securities apply in all
material respects to any debt obligations represented by one or more Global
Securities held by DTC. The Company may appoint a successor to DTC or any
successor depositary in the event DTC or such successor depositary is unable or
unwilling to continue as a depositary for the Global Securities.
None of the Company, the Indenture Trustee, any paying agent and any other
agent of the Company or the Indenture Trustee 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 for such Junior
Subordinated Debentures or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
A Global Security shall be exchangeable for Junior Subordinated Debentures
registered in the names of persons other than the depositary or its nominee only
if (i) the depositary notifies the Company that it is unwilling or unable to
continue as a depositary for such Global Security and no successor depositary
shall have been appointed; (ii) the depositary, at any time, ceases to be a
clearing agency registered under the Exchange Act at which time the depositary
is required to be so registered to act as such depositary and no successor
depositary shall have been appointed; (iii) the Company, in its sole discretion,
determines that such Global Security shall be so exchangeable; or (iv) there
shall have occurred an Indenture Event of Default with respect to such Junior
Subordinated Debentures. Any Global Security that is exchangeable pursuant to
the preceding sentence shall be exchangeable for Junior Subordinated Debentures
registered in such names as the depositary shall direct. It is expected that
such instructions will be based upon directions received by the depositary from
its Participants with respect to ownership of beneficial interests in such
Global Security.
RELATIONSHIP BETWEEN THE PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED DEBENTURES AND
THE PREFERRED SECURITIES GUARANTEE
As set forth in the Declaration, the Trust exists for the sole purpose of
(a) issuing and selling the Trust Securities evidencing undivided beneficial
interests in the assets of the Trust and investing the proceeds from such
issuance and sale in the Junior Subordinated Debentures and (b) engaging in such
other activities as are necessary, convenient or incidental thereto.
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debentures, such payments will be sufficient to cover
distributions and other payments due on the Preferred Securities primarily
because (i) the aggregate principal amount of Junior Subordinated Debentures
held as trust assets will be equal to the sum of the aggregate stated
liquidation amount of the Trust Securities; (ii) the interest rate and interest
and other payment dates on the Junior Subordinated Debentures will match the
distribution rate and distribution and other payment dates for the Preferred
Securities; (iii) the Declaration provides that the Company shall pay for all
debts and obligations (other than with respect to the Trust Securities) and all
costs and expenses of the Trust, including any taxes and all costs and expenses
with respect thereto, to which the Trust may become subject, except for United
States withholding taxes; and (iv) the Declaration further provides that the
Trustees shall not cause or permit the Trust, among other things, to engage in
any activity that is not consistent with the limited purposes of the Trust. With
respect to clause (iii) above, however, no assurance can be given that the
Company will have sufficient resources to enable it to pay such debts,
obligations, costs and expenses on behalf of the Trust.
Payments of distributions and other payments due on the Preferred
Securities are guaranteed by the Company on a subordinated basis as and to the
extent set forth under "Description of the Preferred Securities Guarantees" in
the accompanying prospectus. If the Company does not make interest or other
payments on the Junior Subordinated Debentures, the Trust will not make
distributions or other payments
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on the Preferred Securities. Under the Declaration, if and to the extent the
Company does make interest or other payments on the Junior Subordinated
Debentures, the Property Trustee is obligated to make distributions or other
payments on the Preferred Securities. The Preferred Securities Guarantee is a
full and unconditional guarantee from the time of issuance of the Preferred
Securities, but the Preferred Securities Guarantee covers distributions and
other payments on the Preferred Securities only if and to the extent that the
Company has made a payment to the Property Trustee of interest or principal on
the Junior Subordinated Debentures deposited in the Trust as trust assets.
The Property Trustee will have the power to exercise all rights, powers and
privileges under the Indenture with respect to the Junior Subordinated
Debentures, including its rights as the holder of the Junior Subordinated
Debentures to enforce the Company's obligations under the Junior Subordinated
Debentures upon the occurrence of an Indenture Event of Default, and will also
have the right to enforce the Preferred Securities Guarantee on behalf of the
holders of the Preferred Securities. In addition, the holders of at least a
majority in liquidation amount of the Preferred Securities will have the right
to direct the Property Trustee with respect to certain matters under the
Declaration and the Preferred Securities Guarantee. If the Property Trustee
fails to enforce its rights under the Junior Subordinated Debentures, any holder
of Preferred Securities may, to the extent permitted by applicable law, after a
period of 30 days has elapsed from such holder's written request to the Property
Trustee to enforce such rights, institute a legal proceeding against the Company
to enforce the Property Trustee's rights under the Junior Subordinated
Debentures without first instituting any legal proceeding against the Property
Trustee or any other person or entity. Notwithstanding the foregoing, if an
Event of Default has occurred and is continuing and such event is attributable
to the failure of the Company to pay interest or principal on the Junior
Subordinated Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, the redemption date), then a holder of
Preferred Securities may directly institute suit against the Company for
enforcement of payment to such holder of the principal of or interest on Junior
Subordinated Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities held by such holder on or after
the respective due date specified in the Junior Subordinated Debentures. The
holders of Preferred Securities will not be able to exercise directly against
the Company any other remedy available to the holders of the Junior Subordinated
Debentures unless the Property Trustee first fails to do so. If the Property
Trustee fails to enforce the Preferred Securities Guarantee, to the extent
permitted by applicable law, any holder of Preferred Securities may institute a
legal proceeding directly against the Company to enforce the Property Trustee's
rights under the Preferred Securities Guarantee without first instituting a
legal proceeding against the Trust, the Property Trustee or any other person or
entity. Notwithstanding the foregoing, if the Company has failed to make a
Guarantee Payment (as defined in the accompanying prospectus), a holder of
Preferred Securities may directly institute a proceeding against the Company for
enforcement of such holder's right to receive payment under the Preferred
Securities Guarantee. The Company waives any right or remedy to require that any
action be brought first against the Trust or any other person or entity before
proceeding directly against the Company. See "Description of the Preferred
Securities" and "Description of the Preferred Securities Guarantees" in the
accompanying prospectus.
The above mechanisms and obligations, taken together, provide a full and
unconditional guarantee by the Company of payments due on the Preferred
Securities.
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TAXATION
In the opinion of Cravath, Swaine & Moore, counsel to the Company and the
Trust ("Tax Counsel"), the following are the material United States Federal
income tax consequences of the ownership and disposition of Preferred
Securities. Unless otherwise stated, this summary deals only with Preferred
Securities held as capital assets by holders who acquire the Preferred
Securities upon original issuance ("Initial Holders"). It does not deal with
special classes of holders, such as dealers in securities or currencies, life
insurance companies, persons holding Preferred Securities as part of a straddle
or as part of a hedging or conversion transaction, or persons whose functional
currency is not the United States dollar. This summary is based on the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury Regulations thereunder
and administrative and judicial interpretations thereof as of the date hereof,
all of which are subject to change (possibly on a retroactive basis).
INVESTORS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO THE UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF PREFERRED
SECURITIES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF
ANY STATE, LOCAL OR OTHER TAX LAWS.
CLASSIFICATION OF THE TRUST
In the opinion of Tax Counsel, under current law and assuming full
compliance with the terms of the Declaration, the Trust will be classified for
United States Federal income tax purposes as a grantor trust and not as an
association taxable as a corporation. Accordingly, each holder of Preferred
Securities (a "Securityholder") will be considered the owner of a pro rata
portion of the Junior Subordinated Debentures held by the Trust. Accordingly,
each Securityholder will be required to include in gross income the pro rata
share of income accrued on the Junior Subordinated Debentures.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
In the opinion of Tax Counsel, under current law and assuming full
compliance with the Indenture, the Junior Subordinated Debentures will be
classified for United States Federal income tax purposes as indebtedness of the
Company.
INTEREST AND ORIGINAL ISSUE DISCOUNT
If an Extension Period occurs, the Junior Subordinated Debentures would be
considered to have original issue discount at all times after the beginning of
the first Extension Period, including after the termination of the Extension
Period. In addition, the Company's option to defer the payment of interest on
the Junior Subordinated Debentures during an Extension Period might cause the
Junior Subordinated Debentures to be considered initially issued with original
issue discount. The Company believes, and will take the position, that this
latter result will not arise because of an exception in the Treasury Regulations
that applies when there is only a "remote" likelihood that an Extension Period
will occur. Assuming that the likelihood of an Extension Period is in fact
remote, Tax Counsel believes that this position is correct although there is no
authority directly on point and the IRS could take a contrary position.
If the original issue discount rules apply to the Junior Subordinated
Debentures (either following the occurrence of an Extension Period or
initially), each Securityholder, whether on the cash or accrual method of
accounting, will be required to accrue its pro rata share of original issue
discount into income in accordance with a constant yield method based on the
compounding of interest. As a result, income will be required to be reported by
Securityholders before the receipt of cash attributable to such income, and, in
particular, income will be reported during an Extension Period even though no
cash distributions are being made. If the original issue discount rules apply
for a period during which cash distributions are currently being made, the sum
of the daily accruals of income for a quarterly period for a Securityholder that
purchased the Preferred Securities for their liquidation value will equal the
cash distribution received by the Securityholder for such quarter, assuming no
disposition prior to the record date for such distribution.
S-32
<PAGE> 36
If the original issue discount rules apply, actual distributions of stated
interest will not separately be reported as income. In that case, a
Securityholder's tax basis for the Junior Subordinated Debentures will be
increased by original issue discount accrued into income, and decreased by cash
distributions of interest. If the original issue discount rules do not apply,
stated interest will be includible in a Securityholder's gross income as
ordinary interest income in accordance with such holder's regular method of tax
accounting.
Whether or not the original issue discount rules apply, no portion of the
amounts received on the Preferred Securities will be eligible for the corporate
dividends received deduction.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF PREFERRED
SECURITIES
Under current law, a distribution by the Trust of the Junior Subordinated
Debentures as described under the caption "Description of the Preferred
Securities--Distribution at Company's Option or Upon Special Event" will be
non-taxable and will result in the Securityholder receiving directly such
Securityholder's pro rata share of the Junior Subordinated Debentures previously
held indirectly through the Trust, with a holding period and tax basis equal to
the holding period and adjusted tax basis such Securityholder was considered to
have had in such Securityholder's pro rata share of the underlying Junior
Subordinated Debentures immediately prior to such distribution. If, however, the
Special Event giving rise to the distribution is a Tax Event which results in
the Trust being treated as an association taxable as a corporation, the
distribution would constitute a taxable event to Securityholders.
MARKET DISCOUNT AND BOND PREMIUM
Securityholders other than Initial Holders may be considered to have
acquired their pro rata interest in the Junior Subordinated Debentures with
market discount, acquisition premium or amortizable bond premium. Such holders
are advised to consult their tax advisors as to the income tax consequences of
the acquisition, ownership and disposition of the Preferred Securities.
DISPOSITION OF THE PREFERRED SECURITIES
Upon a sale, exchange or other disposition of the Preferred Securities
(including a distribution of cash in redemption of a Securityholder's Preferred
Securities upon redemption or repayment of the underlying Junior Subordinated
Debentures, but excluding the distribution of Junior Subordinated Debentures), a
Securityholder will be considered to have disposed of all or part of such
Securityholder's pro rata share of the Junior Subordinated Debentures, and will
recognize gain or loss equal to the difference between the amount realized
(other than amounts attributable to accrued but unpaid interest that is not
treated as original issue discount) and the Securityholder's adjusted tax basis
in such Securityholder's pro rata share of the underlying Junior Subordinated
Debentures deemed disposed of. A Securityholder's adjusted tax basis in the
Preferred Securities generally will be its initial purchase price increased by
original issue discount previously includible in such Securityholder's gross
income to the date of disposition and decreased by payments (other than payments
of stated interest that are not treated as original issue discount) received on
the Preferred Securities. Gain or loss will be capital gain or loss (except to
the extent of any accrued interest or market discount not previously included in
income). See "Market Discount and Bond Premium" above. Such gain or loss will be
long-term capital gain or loss if the Preferred Securities have been held for
more than one year.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
individual, corporation, partnership, estate or trust that is, as to the United
States, a non-resident alien individual or a foreign corporation, partnership,
estate or trust.
S-33
<PAGE> 37
Under present United States Federal income tax law:
(i) payments by the Trust or any of its paying agents to any holder of
a Preferred Security who or which is a United States Alien Holder will not
be subject to United States Federal income or withholding tax, provided
that (a) the beneficial owner of the Preferred Security 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; (b) the beneficial owner
of the Preferred Security is not a controlled foreign corporation that is
related to the Company through stock ownership; (c) either (A) the
beneficial owner of the Preferred Security certifies to the Trust or its
agent, under penalties of perjury, that it is not a United States holder
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 Preferred Security certifies to the Trust or
its agent under penalties of perjury that such statement has been received
from the beneficial owner by it or by a Financial Institution between it
and the beneficial owner and furnishes the Trust or its agent with a copy
thereof; and (d) such payments are not effectively connected with the
conduct by the United States Alien Holder of a trade or business in the
United States; and
(ii) A United States Alien Holder of a Preferred Security will not be
subject to United States Federal income or withholding tax on any gain
realized upon the sale or other disposition of a Preferred Security unless
(i) the United States Alien Holder is an individual who is present in the
United States for 183 days or more in the taxable year of disposition, and
certain other conditions apply, or (ii) the gain is effectively connected
with the conduct by the United States Alien Holder of a trade or business
in the United States.
Under recently finalized Treasury Regulations, the certification
requirement referred to in (i)(c) above may also be satisfied with other
documentary evidence for payments made after December 31, 1999 with respect to
an offshore account or through certain foreign intermediaries.
INFORMATION REPORTING TO HOLDERS
The Trust will report the interest paid or the original issue discount that
accrued during the year with respect to the Junior Subordinated Debentures, and
any gross proceeds received by the Trust from the retirement or redemption of
the Junior Subordinated Debentures, annually to the holders of record of the
Preferred Securities and the IRS. The Trust currently intends to deliver such
reports to holders of record prior to January 31 following each calendar year.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, Preferred Securities may
be subject to a "backup" withholding tax of 31% unless the Securityholder
complies with certain identification requirements. Any withheld amounts will
generally be allowed as a credit against the Securityholder's United States
Federal income tax, provided the required information is timely filed with the
IRS.
POSSIBLE TAX LAW CHANGES
From time to time, the Clinton Administration has proposed certain tax law
changes that would, among other things, generally deny interest deductions to a
corporate issuer if the debt instrument has a term exceeding 15 years (certain
proposed tax law changes would have denied interest deductions if the debt
instrument had a term exceeding 20 years) and if such debt instrument is not
reflected as indebtedness on such issuer's consolidated balance sheet. Although
there can be no assurance as to future proposals, prior proposals if enacted
into law would not have applied to securities with characteristics similar to
the Junior Subordinated Debentures which were already issued and outstanding at
the time such legislation was proposed. However, if a future proposal of this
sort were to become effective in a form applicable to already issued and
outstanding securities, the Company could be precluded from deducting interest
on the Junior Subordinated Debentures. Enactment of any such proposal might in
turn give rise to
S-34
<PAGE> 38
a Tax Event which, if the Company were to exercise its optional right to redeem
the Junior Subordinated Debentures, would thereby result in a mandatory
redemption of the Preferred Securities, as described under "Description of the
Preferred Securities -- Mandatory Redemption."
Prospective investors should also be aware that a petition was recently
filed in the United States Tax Court as a result of a challenge by the IRS of a
taxpayer's treatment as indebtedness of a security issued with characteristics
similar to the Junior Subordinated Debentures. If this matter is litigated to a
conclusion and the IRS's position on this matter is sustained, such a judicial
determination could constitute a Tax Event which could result in an early
redemption of the Preferred Securities. See "Description of the Preferred
Securities -- Distribution at Company's Option or Upon Special Event; Tax Event
Redemption."
S-35
<PAGE> 39
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
dated the date hereof (the "Underwriting Agreement"), the Company and the Trust
have agreed that the Trust will sell to each of the Underwriters named below,
and each of the Underwriters, for whom PaineWebber Incorporated ("PaineWebber")
is acting as representative (the "Representative"), has severally agreed to
purchase from the Trust, the number of Preferred Securities set forth opposite
its name below.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER PREFERRED SECURITIES
----------- --------------------
<S> <C>
PaineWebber Incorporated....................................
---------
Total.............................................
=========
</TABLE>
In the Underwriting Agreement, the several Underwriters have agreed,
subject to the terms and conditions set forth therein, to purchase all the
Preferred Securities offered hereby if any Preferred Securities are purchased by
the Underwriters. In the event of default by an Underwriter, the Underwriting
Agreement provides that, in certain circumstances, the purchase commitment of
the nondefaulting Underwriters may be increased or the Underwriting Agreement
may be terminated.
The Company has been advised by the Representative that the Underwriters
propose initially to offer the Preferred Securities to the public at the public
offering price set forth on the cover page of this prospectus supplement, and to
certain dealers at such price less a concession not in excess of $0. per
Preferred Security. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of $0. per Preferred Security to certain brokers and
dealers. After the initial public offering, the public offering price and such
concessions may be changed.
The Company estimates that it will incur $ in offering expenses related
to registration and filing fees, printing and engraving expenses, rating agency
fees, and professional services fees in connection with this offering.
In view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Junior Subordinated Debentures of the
Company, the Underwriting Agreement provides that the Company will pay as
Underwriters' Compensation for the Underwriters' arranging the investment
therein of such proceeds $0. per Preferred Security or $ in the
aggregate ($ in the aggregate if the Underwriters' over-allotment
option is exercised in full) for the accounts of the several Underwriters.
Pursuant to the Underwriting Agreement, the Trust has granted to the
Underwriters an option, exercisable for 30 days from the date hereof, to
purchase up to additional Preferred Securities at the public
offering price set forth on the cover page hereof. The Underwriters may exercise
such option to purchase solely for the purpose of covering over-allotments, if
any, made in connection with the offering. The Company will pay Underwriters'
Compensation in the amount per Preferred Security set forth above with respect
to such additional Preferred Securities. To the extent such option is exercised,
each Underwriter will become obligated, subject to certain conditions, to
purchase approximately the same percentage of such additional Preferred
Securities as the number set forth next to such Underwriter's name in the
preceding table bears to the total number of Preferred Securities offered by the
Underwriters hereby.
S-36
<PAGE> 40
During a period of 30 days from the date of this prospectus supplement,
neither the Trust nor the Company will, without the prior written consent of the
Representative, directly or indirectly, sell, offer to sell, grant any option
for the sale of, or otherwise dispose of, any Preferred Securities, any security
convertible into or exchangeable into or exercisable for Preferred Securities or
Junior Subordinated Debentures or any debt securities substantially similar to
the Junior Subordinated Debentures or equity securities substantially similar to
the Preferred Securities (except for the Junior Subordinated Debentures and the
Preferred Securities offered hereby).
Until the distribution of the Preferred Securities is completed, rules of
the Commission may limit the ability of the Underwriters and certain selling
group members to bid for and purchase the Preferred Securities. As an exception
to these rules, the Representative is permitted to engage in certain
transactions that stabilize the price of the Preferred Securities. Such
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the Preferred Securities.
If the Underwriters create a short position in the Preferred Securities in
connection with the offering, i.e., if they sell more shares of Preferred
Securities than are set forth on the cover page of this prospectus supplement,
the Representative may reduce that short position by purchasing the Preferred
Securities in the open market.
The Representative may also impose a penalty bid on certain Underwriters
and selling group members. This means that if the Representative purchases
shares of Preferred Securities in the open market to reduce the Underwriters'
short position or to stabilize the price of the Preferred Securities, they may
reclaim the amount of the selling concession from the Underwriters and selling
group members who sold those shares as part of the offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.
None of the Company, the Trust or any of the Underwriters makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the Preferred
Securities. In addition, none of the Company, the Trust or any of the
Underwriters makes any representation that the Representative will engage in
such transactions or that such transactions, once commenced, will not be
discontinued without notice.
Application will be made to list the Preferred Securities on the NYSE. The
NYSE symbol for the Preferred Securities is expected to be " ." If such
listing is approved, trading of the Preferred Securities on the NYSE is expected
to commence within a 30-day period after the date of this prospectus supplement.
PaineWebber has advised the Trust that it intends to make a market in the
Preferred Securities. PaineWebber will have no obligation to make a market in
the Preferred Securities, however, and may cease market making activities, if
commenced, at any time.
Prior to this offering, there has been no public market for the Preferred
Securities. In order to meet one of the requirements for listing the Preferred
Securities on the NYSE, the Underwriters will represent that, at the time of the
consummation of the offering of the Preferred Securities, there will be at least
400 holders of Preferred Securities.
The Representative is a wholly-owned subsidiary of the Company. The
underwriting of the Preferred Securities offered hereby is being conducted in
accordance with Rule 2720 of the NASD Conduct Rules.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or contribute to payments which the Underwriters may be required to make in
respect thereof.
S-37
<PAGE> 41
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED NOVEMBER 12, 1998
PROSPECTUS
PAINE WEBBER GROUP INC.
JUNIOR SUBORDINATED DEBT SECURITIES
PWG CAPITAL TRUST III
PWG CAPITAL TRUST IV
PWG CAPITAL TRUST V
PREFERRED SECURITIES FULLY AND UNCONDITIONALLY GUARANTEED BY
PAINE WEBBER GROUP INC.
Paine Webber Group Inc., also called Paine Webber Group or the Company, may
offer, from time to time, junior subordinated debt securities consisting of
debentures, notes or other types of indebtedness in one or more series, and in
amounts, at prices and on terms to be determined at or prior to the time of any
offering. The junior subordinated debt securities will be unsecured obligations
of Paine Webber Group. Paine Webber Group's obligations under the junior
subordinated debt securities will be subject to payment on its Senior
Indebtedness (as defined in this prospectus).
PWG Capital Trust III, PWG Capital Trust IV and PWG Capital Trust V are
business trusts formed under the laws of the State of Delaware. Each of these
PWG Trusts may offer and sell, from time to time, preferred securities
representing undivided beneficial interests in the assets of such PWG Trust. The
payment of periodic cash distributions and payments on liquidation of such PWG
Trust and on redemption of preferred securities of such PWG Trust will be
guaranteed by Paine Webber Group on a subordinated basis and as described in
this prospectus under "Description of Preferred Securities Guarantees." The
guarantees cover payments only if and to the extent that such PWG Trust has
funds available for payment.
Each PWG Trust will use all proceeds received from the sale of its trust
securities to purchase junior subordinated debt securities from Paine Webber
Group. Since the sole asset of each PWG Trust will be the junior subordinated
debt securities of Paine Webber Group issued to it, such Trust will not have
funds available for payment if Paine Webber Group fails to make a corresponding
payment under the junior subordinated debt securities.
We will provide specific terms of the junior subordinated debt securities
of Paine Webber Group and the preferred securities of any PWG Trust in
supplements to this prospectus. The prospectus supplement may also add, update
or change information contained in this prospectus. You should read this
prospectus and any prospectus supplement carefully before you invest. By this
prospectus, we may offer up to $706,250,000 of securities.
---------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
---------------------
This prospectus may not be used to consummate sales of offered securities
unless accompanied by a prospectus supplement.
Our affiliates, including Paine Webber Incorporated and Paine Webber
International (U.K.) Ltd., may use this prospectus and the related prospectus
supplement in connection with offers and sales of the offered securities in the
secondary market. These affiliates may act as principal or agent in those
transactions. Secondary market sales will be made at negotiated prices related
to market prices at the time of sale.
---------------------
The date of this prospectus is , 1998.
<PAGE> 42
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Our
Commission filings are available to the public over the Internet at the
Commission's web site at http://www.sec.gov. You may also read and copy any
document we file at the Commission's public reference rooms at 450 Fifth Street,
NW, 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.
Please call the Commission at 1-800-SEC-0330 for further information on the
public reference rooms.
This prospectus is a part of the Registration Statement on Form S-3 and the
amendments and exhibits thereto (the "Registration Statement") filed with the
Commission. This prospectus does not contain all of the information in the
Registration Statement. Please refer to the Registration Statement and its
exhibits for further information regarding Paine Webber Group, the PWG Trusts
and the offered securities.
We have not included or incorporated by reference separate financial
statements of any of the PWG Trusts. Paine Webber Group and the PWG Trusts do
not consider that such financial statements would be material to holders of the
preferred securities because:
- all voting securities of each PWG Trust will be owned directly or
indirectly by Paine Webber Group;
- each PWG Trust is a special purpose entity, has no operating history, has
no independent operations and is not engaged in, and does not propose to
engage in, any activity other than issuing trust securities representing
undivided beneficial interests in the assets of such PWG Trust and
investing the proceeds in junior subordinated debt securities issued by
Paine Webber Group; and
- the obligations of each PWG Trust under the preferred securities of such
PWG Trust will be fully and unconditionally guaranteed by the Company as
described in this prospectus.
Each holder of preferred securities of a PWG Trust will be furnished
annually with unaudited financial statements of such PWG Trust as soon as
available after the end of such PWG Trust's fiscal year.
DOCUMENTS INCORPORATED BY REFERENCE
The Commission allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the Commission will automatically update and supersede this information. We
incorporate by reference the documents of Paine Webber Group listed below and
any future filings made with the Commission under Sections 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934, as amended, until we sell all of
the securities.
- Annual Report on Form 10-K for the year ended December 31, 1997;
- Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998; and
- Current Reports on Form 8-K, filed July 15, 1998 and October 13, 1998.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address: Assistant Secretary, Paine Webber Group
Inc., 1285 Avenue of the Americas, New York, New York 10019, telephone (212)
713-3224.
You should rely only on the information contained or incorporated by
reference in this prospectus or any prospectus supplement. We have not
authorized any other person to provide you with different information. We are
not making an offer of these securities in any jurisdiction where the offer is
not permitted. You should assume that the information appearing in this
prospectus or any prospectus
2
<PAGE> 43
supplement, as well as information we previously filed with the Commission and
incorporated by reference, is accurate as of the date on the front of those
documents only.
USE OF PROCEEDS
Each PWG Trust will use all proceeds received from the sale of its trust
securities to purchase junior subordinated debt securities from the Company.
Unless otherwise set forth in the applicable prospectus supplement,
proceeds from the sale of junior subordinated debt securities will be used by
the Company 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.
RATIOS OF EARNINGS
TO FIXED CHARGES AND EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred stock dividends for the Company
for the periods indicated.
<TABLE>
<CAPTION>
NINE MONTHS
YEARS ENDED DECEMBER 31 ENDED
------------------------------------ SEPTEMBER 30,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- -------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges.......... 1.3 1.0 1.1 1.3 1.2 1.2
Ratio of earnings to combined fixed charges
and preferred stock dividends............. 1.3 1.0 1.0 1.2 1.2 1.2
</TABLE>
For purposes of computing the ratio of earnings to fixed charges and the
ratio of earnings to combined fixed charges and preferred stock dividends,
"earnings" consist of earnings before taxes on income and fixed charges and
"fixed charges" consist of interest expense incurred on securities sold under
repurchase agreements, short-term and long-term borrowings, preferred trust
securities and that portion of rental expense estimated to be representative of
the interest factor.
3
<PAGE> 44
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 17,424 people in 299 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 Incorporated, 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 National 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-fee
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
850 companies in 61 industries.
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 activity, 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.
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
4
<PAGE> 45
or fines, and the suspension or expulsion of a firm, its officers or employees.
The Company's businesses are regulated by various agencies, including the
Commission, the New York Stock Exchange (the "NYSE"), the Commodity Futures
Trading Commission, the National Association of Securities Dealers, Inc. (the
"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.
THE PWG TRUSTS
Each of PWG Capital Trust III and PWG Capital Trust IV is a business trust
formed on October 7, 1996 and PWG Capital Trust V is a business trust formed on
November 10, 1998, each under the Delaware Business Trust Act (the "Business
Trust Act") pursuant to a separate declaration of trust among the Trustees (as
defined herein) of such PWG Trust and the Company and the filing of a
certificate of trust with the Secretary of State of the State of Delaware. Such
declaration will be amended and restated in its entirety (as so amended and
restated, the "Declaration") substantially in the form filed as an exhibit to
the Registration Statement of which this prospectus forms a part, as of the date
the preferred securities of such PWG Trust are initially issued. Each
Declaration will be qualified under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
This description summarizes the material terms of the Declarations and is
qualified in its entirety by reference to the form of Declaration, which has
been filed as an exhibit to the Registration Statement of which this prospectus
is a part, and the Trust Indenture Act.
TRUST SECURITIES
Upon issuance of any preferred securities ("Preferred Securities") by a PWG
Trust, the holders thereof will own all the issued and outstanding Preferred
Securities of such PWG Trust. The Company will acquire securities representing
common undivided beneficial interests in the assets of each PWG Trust (the
"Common Securities" and, together with the Preferred Securities, the "Trust
Securities") in an amount equal to at least 3% of the total capital of such PWG
Trust and will own, directly or indirectly, all the issued and outstanding
Common Securities of each PWG Trust. The Preferred Securities and the Common
Securities will rank pari passu with each other and will have equivalent terms;
provided that (i) if a Declaration Event of Default (as defined herein) under
the Declaration of a PWG Trust occurs and is continuing, the holders of
Preferred Securities of such PWG Trust will have a priority over holders of the
Common Securities of such PWG Trust with respect to payments in respect of
distributions and payments upon liquidation, redemption and maturity and (ii)
holders of Common Securities have the exclusive right (subject to the terms of
the Declaration) to appoint, remove or replace the Trustees and to increase or
decrease the number of Trustees. Each PWG Trust exists for the purpose of (a)
issuing its Preferred Securities, (b) issuing its Common Securities to the
Company, (c) investing the proceeds from the sale of the Trust Securities in
junior subordinated debt securities of the Company ("Junior Subordinated Debt
Securities") and (d) engaging in only such other activities as are necessary,
convenient or incidental thereto. The rights of the holders of the Preferred
Securities, including economic rights, rights to information and voting rights,
are set forth in the applicable Declaration, the Business Trust Act and the
Trust Indenture Act.
POWERS AND DUTIES OF TRUSTEES
The number of trustees (the "Trustees") of each PWG Trust shall initially
be five. Three of such Trustees (the "Regular Trustees") are individuals who are
employees or officers of the Company. The fourth such trustee will be The Chase
Manhattan Bank, which is unaffiliated with the Company and which will serve as
the property trustee (the "Property Trustee") and act as the indenture trustee
for purposes of
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the Trust Indenture Act. The fifth such trustee is Chase Manhattan Bank
Delaware, an affiliate of The Chase Manhattan Bank that has its principal place
of business in the State of Delaware (the "Delaware Trustee"). Pursuant to each
Declaration, legal title to the Junior Subordinated Debt Securities purchased by
a PWG Trust will be held by the Property Trustee for the benefit of the holders
of the Trust Securities of such PWG Trust, and the Property Trustee will have
the power to exercise all rights, powers and privileges under the Indenture (as
defined under "Description of the Junior Subordinated Debt Securities") with
respect to such Junior Subordinated Debt Securities. In addition, the Property
Trustee will maintain exclusive control of a segregated non-interest-bearing
bank account (the "Property Account") to hold all payments in respect of the
Junior Subordinated Debt Securities purchased by a PWG Trust for the benefit of
the holders of Trust Securities. The Property Trustee will promptly make
distributions to the holders of the Trust Securities of a PWG Trust out of funds
from the Property Account of such PWG Trust. The preferred securities guarantees
by PaineWebber Group (the "Preferred Securities Guarantees") are separately
qualified under the Trust Indenture Act and will be held by The Chase Manhattan
Bank, acting in its capacity as indenture trustee with respect thereto, for the
benefit of the holders of the applicable Preferred Securities. As used in this
prospectus and any accompanying prospectus supplement, the term "Property
Trustee" with respect to a PWG Trust refers to The Chase Manhattan Bank acting
either in its capacity as a Trustee under the relevant Declaration and the
holder of legal title to the Junior Subordinated Debt Securities purchased by
such PWG Trust or in its capacity as indenture trustee under, and the holder of,
the applicable Preferred Securities Guarantee, as the context may require. The
Company, as the direct or indirect owner of all the Common Securities of each
PWG Trust, will have the exclusive right (subject to the terms of the related
Declaration) to appoint, remove or replace Trustees and to increase or decrease
the number of Trustees, provided that the number of Trustees shall be at least
five (unless the Trustee that acts as the Property Trustee also acts as the
Delaware Trustee, in which case the number of Trustees shall be at least three)
and the majority of Trustees shall be Regular Trustees. The term of a PWG Trust
will be set forth in the applicable prospectus supplement, but may terminate
earlier as provided in the Declaration of such PWG Trust.
The duties and obligations of the Trustees of a PWG Trust shall be governed
by the Declaration of such PWG Trust. Under its Declaration, each PWG Trust
shall not, and the Trustees of such PWG Trust shall cause such PWG Trust not to,
engage in any activity other than in connection with the purposes of such PWG
Trust or other than as required or authorized by such Declaration. In
particular, each PWG Trust shall not, and the Trustees of such PWG Trust shall
cause such PWG Trust not to, (a) invest any proceeds received by such PWG Trust
from holding the Junior Subordinated Debt Securities purchased by such PWG
Trust, but shall promptly distribute from the Property Account of such PWG Trust
all such proceeds to holders of its Trust Securities pursuant to the terms of
the Declaration of such PWG Trust and of such Trust Securities; (b) acquire any
assets other than as expressly provided in such Declaration; (c) possess trust
property for other than a trust purpose; (d) make any loans, other than loans
represented by such Junior Subordinated Debt Securities; (e) possess any power
or otherwise act in such a way as to vary the assets of such PWG Trust or the
terms of its Trust Securities in any way whatsoever; (f) issue any securities or
other evidences of beneficial ownership of, or beneficial interests in, such PWG
Trust other than its Trust Securities; (g) incur any indebtedness for borrowed
money or (h)(i) direct the time, method and place of exercising any trust or
power conferred upon the Indenture Trustee (as defined under "Description of the
Junior Subordinated Debt Securities") with respect to the Junior Subordinated
Debt Securities deposited in such PWG Trust as trust assets, (ii) waive any past
default that is waivable under the applicable Indenture, (iii) exercise any
right to rescind or annul any declaration that the principal of all of the
Junior Subordinated Debt Securities deposited in such PWG Trust as trust assets
shall be due and payable or (iv) consent to any amendment, modification or
termination of such Indenture or such Junior Subordinated Debt Securities, in
each case where such consent shall be required, unless in the case of this
clause (h) the Property Trustee shall have received an unqualified opinion of
nationally recognized independent tax counsel recognized as expert in such
matters to the effect that such action will not cause such PWG Trust to be
classified for United States Federal income tax purposes as an association
taxable as a corporation or a partnership and that such PWG Trust will continue
to be classified as a grantor trust for United States Federal income tax
purposes.
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BOOKS AND RECORDS
The books and records of each PWG Trust will be maintained at the principal
office of such PWG Trust and will be open for inspection by a holder of
Preferred Securities of such PWG Trust or such holder's representative for any
purpose reasonably related to such holder's interest in such PWG Trust during
normal business hours. Each holder of Preferred Securities will be furnished
annually with unaudited financial statements of the applicable PWG Trust as soon
as available after the end of such PWG Trust's fiscal year.
VOTING
Except as provided under the Business Trust Act, the applicable Declaration
and the Trust Indenture Act, holders of Preferred Securities will have no voting
rights.
THE PROPERTY TRUSTEE
The Property Trustee, for the benefit of the holders of the Trust
Securities of a PWG Trust, is authorized under each Declaration to exercise all
rights under the Indenture with respect to the Junior Subordinated Debt
Securities deposited in such PWG Trust as trust assets, including its rights as
the holder of such Junior Subordinated Debt Securities to enforce the Company's
obligations under such Junior Subordinated Debt Securities upon the occurrence
of an Indenture Event of Default. The Property Trustee is also authorized to
enforce the rights of holders of Preferred Securities of a PWG Trust under the
related Preferred Securities Guarantee. If any PWG Trust's failure to make
distributions on the Preferred Securities of such PWG Trust is a consequence of
the Company's exercise of any right under the terms of the Junior Subordinated
Debt Securities deposited in such PWG Trust as trust assets to extend the
interest payment period for such Junior Subordinated Debt Securities, the
Property Trustee will have no right to enforce the payment of distributions on
such Preferred Securities until a Declaration Event of Default (as defined
herein) shall have occurred. Holders of at least a majority in liquidation
amount of the Preferred Securities of a PWG Trust will have the right to direct
the Property Trustee for such PWG Trust with respect to certain matters under
the Declaration for such PWG Trust and the related Preferred Securities
Guarantee. If the Property Trustee fails to enforce its rights under the
Indenture or fails to enforce the applicable Preferred Securities Guarantee, a
holder of Preferred Securities of a PWG Trust may institute a legal proceeding
against the Company to enforce such rights or such Preferred Securities
Guarantee, as the case may be, as described under "Description of the Preferred
Securities" and "Description of the Preferred Securities Guarantees -- Status of
the Preferred Securities Guarantees."
DISTRIBUTIONS
Pursuant to each Declaration, distributions on the Preferred Securities of
a PWG Trust must be paid on the dates payable to the extent that the Property
Trustee has cash on hand in the Property Account of such PWG Trust to permit
such payment. The funds available for distribution to the holders of the
Preferred Securities of a PWG Trust will be limited to payments received by the
Property Trustee in respect of the Junior Subordinated Debt Securities that are
deposited in such PWG Trust as trust assets. If the Company does not make
interest payments on the Junior Subordinated Debt Securities deposited in a PWG
Trust as trust assets, the Property Trustee will not make distributions on the
Preferred Securities of such PWG Trust. Under the Declaration, if and to the
extent the Company does make interest payments on the Junior Subordinated Debt
Securities deposited in a PWG Trust as trust assets, the Property Trustee is
obligated to make distributions on the Trust Securities of such PWG Trust on a
pro rata basis (as defined below). The payment of distributions on the Preferred
Securities of a PWG Trust is guaranteed by the Company on a subordinated basis
as and to the extent set forth under "Description of the Preferred Securities
Guarantees." A Preferred Securities Guarantee is a full and unconditional
guarantee from the time of issuance of the Preferred Securities of a PWG Trust,
but such Preferred Securities Guarantee covers distributions and other payments
on such Preferred Securities only if and to the extent that the Company has made
a payment to the Property Trustee of interest or principal on the Junior
Subordinated Debt Securities deposited in such PWG Trust as trust assets. As
used in this
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prospectus, the term "pro rata basis" shall mean pro rata to each holder of
Trust Securities of a PWG Trust according to the aggregate liquidation amount of
the Trust Securities of such PWG Trust held by the relevant holder in relation
to the aggregate liquidation amount of all Trust Securities of such PWG Trust
outstanding unless, in relation to a payment, a Declaration Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each holder of the
Preferred Securities of such PWG Trust pro rata according to the aggregate
liquidation amount of the Preferred Securities held by the relevant holder in
relation to the aggregate liquidation amount of all the Preferred Securities of
such PWG Trust outstanding, and only after satisfaction of all amounts owed to
the holders of such Preferred Securities, to each holder of Common Securities of
such PWG Trust pro rata according to the aggregate liquidation amount of such
Common Securities held by the relevant holder in relation to the aggregate
liquidation amount of all Common Securities of such PWG Trust outstanding.
EVENTS OF DEFAULT
If an Indenture Event of Default occurs and is continuing with respect to
Junior Subordinated Debt Securities deposited in a PWG Trust as trust assets, an
Event of Default under the Declaration (a "Declaration Event of Default") of
such PWG Trust will occur and be continuing with respect to any outstanding
Trust Securities of such PWG Trust. In such event, each Declaration provides
that the holders of Common Securities of the applicable PWG Trust will be deemed
to have waived any such Declaration Event of Default with respect to such Common
Securities until all Declaration Events of Default with respect to the Preferred
Securities of such PWG Trust have been cured or waived. Until all such
Declaration Events of Default with respect to the Preferred Securities of such
PWG Trust have been so cured or waived, the Property Trustee will be deemed to
be acting solely on behalf of the holders of the Preferred Securities of such
PWG Trust and only the holders of such Preferred Securities will have the right
to direct the Property Trustee with respect to certain matters under such
Declaration and consequently under the Indenture. In the event that any
Declaration Event of Default with respect to the Preferred Securities of a PWG
Trust is waived by the holders of the Preferred Securities of such PWG Trust as
provided in the Declaration of such PWG Trust, the holders of Common Securities
of such PWG Trust pursuant to such Declaration have agreed that such waiver also
constitutes a waiver of such Declaration Event of Default with respect to such
Common Securities for all purposes under such Declaration without any further
act, vote or consent of the holders of such Common Securities.
RECORD HOLDERS
Each Declaration provides that the Trustees of the applicable PWG Trust may
treat the person in whose name a certificate representing Preferred Securities
of such PWG Trust is registered on the books and records of such PWG Trust as
the sole holder thereof and of the Preferred Securities represented thereby for
purposes of receiving distributions and for all other purposes and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest in
such certificate or in the Preferred Securities represented thereby on the part
of any person, whether or not such Trustees shall have actual or other notice
thereof. Preferred Securities will be issued in fully registered form. Unless
otherwise specified in a prospectus supplement, Preferred Securities will be
represented by a global certificate registered on the books and records of such
PWG Trust in the name of a depositary (the "Depositary") named in an
accompanying prospectus supplement or its nominee. Under each Declaration:
(i) the applicable PWG Trust and the Trustees thereof shall be
entitled to deal with the Depositary for all purposes, including the
payment of distributions and receiving approvals, votes or consents under
such Declaration and, except as set forth in such Declaration with respect
to the Property Trustee, shall have no obligation to persons owning a
beneficial interest in Preferred Securities of such PWG Trust ("Preferred
Security Beneficial Owners") registered in the name of and held by the
Depositary or its nominee; and
(ii) the rights of Preferred Security Beneficial Owners shall be
exercised only through the Depositary and shall be limited to those
established by law and agreements between such Preferred
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Security Beneficial Owners and the Depositary and/or its participants. With
respect to Preferred Securities registered in the name of and held by the
Depositary or its nominee, all notices and other communications required under
such Declaration shall be given to, and all distributions on such Preferred
Securities shall be given or made to, the Depositary.
The specific terms of the depositary arrangement with respect to the Preferred
Securities of a PWG Trust will be disclosed in the applicable prospectus
supplement.
DEBTS AND OBLIGATIONS
In each Declaration, the Company has agreed to pay for all debts and
obligations (other than with respect to the Trust Securities of the applicable
PWG Trust) and all costs and expenses of such PWG Trust, including the fees and
expenses of its Trustees and any taxes and all costs and expenses with respect
thereto, to which such PWG Trust may become subject, except for United States
withholding taxes. The foregoing obligations of the Company under each
Declaration are for the benefit of, and shall be enforceable by, any person to
whom any such debts, obligations, costs, expenses and taxes are owed (a
"Creditor") whether or not such Creditor has received notice thereof. Any such
Creditor may enforce such obligations of the Company directly against the
Company and the Company will irrevocably waive any right or remedy to require
that any such Creditor take any action against any PWG Trust or any other person
before proceeding against the Company. The Company will agree in each
Declaration to execute such additional agreements as may be necessary or
desirable in order to give full effect to the foregoing.
The business address of each PWG Trust is c/o PaineWebber Group Inc., 1285
Avenue of the Americas, New York, NY 10019, telephone number (212) 713-2000.
DESCRIPTION OF THE PREFERRED SECURITIES
Each PWG Trust may issue, from time to time, only one series of Preferred
Securities having terms described in the prospectus supplement relating thereto.
The Declaration of each PWG Trust authorizes the Regular Trustees of such PWG
Trust to issue on behalf of such PWG Trust one series of Preferred Securities.
Each Declaration will be qualified as an indenture under the Trust Indenture
Act. The Preferred Securities will have such terms, including distributions,
redemption, voting, liquidation rights and such other preferred, deferred or
other special rights or such restrictions, as shall be set forth in the related
Declaration or made part of such Declaration by the Trust Indenture Act.
Reference is made to the prospectus supplement relating to the Preferred
Securities of a PWG Trust for specific terms, including (i) the specific
designation of such Preferred Securities, (ii) the number of Preferred
Securities issued by such PWG Trust, (iii) the annual distribution rate (or
method of calculation thereof) for Preferred Securities issued by such PWG
Trust, the date or dates upon which such distributions shall be payable and the
record date or dates for the payment of such distributions, (iv) whether
distributions on Preferred Securities issued by such PWG Trust shall be
cumulative, and, in the case of Preferred Securities having such cumulative
distribution rights, the date or dates or method of determining the date or
dates from which distributions on Preferred Securities issued by such PWG Trust
shall be cumulative, (v) the amount or amounts which shall be paid out of the
assets of such PWG Trust to the holders of Preferred Securities of such PWG
Trust upon voluntary or involuntary dissolution, winding-up or termination of
such PWG Trust, (vi) the obligation or right, if any, of such PWG Trust to
purchase or redeem Preferred Securities issued by such PWG Trust and the price
or prices at which, the period or periods within which and the terms and
conditions upon which Preferred Securities issued by such PWG Trust shall or may
be purchased or redeemed, in whole or in part, pursuant to such obligation or
right, (vii) the voting rights, if any, of Preferred Securities issued by such
PWG Trust in addition to those required by law, including the number of votes
per Preferred Security and any requirement for the approval by the holders of
Preferred Securities, or of Preferred Securities issued by one or more PWG
Trusts, or of both, as a condition to specified actions or amendments to the
Declaration of such PWG Trust, (viii) terms for any conversion or exchange into
other securities and (ix) any other relevant rights, preferences, privileges,
limitations or restrictions of Preferred Securities issued by such PWG Trust
consistent with the Declaration of such
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PWG Trust or with applicable law. All Preferred Securities offered hereby will
be guaranteed by the Company as and to the extent set forth below under
"Description of the Preferred Securities Guarantees." Certain United States
Federal income tax considerations applicable to any offering of Preferred
Securities will be described in the prospectus supplement relating thereto.
In connection with the issuance of Preferred Securities, each PWG Trust
will issue one series of Common Securities. The Declaration of each PWG Trust
authorizes the Regular Trustees of such PWG Trust to issue on behalf of such PWG
Trust one series of Common Securities having such terms, including
distributions, redemption, voting, liquidation rights and such other rights or
such restrictions, as shall be set forth therein. The terms of the Common
Securities issued by a PWG Trust will be substantially identical to the terms of
the Preferred Securities issued by such PWG Trust and the Common Securities will
rank pari passu and payments will be made thereon on a pro rata basis with the
Preferred Securities except that, if a Declaration Event of Default occurs and
is continuing, the rights of the holders of such Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and maturity
will be subordinated to the rights of the holders of such Preferred Securities.
Except in certain limited circumstances, the Common Securities issued by a PWG
Trust will also carry the right to vote and to appoint, remove or replace any of
the Trustees of such PWG Trust. All the Common Securities of a PWG Trust will be
directly or indirectly owned by the Company.
If a Declaration Event of Default with respect to any PWG Trust occurs and
is continuing, then the holders of Preferred Securities of such PWG Trust would
rely on the enforcement by the Property Trustee of its rights as a holder of the
Junior Subordinated Debt Securities deposited in such PWG Trust against the
Company. In addition, the holders of a majority in liquidation amount of such
Preferred Securities will have the right to direct the time, method, and place
of conducting any proceeding for any remedy available to the Property Trustee or
to direct the exercise of any trust or power conferred upon the Property Trustee
under the Declaration of such PWG Trust, including the right to direct the
Property Trustee to exercise the remedies available to it as a holder of such
Junior Subordinated Debt Securities. If the Property Trustee fails to enforce
its rights under such Junior Subordinated Debt Securities deposited in such PWG
Trust, any holder of such Preferred Securities may, to the extent permitted by
applicable law, after a period of 30 days has elapsed from such holder's written
request, institute a legal proceeding against the Company to enforce the
Property Trustee's rights under such Junior Subordinated Debt Securities without
first instituting any legal proceeding against the Property Trustee or any other
person or entity. If a Declaration Event of Default with respect to any PWG
Trust occurs and is continuing and such event is attributable to the failure of
the Company to pay interest or principal on the Junior Subordinated Debt
Securities on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then a holder of Preferred
Securities of such PWG Trust may also directly institute a proceeding for
enforcement of payment to such holder of the principal of or interest on such
Junior Subordinated Debt Securities having a principal amount equal to the
aggregate liquidation amount of such Preferred Securities held by such holder (a
"Direct Action") on or after the respective due date specified in such Junior
Subordinated Debt Securities without first (i) directing the Property Trustee to
enforce the terms of such Junior Subordinated Debt Securities or (ii)
instituting a legal proceeding against the Company to enforce the Property
Trustee's rights under such Junior Subordinated Debt Securities. In connection
with such Direct Action, the Company will be subrogated to the rights of such
holder of such Preferred Securities under such Declaration to the extent of any
payment made by the Company to such holder of such Preferred Securities in such
Direct Action. The holders of Preferred Securities of a PWG Trust will not be
able to exercise directly any other remedy available to the holders of the
Junior Subordinated Debt Securities unless the Property Trustee first fails to
do so.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
Set forth below is a summary of information concerning the Preferred
Securities Guarantees that will be executed and delivered by the Company for the
benefit of the holders from time to time of Preferred Securities of a PWG Trust.
Each Preferred Security Guarantee will be separately qualified under the Trust
Indenture Act and will be held by The Chase Manhattan Bank, acting in its
capacity as indenture trustee
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with respect thereto (the "Guarantee Trustee"), for the benefit of holders of
the Preferred Securities of the applicable PWG Trust. The terms of each
Preferred Securities Guarantee will be those set forth in such Preferred
Securities Guarantee and those made part of such Preferred Securities Guarantee
by the Trust Indenture Act. This description summarizes the material terms of
the Preferred Securities Guarantees and is qualified in its entirety by
reference to the form of Preferred Securities Guarantee, which is filed as an
exhibit to the Registration Statement of which this prospectus forms a part, and
the Trust Indenture Act. Section and Article references used herein are
references to the provisions of the form of Preferred Securities Guarantee.
GENERAL
Pursuant to each Preferred Securities Guarantee, the Company will
irrevocably and unconditionally agree, to the extent set forth therein, to pay
in full, to the holders of the Preferred Securities issued by the applicable PWG
Trust, the Guarantee Payments (as defined herein), to the extent not paid by
such PWG Trust, regardless of any defense, right of set-off or counterclaim that
such PWG Trust may have or assert. The following distributions and other
payments with respect to Preferred Securities issued by a PWG Trust to the
extent not made or paid by such PWG Trust (the "Guarantee Payments"), will be
subject to the Preferred Securities Guarantee (without duplication): (i) any
accrued and unpaid distributions on such Preferred Securities, but only if and
to the extent that in each case the Company has made a payment to the Property
Trustee of interest on the Junior Subordinated Debt Securities deposited in such
PWG Trust as trust assets, (ii) the redemption price, including all accrued and
unpaid distributions to the date of redemption, with respect to any Preferred
Securities called for redemption by such PWG Trust, but only if and to the
extent that in each case the Company has made a payment to the Property Trustee
of interest or principal on such Junior Subordinated Debt Securities, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of such
PWG Trust (other than in connection with the distribution of such Junior
Subordinated Debt Securities to the holders of such Preferred Securities or the
redemption of all such Preferred Securities upon the maturity or redemption of
such Junior Subordinated Debt Securities) the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on such Preferred
Securities to the date of payment, to the extent such PWG Trust has funds
available therefor, and (b) the amount of assets of such PWG Trust remaining
available for distribution to holders of such Preferred Securities upon
liquidation of such PWG Trust. The Company's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Company to the holders of the applicable Preferred Securities or by causing the
applicable PWG Trust to pay such amounts to such holders.
The Preferred Securities Guarantee is a full and unconditional guarantee
from the time of issuance of the applicable Preferred Securities, but the
Preferred Securities Guarantee covers distributions and other payments on such
Preferred Securities only if and to the extent that the Company has made a
payment to the Property Trustee of interest or principal on the Junior
Subordinated Debt Securities deposited in the applicable PWG Trust as trust
assets. If the Company does not make interest or principal payments on the
Junior Subordinated Debt Securities deposited in the applicable PWG Trust as
trust assets, the Property Trust will not make distributions on the Preferred
Securities of such PWG Trust and the PWG Trust will not have funds available
therefor.
The Company's obligations under the Declaration for each PWG Trust, the
Preferred Securities Guarantee issued with respect to Preferred Securities
issued by such PWG Trust, the Junior Subordinated Debt Securities purchased by
such PWG Trust and the Indenture in the aggregate will provide a full and
unconditional guarantee on a subordinated basis by the Company of payments due
on the Preferred Securities issued by such PWG Trust.
CERTAIN COVENANTS OF THE COMPANY
In each Preferred Securities Guarantee, the Company will covenant that, so
long as any Preferred Securities issued by the applicable PWG Trust remain
outstanding, the Company will not declare or pay any dividends on, or redeem,
purchase, acquire or make a distribution or liquidation payment with respect
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to, any of its common stock or preferred stock or make any guarantee payment
with respect thereto, if at such time (i) the Company shall be in default with
respect to its Guarantee Payments or other payment obligations under such
Preferred Securities Guarantee, (ii) there shall have occurred any Declaration
Event of Default under the related Declaration or (iii) in the event that Junior
Subordinated Debt Securities are issued to the applicable PWG Trust in
connection with the issuance of Trust Securities by such PWG Trust, the Company
shall have given notice of its election to defer payments of interest on such
Junior Subordinated Debt Securities by extending the interest payment period as
provided in the terms of the Junior Subordinated Debt Securities and such
period, or any extension thereof, is continuing; provided, however, that the
foregoing restrictions shall not apply to (i) dividends, redemptions, purchases,
acquisitions, distributions or payments made by the Company by way of issuance
of shares of its capital stock, (ii) payments of accrued dividends by the
Company upon the redemption, exchange or conversion of any preferred stock of
the Company as may be outstanding from time to time in accordance with the terms
of such preferred stock or (iii) cash payments made by the Company in lieu of
delivering fractional shares upon the redemption, exchange or conversion of any
preferred stock of the Company as may be outstanding from time to time in
accordance with the terms of such preferred stock. In addition, so long as any
Preferred Securities of a PWG Trust remain outstanding, the Company has agreed
(i) to remain the sole direct or indirect owner of all the outstanding Common
Securities issued by such PWG Trust and not to cause or permit such Common
Securities to be transferred except to the extent permitted by the Declaration
of such PWG Trust, provided that any permitted successor of the Company under
the Indenture may succeed to the Company's ownership of such Common Securities,
and (ii) to use reasonable efforts to cause such PWG Trust to continue to be
treated as a grantor trust for United States Federal income tax purposes, except
in connection with a distribution of Junior Subordinated Debt Securities.
(Section 6.01)
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of the applicable Preferred Securities (in which case no consent will
be required), each Preferred Securities Guarantee may be amended only with the
prior approval of the holders of not less than 66 2/3% in liquidation amount of
the outstanding Preferred Securities issued by the applicable PWG Trust. The
manner of obtaining any such approval of holders of such Preferred Securities
will be set forth in an accompanying prospectus supplement. (Section 9.02) All
guarantees and agreements contained in a Preferred Securities Guarantee shall
bind the successors, assignees, receivers, trustees and representatives of the
Company and shall inure to the benefit of the holders of the Preferred
Securities of the applicable PWG Trust then outstanding. Except in connection
with a consolidation, merger, conveyance, transfer or lease of assets involving
the Company that is permitted under the Indenture, the Company may not assign
its obligations under any Preferred Securities Guarantee. (Section 9.01)
TERMINATION OF THE PREFERRED SECURITIES GUARANTEES
Each Preferred Securities Guarantee will terminate and be of no further
force and effect as to the Preferred Securities issued by the applicable PWG
Trust upon full payment of the redemption price of all Preferred Securities of
such PWG Trust, or upon distribution of the Junior Subordinated Debt Securities
to the holders of the Preferred Securities of such PWG Trust in exchange for all
the Preferred Securities issued by such PWG Trust, or upon full payment of the
amounts payable upon liquidation of such PWG Trust. Notwithstanding the
foregoing, each Preferred Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of Preferred
Securities issued by the applicable PWG Trust must restore payment of any sums
paid under such Preferred Securities or such Preferred Securities Guarantee.
(Article VII)
STATUS OF THE PREFERRED SECURITIES GUARANTEES
The Company's obligations under each Preferred Securities Guarantee to make
the Guarantee Payments will constitute an unsecured obligation of the Company
and will rank (i) subordinate and junior
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in right of payment to all other indebtedness, liabilities and obligations of
the Company and any guarantees, endorsements or other contingent obligations of
the Company in respect of such indebtedness, liabilities or obligations,
including the Junior Subordinated Debt Securities, except those made pari passu
or subordinate by their terms, and (ii) senior to all capital stock now or
hereafter issued by the Company and to any guarantee now or hereafter entered
into by the Company in respect of any of its capital stock. The Company's
obligations under each Preferred Securities Guarantee will rank pari passu with
each other Preferred Securities Guarantee. (Section 6.02) Because the Company is
a holding company, the Company's obligations under each Preferred Securities
Guarantee are also effectively subordinated to all existing and future
liabilities, including trade payables, of the Company's subsidiaries, except to
the extent that the Company is a creditor of the subsidiaries recognized as
such. Each Declaration provides that each holder of Preferred Securities issued
by the applicable PWG Trust, by acceptance thereof, agrees to the subordination
provisions and other terms of the related Preferred Securities Guarantee.
Each Preferred Securities Guarantee will constitute a guarantee of payment
and not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the Company to enforce its rights under such
Preferred Securities Guarantee without first instituting a legal proceeding
against any other person or entity). Each Preferred Securities Guarantee will be
deposited with the Guarantee Trustee, to be held for the benefit of the holders
of the Preferred Securities issued by the applicable PWG Trust. The Guarantee
Trustee shall enforce such Preferred Securities Guarantee on behalf of the
holders of such Preferred Securities. The holders of not less than a majority in
aggregate liquidation amount of the Preferred Securities issued by the
applicable PWG Trust have the right to direct the time, method and place of
conducting any proceeding for any remedy available in respect of the related
Preferred Securities Guarantee, including the giving of directions to the
Guarantee Trustee. If the Guarantee Trustee fails to enforce a Preferred
Securities Guarantee as above provided, any holder of Preferred Securities
issued by the applicable PWG Trust may institute a legal proceeding directly
against the Company to enforce its rights under such Preferred Securities
Guarantee, without first instituting a legal proceeding against the applicable
PWG Trust, or any other person or entity. Notwithstanding the foregoing, if the
Company has failed to make a Guarantee Payment, a holder of Preferred Securities
may directly institute a proceeding against the Company for enforcement of such
holder's right to receive payment under the Preferred Securities Guarantee. The
Company will waive any right or remedy to require that any action be brought
first against a PWG Trust or any other person or entity before proceeding
directly against the Company. (Section 5.04)
MISCELLANEOUS
The Company will be required to provide annually to the Guarantee Trustee a
statement as to the performance by the Company of certain of its obligations
under each Preferred Securities Guarantee and as to any default in such
performance. The Company is required to file annually with the Guarantee Trustee
an officer's certificate as to the Company's compliance with all conditions to
be complied with by it under each Preferred Securities Guarantee. (Section 2.04)
The Guarantee Trustee, prior to the occurrence of a default, undertakes to
perform only such duties as are specifically set forth in the applicable
Preferred Securities Guarantee and, after default with respect to a Preferred
Securities Guarantee, shall exercise the same degree of care as a prudent
individual would exercise under the circumstances in the conduct of his or her
own affairs. Subject to such provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by a Preferred Securities
Guarantee at the request of any holder of Preferred Securities unless it is
offered reasonable security and indemnity against the costs, expenses and
liabilities that might be incurred thereby. (Section 3.02)
GOVERNING LAW
The Preferred Securities Guarantees will be governed by, and construed in
accordance with, the laws of the State of New York. (Section 9.06)
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DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
Junior Subordinated Debt Securities may be issued from time to time in one
or more series under an Indenture dated as of December 9, 1996 (the "Indenture")
between the Company and The Chase Manhattan Bank, as trustee (the "Indenture
Trustee"). The Indenture has been filed as an exhibit to the Registration
Statement of which this prospectus forms a part. The following description
summarizes the material terms of the Indenture, and is qualified in its entirety
by reference to the Indenture and the Trust Indenture Act. Whenever particular
provisions or defined terms in the Indenture are referred to herein, such
provisions or defined terms are incorporated by reference herein. Section
references used herein are references to provisions of the Indenture.
GENERAL
The Junior Subordinated Debt Securities will be unsecured, junior
subordinated obligations of the Company. The Indenture does not limit the amount
of additional indebtedness the Company or any of its subsidiaries may incur.
Since the Company is a holding company, the Company's rights and the rights of
its creditors, including the holders of Junior Subordinated Debt Securities, to
participate in the assets of any subsidiary upon the latter's liquidation or
recapitalization will be subject to the prior claims of the subsidiary's
creditors, except to the extent that the Company may itself be a creditor with
recognized claims against the subsidiary.
The Indenture does not limit the aggregate principal amount of indebtedness
which may be issued thereunder and provides that Junior Subordinated Debt
Securities may be issued thereunder from time to time in one or more series. The
Junior Subordinated Debt Securities are issuable in one or more series pursuant
to an indenture supplemental to the Indenture.
In the event Junior Subordinated Debt Securities are issued to a PWG Trust
or a Trustee of such PWG Trust in connection with the issuance of Trust
Securities by such PWG Trust, such Junior Subordinated Debt Securities
subsequently may be distributed pro rata to the holders of such Trust Securities
in connection with the dissolution of such PWG Trust as described in the
applicable prospectus supplement. Only one series of Junior Subordinated Debt
Securities will be issued to a PWG Trust or a Trustee of such PWG Trust in
connection with the issuance of Trust Securities by such PWG Trust.
Reference is made to the prospectus supplement which will accompany this
prospectus for the following terms of the series of Junior Subordinated Debt
Securities being offered thereby (to the extent such terms are applicable to the
Junior Subordinated Debt Securities): (i) the specific designation of such
Junior Subordinated Debt Securities, aggregate principal amount and purchase
price; (ii) any limit on the aggregate principal amount of such Junior
Subordinated Debt Securities; (iii) the date or dates on which the principal of
such Junior Subordinated Debt Securities is payable and the right, if any, to
extend such date or dates; (iv) the rate or rates at which such Junior
Subordinated Debt Securities will bear interest or the method of calculating
such rate or rates, if any; (v) the date or dates from which such interest shall
accrue, the interest payment dates on which such interest will be payable or the
manner of determination of such interest payment dates and the record dates for
the determination of holders to whom interest is payable on any such interest
payment dates; (vi) the right, if any, to extend the interest payment periods
and the duration of such extension; (vii) the period or periods within which,
the price or prices at which, and the terms and conditions upon which, such
Junior Subordinated Debt Securities may be redeemed, in whole or in part, at the
option of the Company; (viii) the obligation, if any, of the Company to redeem
or purchase such Junior Subordinated Debt Securities pursuant to any sinking
fund or analogous provisions or at the option of the holder thereof and the
period or periods within which, the price or prices at which, and the terms and
conditions upon which, such Junior Subordinated Debt Securities shall be
redeemed or purchased, in whole or part, pursuant to such obligation; (ix) any
applicable United States Federal income tax consequences, including whether and
under what circumstances the Company will pay additional amounts on the Junior
Subordinated Debt Securities held by a person who is not a U.S. person in
respect of any tax, assessment or governmental charge withheld or deducted and,
if so, whether the Company will have the option to redeem such Junior
Subordinated Debt Securities rather than pay such additional
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amounts; (x) the form of such Junior Subordinated Debt Securities; (xi) if other
than denominations of $25 or any integral multiple thereof, the denominations in
which such Junior Subordinated Debt Securities shall be issuable; (xii) any and
all other terms with respect to such series, including any modification of or
additions to the events of default or covenants provided for with respect to the
Junior Subordinated Debt Securities, and any terms which may be required by or
advisable under applicable laws or regulations not inconsistent with the
Indenture; and (xiii) whether such Junior Subordinated Debt Securities are
issuable as a global security, and in such case, the identity of the depositary.
(Section 2.01)
Unless otherwise indicated in the applicable prospectus supplement, the
Junior Subordinated Debentures will be issued in United States dollars in fully
registered form without coupons in denominations of $25 or integral multiples
thereof. Junior Subordinated Debt Securities may be presented for exchange and
Junior Subordinated Debt Securities in registered form may be presented for
transfer in the manner, at the places and subject to the restrictions set forth
in the Junior Subordinated Debt Securities and the applicable prospectus
supplement. Such services will be provided without charge, other than any tax or
other governmental charge payable in connection therewith, but subject to the
limitations provided in the Indenture. Junior Subordinated Debt Securities in
bearer form and the coupons, if any, appertaining thereto will be transferable
by delivery.
Junior Subordinated Debt Securities may bear interest at a fixed rate or a
floating rate. Junior Subordinated Debt Securities bearing no interest or
interest at a rate that at the time of issuance is below the prevailing market
rate will be sold at a discount below their stated principal amount. Special
United States Federal income tax considerations applicable to any such
discounted Junior Subordinated Debt Securities or to certain Junior Subordinated
Debt Securities issued at par which are treated as having been issued at a
discount for United States Federal income tax purposes will be described in the
applicable prospectus supplement.
CERTAIN COVENANTS OF THE COMPANY APPLICABLE TO THE JUNIOR SUBORDINATED DEBT
SECURITIES
If Junior Subordinated Debt Securities are issued to a PWG Trust in
connection with the issuance of Trust Securities by such PWG Trust, the Company
will covenant in the Indenture that, so long as the Preferred Securities of such
PWG Trust remain outstanding, the Company will not declare or pay any dividends
on, or redeem, purchase, acquire or make a distribution or liquidation payment
with respect to, any of its common stock or preferred stock or make any
guarantee payments with respect thereto if at such time (i) the Company shall be
in default with respect to its Guarantee Payments or other payment obligations
under the related Preferred Securities Guarantee or (ii) there shall have
occurred any Indenture Event of Default with respect to such Junior Subordinated
Debt Securities provided, however, that the foregoing restrictions shall not
apply to (i) dividends, redemptions, purchases, acquisitions, distributions or
payments made by the Company by way of issuance of shares of its capital stock,
(ii) payments of accrued dividends by the Company upon the redemption, exchange
or conversion of any preferred stock of the Company as may be outstanding from
time to time in accordance with the terms of such preferred stock or (iii) cash
payments made by the Company in lieu of delivering fractional shares upon the
redemption, exchange or conversion of any preferred stock of the Company as may
be outstanding from time to time in accordance with the terms of such preferred
stock. In addition, if Junior Subordinated Debt Securities are issued to a PWG
Trust in connection with the issuance of Trust Securities by such PWG Trust, for
so long as the Preferred Securities of such PWG Trust remain outstanding, the
Company has agreed (i) to remain the sole direct or indirect owner of all the
outstanding Common Securities issued by such PWG Trust and not to cause or
permit such Common Securities to be transferred except to the extent permitted
by the Declaration of such PWG Trust; provided that any permitted successor of
the Company under the Indenture may succeed to the Company's ownership of such
Common Securities, (ii) to comply fully with all its obligations and agreements
under such Declaration and (iii) not to take any action which would cause such
PWG Trust to cease to be treated as a grantor trust for United States Federal
income tax purposes, except in connection with a distribution of Junior
Subordinated Debt Securities.
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SUBORDINATION
The Indenture provides that the Junior Subordinated Debt Securities are
subordinate and junior in right of payment to all Senior Indebtedness of the
Company. No payment by the Company on account of principal of (or premium, if
any) or any interest on the Junior Subordinated Debt Securities may be made if
any default or event of default with respect to any Senior Indebtedness shall
have occurred and be continuing and written notice thereof shall have been given
to the Indenture Trustee by the Company or to the Company and the Indenture
Trustee by the holders of at least 10% in principal amount of any kind or
category of any Senior Indebtedness (or a representative or trustee on their
behalf). Upon any acceleration of the principal due on the Junior Subordinated
Debt 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 Senior Indebtedness must be paid in full before the holders of
Junior Subordinated Debt Securities will be 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 Senior Indebtedness). Subject to the payment in full of all Senior
Indebtedness, the holders of the Junior Subordinated Debt Securities are to be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Company applicable to Senior
Indebtedness until the Junior Subordinated Debt Securities are paid in full. By
reason of such subordination, in the event of insolvency, creditors of the
Company who are holders of Senior Indebtedness, as well as general creditors of
the Company, may recover more, ratably, than the holders of the Junior
Subordinated Debt Securities. If this prospectus is being delivered in
connection with a series of Junior Subordinated Debt Securities, the
accompanying prospectus supplement will set forth the approximate amount of
Senior Indebtedness outstanding as of the end of the most recent fiscal quarter.
The term "Senior Indebtedness" shall mean (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 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 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
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 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 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 Junior Subordinated Debt Securities; provided, however, that
Senior Indebtedness shall not include any obligation of the Company to any
subsidiary. The Junior Subordinated Debt Securities of any series are not
superior in right of payment to the securities of any series (or coupons
appertaining thereto) issued pursuant to the Indenture dated as of March 15,
1988, between the Company and Chase Manhattan Bank Delaware (formerly known as
Chemical Bank (Delaware)), as amended or supplemented from time to time, or any
securities ranking pari passu in right of payment with any such securities (or
coupons), all of which shall constitute Senior Indebtedness. Notwithstanding
anything to the contrary in the Indenture or the Junior Subordinated Debt
Securities, Senior Indebtedness shall not include any indebtedness of the
Company which, by its terms or the terms of the instrument creating or
evidencing it, is subordinate in right of payment to, or pari passu with, the
Junior Subordinated Debt Securities. The Indenture does not contain any
limitation on the amount of Senior Indebtedness that can be incurred by the
Company.
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The Company's rights and the rights of its creditors (including holders of
Senior Indebtedness and Junior Subordinated Debt 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 Incorporated 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 Indebtedness and Junior Subordinated Debt
Securities. The Senior Indebtedness and Junior Subordinated Debt Securities will
be effectively subordinated to all liabilities and obligations of the Company's
subsidiaries.
INDENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Indenture Event of
Default" with respect to a series of Junior Subordinated Debt Securities:
(a) failure for 30 days to pay interest on the Junior Subordinated
Debt Securities of such series when due; provided that a valid extension of
the interest payment period by the Company shall not constitute a default
in the payment of interest for this purpose;
(b) failure to pay principal of or premium, if any, on the Junior
Subordinated Debt Securities of such series when due whether at maturity,
upon redemption, by declaration or otherwise, or to make any sinking fund
or analogous payment with respect to Junior Subordinated Debt Securities of
such series;
(c) failure to observe or perform any other covenant contained in the
Indenture with respect to such series for 90 days after written notice to
the Company from the Indenture Trustee or the holders of at least 25% in
principal amount of the outstanding Junior Subordinated Debt Securities of
such series; or
(d) certain events in bankruptcy, insolvency or reorganization of the
Company.
In each and every such case, unless the principal of all the Junior Subordinated
Debt Securities of such series shall have already become due and payable, either
the Indenture Trustee or the holders of not less than 25% in aggregate principal
amount of the Junior Subordinated Debt Securities of such series then
outstanding, by notice in writing to the Company (and to the Indenture Trustee
if given by such holders), may declare the principal of all the Junior
Subordinated Debt Securities of such series to be due and payable immediately,
and upon any such declaration the same shall become and shall be immediately due
and payable. (Section 6.01)
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities of the applicable series have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee. (Section 6.06) The Indenture Trustee or the
holders of not less than 25% in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities of such series may declare the principal due
and payable immediately upon an Indenture Event of Default with respect to such
series, but the holders of a majority in aggregate outstanding principal amount
of Junior Subordinated Debt Securities of such series may annul such declaration
and waive the default if the default has been cured and a sum sufficient to pay
all matured installments of interest and principal otherwise than by
acceleration and any premium has been deposited with the Indenture Trustee.
(Sections 6.01 and 6.06)
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The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debt Securities of a series may, on behalf of the holders of
all the Junior Subordinated Debt Securities of such series, waive any past
default, except a default in the payment of principal, premium, if any, or
interest on Junior Subordinated Securities of such series (unless such default
has been cured and a sum sufficient to pay all matured installments of interest
and principal otherwise than by acceleration and any premium has been deposited
with the Indenture Trustee) or a call for redemption of Junior Subordinated Debt
Securities of such series. (Section 6.06) The Company is required to file
annually with the Indenture Trustee a certificate as to whether or not the
Company is in compliance with all the conditions and covenants under the
Indenture. (Section 5.03)
If a series of Junior Subordinated Debt Securities is issued to a PWG Trust
in connection with the issuance of Trust Securities of such PWG Trust, then,
under the applicable Declaration, an Indenture Event of Default with respect to
such series of Junior Subordinated Debt Securities will constitute a Declaration
Event of Default.
MODIFICATION OF THE INDENTURE
The Indenture provides that the Company and the Indenture Trustee may,
without the consent of any holders of Junior Subordinated Debt 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 any series of Junior Subordinated Debt Securities or, provided
such action shall not adversely affect the interests of the holders of any
series of Junior Subordinated Debt Securities in any material respect, curing
ambiguities or inconsistencies in such Indenture or making other provisions.
(Section 9.01)
The Indenture contains provisions permitting the Company and the Indenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of the outstanding Junior Subordinated Debt Securities of each
series affected thereby, to modify the Indenture or any supplemental indenture
affecting the rights of the holders of such Junior Subordinated Debt Securities;
provided that no such modification may, without the consent of the holder of
each outstanding Junior Subordinated Debt Security affected thereby, (i) extend
the fixed maturity of any Junior Subordinated Debt Securities of any series,
reduce the principal amount thereof, reduce the rate or extend the time of
payment of interest thereon, or reduce any premium payable upon the redemption
thereof, without the consent of the holder of each Junior Subordinated Debt
Security so affected, or (ii) reduce the percentage of Junior Subordinated Debt
Securities, the holders of which are required to consent to any such
modification, without the consent of the holders of each Junior Subordinated
Debt Security then outstanding and affected thereby. (Section 9.02)
BOOK ENTRY AND SETTLEMENT
If any Junior Subordinated Debt Securities of a series are represented by
one or more global securities (each, a "Global Security"), the applicable
prospectus supplement will describe the circumstances, if any, under which
beneficial owners of interests in any such Global Security may exchange such
interests for Junior Subordinated Debt Securities of such series and of like
tenor and principal amount in any authorized form and denomination. Principal
of, and any premium and interest on, a Global Security will be payable in the
manner described in the applicable prospectus supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of Junior Subordinated Debt Securities to be represented by
a Global Security will be described in the applicable prospectus supplement.
CONSOLIDATION, MERGER AND SALE
The Indenture provides that the Company, without the consent of the Holders
of any of the Junior Subordinated Debt Securities, may consolidate with or merge
into any other Person or convey, 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 Person to consolidate with or
merge into the Company or
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convey, transfer or lease its properties and assets substantially as an entirety
to 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 the Indenture and the
Junior Subordinated Debt 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
10.01)
DEFEASANCE AND DISCHARGE
Under the terms of the Indenture, the Company will be discharged from any
and all obligations in respect of the Junior Subordinated Debt Securities of a
series (except in each case for certain obligations to register the transfer or
exchange of such Junior Subordinated Debt Securities, replace stolen, lost or
mutilated Junior Subordinated Debt Securities of such series, maintain paying
agencies and hold moneys for payment in trust) if (i) the Company irrevocably
deposits with the Indenture Trustee cash or U.S. Government Obligations, as
trust funds, in an amount certified to be sufficient to pay at maturity (or upon
redemption) the principal of, premium, if any, and interest on all outstanding
Junior Subordinated Debt Securities of such series; (ii) such deposit will not
result in a breach or violation of, or constitute a default under, any agreement
or instrument to which the Company is a party or by which it is bound; (iii) the
Company delivers to the Indenture Trustee an opinion of counsel to the effect
that the holders of the Junior Subordinated Debt Securities of such series will
not recognize income, gain or loss for United States Federal income tax purposes
as a result of such defeasance and that such defeasance will not otherwise alter
holders' United States Federal income tax treatment of principal, premium and
interest payments on the Junior Subordinated Debt Securities of such series
(such opinion must be based on a ruling of the Internal Revenue Service or a
change in United States Federal income tax law occurring after the date of the
Indenture, since such a result would not occur under current tax law); (iv) the
Company delivers to the Indenture Trustee an Officers' Certificate and an
opinion of counsel, each stating that all conditions precedent provided for
relating to the defeasance contemplated by such provision have been complied
with; and (v) no event or condition shall exist that, pursuant to the
subordination provisions applicable to the Junior Subordinated Debt Securities
of such series, would prevent the Company from making payments of principal of,
premium, if any, and interest on the Junior Subordinated Debt Securities of such
series at the date of the irrevocable deposit referred to above. (Section 11.01)
GOVERNING LAW
The Indenture and the Junior Subordinated Debt Securities will be governed
by, and construed in accordance with, the laws of the State of New York.
(Section 13.05)
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture Trustee, prior to an Indenture Event of Default, undertakes
to perform only such duties as are specifically set forth in the Indenture and,
during an Indenture Event of Default, shall exercise and use the same degree of
care and skill as a prudent individual would exercise or use under the
circumstances in the conduct of his or her own affairs. (Section 7.01) Subject
to such provision, the Indenture Trustee is under no obligation to exercise any
of the powers vested in it by the Indenture at the request of any holder of
Junior Subordinated Debt Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities that might be incurred
thereby. (Section 7.02) The Indenture Trustee is not required to expend or risk
its own funds or otherwise incur personal financial liability in the performance
of its duties if the Indenture Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it. (Section 7.01)
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.
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MISCELLANEOUS
The Company will have the right at all times to assign any of its rights or
obligations under the Indenture to a direct or indirect wholly owned subsidiary
of the Company; provided that, in the event of any such assignment, the Company
will remain jointly and severally liable for all such obligations. Subject to
the foregoing, the Indenture will be binding upon and inure to the benefit of
the parties thereto and their respective successors and assigns. The Indenture
provides that it may not otherwise be assigned by the parties thereto other than
by the Company to a successor or purchaser pursuant to a consolidation, merger
or sale permitted by the Indenture. (Section 13.11)
ERISA MATTERS
The Company, PaineWebber Incorporated and other affiliates of the Company
and the Property Trustee and its affiliates 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
described in Section 4975 of the Code. The purchase of Offered Securities (as
defined below) 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 Incorporated, PaineWebber International (U.K.) Ltd. or any other
affiliate of the Company and the Property Trustee and its affiliates 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 Offered Securities are acquired pursuant to and in
accordance with an 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. In addition, a Plan
fiduciary considering the purchase of Offered Securities should be aware that
the assets of the Trust may be considered "plan assets" for ERISA purposes.
Therefore, a Plan fiduciary should consider whether the purchase of Offered
Securities could result in a delegation of fiduciary authority to the Property
Trustee, and, if so, whether such a delegation of authority is permissible under
the Plan's governing instrument or any investment management agreement with the
Plan. In making this determination, it should be borne in mind that, prior to an
Event of Default with respect to the Junior Subordinated Debentures, the
Property Trustee will have only limited custodial and ministerial authority with
respect to Trust assets. Any pension or other employee benefit plan proposing to
acquire any Offered Securities should determine that the Offered 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.
PLAN OF DISTRIBUTION
The Company may sell any series of Junior Subordinated Debt Securities and
the PWG Trusts may sell the Preferred Securities being offered hereby (i)
directly to one or more purchasers, (ii) through agents designated from time to
time and/or (iii) through underwriters or dealers or a group of underwriters.
The applicable prospectus supplement will set forth the terms of the offering of
any securities offered thereby ("Offered Securities"), including the name or
names of any underwriters, the purchase price of the Offered Securities and the
proceeds to the Company and/or any PWG Trust 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 applicable prospectus supplement.
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<PAGE> 61
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 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
Offered 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.
All Offered Securities will be a new issue of securities with no
established trading market. Certain agents through whom, and underwriters to
whom, Offered Securities are sold by the Company for public offering and sale
may make a market in such Offered Securities, but such agents and underwriters
will not be obligated to do so and may discontinue any market making at any time
without notice. No assurance can be given as to the liquidity of the trading
market for any Offered Securities.
PaineWebber Incorporated or one or more other affiliates of the Company may
participate in distributions of the Offered Securities. All distributions of the
Offered Securities will conform to the requirements set forth in the applicable
sections of Rule 2720 of the Conduct Rules of the NASD.
FORWARD LOOKING INFORMATION
Certain items herein are forward-looking statements. The matters referred
to in such forward-looking statements could be affected by many factors,
including (without limitation) general economic and financial conditions, the
level and volatility of interest rates, currency and security valuations,
competitive conditions, counterparty risk, transactional volume, market
liquidity, the impact of current, pending and future legislation and regulation
and other risks and uncertainties. The Company disclaims any obligation or
undertaking to update publicly or revise any forward-looking statements.
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<PAGE> 62
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus supplement, certain
matters of Delaware law relating to the validity of the Preferred Securities
will be passed upon by Richards, Layton & Finger, Wilmington, Delaware. The
validity of the Preferred Securities Guarantees and the Junior Subordinated Debt
Securities and certain other matters will be passed upon for the Company by
Cravath, Swaine & Moore, New York, New York and for the agents or underwriters,
if any, by Brown & Wood LLP, New York, New York. Cravath, Swaine & Moore and
Brown & Wood LLP act 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 herein by reference to the Company's Annual
Report on Form 10-K for the fiscal 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.
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PREFERRED SECURITIES
PWG CAPITAL TRUST III
% PREFERRED TRUST SECURITIES
FULLY AND UNCONDITIONALLY
GUARANTEED BY
PAINE WEBBER GROUP INC.
------------------------------------------------------------------------------
PROSPECTUS SUPPLEMENT
------------------------------------------------------------------------------
PAINEWEBBER INCORPORATED
------------------------------------------------------------------------------
, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 64
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED NOVEMBER 12, 1998
PROSPECTUS
PAINE WEBBER GROUP INC.
BY THIS PROSPECTUS, WE MAY OFFER
UP TO $706,250,000 OF:
DEBT SECURITIES
---------------------
We will provide specific terms of the debt securities of Paine Webber Group
in supplements to this prospectus. The prospectus supplement may also add,
update or change information contained in this prospectus. You should read this
prospectus and any prospectus supplement carefully before you invest.
---------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
---------------------
This prospectus may not be used to consummate sales of offered securities
unless accompanied by a prospectus supplement.
Our affiliates, including Paine Webber Incorporated and Paine Webber
International (U.K.) Ltd., may use this prospectus and the related prospectus
supplement in connection with offers and sales of the offered securities in the
secondary market. These affiliates may act as principal or agent in those
transactions. Secondary market sales will be made at negotiated prices related
to market prices at the time of sale.
The date of this prospectus is , 1998.
<PAGE> 65
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Our
Commission filings are available to the public over the Internet at the
Commission's web site at http://www.sec.gov. You may also read and copy any
document we file at the Commission's public reference rooms at 450 Fifth Street,
NW, 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.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms.
This prospectus is a part of the Registration Statement on Form S-3 and the
amendments and exhibits thereto (the "Registration Statement") filed with the
Commission. This prospectus does not contain all of the information in the
Registration Statement. Please refer to the Registration Statement and its
exhibits for further information regarding Paine Webber Group and the offered
securities.
DOCUMENTS INCORPORATED BY REFERENCE
The Commission allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the Commission will automatically update and supersede this information. We
incorporate by reference the documents of Paine Webber Group listed below and
any future filings made with the Commission under Sections 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934, as amended, until we sell all of
the securities.
- Annual Report on Form 10-K for the year ended December 31, 1997;
- Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998; and
- Current Reports on Form 8-K, filed on July 15, 1998 and October 13, 1998.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address: Assistant Secretary, Paine Webber Group
Inc., 1285 Avenue of the Americas, New York, New York 10019, telephone (212)
713-3224.
You should rely only on the information contained or incorporated by
reference in this prospectus or any prospectus supplement. We have not
authorized any other person to provide you with different information. We are
not making an offer of these securities in any jurisdiction where the offer is
not permitted. You should assume that the information appearing in this
prospectus or any prospectus supplement, as well as information we previously
filed with the Commission and incorporated by reference, is accurate as of the
date on the front of those documents only.
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<PAGE> 66
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 17,424 people in 299 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 Incorporated, 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.
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
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<PAGE> 67
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 "PaineWebber" refer
to PaineWebber 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 nine-month
period ended September 30, 1998.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED NINE MONTHS ENDED
DECEMBER 31 SEPTEMBER 30, 1998
- -------------------------------- ------------------
1993 1994 1995 1996 1997
- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
1.3 1.0 1.1 1.3 1.2 1.2
</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
Senior debt 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"). Subordinated debt
securities (the "Subordinated Securities" and, together with the Senior
Securities, the "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. Reference is made to the prospectus supplement for
information regarding the Indenture under which the Securities in respect of
which this prospectus is being delivered (the "Offered Securities") will be
issued.
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<PAGE> 68
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
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
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<PAGE> 69
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 thereof 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)
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.
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<PAGE> 70
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 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.
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<PAGE> 71
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 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)
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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.
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
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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 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.
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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)
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
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the purposes required by such Indenture; (vi) impair the right to institute suit
for the enforcement of any payment due on any Securities on or after their
applicable maturity date; (vii) reduce the percentage in principal amount of the
Outstanding Securities of any series the consent of the Holders of which is
required for any such supplemental indenture or for any waiver of compliance
with certain provisions of, or of certain defaults under, such Indenture; or
(viii) with certain exceptions, modify the provisions for the waiver of certain
covenants and defaults and any of the foregoing provisions. (Section 902)
WAIVER OF CERTAIN COVENANTS
The Senior Indenture provides that the Company will not be required to
comply with certain restrictive covenants (including those described above under
"Certain Restrictive Provisions") if the Holders of not less than 66 2/3% in
principal amount of each series of Outstanding Securities affected thereby waive
compliance with such restrictive covenants. (Section 1005)
EVENTS OF DEFAULT, NOTICE AND WAIVER
An Event of Default in respect of any series of Securities (unless it is
either inapplicable to a particular series or has been modified or deleted with
respect to any particular series) is defined in each Indenture to be: (i) a
default for 30 days in the payment of any installment of interest upon any of
the Securities of such series when due; (ii) a default in the payment of
principal of (or premium, if any, on) any of the Securities of such series when
due; (iii) a default in the deposit of any sinking fund payment when the same
becomes due by the terms of the Securities of such series; (iv) a default in the
performance, or breach, of any other covenants or warranties of the Company in
the applicable Indenture which shall not have been remedied for a period of 60
days after notice from the Trustee thereunder or the Holders of not less than
25% in principal amount of the Outstanding Securities of such series; (v)
certain events of bankruptcy, insolvency or reorganization of the Company; and
(vi) such other events as may be specified for such series. (Section 501)
Each Indenture provides that if an Event of Default specified therein in
respect of any series of Outstanding Securities issued under such Indenture
shall have occurred and be continuing, either the Trustee thereunder or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of such series may declare the principal (or, if such Securities are Original
Issue Discount Securities, such portion of the principal amount as may be
specified by the terms of such Securities) of all of the Outstanding Securities
of such series to be immediately due and payable. (Section 502)
Each Indenture provides that the Holders of not less than a majority in
principal amount of the Outstanding Securities of any series may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee thereunder, or exercising any trust or power conferred on such
Trustee, with respect to the Securities of such series, provided that such
Trustee may act in any way that is not inconsistent with such directions and may
decline to act if any such direction is contrary to law or to such Indenture or
would involve such Trustee in personal liability. (Section 512)
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)
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Each Indenture provides that the Trustee thereunder will, within 90 days
after the occurrence of a default in respect of any series of Securities, give
to the Holders of the Securities of such series notice of all uncured and
unwaived defaults known to it; provided, however, that, except in the case of a
default in the payment of the principal of (or premium, if any) or any interest
on, or any sinking fund installment with respect to, any of the Securities of
such series, such Trustee will be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in the interest of
the Holders of the Securities of such series; and provided, further, that such
notice shall not be given until at least 30 days after the occurrence of an
Event of Default regarding the performance, or breach, of any covenant or
warranty of the Company under such Indenture other than for the payment of the
principal of (or premium, if any) or any interest on, or any sinking fund
installment with respect to, any of the Securities of such series. The term
default for the purpose of this provision only means any event that is, or after
notice or lapse of time, or both, would become, an Event of Default with respect
to the Securities of such series. (Section 602)
Each Indenture requires the Company to file annually with the Trustee
thereunder a certificate, executed by an officer of the Company, indicating
whether the Company is in default under such Indenture. (Section 1004)
MEETINGS
Each Indenture contains provisions for convening meetings of the Holders of
Securities of a series if Securities of that series are issuable as Bearer
Securities to make, give or take any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by such
Holders pursuant to such Indenture. (Section 1301). A meeting may be called at
any time by the Trustee under the applicable Indenture, and also, upon request,
by the Company or the Holders of at least 10% in principal amount of the
Outstanding Securities of such series, in any such case upon notice given in
accordance with "Notices" below. (Section 1302) Persons entitled to vote a
majority in principal amount of the Outstanding Securities of a series shall
constitute a quorum at a meeting of Holders of Securities of such series;
provided, however, that if any action is to be taken at such meeting with
respect to a consent or waiver which is required to be given by the Holders of
not less than 66 2/3% in principal amount of the Outstanding Securities of a
series, the Persons entitled to vote 66 2/3% in principal amount of the
Outstanding Securities of such series shall constitute a quorum. In the absence
of a quorum, (i) a meeting called by the Company or the Trustee shall be
adjourned for a period of not less than 10 days, and in the absence of a quorum
at any such adjourned meeting, the meeting shall be further adjourned for a
period of not less than 10 days and (ii) a meeting called by the Holders shall
be dissolved. Any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action which may be made, given or
taken by the Holders of a specified percentage in principal amount of
Outstanding Securities of a series may be adopted at a meeting or adjourned
meeting duly reconvened at which a quorum is present by the affirmative vote of
the Holders of such specified percentage in principal amount of the Outstanding
Securities of that series. Any resolution 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
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city or cities as may be specified in such Bearer Securities and will be mailed
to such Persons whose names and addresses were previously filed with the Trustee
under the applicable Indenture within the two preceding years, within the time
prescribed for the giving of such notice. Notices to Holders of Registered
Securities will be given by mail to the addresses of such Holders as they appear
in the Security Register, within the time prescribed for the giving of such
notice. (Section 106)
TITLE
Title to any Bearer Securities (including Bearer Securities that are Global
Securities) and any Coupons appertaining thereto will pass by delivery. The
Company, the appropriate Trustee and any agent of the Company or such Trustee
may treat the Holder of any Bearer Security, the Holder of any Coupon and the
registered owner of any Registered Security as the absolute owner thereof
(whether or not such Security or Coupon shall be overdue and notwithstanding any
notice to the contrary) for the purpose of making payment and for all other
purposes. (Section 308)
REPLACEMENT OF SECURITIES AND COUPONS
Any mutilated Security and any Security with a mutilated Coupon
appertaining thereto will be replaced by the Company at the expense of the
Holder upon surrender of such mutilated Security or Security with a mutilated
Coupon to the appropriate Trustee. Securities or Coupons that become destroyed,
stolen or lost will be replaced by the Company at the expense of the Holder upon
delivery to the appropriate Trustee of evidence of the destruction, loss or
theft thereof satisfactory to the Company and such Trustee; in the case of any
Coupon which becomes destroyed, stolen or lost, such Coupon will be replaced
(upon surrender to the appropriate Trustee of the Security with all appurtenant
Coupons not destroyed, stolen or lost) by issuance of a new Security in exchange
for the Security to which such Coupon appertains. In the case of a destroyed,
lost or stolen Security or Coupon, an indemnity satisfactory to the appropriate
Trustee and the Company may be required at the expense of the Holder of such
Security or Coupon before a replacement Security will be issued. (Section 306)
DEFEASANCE
Unless the prospectus supplement relating to the Offered Securities
provides otherwise, the Company at its option (i) will be Discharged (as such
term is defined in the applicable Indenture) from any and all obligations in
respect of the Offered Securities (except for certain obligations to register
the transfer or exchange of Securities, replace stolen, lost or mutilated
Securities and Coupons, maintain paying agencies and hold moneys for payment in
trust) or (ii) need not comply with certain restrictive covenants of the
applicable Indenture (including those described above under "Certain Restrictive
Provisions"), if there is deposited with the Trustee money and/or (a) in the
case of Securities and Coupons denominated in U.S. dollars, U.S. Government
Obligations (as defined in the applicable Indenture), or (b) in the case of
Securities and Coupons denominated in a foreign currency, Foreign 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
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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 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
15
<PAGE> 79
recognized. Also, dividend payments and advances to the Company by PaineWebber
Incorporated 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 liabilities and obligations of the Company's
subsidiaries.
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 Incorporated, PaineWebber International (U.K.)
Ltd. 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
described 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 Incorporated,
PaineWebber International (U.K.) Ltd. or any other affiliate of the Company is a
service provider (or otherwise is a party in interest or a disqualified person)
may constitute or result in a prohibited transaction under ERISA or Section 4975
of the Code, unless such Securities are acquired pursuant to and in accordance
with an applicable exemption 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.
16
<PAGE> 80
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 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.
17
<PAGE> 81
PaineWebber Incorporated, PaineWebber International (U.K.) Ltd. 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 Securities 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 any state thereof or the District of
Columbia (unless, in the case of a partnership, Treasury regulations provide
otherwise), an estate, the income of which is subject to United States Federal
income taxation regardless of its source or a trust if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more United States persons have the ability to control all
substantial decisions of the trust. The term "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.
18
<PAGE> 82
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses payable by the Company
in connection with the issuance and distribution of the securities other than
underwriting discounts and commissions. All such fees and expenses except the
Securities and Exchange Commission registration fee and the NASD filing fee are
estimated:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $166,800
NASD filing fee............................................. 30,500
NYSE listing fee............................................ 80,000
Blue Sky fees and expenses.................................. 2,500
Printing and engraving expenses............................. 100,000
Rating agency fees.......................................... 70,000
Fees and expenses of accountants............................ 60,000
Fees and expenses of counsel................................ 250,000
Fees and expenses of trustees............................... 30,000
Miscellaneous............................................... 10,200
--------
Total............................................. $800,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the General Corporation Law of the State of Delaware gives
corporations the power to eliminate or limit the personal liability of directors
under certain circumstances. Section 145 of the General Corporation Law of the
State of Delaware gives corporations the power to indemnify directors and
officers under certain circumstances.
Article IX of the Restated Certificate of Incorporation (relating to the
elimination of personal liability of directors of the Company) of Paine Webber
Group Inc. is hereby incorporated by reference to Exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1998. Article VII
of Paine Webber Group Inc.'s By-Laws (relating to indemnification of directors
and officers of the Company) is hereby incorporated by reference to Exhibit 3.5
to the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997.
The Company also maintains directors and officers liability and corporate
reimbursement insurance which provides for coverage against loss arising from
claims made against directors and officers in their capacity as such. The
general scope of coverage is any breach of duty, neglect, error, misstatement,
misleading statement or omission. Such policy does not exclude liabilities under
the Securities Act of 1933. The Company also maintains fiduciary liability
insurance for losses in connection with claims made against directors of
officers for violation of any of the responsibilities, obligations or duties
imposed upon fiduciaries under the Employee Retirement Income Security Act of
1974.
The indemnification provisions (relating to indemnification of, among
others, controlling persons, directors and officers of the Company against
certain liabilities) contained in the proposed forms of Underwriting Agreement
are hereby incorporated by reference to Exhibits 1.1 and 1.2 hereto.
The Amended and Restated Declaration of Trust for each of PWG Capital Trust
III, PWG Capital Trust IV and PWG Capital Trust V (each a "PWG Trust") provides
that no Trustee, any of its Affiliates, or any officer, director, shareholder,
member, partner, employee, representative, or agent of any Trustee, or any
employee or agent of any PWG Trust or any of its Affiliates (each an
"Indemnified Person"), shall be liable, responsible or accountable in damages or
otherwise to (i) any PWG Trust or any officer, director, shareholder, partner,
member, representative, employee or agent of any PWG Trust or its Affiliates,
(ii) any officer, director, shareholder, employee, representative or agent of
Paine Webber Group Inc. or any of its Affiliates, or (iii) any holder of
Preferred Securities (each a "Covered Person"), for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of any of PWG Trust and in a manner
such Indemnified Person reasonably
II-1
<PAGE> 83
believed to be within the scope of the authority conferred on such Indemnified
Person by such Declaration or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence or willful misconduct with respect to such acts or
omissions.
The Amended and Restated Declaration of Trust for each PWG Trust also
provides that to the full extent permitted by law, Paine Webber Group Inc. shall
indemnify and hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of any PWG Trust and in a manner such Indemnified Person reasonably believed to
be within the scope of authority conferred on such Indemnified Person by such
Declaration, except that no Indemnified Person shall be entitled by to
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of gross negligence (or, in the case of the Property Trustee,
negligence) or willful misconduct with respect to such acts or omissions.
The Amended and Restated Declaration of Trust for each PWG Trust also
provides that to the full extent permitted by law, that expenses (including
legal fees) incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by Paine Webber
Group Inc. prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by Paine Webber Group Inc. of an undertaking by or on
behalf of the Indemnified Person to repay such amount if it shall be determined
that the Indemnified Person is not entitled to be indemnified as authorized in
such Declaration.
Item 16. EXHIBITS.
See exhibit index at E-1.
Item 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, 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; and
(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 the undertakings set forth in paragraph (i) and
(ii) above 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 registrants pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
this 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.
II-2
<PAGE> 84
(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.
The undersigned registrant hereby undertakes 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 this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
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 in Item 15 above or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1993 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned Registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of a registration statement in reliance upon Rule 430A and contained in the
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities
Act of 1933 each post-effective amendment that contains a form of
prospectus 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.
II-3
<PAGE> 85
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 November 12, 1998.
PAINE WEBBER GROUP INC.,
by /s/ DONALD B. MARRON
------------------------------------
Name: Donald B. Marron
Title: 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 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
--------- ----- ----
<S> <C> <C>
/s/ DONALD B. MARRON Chairman of the Board, Chief November 12, 1998
- --------------------------------------------- Executive Officer, Director
(Donald B. Marron) (principal executive officer)
/s/ REGINA A. DOLAN Senior Vice President and Chief November 12, 1998
- --------------------------------------------- Financial Officer (principal
(Regina A. Dolan) financial and accounting
officer) and Director
/s/ E. GARRETT BEWKES, JR. Director November 12, 1998
- ---------------------------------------------
(E. Garrett Bewkes, Jr.)
/s/ RETO BRAUN Director November 12, 1998
- ---------------------------------------------
(Reto Braun)
/s/ FRANK P. DOYLE Director November 12, 1998
- ---------------------------------------------
(Frank P. Doyle)
/s/ JOSEPH J. GRANO, JR. Director November 12, 1998
- ---------------------------------------------
(Joseph J. Grano, Jr.)
/s/ JAMES W. KINNEAR Director November 12, 1998
- ---------------------------------------------
(James W. Kinnear)
</TABLE>
II-4
<PAGE> 86
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ NAOSHI KIYONO Director November 12, 1998
- ---------------------------------------------
(Naoshi Kiyono)
/s/ ROBERT M. LOEFFLER Director November 12, 1998
- ---------------------------------------------
(Robert M. Loeffler)
/s/ EDWARD RANDALL Director November 12, 1998
- ---------------------------------------------
(Edward Randall, III)
/s/ HENRY ROSOVSKY Director November 12, 1998
- ---------------------------------------------
(Henry Rosovsky)
/s/ YOSHINAO SEKI Director November 12, 1998
- ---------------------------------------------
(Yoshinao Seki)
/s/ JOHN R. TORELL III Director November 12, 1998
- ---------------------------------------------
(John R. Torell III)
</TABLE>
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<PAGE> 87
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, PWG Capital
Trust III, PWG Capital Trust IV and PWG Capital Trust V each 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 of New
York, State of New York on November 12, 1998.
PWG CAPITAL TRUST III,
by Paine Webber Group Inc., as
Sponsor,
by /s/ WILLIAM J. NOLAN
------------------------------------
Name: William J. Nolan
Title: Treasurer
PWG CAPITAL TRUST IV,
by Paine Webber Group Inc., as
Sponsor,
by /s/ WILLIAM J. NOLAN
------------------------------------
Name: William J. Nolan
Title: Treasurer
PWG CAPITAL TRUST V,
by Paine Webber Group Inc., as
Sponsor,
by /s/ WILLIAM J. NOLAN
------------------------------------
Name: William J. Nolan
Title: Treasurer
II-6
<PAGE> 88
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. DESCRIPTION NUMBERED PAGE
------- ----------- -------------
<S> <C> <C>
1.1+ Form of Underwriting Agreement relating to the Preferred
Securities..................................................
1.2*** Form of Underwriting Agreement relating to the Debt
Securities..................................................
4.1+ Junior Subordinated Debt Indenture dated as of December 9,
1996 between the Company and The Chase Manhattan Bank, as
Trustee.....................................................
4.2a Indenture dated as of March 15, 1988, between the Registrant
and The Chase Manhattan 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, as
Trustee, relating to Senior Debt Securities.................
4.2c* Supplemental Indenture dated as of March 22, 1991, between
the Registrant and The Chase Manhattan Bank, as Trustee,
relating to Senior Debt Securities..........................
4.2d Indenture dated as of March 15, 1988, between the Registrant
and Chase Manhattan 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, as
Trustee, relating to Subordinated Debt Securities...........
4.2f* Supplemental Indenture dated as of March 22, 1991, between
the Registrant and Chase Manhattan Bank Delaware, as
Trustee, relating to Subordinated Debt Securities...........
4.2g* Supplemental Indenture dated as of November 30, 1993,
between the Registrant and Chase Manhattan Bank Delaware, as
Trustee, relating to Subordinated Debt Securities...........
4.3** Declaration of Trust of PWG Capital Trust III...............
4.4** Certificate of Trust of PWG Capital Trust III...............
4.5** Declaration of Trust of PWG Capital Trust IV................
4.6** Certificate of Trust of PWG Capital Trust IV................
4.7+ Declaration of Trust of PWG Capital Trust V.................
4.8+ Certificate of Trust of PWG Capital Trust V.................
4.9+ Form of Amended and Restated Declaration of Trust for each
of PWG Capital Trust III, IV and V..........................
4.10+ Form of Preferred Security (included in Exhibit 4.9)........
4.11+ Form of Supplemental Indenture to be used in connection with
issuance of Junior Subordinated Debt Securities.............
4.12+ Form of Junior Subordinated Debt Security (included in
Exhibit 4.11)...............................................
4.13+ Form of Guarantee with respect to Preferred Securities......
</TABLE>
E-1
<PAGE> 89
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. DESCRIPTION NUMBERED PAGE
------- ----------- -------------
<S> <C> <C>
5.1+ Opinion of Cravath, Swaine & Moore in respect of the
legality of the Junior Subordinated Debt Securities and
Preferred Guarantees registered hereunder, containing the
consent of such counsel.....................................
5.2a+ Opinion of Richards, Layton & Finger in respect of the
legality of the Preferred Securities of PWG Capital Trust
III registered hereunder, containing the consent of such
counsel.....................................................
5.2b+ Opinion of Richards, Layton & Finger in respect of the
legality of the Preferred Securities of PWG Capital Trust IV
registered hereunder, containing the consent of such
counsel.....................................................
5.2c+ Opinion of Richards, Layton & Finger in respect of legality
of the Preferred Securities of PWG Capital Trust V
registered hereunder, containing the consent of such
counsel.....................................................
5.3+ Opinion of Theodore A. Levine in respect of the legality of
the Senior Debt Securities and Subordinated Debt Securities
registered hereunder, containing the consent of such
counsel.....................................................
8.1+ Opinion of Cravath, Swaine & Moore..........................
12.1 Computation of ratio of earnings to fixed charges and ratio
of earnings to combined fixed charges and preferred stock
dividends (incorporated by reference to Exhibits 12.1 and
12.2 to the Registrant's Quarterly Report on Form 10-Q for
the fiscal quarter ended September 30, 1998)................
23.1+ Consent of Cravath, Swaine & Moore (included in Exhibits 5.1
and 8.1)....................................................
23.2+ Consent of Richards, Layton & Finger (included in Exhibit
5.2)........................................................
23.3+ Consent of Theodore A. Levine (included in Exhibit 5.3).....
23.4+ Consent of Ernst & Young LLP................................
24.1+ Powers of Attorney for directors and officers of PaineWebber
Group Inc. (set forth on the signature pages of this
Registration Statement).....................................
24.2 Powers of Attorneys for PaineWebber Group, Inc., as sponsor,
to sign the Registration Statement on behalf of PWG Capital
Trust III, IV and V (included in Exhibits 4.3, 4.5 and 4.7,
respectively)...............................................
25.1+ Statement of Eligibility under the Trustee Indenture Act of
1939, as amended, of The Chase Manhattan Bank, as Trustee,
under the Senior Indenture, the Subordinated Indenture and
the Junior Subordinated Indenture...........................
25.2+ Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Chase Manhattan Bank, as Trustee,
with respect to the Amended and Restated Declaration of
Trust of PWG Capital Trust III..............................
25.3+ Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Chase Manhattan Bank, as Trustee,
with respect to the Amended and Restated Declaration of
Trust of PWG Capital Trust IV...............................
25.4+ Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Chase Manhattan Bank, as Trustee,
with respect to the Amended and Restated Declaration of
Trust of PWG Capital Trust V................................
25.5+ Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Chase Manhattan Bank, as Trustee,
under the Preferred Securities Guarantee of the Company with
respect to the Preferred Securities of PWG Capital Trust
III.........................................................
</TABLE>
E-2
<PAGE> 90
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. DESCRIPTION NUMBERED PAGE
------- ----------- -------------
<S> <C> <C>
25.6+ Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Chase Manhattan Bank, as Trustee,
under the Preferred Securities Guarantee of the Company with
respect to the Preferred Securities of PWG Capital Trust
IV..........................................................
25.7+ Statement of Eligibility under the Trust Indenture Act of
1939, as amended, of The Chase Manhattan Bank, as Trustee,
under the Preferred Securities Guarantee of the Company with
respect to the Preferred Securities of PWG Capital Trust
V...........................................................
</TABLE>
- ---------------
* Incorporated by reference to the corresponding exhibit to Paine Webber Group
Inc.'s Registration Statement on Form S-3 (Registration No. 33-52695-01).
** Incorporated by reference to the corresponding exhibit to Paine Webber Group
Inc.'s Registration Statement on Form S-3 (Registration No. 333-13831).
*** Incorporated by reference to the corresponding exhibit to Paine Webber Group
Inc.'s Registration Statement on Form S-3 (Registration No. 333-63107).
+ Filed herewith.
E-3
<PAGE> 1
EXHIBIT 1.1
[FORM OF PREFERRED SECURITIES UNDERWRITING AGREEMENT]
PWG CAPITAL TRUST [ ]
[ ] Preferred Securities
(Liquidation Amount $25 Per Preferred Security)
Guaranteed by
PAINE WEBBER GROUP INC.
UNDERWRITING AGREEMENT
_________, ____
PAINEWEBBER INCORPORATED
as Representative of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
PWG Capital Trust [ ] (the "Trust"), a business trust organized under the
Delaware Business Trust Act (the "Delaware Act") of the State of Delaware
(Chapter 38, Title 12, of the Delaware Code, 12 Del. C. ss. 3801 et seq.),
proposes to issue and sell an aggregate of [ ] shares of its [ ]% preferred
trust securities (the "Firm Securities"). The Trust has also agreed to grant to
you and the other Underwriters (as defined below) an option (the "Option") to
purchase up to an additional [ ] shares of its [ ]% preferred trust securities
(the "Option Securities") on the terms and for the purposes set forth in Section
1(b). The Firm Securities and the Option Securities are hereinafter collectively
referred to as the "Preferred Securities." The Preferred Securities will be sold
to you and to the other underwriters named in Schedule I (collectively, the
"Underwriters") for whom you are acting as representative (the
"Representative"). The Preferred Securities will be guaranteed, to the extent
set forth in the Prospectus (as defined in Section 3(a) hereof), by Paine Webber
Group Inc., a Delaware corporation (the "Company"). Capitalized terms used but
not separately defined herein are defined in the Prospectus and used herein as
so defined.
It is understood that substantially contemporaneously with the offering
and sale of the Firm Securities to the Underwriters contemplated hereby, (i) the
Trust, its trustees (the "Trustees") and the Company shall take all necessary
action to adopt an Amended and Restated Declaration of Trust in substantially
the form of the Form of Amended and Restated Declaration of Trust filed as
Exhibit 4.9 to the registration statement No. 333-______ (as defined in Section
3(a) hereof) (as so amended and restated, the "Declaration"), pursuant to which
the Trust shall (x) issue and sell the Preferred Securities to the Underwriters
pursuant hereto and (y) issue [ ] shares of its [ ]% common trust securities
(and up to an additional [ ] shares of such securities in connection with the
issuance and sale of the Option Securities) (the "Common Securities" and,
together with the Preferred Securities, the "Trust Securities")
<PAGE> 2
to the Company, in each case with such rights and obligations as shall be set
forth in the Declaration, (ii) the Company and The Chase Manhattan Bank, as
trustee (the "Debt Trustee"), shall enter into a Supplemental Indenture
substantially in the form filed as Exhibit 4.11 to the registration statement
No.333-____ (the "Supplemental Indenture" and, together with the Indenture dated
as of December 9, 1996 between the Company and The Chase Manhattan Bank, as
Trustee, hereinafter referred to as the "Indenture") providing for the issuance
of up to $[ ] in aggregate principal amount of the Company's [ ]% Junior
Subordinated Debentures due 20___ (the "Debentures"), (iii) the Company shall
sell such Debentures to the Trust in conjunction with the consummation of the
sale of the Preferred Securities to the Underwriters contemplated hereby and
(iv) the Company and The Chase Manhattan Bank, as Guarantee Trustee (the
"Guarantee Trustee"), shall enter into a Guarantee Agreement in substantially
the form of the Form of Guarantee Agreement with respect to the Preferred
Securities filed as Exhibit 4.13 to the registration statement No. 333-____ (the
"Guarantee") for the benefit of holders from time to time of the Preferred
Securities. The Preferred Securities together with the Guarantee are
collectively hereinafter called the "Offered Securities".
The Company confirms as follows its agreements with the Representative and
the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and
agreements of the Trust and the Company herein contained and subject to all the
terms and conditions of this Agreement, the Trust agrees to sell to each
Underwriter, and each Underwriter, severally and not jointly, agrees to purchase
from the Trust, at a purchase price of $25.00 per Preferred Security plus
accrued and unpaid distributions, if any, on the Firm Securities as of the
Closing Date (as defined below), the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule I, plus such additional number
of Firm Securities which such Underwriter may become obligated to purchase
pursuant to Section 8 hereof.
(b) Subject to all the terms and conditions of this Agreement,
the Trust grants the Option to the several Underwriters to purchase, severally
and not jointly, up to [ ] Option Securities from the Trust at the same purchase
price per Preferred Security as the Underwriters shall pay for the Firm
Securities plus any accrued and unpaid distributions on the Option Securities as
of the Option Closing Date (as defined below). The Option may be exercised only
to cover over-allotments in the sale of the Firm Securities by the Underwriters
and may be exercised in whole or in part at any time (but not more than once) on
or before the 30th day after the date hereof, upon written or telegraphic notice
(the "Option Securities Notice") by the Representative to the Trust and the
Company no later than 12:00 noon, New York City time, at least two and no more
than five business days before the date specified for closing in the Option
Securities Notice (the "Option Closing Date") setting forth the aggregate number
of Option Securities to be purchased and the time and date for such purchase. On
the Option Closing Date, the Trust will issue and sell to the Underwriters the
number of Option Securities set forth in the Option Securities Notice, and each
Underwriter will purchase such percentage of the Option Securities as is equal
to the percentage of Firm Securities that such Underwriter is purchasing, as
adjusted by the Representative in such manner as they deem advisable to avoid
fractional Preferred Securities.
(c) As compensation to the Underwriters for their commitment
hereunder, and in view of the fact that the proceeds of the sale of the
Preferred Securities will be used by the Trust to purchase the Debentures of the
Company, the Company hereby agrees to pay at the Closing Date and the Option
Closing Date, if applicable, for the account of the several Underwriters, an
amount equal to $25.00 per Preferred Security.
2
<PAGE> 3
2. Delivery and Payment. Delivery of the Firm Securities shall be
made to the Representative for the accounts of the Underwriters at the offices
of PaineWebber Incorporated, 1285 Avenue of the Americas, New York, New York
10019, against payment of the purchase price by credit of immediately available
funds to the account of the Trust with The Depository Trust Company. Such
payments shall be made at 10:00 a.m., New York City time, on the third business
day after the date on which the first bona fide offering of the Firm Securities
to the public is made by the Underwriters or at such time on such other date,
not later than seven business days after such date, as may be agreed upon by the
Trust and the Representative (such date is hereinafter referred to as the
"Closing Date").
To the extent the Option is exercised, delivery of the Option
Securities against payment by the Underwriters (in the manner specified above)
will take place at the time and date (which may be the Closing Date) specified
in the Option Securities Notice.
The cost of original issue tax stamps, if any, in connection with
the issuance and delivery of the Firm Securities and Option Securities by the
Trust to the respective Underwriters shall be borne by the Trust. The Trust will
pay and save each Underwriter and any subsequent holder of the Preferred
Securities harmless from any and all liabilities with respect to or resulting
from any failure or delay in paying Federal and state stamp and other transfer
taxes, if any, which may be payable or determined to be payable in connection
with the original issuance or sale to such Underwriter of the Firm Securities
and Option Securities.
At the Closing Date and the Option Closing Date, if any, the Company
will pay, or cause to be paid, the commission payable at such time to the
Underwriters under Section 1(c) hereof by wire transfer of immediately available
funds to a bank account (or bank accounts) designated by the Representative.
3. Representations and Warranties of the Trust and the Company. Each
of the Trust and the Company, jointly and severally, represents and warrants to,
and agrees with, the several Underwriters that:
(a) The Trust and the Company meet the requirements for use
of Form S-3 and a registration statements (Registration Nos. 333-______ and
333-13831) on Form S-3 relating to the Offered Securities, including a
preliminary prospectus relating to the Offered Securities and such amendments to
such registration statements as may have been required to the date of this
Agreement, have been prepared by the Company and the Trust under the provisions
of the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (collectively referred to as the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, and have been
filed with the Commission. Copies of such registration statements and amendments
and of each related preliminary prospectus have been delivered to the
Representative. The Company will next file with the Commission a final
prospectus relating to the Offered Securities in accordance with Rule 415 ("Rule
415") and Rule 424(b)(2) or (5) of the Rules and Regulations. As filed, such
final prospectus shall contain all such required information, with respect to
the Offered Securities and the offering thereof and, except to the extent the
Representative shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the time (the
"Execution Time") this Agreement is entered into or, to the extent not completed
at the Execution Time, shall contain only such specific additional information
and other changes as the Company has advised you, prior to the Execution Time,
will be included or made therein. If the Registration Statements (as defined
below) contain the undertaking specified by Regulation S-K Item 512(a), the
Registration Statements, at the Execution Time, meet the requirements set forth
in Rule 415(a)(1)(x). The term "preliminary prospectus" as used herein means any
preliminary prospectus (including the supplement thereto) relating to the
Offered
3
<PAGE> 4
Securities referred to above and any preliminary prospectus (including the
supplement thereto) relating to the Offered Securities included in the
Registration Statements at the Effective Date that omits information pursuant to
Rule 430A ("Rule 430A") of the Rules and Regulations. The term "Registration
Statements" mean the registration statements referred to above as amended at the
time each became effective (the "Effective Date") and, in the event any
post-effective amendment thereto becomes effective prior to the Closing Date
shall also mean such registration statements as so amended, including financial
statements and all exhibits and any information deemed to be included by Rule
430A of the Rules and Regulations after the Execution Time. The term
"Prospectus" means the prospectus (including the supplement thereto) relating to
the Offered Securities that is first filed with the Commission pursuant to Rule
424(b) ("Rule 424(b)") of the Rules and Regulations after the Execution Time or,
if no such filing is required, the form of final prospectus (including the
supplement thereto) relating to the Offered Securities included in the
Registration Statements at the Effective Date. Any reference herein to the
Registration Statements, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), on or before the Effective Date or
the date of such preliminary prospectus or the Prospectus, as the case may be.
Any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statements, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date, or the date of any preliminary
prospectus or the Prospectus, as the case may be, and deemed to be incorporated
therein by reference.
(b) On the Effective Date, at all times subsequent to and
including the Closing Date and, if later, the Option Closing Date and when any
post-effective amendment to the Registration Statements becomes effective, the
Registration Statements (as amended or supplemented if the Company and the Trust
shall have filed with the Commission any amendment or supplement thereto),
including the financial statements included or incorporated by reference in the
Prospectus, did or will comply with the applicable provisions of the Act, the
Exchange Act, the rules and regulations thereunder (the "Exchange Act Rules and
Regulations"), the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), the rules and regulations thereunder (the "Trust Indenture Act Rules and
Regulations") and the Rules and Regulations and will contain all statements
required to be stated therein in accordance with the Act, the Exchange Act, the
Exchange Act Rules and Regulations and the Rules and Regulations. On the date
the Prospectus is first filed with the Commission pursuant to Rule 424(b) (if
required), at all times subsequent to and including the Closing Date and, if
later, the Option Closing Date and when any amendment or supplement to the
Prospectus is filed with the Commission, the Prospectus (as amended or
supplemented if the Company and the Trust shall have filed with the Commission
any amendment or supplement thereto), including the financial statements
included or incorporated by reference in the Prospectus, will comply with the
applicable provisions of the Act, the Exchange Act, the Trust Indenture Act, the
Exchange Act Rules and Regulations, the Trust Indenture Rules and Regulations
and the Rules and Regulations and will contain all statements required to be
stated therein in accordance with the Act, the Exchange Act, the Exchange Act
Rules and Regulations and the Rules and Regulations. On the Effective Date and
when any post-effective amendment to the Registration Statements becomes
effective, no part of the Registration Statements or any such amendment did or
will contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein not misleading. At the Effective
Date, the Prospectus, if not filed pursuant to Rule 424(b), did not, and on the
date the Prospectus is filed (if required) with the Commission pursuant to Rule
424(b) and on the Closing Date, and, if later, the Option Closing Date, the
Prospectus will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omission made in reliance on and in conformity with information
relating to any Underwriter furnished in writing to the Company by the
Representative specifically for inclusion in the Registration Statements or the
Prospectus or any amendment or supplement thereto. The Company has not
distributed any offering material in connection with the
4
<PAGE> 5
offering or sale of the Offered Securities other than the Registration
Statements, the preliminary prospectus, the Prospectus or any other materials,
if any, permitted by the Act. On the Effective Date, the date the Prospectus is
first filed with the Commission pursuant to Rule 424(b) (if required), and at
all subsequent times to and including the Closing Date or, if later, the Option
Closing Date, the Indenture will comply with all applicable provisions of the
Trust Indenture Act and the Trust Indenture Act Rules and Regulations.
(c) The documents which are incorporated by reference in the
preliminary prospectus and the Prospectus or from which information is so
incorporated by reference, at the time they became effective or were filed with
the Commission, as the case may be, complied in all material respects with the
requirements of the Act and the Exchange Act, as applicable, the Exchange Act
Rules and Regulations and the Rules and Regulations and any documents so filed
and incorporated by reference subsequent to the Effective Date shall, when they
are filed with the Commission, conform in all material respects with the
requirements of the Act and the Exchange Act, as applicable, the Exchange Act
Rules and Regulations and the Rules and Regulations.
(d) The Company and each of the Company's "significant
subsidiaries" as such term is defined in Rule 1-02 of Regulation S-X under the
Act (collectively, the "Subsidiaries") is, and at the Closing Date will be, a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation. The Company and each of its Subsidiaries
has, and at the Closing Date will have, full power and authority to conduct all
the activities conducted by it, to own or lease all the assets owned or leased
by it and to conduct its business as described in the Registration Statements
and the Prospectus; except where the failure to have such power and authority
would not have a Material Adverse Effect (as defined below). The Company and
each of its Subsidiaries is, and at the Closing Date will be, duly licensed or
qualified to do business and in good standing as a foreign corporation in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such licensing or
qualification necessary except for such failures to be licensed or qualified as
would not materially and adversely affect the business, properties, business
prospects, condition (financial or otherwise) or results of operation of the
Trust or of the Company and its subsidiaries considered as one enterprise (a
"Material Adverse Effect"). All of the outstanding shares of capital stock of
the Subsidiaries have been duly authorized and validly issued and are fully paid
and non-assessable and are owned by the Company free and clear of all liens,
encumbrances and claims (collectively, "Liens") whatsoever except for such Liens
as would not have a Material Adverse Effect. Complete and correct copies of the
certificate of incorporation and of the by-laws of the Company and each of its
Subsidiaries and all amendments thereto have been delivered to the
Representative, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date or, if later, the Option Closing Date.
(e) The descriptions of the Preferred Securities, the Common
Securities, the Guarantee and the Debentures in the Registration Statements at
the Effective Date are, and the descriptions in the Prospectus at the date it is
first filed under Rule 424(b) and in the Registration Statements and the
Prospectus at the Closing Date will be, complete and accurate in all material
respects. The Indenture conforms to the description thereof contained in the
Registration Statements and the Prospectus in all material respects.
(f) The financial statements and schedules included or
incorporated by reference in the Registration Statements or the Prospectus, and
any amendment or supplement thereto, present fairly the consolidated financial
condition of the Company as of the respective dates thereof and the consolidated
results of operations and cash flows of the Company for the respective periods
covered thereby, all in conformity with generally accepted accounting principles
applied on a consistent basis throughout the entire period involved, except as
otherwise disclosed in the Prospectus. No other financial
5
<PAGE> 6
statements or schedules of the Company are required by the Act, the Exchange Act
or the Rules and Regulations to be included in the Registration Statements or
the Prospectus. Ernst & Young LLP (the "Accountants"), who have reported on such
financial statements and schedules, are independent accountants with respect to
the Company as required by the Act and the Rules and Regulations. The statements
included in the Registration Statements with respect to the Accountants pursuant
to Rule 509 of Regulation S-K of the Rules and Regulations are true and correct
in all material respects.
(g) Each of the Trust and the Company maintains a system of
internal accountings control sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(h) Subsequent to the respective dates as of which information
is given in the Registration Statements and the Prospectus and prior to the
Closing Date, except as set forth in or contemplated by the Registration
Statements or the Prospectus, (i) there has not been and will not have been any
change in the capitalization of the Trust or material change in the
capitalization of the Company, or any material adverse change in the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Trust or the Company and its subsidiaries considered as one
enterprise, arising for any reason whatsoever, (ii) neither the Trust nor the
Company nor any of its Subsidiaries has incurred nor will incur any material
liabilities or obligations, direct or contingent, nor have they entered into nor
will they enter into any material transactions other than pursuant to this
Agreement and the transactions referred to herein or, in the case of the Company
and its Subsidiaries, in the ordinary course of business, and (iii) the Trust
has not and will not have paid or declared any distributions of any kind on any
class of its securities.
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act; all filings required
under the laws of the State of Delaware with respect to the creation and valid
existence of the Trust as a business trust have been made; under the Delaware
Act and the Declaration, the Trust has the business trust power and authority to
(x) own property and conduct its business, all as described in the Prospectus,
(y) enter into and perform its obligations under this Agreement, and (z) issue
and perform its obligations under the Preferred Securities and the Common
Securities and is not required to be authorized to do business in any
jurisdiction other than Delaware; the Trust is not a party to or otherwise bound
by any agreement other than those described in the Prospectus; the Trust does
not have any consolidated or unconsolidated subsidiaries; and the Trust is and
will be treated as a consolidated subsidiary of the Company pursuant to
generally accepted accounting principles.
(j) The Declaration has been duly and validly authorized by
the Company and, when executed and delivered by the Company and the Regular
Trustees (as defined in the Declaration) at the Closing Date, and assuming due
authorization, execution and delivery thereof by the Property Trustee and the
Delaware Trustee (as such terms are defined in the Declaration), will be the
valid and binding obligation of the Company and the Regular Trustees,
enforceable against the Company and the Regular Trustees in accordance with its
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
6
<PAGE> 7
in equity or at law) and conforms to the description thereof contained in the
Prospectus; and, at the Closing Date, the Declaration will have been duly
qualified under the Trust Indenture Act.
(k) The execution and delivery by the Trust and the Company of
this Agreement and the performance by the Trust and the Company of their
respective obligations hereunder, have been duly authorized by all necessary
business trust action on the part of the Trust and corporate action on the part
of the Company; and this Agreement has been duly executed and delivered by the
Trust and the Company.
(l) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company against
payment therefor in accordance with the Declaration, will be validly issued and
fully paid and undivided beneficial interests in the assets of the Trust; and
under the Delaware Act and the Declaration, the issuance of the Common
Securities will not be subject to preemptive or other similar rights.
(m) The Preferred Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust in accordance with the
Declaration to the Underwriters and paid for in accordance with this Agreement,
will be validly issued, and fully paid and non-assessable undivided beneficial
interests in the assets of the Trust and will be entitled to the benefits of the
Declaration; provided, however, the holders of the Preferred Securities may be
obligated, pursuant to the Declaration, (i) to provide indemnity and/or security
in connection with and pay taxes or governmental charges arising from transfers
or exchanges of Preferred Securities and the issuance of replacement Preferred
Securities certificates, and (ii) to provide security or indemnity in connection
with requests of or directions to the Property Trustee (as defined in the
Declaration) to exercise its rights and powers under the Declaration. The
holders of the Preferred Securities, as beneficial owners of the Trust, will be
entitled to the same limitation of personal liability as that extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware; under the Delaware Act and the
Declaration, the issuance of the Preferred Securities will not be subject to
preemptive or other similar rights; and the Preferred Securities will conform to
the description thereof in the Prospectus.
(n) At the Closing Date and the Option Closing Date, all of
the issued and outstanding Common Securities of the Trust will be directly or
indirectly owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity other than any encumbrances
created by the terms of such Common Securities in the Declaration or by Section
4.04 of the Supplemental Indenture relating to the Debentures.
(o) At the Closing Date and the Option Closing Date, the
Property Trustee will be the record holder of the Debentures and no security
interest, mortgage, pledge, lien, encumbrance, claim or equity will be noted
thereon or on the Debenture register maintained by or on behalf of the Company.
(p) The Guarantee has been duly and validly authorized by the
Company and, when executed and delivered by the Company at the Closing Date,
will constitute a valid and legally binding agreement of the Company enforceable
in accordance with its 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); at the Closing Date, the Guarantee will have
been duly qualified under the Trust Indenture Act; and the Guarantee will
conform to the description thereof contained in the Prospectus.
7
<PAGE> 8
(q) The Indenture has been duly and validly authorized by the
Company and, when executed and delivered by the Company at the Closing Date and,
assuming due authorization, execution and delivery by the Debt Trustee, at such
Closing Date will constitute a valid and legally binding agreement of the
Company enforceable in accordance with its 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); at the Closing Date,
the Indenture will have been duly qualified under the Trust Indenture Act; and
the Indenture will conform to the description thereof contained in the
Prospectus.
(r) The Debentures have been duly and validly authorized by
the Company and, when executed and authenticated in accordance with the terms of
the Indenture and delivered to and paid for by the Trust in accordance with the
Declaration, will constitute valid and legally binding obligations of the
Company enforceable 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); and the Debentures
will be in the form contemplated by, and entitled to the benefits of, the
Indenture and will conform to the description thereof contained in the
Prospectus.
(s) Neither the Commission nor the Blue Sky or securities
authority of any jurisdiction has issued an order (a "Stop Order") suspending
the effectiveness of the Registration Statements, preventing or suspending the
use of any preliminary prospectus, the Prospectus, the Registration Statements
or any amendment or supplement thereto, refusing to permit the effectiveness of
the Registration Statements, suspending the registration or qualification of the
Offered Securities, nor have any such authorities instituted or, to the
knowledge of the Trust or the Company, threatened to institute any proceedings
with respect to a Stop Order in any jurisdiction in which the Offered Securities
are to be sold or in which the Offered Securities may be issued, nor, with
respect to accuracy on the Closing Date, has there been any Stop Order
instituted or, to the knowledge of the Trust or the Company, threatened on or
after the effective date of the Registration Statements in any jurisdiction.
(t) The execution, delivery and performance by the Company of
this Agreement, the Indenture, the Debentures, the Declaration and the Guarantee
and the execution, delivery and performance by the Trust of this Agreement and
the Trust Securities, the performance by the Trust of the Declaration and the
consummation of the transactions contemplated hereby and thereby and compliance
by the Company and the Trust, as the case may be, with the terms hereof and
thereof and the application of the net proceeds from the offering and sale of
the Trust Securities to be sold by the Trust and the Debentures to be sold by
the Company in the manner set forth in the Prospectus under "Use of Proceeds"
will not result in the creation or imposition of any lien, charge or encumbrance
upon any of the assets of the Trust (other than the creation of a lien on the
Debentures in favor of the holders of the Trust Securities as provided in the
Declaration) or the Company or any of the Subsidiaries pursuant to the terms or
provisions of, or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give any other party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under, the Declaration, the certificate of incorporation or by-laws
of the Company or any of the Subsidiaries, any contract or other agreement to
which the Trust or the Company or any of the Subsidiaries is a party or by which
the Trust or the Company or any of the Subsidiaries or any of their respective
properties is bound or affected, or violate or conflict with any judgment,
ruling, decree, order, statute, rule or regulation of any court or governmental
agency or body applicable to the
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<PAGE> 9
business or properties of the Trust or the Company or any of the Subsidiaries
except for any of the foregoing which would not have a Material Adverse Effect.
(u) No holder of securities of the Company or the Trust has
rights to the registration of any securities of the Company or the Trust because
of the filing of the Registration Statements.
(v) Neither the Trust nor the Company is an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
(w) Except as set forth in the Registration Statements and the
Prospectus, there are no actions, suits or proceedings pending or threatened
against or affecting the Trust or the Company or any of its Subsidiaries or any
of their respective officers in their capacity as such, before or by any Federal
or state court, commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, wherein an unfavorable ruling, decision
or finding would reasonably be expected to have a Material Adverse Effect.
(x) Each of the Trust and the Company and each of its
Subsidiaries has, and at the Closing Date will have, (i) all governmental
licenses, permits, consents, orders, approvals and other authorizations
necessary to carry on its business as contemplated in the Prospectus, (ii)
complied in all respects with all laws, regulations and orders applicable to it
or its business and (iii) performed all obligations required to be performed by
it, and is not, and at the Closing Date will not be, in default, under any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement, lease, contract or other agreement or
instrument (collectively, a "contract or other agreement") to which it is a
party or by which its property is bound or affected, except in the case of (i),
(ii) or (iii) above, for such failures to possess, comply or perform as would
not have a Material Adverse Effect. To the best knowledge of each of the Trust
and the Company and each of its Subsidiaries, no other party under any contract
or other agreement to which it is a party is in material default thereunder.
None of the Trust, the Company nor any of its Subsidiaries is, nor at the
Closing Date will any of them be, in violation of its respective Declaration,
charter or by-laws.
(y) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
in connection with the authorization, issuance, transfer, sale or delivery of
the Trust Securities by the Trust or the Guarantee and the Debentures by the
Company, in connection with the execution, delivery and performance of this
Agreement by the Trust and the Company or in connection with the taking by the
Trust or the Company of any action contemplated hereby and in the Indenture, the
Guarantee, the Preferred Securities and the Common Securities, except such as
have been obtained under the Act, the Exchange Act, the Trust Indenture Act and
the Exchange Act Rules and Regulations, the Trust Indenture Act Rules and
Regulations and the Rules and Regulations and such as may be required under
state securities or Blue Sky laws or the by-laws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with the
purchase and distribution by the Underwriters of the Preferred Securities.
(z) The Company and each of its Subsidiaries has valid,
subsisting and enforceable leases for the properties described in the
Registration Statements and the Prospectus as leased by it, with such exceptions
as are not material and do not materially interfere with the use made and
proposed to be made of such properties by the Company and such Subsidiaries.
(aa) There is no document or contract of a character required
to be described in the Registration Statements or the Prospectus or to be filed
as an exhibit to the Registration Statements
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<PAGE> 10
which is not described or filed as required. All such contracts to which the
Trust or the Company or any Subsidiary is a party have been duly authorized,
executed and delivered by the Trust or the Company or such Subsidiary,
constitute valid and binding agreements of the Trust or the Company or such
Subsidiary and are enforceable against the Trust or the Company or such
Subsidiary in accordance with the terms thereof (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).
(bb) No statement, representation, warranty or covenant made
by the Trust or the Company in this Agreement, the Indenture or the Declaration
or made in any certificate or document required by this Agreement to be
delivered to the Representative was or will be, when made, inaccurate, untrue or
incorrect in any material respect.
(cc) Neither the Company nor the Trust nor any of their
respective directors, officers, trustees or controlling persons has taken,
directly or indirectly, any action intended, or which might reasonably be
expected, to cause or result, under the Act or otherwise, in, or which has
constituted, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Preferred Securities.
(dd) Neither the Trust, the Company nor any of its
Subsidiaries is involved in any material labor dispute nor, to the knowledge of
the Trust or the Company, is any such dispute threatened.
(ee) The Company and its Subsidiaries own, or are licensed or
otherwise have the full right to use, all material trademarks and trade names
which are used in or necessary for the conduct of their respective businesses as
described in the Prospectus. No claims have been asserted by any person to the
use of any such trademarks or trade names or challenging or questioning the
validity or effectiveness of any such trademark or trade name except such claims
as would not reasonably be expected to have a Material Adverse Effect. The use,
in connection with the business and operations of the Company and its
Subsidiaries of such trademarks and trade names does not, to the Company's
knowledge, infringe on the rights of any person except such infringements as
would not reasonably be expected to have a Material Adverse Effect.
(ff) Neither the Trust, the Company nor any of its
Subsidiaries nor, to the Trust's or the Company's knowledge, any employee or
agent of the Trust, the Company or any Subsidiary has made any payment of funds
of the Trust, the Company or any Subsidiary or received or retained any funds in
violation of any law, rule or regulation or of a character required to be
disclosed in the Prospectus.
4. Agreements of the Trust and the Company. The Trust and the
Company, jointly and severally, agree with the several Underwriters as follows:
(a) The Company and the Trust will not, either prior to the
Effective Date or thereafter during such period as a prospectus is required by
law to be delivered in connection with sales of the Offered Securities by an
Underwriter or dealer, file any amendment or supplement to the Registration
Statements or the Prospectus, unless a copy thereof shall first have been
submitted to the Representative within a reasonable period of time prior to the
filing thereof and the Representative shall not have objected thereto in good
faith.
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<PAGE> 11
(b) The Trust and the Company will use their best efforts to
cause the Registration Statements to become effective (if not yet effective),
and will notify the Representative promptly, and will confirm such advice in
writing, (1) when the Registration Statements have become effective (if not yet
effective) and when any post-effective amendment thereto becomes effective, (2)
of any request by the Commission for amendments or supplements to the
Registration Statements or the Prospectus or for additional information, (3) of
the issuance by the Commission of any Stop Order suspending the effectiveness of
the Registration Statements or the initiation of any proceedings for that
purpose or the threat thereof, (4) of the happening of any event during the
period mentioned in the second sentence of Section 4(e) that in the judgment of
the Trust or the Company makes any statement made in the Registration Statements
or the Prospectus untrue or that requires the making of any changes in the
Registration Statements or the Prospectus in order to make the statements
therein, in the light of the circumstances in which they are made, not
misleading, and (5) of receipt by the Trust or the Company or any representative
or attorney of the Trust or the Company of any other communication from the
Commission relating to the Trust or the Company, the Registration Statements,
any preliminary prospectus or the Prospectus. If at any time the Commission
shall issue any order suspending the effectiveness of the Registration
Statements, the Trust and the Company will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible moment. The Trust
and the Company will use their best efforts to comply with the provisions of and
make all requisite filings with the Commission pursuant to Rule 430A, if any,
and to notify the Representative promptly of all such filings.
(c) The Trust or the Company will promptly furnish to the
Representative, without charge, two conformed copies of the Registration
Statements and of any post-effective amendment thereto, including financial
statements and schedules, and all exhibits thereto (including any document filed
under the Exchange Act and deemed to be incorporated by reference into the
Prospectus) and will furnish to the Representative, without charge, for
transmittal to each of the other Underwriters, copies of the Registration
Statements and any post-effective amendment thereto, including financial
statements and schedules.
(d) The Trust and the Company will comply with all the
provisions of any undertakings contained in the Registration Statements.
(e) On the Effective Date, and thereafter from time to time,
the Company will deliver to each of the Underwriters, without charge, as many
copies of the preliminary prospectus and Prospectus and any amendment or
supplement thereto, as the Representative may reasonably request. The Company
and the Trust consent to the use of the preliminary prospectus or Prospectus and
any amendment or supplement thereto, as the case may be, by the several
Underwriters and by all dealers to whom the Offered Securities may be sold, both
in connection with the offering or sale of the Offered Securities and for any
period of time thereafter during which the Prospectus is required by law to be
delivered in connection therewith. If during such period of time any event shall
occur which in the judgment of the Company or counsel to the Underwriters should
be set forth in the Prospectus in order to make any statement therein, in the
light of the circumstances under which it was made, not misleading in any
material respect, or if it is necessary to supplement or amend the Prospectus to
comply with law, the Company will forthwith prepare and duly file with the
Commission an appropriate supplement or amendment thereto, and will deliver to
each of the Underwriters, without charge, such number of copies thereof as the
Representative may reasonably request. The Company shall not file any document
under the Exchange Act before the termination of the offering of the Offered
Securities by the Underwriters if such document would be deemed to be
incorporated by reference into the Prospectus which is not approved by the
Representative after reasonable notice thereof.
(f) Prior to any public offering of the Offered Securities by
the Underwriters, the Trust and the Company will cooperate with the
Representative and counsel to the
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<PAGE> 12
Underwriters in connection with the registration or qualification of the Offered
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representative may request; provided, that in no event
shall the Trust or the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to general service of process in any jurisdiction where it is not now
so subject.
(g) During the period of five years commencing on the
Effective Date, the Company will furnish to the Representative and each other
Underwriter who may so request 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 will furnish to
the Representative and each Underwriter who may so request a copy of each annual
or other report it shall be required to file with the Commission.
(h) The Company will make generally available to holders of
the Preferred Securities and the Representative as soon as may be practicable
but in no event later than the last day of the fifteenth full calendar month
following the calendar quarter in which the Effective Date falls, an earnings
statement (which need not be audited but shall be in reasonable detail) for a
period of 12 months ended commencing after the Effective Date, and satisfying
the provisions of Section 11(a) of the Act (including Rule 158 of the Rules and
Regulations).
(i) The Trust will apply the net proceeds from the offering
and sale of the Preferred Securities in the manner set forth in the Prospectus
under the caption "Use of Proceeds."
(j) During a period of 30 days from the date hereof, neither
the Trust nor the Company will, without the Representative's prior written
consent, directly or indirectly, sell, offer to sell, contract to sell, grant
any option for the sale of, or otherwise dispose of, any Preferred Securities,
any security convertible into or exchangeable into or exercisable for, Preferred
Securities or Debentures or any debt securities substantially similar to the
Debentures or any equity securities substantially similar to the Preferred
Securities, except for the Debentures and Preferred Securities offered hereby.
For the avoidance of doubt, it is acknowledged that debt securities
substantially similar to the Debentures would be debt securities that have
substantially the same rate, maturity and other provisions as the Debentures.
(k) The Trust and the Company will use every reasonable effort
to effect and maintain the listing of the Preferred Securities on the New York
Stock Exchange (the "NYSE") and to file with the NYSE all documents and notices
required by the NYSE of issuers that have securities quoted on such exchange.
(l) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay
or cause to be paid or reimburse if paid by the Representative all costs and
expenses incident to the performance of the obligations of the Trust and the
Company under this Agreement, including but not limited to costs and expenses of
or relating to (1) the preparation, printing and filing of the Registration
Statements and exhibits to it, each preliminary prospectus, the Prospectus, any
amendment or supplement to the Registration Statements or the Prospectus and the
Indenture, (2) the preparation and delivery of certificates representing the
Trust Securities, (3) the printing of this Agreement, the Agreement Among
Underwriters, any Dealer Agreements and any Underwriters' Questionnaire, (4)
furnishing (including cost of shipping, mailing and courier) such copies of the
Registration Statements, the Prospectus and any preliminary prospectus, and all
amendments and supplements thereto, as may be requested for use in connection
with the offering and sale of the Offered Securities by the Underwriters or by
dealers to whom Preferred Securities may be sold, (5) the listing of the
Preferred Securities on the NYSE, (6) any filings required to be made by the
Underwriters with the NASD, and the fees, disbursements and other charges of
counsel for the
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<PAGE> 13
Underwriters in connection therewith, (7) the registration or qualification of
the Offered Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions designated pursuant to Section 4(f), including the fees,
disbursements and other charges of counsel to the Underwriters in connection
therewith, and the preparation and printing of preliminary, supplemental and
final Blue Sky memoranda, (8) counsel to the Company and the Trust, (9) the
transfer agent and registrar for the Trust Securities, (10) the rating of the
Debentures by one or more rating agencies, (11) the Debt Trustee under the
Indenture, the Guarantee Trustee under the Guarantee, the Property Trustee, the
Delaware Trustee and the Regular Trustees under the Declaration and any agents
of such trustees and the fees, disbursements and other charges of counsel for
such trustees in connection with the Indenture, the Guarantee, the Declaration
and the Debentures and (12) the Accountants.
(m) If this Agreement shall be terminated by the Company or
the Trust pursuant to any of the provisions hereof (other than pursuant to
Section 8) or if for any reason the Company or the Trust shall be unable to
perform its obligations hereunder, the Company or the Trust will reimburse the
several Underwriters for all out-of-pocket expenses (including the fees,
disbursements and other charges of counsel to the Underwriters) reasonably
incurred by them in connection herewith.
(n) The Company and the Trust will not at any time, directly
or indirectly, take any action intended, or which might reasonably be expected,
to cause or result in, or which will constitute, stabilization of the price of
the Preferred Securities to facilitate the sale or resale of any of the
Preferred Securities.
(o) The Company will not claim the benefit of any usury law
against any holders of Debentures or Preferred Securities.
5. Conditions of Obligations of the Underwriters. The obligations of
each Underwriter hereunder are subject to the following conditions:
(a) Notification that the Registration Statements have become
effective shall be or have been received by the Representative not later than
5:00 P.M., New York City time, on the date of this Agreement or at such later
date and time as shall be consented to in writing by the Representative and all
filings required by Rule 424 of the Rules and Regulations and Rule 430A shall
have been made.
(b) (i) No Stop Order suspending the effectiveness of the
Registration Statements shall have been issued and no proceeding for that
purpose shall be pending or threatened by the Commission; (ii) no order
suspending the effectiveness of the Registration Statements or the qualification
or registration of the Offered Securities under the securities or Blue Sky laws
of any jurisdiction shall be in effect and no proceeding for such purpose shall
be pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statements or the Prospectus shall have been filed unless a
copy thereof was first submitted to the Representative and the Representative
did not object thereto in good faith, and the Representative shall have received
a certificate dated the Closing Date and signed by the chief executive officer
or a vice president and the principal financial or accounting officer of the
Company (who may, as to proceedings threatened, rely upon the best of their
information and belief), to the effect of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is
given in the Registration Statements and the Prospectus (i) there shall not have
been a material adverse change in the general affairs, business, business
prospects, properties, management, condition (financial or otherwise)
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<PAGE> 14
or results of operations of the Company and its subsidiaries, considered as one
enterprise, 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
Registration Statements and the Prospectus, and (ii) neither the Company nor any
of its Subsidiaries shall have sustained any material loss or interference with
its business or properties from fire, explosion, flood or other casualty,
whether or not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is not set
forth in the Registration Statements and the Prospectus, if in the judgment of
the Representative any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Offered Securities by the Underwriters
in accordance with the terms hereof and thereof.
(d) Since the respective dates as of which information is
given in the Registration Statements and the Prospectus, there shall have been
no litigation or other proceeding instituted against the Trust, the Company or
any of its Subsidiaries or any of their respective officers or directors in
their capacities as such, before or by any Federal, state or local court,
commission, regulatory body, administrative agency or other governmental body,
domestic or foreign, in which litigation or proceeding an unfavorable ruling,
decision or finding would materially and adversely affect the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company and its subsidiaries considered as one enterprise.
(e) Each of the representations and warranties of the Company
and the Trust contained herein shall be true and correct in all material
respects on the Closing Date and, with respect to the Option Securities, on the
Option Closing Date, if applicable, as if made on the Closing Date, or on the
Option Closing Date, if applicable, and all covenants and agreements herein
contained to be performed on the part of the Trust and the Company and all
conditions herein contained to be fulfilled or complied with by the Company or
the Trust on or prior to the Closing Date and, with respect to the Option
Securities, on or prior to the Option Closing Date, if applicable, shall have
been duly performed, fulfilled or complied with.
(f) The Representative shall have received an opinion of
Cravath, Swaine & Moore, counsel for the Trust and the Company, dated the
Closing Date and with respect to the Option Securities, the Option Closing Date,
to the effect set forth in Exhibit A hereto, addressed to the Underwriters.
(g) The Representative shall have received an opinion of
Theodore A. Levine, General Counsel of the Company, dated the Closing Date and
with respect to the Option Securities, the Option Closing Date, to the effect
set forth in Exhibit B hereto, addressed to the Underwriters.
(h) The Representative shall have received an opinion of
Richards, Layton & Finger, special Delaware counsel to the Trust, dated the
Closing Date and with respect to the Option Securities, the Option Closing Date,
to the effect set forth in Exhibit C hereto, addressed to the Underwriters.
(i) On the Closing Date, the Representative shall have
received a certificate of the Company, in its capacity as Sponsor of the Trust
and on its own behalf, and of the Chief Financial Officer, the Controller or the
Treasurer of the Company, dated the Closing Date, to the effect that the
conditions set forth in this Section 5 have been satisfied, that as of the date
hereof and on the Closing Date, the representations and warranties of the Trust
and the Company set forth in Section 3 hereof are true and correct in all
material respects, and that on the Closing Date, each of the covenants and
obligations of the Trust and the Company to be performed hereunder on or prior
to the Closing Date have been duly performed in all material respects. In
addition, such certificate shall state that the signer of
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<PAGE> 15
such certificate has carefully examined the Registration Statements and the
Prospectus (including the documents incorporated by reference therein) and (A)
as of the date of such certificate, such documents are true and correct in all
material respects and do not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not untrue or
misleading and (B) in the case of the certificate delivered on the Closing Date
and the Option Closing Date, if applicable, since the Effective Date no event
has occurred as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein not untrue or misleading in
any material respect and there has been no document required to be filed under
the Exchange Act and the rules and regulations thereunder that upon such filing
would be deemed to be incorporated by reference into the Prospectus that has not
been so filed.
(j) Concurrently with the execution and delivery of this
Agreement, the Accountants shall have furnished to the Representative a letter,
dated the date of its delivery, addressed to the Representative and in form and
substance satisfactory to the Representative, confirming that they are
independent accountants with respect to the Trust and the Company as required by
the Act and the Rules and Regulations and with respect to the financial and
other statistical and numerical information contained in the Registration
Statements or incorporated by reference therein. On the Closing Date and, as to
the Option Securities, the Option Closing Date, if applicable, the Accountants
shall have furnished to the Representative a letter, dated the date of its
delivery, which shall confirm, on the basis of a review in accordance with the
procedures set forth in the letter from the Accountants, that nothing has come
to their attention during the period from the date of the letter referred to in
the prior sentence to a date (specified in the letter) not more than three days
prior to the Closing Date and the Option Closing Date, if applicable, which
would require any change in their letter dated the date hereof if it were
required to be dated and delivered on the Closing Date and the Option Closing
Date, if applicable.
(k) The Representative shall have received an opinion, dated
the Closing Date, and, with respect to the Option Securities, the Option Closing
Date, from Brown & Wood LLP, counsel to the Underwriters, with respect to the
Registration Statements, the Prospectus, and this Agreement, which opinion shall
be satisfactory in all respects to the Representative.
(l) The Offered Securities shall be qualified for sale in such
states as the Representative may reasonably request, each such qualification
shall be in effect and not subject to any Stop Order or other proceeding on the
Closing Date or the Option Closing Date, if applicable.
(m) Prior to the Closing Date, the Preferred Securities shall
have been duly authorized for listing by the NYSE upon official notice of
issuance, and the Representative shall have been furnished with appropriate
evidence, reasonably satisfactory to it and its counsel, of the granting of such
authorization for listing of the Preferred Securities by the NYSE.
(n) The Trust and the Company shall have furnished to the
Representative such certificates, in addition to those specifically mentioned
herein, as the Representative may have reasonably requested as to the accuracy
and completeness on the Closing Date and the Option Closing Date, if applicable,
of any statement in the Registration Statements or the Prospectus or any
documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus, as to the accuracy on the Closing Date and the
Option Closing Date, if applicable, of the representations and warranties of the
Trust and the Company herein, as to the performance by the Trust and the Company
of their respective obligations hereunder, or as to the fulfillment of the
conditions concurrent and precedent to the obligations hereunder of the
Representative.
6. Indemnification.
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<PAGE> 16
(a) The Trust and the Company, jointly and severally, will
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person, if any, who controls each
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, liabilities, expenses
and damages (including any and all investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third party, or
otherwise, or any claim asserted), to which any Underwriter, or any such person,
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, liabilities, expenses or damages arise out of or are based on any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statements or the Prospectus or any
amendment or supplement to the Registration Statements or the Prospectus or the
omission or alleged omission to state in such document a material fact required
to be stated in it or necessary to make the statements in it not misleading,
provided that neither the Company nor the Trust will be liable to the extent
that such loss, claim, liability, expense or damage arises from the sale of the
Offered Securities in the public offering to any person by an Underwriter and is
based on an untrue statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company or the Trust by the
Representative on behalf of any Underwriter expressly for inclusion in the
Registration Statements, any preliminary prospectus or the Prospectus. This
indemnity agreement will be in addition to any liability which the Trust and the
Company might otherwise have including under this Agreement.
(b) Each Underwriter will indemnify and hold harmless (i) the
Trust, the Trustees, its officers who sign the Registration Statements and any
person controlling the Trust within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act and (ii) the Company, its directors, its officers
who shall have signed the Registration Statements, and each other person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, in each case to the same extent as the foregoing
indemnity from the Trust and the Company to each Underwriter, but only insofar
as losses, liabilities, claims, expenses or damages arise out of or are based
upon any untrue statement or omission or alleged untrue statement or omission,
made in reliance on and in conformity with written information furnished to the
Trust or the Company by the Representative expressly for use in the Registration
Statements, any preliminary prospectus or the Prospectus. This indemnity will be
in addition to any liability that each Underwriter may otherwise have.
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 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 6, 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
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 6 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, 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,
expenses and other charges of such counsel will
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<PAGE> 17
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 (based on advice of
counsel) that there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available to the
indemnifying party, (3) a conflict or potential conflict exists (based on advice
of counsel to the indemnified party) between the indemnified party and 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 (4)
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 reasonable fees, disbursements and
other charges of counsel will be at the expense of the indemnifying party or
parties. It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm admitted to practice in such jurisdiction at any one time for
all such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party 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 (which consent will not be
unreasonably withheld). No indemnifying party shall, without the prior written
consent of each indemnified party, settle or compromise or consent to the entry
of any judgment in any pending or threatened claim, action or proceeding
relating to the matters contemplated by this Section 6 (whether or not any
indemnified party is a party thereto), unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising or that may arise out of such claim, action or proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Trust and the Company or the
Underwriters, the Trust, the Company and the Underwriters shall contribute to
the aggregate losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claims asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Trust or the Company, any contribution
received by the Trust or the Company from persons other than the Underwriters,
such as persons who control the Trust or the Company within the meaning of the
Act and directors and officers of the Company) to which the Trust, the Company
and any one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Trust and the
Company on the one hand and the Underwriters on the other. The relative benefits
received by the Trust and the Company on the one hand and the Underwriters on
the other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses other than underwriting discounts
and commissions) received by the Trust and the Company bear to the total
underwriting discounts and commissions received by the Underwriters,
respectively, in each case as set forth in the table on the cover page of the
Prospectus. If, but only if, the allocation provided by the foregoing sentence
is not permitted by applicable law, the allocation of contribution shall be made
in such proportion as is appropriate to reflect not only the relative benefits
referred to in the foregoing sentence but also the relative fault of the Trust
and the Company on the one hand and the Underwriters on the other with respect
to the statements or omissions which resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. The relative fault of
the Trust and the Company on the one hand and of the Underwriters on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact related to information supplied by the Trust or the
Company or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Trust, the Company and the
17
<PAGE> 18
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 6(d) were to be determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 6(d) shall be deemed to
include, for purpose of this Section 6(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6(d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions received by it, and no
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) will be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Section 6(d) are several in
proportion to their respective underwriting obligations and not joint. For
purposes of this Section 6(d), any person who controls a party to this Agreement
within the meaning of the Act will have the same rights to contribution as that
party, and each officer of the Trust and the Company who signed the Registration
Statements will have the same rights to contribution as the Trust and the
Company, respectively, subject in each case to the provisions hereof. Any party
entitled to contribution, 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 6(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6(d). No party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in
this Section 6 and the representations and warranties of the Company contained
in this Agreement shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of the Underwriters, (ii)
acceptance of any of the Offered Securities and payment therefor, or (iii) any
termination of this Agreement.
7. Termination. The obligations of the several Underwriters under
this Agreement may be terminated at any time on or prior to the Closing Date
(or, with respect to the Option Securities, on or prior to the Option Closing
Date), by notice to the Trust and the Company from the Representative, without
liability on the part of any Underwriter to the Trust or the Company, if, prior
to delivery and payment for the Preferred Securities (or the Option Securities,
as the case may be), in the sole judgment of the Representative, (i) trading in
any of the equity securities of the Company shall have been suspended by the
Commission, by an exchange that lists the Preferred Securities or by the Nasdaq
Stock Market, (ii) trading in securities generally on the NYSE shall have been
suspended or limited or minimum or maximum prices shall have been generally
established on such exchange, or additional material governmental restrictions,
not in force on the date of this Agreement, shall have been imposed upon trading
in securities generally by such exchange or by order of the Commission or any
court or other governmental authority, (iii) a general banking moratorium shall
have been declared by either Federal or New York State authorities, or (iv) any
material adverse change in the financial or securities markets in the United
States or in political, financial or economic conditions in the United States or
any outbreak or material escalation of hostilities or declaration by the United
States of a national emergency or war or other calamity or crisis shall have
occurred, the effect of any of which is such as to make it, in the sole judgment
of the Representative, impracticable or inadvisable to market the Offered
Securities on the terms and in the manner contemplated by the Prospectus.
8. Substitution of Underwriters. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Securities which
it or they have agreed to purchase hereunder, and the
18
<PAGE> 19
aggregate principal amount of Firm Securities which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate principal amount of Firm Securities, the other
Underwriters shall be obligated, severally, to purchase the Firm Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase, in the proportions which the principal amount of Firm Securities
which they have respectively agreed to purchase pursuant to Section 1 bears to
the aggregate principal amount of Firm Securities which all such non-defaulting
Underwriters have so agreed to purchase, or in such other proportions as the
Representative may specify; provided that in no event shall the maximum
principal amount of Firm Securities which any Underwriter has become obligated
to purchase pursuant to Section 1 be increased pursuant to this Section 8 by
more than one-ninth of the principal amount of Firm Securities agreed to be
purchased by such Underwriter without the prior written consent of such
Underwriter. If any Underwriter or Underwriters shall fail or refuse to purchase
any Firm Securities and the aggregate principal amount of Firm Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase exceeds one-tenth of the aggregate principal amount of the Firm
Securities and arrangements satisfactory to the Representative and the Trust and
the Company for the purchase of such Firm Securities are not made within 48
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter or the Trust and the Company for the
purchase or sale of any Preferred Securities under this Agreement. In any such
case either the Representative or the Trust and the Company shall have the right
to postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statements and in
the Prospectus or in any other documents or arrangements may be effected. Any
action taken pursuant to this Section 8 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
9. Miscellaneous. Notice given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Trust, at 1285 Avenue of the Americas, New
York, New York 10019, Attention: Treasurer, Paine Webber Group Inc., or (b) if
to the Company, at the office of the Company, 1285 Avenue of the Americas, New
York, New York 10019, Attention: Treasurer, Paine Webber Group Inc., or (c) if
to the Underwriters, to the Representative at the offices of PaineWebber
Incorporated, 1285 Avenue of the Americas, New York, New York 10019, Attention:
Corporate Finance Department. Any such notice shall be effective only upon
receipt. Any notice under Section 7 or 8 may be made by facsimile, telex or
telephone, but if so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
several Underwriters and the Trust and the Company and of the controlling
persons, Trustees, directors and officers referred to in Section 6, and their
respective successors and assigns, and no other person shall acquire or have any
right under or by virtue of this Agreement. The term "successors and assigns" as
used in this Agreement shall not include a purchaser, as such purchaser, of
Offered Securities from any of the several Underwriters.
All representations, warranties and agreements of the Trust and the
Company contained herein or in certificates or other instruments delivered
pursuant hereto, shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any Underwriter or any of their
controlling persons and shall survive delivery of and payment for the Preferred
Securities hereunder.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE.
This Agreement may be signed in two or more counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
19
<PAGE> 20
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Trust, the Company and the Underwriters each hereby irrevocably
waive any right they may have to trial by jury in respect of any claim based
upon or arising out of this Agreement or the transactions contemplated hereby.
This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by the
Representative, the Trust and the Company.
Please confirm that the foregoing correctly sets forth the agreement among
the Trust, the Company and the several Underwriters.
Very truly yours,
PWG CAPITAL TRUST [ ]
a Delaware business trust
By: PAINE WEBBER GROUP INC.
as Sponsor
By: _______________________________
Title:
PAINE WEBBER GROUP INC.
By: _______________________________
Title:
Confirmed as of the date first above mentioned:
PAINEWEBBER INCORPORATED Acting on behalf of themselves and as the
Representative of the other several Underwriters named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By: _______________________________
Title:
20
<PAGE> 21
SCHEDULE I
UNDERWRITERS
Name of Number of
Underwriters Firm
Securities
to be
Purchased
PaineWebber Incorporated..................... [ ]
[underwriter] ............................... [ ]
[underwriter] ............................... [ ]
[underwriter]................................ [ ]
[underwriter] ............................... [ ]
-----------------
Total .................................. [ ]
=================
21
<PAGE> 22
EXHIBIT A
TO
UNDERWRITING AGREEMENT
FORM OF
OPINION OF CRAVATH, SWAINE & MOORE
22
<PAGE> 23
EXHIBIT B
TO
UNDERWRITING AGREEMENT
----------------------
FORM of OPINION of
[General Counsel of Paine Webber Group Inc.]
23
<PAGE> 24
EXHIBIT C
TO
UNDERWRITING AGREEMENT
FORM OF OPINION OF
RICHARDS, LAYTON & FINGER
SPECIAL DELAWARE COUNSEL
_________, ____
To Each of the Persons Listed
on Schedule I Hereto
Re: PWG Capital Trust [ ]
Ladies and Gentlemen:
We have acted as special Delaware counsel for Paine Webber Group
Inc., a Delaware corporation ("Paine Webber"), and PWG Capital Trust [ ], a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. This opinion is being furnished to you pursuant to Section 5(h) of the
Underwriting Agreement referred to below.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of ___________
(the "Certificate"), as filed in the office of the Secretary of
State of the State of Delaware (the "Secretary of State") on
___________;
(b) The Declaration of Trust of the Trust, dated as of ____________,
among Paine Webber, and the trustees of the Trust named therein
(collectively, the "Trustees");
(c) The Amended and Restated Declaration of Trust of the Trust,
dated as of __________ (including Exhibits A, B and C thereto) (the
"Declaration"), among Paine Webber, as Sponsor, the Trustees and the
holders, from time to time, of undivided beneficial interests in the
assets of the Trust;
(d) The Underwriting Agreement, dated ___________ (the "Underwriting
Agreement"), among the Trust, Paine Webber and PaineWebber
Incorporated, individually and as Representative of the several
underwriters named in Schedule I thereto (the "Underwriters");
(e) The Registration Statements on Form S-3 of Paine Webber, the
Trust and others (Registration Nos. 333- ______ and 333-13831, the
"Registration Statements") as filed with the Securities and Exchange
Commission (the "Commission") on _________, as amended by Amendment
No. 1 thereto filed with the Commission on ________,
24
<PAGE> 25
including a prospectus, dated __________, and a prospectus
supplement, dated ____________ (together, the "Prospectus"),
relating to the [ ]% Preferred Trust Securities of the Trust,
representing preferred undivided beneficial interests in the assets
of the Trust (each, a "Preferred Security" and collectively, the
"Preferred Securities"); and
(f) A Certificate of Good Standing for the Trust, dated the date
hereof, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined
are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (f) above. In
particular, we have not reviewed any document (other than the documents listed
in paragraphs (a) through (f) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there exists
no provision in any document that we have not reviewed that is inconsistent with
the opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the foregoing
documents, the statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Declaration constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation, and termination of the Trust, and that the Declaration and the
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation, due formation or
due organization, as the case may be, and valid existence in good standing of
each party to the documents examined by us under the laws of the jurisdiction
governing its creation, formation or organization, (iii) the legal capacity of
each natural person who is a party to the documents examined by us, (iv) except
to the extent provided in paragraph 5 below, that each of the parties to the
documents examined by us has the power and authority to execute and deliver, and
to perform its obligations under, such documents, (v) except to the extent
provided in paragraph 5, 6 and 7 below, that each of the parties to the
documents examined by us has duly authorized, executed and delivered such
documents, (vi) the receipt by each Person to whom a Preferred Security is to be
issued by the Trust (the "Holders") of a Preferred Securities Certificate for
such Preferred Security and the payment for the Preferred Security acquired by
it, in accordance with the Declaration and the Prospectus, (vii) that the
Preferred Securities are issued and sold to the Holders in accordance with the
Declaration and the Prospectus, (viii) that the Trust derives no income from or
connected with sources within the State of Delaware and has no assets,
activities (other than having a Delaware trustee as required by the Delaware
Business Trust Act and the filing of documents with the Secretary of State) or
employees in the State of Delaware, (ix) the receipt by the Person (the "Common
Security Holder") to whom a [ ]% Common Security of the Trust representing
common undivided beneficial interests in the assets of the Trust (each, a
"Common Security" and collectively, the "Common Securities") (the Preferred
Securities and the Common Securities being hereinafter collectively referred to
as the "Trust Securities") is to be issued by
25
<PAGE> 26
the Trust of a Common Securities Certificate for the Common Security and the
payment for the Common Security acquired by it, in accordance with the
Declaration, and as described in the Prospectus, (x) that the Common Securities
are issued and sold to the Common Security Holder in accordance with the
Declaration, and as described in the Prospectus, and (xi) that the Trust is
treated as a grantor trust for federal income tax purposes. We have not
participated in the preparation of the Prospectus and assume no responsibility
for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, and all
filings required under the laws of the State of Delaware with respect to the
creation and valid existence of the Trust as a business trust have been made.
2. Under the Delaware Business Trust Act and the Declaration, the
Trust has the trust power and authority to own its property and conduct its
business, all as described in the Prospectus.
3. The Declaration constitutes a valid and binding obligation of
Paine Webber and the Trustees, and is enforceable against Paine Webber and the
Trustees, in accordance with its terms.
4. Under the Delaware Business Trust Act and the Declaration, the
Trust has the trust power and authority (i) to execute and deliver, and to
perform its obligations under, the Underwriting Agreement and (ii) to issue and
perform its obligations under the Preferred Securities.
5. Under the Delaware Business Trust Act and the Declaration, the
execution and delivery by the Company on behalf of the Trust of the Underwriting
Agreement and the performance by the Trust of its obligations thereunder have
been duly authorized by all necessary trust action on the part of the Trust.
6. The Common Securities have been duly authorized by the
Declaration and, when issued and sold in accordance with the Declaration,
represent validly issued undivided beneficial interests in the assets of the
Trust.
7. The Preferred Securities have been duly authorized by the
Declaration and are duly and validly issued and, subject to the qualifications
set forth herein, fully paid and non-assessable undivided beneficial interests
in the assets of the Trust and are entitled to the benefits of the Declaration.
The Holders, as beneficial owners of the Trust, will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. We note that the Holders may be obligated, pursuant to the
Declaration, (i) to provide indemnity and/or security in connection with and pay
taxes or governmental charges arising from
26
<PAGE> 27
transfers or exchanges of Preferred Securities Certificates and the issuance of
replacement Preferred Securities Certificates, and (ii) to provide security or
indemnity in connection with requests of or directions to the Property Trustee
to exercise its rights and powers under the Declaration.
8. Under the Delaware Business Trust Act, the certificates attached
to the Declaration as Exhibits B and C are appropriate forms of certificates to
evidence ownership of the Preferred Securities and Common Securities,
respectively.
9. Under the Delaware Business Trust Act and the Declaration, the
issuance of the Preferred Securities is not subject to preemptive rights.
10. The issuance and sale by the Trust of the Preferred Securities,
the execution, delivery and performance by the Trust of the Underwriting
Agreement, the consummation by the Trust of the transactions contemplated
thereby and compliance by the Trust with its obligations thereunder do not
violate (i) any of the provisions of the Certificate or the Declaration, or (ii)
any applicable Delaware law or administrative regulation.
11. No authorization, approval, consent or order of any Delaware
court or Delaware governmental authority or agency is required to be obtained by
the Trust solely in connection with the issuance and sale of the Preferred
Securities.
12. The Holders of the Preferred Securities (other than those
Holders who reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely as a result
of their participation in the Trust, and the Trust will not be liable for any
income tax imposed by the State of Delaware.
The opinion expressed in paragraph 3 above is subject, as to
enforcement, to the effect upon the Declaration of (i) bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation, fraudulent transfer and
other similar laws relating to or affecting the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a proceeding
in equity or at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution.
We consent to your relying as to matters of Delaware law upon this
opinion in connection with the Underwriting Agreement. We also consent to the
reliance of Brown & Wood LLP, Theodore A. Levine, Esq. and Cravath, Swaine &
Moore as to matters of Delaware law upon this opinion in connection with
opinions to be rendered by them to the Underwriters pursuant to the Underwriting
Agreement. Except as stated above, without our prior written consent, this
opinion may not be furnished or quoted to, or relied upon by, any other person
for any purpose.
Very truly yours,
27
<PAGE> 1
EXHIBIT 4.1
INDENTURE
Among
Paine Webber Group Inc.
and
The Chase Manhattan Bank,
as Trustee
Dated as of December 9, 1996
Junior Subordinated Debentures
<PAGE> 2
TABLE OF CONTENTS(1)
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES...................................................................................................1
RECITALS
Purpose of Indenture.......................................................1
Compliance with legal
requirements...............................................................1
Purpose of and consideration
for Indenture..............................................................1
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain terms defined in the Trust Indenture
Act of 1939, as amended, or by reference
therein in the Securities Act of 1933, as
amended, to have the meanings assigned
therein....................................................................2
Authenticating Agent...........................................................2
Board of Directors.............................................................2
Board Resolution...............................................................2
Business Day...................................................................3
Certificate....................................................................3
Common Securities..............................................................3
Company........................................................................3
Corporate Trust Office.........................................................3
Declaration of Trust...........................................................3
Debenture or Debentures........................................................3
Debentureholder................................................................3
Default........................................................................4
Depositary.....................................................................4
Event of Default...............................................................4
Global Debenture...............................................................4
Governmental Obligations.......................................................4
Guarantee......................................................................5
Indenture......................................................................5
Interest Payment Date..........................................................5
</TABLE>
- ------------------------
(1) This Table of Contents does not constitute part of the Indenture and
should not have any bearing upon the interpretation of any of its terms or
provisions.
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
Officers' Certificate..........................................................5
Opinion of Counsel.............................................................5
Outstanding....................................................................5
Person.........................................................................6
Predecessor Debenture..........................................................6
Preferred Securities...........................................................6
Property Trustee...............................................................6
PWG Capital Trust..............................................................6
Responsible Officer............................................................6
Security Exchange..............................................................7
Senior Indebtedness............................................................7
Subsidiary.....................................................................8
Trustee........................................................................8
Trust Indenture Act............................................................8
ARTICLE II
ISSUE, DESCRIPTION, TERMS, EXECUTION
REGISTRATION AND EXCHANGE OF DEBENTURES
SECTION 2.01 Designation, terms, amount,
authentication and delivery of
Debentures.....................................................................9
SECTION 2.02 Form of Debentures and Trustee's
certificate....................................................................11
SECTION 2.03 Date and denominations of
Debentures and provisions for
payment of principal, premium and
interest.......................................................................11
SECTION 2.04 Execution of Debentures........................................................13
SECTION 2.05 Exchange of Debentures.........................................................15
(a) Registration and transfer of
Debentures............................................................15
(b) Debentures to be accompanied
by proper instruments of
transfer..............................................................15
(c) Charges upon exchange,
transfer or regulations of
Debenture.............................................................16
(d) Restrictions on transfer or
exchange at time of
redemption............................................................16
SECTION 2.06 Temporary Debentures...........................................................16
</TABLE>
ii
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<TABLE>
<CAPTION>
<S> <C>
SECTION 2.07 Mutilated, destroyed, lost or
stolen Debentures..............................................................17
SECTION 2.08 Cancellation of surrendered
Debentures.....................................................................18
SECTION 2.09 Provisions of Indenture and
Debentures for sole benefit of
parties and Debentureholders...................................................18
SECTION 2.10 Appointment of Authenticating
Agent..........................................................................18
SECTION 2.11 Global Debenture...............................................................19
(a) Authentication and Delivery;
Legend................................................................19
(b) Transfer of Global
Debenture.............................................................20
(c) Issuance of Debentures in definitive form.............................20
(d) ......................................................................21
SECTION 2.12 CUSIP Numbers..................................................................21
ARTICLE III
REDEMPTION OF DEBENTURES AND SINKING FUND
PROVISIONS
SECTION 3.01 Redemption of Debentures.......................................................21
SECTION 3.02 (a) Notice of redemption..................................................21
(b) Selection of Debentures in case less than all Debentures
to be redeemed........................................................22
SECTION 3.03 (a) When Debentures called for
redemption become due and
payable...............................................................23
(b) Receipt of new Debenture upon
partial payment.......................................................24
SECTION 3.04 Sinking Fund for Debentures....................................................24
SECTION 3.05 Satisfaction of Sinking Fund
Payments with Debentures.......................................................24
SECTION 3.06 Redemption of Debentures for Sinking Fund......................................25
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
<S> <C>
SECTION 4.01 Payment of principal of (and premium, if any)
and interest on Debentures.....................................................25
SECTION 4.02 Maintenance of office or agency for
payment of Debentures, designation
of office or agency for payment,
registration, transfer and exchange
of Debentures..................................................................26
SECTION 4.03 (a) Duties of payment agent...............................................26
(b) Company as payment agent..............................................27
(c) Holding sums of trust.................................................27
SECTION 4.04 Appointment to fill vacancy in office of
Trustee........................................................................27
ARTICLE V
DEBENTUREHOLDERS LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE
SECTION 5.01 Company to furnish Trustee
information as to names and
addresses of Debentureholders..................................................28
SECTION 5.02 Trustee's treatment of Debenture-
holders list:
(a) Trustee to preserve information as to names and
addresses of Debentureholders received by it in capacity of
payment agent.........................................................28
(b) Trustee may destroy list of
Debentureholders on certain
conditions............................................................28
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
(c) Trustee to make information as to names and
addresses of Debentureholders available to
"applicants" or mail communications to
Debentureholders in certain
circumstances.........................................................28
(d) Procedure if Trustee elects
not to make information
available to applicants...............................................29
(e) Company and Trustee not accountable for disclosure of
information...........................................................30
SECTION 5.03 Reports filed by Company:
(a) Annual and other reports to be
filed by Company with
Trustee...............................................................30
(b) Additional information and
reports to be filed with
Trustee and Securities and
Exchange Commission...................................................30
(c) Summaries of information
and reports to be
transmitted by Company to
Debentureholders......................................................31
(d) Annual Certificate to be
furnished to Trustee..................................................31
SECTION 5.04 Reports transmitted by Trustee:
(a) Trustee to transmit
annual report to
Debentureholders......................................................31
(b) Trustee to transmit certain
further reports to
Debentureholders......................................................32
(c) Copies of reports to be filed
with stock exchanges and
Securities and Exchange
Commission............................................................33
ARTICLE VI
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT
</TABLE>
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<CAPTION>
<S> <C>
SECTION 6.01 (a) Events of Default defined.............................................33
(b) Acceleration of maturity upon
Event of Default......................................................35
(c) Waiver of default and
rescission of declaration of
maturity..............................................................35
(d) Restoration of former position
and rights upon curing
default...............................................................36
(e) Certain rights of holders of
Preferred Securities..................................................36
SECTION 6.02 (a) Covenant of Company to pay to
Trustee whole amount due on
Debentures on Default in
payment of interest or
principal (and premiums, if
any)..................................................................37
(b) Trustee may recover judgment
for whole amount due on
Debentures on failure of
Company to pay........................................................37
(c) Filing of proof of claim by
Trustee in bankruptcy,
reorganization or receivership
proceeding............................................................37
(d) Rights of action and of
asserting claims may be
enforced by Trustee without
possession of Debentures..............................................38
SECTION 6.03 Application of moneys collected by
Trustee........................................................................39
SECTION 6.04 Limitation on suits by holders of
Debentures.....................................................................39
SECTION 6.05 (a) Remedies cumulative...................................................40
(b) Delay or omission in exercise
of rights not waiver of
default...............................................................41
SECTION 6.06 Rights of holders of majority in
principal amount of Debentures to
direct Trustee and to waive
defaults.......................................................................41
SECTION 6.07 Trustee to give notice of defaults
known to it, but may withhold in
certain circumstances..........................................................42
</TABLE>
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SECTION 6.08 Requirements of an undertaking to pay costs
in certain suits under Indenture or against
Trustee........................................................................43
ARTICLE VII
CONCERNING THE TRUSTEE
SECTION 7.01 Trustee conduct:
(a) Upon event of Default occurring and
continuing, Trustee shall exercise powers
vested in it, and use same degree of care
and skill in their exercise, as
prudent individual would use..........................................44
(b) Trustee not relieved from
liability for negligence or
willful misconduct except as
provided in this section..............................................44
(1) Prior to Event of Default
and after the curing of all
Events of Default which may
have occurred.....................................................44
(i) Trustee not liable except
for performance of duties
specifically set forth............................................44
(ii) In absence of bad faith, Trustee may
conclusively rely on certificates or
opinions furnished it hereunder, subject
to duty to examine the same if
specifically required to be
furnished to it...................................................44
(2) Trustee not liable for
error.............................................................45
(3) Trustee not liable for
actions taken at the
direction of holders..............................................45
</TABLE>
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(4) Trustee not required to
expend funds in certain
circumstances without
indemnity.........................................................45
(5) Liability provisions are
subject to Article VII............................................45
SECTION 7.02 Subject to provisions of
Section 7.01:
(a) Trustee may rely on documents
believed genuine and properly
signed or presented...................................................46
(b) Sufficient evidence by
certain instruments
provided for..........................................................46
(c) Trustee may rely on Officer's
Certificate...........................................................46
(d) Trustee may consult with
counsel and act on advice or
Opinion of Counsel....................................................46
(e) Trustee may require indemnity
from Debentureholders.................................................46
(f) Trustee not liable for actions
in good faith believed to be
authorized............................................................46
(g) Trustee not bound to investigate facts or
matters stated in certificates, etc., unless
requested in writing by
Debentureholders......................................................46
(h) Trustee may act through
agents................................................................46
SECTION 7.03 (a) Trustee not liable for
recitals in Indenture or in
Debenture.............................................................47
(b) No representations by Trustee
as to validity of Indenture or
of Debentures.........................................................48
(c) Trustee not accountable
for use of Debentures or
proceeds..............................................................48
SECTION 7.04 Trustee, paying agent or
Debenture Registrar may own
Debentures.....................................................................48
</TABLE>
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SECTION 7.05 Moneys received by Trustee
to be held in trust without
interest.......................................................................48
SECTION 7.06 (a) Trustee entitled to
compensation, reimbursement
and indemnity.........................................................48
(b) Obligations to Trustee to be
secured by lien prior to
Debentures............................................................49
(c) Trustee's expenses in
connection with bankruptcy are
expenses of administration............................................49
(d) Company's obligations under
7.06 survive..........................................................49
SECTION 7.07 Right of Trustee to rely on
certificate of officers of Company
where other evidence specifically
prescribed.....................................................................49
SECTION 7.08 (a) Trustee acquiring conflicting
interest to eliminate conflict
or resign.............................................................49
(b) Notice to Debentureholders in
case of failure to comply with
subsection (a)........................................................50
(c) Trustee resignation not
required under certain
circumstances.........................................................50
SECTION 7.09 Requirements for eligibility of
Trustee........................................................................50
SECTION 7.10 (a) Resignation of Trustee
and appointment of
successor.............................................................51
(b) Removal of Trustee by
Company or by court on
Debentureholders'
application...........................................................51
(c) Removal of Trustee by holders
of majority in principal
amount of Debentures..................................................52
(d) Time when resignation
or removal of Trustee
effective.............................................................52
(e) One Trustee for each
series ...........................................................53
</TABLE>
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SECTION 7.11 (a) Acceptance by successor to
Trustee...............................................................53
(b) Trustee with respect to less
than all series.......................................................53
(c) Company to confirm Trustee's
rights................................................................54
(d) Successor Trustee to be
qualified.............................................................54
(e) Notice of succession..................................................54
SECTION 7.12 Successor to Trustee by merger,
consolidation or succession to
business.......................................................................55
SECTION 7.13 (a) Limitations on rights of
Trustee as a creditor to
obtain payment of certain
claims within four months
prior to default or during
default, or to realize on
property as such creditor
thereafter............................................................55
(b) Certain creditor relationships
excluded..............................................................58
(c) Definition of certain terms........................................59
ARTICLE VIII
CONCERNING THE DEBENTUREHOLDERS
SECTION 8.01 Evidence of action by Debentureholders.........................................60
SECTION 8.02 Proof of execution of
instruments and of holding
of Debentures.............................................................61
SECTION 8.03 Who may de deemed owners of
Debentures.....................................................................61
SECTION 8.04 Debentures owned by Company or
controlled or controlling
companies disregarded for
certain purposes ..............................................................62
SECTION 8.05 Instruments executed by
Debentureholders bind future
holders........................................................................62
</TABLE>
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01 Purposes for which supplemental
indenture may be entered into
without consent of
Debentureholders...............................................................63
SECTION 9.02 Modification of Indenture with
consent of Debentureholders....................................................64
SECTION 9.03 Effect of supplemental
indentures.....................................................................66
SECTION 9.04 Debentures may bear notation
of changes by supplemental
indentures.....................................................................66
SECTION 9.05 Opinion of Counsel.............................................................67
ARTICLE X
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 10.01 Company May Consolidate, Etc. Only on Certain
Terms..........................................................................67
SECTION 10.02 Successor Corporation Substituted............................................68
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 11.01 Satisfaction and discharge of
Indenture......................................................................68
SECTION 11.02 Application by Trustee of Funds
Deposited for Payments of
Debentures.....................................................................71
SECTION 11.03 Application by Trustee of funds
deposited for payment of
Debentures.....................................................................72
</TABLE>
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SECTION 11.04 Repayment of moneys held by paying
agent..........................................................................72
SECTION 11.05 Repayment of moneys held by Trustee............................................72
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01 Incorporators, stockholders, officers and directors of
Company exempt from individual liability.......................................73
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01 Successors and assigns of Company bound by Indenture...........................73
SECTION 13.02 Acts of board, committee or officer
of successor company valid.....................................................74
SECTION 13.03 Surrender of powers of Company.................................................74
SECTION 13.04 Required notices or demands may be
served by mail.................................................................74
SECTION 13.05 Indenture and Debentures to be
construed in accordance with laws
of the State of New York.......................................................74
SECTION 13.06 (a) Officers' Certificate and
Opinion of Counsel to be
furnished upon applications or
demands by Company....................................................74
(b) Statements to be included
in each certificate or
opinion with respect to
compliance with condition or
covenant..............................................................74
SECTION 13.07 Payments due on Sundays or
holidays.......................................................................75
</TABLE>
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SECTION 13.08 Provisions required by
Trust Indenture Act of 1939 to
control........................................................................75
SECTION 13.10 Separability of indenture
provisions.....................................................................75
SECTION 13.11 Assignment by Company to
subsidiary.....................................................................76
SECTION 13.12 Holders of Preferred Securities as third
party beneficiaries of this Indenture;
holders of Preferred Securities may institute
legal proceedings against the Company in
certain cases..................................................................76
ARTICLE XIV
SUBORDINATION OF DEBENTURES
SECTION 14.01 Agreement to Subordinate.......................................................76
SECTION 14.02 Payment Over of Proceeds Upon
Dissolution, etc...............................................................77
SECTION 14.03 Trustee to Effectuate
Subordination..................................................................80
SECTION 14.04 Trustee Not Charged with Knowledge
of Prohibition.................................................................80
SECTION 14.05 Rights of Trustee as Holder of
Senior Indebtedness............................................................81
SECTION 14.06 Trustee Not Fiduciary for Holders
of Senior Indebtedness.........................................................81
SECTION 14.07 Article Applicable to Paying Agents............................................81
ACCEPTANCE OF TRUST BY TRUSTEE............................................................................82
SIGNATURES AND SEALS......................................................................................83
ACKNOWLEDGMENTS...........................................................................................83
</TABLE>
xiii
<PAGE> 15
INDENTURE dated as of December 9, 1996,
between Paine Webber Group Inc., a corporation duly
organized and existing under the laws of the State of
Delaware (hereinafter sometimes referred to as the
"Company"), and The Chase Manhattan Bank, a New York
banking corporation, as Trustee (hereinafter
sometimes referred to as the "Trustee").
WHEREAS, for its lawful corporate purposes, the Company has
fully authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured debentures (hereinafter referred to as the "Debentures"),
in an unlimited aggregate principal amount to be issued from time to time in one
or more series in accordance with the terms of this Indenture, as registered
Debentures without coupons, to be authenticated by the certificate of the
Trustee;
WHEREAS, to provide the terms and conditions upon which the
Debentures are to be authenticated, issued and delivered, the Company has duly
authorized the execution of this Indenture;
WHEREAS, the Debentures and the certificate of authentication
to be borne by the Debentures (the "Certificate of Authentication") are to be
substantially in such forms as may be approved by the Board of Directors (as
defined below) or set forth in any indenture supplemental to this Indenture; and
WHEREAS all acts and things necessary to make the Debentures
issued pursuant hereto, when executed by the Company and authenticated and
delivered by the Trustee in accordance with the terms of this Indenture, the
legal, valid and binding obligations of the Company, and to make this Indenture
a valid indenture and agreement of the Company in accordance with its terms,
have been done and performed or will be done and performed prior to the issuance
of such Debentures, and the execution of this Indenture has been and the
issuance hereunder of the Debentures has been, or will be prior to issuance, in
all respects duly authorized, and the Company, in the exercise
<PAGE> 16
2
of the legal right and power in it vested, executes this Indenture and proposes
to make, execute, issue and deliver the Debentures.
NOW, THEREFORE, in order to declare the terms and conditions
upon which the Debentures are, and are to be, authenticated, issued and
delivered, and in consideration of the premises, and of the acquisition and
acceptance of the Debentures by the holders thereof, the Company covenants and
agrees with the Trustee, for the equal and proportionate benefit (subject to the
provisions of this Indenture) of the respective holders from time to time of the
Debentures, without any discrimination, preference or priority of any one
Debenture over any other by reason of priority in the time of issue, sale or
negotiation thereof, or otherwise, except as provided herein, as follows:
ARTICLE I
Definitions
SECTION 1.01. The terms defined in this Section (except as in
this Indenture otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture, any resolution of the Board of
Directors of the Company and of any indenture supplemental hereof shall have the
respective meanings specified in this Section. All other terms used in this
Indenture which are defined in the Trust Indenture Act of 1939, as amended, or
which are by reference in such Act defined in the Securities Act of 1933, as
amended (except as herein otherwise expressly provided or unless the context
otherwise requires), shall have the meanings assigned to such terms in said
Trust Indenture Act and in said Securities Act as in force at the date of this
instrument.
"Authenticating Agent" means an authenticating agent with
respect to all or any of the series of Debentures, as the case may be, appointed
with respect to all or any series of the Debentures, as the case may be, by the
Trustee pursuant to Section 2.10.
<PAGE> 17
3
"Board of Directors" means the Board of Directors of the
Company, or any committee of such Board duly authorized to act on behalf of such
Board.
"Board Resolution" means a copy of one or more resolutions,
certified by the secretary or an assistant secretary of the Company to have been
adopted or consented to by the Board of Directors and to be in full force and
effect, and delivered to the Trustee.
"Business Day", with respect to any series of Debentures,
means any day other than a Saturday, Sunday or any other day on which banking
institutions in the City and State of New York, are authorized or required by
law to close.
"Certificate" means a certificate signed by the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company. The Certificate need not comply with the provisions of
Section 13.06.
"Common Securities" means the common undivided beneficial
interests in the assets of the applicable PWG Capital Trust.
"Company" means Paine Webber Group Inc., a corporation duly
organized and existing under the laws of the State of Delaware, and, subject to
the provisions of Article X, shall also include its successors and assigns.
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of the execution of this Indenture is
located at 450 West 33rd Street, New York, New York 10001 Attention:
Corporate Trustee Administration Department.
"Declaration of Trust" means the Declaration of Trust of the
PWG Capital Trust, if any, specified in the applicable Board Resolution or
supplemental indenture establishing a particular series of Debentures pursuant
to Section 2.01.
<PAGE> 18
4
"Debenture" or "Debentures" means any Debenture or
Debentures, as the case may be, authenticated and delivered
under this Indenture.
"Debentureholder", "holder of Debentures", "registered
holder", or other similar term, means the Person or Persons in whose name or
names a particular Debenture shall be registered on the books of the Company
kept for such purpose in accordance with the terms of this Indenture.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Depositary" means, with respect to Debentures of any series
for which the Company shall determine that such Debentures will be issued as a
Global Debenture, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other
applicable statute or regulation, which, in each case, shall be designated by
the Company pursuant to either Section 2.01 or 2.11.
"Event of Default" means, with respect to Debentures of a
particular series, any event specified in Section 6.01(a), continued for the
period of time, if any, therein designated.
"Global Debenture" means, with respect to any series of
Debentures, a Debenture executed by the Company and delivered by the Trustee to
the Depositary or pursuant to the Depositary's instruction, all in accordance
with the Indenture, which shall be registered in the name of the Depositary or
its nominee.
"Governmental Obligations" means securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either
<PAGE> 19
5
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depositary receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to
any such Governmental Obligation or a specific payment of principal of, or
interest on, any such Governmental Obligation held by such custodian for the
account of the holder of such depositary receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depositary receipt from any amount received
by the custodian in respect of the Governmental Obligation or the specific
payment of principal of, or interest on, the Governmental Obligation evidenced
by such depositary receipt.
"Guarantee" means the guarantee, if any, that the Company may
enter into that operates directly or indirectly for the benefit of holders of
Preferred Securities issued by a PWG Capital Trust.
"Indenture" means this instrument as originally executed, or,
if amended or supplemented as herein provided, as so amended or supplemented,
including for all purposes of this instrument, as amended or supplemented, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument, as amended or supplemented.
"Interest Payment Date" when used with respect to any
installment of interest on a Debenture of a particular series means the date
specified in such Debenture or in a Board Resolution or in an indenture
supplemental hereto with respect to such series as the fixed date on which an
installment of interest with respect to Debentures of that series is due and
payable.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the Vice-Chairman of the Board, the President or any Vice
President and by the Treasurer or any Assistant Treasurer or the Controller or
any Assistant Controller or the Secretary or any Assistant Secretary of the
Company and delivered to the Trustee. Each such certificate shall include the
statements provided for
<PAGE> 20
6
in Section 13.06, if and to the extent required by the provisions thereof.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of, or counsel for, the Company and who
shall be satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 13.06, if and to the extent required by the
provisions thereof.
"Outstanding", when used with reference to Debentures of any
series, subject to the provisions of Section 8.01, means, as of any particular
time, all Debentures of that series theretofore authenticated and delivered by
the Trustee under this Indenture, except (a) Debentures theretofore canceled by
the Trustee or any paying agent, or delivered to the Trustee or any paying agent
for cancelation or which have previously been canceled; (b) Debentures or
portions thereof for the payment or redemption of which moneys or Governmental
Obligations in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been set
aside and segregated in trust for the holders of such Debentures by the Company
(if the Company shall act as its own paying agent); provided, however, that if
such Debentures or portions of such Debentures are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given as in Article
III provided, or provision satisfactory to the Trustee shall have been made for
giving such notice; and (c) Debentures in lieu of, or in substitution for, which
other Debentures shall have been authenticated and delivered pursuant to the
terms of Section 2.07.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Debenture" of any particular Debenture means
every previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
<PAGE> 21
7
definition, any Debenture authenticated and delivered under Section 2.07 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture.
"Preferred Securities" means the preferred undivided
beneficial interests in the assets of the applicable PWG Capital Trust.
"Property Trustee" means the entity performing the function of
the Property Trustee under the applicable Declaration of Trust of a PWG Capital
Trust.
"PWG Capital Trust" means such business trust created under
the laws of the State of Delaware specified in the applicable Board Resolution
or supplemental indenture establishing a particular series of Debentures
pursuant to Section 2.01 and to whom such Series of Debentures will be sold.
"Responsible Officer" when used with respect to the Trustee
means any officer of the Trustee responsible for the administration of this
Indenture and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge of, and familiarity with, the particular subject.
"Security Exchange" when used with respect to the Debentures
of any series which are held as trust assets of a PWG Capital Trust pursuant to
the Declaration of Trust of such PWG Capital Trust means the distribution of the
Debentures of such series by such PWG Capital Trust in exchange for the
Preferred Securities and Common Securities of such PWG Capital Trust in
dissolution of such PWG Capital Trust pursuant to the Declaration of Trust of
such PWG Capital Trust.
"Senior Indebtedness" means (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 this Indenture
or thereafter created, incurred or assumed, (b) guarantees by the Company of
indebtedness for money borrowed by any other
<PAGE> 22
8
Person, whether outstanding on the date of execution of this 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 this 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 this 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 this 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 Debentures; provided, however, that Senior Indebtedness shall not include
any obligation of the Company to any Subsidiary. The Debentures of any series
are not superior in right of payment to the securities of any series (or coupons
appertaining thereto) issued pursuant to the Indenture dated as of March 15,
1988, between the Company and Chase Manhattan Bank Delaware (formerly known as
Chemical Bank (Delaware)), as amended or supplemented from time to time, or any
securities ranking pari passu in right of payment with any such securities (or
coupons), all of which shall constitute Senior Indebtedness. Notwithstanding
anything to the contrary in this Indenture or the Debentures, Senior
Indebtedness shall not include any indebtedness of the Company which, by its
terms or the terms of the instrument creating or evidencing it, is subordinate
in right of payment to, or pari passu with, the Debentures.
"Subsidiary" means any corporation, association or other
business entity of which a majority of the outstanding stock, having under
ordinary circumstances (not dependent
<PAGE> 23
9
upon the happening of a contingency) voting power to elect a majority of the
board of directors (or persons performing similar functions) of such
corporation, association or other business entity in question, is at the time,
directly or indirectly, owned or controlled by the Company or by one or more
Subsidiaries or by the Company and one or more Subsidiaries; collectively, the
"Subsidiaries".
"Trustee" means The Chase Manhattan Bank, a New York banking
corporation, and, subject to the provisions of Article Seven, shall also include
its successors and assigns, and, if at any time there is more than one person
acting in such capacity hereunder, "Trustee" shall mean each such person. The
term "Trustee" as used with respect to a particular series of the Debentures
means the trustee with respect to such series.
"Trust Indenture Act", means the Trust Indenture Act of 1939
as in force at the date as of which this instrument is executed; provided,
however, that, in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
ARTICLE II
Issue, Description, Terms, Execution,
Registration and Exchange of Debentures
Section 2.01. The aggregate principal amount of Debentures
which may be authenticated and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series up to the
aggregate principal amount of Debentures of that series authorized in or
pursuant to one or more indentures supplemental hereto, prior to the initial
issuance of Debentures of a particular series. Prior to the initial issuance of
Debentures of any series, there shall be
<PAGE> 24
10
established in or pursuant to one or more indentures supplemental hereto:
(1) the title of the Debentures of the series (which shall
distinguish the Debentures of the series from all other Debentures);
(2) any limit upon the aggregate principal amount of the
Debentures of the series which may be authenticated and delivered under
this Indenture (except for Debentures authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Debentures of the series);
(3) the date or dates on which the principal of the Debentures
of the series is payable and the right, if any, to extend such date or
dates and the conditions, if any, to such an extension;
(4) the rate or rates at which the Debentures of the series
shall bear interest or the manner of calculation of such rate or rates,
if any;
(5) the date or dates from which such interest shall accrue,
the Interest Payment Dates on which such interest will be payable or
the manner of determination of such Interest Payment Dates and the
record date for the determination of holders to whom interest is
payable on any such Interest Payment Dates;
(6) the right, if any, to extend the interest payment periods
and the duration of such extension and the conditions, if any, to such
an extension;
(7) the period or periods within which, the price or prices at
which, and the terms and conditions upon which, Debentures of the
series may be redeemed, in whole or in part, at the option of the
Company;
(8) the obligation, if any, of the Company to redeem or
purchase Debentures of the series pursuant to any sinking fund or
analogous provisions (including payments made in cash in anticipation
of future sinking fund obligations) or at the option of a holder
thereof
<PAGE> 25
11
and the period or periods within which, the price or prices at which,
and the terms and conditions upon which, Debentures of the series shall
be redeemed or purchased, in whole or in part, pursuant to such
obligation;
(9) the form of the Debentures of the series, including the
form of the Certificate of Authentication for the series;
(10) if other than denominations of $25 or any integral multiple
thereof, the denominations in which the Debentures of the series shall
be issuable;
(11) whether the Debentures of the series are issuable as a
Global Debenture and, in such case, the identity of the Depositary for
the Debentures of the series.
(12) any and all other terms with respect to the Debentures of
the series (which terms shall not be inconsistent with the terms of
this Indenture);
(13) if the Debentures of the series are to be deposited as
trust assets in a PWG Capital Trust, the name of the applicable PWG
Capital Trust (which shall distinguish such statutory business trust
from all other PWG Capital Trusts) into which the Debentures of the
series are to be deposited as trust assets and the date of its
Declaration of Trust; and
(14) any condition to, or restriction on, the
transferability of the Debentures.
All Debentures of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to any indenture supplemental hereto.
SECTION 2.02. The Debentures of any series and the Trustee's
certificate of authentication to be borne by such Debentures shall be
substantially of the tenor and purport as set forth in one or more indentures
supplemental hereto and may have such letters, numbers or other marks of
<PAGE> 26
12
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which Debentures of that series
may be listed, or to conform to usage.
SECTION 2.03. The Debentures shall be issuable as registered
Debentures and in the denominations of $25 or any integral multiple thereof,
subject to Section 2.01(10). The Debentures of a particular series shall bear
interest payable on the dates and at the rate specified with respect to that
series. The principal of and the interest on the Debentures of any series, as
well as any premium thereon in case of redemption thereof prior to maturity,
shall be payable in such coin or currency of the United States of America as at
the time of payment is legal tender for public and private debt, at the office
or agency of the Company maintained for that purpose in the Borough of
Manhattan, the City and State of New York. Each Debenture shall be dated the
date of its authentication. Interest on the Debentures shall be computed on the
basis of a 360-day year of twelve 30-day months.
The interest installment on any Debenture which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series shall be paid to the person in whose name such
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on the regular record date for such interest installment. In the event
that any Debenture of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record date with
respect to any Interest Payment Date for Debentures of that series and on or
prior to such Interest Payment Date, interest on such Debenture will be paid
upon presentation and surrender of such Debenture as provided in Section 3.03.
Any interest on any Debenture which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date for
Debentures of that series (herein
<PAGE> 27
13
called "Defaulted Interest") shall forthwith cease to be payable to the
registered holder on the relevant regular record date by virtue of having been
such holder; and such Defaulted Interest shall be paid by the Company, at its
election, as provided in clause (1) or clause (2) below:
(1) The Company may make payment of any Defaulted Interest on
Debentures to the persons in whose names such Debentures (or their
respective Predecessor Debentures) are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner: the Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Debenture and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a special record date
for the payment of such Defaulted Interest which shall not be more than
20 nor less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of
such special record date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the special record date therefor to be mailed, first-class
postage prepaid, to each Debentureholder at his or her address as it
appears in the Debenture Register (as hereinafter defined), not less
than 10 days prior to such special record date. Notice of the proposed
payment of such Defaulted Interest and the special record date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid
to the persons in whose names such Debentures (or their Predecessor
Debentures) are registered on such special record date and shall be no
longer payable pursuant to the following clause (2).
<PAGE> 28
14
(2) The Company may make payment of any Defaulted Interest on
any Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Debentures may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Unless otherwise set forth in one or more indentures
supplemental hereto establishing the terms of any series of Debentures pursuant
to Section 2.01, the term "regular record date" as used in this Section with
respect to a series of Debentures with respect to any Interest Payment Date for
such series shall mean either (x) the fifteenth day of the month immediately
preceding the month in which an Interest Payment Date established for such
series pursuant to Section 2.01 shall occur, if such Interest Payment Date is
the first day of a month, or (y) the first day of the month in which an Interest
Payment Date established for such series pursuant to Section 2.01 shall occur,
if such Interest Payment Date is the fifteenth day of a month, whether or not
such date is a Business Day.
Subject to the foregoing provisions of this Section, each
Debenture of a series delivered under this Indenture upon transfer of, or in
exchange for, or in lieu of, any other Debenture of such series shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Debenture.
SECTION 2.04. Subject to the provisions of Section 2.06, the
Debentures shall be printed, lithographed or engraved on steel engraved borders
or produced by any combination of these methods or may be produced in any other
manner, as the proper officers of the Company may determine, and shall be signed
on behalf of the Company by the Chairman or Vice Chairman of its Board of
Directors or its Chief Executive Officer, President or one of its Vice
Presidents, or its Treasurer or any Assistant Treasurer under its corporate seal
attested by its Secretary or one of its Assistant Secretaries. The signature of
the Chairman, Vice
<PAGE> 29
15
Chairman, Chief Executive Officer, President, any Vice President, the Treasurer
or any Assistant Treasurer and/or the signature of the Secretary or any
Assistant Secretary in attestation of the corporate seal, upon the Debentures,
may be in the form of a manual or facsimile signature of a present or any future
Chairman, Vice Chairman, President, Vice President, Treasurer or Assistant
Treasurer and of a present or any future Secretary or Assistant Secretary and
may be imprinted or otherwise reproduced on the Debentures and for that purpose
the Company may use the manual or facsimile signature of any person who shall
have been a Chairman, Vice Chairman, Chief Executive Officer, President, Vice
President, Treasurer or Assistant Treasurer or any person who shall have been a
Secretary or Assistant Secretary, notwithstanding the fact that at the time the
Debentures shall be authenticated and delivered, or disposed of, such person
shall have ceased to be the Chairman, Vice Chairman, Chief Executive Officer,
President or a Vice President, or the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, of the Company, as the case may be. The
seal of the Company may be in the form of a facsimile of the seal of the Company
and may be impressed, affixed, imprinted or otherwise reproduced on the
Debentures.
Only such Debentures as shall bear thereon a Certificate of
Authentication substantially in the form established for such Debentures,
executed manually by an authorized signatory of the Trustee, or by any
Authenticating Agent with respect to such Debentures, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. Such
Certificate of Authentication executed by the Trustee, or by any Authenticating
Agent appointed by the Trustee with respect to such Debentures, upon any
Debenture executed by the Company shall be conclusive evidence that the
Debenture so authenticated has been duly authenticated and made available for
delivery hereunder and that the holder is entitled to the benefits of this
Indenture.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debentures of any series
executed by the Company to the Trustee for authentication, together with a
written
<PAGE> 30
16
order of the Company in the form of an Officers' Certificate for the
authentication and delivery of such Debentures, and the other documents required
by Section 13.06, and the Trustee, in accordance with such written order, shall
authenticate and make available for delivery such Debentures.
The Trustee shall not be required to authenticate such
Debentures if the issue of such Debentures pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under the Debentures, this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee.
SECTION 2.05. (a) Debentures of any series
may be exchanged, upon presentation thereof at the office or agency of the
Company designated for such purpose in the Borough of Manhattan, the City and
State of New York, for other Debentures of such series of authorized
denominations, and for a like aggregate principal amount, upon payment of a sum
sufficient to cover any tax or other governmental charge in relation thereto,
all as provided in this Section. In respect of any Debentures so surrendered for
exchange, the Company shall execute, the Trustee shall authenticate and such
office or agency shall make available for delivery in exchange therefor the
Debenture or Debentures of the same series which the Debentureholder making the
exchange shall be entitled to receive, bearing numbers not contemporaneously
outstanding.
(b) The Company shall keep, or cause to be kept, at its office
or agency designated for such purpose in the Borough of Manhattan, the City and
State of New York, or such other location designated by the Company a register
or registers (herein referred to as the "Debenture Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall register
the Debentures and the transfers of Debentures as in this Article provided and
which at all reasonable times shall be open for inspection by the Trustee. The
registrar for the purpose of registering Debentures and transfers of Debentures
as herein provided shall be appointed as authorized by Board Resolution (the
"Debenture Registrar").
<PAGE> 31
17
Upon surrender for registration of transfer of any Debenture
at the office or agency of the Company designated for such purpose in the
Borough of Manhattan, the City and State of New York, the Company shall execute,
the Trustee shall authenticate and such office or agency shall make available
for delivery in the name of the transferee or transferees a new Debenture or
Debentures of the same series as the Debenture presented for a like aggregate
principal amount.
All Debentures presented or surrendered for exchange or
registration of transfer, as provided in this Section, shall be accompanied (if
so required by the Company or the Debenture Registrar) by a written instrument
or instruments of transfer, in form satisfactory to the Company or the Debenture
Registrar, duly executed by the registered holder or by his duly authorized
attorney in writing.
(c) No service charge shall be made for any exchange or
registration of transfer of Debentures, or issue of new Debentures in case of
partial redemption of any series, but the Company may require payment by the
Debentureholder requesting an exchange or registration of transfer of a sum
sufficient to cover any tax or other governmental charge in relation thereto,
other than in connection with exchanges made pursuant to Section 2.06, Section
3.03(b) and Section 9.04 not involving any transfer.
(d) The Company shall not be required (i) to issue, register
the transfer of or exchange any Debentures of a series during a period beginning
at the opening of business 15 days before the day of the mailing of a notice of
redemption of all or less than all of the outstanding Debentures of such series
and ending at the close of business on the day of such mailing or (ii) register
the transfer of or exchange any Debentures so selected for redemption, in whole
or in part, except the unredeemed portion of any Debentures being redeemed in
part. The provisions of this Section 2.05 are, with respect to any Global
Debenture, subject to Section 2.11.
SECTION 2.06. Pending the preparation of definitive Debentures
of any series, the Company may execute, and the Trustee shall authenticate and
make
<PAGE> 32
18
available for delivery, temporary Debentures (printed, lithographed or
typewritten) of any authorized denomination, and substantially in the form of
the definitive Debentures in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Debentures, all as may be determined by the Company. Every temporary Debenture
of any series shall be executed by the Company and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Debentures of such series. Without unnecessary
delay the Company will execute and will furnish definitive Debentures of such
series and thereupon any or all temporary Debentures of such series may be
surrendered in exchange therefor (without charge to the holders), at the office
or agency of the Company designated for the purpose in the Borough of Manhattan,
the City and State of New York, and the Trustee shall authenticate and such
office or agency shall make available for delivery in exchange for such
temporary Debentures an equal aggregate principal amount of definitive
Debentures of such series, unless the Company advises the Trustee to the effect
that definitive Debentures need not be executed and furnished until further
notice from the Company. Until so exchanged, the temporary Debentures of such
series shall be entitled to the same benefits under this Indenture as definitive
Debentures of such series authenticated and delivered hereunder.
SECTION 2.07. In case any temporary or definitive Debenture
shall become mutilated or be destroyed, lost or stolen, the Company (subject to
the next succeeding sentence) shall execute, and upon its request the Trustee
(subject as aforesaid) shall authenticate and make available for delivery, a new
Debenture of the same series bearing a number not contemporaneously Outstanding,
in exchange and substitution for the mutilated Debenture, or in lieu of and in
substitution for the Debenture so destroyed, lost or stolen. In every case the
applicant for a substituted Debenture shall furnish to the Company and to the
Trustee such security or indemnity as may be required by them to save each of
them harmless, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company and to the Trustee evidence to their
satisfaction of the destruction, loss or theft of the
<PAGE> 33
19
applicant's Debenture and of the ownership thereof. The Trustee may authenticate
any such substituted Debenture and make available for delivery the same upon the
written request or authorization of any officer of the Company. Upon the
issuance of any substituted Debenture, the Company may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. In case any Debenture which has matured or is
about to mature shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Debenture, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
Debenture) if the applicant for such payment shall furnish to the Company and to
the Trustee such security or indemnity as they may require to save each of them
harmless, and, in case of destruction, loss or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft of
such Debenture and of the ownership thereof.
Every Debenture issued pursuant to the provisions of this
Section in substitution for any Debenture which is mutilated, destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Debentures of
the same series duly issued hereunder. All Debentures shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.08. All Debentures surrendered for the purpose of
payment, redemption, exchange or registration of transfer shall, if surrendered
to the Company or any paying agent, be delivered to the Trustee for
cancellation, or, if surrendered to the Trustee, shall be canceled by it, and no
<PAGE> 34
20
Debentures shall be issued in lieu thereof except as expressly required or
permitted by any of the provisions of this Indenture. On written request of the
Company, the Trustee shall deliver to the Company canceled Debentures held by
the Trustee. If the Company shall otherwise acquire any of the Debentures,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Debentures unless and until the same are
delivered to the Trustee for cancelation.
SECTION 2.09. Nothing in this Indenture or in the Debentures,
express or implied, shall give or be construed to give to any Person, other than
the parties hereto and the holders of the Debentures, any legal or equitable
right, remedy or claim under, or in respect of, this Indenture, or under any
covenant, condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties hereto and
of the holders of the Debentures.
SECTION 2.10. So long as any of the Debentures of any series
remain Outstanding there may be an Authenticating Agent for any or all such
series of Debentures which the Trustee shall have the right to appoint. Said
Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Debentures of such series issued upon exchange, transfer or partial
redemption thereof, and Debentures so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. All references in this Indenture to
the authentication of Debentures by the Trustee shall be deemed to include
authentication by an Authenticating Agent for such series except for
authentication upon original issuance or pursuant to Section 2.07 hereof. Each
Authenticating Agent shall be acceptable to the Company and shall be a
corporation which has a combined capital and surplus, as most recently reported
or determined by it, sufficient under the laws of any jurisdiction under which
it is organized or in which it is doing business to conduct a trust business,
and which is otherwise authorized under such laws to conduct such business and
is subject to supervision or examination by Federal or state authorities. If at
any time any Authenticating Agent shall cease to be eligible in
<PAGE> 35
21
accordance with these provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee may
at any time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent, upon acceptance of its appointment hereunder, shall become
vested with all the rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto.
SECTION 2.11. (a) If, pursuant to Section 2.01, the Company
shall establish that the Debentures of a particular series are to be issued as
one or more Global Debentures, then the Company shall execute, and the Trustee
shall, in accordance with Section 2.04, authenticate and deliver, one or more
Global Debentures which (i) shall represent, and shall be denominated in an
aggregate amount equal to the aggregate principal amount of, all of the
Outstanding Debentures of such series, (ii) shall be registered in the name of
the Depositary or its nominee, (iii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instruction and (iv) shall bear a
legend substantially to the following effect: "Except as otherwise provided in
Section 2.11 of the Indenture, this Debenture may be transferred, in whole but
not in part, only to another nominee of the Depositary or to a successor
Depositary or to a nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.05, the Global
Debenture of a series may be transferred, in whole but not in part and in the
manner provided in Section 2.05, only to another nominee of the Depositary for
such series, or to a successor Depositary for such series selected or approved
by the Company or to a nominee of such successor Depositary.
<PAGE> 36
22
(c) If at any time the Depositary for a series of Debentures
notifies the Company that it is unwilling or unable to continue as Depositary
for such series or if at any time the Depositary for such series shall no longer
be registered, or in good standing, under the Exchange Act or other applicable
statute or regulation and a successor Depositary for such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, as the case may be, this Section 2.11 shall
no longer be applicable to the Debentures of such series, and the Company will
execute, and subject to Section 2.05, the Trustee will authenticate and make
available for delivery, Debentures of such series in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debenture of such series in
exchange for such Global Debenture. In addition, the Company may at any time
determine that the Debentures of any series shall no longer be represented by
one or more Global Debentures and that the provisions of this Section 2.11 shall
no longer apply to the Debentures of such series. In such event, the Company
will execute and, subject to Section 2.05, the Trustee, upon receipt of an
Officers' Certificate evidencing such determination by the Company, will
authenticate and deliver Debentures of such series in definitive registered
form, without coupons, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global Debenture of such
series in exchange for such Global Debenture. Upon the exchange of a Global
Debenture for such Debentures in definitive registered form, without coupons, in
authorized denominations, the Global Debenture shall be canceled by the Trustee.
Any Debentures in definitive registered form issued in exchange for a Global
Debenture pursuant to this Section 2.11(c) shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Debentures to the Depositary for
delivery to the persons in whose names such Debentures are so registered.
(d) None of the Company, the Trustee, any paying agent or the
security registrar will have any responsibility
<PAGE> 37
23
or liability for any aspect of the records relating to or payments made on
account of the beneficial ownership interests of a Global Debenture or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
SECTION 2.12. CUSIP Numbers. The Company in issuing the
Debentures may use "CUSIP" and "CINS" numbers (if then generally in use), and
the Trustee shall use CUSIP numbers or CINS numbers, as the case may be, in
notices of redemption or exchange as a convenience to Debentureholders but no
representation shall be made by the Company, the Trustee or any other Person as
to the correctness of such numbers either as printed on the Debentures or as
contained in any notice of redemption or exchange.
ARTICLE III
Redemption of Debentures and
Sinking Fund Provisions
SECTION 3.01. The Company may redeem the Debentures of any
series issued hereunder on and after the dates and in accordance with the terms
established for such series pursuant to Section 2.01.
SECTION 3.02. (a) In case the Company shall desire to exercise
such right to redeem all or, as the case may be, a portion of the Debentures of
any series in accordance with the right reserved so to do, it shall give notice
of such redemption by mail, first class postage prepaid, not less than 30 nor
more than 60 days before the date fixed for redemption to holders of the
Debentures of the series to be redeemed at their last addresses as they shall
appear upon the Debenture Register. Any notice which is mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the registered holder receives the notice. In any case, failure duly to
give such notice to the holder of any Debenture of any series designated for
redemption in whole or in part, or any defect in the notice, shall not affect
the validity of the proceedings for the redemption of any other Debentures of
such series or any other series. In the
<PAGE> 38
24
case of any redemption of Debentures prior to the expiration of any restriction
on such redemption provided in the terms of such Debentures or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with any such restriction.
Each such notice of redemption (which shall be irrevocable)
shall specify the date fixed for redemption and the redemption price at which
Debentures of that series are to be redeemed, and shall state that payment of
the redemption price of such Debentures to be redeemed will be made at the
office or agency of the Company in the Borough of Manhattan, the City and State
of New York, upon presentation and surrender of such Debentures, that interest
accrued to the date fixed for redemption will be paid as specified in said
notice, that from and after said date interest will cease to accrue and that the
redemption is for a sinking fund, if such is the case. If less than all the
Debentures of a series are to be redeemed, the notice to the holders of
Debentures of that series to be redeemed in whole or in part shall specify the
particular Debentures to be so redeemed. In case any Debenture is to be redeemed
in part only, the notice which relates to such Debenture shall state the portion
of the principal amount thereof to be redeemed and shall state that, on and
after the redemption date, upon surrender of such Debenture, a new Debenture or
Debentures of such series in principal amount equal to the unredeemed portion
thereof will be issued. If the Company gives a notice of redemption in respect
of Debentures of a series, then, by 12:00 noon, New York City time, on the date
fixed for redemption, the Company shall deposit irrevocably with the Trustee
funds sufficient to pay the applicable redemption price and shall give
irrevocable instructions and authority to pay such redemption price to the
holders of Debentures of such series.
(b) If less than all the Debentures of a series are to be
redeemed, the Company shall give the Trustee at least 45 days notice in advance
of the date fixed for redemption (unless a shorter notice shall be satisfactory
to the Trustee) as to the aggregate principal amount of Debentures of the series
to be redeemed, and thereupon the Trustee shall select, by lot or in any other
manner as it shall deem appropriate and fair in its discretion and which
<PAGE> 39
25
may provide for the selection of a portion or portions (equal to $25 or any
integral multiple thereof) of the principal amount of such Debentures of a
denomination larger than $25, the Debentures to be redeemed and shall thereafter
promptly notify the Company in writing of the numbers of the Debentures to be
redeemed, in whole or in part.
The Company may, if and whenever it shall so elect in
accordance with the terms of any series of Debentures established pursuant to
Section 2.01, by delivery of instructions signed on its behalf by its President
or any Vice President, instruct the Trustee or any paying agent to call all or
any part of the Debentures of a particular series for redemption and to give
notice of redemption in the manner set forth in this Section, such notice to be
in the name of the Company or its own name as the Trustee or such paying agent
may deem advisable. In any case in which notice of redemption is to be given by
the Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as the
case may be, such Debenture Register, transfer books or other records or
suitable copies or extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required under the
provisions of this Section.
The Company shall not be required to (i) issue, register the
transfer of or exchange any Debentures of such series to be redeemed during a
period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of all or less than all of the Debentures of
such series and ending at the close of business on the day of such mailing and
(ii) register the transfer of or exchange any Debentures of such series so
selected for redemption, in whole or in part, except the unredeemed portion of
any Debentures of such series redeemed in part.
SECTION 3.03. (a) If the giving of notice of redemption shall
have been completed as above provided, the Debentures or portions of Debentures
of the series to be redeemed specified in such notice shall become due and
payable on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to but not including the date
fixed for redemption
<PAGE> 40
26
and interest on such Debentures or portions of Debentures shall cease to accrue
on and after the date fixed for redemption, unless the Company shall default in
the payment of such redemption price and accrued interest with respect to any
such Debenture or portion thereof. On presentation and surrender of such
Debentures on or after the date fixed for redemption at the place of payment
specified in the notice, said Debentures shall be paid and redeemed at the
applicable redemption price for such series, together with interest accrued
thereon to but not including the date fixed for redemption (but if the date
fixed for redemption is after the record date with respect to an Interest
Payment Date and on or prior to such Interest Payment Date, the interest
installment payable on such Interest Payment Date shall be payable to the
registered holder at the close of business on the applicable record date
pursuant to Section 2.03).
(b) Upon presentation of any Debenture of such series which is
to be redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Debenture is presented shall
make available for delivery to the holder thereof, at the expense of the
Company, a new Debenture or Debentures of the same series, of authorized
denominations in principal amount equal to the unredeemed portion of the
Debenture so presented.
SECTION 3.04. The provisions of Sections 3.04, 3.05 and 3.06
shall be applicable to any sinking fund for the retirement of Debentures of a
series, except as otherwise specified as contemplated by Section 2.01 for
Debentures of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Debentures of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount provided
for by the terms of Debentures of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Debentures for
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 3.05. Each sinking fund payment shall be
applied to the redemption of Debentures
<PAGE> 41
27
of any series as provided for by the terms of Debentures of such series.
SECTION 3.05. The Company (i) may deliver Outstanding
Debentures of a series (other than any previously called for redemption) and
(ii) may apply as a credit Debentures of a series which have been redeemed,
either at the election of the Company pursuant to the terms of such Debentures
or through the application of permitted optional sinking fund payments pursuant
to the terms of such Debentures, in each case in satisfaction of all or any part
of any sinking fund payment with respect to the Debentures of such series
required to be made pursuant to the terms of such Debentures as provided for by
the terms of such series; provided that such Debentures have not been previously
so credited. Such Debentures shall be received and credited for such purpose by
the Trustee at the redemption price specified in such Debentures for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
SECTION 3.06. Not less than 45 days prior to each sinking fund
payment date for any series of Debentures, the Company (i) will deliver to the
Trustee an Officers' Certificate specifying (x) the amount of the next ensuing
sinking fund payment for that series pursuant to the terms of such series, and
(y) the portion thereof, if any, which is to be satisfied by delivering and
crediting Debentures of such series pursuant to Section 3.05 and the basis for
such credit and (ii) will, together with such Officers' Certificate, deliver to
the Trustee any Debentures to be so delivered. Not less than 30 days before each
such sinking fund payment date, the Trustee shall select the Debentures to be
redeemed upon such sinking fund payment date in the manner specified in Section
3.02 and cause notice of the redemption thereof to be given in the name and at
the expense of the Company in the manner provided in Section 3.02. Such notice
having been duly given, the redemption of such Debentures shall be made upon the
terms and in the manner stated in Section 3.03.
<PAGE> 42
28
ARTICLE IV
Particular Covenants of the Company
The Company covenants and agrees for each series of the
Debentures as follows:
SECTION 4.01. The Company will duly and punctually pay or
cause to be paid the principal of (and premium, if any), and interest on, the
Debentures of such series at the time and place and in the manner provided
herein and established with respect to such Debentures.
SECTION 4.02. So long as any series of the Debentures remain
Outstanding, the Company agrees to maintain an office or agency in the Borough
of Manhattan, The City and State of New York, with respect to each such series
and at such other location or locations as may be designated as provided in this
Section 4.02, where (i) Debentures of that series may be presented for payment,
(ii) Debentures of that series may be presented as hereinabove authorized for
registration of transfer and exchange, and (iii) notices and demands to or upon
the Company in respect of the Debentures of that series and this Indenture may
be given or served, such designation to continue with respect to such office or
agency until the Company shall, by written notice signed by its President or a
Vice President and delivered to the Trustee, designate some other office or
agency for any or all of such purposes. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, notices and
demands.
SECTION 4.03. (a) If the Company shall appoint one or more
paying agents for all or any series of the Debentures, other than the Trustee,
the Company will cause each such paying agent to execute and deliver to the
Trustee an instrument in which such paying agent shall agree with the Trustee,
subject to the provisions of this Section:
<PAGE> 43
29
(1) that it will hold all sums held by it as such agent for
the payment of the principal of (and premium, if any), or interest on,
the Debentures of that series (whether such sums have been paid to it
by the Company or by any other obligor of such Debentures) in trust for
the benefit of the persons entitled thereto;
(2) that it will give the Trustee written notice of any
failure by the Company (or by any other obligor of such Debentures) to
make any payment of the principal of (and premium, if any), or interest
on, the Debentures of that series when the same shall be due and
payable;
(3) that it will, at any time during the continuance of any
failure referred to in the preceding paragraph (a)(2) above, upon the
written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such paying agent; and
(4) that it will perform all other duties of paying agent as
set forth in this Indenture.
(b) If the Company shall act as its own paying agent with
respect to any series of the Debentures, it will, on or before each due date of
the principal of (and premium, if any), or interest on, Debentures of that
series, set aside, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay such principal (and premium, if any) or
interest so becoming due on Debentures of that series until such sums shall be
paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee in writing of such action, or any failure (by it or
any other obligor on such Debentures) to take such action. Whenever the Company
shall have one or more paying agents for any series of Debentures, it will,
prior to each due date of the principal of (and premium, if any), or interest
on, any Debentures of that series, deposit with the paying agent a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such paying agent is the
Trustee) the
<PAGE> 44
30
Company will promptly notify the Trustee of its action or failure so to act.
(c) Anything in this Section to the contrary notwithstanding,
(i) the agreement to hold sums in trust as provided in this Section is subject
to the provisions of Section 11.04 and (ii) the Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for any
other purpose, pay, or direct any paying agent to pay, to the Trustee all sums
held in trust by the Company or such paying agent, such sums to be held by the
Trustee upon the same terms and conditions as those upon which such sums were
held by the Company or such paying agent; and, upon such payment by any paying
agent to the Trustee, such paying agent shall be released from all further
liability with respect to such money.
SECTION 4.04. The Company, whenever necessary to avoid or fill
a vacancy in the office of Trustee, will appoint, in the manner provided in
Section 7.10, a Trustee, so that there shall at all times be a Trustee
hereunder.
ARTICLE V
Debentureholders Lists and Reports
by the Company and the Trustee
SECTION 5.01. The Company will furnish or cause to be
furnished to the Trustee (a) on a monthly basis on each regular record date (as
defined in Section 2.03) a list, in such form as the Trustee may reasonably
require, of the names and addresses of the holders of each series of Debentures
as of such regular record date; provided that the Company shall not be obligated
to furnish or cause to be furnished such list at any time that the list shall
not differ in any respect from the most recent list furnished to the Trustee by
the Company and (b) at such other times as the Trustee may request in writing
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished; provided, however, that no such list need be furnished
for any series for which the Trustee shall be the Debenture Registrar.
<PAGE> 45
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SECTION 5.02. (a) The Trustee shall preserve, in as current a
form as is reasonably practicable, all information as to the names and addresses
of the holders of Debentures contained in the most recent list furnished to it
as provided in Section 5.01 and as to the names and addresses of holders of
Debentures received by the Trustee in its capacity as Debenture Registrar (if
acting in such capacity).
(b) The Trustee may destroy any list furnished to it as
provided in Section 5.01 upon receipt of a new list so furnished.
(c) In case three or more holders of Debentures of a series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has owned a
Debenture for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Debentures of such series or holders of all
Debentures with respect to their rights under this Indenture or under such
Debentures, and such application is accompanied by a copy of the form of proxy
or other communication which such applicants propose to transmit, then the
Trustee shall within five business days after the receipt of such application,
at its election, either:
(1) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions
of subsection (a) of this Section 5.02; or
(2) inform such applicants as to the approximate number of
holders of Debentures of such series or of all Debentures, as the case
may be, whose names and addresses appear in the information preserved
at the time by the Trustee, in accordance with the provisions of
subsection (a) of this Section 5.02, and as to the approximate cost of
mailing to such Debentureholders the form of proxy or other
communication, if any, specified in such application.
<PAGE> 46
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(d) If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each holder of such series or of all Debentures, as the case
may be, whose name and address appears in the information preserved at the time
by the Trustee in accordance with the provisions of subsection (a) of this
Section 5.02, a copy of the form of proxy or other communication which is
specified in the application of such applicants received pursuant to subsection
(c) of this Section 5.02, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Securities and Exchange Commission (the "Commission"), together with a copy of
the material to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the best interests of
the holders of Debentures of such series or of all Debentures, as the case may
be, or would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry
of an order sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing, that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee shall
mail copies of such material to all such Debentureholders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise, the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(e) Each and every holder of the Debentures, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any paying agent nor any Debenture Registrar shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the holders of Debentures in accordance with the
provisions of this Section, regardless of the source from which such information
was derived, and that the Trustee shall not be
<PAGE> 47
33
held accountable by reason of mailing any material pursuant to a request made
under this Section.
SECTION 5.03. (a) The Company covenants and agrees to file
with the Trustee, within 15 days after the Company is required to file the same
with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may from time to time by rules and regulations prescribe)
which the Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to either of such
Sections, then to file with the Trustee and the Commission in accordance with
the rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on a national securities exchange, as may be prescribed
from time to time in such rules and regulations. Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Company's compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely exclusively
on Officers' Certificates).
(b) The Company covenants and agrees to file with the Trustee
and the Commission, in accordance with the rules and regulations prescribed from
time to time by the Commission, such additional information, documents and
reports with respect to compliance by the Company with the conditions and
covenants provided for in this Indenture as may be required from time to time by
such rules and regulations.
(c) The Company covenants and agrees to transmit by mail,
first class postage prepaid, or by reputable overnight delivery service which
provides for evidence of receipt, to the Debentureholders, as their names and
addresses appear upon the Debenture Register, within 30 days after the filing
thereof with the Trustee, such summaries of
<PAGE> 48
34
any information, documents and reports required to be filed by the Company
pursuant to subsections (a) and (b) of this Section as may be required by rules
and regulations prescribed from time to time by the Commission.
(d) The Company covenants and agrees to furnish to the
Trustee, on or before May 15 in each calendar year in which any of the
Debentures are Outstanding, or on or before such other day in each calendar year
as the Company and the Trustee may from time to time agree upon, a Certificate
of the principal executive officer, principal financial officer, or principal
accounting officer as to his or her knowledge of the Company's compliance with
all conditions and covenants under this Indenture. For purposes of this
subsection (d), such compliance shall be determined without regard to any period
of grace or requirement of notice provided under this Indenture.
SECTION 5.04. (a) On or before July 15 in each year in which
any of the Debentures are Outstanding, the Trustee shall transmit by mail, first
class postage prepaid, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, a brief report dated as of the preceding May
15, with respect to any of the following events which may have occurred within
the previous 12 months (but if no such event has occurred within such period no
report need be transmitted):
(1) any change to its eligibility under Section 7.09, and its
qualifications under Section 7.08;
(2) the creation of, or any material change to, a
relationship specified in paragraphs (1) through (10) of subsection (c)
of Section 7.08;
(3) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date
of such report, and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Debentures, on any
property or funds held or collected by it as Trustee if such advances
so remaining unpaid
<PAGE> 49
35
aggregate more than 1/2 of 1% of the principal amount of the Debentures
outstanding, determined in accordance with Section 8.04, on the date of
such report;
(4) any change to the amount, interest rate, and maturity date
of all other indebtedness owing by the Company, or by any other obligor
on the Debentures, to the Trustee in its individual capacity, on the
date of such report, with a brief description of any property held as
collateral security therefor, except any indebtedness based upon a
creditor relationship arising in any manner described in paragraph (2),
(3), (4) or (6) of subsection (b) of Section 7.13;
(5) any change to the property and funds, if any, physically
in the possession of the Trustee as such on the date of such report;
(6) any release, or release and substitution, of property
subject to the lien of this Indenture (and the consideration thereof,
if any) which it has not previously reported;
(7) any additional issue of Debentures which the Trustee has
not previously reported; and
(8) any action taken by the Trustee in the performance of its
duties under this Indenture which it has not previously reported and
which in its opinion materially affects the Debentures or the
Debentures of any series, except any action in respect of a default,
notice of which has been or is to be withheld by it in accordance with
the provisions of Section 6.07.
(b) The Trustee shall transmit by mail, first class postage
prepaid, to the Debentureholders, as their names and addresses appear upon the
Debenture Register, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee as such since the date of
the last report transmitted pursuant to the provisions of subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this Indenture),
<PAGE> 50
36
for the reimbursement of which it claims or may claim a lien or charge prior to
that of the Debentures of any series on property or funds held or collected by
it as Trustee, and which it has not previously reported pursuant to this
subsection if such advances remaining unpaid at any time aggregate more than 10%
of the principal amount of Debentures of such series outstanding, determined in
accordance with Section 8.04, at such time, such report to be transmitted within
90 days after such advances.
(c) A copy of each such report shall, at the time of such
transmission to Debentureholders, be filed by the Trustee with the Company, with
each stock exchange upon which any Debentures are listed (if so listed) and also
with the Commission. The Company agrees to notify the Trustee when any
Debentures become listed on any stock exchange.
ARTICLE VI
REMEDIES OF THE TRUSTEE AND
DEBENTUREHOLDERS ON EVENT OF DEFAULT
SECTION 6.01. (a) Whenever used herein with respect to
Debentures of a particular series, "Event of Default" means any one or more of
the following events which has occurred and is continuing:
(1) default in the payment of any installment of interest upon
any of the Debentures of that series, as and when the same shall become
due and payable, and continuance of such default for a period of 30
days; provided, however, that a valid extension of an interest payment
period by the Company in accordance with the terms of any indenture
supplemental hereto, shall not constitute a default in the payment of
interest;
(2) default in the payment of the principal of (or premium, if
any, on) any of the Debentures of that series as and when the same
shall become due and payable whether at maturity, upon redemption, by
declaration or otherwise, or in any payment required by any sinking or
analogous fund established with respect to that series;
<PAGE> 51
37
(3) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company with respect to that series contained in such Debentures or
otherwise established with respect to that series of Debentures
pursuant to Section 2.01 or contained in this Indenture (other than a
covenant or agreement which has been expressly established solely for
the benefit of one or more series of Debentures other than such series)
for a period of 90 days after the date on which written notice of such
failure, requiring the same to be remedied and stating that such notice
is a "Notice of Default" hereunder, shall have been given to the
Company by the Trustee, by registered or certified mail, or to the
Company and the Trustee by the holders of at least 25% in principal
amount of the Debentures of that series at the time outstanding,
determined in accordance with Section 8.04;
(4) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 90 consecutive
days; or
(5) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by
it to the entry of a decree or order for relief in respect of the
Company in an involuntary case
<PAGE> 52
38
or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the filing
of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action.
(b) If an Event of Default occurs and is continuing with
respect to Debentures of a particular series, unless the principal of all the
Debentures of such series shall have already become due and payable, either the
Trustee or the holders of not less than 25% in aggregate principal amount of the
Debentures of that series then outstanding hereunder, determined in accordance
with Section 8.04, by notice in writing to the Company (and to the Trustee if
given by such Debentureholders), may declare the principal of all the Debentures
of that series to be due and payable immediately, and upon any such declaration
the same shall become and shall be immediately due and payable, anything
contained in this Indenture or in the Debentures of that series or established
with respect to that series pursuant to Section 2.01 to the contrary
notwithstanding.
(c) Section 6.01(b), however, is subject to the condition that
if, at any time after the principal of the Debentures of a series shall have
been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all the Debentures
of such series and the principal of (and premium, if any, on) any and all
Debentures of that series which shall have become
<PAGE> 53
39
due otherwise than by acceleration (with interest upon such principal (and
premium, if any), and, to the extent that such payment is enforceable under
applicable law, upon overdue installments of interest, at the rate per annum
expressed in the Debentures of such series to the date of such payment or
deposit) and the amount payable to the Trustee under Section 7.06, and any and
all defaults under the Indenture, other than the nonpayment of principal on
Debentures of such series which shall not have become due by their terms, shall
have been remedied or waived as provided in Section 6.06, then the holders of a
majority in aggregate principal amount of the Debentures of such series then
outstanding, determined in accordance with Section 8.04, (subject to, in the
case of any series of Debentures held as trust assets of a PWG Capital Trust and
with respect to which a Security Exchange has not theretofore occurred, such
consent of the holders of the Preferred Securities and the Common Securities of
such PWG Capital Trust as may be required under the Declaration of Trust of such
PWG Capital Trust), by written notice to the Company and to the Trustee, may
rescind and annul such declaration and its consequences with respect to such
series of Debentures; but no such rescission and annulment shall extend to or
shall affect any subsequent default, or shall impair any right consequent
thereon.
(d) In case the Trustee shall have proceeded to enforce any
right with respect to Debentures of a series under this Indenture and such
proceedings shall have been discontinued or abandoned because of rescission or
annulment as provided in (c) above or for any other reason or shall have been
determined adversely to the Trustee, then the Company and the Trustee shall be
restored to their former respective positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.
(e) If, prior to a Security Exchange with respect to the
Debentures of any series, a Default with respect to the Debentures of such
series shall have occurred, the Company expressly acknowledges that under the
circumstances set forth in the applicable Declaration of Trust, any holder of
Preferred Securities of the applicable PWG Capital Trust may, to the extent
permitted by applicable law, enforce
<PAGE> 54
40
directly against the Company the applicable Property Trustee's rights hereunder.
In furtherance of the foregoing and for the avoidance of any doubt, the Company
acknowledges that, under the circumstances described in the applicable
Declaration of Trust, any such holder of Preferred Securities, in its own name,
in the name of the applicable PWG Capital Trust or in the name of the holders of
the Preferred Securities issued by such PWG Capital Trust, may institute or
cause to be instituted a proceeding, including, without limitation, any suit in
equity, an action at law or other judicial or administrative proceeding, to
enforce the applicable Property Trustee's rights hereunder directly against the
Company as issuer of the applicable series of Debentures, and may prosecute such
proceeding to judgment or final decree, and enforce the same against the
Company.
SECTION 6.02. (a) The Company covenants that (1) in case
default shall be made in the payment of any installment of interest on any of
the Debentures of a series, or any payment required by any sinking or analogous
fund established with respect to such series as and when the same shall have
become due and payable, and such default shall have continued for a period of 30
days, or (2) in case default shall be made in the payment of the principal of
(or premium, if any, on) any of the Debentures of a series when the same shall
have become due and payable, whether upon maturity of the Debentures of a series
or upon redemption or upon declaration or otherwise, then, upon demand of the
Trustee, the Company will pay to the Trustee, for the benefit of the holders of
the Debentures of such series, the whole amount that then shall have become due
and payable on all Debentures of such series for principal (and premium, if any)
or interest, or both, as the case may be, with interest upon the overdue
principal (and premium, if any) and (to the extent that payment of such interest
is enforceable under applicable law and without duplication of any other amounts
paid by the Company in respect thereof) upon overdue installments of interest at
the rate per annum expressed in the Debentures of such series; and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, and the amount payable to the Trustee under Section
7.06.
<PAGE> 55
41
(b) In case the Company shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any action or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company or
other obligor upon the Debentures of such series and collect in the manner
provided by law out of the property of the Company or other obligor upon the
Debentures of such series wherever situated the moneys adjudged or decreed to be
payable.
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition or other
judicial proceedings affecting the Company, any other obligor on the Debentures
of any series, or the creditors or property of either, the Trustee shall have
the power to intervene in such proceedings and take any action therein that may
be permitted by the court and shall (except as may be otherwise provided by law)
be entitled to file such proofs of claim and other papers and documents as may
be necessary or advisable in order to have the claims of the Trustee and of the
holders of Debentures of such series allowed for the entire amount due and
payable by the Company or such other obligor under the Indenture at the date of
institution of such proceedings and for any additional amount which may become
due and payable by the Company or such other obligor after such date, and to
collect and receive any moneys or other property payable or deliverable on any
such claim, and to distribute the same after the deduction of the amount payable
to the Trustee under Section 7.06; and any receiver, assignee or trustee in
bankruptcy or reorganization is hereby authorized by each of the holders of
Debentures of such series to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such payments directly to
such Debentureholders, to pay to the Trustee any amount due it under Section
7.06.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to Debentures of
any series, may be enforced by the Trustee without the possession of any of such
<PAGE> 56
42
Debentures, or the production thereof at any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for payment to the Trustee of any amounts due
under Section 7.06, be for the ratable benefit of the holders of the Debentures
of such series.
In case of an Event of Default hereunder, the Trustee may in
its discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Debentureholder any plan of reorganization, arrangement, adjustment or
composition affecting the Debentures of any series or the rights of any holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Debentureholder in any such proceeding.
SECTION 6.03. Any moneys collected by the Trustee pursuant to
Section 6.02 with respect to a particular series of Debentures shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such moneys on account of principal (or premium, if any)
or interest, upon presentation of the Debentures of such series, and stamping
thereon the payment, if only partially paid, and upon surrender thereof if fully
paid:
FIRST: To the payment of costs and expenses of collection and
of all amounts payable to the Trustee under Section 7.06;
<PAGE> 57
43
SECOND: To the payment of the amounts then due and unpaid upon
Debentures of such series for principal (and premium, if any) and
interest, in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Debentures for
principal (and premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 6.04. No holder of any Debenture of any series shall
have any right by virtue or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless such holder previously shall have
given to the Trustee written notice of an Event of Default and of the
continuance thereof with respect to Debentures of such series specifying such
Event of Default, as hereinbefore provided, and unless also the holders of not
less than 25% in aggregate principal amount of the Debentures of such series
then outstanding, determined in accordance with Section 8.04, shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 30 days after
its receipt of such notice, request and offer of indemnity, shall have failed to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by the holders and the Trustee, that no one or
more holders of Debentures of such series shall have any right in any manner
whatsoever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of the holders of any other of such
Debentures, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Debentures of such series. For the protection and enforcement of the
provisions of this
<PAGE> 58
44
Section, each and every Debentureholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
Notwithstanding any other provisions of this Indenture,
however, the right of any holder of any Debenture to receive payment of the
principal of (and premium, if any) and interest on such Debenture, as therein
provided, on or after the respective due dates expressed in such Debenture (or
in the case of redemption, on the redemption date), or to institute suit for the
enforcement of any such payment on or after such respective dates or redemption
date, shall not be impaired or affected without the consent of such holder. In
addition, as set forth in the Declaration, any holder of Preferred Securities
shall have the right to institute suit for the enforcement of any such payment
to such holder with respect to Debentures having a principal amount equal to the
aggregate liquidation preference of the Preferred Securities held by such
holder.
SECTION 6.05. (a) All powers and remedies given by this
Article to the Trustee or to the Debentureholders shall, to the extent permitted
by law, be deemed cumulative and not exclusive of any others thereof or of any
other powers and remedies available to the Trustee or the holders of the
Debentures, by judicial proceedings or otherwise, to enforce performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Debentures.
(b) No delay or omission by the Trustee or by any holder of
any of the Debentures to exercise any right or power accruing upon any Event of
Default occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 6.04, every
power and remedy given by this Article or by law to the Trustee or to the
Debentureholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Debentureholders.
SECTION 6.06. The holders of a majority in aggregate
principal amount of the Debentures of any series
<PAGE> 59
45
at the time outstanding, determined in accordance with Section 8.04 (with, in
the case of any series of Debentures held as trust assets of a PWG Capital Trust
and with respect to which a Security Exchange has not theretofore occurred, such
consent of holders of the Preferred Securities and the Common Securities of such
PWG Capital Trust as may be required under the Declaration of Trust of such PWG
Capital Trust), shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee with respect to such series;
provided, however, that such direction shall not be in conflict with any rule of
law or with this Indenture or unduly prejudicial to the rights of holders of
Debentures of any other series at the time outstanding (determined in accordance
with Section 8.04) and not parties thereto. Subject to the provisions of Section
7.01, the Trustee shall have the right to decline to follow any such direction
if the Trustee in good faith shall, by a Responsible Officer or Responsible
Officers of the Trustee, determine that the proceeding so directed would involve
the Trustee in personal liability. The holders of a majority in aggregate
principal amount of the Debentures of any series at the time outstanding,
determined in accordance with Section 8.04, affected thereby (with, in the case
of any series of Debentures held as trust assets of a PWG Capital Trust and with
respect to which a Security Exchange has not theretofore occurred, such consent
of holders of the Preferred Securities and the Common Securities of such PWG
Capital Trust as may be required under the Declaration of Trust of such PWG
Capital Trust), may, on behalf of the holders of all of the Debentures of such
series, waive any past default in the performance of any of the covenants
contained herein or established pursuant to Section 2.01 with respect to such
series and its consequences, except a default in the payment of the principal
of, or premium, if any, or interest on, any of the Debentures of such series as
and when the same shall become due (x) by the terms of such Debentures otherwise
than by acceleration (unless such default has been cured and a sum sufficient to
pay all matured installments of interest and principal and any premium has been
deposited with the Trustee (in accordance with Section 6.01(c)) or (y) as a
result of a call for redemption of Debentures of such series. Upon any such
waiver, the default covered thereby
<PAGE> 60
46
shall be deemed to be cured for all purposes of this Indenture and the Company,
the Trustee and the holders of the Debentures of such series shall be restored
to their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
SECTION 6.07. The Trustee shall, within 90 days after the
occurrence of a default with respect to a particular series, transmit by mail,
first-class postage prepaid, to the holders of Debentures of such series, as
their names and addresses appear upon the Debenture Register, notice of all
defaults with respect to such series known to the Trustee, unless such defaults
shall have been cured before the giving of such notice (the term "defaults" for
the purpose of this Section being hereby defined to be the events specified in
subsections (1), (2), (3), (4) and (5) of Section 6.01(a), not including any
periods of grace provided for therein and irrespective of the giving of notice
provided for by subsection (3) of Section 6.01(a)); provided that, except in the
case of default in the payment of the principal of (or premium, if any), or
interest on, any of the Debentures of such series or in the payment of any
sinking fund installment established with respect to such series, the Trustee
shall be protected in withholding such notice if and so long as the Board of
Directors, the executive committee, or a trust committee of directors and/or
Responsible Officers, of the Trustee in good faith determine that the
withholding of such notice is in the interests of the holders of Debentures of
such series; provided further, however, that, in the case of any default of the
character specified in Section 6.01(a)(3) with respect to Debentures of such
series, no such notice to the holders of the Debentures of such series shall be
given until at least 30 days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any
default, except (i) a default under subsection (a)(1) or (a)(2) of Section 6.01
as long as the Trustee is acting as paying agent for such series of Debentures
or (ii) any default as to which the Trustee shall have received written notice
or a Responsible Officer shall have obtained written notice.
<PAGE> 61
47
SECTION 6.08. All parties to this Indenture agree, and each
holder of any Debentures by his or her acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, or by any Debentureholder, or group of
Debentureholders, holding more than 10% in aggregate principal amount of the
Debentures of any series at the time outstanding, determined in accordance with
Section 8.04, or to any suit instituted by any Debentureholder for the
enforcement of the payment of the principal of (premium, if any), or interest
on, any Debenture of such series, on or after the respective due dates expressed
in such Debenture or established pursuant to this Indenture.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
<PAGE> 62
48
ARTICLE VII
Concerning the Trustee
SECTION 7.01. (a) The Trustee, prior to the occurrence of an
Event of Default with respect to Debentures of a series and after the curing of
all Events of Default with respect to Debentures of that series which may have
occurred, shall undertake to perform with respect to Debentures of such series
such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to Debentures of a series
has occurred (which has not been cured or waived), the Trustee shall exercise
with respect to Debentures of that series such of the rights and powers vested
in it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(b) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own wilful misconduct, except that:
(1) prior to the occurrence of an Event of Default with
respect to Debentures of a series and after the curing or waiving of
all such Events of Default which may have occurred with respect to such
series:
(i) the duties and obligations of the Trustee shall
with respect to Debentures of such series be determined solely
by the express provisions of this Indenture, and the Trustee
shall not be liable with respect to Debentures of such series
except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may with respect to
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49
Debentures of such series conclusively rely, as to the truth
of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture but need
not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of a majority in principal amount of the
Debentures of any series at the time outstanding, determined in
accordance with Section 8.04, relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Indenture with respect to the Debentures of such series;
(4) none of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if there is reasonable
ground for believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this Indenture or
adequate indemnity against such risk is not reasonably assured to it;
and
<PAGE> 64
50
(5) whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to
the provisions of this Article VII.
SECTION 7.02. Except as otherwise provided in Section 7.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, security or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board Resolution
or an instrument signed in the name of the Company by the Chairman or
the Vice Chairman of the Board of Directors or the President or any
Vice President and by the Secretary or any Assistant Secretary or the
Treasurer or any Assistant Treasurer or the Controller or any Assistant
Controller (unless other evidence in respect thereof is specifically
prescribed herein);
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may
in the absence of bad faith on its part, rely upon an Officer's
Certificate;
(d) the Trustee may consult with counsel of its selection and
the written advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action
taken or suffered or omitted hereunder in good faith and in reliance
thereon;
<PAGE> 65
51
(e) the Trustee shall be under no obligations to exercise any
of the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Debentureholders, pursuant to the
provisions of this Indenture, unless such Debentureholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or
thereby; nothing herein contained shall, however, relieve the Trustee
of the obligation, upon the occurrence of an Event of Default with
respect to a series of the Debentures (which has not been cured or
waived) to exercise with respect to Debentures of that series such of
the rights and powers vested in it by this Indenture, and to use the
same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own
affairs;
(f) the Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture;
(g) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, security, or other papers or documents, unless
requested in writing so to do by the holders of not less than a
majority in principal amount of the Debentures of the particular series
outstanding affected thereby, determined in accordance with Section
8.04; provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such costs, expenses or liabilities as a
condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Company or, if paid by the Trustee,
shall be repaid by the Company
<PAGE> 66
52
upon demand; if the Trustee makes such investigation, it shall be
entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(h) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 7.03. (a) The recitals contained herein and in the
Debentures (other than the Certificate of Authentication on the Debentures)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same.
(b) The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Debentures or of the proceeds of such
Debentures, or for the use or application of any moneys paid over by the Trustee
in accordance with any provision of this Indenture or established pursuant to
Section 2.01, or for the use or application of any moneys received by any paying
agent other than the Trustee.
SECTION 7.04. The Trustee or any paying agent or Debenture
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Debentures with the same rights it would have if it were not Trustee,
paying agent or Debenture Registrar.
SECTION 7.05. Subject to the provisions of Section 11.04, all
moneys received by the Trustee shall until used or applied as herein provided,
be held in trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for
<PAGE> 67
53
interest on any moneys received by it hereunder except such as it may agree with
the Company to pay thereon.
SECTION 7.06. (a) The Company covenants and agrees to pay to
the Trustee from time to time, and the Trustee shall be entitled to, such
reasonable compensation as the Company and the Trustee shall from time to time
agree in writing (which shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust) for all services rendered
by it in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith. The Company also
covenants to indemnify the Trustee (and its officers, agents, directors and
employees) for, and to hold it harmless against, any loss, liability or expense
including taxes (other than taxes based upon, measured by or determined by the
income of the Trustee) incurred without negligence or bad faith on the part of
the Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in the premises.
(b) The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder. Such additional indebtedness shall be secured by a lien prior to that
of the Debentures upon all property and funds held or collected by the Trustee
as such, except funds held in trust for the benefit of the holders of particular
Debentures.
(c) When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 6.01(4) or (5), the
expenses and the compensation
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54
for the services are intended to constitute expenses of administration under any
bankruptcy law.
(d) The Company's obligations under this Section 7.06 shall
survive the resignation or removal of any Trustee, the discharge of the
Company's obligations pursuant to Article XI of this Indenture and/or the
termination of this Indenture.
SECTION 7.07. Except as otherwise provided in Section 7.01,
whenever in the administration of the provisions of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established
prior to taking or suffering or omitting to take any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee and such certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full warrant to the
Trustee for any action taken, suffered or omitted to be taken by it under the
provisions of this Indenture in reliance thereon.
SECTION 7.08. (a) If the Trustee has or shall acquire any
conflicting interest, as defined in Section 310(b) of the Trust Indenture Act,
with respect to the Debentures of any series and if the Default to which such
conflicting interest relates has not been cured, duly waived or otherwise
eliminated, within 90 days after ascertaining that it has such conflicting
interest, it shall either eliminate such conflicting interest, except as
otherwise provided herein, or resign with respect to the Debentures of such
series in the manner and with the effect specified in Section 7.10 and the
Company shall promptly appoint a successor Trustee in the manner provided
herein.
(b) In the event that the Trustee shall fail to comply with
the provisions of subsection (a) of this Section, with respect to the Debentures
of any series the Trustee shall, within ten days after the expiration of such
90-day period, transmit notice of such failure by mail, first-class postage
prepaid, to the Debentureholders of such
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55
series as their names and addresses appear upon the Debenture Register.
(c) Except in the case of a default in the payment of the
principal of (or premium, if any), or interest on, any Debentures issued under
this Indenture, or in the payment of any sinking or analogous fund installment,
the Trustee shall not be required to resign as provided by this Section 7.08 if
such Trustee shall have sustained the burden of proving, on application to the
Commission and after opportunity for hearing thereon, that (i) the default under
the Indenture may be cured or waived during a reasonable period and under the
procedures described in such application and (ii) a stay of the Trustee's duty
to resign will not be inconsistent with the interests of Debentureholders. The
filing of such an application shall automatically stay the performance of the
duty to resign until the Commission orders otherwise.
Any resignation of the Trustee shall become effective only
upon the appointment of a successor trustee and such successor's acceptance of
such an appointment.
SECTION 7.09. There shall at all times be a Trustee with
respect to the Debentures issued hereunder which shall at all times be a
corporation organized and doing business under the laws of the United States of
America or any State or Territory thereof or of the District of Columbia, or a
corporation or other person permitted to act as trustee by the Commission,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million dollars, and subject to supervision
or examination by Federal, State, Territorial, or District of Columbia
authority. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. The
Company may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee. In
case at any time the Trustee shall cease to be eligible in
<PAGE> 70
56
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 7.10.
SECTION 7.10. (a) The Trustee or any successor hereafter
appointed may at any time resign with respect to the Debentures of one or more
series by giving written notice thereof to the Company and by transmitting
notice of resignation by mail, first class postage prepaid, to the
Debentureholders of such series, as their names and addresses appear upon the
Debenture Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee with respect to Debentures of such series
by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
mailing of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee with
respect to Debentures of such series, or any Debentureholder of that series who
has been a bona fide holder of a Debenture or Debentures for at least six months
may, subject to the provisions of Section 6.08, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon after such notice, if any, as it may
deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following
shall occur:
(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 7.08 after written request therefor by the
Company or by any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with
the provisions of Section 7.09 and shall fail to resign after written
request therefor by the Company or by any such Debentureholder; or
<PAGE> 71
57
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then, in any
such case, the Company may remove the Trustee with respect to all
Debentures and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of
which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee. If no successor trustee shall have been
so appointed and have accepted appointment within 30 days after the
mailing of such notice of removal, the Trustee so removed may petition
any court of competent jurisdiction for the appointment of a successor
trustee with respect to Debentures of such series, or any
Debentureholder of that series who has been a bona fide holder of a
Debenture or Debentures for at least six months may, subject to the
provisions of Section 6.08, on behalf of himself and all others
similarly situated, petition any such court for the removal of the
Trustee and the appointment of a successor trustee. Such court may
thereupon after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of
the Debentures of any series at the time outstanding, determined in accordance
with Section 8.04, may at any time remove the Trustee with respect to such
series and appoint a successor trustee.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee with respect to the Debentures of a series pursuant to
any of the provisions of this Section shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section
may be appointed with respect to the Debentures of one more series or all such
series, but at any time there
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58
shall be only one Trustee with respect to the Debentures of any particular
series.
SECTION 7.11. (a) In case of the appointment hereunder of a
successor trustee with respect to all Debentures, such successor trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor trustee all the rights, powers, and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
trustee with respect to the Debentures of one or more (but not all) series, the
Company, the retiring Trustee and each successor trustee with respect to the
Debentures of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debentures of that or those series to which the appointment of such successor
trustee relates, (2) shall contain such provisions as shall be deemed necessary
or desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Debentures of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust, that each such Trustee shall be trustee of a
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trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee and that no Trustee shall be responsible
for any act or failure to act on the part of any other Trustee hereunder; and
upon the execution and delivery of such supplemental indenture the resignation
or removal of the retiring Trustee shall become effective to the extent provided
therein, such retiring Trustee shall with respect to the Debentures of that or
those series to which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee under this
Indenture, and each such successor trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Debentures of that or those series
to which the appointment of such successor trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor trustee, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the Debentures of that or those series to
which the appointment of such successor trustee relates, subject, to the lien,
if any, of the retiring Trustee provided for in Section 7.06.
(c) Upon request of any such successor trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in,
and confirming to, such successor trustee all such rights, power and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor trustee shall accept its appointment unless
at the time of such acceptance such successor trustee shall be qualified and
eligible under this Article.
(e) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Company shall transmit notice of the succession of
such trustee hereunder by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon
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the Debenture Register. If the Company fails to transmit such notice within ten
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be transmitted at the expense of the Company.
SECTION 7.12. Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be qualified under the provisions of
Section 7.08 and eligible under the provisions of Section 7.09, without the
execution or filing of any paper of any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. In case any
Debentures shall have been authenticated, but not made available for delivery,
by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
make available for delivery the Debentures so authenticated with the same effect
as if such successor Trustee had itself authenticated such Debentures.
SECTION 7.13. (a) Subject to the provisions of subsection (b)
of this Section, if the Trustee shall be or shall become a creditor, directly or
indirectly, secured or unsecured, of the Company within three months prior to a
default, as defined in subsection (b) of this Section, or subsequent to such a
default, then, unless and until such default shall be cured, the Trustee shall
set apart and hold in a special account for the benefit of the Trustee
individually, the holders of the Debentures and the holders of other indenture
securities (as defined in subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of principal
or interest, effected after the beginning of such three months' period
and valid as against the Company and its other creditors, except any
such reduction resulting from the receipt or disposition of any
property described in paragraph
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(2) of this subsection, or from the exercise of any right of setoff
which the Trustee could have exercised if a petition in bankruptcy had
been filed by or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any
claim as such creditor, either as security therefor, or in satisfaction
or composition thereof, or otherwise, after the beginning of such three
months' period, or an amount equal to the proceeds of any such
property, if disposed of, subject, however, to the rights, if any, of
the Company and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of
the Trustee:
(A) to retain for its own account (i) payments made on account
of any such claim by any person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim
by the Trustee to a third person, and (iii) distributions made in cash,
securities, or other property in respect of claims filed against the
Company in bankruptcy or receivership or in a case for reorganization
pursuant to the Federal Bankruptcy Code or applicable State law;
(B) to realize, for its own account, upon any property held by
it as security for any such claim, if such property was so held prior
to the beginning of such three month period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such three month period and such property was received as
security therefor simultaneously with the creation thereof, and if the
Trustee shall sustain the burden of proving that the time such property
was so received the Trustee had no reasonable cause to believe that a
default, as defined in subsection (c) of this Section, would occur
within three months; or
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62
(D) to receive payment on any claim referred to in paragraph
(B) or (C), against the release of any property held as security for
such claim as provided in such paragraph (B) or (C), as the case may
be, to the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three month period for property held as
security at the time of such substitution shall, to the extent of the fair value
of the property released, have the same status as the property released, and, to
the extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such preexisting claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned between the Trustee, the Debentureholders and the holders of other
indenture securities in such manner that the Trustee, the Debentureholders and
the holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in a case for reorganization pursuant
to the Federal Bankruptcy Code or applicable State law, the same percentage of
their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the funds and
property in such special account and before crediting to the respective claims
of the Trustee, the Debentureholders and the holders of other indenture
securities dividends on claims filed against the Company in bankruptcy or
receivership or in a case for reorganization pursuant to the Federal Bankruptcy
Code or applicable State law, but after crediting thereon receipts on account of
the indebtedness represented by their respective claims from all sources other
than from such dividends and from the funds and property so held in such special
account. As used in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or in a case for reorganization pursuant to the
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Federal Bankruptcy Code or applicable State law, whether such distribution is
made in cash, securities, or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or a case for reorganization is
pending shall have jurisdiction (i) to apportion between the Trustee, the
Debentureholders and the holders of other indenture securities, in accordance
with the provisions of this paragraph, the funds and property held in such
special account and the proceeds thereof, or (ii) in lieu of such apportionment,
in whole or in part, to give to the provisions of this paragraph due
consideration in determining the fairness of the distributions to be made to the
Trustee, the Debentureholders and the holders of other indenture securities with
respect to their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property held in
such special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee who has resigned or been removed after the
beginning of such three month period shall be subject to the provisions of this
subsection (a) as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such three month
period, it shall be subject to the provisions of this subsection (a) if and only
if the following conditions exist:
(i) the receipt of property or reduction of claim which would
have given rise to the obligation to account, if such Trustee had
continued as trustee, occurred after the beginning of such three month
period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
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(b) There shall be excluded from the operation of subsection
(a) of this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court
of competent jurisdiction, or by this Indenture, for the purpose of
preserving any property other than cash which shall at any time be
subject to the lien, if any, of this Indenture or of discharging tax
liens or other prior liens or encumbrances thereon, if notice of such
advance and of the circumstances surrounding the making thereof is
given to the Debentureholders at the time and in the manner provided in
this Indenture;
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, subscription agent, fiscal agent or
depositary, or other similar capacity;
(4) any indebtedness created as a result of services rendered
or premises rented; or any indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of
this Section;
(5) the ownership of stock or of other securities of a Company
organized under the provisions of Section 25(a) of the Federal Reserve
Act, as amended, which is directly or indirectly a creditor of the
Company; or
(6) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptance or obligations which fall
within the classification of self-liquidating paper as defined in
subsection (c) of this Section.
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(c) As used in this Section:
(1) The term "default" shall mean any failure to make payment
in full of the principal of (or premium, if any) or interest upon any
of the Debenture or upon the other indenture securities when and as
such principal (or premium, if any) or interest becomes due and
payable.
(2) The term "other indenture securities" shall mean
securities upon which the Company is an obligor (as defined in the
Trust Indenture Act) outstanding under any other indenture (A) under
which the Trustee is also trustee, (B) which contains provisions
substantially similar to the provisions of subsection (a) of this
Section, and (C) under which a default exists at the time of the
apportionment of the funds and property held in said special account.
(3) The term "cash transaction" shall mean any transaction in
which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in checks
or other orders drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" shall mean any draft,
bill of exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Company for the purpose of financing the
purchase, processing, manufacture, shipment, storage or sale of goods,
wares or merchandise and which is secured by documents evidencing title
to, possession of, or a lien upon, the goods, wares or merchandise or
the receivables or proceeds arising from the sale of the goods, wares
or merchandise previously constituting the security, provided the
security is received by the Trustee simultaneously with the creation of
the creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation.
(5) The term "Company shall mean any obligor upon
any of the Debentures.
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ARTICLE VIII
Concerning the Debentureholders
SECTION 8.01. Whenever in this Indenture it is provided that
the holders of a majority or a specified percentage in aggregate principal
amount of the Debentures of a particular series may take any action (including
the making of any demand or request, the giving of any notice, consent or waiver
or the taking of any other action), the fact that, at the time of taking any
such action, the holders of such majority or specified percentage of such series
have joined therein may be evidenced by any instrument or any number of
instruments of similar terms executed by the holders of Debentures of such
series in person or by agent or proxy appointed in writing and acceptable to the
Trustee.
If the Company shall solicit from the Debentureholders of any
series any request, demand, authorization, direction, notice, consent, waiver or
other action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for such series for the determination
of Debentureholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be given
before or after the record date, but only the Debentureholders of record at the
close of business on the record date shall be deemed to be Debentureholders for
the purposes of determining whether Debentureholders of the requisite proportion
of outstanding Debentures of that series have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the outstanding Debentures of that series
shall be computed as of the record date; provided that no such authorization,
agreement or consent by such Debentureholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
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SECTION 8.02. Subject to the provisions of Section 7.01, proof
of the execution of any instrument by a Debentureholder (such proof will not
require notarization) or his agent or proxy and proof of the holding by any
person of any of the Debentures shall be sufficient if made in the following
manner:
(a) The fact and date of the execution by any such person of
any instrument may be proved in any reasonable manner acceptable to the
Trustee.
(b) The ownership of Debentures shall be proved by the
Debenture Register for Debentures of such series or by a certificate of
the Debenture Registrar with respect thereto.
(c) The Trustee may require such additional proof of any
matter referred to in this Section as it shall deem necessary.
SECTION 8.03. Prior to the due presentment for registration of
transfer of any Debenture, the Company, the Trustee, any paying agent and any
Debenture Registrar may deem and treat the person in whose name such Debenture
shall be registered upon the books of the Company as the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and notwithstanding
any notice of ownership or writing thereon made by anyone other than the
Debenture Registrar) for the purpose of receiving payment of, or on account of,
the principal of, premium, if any, and (subject to Section 2.03) interest on,
such Debenture and for all other purposes; and neither the Company nor the
Trustee nor any paying agent nor any Debenture Registrar shall be affected by
any notice to the contrary.
SECTION 8.04. In determining whether the holders of the
requisite aggregate principal amount of Debentures of a particular series have
concurred in any direction, consent or waiver under this Indenture, Debentures
of that series which are owned by the Company or any other obligor on the
Debentures of that series or by any Subsidiary of the Company or of such other
obligor on the Debentures of that series shall be disregarded and deemed not to
be outstanding for the purpose of any such determination, except that for
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the purpose of determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver, only Debentures of such series which a
Responsible Officer of the Trustee actually knows are so owned shall be so
disregarded. Debentures so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section, if the pledgee shall
establish to the satisfaction of the Trustee the pledgee's right so to act with
respect to such Debentures and that the pledgee is not a person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In case of a dispute as to
such right, any decision by the Trustee taken upon the advice of counsel shall
be full protection to the Trustee.
SECTION 8.05. At any time prior to (but not after) the
evidencing to the Trustee, as provided in Section 8.01, of the taking of any
action by the holders of the majority or a specified percentage in aggregate
principal amount of the Debentures of a particular series, any holder of a
Debenture of that series which is shown by the evidence to be included in the
Debentures the holders of which have consented to such action may, by filing
written notice with the Trustee, and upon proof of holding as provided in
Section 8.02, revoke such action so far as concerns such Debenture. Except as
aforesaid any such action taken by the holder of any Debenture shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Debenture, and of any Debenture issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Debenture. Any action
required by the Indenture to be taken, and that is taken, by the holders of the
majority or a specified percentage in aggregate principal amount of the
Debentures of a particular series shall be conclusively binding upon the
Company, the Trustee and the holders of all the Debentures of that series.
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ARTICLE IX
Supplemental Indentures
SECTION 9.01. In addition to any supplemental indenture
otherwise authorized by this Indenture, the Company, when authorized by a Board
Resolution, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect), without the consent of
the Debentureholders, for one or more of the following purposes:
(a) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company contained herein or otherwise established with respect to
the Debentures of all or any series; or
(b) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the protection of
the holders of the Debentures of all or any series as the Board of
Directors shall consider to be for the protection of the holders of
Debentures of all or any series, and to make the occurrence, or the
occurrence and continuance, of a default in any of such additional
covenants, restrictions, conditions or provisions an Event of Default
with respect to such series permitting the enforcement of all or any of
the several remedies provided in this Indenture as herein set forth;
provided, however, that in respect of any such additional covenant,
restriction, condition or provision, such supplemental indenture may
provide for a particular period of grace after default (which period
may be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such default
or may limit the remedies available to the Trustee upon such default or
may limit the right of the holders of a majority in aggregate principal
amount of the Debentures of such series to waive such default; or
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(c) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture, or to make such other provisions in
regard to matters or questions arising under this Indenture as shall
not be inconsistent with the provisions of this Indenture and shall not
adversely affect the interests of the holders of the Debentures of any
series; or
(d) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Debenture outstanding, determined in
accordance with Section 8.04, of any series created prior to the
execution of such supplemental indenture which is entitled to the
benefit of such provision; or
(e) to add to this Indenture such provisions as may be
expressly permitted by the Trust Indenture Act, excluding, however, the
provisions referred to in Section 316(a)(2) of the Trust Indenture Act
as in effect at the date as of which this instrument was executed or
any corresponding provision in any similar federal statute hereafter
enacted.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed by the Company and the Trustee without the consent
of the holders of any of the Debentures at the time outstanding, notwithstanding
any of the provisions of Section 9.02.
SECTION 9.02. With the consent (evidenced as provided in
Section 8.01) of the holders of not less than a majority in aggregate principal
amount of the Debentures of
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each series affected by such supplemental indenture or indentures at the time
outstanding, determined in accordance with Section 8.04, (and, in the case of
any series of Debentures held as trust assets of a PWG Capital Trust and with
respect to which a Security Exchange has not theretofore occurred, such consent
of holders of the Preferred Securities and the Common Securities of such PWG
Capital Trust as may be required under the Declaration of Trust of such PWG
Capital Trust), the Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the holders
of the Debentures of such series under this Indenture; provided, however, that
no such supplemental indenture shall (i) extend the fixed maturity of any
Debentures of any series, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any premium
payable upon the redemption thereof, without the consent of the holder of each
Debenture so affected or (ii) reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Debenture (and, in the case of any
series of Debentures held as trust assets of a PWG Capital Trust and with
respect to which a Security Exchange has not theretofore occurred, such consent
of the holders of the Preferred Securities and the Common Securities of such PWG
Capital Trust as may be required under the Declaration of Trust of such PWG
Capital Trust) then outstanding and affected thereby.
Upon the request of the Company, accompanied by a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Debentureholders
(and, in the case of any series of Debentures held as trust assets of PWG
Capital Trust and with respect to which a Security Exchange has not theretofore
occurred, such consent of holders of the Preferred Securities and the Common
Securities of such PWG Capital Trust as may be required under the Declaration of
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Trust of such PWG Capital Trust), the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion but shall not be
obligated to enter into such supplement indenture.
It shall not be necessary for the consent of the
Debentureholders of any series affected thereby under this Section to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Trustee shall transmit by mail, first class postage prepaid, a notice, setting
forth in general terms the substance of such supplemental indenture, to the
Debentureholders of all series affected thereby as their names and addresses
appear upon the Debenture Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.03. Upon the execution of any supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, this Indenture
shall, with respect to Debentures of the series affected thereby, be and be
deemed to be modified and amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the holders of Debentures of the
series affected thereby shall thereafter be determined, exercised and enforced
hereunder subject to in all respects to such modifications and amendments, and
all the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 9.04. Debentures of any series, affected by a
supplemental indenture, authenticated and delivered after the execution of such
supplemental indenture pursuant
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to the provisions of this Article or of Section 10.01, may bear a notation in
form approved by the Company, provided such form meets the requirements of any
exchange upon which such series may be listed, as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Debentures
of that series so modified as to conform, in the opinion of the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Debentures of that series then
Outstanding.
SECTION 9.05. The Trustee, subject to the provisions of
Section 7.01, may receive an Opinion of Counsel and the other documents, if any,
required by Section 13.06, as conclusive evidence that any supplemental
indenture executed pursuant to this Article is authorized or permitted by, and
conforms to, the terms of this Article and that it is proper for the Trustee
under the provisions of this Article to join in the execution thereof.
ARTICLE X
Consolidation, Merger, Sale or Conveyance
SECTION 10.01. The Company shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and the Company shall not permit any
other Person to consolidate with or merge into the Company or convey, transfer
or lease its properties and assets substantially as an entirety to the Company,
unless:
(a) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a
corporation organized and existing under the laws of the United States
of America, any State thereof or the District of Columbia
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and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of (and premium,
if any) and interest on all the Debentures and the performance of every
covenant and obligation of this Indenture on the part of the Company to
be performed or observed;
(b) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or
a Subsidiary as a result of such transaction as having been incurred by
the Company or such Subsidiary at the time of such transaction, no
Event of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have happened and be
continuing; and
(c) if a supplemental indenture is required in connection with
such transaction, the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and such
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
SECTION 10.02. Upon any consolidation by the Company with or
merger by the Company into any other Person or any conveyance, transfer or lease
of the properties and assets of the Company substantially as an entirety in
accordance with Section 10.01, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein, and thereafter,
except in the case of such lease, the predecessor Person shall be relieved of
all obligations and covenants under this Indenture and the Debentures.
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ARTICLE XI
Satisfaction and Discharge of Indenture;
Unclaimed Moneys
SECTION 11.01. (A) If at any time (a) the Company shall have
paid or caused to be paid the principal of, and interest on, all the Debentures
of any series outstanding hereunder (other than Debentures of such series which
have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.07) as and when the same shall have become due and
payable, or (b) the Company shall have delivered to the Trustee for cancellation
all Debentures of any series theretofore authenticated (other than any
Debentures of such series which shall have been destroyed, lost or stolen and
which shall have been replaced or paid as provided in Section 2.07) or (c)) (i)
all the Debentures of any series not theretofore delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and (ii) the Company shall have irrevocably deposited or caused to
be deposited with the Trustee as trust funds the entire amount in cash (other
than moneys repaid by the Trustee or any paying agent to the Company in
accordance with Section 11.04) or Government Obligations, maturing as to
principal and interest at such times and in such amounts as will insure the
availability of cash, or a combination thereof, sufficient in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (A) the principal
and interest on all Debentures of such series on each date that such principal
or interest is due and payable and (B) any mandatory sinking fund payments on
the dates on which such payments are due and payable in accordance with the
terms of the Indenture and the Debentures of such series; and if, in any such
case, the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company, then this Indenture shall cease to be of further
effect (except as to (i) rights of registration of transfer and exchange of
Debentures of such
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series and the Company's right of optional redemption, if any, (ii) substitution
of mutilated, defaced, destroyed, lost or stolen Debentures, (iii) rights of
holders of Debentures to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Debentureholders to receive mandatory
sinking fund payments, if any, (iv) the rights, obligations, duties and
immunities of the Trustee hereunder, (v) the rights of the holders of Debentures
of such series as beneficiaries hereof with respect to the property so deposited
with the Trustee payable to all or any of them, and (vi) the obligations of the
Company under Section 4.02) and the Trustee, on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company, shall execute proper instruments acknowledging
such satisfaction of and discharging this Indenture; provided that the rights of
Holders of the Debentures to receive amounts in respect of principal of, and
interest on, the Debentures held by them shall not be delayed longer than
required by then-applicable mandatory rules or policies of any securities
exchange upon which the Debentures are listed. The Company agrees to reimburse
the Trustee for any costs or expenses thereafter reasonably and properly
incurred and to compensate the Trustee for any services thereafter reasonably
and properly rendered by the Trustee in connection with this Indenture or the
Debentures of such series.
(B) The following provisions shall apply to the Debentures of
each series unless specifically otherwise provided in a supplemental indenture
hereto pursuant to Section 2.01. In addition to discharge of the Indenture
pursuant to the next preceding paragraph, the Company shall be deemed to have
paid and discharged the entire indebtedness on all the Debentures of a series on
the date of the deposit referred to in subparagraph (a) below, and the
provisions of this Indenture with respect to the Debentures of such series shall
no longer be in effect (except as to (i) rights of registration of transfer and
exchange of Debentures of such series and the Company's right of optional
redemption, if any, (ii) substitution of mutilated, defaced, destroyed, lost or
stolen Debentures, (iii) rights of holders of Debentures to receive payments of
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principal thereof and interest thereon, upon the original stated due dates
therefor (but not upon acceleration), and remaining rights of the holders of
Debentures to receive mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, (v) the rights of
the holders of Debentures as beneficiaries hereof with respect to the property
so deposited with the Trustee payable to all or any of them and (vi) the
obligations of the Company under Section 4.02) and the Trustee, at the expense
of the Company, shall at the Company's request, execute proper instruments
acknowledging the same, if
(a) with reference to this provision the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as trust funds in trust, specifically pledged as security for,
and dedicated solely to, the benefit of the holders of the Debentures
of such series (i) cash in an amount, or (ii) Governmental Obligations
maturing as to principal and interest at such times and in such amounts
as will insure the availability of cash or (iii) a combination thereof,
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal and interest
on all Debentures of such series on each date that such principal or
interest is due and payable and (B) any mandatory sinking fund payments
on the dates on which such payments are due and payable in accordance
with the terms of the Indenture and the Debentures of such series;
(b) such deposit will not result in a breach or violation of,
or constitute a default under, any agreement or instrument to which the
Company is a party or by which it is bound;
(c) the Company has delivered to the Trustee an Opinion of
Counsel based on the fact that (x) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or
(y) since the date hereof, there has been a change in the applicable
Federal income tax law, in either case to
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the effect that, and such opinion shall confirm that, the holders of
the Debentures of such series will not recognize income, gain or loss
for Federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to Federal income tax on the same
amount and in the same manner and at the same times, as would have been
the case if such deposit, defeasance and discharge had not occurred;
(d) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the defeasance contemplated by this
provision have been complied with; and
(e) no event or condition shall exist that, pursuant to the
provisions of Section 14.02 or 14.03, would prevent the Company from
making payments of the principal of or interest on the Debentures of
such series on the date of such deposit.
SECTION 11.02. Subject to Section 11.04, all moneys deposited
with the Trustee (or other trustee) pursuant to Section 11.01 shall be held in
trust and applied by it to the payment, either directly or through any paying
agent (including the Company acting as its own paying agent), to the holders of
the particular Debentures of such series for the payment or redemption of which
such moneys have been deposited with the Trustee, of all sums due and to become
due thereon for principal and interest; but such money need not be segregated
from other funds except to the extent required by law.
SECTION 11.03. In connection with the satisfaction and
discharge of this Indenture with respect to Debentures of any series, all moneys
then held by any paying agent under the provisions of this Indenture with
respect to such series of Debentures shall, upon demand of the Company be repaid
to it or paid to the Trustee and thereupon such paying agent shall be released
from all further liability with respect to such moneys.
SECTION 11.04. Any moneys deposited with, or paid
to, the Trustee or any paying agent for the payment of
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principal of, or interest on, any Debenture of any series and not applied but
remaining unclaimed for two years after the date upon which such principal or
interest shall have become due and payable, shall, upon the written request of
the Company and unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, be repaid to the Company by the
Trustee for such series or such paying agent, and the holder of any Debentures
of such series shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property laws, thereafter look only
to the Company for any payment which such holder may be entitled to collect, and
all liability of the Trustee or any paying agent with respect to such moneys
shall thereupon cease; provided, however, that the Trustee or such paying agent,
before being required to make any such repayment with respect to moneys
deposited with it for any payment, shall, at the expense of the Company, mail by
first-class mail to holders of such Debentures at their addresses as they shall
appear on the Debenture Register, notice that such moneys remain and that, after
a date specified therein, which shall not be less than 30 days from the date of
such mailing, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 11.05. The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on, or assessed against, the
Governmental Obligations deposited pursuant to Section 11.01 or the principal or
interest received in respect of such obligations.
ARTICLE XII
Immunity of Incorporators, Stockholders,
Officers and Directors
SECTION 12.01. No recourse under or upon any obligation,
covenant or agreement of this Indenture, or of any Debenture, or for any claim
based thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor
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corporation, either directly or through the Company or any such predecessor or
successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations issued hereunder
are solely corporate obligations, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the incorporators, stockholders,
officers or directors, as such, of the Company or of any predecessor or
successor corporation, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Debentures
or implied therefrom; and that any and all such personal liability of every name
and nature, either at common law or in equity or by constitution or statute, and
any and all such rights and claims against every such incorporator, stockholder,
officer or director, as such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or implied therefrom,
are hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issuance of such
Debentures.
ARTICLE XIII
Miscellaneous Provisions
SECTION 13.01. All the covenants, stipulations, promises and
agreements in this Indenture made by, or on behalf of, the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 13.02. Any act or proceeding required by any provision
of this Indenture to be authorized or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the corresponding board, committee or officer of any corporation that
shall at the time be the lawful sole successor of the Company.
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SECTION 13.03. The Company, by instrument in writing executed
by authority of two-thirds of its Board of Directors and delivered to the
Trustee, may surrender any of the powers reserved to the Company and thereupon
such power so surrendered shall terminate both as to the Company and as to any
successor corporation.
SECTION 13.04. Except as otherwise expressly provided herein,
any notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders of Debentures
to or on the Company may be given or served by being deposited first class
postage prepaid in a post-office letterbox addressed (until another address is
filed in writing by the Company with the Trustee), as follows: Paine Webber
Group Inc., 1285 Avenue of the Americas, New York, New York 10019, Attention of
Secretary. Any notice, election, request or demand by the Company or any
Debentureholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the Corporate
Trust Office of the Trustee.
SECTION 13.05. This Indenture and each Debenture shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of said State
(without regard to principles of conflicts of laws thereof).
SECTION 13.06. (a) Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect
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to compliance with a condition or covenant in this Indenture (other than the
Certificate provided pursuant to Section 5.03(d)) shall include (1) a statement
that the person making such certificate or opinion has read such covenant or
condition; (2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based; (3) a statement that, in the opinion of such
person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
SECTION 13.07. Except as provided pursuant to Section 2.01 in
one or more indentures supplemental to this Indenture, in any case where the
date of maturity of interest or principal of any Debenture or the date of
redemption of any Debenture shall not be a Business Day then payment of interest
or principal (and premium, if any) may be made on the next succeeding day which
is a Business Day with the same force and effect as if made on the nominal date
of maturity or redemption, and no interest shall accrue for the period after
such nominal date.
SECTION 13.08. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 13.09. This Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
SECTION 13.10. In case any one or more of the provisions
contained in this Indenture or in the Debentures of any series shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Indenture or of such Debentures, but this Indenture and such Debentures
shall be construed as if such
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invalid or illegal or unenforceable provision had never been contained herein or
therein.
SECTION 13.11. The Company will have the right at all times to
assign any of its rights or obligations under this Indenture to a direct or
indirect wholly owned Subsidiary of the Company; provided that, in the event of
any such assignment, the Company will remain jointly and severally liable for
all such obligations. Subject to the foregoing, this Indenture is binding upon
and inures to the benefit of the parties thereto and their respective successors
and assigns. This Indenture may not otherwise be assigned by the parties hereto.
SECTION 13.12. The Company hereby acknowledges that, to the
extent specifically set forth herein, prior to a Security Exchange with respect
to the Debentures of any series held as trust assets of a PWG Capital Trust, the
holders of the Preferred Securities of such PWG Capital Trust shall expressly be
third party beneficiaries of this Indenture. The Company further acknowledges
that, prior to a Security Exchange with respect to Debentures of any series held
as trust assets of a PWG Capital Trust, if the Property Trustee of such PWG
Capital Trust fails to enforce its rights under this Indenture as the holder of
the Debentures of a series held as trust assets of such PWG Capital Trust, any
holder of the Preferred Securities of such PWG Capital Trust may institute legal
proceedings directly against the Company to enforce such Property Trustee's
rights under this Indenture without first instituting any legal proceedings
against such Property Trustee or any other Person.
ARTICLE XIV
Subordination of Debentures
SECTION 14.01. The Company, for itself, its successors and
assigns, covenants and agrees, and each holder of a Debenture, by its acceptance
thereof, likewise covenants and agrees, that the payment of the principal of
(premium, if any), and interest on, each and all of the Debentures is hereby
expressly subordinated, to the extent and in the manner hereinafter in this
Article set forth, in
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right of payment to the prior payment in full of all Senior Indebtedness. The
provisions of this Article are made for the benefit of all holders of Senior
Indebtedness, and any such holder may proceed to enforce such provisions.
SECTION 14.02. No payment by the Company on account of
principal of (premium, if any), or interest on, the Debentures of any series
shall be made if any default or event of default with respect to any Senior
Indebtedness, which permits or with the giving of notice or passage of time or
both would permit the holders thereof (or a trustee on their behalf) to
accelerate the maturity thereof, shall have occurred and be continuing and the
Company and the Trustee shall have received written notice thereof from the
holders of at least 10% in principal amount of any kind or category of any
Senior Indebtedness (or the representative or trustee of such holders) or the
Trustee shall have received written notice thereof from the Company.
In the event that any Debentures of any series are declared
due and payable before the date specified therein as the fixed dated on which
the principal thereof is due and payable pursuant to Article VI, or upon any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution or
winding up or total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all principal of (premium, if any) and interest due or to
become due upon all Senior Indebtedness shall first be paid in full before any
holders of Debentures, or the Trustee, shall be entitled to receive or retain
any assets (other than shares of stock of the Company as reorganized or
readjusted or securities of the Company or any other corporation provided for by
a plan of reorganization or readjustment, the payment of which is subordinated,
at least to the same extent as the Debentures, to the payment of all Senior
Indebtedness which may at the time be outstanding, provided that the rights of
the holders of the Senior Indebtedness are not altered by such reorganization or
readjustment) so paid or distributed in respect of the Debentures (for principal
or interest); and upon such dissolution or winding up or liquidation or
reorganization, any payment or distribution of assets of the
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85
Company of any kind or character, whether in cash, property or securities (other
than shares of stock of the Company as reorganized or readjusted or securities
of the Company or any other corporation provided for by a plan of reorganization
or readjustment, the payment of which is subordinated at least to the same
extent as the Debentures, to the payment of all Senior Indebtedness which may at
the time be outstanding, provided that the rights of the holders of the Senior
Indebtedness are not altered by such reorganization or readjustment), to which
any holder of Debentures or the Trustee would be entitled, except for the
provisions of this Section, shall be paid by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, or by any holder of Debentures or the Trustee if
received by them or it, directly to the holders of Senior Indebtedness (pro rata
to each such holder on the basis of the respective amounts of Senior
Indebtedness held by such holder) or their representatives or trustees, to the
extent necessary to pay all Senior Indebtedness in full, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness, before any payment or distribution is made to the holders of
Debentures or to the Trustee.
No holder of Senior Indebtedness shall be prejudiced in his
right to enforce subordination of the Debentures of any series by any act or
failure to act on the part of the Company.
Without notice to or the consent of any holder of Debentures
or the Trustee the holders of Senior Indebtedness may at any time and from time
to time, without impairing or releasing the subordination herein made, change
the manner, place or terms of payment, or change or extend the time of payment
of or renew or alter the Senior Indebtedness, or amend or supplement in any
manner any instrument evidencing the Senior Indebtedness, any agreement pursuant
to which the Senior Indebtedness was issued or incurred or any instrument
securing or relating to the Senior Indebtedness; release any person liable in
any manner for the payment or collection of the Senior Indebtedness; exercise or
refrain from exercising any rights in respect of the Senior Indebtedness against
the Company or any other person; apply any moneys or other property paid by any
person or released in any manner to the
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Senior Indebtedness; or accept or release any security for the Senior
Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the
holders of Debentures shall be subrogated (equally and ratably with the holders
of all indebtedness of the Company that, by its express terms, ranks on a parity
with the Debentures and is entitled to like rights or subrogation) to the rights
of the holders of Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until the Debentures
shall be paid in full. For purposes of such subrogation, no payments or
distributions on the Senior Indebtedness pursuant to this Section shall, as
between the Company, its creditors other than the holders of Senior
Indebtedness, and the holders of the Debentures, be deemed to be a payment by
the Company to or on account of the Senior Indebtedness, and no payments or
distributions to the Trustee or the holders of the Debentures of assets by
virtue of the subrogation herein provided for shall, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Debentures, be deemed to be a payment to or on account of the Debentures. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the holders of the Debentures, on the one hand,
and the holders of Senior Indebtedness, on the other hand, and nothing contained
in this Article or elsewhere in this Indenture or in the Debentures of any
series is intended to or shall impair the obligation of the Company, which is
unconditional and absolute, to pay the principal of and interest on the
Debentures of any series when the same shall become due and payable in
accordance with their terms, or to affect the relative rights of the holders of
the Debentures and creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
holder of any Debenture from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article, of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company otherwise payable or delivered to the
Trustee or any holder of Debentures upon the exercise of any such remedy.
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Upon any payment or distribution pursuant to this Section, the
Trustee and any holder of Debentures shall be entitled to rely upon any order or
decree of a court of competent jurisdiction in which any proceedings of the
nature referred to in this Section are pending, and the Trustee, subject to the
provisions of Section 7.01, and any holder of Debentures shall be entitled to
rely upon a certificate of the liquidating trustee or agent or other person
making such payment or distribution delivered to the Trustee or to any holder of
Debentures, for the purpose of ascertaining the persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Section. In the event that the Trustee determines, in good
faith, that evidence is required with respect to the right of any person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Section, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such person, as to the extent to which such person
is entitled to participate in such payment or distribution, and as to other
facts pertinent to the rights of such person under this Section, and if such
evidence is not furnished, the Trustee may defer any payment to such person
pending judicial determination as to the right of such person to receive such
payment.
Nothing contained in this Article or elsewhere in this
Indenture, or in any of the Debentures of any series, shall prevent (a) the
application by the Trustee or any paying agent of any moneys deposited with it
hereunder to the payment of or on account of the principal of or interest on
Debentures of any series if, at the time of such deposit (provided that the time
of such deposit was not more than 10 days prior to the time of such payment),
such payment would not have been prohibited by the foregoing provisions of this
Section or (b) any payment by the Company or the Trustee to any holder of
Debentures of moneys in connection with a redemption of Debentures of any series
if (i) notice of such redemption has been given to the holders of the Debentures
to be redeemed pursuant to Article III prior to the receipt
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by the Trustee of the written notice referred to in Section 14.04 and (ii) such
notice of redemption is given not earlier than 60 days before the date fixed for
redemption.
SECTION 14.03. The holder of each Debenture by his acceptance
thereof authorizes and directs the Trustee on his behalf to take such action as
may be necessary or appropriate to acknowledge and effectuate the subordination
between the holders of Debentures and the holders of Senior Indebtedness as
provided in this Article and appoints the Trustee as attorney-in-fact for any
and all such purposes.
SECTION 14.04. Notwithstanding the provisions of this Article
or any other provision of this Indenture, but subject to the provisions of
Section 7.01, the Trustee and any paying agent shall not be charged with
knowledge of the existence of any Senior Indebtedness, or any default in the
payment of the principal of (premium, if any), or interest on, any Senior
Indebtedness, or of any facts which would prohibit the making of any payment of
moneys to or by the Trustee or any such paying agent, unless and until the
Trustee or such paying agent shall have received written notice thereof from the
Company or the holders of at least 10% in principal amount of any kind or
category of any Senior Indebtedness or the representative or trustee of such
holders; nor shall the Trustee or any such paying agent be charged with
knowledge of the curing of any such default or of the elimination of the act or
condition preventing any such payment unless and until the Trustee or such
paying agent shall have received an Officers' Certificate to such effect.
SECTION 14.05. The Trustee shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness; and nothing in Section 7.13, or elsewhere in this Indenture, shall
deprive the Trustee of any of its rights as such holder. Nothing in this Article
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.06.
<PAGE> 103
89
SECTION 14.06. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness and shall not be liable to
any such holders if it shall mistakenly pay over or distribute to any holder of
Debentures or the Company or any other person moneys or assets to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article or
otherwise.
SECTION 14.07. In case at any time any paying agent other than
the Trustee shall have been appointed by the Company and be acting hereunder,
the term "Trustee" as used in this Article shall in such case (unless the
context shall otherwise require) be construed as extending to and including such
paying agent within its meaning as fully for all intents and purposes as if such
paying agent were named in this Article in addition to or in place of the
Trustee; provided, however, that Sections 14.04, 14.05 and 14.06 shall not apply
to the Company if it acts as paying agent.
The Chase Manhattan Bank, as Trustee, hereby accepts the trust
in this Indenture declared and provided, upon the terms and conditions
hereinabove set forth.
<PAGE> 104
90
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
PAINE WEBBER GROUP INC.,
by /s/ Pierce R. Smith
--------------------
Name:
Title:
Attest:
/s/ Geraldine L. Banyo
- ----------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Trustee,
by /s/ G. McFarlane
-------------------
Name:
Title:
Attest:
/s/ L. O'Brien
- -----------------------
Name:
Title:
<PAGE> 1
Exhibit 4.7
DECLARATION OF TRUST, dated as of November 9, 1998, between Paine Webber
Group Inc., a Delaware corporation (the "Sponsor"), and The Chase Manhattan
Bank, a New York banking corporation, not in its individual capacity but solely
as trustee (the "Property Trustee"), Chase Manhattan Bank Delaware, a Delaware
banking corporation, not in its individual capacity but solely as trustee (the
"Delaware Trustee"), and Regina A. Dolan, F. Daniel Corkery and William J.
Nolan, each not in her or his individual capacity but solely as trustee (the
Property Trustee, the Delaware Trustee and each such individual as trustee,
collectively, the "Trustees"). The Sponsor and the Trustees hereby agree as
follows:
1. The trust created hereby shall be known as "PWG Capital Trust V", in
which name the Trustees, or the Sponsor to the extent provided herein, may
conduct the business of the Trust, make and execute contracts, and sue and be
sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trustees the sum of $10. The Trustees hereby acknowledge receipt of such amount
in trust from the Sponsor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the trust estate in
trust for the Sponsor. It is the intention of the parties hereto that the Trust
created hereby constitute a business trust under Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq. (the "Business Trust Act"), and
that this document constitute the governing instrument of the Trust. The
Trustees are hereby authorized and directed to execute and file a certificate of
trust in the office of the Secretary of State of the State of Delaware in the
form attached hereto. The Trust is hereby established by the Sponsor and the
Trustees for the purposes of (i) issuing preferred securities ("Preferred
Securities") representing undivided beneficial interests in the assets of the
Trust in exchange for cash and investing the proceeds thereof in junior
subordinated debentures of the Sponsor, (ii) issuing and selling common
securities ("Common Securities" and, together with the Preferred Securities,
"Trust Securities") representing undivided beneficial interests in the assets of
the Trust to the Sponsor in exchange for cash and investing the proceeds thereof
in additional junior subordinated debentures of the Sponsor and (iii) engaging
in such other activities as are necessary, convenient or incidental thereto.
3. Concurrent with the first issuance of any Trust Securities by the Trust,
the Sponsor and the Trustees intend to enter into an amended and restated
Declaration of
<PAGE> 2
2
Trust, satisfactory to each such party and substantially in the form included as
an exhibit to the 1933 Act Registration Statement referred to below at the time
such registration statement becomes effective under the Securities Act of 1933,
as amended (the "Securities Act"), to provide for the contemplated operation of
the Trust created hereby and the issuance of the Preferred Securities and the
Common Securities referred to therein. Prior to the execution and delivery of
such amended and restated Declaration of Trust, the Trustees shall not have any
duty or obligation hereunder or with respect to the trust estate, except as
otherwise required by applicable law or as may be necessary to obtain, prior to
such execution and delivery, any licenses, consents or approvals required by
applicable law or otherwise.
4. The Sponsor and the Trustees hereby authorize and direct the Sponsor, as
the sponsor of the Trust, (i) to prepare and file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) a Registration Statement on Form S-3 (the "1933 Act Registration
Statement"), including any pre-effective or post-effective amendments to such
Registration Statement, relating to the registration of the Preferred Securities
under the Securities Act and (b) a Registration Statement on Form 8-A (the "1934
Act Registration Statement") (including any pre-effective or post-effective
amendments thereto) relating to the registration of the Preferred Securities
under Section 12(b) of the Securities Exchange Act of 1934, as amended; (ii) to
prepare and file with the New York Stock Exchange and execute, in each case on
behalf of the Trust, a listing application and all other applications,
statements, certificates, agreements and other instruments as shall be necessary
or desirable to cause the Preferred Securities to be listed on the New York
Stock Exchange; (iii) to prepare and file and execute, in each case on behalf of
the Trust, such applications, reports, surety bonds, irrevocable consents,
appointments of attorney for service of process and other papers and documents
as shall be necessary or desirable to register the Preferred Securities under
the securities or "blue sky" laws of such jurisdictions as the Sponsor, on
behalf of the Trust, may deem necessary or desirable; and (iv) to negotiate the
terms of, and execute on behalf of the Trust, an underwriting agreement among
the Trust, the Sponsor and any underwriter, dealer or agent relating to the
Preferred Securities, substantially in the form included as an exhibit to the
1933 Act Registration Statement at the time it becomes effective
<PAGE> 3
3
under the Securities Act. In the event that any filing referred to in any of
clauses (i)-(iii) above is required by the rules and regulations of the
Commission or the New York Stock Exchange or state securities or blue sky laws,
to be executed on behalf of the Trust by the Trustees, Regina A. Dolan, Pierce
R. Smith and William J. Nolan, in their capacities as Trustees of the Trust, are
hereby authorized and directed to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that The
Chase Manhattan Bank and Chase Manhattan Bank Delaware, in their capacities as
Trustees of the Trust, shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required by the rules
and regulations of the Commission or the New York Stock Exchange or state
securities or blue sky laws. In connection with all of the foregoing, the
Sponsor and each Trustee, solely in its capacity as Trustee of the Trust, hereby
constitutes and appoints Donald B. Marron, Regina A. Dolan, Pierce R. Smith and
William J. Nolan, and each of them, his, her or its, as the case may be, true
and lawful attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for the Sponsor or such Trustee and in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign and file (i)
any and all amendments (including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement with all exhibits
thereto, and other documents in connection therewith, and (ii) a registration
statement and any and all amendments thereto filed pursuant to Rule 462(b) under
the Securities Act with the Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as the Sponsor or such Trustee might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them, or their or his or her substitute or substitutes, shall do or cause
to be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more counterparts.
6. The number of Trustees initially shall be five (5) and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by a
written instrument signed by the Sponsor which may increase or decrease the
number of Trustees; provided, however, that the
<PAGE> 4
4
number of Trustees shall in no event be less than five (5); and provided,
further, however, that to the extent required by the Business Trust Act, one
Trustee shall either be a natural person who is a resident of the State of
Delaware or, if not a natural person, an entity which has its principal place of
business in the State of Delaware and meets any other requirements imposed by
applicable law. Subject to the foregoing, the Sponsor is entitled to appoint or
remove without cause any Trustee at any time. Any Trustee may resign upon 30
days prior notice to the Sponsor.
7. The Trust may terminate without issuing any Trust Securities at the
election of the Sponsor.
IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.
PAINE WEBBER GROUP INC., as
Sponsor
by /s/ William J. Nolan
---------------------------------
Name: William J. Nolan
Title: Treasurer
THE CHASE MANHATTAN BANK, not
in its individual capacity but
solely as Property Trustee,
by /s/ L. O'Brien
---------------------------------
Name: L. O'Brien
Title: Senior Trust Officer
<PAGE> 5
5
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
but solely as Delaware
Trustee,
by /s/ John J. Cashin
---------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
/s/ Regina A. Dolan
----------------------------
Regina A. Dolan,
not in her individual
capacity but solely as
Trustee
/s/ F. Daniel Corkery
----------------------------
F. Daniel Corkery,
not in his individual
capacity but solely as
Trustee
/s/ William J. Nolan
----------------------------
William J. Nolan,
not in his individual
capacity but solely as
Trustee
<PAGE> 1
Exhibit 4.8
CERTIFICATE OF TRUST
OF
PWG CAPITAL TRUST V
THIS CERTIFICATE OF TRUST of PWG Capital Trust V (the "Trust"), dated as of
November 9, l998, is being duly executed and filed by the undersigned, as
trustees, to form business trust under the Delaware Business Trust Act (12 Del.
Code Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby is PWG Capital
Trust V.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware is Chase
Manhattan Bank Delaware, 1201 North Market Street, Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective upon its
filing in the office of the Secretary of State of the State of Delaware.
4. Counterparts. This Certificate of Trust may be executed in one or more
counterparts.
<PAGE> 2
2
IN WITNESS WHEREOF, the undersigned, being the sole trustees
of the Trust, have executed this Certificate of Trust as of the date first above
written.
CHASE MANHATTAN BANK DELAWARE as
Delaware Trustee,
by /s/ John J. Cashin
-----------------------------
Name: John J. Cashin
Title: Senior Trust Officer
THE CHASE MANHATTAN BANK as
Property Trustee,
by /s/ L. O'Brien
-----------------------------
Name: L. O'Brien
Title: Senior Trust Officers
by /s/ Regina A. Dolan
-----------------------------
Name: Regina A. Dolan,
as Trustee
by /s/ F. Daniel Corkery
-----------------------------
Name: F. Daniel Corkery,
as Trustee
by /s/ William J. Nolan
-----------------------------
Name: William J. Nolan,
as Trustee
<PAGE> 1
Exhibit 4.9
AMENDED AND RESTATED DECLARATION OF TRUST
OF
PWG Capital Trust [ ]
Dated as of March [ ]
<PAGE> 2
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
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<S> <C>
PARTIES.................................................................................. 1
RECITALS................................................................................. 1
ARTICLE I
Definitions
SECTION 1.01 Certain terms defined; other terms
defined in the Trust Indenture Act of
1939, as amended, or by reference
therein in the Securities Act of
1933, as amended, to have the
meanings assigned therein............................................ 2
Affiliate................................................................. 2
Book Entry Interest....................................................... 3
Business Day.............................................................. 3
Business Trust Act........................................................ 3
Certificate............................................................... 3
Certificate of Trust...................................................... 3
Clearing Agency........................................................... 3
Clearing Agency Participant............................................... 3
Closing Date.............................................................. 3
Code...................................................................... 3
Commission................................................................ 4
Common Securities......................................................... 4
Common Security Certificate............................................... 4
Covered Person............................................................ 4
Debenture Trustee......................................................... 4
Debentures................................................................ 4
Definitive Preferred Security
Certificates......................................................... 4
Delaware Trustee.......................................................... 4
Depositary Agreement...................................................... 4
Distribution.............................................................. 4
DTC....................................................................... 4
</TABLE>
* This Table of Contents does not constitute part of the Amended and
Restated Declaration of Trust and should not have any bearing upon the
interpretation of any of its terms or provisions.
<PAGE> 3
Contents p. 2
<TABLE>
<CAPTION>
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<S> <C>
Event of Default.......................................................... 4
Exchange Act.............................................................. 5
Fiscal Year............................................................... 5
Global Certificate........................................................ 5
Holder.................................................................... 5
Indemnified Person........................................................ 5
Indenture................................................................. 5
Indenture Event of Default................................................ 5
Investment Company........................................................ 5
Investment Company Act.................................................... 5
Legal Action.............................................................. 5
Liquidation Distribution.................................................. 5
Majority in liquidation amount of the
Securities........................................................... 6
Ministerial Action........................................................ 6
Option Closing Date....................................................... 6
Original Declaration...................................................... 6
Paying Agent.............................................................. 6
Person.................................................................... 6
Preferred Guarantee....................................................... 6
Preferred Securities...................................................... 6
Preferred Security Beneficial Owner....................................... 6
Preferred Security Certificate............................................ 7
Property Trustee.......................................................... 7
Property Account.......................................................... 7
Quorum.................................................................... 7
Regular Trustee........................................................... 7
Related Party............................................................. 7
Resignation Request....................................................... 7
Responsible Officer....................................................... 7
Rule 3a-7................................................................. 7
Securities................................................................ 7
Securities Act............................................................ 7
66-2/3% in liquidation amount of the
Securities........................................................... 8
Special Event............................................................. 8
Sponsor or PWG............................................................ 8
Successor Delaware Trustee................................................ 8
Successor Property Trustee................................................ 8
10% in liquidation amount of the
Securities........................................................... 8
Treasury Regulations...................................................... 8
Trustee or Trustees....................................................... 9
Trust Indenture Act....................................................... 9
</TABLE>
<PAGE> 4
Contents p. 3
<TABLE>
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<S> <C>
Underwriting Agreement.................................................... 9
Voluntary Distribution.................................................... [ ]
ARTICLE II
Trust Indenture Act
SECTION 2.01 Trust Indenture Act; Application.......................................... 9
SECTION 2.02 List of Holders of Preferred
Securities................................................................ 9
SECTION 2.03 Reports by the Property Trustee........................................... 10
SECTION 2.04 Periodic Reports to Property Trustee...................................... 10
SECTION 2.05 Evidence of Compliance with Conditions
Precedent............................................................ 10
SECTION 2.06 Events of Default; Waiver................................................. 10
SECTION 2.07 Disclosure of Information................................................. 13
ARTICLE III
Organization
SECTION 3.01 Name...................................................................... 13
SECTION 3.02 Office.................................................................... 13
SECTION 3.03 Issuance of the Trust Securities.......................................... 14
SECTION 3.04 Purchase of Debentures.................................................... 14
SECTION 3.05 Purpose................................................................... 15
SECTION 3.06 Authority................................................................. 16
SECTION 3.07 Title to Property of the Trust............................................ 16
SECTION 3.08 Powers and Duties of the Regular
Trustees ........................................................ 16
SECTION 3.09 Prohibition of Actions by Trust and
Trustees............................................................. 19
SECTION 3.10 Powers and Duties of the Property
Trustee.............................................................. 20
SECTION 3.11 Delaware Trustee.......................................................... 24
SECTION 3.12 Certain Rights and Duties of the
Property Trustee..................................................... 24
SECTION 3.13 Registration Statement and Related
Matters.............................................................. 27
SECTION 3.14 Filing of Amendments to Certificate of
Trust................................................................ 29
SECTION 3.15 Execution of Documents by Regular
Trustees............................................................. 29
</TABLE>
<PAGE> 5
Contents p. 4
<TABLE>
<CAPTION>
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<S> <C>
SECTION 3.16 Trustees Not Responsible for Recitals or
Issuance of Securities............................................... 29
SECTION 3.17 Duration of Trust......................................................... 29
ARTICLE IV
Sponsor
SECTION 4.01 Purchase of Common Securities by
Sponsor................................................................... 30
SECTION 4.02 Expenses.................................................................. 30
ARTICLE V
Trustees
SECTION 5.01 Number of Trustees; Qualifications........................................ 31
SECTION 5.02 Appointment, Removal and Resignation of
Trustees............................................................. 33
SECTION 5.03 Vacancies Among Trustees.................................................. 35
SECTION 5.04 Effect of Vacancies....................................................... 35
SECTION 5.05 Meetings.................................................................. 36
SECTION 5.06 Delegation of Power....................................................... 36
ARTICLE VI
Distributions
SECTION 6.01 Distributions............................................................. 37
ARTICLE VII
Issuance of Securities
SECTION 7.01 General Provisions Regarding
Securities................................................................ 37
ARTICLE VIII
Termination of Trust
</TABLE>
<PAGE> 6
Contents p. 5
<TABLE>
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<S> <C>
SECTION 8.01 Termination of Trust...................................................... 39
ARTICLE IX
Transfer of Interests
SECTION 9.01 Transfer of Securities.................................................... 40
SECTION 9.02 Transfer of Certificates.................................................. 41
SECTION 9.03 Deemed Security Holders................................................... 41
SECTION 9.04 Book Entry Interests...................................................... 42
SECTION 9.05 Notices to Holders of Certificates........................................ 42
SECTION 9.06 Appointment of Successor Clearing
Agency.................................................................... 43
SECTION 9.07 Definitive Preferred Securities
Certificates......................................................... 43
SECTION 9.08 Mutilated, Destroyed, Lost or Stolen
Certificates......................................................... 43
ARTICLE X
Limitation of Liability, Indemnification
SECTION 10.01 Exculpation............................................................... 44
SECTION 10.02 Indemnification and Compensation.......................................... 45
SECTION 10.03 Outside Businesses........................................................ 46
ARTICLE XI
Accounting
SECTION 11.01 Fiscal Year............................................................... 46
SECTION 11.02 Certain Accounting Matters................................................ 46
SECTION 11.03 Banking................................................................... 48
SECTION 11.04 Withholding............................................................... 48
ARTICLE XII
Amendments and Meetings
SECTION 12.01 Amendments................................................................ 48
SECTION 12.02 Meetings of the Holders of Securities;
Action by Written Consent............................................ 50
</TABLE>
<PAGE> 7
Contents p. 6
<TABLE>
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<S> <C>
ARTICLE XIII
Representations of Property Trustee
and Delaware Trustee
SECTION 13.01 Representations and Warranties of
Property Trustee..................................................... 52
ARTICLE XIV
Miscellaneous
SECTION 14.01 Notices................................................................... 53
SECTION 14.02 Undertaking for Costs..................................................... 55
SECTION 14.03 Governing Law............................................................. 55
SECTION 14.04 Headings.................................................................. 55
SECTION 14.05 Partial Enforceability.................................................... 55
SECTION 14.06 Counterparts.............................................................. 56
SECTION 14.07 Intention of the Parties.................................................. 56
SECTION 14.08 Successors and Assigns.................................................... 56
SIGNATURES AND SEALS...................................................................... 57
</TABLE>
EXHIBIT A CERTIFICATE OF TRUST
EXHIBIT B TERMS OF THE PREFERRED SECURITIES
EXHIBIT C TERMS OF THE COMMON SECURITIES
<PAGE> 8
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
PWG Capital Trust [ ]
AMENDED AND RESTATED DECLARATION OF TRUST
("Declaration"), dated and effective as of [ ], by the
undersigned trustees (together with all other Persons from
time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the
"Trustees"), Paine Webber Group Inc., a Delaware
corporation, as trust sponsor ("PWG" or the "Sponsor"), and
the holders, from time to time, of undivided beneficial
interests in the assets of the PWG Capital Trust [ ] to be
issued pursuant to this Declaration.
WHEREAS the Sponsor and the original trustees entered into a Declaration of
Trust dated as of 1998 (the "Original Declaration") in order to establish PWG
Capital Trust [ ], a business trust (the "Trust") under the Business Trust Act
(as defined herein);
WHEREAS the Certificate of Trust (the "Certificate of Trust") of the Trust
was filed with the office of the Secretary of State of the State of Delaware on
1998; and
WHEREAS the Trustees and the Sponsor desire to continue the Trust pursuant
to the Business Trust Act for the purpose of, as described more fully in
Sections 3.03, 3.04 and 3.05 hereof, (i) issuing and selling Preferred
Securities (as defined herein) representing preferred undivided beneficial
interests in the assets of the Trust for cash and investing the proceeds thereof
in Debentures (as defined herein) of PWG issued under the Indenture (as defined
herein) to be held as assets of the Trust, (ii) issuing and selling Common
Securities (as defined herein) representing common undivided beneficial
interests in the assets of the Trust to PWG for cash and investing the
<PAGE> 9
2
proceeds thereof in additional Debentures issued under the Indenture to be held
as assets of the Trust and (iii) engaging in such other activities as are
necessary, convenient or incidental thereto.
NOW, THEREFORE, it being the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Act, that the Original
Declaration be amended and restated in its entirety as provided herein and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets referred to in clauses (i) and (ii) of the
immediately proceeding Whereas clause purchased by the Trust will be held in
trust for the benefit of the Holders (as defined herein) from time to time of
the Certificates (as defined herein) representing undivided beneficial interests
in the assets of the Trust issued hereunder, subject to the provisions of this
Declaration.
ARTICLE I
Definitions
SECTION 1.01. Definitions. (a) Capitalized terms used in this Declaration
but not defined in the preamble above have the respective meanings assigned to
them in this Section 1.01; (b) a term defined anywhere in this Declaration has
the same meaning throughout; (c) all references to "the Declaration" or "this
Declaration" are to this Amended and Restated Declaration of Trust (including
Exhibits A, B and C hereto (the "Exhibits")) as modified, supplemented or
amended from time to time; (d) all references in this Declaration to Articles
and Sections and Exhibits are to Articles and Sections of and Exhibits to this
Declaration unless otherwise specified; (e) a term defined in the Trust
Indenture Act has the same meaning when used in this Declaration unless
otherwise defined in this Declaration or unless the context otherwise requires;
and (f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.
"Book Entry Interest" means a beneficial interest in a Global Certificate
registered in the name of a Clearing Agency or a nominee thereof, ownership and
transfers of
<PAGE> 10
3
which shall be maintained and made through book entries by such Clearing Agency
as described in Section 9.04.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which banking institutions in New York, New York are authorized or required
by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code Section 3801 et seq., as it may be amended from time to time.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
"Certificate of Trust" has the meaning set forth in the second Whereas
clause above.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act that is acting as depository for the
Preferred Securities and in whose name, or in the name of a nominee of that
organization, shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the Closing Date as specified in the Underwriting
Agreement, which date is also the date of execution and delivery of this
Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section of the
Code refers not only to such specific section but also to any corresponding
provision of any Federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.01(b).
<PAGE> 11
4
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Annex I to Exhibit C.
"Covered Person" means (i) any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or its Affiliates, (ii)
any officer, director, shareholder, employee, representative or agent of PWG or
any of its Affiliates and (iii) the Holders from time to time of the Securities.
"Debenture Trustee" means The Chase Manhattan Bank, as trustee under the
Indenture, until a successor, if any, is appointed thereunder and thereafter
means such successor trustee.
"Debentures" means the series of Junior Subordinated Debentures issued by
PWG under the Indenture to the Property Trustee and entitled the "[ ]% Junior
Subordinated Debentures due [ ]".
"Definitive Preferred Security Certificates" has the meaning set forth in
Section 9.04.
"Delaware Trustee" has the meaning set forth in Section 5.01(a)(3).
"Depositary Agreement" means the agreement among the Trust, the Property
Trustee and DTC dated as of the Closing Date, as the same may be amended or
supplemented from time to time.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.01.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Indenture Event of
Default has occurred and is continuing in respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Fiscal Year" has the meaning specified in Section 11.01.
"Global Certificate" has the meaning set forth in Section 9.04.
<PAGE> 12
5
"Holder" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means any Trustee, any Affiliate of any Trustee, any
officer, director, shareholder, member, partner, employee, representative or
agent of any Trustee, or any employee or agent of the Trust or any of its
Affiliates.
"Indenture" means the Indenture dated as of December 9, 1996, between PWG
and the Debenture Trustee, as supplemented by the Second Supplemental Indenture
thereto dated as of [ ], pursuant to which the Debentures are to be issued, as
each may be amended or supplemented from time to time.
"Indenture Event of Default" means an event or condition defined as an
"Event of Default" with respect to the Debentures under Section 6.01(a) of the
Indenture has occurred and is continuing.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning specified in Section 3.08(g).
"Liquidation Distribution" has the meaning set forth in Section 3 of the
terms of the Securities as set forth in Exhibits B and C hereto.
"Majority in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
represents more than 50% of the liquidation amount of all outstanding Securities
of such class.
<PAGE> 13
6
"Ministerial Action" has the meaning set forth in Section 4(c) of the terms
of the Securities as set forth in Exhibits B and C hereto.
"Option Closing Date" means the Option Closing Date as specified in the
Underwriting Agreement.
"Original Declaration" has the meaning set forth in the first Whereas
clause above.
"Paying Agent" has the meaning specified in Section 3.10(i).
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee" means the Guarantee Agreement dated as of [ ], of PWG
in respect of the Preferred Securities.
"Preferred Securities" has the meaning specified in Section 7.01(b).
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Preferred Security Certificate" means a definitive certificate in fully
registered form representing a Preferred Security substantially in the form of
Annex I to Exhibit B.
"Property Trustee" means the Trustee meeting the eligibility requirements
set forth in Section 5.01(c) and having the duties set forth for the Property
Trustee herein.
"Property Account" has the meaning specified in Section 3.10(c)(i).
"Quorum" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both such Regular Trustees.
<PAGE> 14
7
"Regular Trustee" means any Trustee other than the Property Trustee or the
Delaware Trustee.
"Related Party" means any direct or indirect wholly owned subsidiary of PWG
or any Person which owns, directly or indirectly, 100% of the outstanding voting
securities of PWG.
"Resignation Request" has the meaning specified in Section 5.02(d).
"Responsible Officer" means, with respect to the Property Trustee, any
officer of the Property Trustee with responsibility for the administration of
this Declaration and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of, and familiarity with, the particular subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or any
successor rule thereunder.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"66-2/3% in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities,
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
represents 66-2/3% or more of the liquidation amount of all outstanding
Securities of such class.
"Special Event" has the meaning set forth in Section 4(c) of the terms of
the Securities as set forth in Exhibits B and C hereto.
"Sponsor" or "PWG" means Paine Webber Group Inc., a Delaware corporation,
or any successor entity in a merger, consolidation or other business combination
transaction in its capacity as sponsor of the Trust.
<PAGE> 15
8
"Successor Delaware Trustee" has the meaning specified in Section
5.02(b)(ii).
"Successor Property Trustee" means a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.01(c).
"10% in liquidation amount of the Securities" means, except as otherwise
required by the Trust Indenture Act and except as provided in the penultimate
paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holder(s) of outstanding Preferred Securities or Common Securities, voting
separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
represents 10% or more of the liquidation amount of all outstanding Securities
of such class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as a Trustee in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement dated [ ], among
the Trust, the Sponsor and PaineWebber Incorporated, as representative of the
several underwriters named therein.
"Voluntary Distribution" has the meaning set forth in Section 4(d) of the
terms of the Securities as set forth in Exhibits B and C hereto.
<PAGE> 16
9
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This Declaration is
subject to the provisions of the Trust Indenture Act that are required to be
part of this Declaration and shall, to the extent applicable, be governed by
such provisions; (b) if and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310 to
317, inclusive, of the Trust Indenture Act, such imposed duties shall control;
(c) the Property Trustee, to the extent permitted by applicable law and/or the
rules and regulations of the Commission, shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act; and (d) the application of
the Trust Indenture Act to this Declaration shall not affect the nature of the
Securities as equity securities representing undivided beneficial interests in
the assets of the Trust.
SECTION 2.02. Lists of Holders of Preferred Securities. (a) Each of the
Sponsor and the Regular Trustees on behalf of the Trust shall provide the
Property Trustee with such information as is required under Section 312(a) of
the Trust Indenture Act at the times and in the manner provided in Section
312(a); and (b) the Property Trustee shall comply with its obligations under
Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Property Trustee. Within 60 days after May 15
of each year, the Property Trustee shall provide to the Holders of the
Securities such reports as are required by Section 313 of the Trust Indenture
Act, if any, in the form, in the manner and at the times provided by Section 313
of the Trust Indenture Act. The Property Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Property Trustee. Each of the Sponsor and
the Regular Trustees on behalf of the Trust shall provide to the Property
Trustee, the Commission and the Holders of the Securities, as applicable, such
documents, reports and information as required by Section 314(a)(1)-(3) (if any)
of the Trust Indenture Act and the compliance certificates required by Section
314(a)(4) and (c) of the Trust Indenture Act, any such certificates to be
provided in the form, in the manner and at the times required by Section
314(a)(4) and (c) of the Trust Indenture Act (provided that any certificate to
be provided pursuant to
<PAGE> 17
10
Section 314(a)(4) of the Trust Indenture Act shall be provided within 120 days
of the end of each Fiscal Year).
SECTION 2.05. Evidence of Compliance with Conditions Precedent. Each of the
Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Property Trustee such evidence of compliance with any conditions precedent, if
any, provided for in this Declaration which relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given pursuant to Section 314(c) of the Trust Indenture Act shall
comply with Section 314(e) of the Trust Indenture Act.
SECTION 2.06. Events of Default; Waiver. (a) Subject to Section 2.06(c),
Holders of Preferred Securities may, by vote of at least a Majority in
liquidation amount of the Preferred Securities, (A) in accordance with the terms
of the Preferred Securities, direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee, or (B) on behalf of the
Holders of all Preferred Securities, waive any past Event of Default in respect
of the Preferred Securities and its consequences; provided that, if the Event of
Default arises out of an Indenture Event of Default:
(i) which is not waivable under the Indenture, the Event of Default
under this Declaration shall also be not waivable; or
(ii) which requires the consent or vote of (1) holders of Debentures
representing a specified percentage greater than a majority in principal
amount of the Debentures affected thereby, or (2) each holder of
Debentures, the Event of Default under this Declaration may only be waived
by, in the case of clause (1) above, the vote of Holders of Preferred
Securities representing such specified percentage of the aggregate
liquidation amount of the Preferred Securities or, in the case of clause
(2) above, each Holder of Preferred Securities affected thereby.
Upon such waiver, any such default shall cease to exist, and any Event of
Default with respect to the Preferred Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Preferred Securities or impair any right consequent thereto.
<PAGE> 18
11
(b) Subject to Section 2.06(c), Holders of Common Securities may, by vote
of at least a Majority in liquidation amount of the Common Securities, (A) in
accordance with the terms of the Common Securities, direct the time, method and
place of conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property Trustee,
or (B) on behalf of the Holders of all of the Common Securities, waive any past
Event of Default with respect to the Common Securities and its consequences;
provided that if the Event of Default arises out of an Indenture Event of
Default:
(i) which is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event of
Default under the Declaration as provided below, the Event of Default under
this Declaration shall also not be waivable; or
(ii) which requires the consent or vote of (1) holders of Debentures
representing a specified percentage greater than a majority in principal
amount of the Debentures or (2) each holder of Debentures affected thereby,
except where the holders of the Common Securities are deemed to have waived
such Event of Default under this Declaration as provided below, the Event
of Default under this Declaration may only be waived by, in the case of
clause (1) above, the vote of Holders of Common Securities representing
such specified percentage of the aggregate liquidation amount of the Common
Securities or, in the case of clause (2) above, each holder of Common
Securities affected thereby; and
provided further that each Holder of Common Securities will be deemed to have
waived any Event of Default with respect to the Common Securities and its
consequences until all Events of Default with respect to the Preferred
Securities have been cured or waived by the Holders of Preferred Securities as
provided in this Declaration or otherwise eliminated and until all Events of
Default with respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of this Declaration or the Securities. In the event
that an Event of Default with respect to the Preferred Securities is waived by
the Holders of Preferred Securities as provided in this Declaration, the Holders
of Common Securities agree that such waiver shall
<PAGE> 19
12
also constitute the waiver of such Event of Default with respect to the Common
Securities for all purposes under this Declaration without any further act, vote
or consent of the Holders of the Common Securities. Subject to the foregoing
provisions of this Section 2.06(b), upon such waiver, any such default shall
cease to exist and any Event of Default with respect to the Common Securities
arising therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other default
or Event of Default with respect to the Common Securities or impair any right
consequent thereon.
(c) The right of any Holder of Securities to receive payment of
Distributions on the Securities in accordance with this Declaration and the
terms of the Securities set forth in Exhibits B and C on or after the respective
payment dates therefor, or to institute suit for the enforcement of any such
payment on or after such payment dates, shall not be impaired without the
consent of such Holder.
(d) As provided in the terms of the Securities set forth in Exhibits B and
C hereto, a waiver of an Indenture Event of Default by the Property Trustee at
the written direction of the Holders of the Preferred Securities constitutes a
waiver of the corresponding Event of Default under this Declaration in respect
of the Securities.
SECTION 2.07. Disclosure of Information. The disclosure of information as
to the names and addresses of the Holders of the Securities in accordance with
Section 312 of the Trust Indenture Act, regardless of the source from which such
information was derived, shall not be deemed to be a violation of any existing
law or any law hereafter enacted which does not specifically refer to Section
312 of the Trust Indenture Act, nor shall the Property Trustee be held
accountable by reason of mailing any material pursuant to a request made under
Section 312(b) of the Trust Indenture Act.
ARTICLE III
Organization
SECTION 3.01. Name. The Trust continued by this Declaration is named "PWG
Capital Trust [ ]" as such name may be modified from time to time by the Regular
Trustees following written notice to the Holders of Securities. The Trust's
activities may be conducted under the name of the
<PAGE> 20
13
Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.02. Office. The address of the principal office of the Trust is
c/o Paine Webber Group Inc., 1285 Avenue of the Americas, New York, New York
10019. Upon ten days' written notice to the Holders (a copy of such notice to be
sent to the Property Trustee and the Delaware Trustee), the Regular Trustees may
change the location of the Trust's principal office. The name of the registered
agent and office of the Trust in the State of Delaware is The Corporation Trust
Company, 1209 Orange Street, Wilmington, Delaware 19801. At any time, the
Regular Trustees may designate another registered agent and/or registered
office.
SECTION 3.03. Issuance of the Trust Securities. On [ ], the Sponsor, on
behalf of the Trust and pursuant to the Original Declaration, executed and
delivered the Underwriting Agreement. On the Closing Date and contemporaneously
with the execution and delivery of this Declaration, the Regular Trustees, on
behalf of the Trust, shall execute and deliver (i) to the underwriters named in
the Underwriting Agreement, a Global Certificate, registered in the name of the
nominee of the initial Clearing Agency as specified in Section 9.04, in an
aggregate amount of [ ] Preferred Securities having an aggregate liquidation
amount of $[ ], against receipt of the aggregate purchase price of such
Preferred Securities of $[ ], and (ii) to the Sponsor, Common Securities
Certificates, registered in the name of the Sponsor, in an aggregate amount of
[ ] Common Securities having an aggregate liquidation amount of $[ ], against
receipt of the aggregate purchase price of such Common Securities of $[ ].
SECTION 3.04. Purchase of Debentures. On the Closing Date and
contemporaneously with the execution and delivery of this Declaration, the
Regular Trustees, on behalf of the Trust, shall purchase from the Sponsor with
the proceeds received by the Trust from the sale of the Securities on such date
pursuant to Section 3.03, at a purchase price of 100% of the principal amount
thereof, Debentures, registered in the name of the Property Trustee and having
an aggregate principal amount equal to $[ ], and, in satisfaction of the
purchase price for such Debentures, the Regular Trustee, on behalf of the Trust,
shall deliver or cause to be delivered to the Sponsor the sum of $[ ].
<PAGE> 21
14
SECTION 3.05. Purpose. The exclusive purposes and functions of the Trust
are: (a)(i) to issue and sell Preferred Securities for cash and use the proceeds
of such sales to purchase as trust assets Debentures issued under the Indenture
having an aggregate principal amount equal to the aggregate liquidation amount
of the Preferred Securities so issued and sold; (ii) to enter into such
agreements and arrangements as may be necessary in connection with the sale of
Preferred Securities to the initial purchasers thereof (including the
Underwriting Agreement) and to take all actions and exercise such discretion as
may be necessary or desirable in connection therewith and to file such
registration statements or make such other filings under the Securities Act, the
Exchange Act or state securities or "Blue Sky" laws as may be necessary or
desirable in connection therewith and the issuance of the Preferred Securities;
and (iii) to issue and sell Common Securities to PWG for cash and use the
proceeds of such sale to purchase as trust assets an equal aggregate principal
amount of Debentures issued under the Indenture; and (b) except as otherwise
limited herein, to engage in such other activities as are necessary, convenient
or incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, pledge any of its assets or, at any time
while the Securities are outstanding, otherwise undertake (or permit to be
undertaken) an activity that would result in or cause the Trust to be treated as
anything other than a grantor trust for United States federal income tax
purposes.
SECTION 3.06. Authority. Subject to the limitations provided in this
Declaration and to the specific duties of the Property Trustee, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust and an action
taken by the Property Trustee in accordance with its powers shall constitute the
act of and serve to bind the Trust. In dealing with the Trustees acting on
behalf of the Trust, no Person shall be required to inquire into the authority
of the Trustees to bind the Trust. Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Trustees as set forth in
this Declaration.
SECTION 3.07. Title to Property of the Trust. Except as provided in Section
3.10 with respect to the Debentures and the Property Account or unless otherwise
provided in this Declaration, legal title to all assets of the Trust shall be
vested in the Trust. The Holders shall not have legal title to any part of the
assets of the Trust,
<PAGE> 22
15
but shall have an individual undivided beneficial interest in the assets of the
Trust.
SECTION 3.08. Powers and Duties of the Regular Trustees. The Regular
Trustees shall have the exclusive power, authority and duty to cause the Trust,
and shall cause the Trust, to engage in the following activities:
(a) to issue Preferred Securities and Common Securities, in each case
in accordance with this Declaration; provided, however, that the Trust may
issue no more than one series of Preferred Securities and no more than one
series of Common Securities; and provided further that there shall be no
interests in the Trust other than the Securities and the issuance of
Securities shall be limited to (x) a one-time, simultaneous issuance of
both Preferred Securities and Common Securities on the Closing Date and (y)
any subsequent issuance of both Preferred Securities and Common Securities
on the Option Closing Date pursuant to an exercise of the overallotment
option granted to the underwriters in the Underwriting Agreement;
(b) in connection with the issuance of the Preferred Securities, at
the direction of the Sponsor, to effect or cause to be effected the
filings, and to execute or cause to be executed the documents, set forth in
Section 3.13 and to execute, deliver and perform on behalf of the Trust the
Depositary Agreement;
(c) to acquire as trust assets Debentures with the proceeds of the
sale of the Preferred Securities and Common Securities; provided, however,
that the Regular Trustees shall cause all the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders
of the Preferred Securities and the Common Securities;
(d) to cause the Trust to enter into such agreements and arrangements
as may be necessary or desirable in connection with the sale of Preferred
Securities to the initial purchasers thereof and the consummation thereof,
and to take all action, and exercise all discretion, as may be necessary or
desirable in connection with the consummation thereof;
(e) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Special Event; provided that the Regular Trustees
shall consult with the Sponsor and the Property Trustee before taking
<PAGE> 23
16
or refraining to take any Ministerial Action in relation to a Special
Event;
(f) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the
purposes of Section 316(c) of the Trust Indenture Act and with respect to
Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to Holders of the Preferred Securities and the Common
Securities as to such actions and applicable record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless, pursuant to Section 3.10(e), the Property Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate to the Property Trustee required by
Section 314(a)(4) of the Trust Indenture Act, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses which are necessary or incidental to carrying
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities, the Regular Trustees hereby initially
appointing the Property Trustee for such purposes;
(m) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities set forth in
Exhibits B and C hereto;
(n) to execute all documents or instruments, perform all duties and
powers and do all things for and on behalf of the Trust in all matters
necessary, convenient or incidental to the foregoing;
<PAGE> 24
17
(o) to take all action which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a business trust under the laws of the State
of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Securities
or to enable the Trust to effect the purposes for which the Trust has been
created;
(p) to take all action, not inconsistent with this Declaration or with
applicable law, which the Regular Trustees determine in their discretion to
be reasonable and necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.08, in order that:
(i) the Trust will not be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) the Trust will not be classified for United States Federal
income tax purposes as an association taxable as a corporation or a
partnership and will be treated as a grantor trust for United States
Federal income tax purposes; and
(iii) the Trust will comply with any requirements imposed by any
taxing authority on holders of instruments treated as indebtedness for
Unites States Federal income tax purposes;
provided that such action does not adversely affect the interests of
Holders;
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed by the Regular
Trustees, on behalf of the Trust; and
(r) subject to the requirements of Rule 3a-7 and Section 317(b)
of the Trust Indenture Act, to appoint one or more Paying Agents in
addition to the Property Trustee.
The Regular Trustees must exercise the powers set forth in this Section
3.08 in a manner which is consistent with the purposes and functions of the
Trust set out in Section 3.05 and the Regular Trustees shall not take any action
which is inconsistent with the purposes and functions of the Trust set forth in
Section 3.05.
<PAGE> 25
18
Subject to this Section 3.08, the Regular Trustees shall have none of the
powers nor any of the authority of the Property Trustee set forth in Section
3.10.
SECTION 3.09. Prohibition of Actions by Trust and Trustees. The Trust shall
not, and no Trustee (including the Property Trustee) shall cause the Trust to,
engage in any activity other than as required or authorized by this Declaration.
In particular, the Trust shall not, and no Trustee (including the Property
Trustee) shall cause the Trust to:
(a) invest any proceeds received by the Trust from holding the
Debentures, but shall promptly distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the Debentures;
(e) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(f) issue any securities or other evidences of beneficial ownership
of, or beneficial interests in, the Trust other than the Securities;
(g) incur any indebtedness for borrowed money; or
(h)(i) direct the time, method and place of exercising any trust or
power conferred upon the Debenture Trustee with respect to the Debentures,
(ii) waive any past default that is waivable under Section 6.06 of the
Indenture, (iii) exercise any right to rescind or annul any declaration
that the principal of all of the Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the Indenture
or the Debentures, where such consent shall be required, unless in the case
of this clause (h) the Property Trustee shall have received an unqualified
opinion of nationally recognized independent tax counsel recognized as
expert in such matters to the effect that such action will not cause the
Trust to be classified for United States
<PAGE> 26
19
Federal income tax purposes as an association taxable as a corporation or
partnership and that the Trust will continue to be classified as a grantor
trust for United States federal income tax purposes.
SECTION 3.10. Powers and Duties of the Property Trustee. (a) The Debentures
shall be held of record in the name of the Property Trustee in trust for the
benefit of the Holders of the Securities. The right, title and interest of the
Property Trustee to the Debentures shall vest automatically in each Person who
may hereafter be appointed as Property Trustee in accordance with Article V.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and interest
in the Debentures to the Regular Trustees or, if the Property Trustee does not
also act as the Delaware Trustee, the Delaware Trustee.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing bank
account (the "Property Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the Securities
and on the receipt of payments of funds made in respect of the Debentures
held by the Property Trustee, deposit such funds into the Property Account
and, without any further acts of the Property Trustee or the Regular
Trustees, promptly make payments to the Holders of the Preferred Securities
and Common Securities from the Property Account in accordance with Section
6.01. Funds in the Property Account shall be held uninvested, and without
liability for interest thereon, until disbursed in accordance with this
Declaration. The Property Account shall be an account which is maintained
with a banking institution whose long term unsecured indebtedness is rated
by a "nationally recognized statistical rating organization", as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act, at
least equal to (but in no event less than "A" or the equivalent) the rating
assigned to the Preferred Securities by a nationally recognized statistical
rating organization;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Preferred Securities
and the Common Securities to the extent the Debentures are redeemed or
mature;
<PAGE> 27
20
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary or
appropriate to effect promptly, pursuant to the terms of the Securities,
the distribution of Debentures to Holders of Securities upon the occurrence
of a Special Event; and
(iv) have the legal power to exercise all of the rights, powers and
privileges of a holder of the Debentures under the Indenture and, if an
Event of Default occurs and is continuing, the Property Trustee, subject to
Section 2.06(b), shall, for the benefit of the Holders of the Securities,
enforce its rights as holder of the Debentures under the Indenture, subject
to the rights of the Holders of the Preferred Securities pursuant to the
terms of this Declaration, the Business Trust Act and the Trust Indenture
Act.
(d) The Property Trustee shall take all actions and perform such duties as
may be specifically required of the Property Trustee pursuant to the terms of
the Securities set forth in Exhibits B and C hereto.
(e) The Property Trustee shall take any Legal Action which arises out of or
in connection with an Event of Default or the Property Trustee's duties and
obligations under this Declaration, the Business Trust Act or the Trust
Indenture Act.
(f) All moneys deposited in the Property Account, and all Debentures held
by the Property Trustee for the benefit of the Holders of the Securities, will
not be subject to any right, charge, security interest, lien or claim of any
kind in favor of, or for the benefit of, the Property Trustee or its agents or
their creditors.
(g) The Property Trustee shall, within 90 days after the occurrence of a
default with respect to the Securities, transmit by mail, first class postage
prepaid, to the Holders of the Securities, as their names and addresses appear
upon the register, notice of all defaults with respect to the Securities known
to the Property Trustee, unless such defaults shall have been cured before the
giving of such notice (the term "defaults" for the purposes of this Section
3.10(g) being hereby defined to be an Indenture Event of Default, not including
any periods of grace provided for in the Indenture and irrespective of the
giving of any notice provided therein); provided that, except in the case of
default in the payment of the
<PAGE> 28
21
principal of (or premium, if any) or interest on any of the Debentures, the
Property Trustee shall be protected in withholding such notice if and so long as
the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Property Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities. The Property Trustee shall not be deemed to have
knowledge of any default, except (i) a default in the payment of principal of
(or premium, if any) or interest on the Debentures or (ii) any default as to
which the Property Trustee shall have received written notice or a Responsible
Officer charged with the administration of this Declaration shall have obtained
written notice.
(h) The Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds thereof
distributed to the Holders of Securities pursuant to the terms of the
Securities; or
(ii) a Successor Property Trustee has been appointed and accepted that
appointment in accordance with Article V.
(i) The Property Trustee shall act as paying agent in respect of the Common
Securities and the Preferred Securities and, subject to Section 3.08(r), may
authorize one or more Persons (each, a "Paying Agent") to pay Distributions,
redemption payments or liquidation payments on behalf of the Trust with respect
to the Preferred Securities. Any such Paying Agent shall comply with Section
317(b) of the Trust Indenture Act. Any Paying Agent may be removed by the
Property Trustee, after consultation with the Regular Trustees, at any time and
a successor Paying Agent or additional Paying Agents may be appointed at any
time by the Property Trustee, subject to Section 3.08(r).
(j) The Property Trustee shall give prompt written notice to the Holders of
the Securities of any notice received by it from PWG of its election to defer
payments of interest on the Debentures by extending the interest payment period
with respect thereto.
(k) Subject to this Section 3.10, the Property Trustee shall have none of
the powers or the authority of the Regular Trustees set forth in Section 3.08.
(1) The Property Trustee shall exercise the powers, duties and rights set
forth in this Section 3.10 and
<PAGE> 29
22
Section 3.12 in a manner which is consistent with the purposes and functions of
the Trust set out in Section 3.05, and the Property Trustee shall not take any
action which is inconsistent with the purposes and functions of the Trust set
forth in Section 3.05.
SECTION 3.11. Delaware Trustee. Notwithstanding any other provision of this
Declaration other than Section 5.01(a)(3), the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Regular Trustees or the Property Trustee
described in this Declaration. Except as set forth in Section 5.01(a)(3), the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act. In the
event the Delaware Trustee shall at any time be required to take any action or
perform any duty hereunder, the Delaware Trustee shall be entitled to the
benefits of Section 3.12(b)(ii), (iii) and (iv) and Section 3.12(c). No implied
covenants or obligations shall be read into this Declaration against the
Delaware Trustee.
SECTION 3.12. Certain Rights and Duties of the Property Trustee. (a) The
Property Trustee, before the occurrence of an Event of Default and after the
curing or waiving of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration, and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.06), the Property Trustee shall
exercise such of the rights and powers vested in it by this Declaration, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration, and
the Property Trustee shall not be liable except for the performance of
such duties and obligations as
<PAGE> 30
23
are specifically set forth in this Declaration, and no implied
covenants or obligations shall be read into this Declaration against
the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Declaration; but in
the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Property
Trustee, the Property Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of
this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders as provided herein relating to the time,
method and place of conducting any proceeding for any remedy available to
the Property Trustee hereunder or under the Indenture, or exercising any
trust or power conferred upon the Property Trustee under this Declaration;
and
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable ground
for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or adequate
indemnity against such risk or liability is not reasonably assured to it.
<PAGE> 31
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(c) Subject to the provisions of Section 3.12(a) and (b):
(i) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part
and, if the Trust is excluded from the definition of Investment
Company solely by means of Rule 3a-7, subject to the requirements of
Rule 3a-7, request and rely upon a certificate, which shall comply
with the provisions of Section 314(e) of the Trust Indenture Act,
signed by any two of the Regular Trustees or by an authorized officer
of the Sponsor, as the case may be;
(ii) the Property Trustee (A) may consult with counsel (which may
be counsel to the Sponsor or any of its Affiliates and may include any
of its employees) selected by it in good faith and with due care and
the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon and in accordance with such advice
and opinion and (B) shall have the right at any time to seek
instructions concerning the administration of this Declaration from
any court of competent jurisdiction;
(iii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed by it in good faith and with due care;
(iv) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holders, unless such Holders shall
have offered to the Property Trustee reasonable security and indemnity
against the costs, expenses (including attorneys' fees and expenses)
and liabilities that might be incurred by it in complying with such
request or direction; provided that nothing contained in this clause
(iv) shall relieve the Property Trustee of the obligation, upon the
occurrence of an Event of Default (which has not been cured or
<PAGE> 32
25
waived) to exercise such of the rights and powers vested in it by this
Declaration, and to use the same degree of care and skill in such
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs;
(v) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities and
the signature of the Property Trustee or its agents alone shall be
sufficient and effective to perform any such action; and no third
party shall be required to inquire as to the authority of the Property
Trustee to so act, or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking such action;
(vi) the Property Trustee may rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, security or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties; and
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, security or other paper or document,
but the Property Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
SECTION 3.13. Registration Statement and Related Matters. In
accordance with the Original Declaration, PWG and the Trustees have authorized
and directed, and hereby confirm the authorization of, PWG, as the sponsor of
the Trust, (i) to file with the Commission and execute, in each case on behalf
of the Trust, (a) the Registration Statement on Form S-3 (File Nos. [ ]) (the
"1933 Act Registration Statement") including any amendments thereto and any
further pre-effective or post-effective amendments to such Registration
Statement, relating to the registration under the Securities Act of, among other
things, the Preferred Securities of the Trust and the related guarantees of such
Preferred Securities by the Sponsor and (b) a Registration Statement on Form 8-A
or other appropriate form (the "1934 Act Registration Statement") (including all
pre-
<PAGE> 33
26
effective and post-effective amendments thereto) relating to the registration of
the Preferred Securities of the Trust and the related guarantees of such
Preferred Securities by the Sponsor under Section 12(b) of the Exchange Act;
(ii) to file with the New York Stock Exchange and execute on behalf of the Trust
a listing application and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desirable to cause the
Preferred Securities to be listed on the New York Stock Exchange; (iii) to file
and execute on behalf of the Trust such applications, reports, surety bonds,
irrevocable consents, appointments of attorney for service of process and other
papers and documents as shall be necessary or desirable to register the
Preferred Securities under the securities or "Blue Sky" laws of such
jurisdictions as PWG, on behalf of the Trust, may deem necessary or desirable
and (iv) to negotiate and execute on behalf of the Trust the Underwriting
Agreement. In the event that any filing referred to in clauses (i)-(iii) above
is required by the rules and regulations of the Commission, the New York Stock
Exchange or state securities or blue sky laws to be executed on behalf of the
Trust by the Trustees, the Regular Trustees, in their capacities as Trustees of
the Trust, are hereby authorized and directed to join in any such filing and to
execute on behalf of the Trust any and all of the foregoing, it being understood
that the Property Trustee and the Delaware Trustee, in their capacities as
Trustees of the Trust, shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required by the rules
and regulations of the Commission, the New York Stock Exchange or state
securities or blue sky laws. In connection with all of the foregoing, PWG and
each Trustee, solely in its capacity as a Trustee of the Trust, have constituted
and appointed, and hereby confirm the appointment of Donald B. Marron, Regina A.
Dolan, F. Daniel Corkery and William J. Nolan, and each of them, as his, her or
its, as the case may be, true and lawful attorneys-in-fact, and agents, with
full power of substitution and resubstitution, for PWG or such Trustee or in
PWG's or such Trustee's name, place and stead, in any and all capacities, to
sign any and all amendments (including post-effective amendments) to the 1933
Act Registration Statement and the 1934 Act Registration Statement and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission, granting unto said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as PWG or such Trustee might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them,
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27
or their or his or her substitute or substitutes, shall do or cause to be done
by virtue hereof.
SECTION 3.14. Filing of Amendments to Certificate of Trust. The Certificate
of Trust as filed with the Secretary of State of the State of Delaware on
November 10, 1998 is attached hereto as Exhibit A. On or after the date of
execution of this Declaration, the Trustees shall cause the filing with the
Secretary of State of the State of Delaware of such amendments to the
Certificate of Trust as the Trustees shall deem necessary or desirable.
SECTION 3.15. Execution of Documents by Regular Trustees. Unless otherwise
determined by the Regular Trustees and except as otherwise required by the
Business Trust Act with respect to the Certificate of Trust or otherwise, a
majority of, or if there are only two, both of, the Regular Trustees are
authorized to execute and deliver on behalf of the Trust any documents which the
Regular Trustees have the power and authority to execute or deliver pursuant to
this Declaration.
SECTION 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities. The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.17. Duration of Trust. The Trust, absent termination pursuant to
the provisions of Article VIII hereof, shall have existence until [ ].
ARTICLE IV
Sponsor
SECTION 4.01. Purchase of Common Securities by Sponsor. On the Closing
Date, the Sponsor will purchase all of the Common Securities issued by the Trust
at the same time as the Preferred Securities to be issued on such date are
issued, such purchase to be in an amount equal to [ ]% of the total capital of
the Trust. On the Option Closing Date, the Sponsor shall purchase all of the
Common Securities issued by the Trust at the same time as the Preferred
Securities to be issued on such date are issued,
<PAGE> 35
28
such purchase to be in such amount so that the Common Securities continue to
represent [ ]% of the total capital of the Trust.
SECTION 4.02. Expenses. (a) In connection with the purchase of the
Debentures by the Trust, the Sponsor, in its capacity as Sponsor and not as a
Holder, shall be responsible for and shall pay for all debts and obligations
(other than with respect to the Securities) and all costs and expenses of the
Trust (including, but not limited to, costs and expenses relating to the
organization of the Trust, the issuance of the Preferred Securities to initial
purchasers thereof, the fees and expenses (including reasonable counsel fees and
expenses) of the Trustees (including any amounts payable under Article X), the
costs and expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, Paying Agent(s), registrars, transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the disposition of Trust assets).
(b) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, will pay any and all
taxes (other than United States withholding taxes attributable to the Trust or
its assets) and all liabilities, costs and expenses with respect to such taxes
of the Trust.
(c) The Sponsor's obligations under this Section 4.02 shall be for the
benefit of, and shall be enforceable by, any Person to whom any such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
Sponsor's obligations under this Section 4.02 directly against the Sponsor and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Sponsor agrees to execute such additional agreements as
may be necessary or desirable in order to give full effect to the provisions of
this Section 4.02.
ARTICLE V
Trustees
<PAGE> 36
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SECTION 5.01. Number of Trustees; Qualifications. (a) Except as provided in
(1) below, the number of Trustees initially shall be five (5). At any time (i)
before the issuance of the Securities, the Sponsor may, by written instrument,
increase or decrease the number of, and appoint, remove and replace the,
Trustees, and (ii) after the issuance of the Securities the number of Trustees
may be increased or decreased solely by, and Trustees may be appointed, removed
or replaced solely by, vote of Holders of Common Securities representing a
Majority in liquidation amount of the Common Securities voting as a class;
provided that in any case:
(1) the number of Trustees shall be at least five (5) unless the
Trustee that acts as the Property Trustee also acts as the Delaware
Trustee, in which case the number of Trustees shall be at least three (3);
(2) at least a majority of the Trustees shall at all times be officers
or employees of PWG;
(3) if required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be either a natural person who is a resident of the State
of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware and otherwise is permitted to
act as a Trustee hereunder under the laws of the State of Delaware, except
that if the Property Trustee has its principal place of business in the
State of Delaware and otherwise is permitted to act as a Trustee hereunder
under the laws of the State of Delaware, then the Property Trustee shall
also be the Delaware Trustee and Section 3.09 shall have no application;
and
(4) there shall at all times be a Property Trustee hereunder which
shall satisfy the requirements of Section 5.01(c).
Each Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed representatives.
(b) The initial Regular Trustees shall be:
Regina A. Dolan
F. Daniel Corkery
William J. Nolan
In care of Paine Webber Group Inc.
<PAGE> 37
30
1285 Avenue of the Americas
New York, New York 10019
(c) There shall at all times be one Trustee which shall act as Property
Trustee. In order to act as Property Trustee hereunder, such Trustee shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least $50,000,000, and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the supervising
or examining authority referred to above, then for the purposes of this
Section 5.01(c)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7 and to the extent Rule 3a-7 requires
a trustee having certain qualifications to hold title to the "eligible
assets" (as defined in Rule 3a-7) of the Trust, the Property Trustee shall
possess those qualifications.
If at any time the Property Trustee shall cease to satisfy the requirements
of clauses (i)-(iii) above, the Property Trustee shall immediately resign in the
manner and with the effect set out in Section 5.02(d). If the Property Trustee
has or shall acquire any "conflicting interest" within the meaning of Section
310(b) of the Trust Indenture Act, the Property Trustee and the Holders of the
Common Securities (as if such Holders were the obligor referred to in Section
310(b) of the Trust Indenture Act) shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act. The Preferred Guarantee
shall be deemed to be specifically described in this Declaration for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
<PAGE> 38
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The initial Trustee which shall serve as the Property Trustee is The Chase
Manhattan Bank, a New York banking corporation, whose address is as set forth in
Section 14.01(b).
(d) The initial Trustee which shall serve as the Delaware Trustee is Chase
Manhattan Bank Delaware, a Delaware banking corporation, whose address is as set
forth in Section 14.01(c).
(e) Any action taken by Holders of Common Securities pursuant to this
Article V shall be taken at a meeting of Holders of Common Securities convened
for such purpose or by written consent as provided in Section 12.02.
(f) No amendment may be made to this Section 5.01 which would change any
rights with respect to the number, existence or appointment and removal of
Trustees, except with the consent of each Holder of Common Securities.
SECTION 5.02. Appointment, Removal and Resignation of Trustees. (a) Subject
to Section 5.02(b), Trustees may be appointed or removed without cause at any
time:
(i) until the issuance of the Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of the Securities by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as a class.
(b)(i) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.02(a) until a Successor Property Trustee
possessing the qualifications to act as Property Trustee under Section
5.01(c) has been appointed and has accepted such appointment by written
instrument executed by such Successor Property Trustee and delivered to the
Regular Trustees, the Sponsor and the Property Trustee being removed; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 5.02(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Section 5.01(a)(3) (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees, the Sponsor and the Delaware
Trustee being removed.
<PAGE> 39
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(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation.
(d) Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument (a "Resignation Request") in
writing signed by the Trustee and delivered to the Sponsor and the Trust,
which resignation shall take effect upon such delivery or upon such later
date as is specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the Property
Trustee shall be effective until:
(A) a Successor Property Trustee possessing the qualifications to
act as Property Trustee under Section 5.01(c) has been appointed and
has accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or
(B) if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7, until the assets of the Trust
have been completely liquidated and the proceeds thereof distributed
to the Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this
Section 5.02 within 60 days after delivery to the Sponsor and the Trust of
a Resignation Request, the resigning Property Trustee or Delaware Trustee
may petition any court of competent jurisdiction for appointment of a
Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a Successor Property Trustee or Successor Delaware Trustee, as the
case may be.
<PAGE> 40
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(f) The Sponsor shall provide notice to the Property Trustee of any
resignation or removal of a Regular Trustee.
SECTION 5.03. Vacancies Among Trustees. If a Trustee ceases to hold office
for any reason and the number of Trustees is not reduced pursuant to Section
5.01 or if the number of Trustees is increased pursuant to Section 5.01, a
vacancy shall occur. A resolution certifying the existence of such vacancy by a
majority of the Regular Trustees shall be conclusive evidence of the existence
of such vacancy. The vacancy shall be filled with a Trustee appointed in
accordance with the requirements of this Article V.
SECTION 5.04. Effect of Vacancies. The death, resignation, retirement,
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee, or any one of them, shall not operate to annul
the Trust. Whenever a vacancy in the number of Regular Trustees shall occur
until such vacancy is filled as provided in this Article V, the Regular Trustees
in office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.05. Meetings. Meetings of the Regular Trustees shall be held from
time to time upon the call of any Trustee. Regular meetings of the Regular
Trustees may be held at a time and place fixed by resolution of the Regular
Trustees. Notice of any in-person meeting of the Regular Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 48 hours before such meeting. Notice of
any telephonic meeting of the Regular Trustees or any committee thereof shall be
hand delivered or otherwise delivered in writing (including by facsimile, with a
hard copy by overnight courier) not less than 24 hours before such meeting.
Notices shall contain a brief statement of the time, place and anticipated
purposes of the meeting. The presence (whether in person or by telephone) of a
Regular Trustee at a meeting shall constitute a waiver of notice of such meeting
except where a Regular Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting has
not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Regular Trustees may be taken at a meeting by
vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to such
<PAGE> 41
34
matter; provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees.
SECTION 5.06. Delegation of Power. (a) Any Regular Trustee may, by power of
attorney consistent with applicable law, delegate to any other natural person
over the age of 21 his or her power for the purpose of executing any
registration statement or amendment thereto or other document or schedule filed
with the Commission or making any other governmental filing (including, without
limitation the filings referred to in Section 3.13).
(b) The Regular Trustees shall have the power to delegate from time to time
to such of their number or to officers of the Trust or to officers of PWG or
PaineWebber Incorporated the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Regular Trustees
or otherwise as the Regular Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the provisions of
the Trust, as set forth herein.
ARTICLE VI
Distributions
SECTION 6.01. Distributions. Holders shall receive periodic distributions,
redemption payments and liquidation distributions in accordance with the
applicable terms of the relevant Holder's Securities ("Distributions").
Distributions shall be made to the Holders of Preferred Securities and Common
Securities in accordance with the terms of the Securities as set forth in
Exhibits B and C hereto. If and to the extent that PWG makes a payment of
interest (including Compounded Interest (as defined in the Indenture)), premium
or principal on the Debentures held by the Property Trustee (the amount of any
such payment being a "Payment Amount"), the Property Trustee shall and is
directed to promptly make a Distribution of the Payment Amount to Holders in
accordance with the terms of the Securities as set forth in Exhibits B and C
hereto.
ARTICLE VII
Issuance of Securities
SECTION 7.01. General Provisions Regarding Securities. (a) The Regular
Trustees shall issue on behalf
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35
of the Trust Securities in fully registered form representing undivided
beneficial interests in the assets of the Trust in accordance with Section
7.01(b) and for the consideration specified in Section 3.03.
(b) The Regular Trustees shall issue on behalf of the Trust one class of
preferred securities representing preferred undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Exhibit B (the
"Preferred Securities") which terms are incorporated by reference in, and made a
part of, this Declaration as if specifically set forth herein, and one class of
common securities representing common undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Exhibit C (the "Common
Securities") which terms are incorporated by reference in, and made a part of,
this Declaration as if specifically set forth herein. The Trust shall have no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust by the Regular
Trustees (or if there are more than two Regular Trustees by any two of the
Regular Trustees). Such signatures may be the manual or facsimile signatures of
the present or any future Regular Trustee. Typographical and other minor errors
or defects in any such reproduction of any such signature shall not affect the
validity of any Certificate. In case any Regular Trustee of the Trust who shall
have signed any of the Certificates shall cease to be such Regular Trustee
before the Certificate so signed shall be delivered by the Trust, such
Certificate nevertheless may be delivered as though the person who signed such
Certificate had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons as, at the actual date of the
execution of such Certificate, shall be the Regular Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
the Securities may be listed, or to conform to usage. Pending the preparation of
definitive Certificates, the Regular Trustees on behalf of the Trust may execute
temporary
<PAGE> 43
36
Certificates (printed, lithographed or typewritten), in substantially the form
of the definitive Certificates in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Certificates, all as may be determined by the Regular Trustees. Each temporary
Certificate shall be executed by the Regular Trustees on behalf of the Trust
upon the same conditions and in substantially the same manner, and with like
effect, as definitive Certificates. Without unnecessary delay, the Regular
Trustees on behalf of the Trust will execute and furnish definitive Certificates
and thereupon any or all temporary Certificates may be surrendered to the
transfer agent and registrar in exchange therefor (without charge to the
Holders). Each Certificate whether in temporary or definitive form shall be
countersigned by the manual or facsimile signature of an authorized signatory of
the Person acting as registrar and transfer agent for the Securities, which
shall initially be the Property Trustee.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
(g) Upon issuance of the Securities as provided in this Declaration, the
Regular Trustees on behalf of the Trust shall return to PWG the $10 constituting
initial trust assets as set forth in the Original Declaration.
ARTICLE VIII
Termination of Trust
SECTION 8.01. Termination of Trust. The Trust shall dissolve when:
(i) all of the Securities shall have been called for redemption and the
amounts necessary for redemption thereof shall have been paid to the Holders of
<PAGE> 44
37
Securities in accordance with the terms of the Securities; or
(ii) all of the Debentures shall have been distributed to the Holders
of Securities in exchange for all of the Securities in accordance with the
terms of the Securities; or
(iii) upon the expiration of the term of the Trust as set forth in
Section 3.17,
and thereafter the Trustees shall, after satisfaction of all obligations of the
Trust, file a certificate of cancelation with the Secretary of State of the
State of Delaware and the Trust shall terminate. The Trustees shall so file such
a certificate as soon as practicable after the occurrence of an event referred
to in this Section 8.01.
The provisions of Sections 3.12 and 4.02 and Article X shall survive the
termination of the Trust.
ARTICLE IX
Transfer of Interests
SECTION 9.01. Transfer of Securities. (a) Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, PWG and any Related Party may only transfer
Common Securities to PWG or a Related Party; provided that any such transfer
shall be subject to the condition that the transferor shall have obtained (1)
either a ruling from the Internal Revenue Service or an unqualified written
opinion addressed to the Trust and delivered to the Trustees of nationally
recognized independent tax counsel experienced in such matters to the effect
that such transfer will not (i) cause the Trust to be treated as issuing a class
of interests in the Trust differing from the class of interests represented by
the Common Securities originally issued to PWG, (ii) result in the Trust
acquiring or disposing of, or being deemed to have acquired or disposed of, an
asset, or (iii) result in or cause the Trust to be treated as anything other
than a
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338
grantor trust for United States Federal income tax purposes and (2) an
unqualified written opinion addressed to the Trust and delivered to the Trustees
of a nationally recognized independent counsel experienced in such matters that
such transfer will not cause the Trust to be an Investment Company or controlled
by an Investment Company.
SECTION 9.02. Transfer of Certificates. The Regular Trustees shall cause to
be kept at an office or agency to be maintained by the Trust a register in
which, subject to such reasonable regulations as it may prescribe, the Trust
shall provide for the registration of Certificates and of transfers of
Certificates, which will be effected without charge but only upon payment (with
such indemnity as the Trust or the Registrar (as defined below) may require) in
respect of any tax or other government charges which may be imposed in relation
to it. The Property Trustee will be the initial registrar and transfer agent
(the "Registrar") for the purpose of registering Certificates and transfers of
Certificates as provided herein.
Upon surrender for registration of transfer of any Certificate at the
office or agency of the Registrar, the Regular Trustees shall execute and the
Registrar shall countersign in accordance with section 7.01(c) one or more new
Certificates of any authorized denominations and of a like aggregate liquidation
amount to be issued in the name of the designated transferee or transferees.
Every Certificate surrendered for registration of transfer shall be accompanied
by a written instrument of transfer in form satisfactory to the Trust duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.03. Deemed Security Holders. The Trustees may treat the Person in
whose name any Certificate shall be registered on the books and records of the
Trust as the sole holder of such Certificate and of the Securities represented
by such Certificate for purposes of receiving Distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Certificate or in the Securities
represented by such Certificate on the part of any Person, whether or not the
Trustees shall have actual or other notice thereof.
<PAGE> 46
39
SECTION 9.04. Book Entry Interests. Unless otherwise specified in the terms
of the Preferred Securities, the Preferred Securities Certificates, on original
issuance (including Preferred Securities, if any, issued on the Option Closing
Date pursuant to the exercise of the overallotment option set forth in the
Underwriting Agreement), will be issued in the form of one or more, fully
registered, global Preferred Security Certificates (each a "Global
Certificate"), to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Trust. Such Global Certificates shall initially be registered on
the books and records of the Trust in the name of Cede & Co., the nominee of
DTC, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Certificates, except as provided in Section
9.07. Unless and until definitive, fully registered Preferred Security
Certificates (the "Definitive Preferred Security Certificates") have been issued
to the Preferred Security Beneficial Owners pursuant to Section 9.07:
(i) the provisions of this Section 9.04 shall be in full force and
effect;
(ii) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Certificates and receiving approvals, votes
or consents hereunder) as the Holder of the Preferred Securities and the
sole holder of the Global Certificates and shall have no obligation to the
Preferred Security Beneficial Owners;
(iii) to the extent that the provisions of this Section 9.04 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.04 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants. DTC will make book entry transfers among the Clearing Agency
Participants and receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants.
<PAGE> 47
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SECTION 9.05. Notices to Holders of Certificates. Whenever a notice or
other communication to the Holders is required to be given under this
Declaration, unless and until Definitive Preferred Security Certificates shall
have been issued pursuant to Section 9.07, the relevant Trustees shall give all
such notices and communications, specified herein to be given to Preferred
Securities Holders, to the Clearing Agency and, with respect to any Preferred
Security Certificate registered in the name of a Clearing Agency or the nominee
of a Clearing Agency, the Trustees shall, except as set forth herein, have no
notice obligations to the Preferred Security Beneficial Owners.
SECTION 9.06. Appointment of Successor Clearing Agency. If any Clearing
Agency elects to discontinue its services as securities depository with respect
to the Preferred Securities, the Regular Trustees may, in their sole discretion,
appoint a successor Clearing Agency with respect to the Preferred Securities.
SECTION 9.07. Definitive Preferred Securities Certificates. If (i) a
Clearing Agency elects to discontinue its services as securities depository with
respect to the Preferred Securities and a successor Clearing Agency is not
appointed within 90 days after such discontinuance pursuant to Section 9.06 or
(ii) the Regular Trustees elect after consultation with the Sponsor to terminate
the book entry system through the Clearing Agency with respect to the Preferred
Securities, then (x) Definitive Preferred Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with respect to such
Preferred Securities and (y) upon surrender of the Global Certificates by the
Clearing Agency, accompanied by registration instructions, the Regular Trustees
shall cause definitive Preferred Security Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the instructions of the
Clearing Agency. Neither the Trustees nor the Trust shall be liable for any
delay in delivery of such instructions and each of them may conclusively rely
on, and shall be protected in relying on, such instructions.
SECTION 9.08. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificates should be surrendered to the Registrar, or if the
Registrar shall receive evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there shall be delivered to the Trustees such
security or indemnity as may be required by them to keep each of them harmless,
then in the absence of notice that such Certificate shall have been acquired by
a bona fide
<PAGE> 48
41
purchaser, any two Regular Trustees on behalf of the Trust shall execute and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like denomination. In connection with
the issuance of any new Certificate under this Section 9.08, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
Limitation of Liability; Indemnification
SECTION 10.01 Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Trust or any Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of assets, liabilities, profits, losses or any other facts pertinent
to the existence and amount of assets from which Distributions to Holders of
Securities might properly be paid.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders
of Securities, in their capacities as Holders, shall be entitled to the same
limitation of liability that is extended to stockholders of private
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corporations for profit organized under the General Corporation Law of the State
of Delaware.
SECTION 10.02. Indemnification and Compensation. (a) To the fullest
extent permitted by applicable law, the Sponsor shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage or claim
incurred by such Indemnified Person by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by this Declaration, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Sponsor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Sponsor of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
10.02(a).
(c) The Sponsor agrees to pay the Property Trustee and the Delaware
Trustee from time to time such compensation for all services rendered by the
Property Trustee and the Delaware Trustee hereunder as may be mutually agreed
upon in writing by the Sponsor and the Property Trustee or the Delaware Trustee,
as the case may be, and, except as otherwise expressly provided herein, to
reimburse the Property Trustee and the Delaware Trustee upon its or their
request for all reasonable expenses, disbursements and advances incurred or made
by the Property Trustee or the Delaware Trustee, as the case may be, in
accordance with the provisions of this Declaration, except any such expense,
disbursement or advance as may be attributable to its or their negligence or bad
faith.
SECTION 10.03. Outside Businesses. Any Covered Person, the Sponsor,
PWG, the Delaware Trustee and the Property Trustee may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the business of the Trust, and the
Trust and the Holders of
<PAGE> 50
43
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. None of the Covered Persons, the Sponsor,
PWG, the Delaware Trustee or the Property Trustee shall be obligated to present
any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and any Covered Person, the Sponsor, PWG, the Delaware Trustee and
the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Property Trustee may engage or be interested in any financial or
other transaction with the Sponsor or any Affiliate of the Sponsor, or may act
as depositary for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
Accounting
SECTION 11.01. Fiscal Year. The fiscal year ("Fiscal Year") of the
Trust shall be the calendar year, or such other year as is required by the Code.
SECTION 11.02. Certain Accounting Matters. (a) At all times during the
existence of the Trust, the Regular Trustees shall keep, or cause to be kept,
full books of account, records and supporting documents, which shall reflect in
reasonable detail each transaction of the Trust. The books of account shall be
maintained on the accrual method of accounting, in accordance with generally
accepted accounting principles consistently applied. The Trust shall use the
accrual method of accounting for United States Federal income tax purposes. The
books and records of the Trust, together with a copy of this Declaration and a
certified copy of the Certificate of Trust, or any amendment thereto, shall at
all times be maintained at the principal office of the Trust and shall be open
for inspection by any Holder or its duly authorized representative for any
purpose reasonably related to its interest in the Trust during normal business
hours.
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(b) The Regular Trustees shall, as soon as available after the end of
each Fiscal Year of the Trust, cause to be prepared and mailed to each Holder of
Securities unaudited financial statements of the Trust for such Fiscal Year,
prepared in accordance with generally accepted accounting principles; provided
that if the Trust is required to comply with the periodic reporting requirements
of Sections 13(a) or 15(d) of the Exchange Act, such financial statements for
such Fiscal Year shall be examined and reported on by a firm of independent
certified public accountants selected by the Regular Trustees (which firm may be
the firm used by the Sponsor).
(c) The Regular Trustees shall cause to be prepared and mailed to each
Holder of Securities an annual United States Federal income tax information
statement, on such form as is required by the Code, containing such information
with regard to the Securities held by each Holder as is required by the Code and
the Treasury Regulations. Notwithstanding any right under the Code to deliver
any such statement at a later date, the Regular Trustees shall endeavor to
deliver all such statements within 30 days after the end of each Fiscal Year of
the Trust.
(d) The Regular Trustees shall cause to be prepared and filed with the
appropriate taxing authority an annual United States Federal income tax return,
on such form as is required by the Code, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust with any
state or local taxing authority, such returns to be filed as soon as practicable
after the end of each Fiscal Year of the Trust.
SECTION 11.03. Banking. The Regular Trustees shall maintain one or more
bank accounts in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Debentures held by the
Property Trustee shall be made directly to the Property Account and no other
funds from the Trust shall be deposited in the Property Account. The sole
signatories for such accounts shall be designated by the Regular Trustees;
provided, however, that the Property Trustee shall designate the sole
signatories for the Property Account.
SECTION 11.04. Withholding. The Trust and the Trustees shall comply
with all withholding requirements under United States Federal, state and local
law. The Trust shall request, and the Holders shall provide to the Trust, such
forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and
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45
any representations and forms as shall reasonably be requested by the Trust to
assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Property Trustee shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly established
by a Holder, the Property Trustee shall remit amounts withheld with respect to
the Holder to applicable jurisdictions. To the extent that the Trust is required
to withhold and pay over any amounts to any authority with respect to
distributions or allocations to any Holder, the amount withheld shall be deemed
to be a distribution in the amount of the withholding to the Holder. In the
event of any claimed overwithholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount to be withheld was not
withheld from a Distribution, the Property Trustee may reduce subsequent
Distributions by the amount of such withholding.
ARTICLE XII
Amendments and Meetings
SECTION 12.01. Amendments. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
be amended by, and only by, a written instrument executed by a majority of the
Regular Trustees (or, if there are only two Regular Trustees, both Regular
Trustees); provided, however, that (i) no amendment to this Declaration shall be
made unless the Regular Trustees shall have obtained (A) either a ruling from
the Internal Revenue Service or a written unqualified opinion of nationally
recognized independent tax counsel experienced in such matters to the effect
that such amendment will not cause the Trust to be classified for United States
Federal income tax purposes as an association taxable as a corporation or a
partnership and to the effect that the Trust will continue to be treated as a
grantor trust for purposes of United States Federal income taxation and (B) a
written unqualified opinion of nationally recognized independent counsel
experienced in such matters to the effect that such amendment will not cause the
Trust to be an Investment Company which is required to be registered under the
Investment Company Act, (ii) if Securities are outstanding, any amendment which
would adversely affect the rights, privileges or preferences of any Holder of
Securities may be effected only after satisfaction of such additional
requirements as may be set forth in the terms of such Securities, (iii) Section
4.02, Section 9.01(c) and this Section 12.01 shall not be amended without the
consent of all Holders of the Securities,
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(iv) no amendment which adversely affects the rights, powers and privileges of
the Property Trustee or the Delaware Trustee shall be made without the consent
of the Property Trustee or the Delaware Trustee, as the case may be, (v) Article
IV shall not be amended without the consent of the Sponsor, and (vi) the rights
of Holders of Common Securities under Article V to increase or decrease the
number of, and to appoint, replace or remove, Trustees shall not be amended
without the consent of each Holder of Common Securities.
(b) Notwithstanding Section 12.02(a)(ii), this Declaration may be
amended without the consent of the Holders of the Securities to (i) cure any
ambiguity, (ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration, (iii)
to add to the covenants, restrictions or obligations of the Sponsor, and (iv) to
conform to any changes in Rule 3a-7 or any change in interpretation or
application of Rule 3a-7 by the Commission, which amendment does not adversely
affect the rights, preferences or privileges of the Holders.
(c) The Regular Trustees shall promptly furnish to each of the Property
Trustee and the Delaware Trustee a copy of each amendment to this Declaration.
SECTION 12.02. Meetings of the Holders of Securities; Action by Written
Consent. (a) Meetings of the Holders of Preferred Securities and/or Common
Securities may be called at any time by the Regular Trustees (or as provided in
the terms of the Securities) to consider and act on any matter on which Holders
of such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange on
which the Preferred Securities are listed or admitted for trading. The Regular
Trustees shall call a meeting of Holders of Preferred Securities or Common
Securities if directed to do so by Holders of at least 10% in liquidation amount
of such class of Securities. Such direction shall be given by delivering to the
Regular Trustees one or more notices in writing stating that the signing Holders
of Securities wish to call a meeting and indicating the general or specific
purpose for which the meeting is to be called. Any Holders of Securities calling
a meeting shall specify in writing the Certificates held by the Holders of
Securities exercising the right to call a meeting and only those specified
Certificates shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
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(b) Except to the extent otherwise provided in the terms of the
Securities, the following provision shall apply to meetings of Holders of
Securities:
(i) Notice of any such meeting shall be given by mail to each Trustee
and all the Holders of Securities having a right to vote thereat not less
than seven days nor more than 60 days prior to the date of such meeting.
Whenever a vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration or the rules of any stock
exchange on which the Preferred Securities are listed or admitted for
trading, such vote, consent or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if a consent in
writing setting forth the action so taken is signed by Holders of
Securities owning not less than the minimum aggregate liquidation amount of
Securities that would be necessary to authorize or take such action at a
meeting at which all Holders of Securities having a right to vote thereon
were present and voting. Prompt notice of the taking of action without a
meeting shall be given to the Holders of Securities entitled to vote who
have not consented in writing. The Regular Trustees may specify that any
written ballot submitted to the Holders of Securities for the purpose of
taking any action without a meeting shall be returned to the Trust within
the time specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act for it
by proxy on all matters in which a Holder of a Security is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of
11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Security
executing it. Except as otherwise provided herein or in the terms of the
Securities, all matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation Law of the State of
Delaware relating to proxies and judicial interpretations thereunder as if
the Trust were a Delaware corporation and the Holders of the Securities
were stockholders of a Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be conducted
by the Regular Trustees or by such other Person that the Regular Trustees
may designate.
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(iv) Unless otherwise provided in the Business Trust Act, this
Declaration or the rules of any stock exchange on which the Preferred
Securities are then listed or admitted for trading, the Regular Trustees,
in their sole discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any Holders
of Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements, voting in
person or by proxy or any other matter with respect to the exercise of any
such right to vote.
ARTICLE XIII
Representations of Property Trustee
and Delaware Trustee
SECTION 13.01. Representations and Warranties of Property Trustee. (a)
The Trustee which acts as initial Property Trustee represents and warrants to
the Trust and to the Sponsor at the date of this Declaration, and each Successor
Property Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(i) The Property Trustee is a banking corporation with trust powers,
duly organized, validly existing and in good standing under the laws of the
State of its incorporation, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of,
this Declaration.
(ii) The execution, delivery and performance by the Property Trustee
of this Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been duly
executed and delivered by the Property Trustee, and constitutes a legal,
valid and binding obligation of the Property Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
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(iii) The execution, delivery and performance of this Declaration by
the Property Trustee does not conflict with or constitute a breach of the
charter or By-laws of the Property Trustee.
(iv) No consent, approval or authorization of, or registration with or
notice to, any banking authority which supervises or regulates the Property
Trustee is required for the execution, delivery or performance by the
Property Trustee of this Declaration.
(v) The Property Trustee satisfies the qualifications set forth in
Section 5.01(c).
(b) The Trustee which acts as initial Delaware Trustee represents and
warrants to the Trust and the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee, that it satisfies the qualifications set forth in Section
5.01(a)(3).
ARTICLE XIV
Miscellaneous
SECTION 14.01. Notices. All notices provided for in this Declaration
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Regular Trustees on behalf of the Trust may give notice of to the Property
Trustee, the Delaware Trustee and the Holders of the Securities):
PWG Capital Trust [ ]
In care of Paine Webber Group Inc.
1285 Avenue of the Americas
New York, New York 10019
Attention of Regina A. Dolan
F. Daniel Corkery
William J. Nolan,
Trustees
Facsimile No: (212) 713-[ ]
(b) if given to the Property Trustee, at the mailing address of the
Property Trustee set forth below
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(or such other address as the Property Trustee may give notice of to the Trust
and the Holders of the Securities):
The Chase Manhattan Bank
450 W. 33rd Street
New York, New York 10001
Attention of Corporate Trust Trustee
Administration
Facsimile No: (212) 946-8160
(c) if given to the Delaware Trustee, at the mailing address of the
Delaware Trustee set forth below (or such other address as the Delaware
Trustee may give notice of to the Trust and the Holders of the Securities):
Chase Manhattan Bank Delaware
1201 North Market Street
Wilmington, Delaware 19801
Attention of Delaware Trustee,
Corporate Trust Administration
Facsimile No: (302) 428-3390
with a copy to:
The Chase Manhattan Bank
450 W. 33rd Street
New York, New York 10001
Attention of Corporate Trust Trustee
Administration
Facsimile No: (212) 946-8160
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder
of the Common Securities may give notice to the Property Trustee, the
Delaware Trustee and the Trust):
Paine Webber Group Inc.
1285 Avenue of the Americas
New York, New York 10019
Attention of Corporate Secretary
Facsimile No: (212) 713-2114
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
A copy of any notice to the Property Trustee or the Delaware Trustee
shall also be sent to the Trust. All notices shall be deemed to have been given
when received in
<PAGE> 58
51
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.02. Undertaking for Costs. All parties to this Declaration
agree, and each Holder of any Securities by his or her acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Declaration, or in
any suit against the Property Trustee for any action taken or omitted by it as
Property Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 14.02 shall not apply to any suit instituted by the
Property Trustee, to any suit instituted by any Holder of Preferred Securities,
or group of Holders of Preferred Securities, holding more than 10% in aggregate
liquidation amount of the outstanding Preferred Securities, or to any suit
instituted by any Holder of Preferred Securities for the enforcement of the
payment of the principal of (or premium, if any) or interest on the Debentures,
on or after the respective due dates expressed in such Debentures.
SECTION 14.03. Governing Law. This Declaration and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws.
SECTION 14.04. Headings. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.
SECTION 14.05. Partial Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
<PAGE> 59
52
SECTION 14.06. Counterparts. This Declaration may contain more than one
counterpart of the signature pages and this Declaration may be executed by the
affixing of the signature of the Sponsor and each of the Trustees to one of such
counterpart signature pages. All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
SECTION 14.07. Intention of the Parties. It is the intention of the
parties hereto that the Trust not be classified for United States Federal income
tax purposes as an association taxable as a corporation or partnership but that
the Trust be treated as a grantor trust for United States Federal income tax
purposes. The provisions of this Declaration shall be interpreted to further
this intention of the parties.
SECTION 14.08. Successors and Assigns. Whenever in this Declaration any
of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Declaration by the Sponsor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether so expressed.
<PAGE> 60
53
IN WITNESS WHEREOF, the undersigned have caused these presents
to be executed as of the day and year first above written.
PAINE WEBBER GROUP INC., as
Sponsor,
by
-------------------------
Name:
Title:
REGULAR TRUSTEES:
-------------------------
Regina A. Dolan,
as Regular Trustee
-------------------------
F. Daniel Corkery,
as Regular Trustee
-------------------------
William J. Nolan,
as Regular Trustee
THE CHASE MANHATTAN BANK, as
Property Trustee,
by
-------------------------
Name:
Title:
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee,
by
-------------------------
Name:
Title:
<PAGE> 61
EXHIBIT A
CERTIFICATE OF TRUST
OF
PWG Capital Trust [ ]
THIS Certificate of Trust of PWG Capital Trust [ ] (the "Trust"), dated
as of November 9, 1997, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. Code Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby is PWG
Capital Trust [ ].
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware is Chase
Manhattan Bank Delaware, a Delaware banking corporation, White Clay Center,
Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be effective as of
its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
CHASE MANHATTAN BANK DELAWARE, as
Delaware Trustee,
by
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Property Trustee,
by
---------------------------------
Name:
Title:
<PAGE> 62
2
REGULAR TRUSTEES:
-----------------------------------
Regina A. Dolan,
as Regular Trustee
-----------------------------------
F. Daniel Corkery,
as Regular Trustee
-----------------------------------
William J. Nolan,
as Regular Trustee
<PAGE> 63
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.01 of the Amended and Restated Declaration of
Trust of PWG Capital Trust [ ] dated as of [ ] (as amended from time to time,
the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. Designation and Number. Preferred Securities of the Trust with an
aggregate liquidation amount in the assets of the Trust of up to [ ] Dollars ($[
]) (including up to [ ] Dollars ($[ ]) issuable upon exercise of the
overallotment option set forth in the Underwriting Agreement) and a liquidation
amount in the assets of the Trust of $25 per Preferred Security are hereby
designated as "[ ]% Preferred Trust Securities". The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form attached hereto as Annex I, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice or
to conform to the rules of any stock exchange on which the Preferred Securities
are listed. In connection with the issuance and sale of the Preferred Securities
and the Common Securities, the Trust will purchase, as trust assets, Debentures
of PWG having an aggregate principal amount equal to the aggregate liquidation
amount of the Preferred Securities and the Common Securities so issued and
bearing interest at an annual rate equal to the annual Distribution rate on the
Preferred Securities and the Common Securities and having payment and redemption
provisions which correspond to the payment and redemption provisions of the
Preferred Securities and the Common Securities.
2. Distributions. (a) Distributions payable on each Preferred Security
will be fixed at a rate per annum of [ ]% (the "Coupon Rate") of the stated
liquidation amount of $25 per Preferred Security. Distributions in arrears for
more than one calendar quarter will bear interest at the rate per annum of [ ]%
thereof (to the extent permitted by law), compounded quarterly. The term
"Distributions" as used in these terms means such periodic cash distributions
and any such interest payable unless otherwise stated. A Distribution will be
made by the Property Trustee only to the extent that interest payments are made
in respect of the Debentures held by the Property Trustee. The amount of
Distributions payable for any period will be computed on the
<PAGE> 64
2
basis of a 360-day year of twelve 30-day months, and for any period shorter than
a 30-day period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed.
(b) Distributions on the Preferred Securities will be cumulative, will
accrue from [ ], and will be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on March 31, 1999, except
as otherwise described below, but only if and to the extent that interest
payments are made in respect of the Debentures held by the Property Trustee. So
long as PWG is not in default in the payment of interest on the Debentures, PWG
shall have the right under the Indenture for the Debentures to defer payments of
interest by extending the interest payment period from time to time on the
Debentures for a period not to exceed 20 consecutive quarterly interest periods
(an "Extension Period"), provided, however, that an Extension Period may not
extend beyond the maturity of the Debentures. During any such Extension Period,
quarterly Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the rate of [ ]% per annum, compounded
quarterly. Prior to the termination of any such Extension Period, PWG may
further extend such Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarterly interest periods. Upon the termination of any Extension
Period and the payment of all amounts then due, PWG may commence a new Extension
Period, subject to the above requirements. Payments of accrued Distributions
will be payable to Holders of Preferred Securities as they appear on the books
and records of the Trust on the record date for the first interest payment date
occurring at or after the end of the Extension Period.
(c) Distributions on the Preferred Securities will be payable promptly
by the Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and records
of the Trust on the relevant record dates. While the Preferred Securities remain
in book-entry only form, the relevant record dates shall be one Business Day
prior to the relevant Distribution date, and if the Preferred Securities are no
longer in book-entry only form, the relevant record dates will be the fifteenth
(15th) day of the month in which the relevant Distribution date occurs, which
record and
<PAGE> 65
3
payment dates correspond to the record and interest payment dates for the
Debentures. Distributions payable on any Preferred Securities that are not
punctually paid on any Distribution payment date as a result of PWG having
failed to make the corresponding interest payment on the Debentures will
forthwith cease to be payable to the Person in whose name such Preferred
Security is registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such Preferred
Security is registered on the special record date established by the Regular
Trustees, which record date shall correspond to the special record date or other
specified date determined in accordance with the Indenture; provided, however,
that Distributions shall not be considered payable on any Distribution payment
date falling within an Extension Period unless PWG has elected to make a full or
partial payment of interest accrued on the Debentures on such Distribution
payment date. Subject to any applicable laws and regulations and the provisions
of the Declaration, each payment in respect of the Preferred Securities will be
made as described in paragraph 9 hereof. If any date on which Distributions are
payable on the Preferred Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
(d) All Distributions paid with respect to the Preferred Securities and
the Common Securities will be paid pro rata to the Holders thereof entitled
thereto. If an Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities with respect to
Distributions.
(e) In the event that there is any money or other property held by or
for the Trust that is not accounted for under the Declaration, such money or
property shall be distributed pro rata among the Holders of the Preferred
Securities and the Common Securities.
3. Liquidation Distribution upon Dissolution. In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Preferred Securities and the Common Securities at the date
<PAGE> 66
4
of the dissolution, winding-up or termination, as the case may be, will be
entitled to receive pro rata solely out of the assets of the Trust available for
distribution to Holders of Preferred Securities and Common Securities after
satisfaction of liabilities to creditors, an amount equal to the aggregate of
the stated liquidation amount of $25 per Preferred Security and Common Security
plus accrued and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"), unless, in connection with such
dissolution, winding-up or termination, and after satisfaction of liabilities to
creditors, Debentures in an aggregate principal amount equal to the aggregate
stated liquidation amount of such Preferred Securities and Common Securities,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on such Preferred Securities and Common Securities, shall
be distributed pro rata to the Holders of the Preferred Securities and Common
Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Preferred Securities and the Common Securities shall be paid,
subject to the next paragraph, on a pro rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution pro rata with Holders of Preferred
Securities, except that, if an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities with
respect to such Liquidation Distribution.
4. Redemption and Distribution of Debentures. The Preferred Securities
and the Common Securities may only be redeemed if Debentures having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities and the Common Securities are repaid, redeemed or distributed as set
forth below:
(a) Upon the repayment of the Debentures, in whole or in part, whether
at maturity or upon redemption at any time or from time to time on or after [ ],
the proceeds of such repayment will be promptly applied to redeem pro rata
Preferred Securities and Common Securities
<PAGE> 67
5
having an aggregate liquidation amount equal to the aggregate principal amount
of the Debentures so repaid, upon not less than 30 nor more than 60 days notice,
at a redemption price of $25 per Preferred Security and Common Security plus an
amount equal to accrued and unpaid Distributions thereon to the date of
redemption, payable in cash (the "Redemption Price"). The date of any such
repayment of Preferred Securities and Common Securities shall be established to
coincide with the repayment date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed pro rata, it being understood that Preferred
Securities held of record by a Clearing Agency or nominee will be redeemed as
described in paragraph 4(f)(ii) below. If a partial redemption would result in
the delisting of the Preferred Securities by any national securities exchange or
other organization on which the Preferred Securities are then listed, PWG
pursuant to the Indenture, will only redeem Debentures in whole and the Trust
will only redeem the Preferred Securities in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each
as hereinafter defined, and each a "Special Event") shall occur and be
continuing, the Regular Trustees shall, unless the Debentures are redeemed in
the limited circumstances described below, dissolve the Trust and, after
satisfaction of creditors, cause Debentures held by the Property Trustee having
an aggregate principal amount equal to the aggregate stated liquidation amount
of, and bearing accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as, the Preferred
Securities and the Common Securities, to be distributed to the Holders of the
Preferred Securities and the Common Securities on a pro rata basis in
liquidation of such Holders' interests in the Trust, within 90 days following
the occurrence of such Special Event (the "90 Day Period"); provided, however,
that in the case of the occurrence of a Tax Event, as a condition of such
dissolution and distribution, the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on any then
applicable published revenue rulings of the Internal Revenue Service, to the
effect that the Holders of the Preferred
<PAGE> 68
6
Securities will not recognize any gain or loss for United States Federal income
tax purposes as a result of the dissolution of the Trust and distribution of
Debentures; and provided further that, if at the time there is available to PWG
or the Regular Trustees, on behalf of the Trust, the opportunity to eliminate,
within the 90 Day Period, the Special Event by taking some ministerial action,
such as filing a form or making an election, or pursuing some other similar
reasonable measure that has no adverse effect on the Trust, PWG or the Holders
of the Preferred Securities (a "Ministerial Action"), PWG or the Regular
Trustees, on behalf of the Trust, will pursue such Ministerial Action in lieu of
dissolution.
If in the case of the occurrence of a Tax Event, (i) the Regular
Trustees have received an opinion (a "Redemption Tax Opinion") of nationally
recognized independent tax counsel experienced in such matters that, as a result
of a Tax Event, there is more than an insubstantial risk that PWG would be
precluded from deducting the interest on the Debentures for United States
Federal income tax purposes even if the Debentures were distributed to the
Holders of Preferred Securities and Common Securities in liquidation of such
Holder's interest in the Trust as described in this paragraph 4(c) or (ii) the
Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, PWG shall have the right
at any time, upon not less than 30 nor more than 60 days notice, to redeem the
Debentures in whole or in part for cash at the Redemption Price within 90 days
following the occurrence of such Tax Event, and, promptly following such
redemption, Preferred Securities and Common Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
redeemed will be redeemed by the Trust at the Redemption Price on a pro rata
basis; provided, however, that, if at the time there is available to PWG or the
Regular Trustees, on behalf of the Trust, the opportunity to eliminate, within
such 90 day period, the Tax Event by taking some Ministerial Action, PWG or the
Regular Trustees, on behalf of the Trust, will pursue such measure in lieu of
redemption; and provided further that PWG shall have no right to redeem the
Debentures while the Regular Trustees, on behalf of the Trust, are pursuing such
Ministerial Action. The Common Securities will be redeemed pro rata with the
Preferred Securities, except that if an Event of Default under the Indenture has
occurred and is continuing, the Preferred
<PAGE> 69
7
Securities will have a priority over the Common Securities with respect to
payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have obtained an
opinion of nationally recognized independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect that, on or after [ ], as a
result of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) any amendment
to, or change (including any announced prospective change) in, an interpretation
or application of any such laws or regulations by any legislative body, court,
governmental agency or regulatory authority (including the enactment of any
legislation and the publication of any judicial decision or regulatory
determination), (c) any interpretation or pronouncement that provides for a
position with respect to such laws or regulations that differs from the
theretofore generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or effective or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after [ ], there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date thereof, subject to United States Federal
income tax with respect to income accrued or received on the Debentures, (ii)
the Trust is, or will be within 90 days of the date thereof, subject to more
than a de minimis amount of other taxes, duties or other governmental charges or
(iii) interest payable by PWG to the Trust on the Debentures is not, or within
90 days of the date thereof will not be, deductible by PWG for United States
Federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced in
practice under the Investment Company Act that, as a result of the occurrence of
a change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law"), there is more than an
insubstantial risk that the Trust is or will be considered an Investment Company
which is required to be
<PAGE> 70
8
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after [ ].
(d) At any time, the Company may elect to cause the dissolution of the
Trust and the distribution of the Debentures (a "Voluntary Distribution") by
delivery of notice to the Regular Trustees of such election, which notice shall
be accompanied by a No Recognition Opinion. The Regular Trustees, upon receipt
of such notice and such No Recognition Opinion shall dissolve the Trust and,
after satisfaction of creditors of the trust, shall cause Debentures held by the
Property Trustee having an aggregate principal amount equal to the aggregate
stated liquidation amount of, and bearing accrued and unpaid interest equal to
accrued and unpaid Distributions on, and having the same record date for payment
as, the Preferred Securities and the Common Securities, to be distributed to the
Holders of the Preferred Securities and the Common Securities on a pro rata
basis in liquidation of such Holders' interests in the Trust, within 90 days
following the receipt of such notice (the "90 Day Period").
(e) The Trust may not redeem fewer than all the outstanding Preferred
Securities unless all accrued and unpaid Distributions have been paid on all
Preferred Securities for all quarterly Distribution periods terminating on or
prior to the date of redemption.
(f) If Debentures are distributed to Holders of the Preferred
Securities, PWG, pursuant to the terms of the Indenture, will use its best
efforts to have the Debentures listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities were listed immediately prior to the
distribution of the Debentures.
(g)(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Preferred Securities and the Common Securities
(a "Redemption/Distribution Notice") will be given by the Regular Trustees on
behalf of the Trust by mail to each Holder of Preferred Securities and Common
Securities to be redeemed or exchanged not less than 30 nor more than 60 days
prior to the date fixed for redemption or exchange thereof. For purposes of the
calculation of the date of redemption or exchange and the dates on which notices
are given pursuant to this paragraph (g)(i), a Redemption/Distribution Notice
shall be deemed to be given on the day such notice is first
<PAGE> 71
9
mailed by first class mail, postage prepaid, to Holders of Preferred Securities
and Common Securities. Each Redemption/Distribution Notice shall be addressed to
the Holders of Preferred Securities and Common Securities at the address of each
such Holder appearing in the books and records of the Trust. No defect in the
Redemption/ Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Preferred
Securities are to be redeemed, the Preferred Securities to be redeemed will be
redeemed pro rata from each Holder of Preferred Securities, it being understood
that, in respect of Preferred Securities registered in the name of and held of
record by DTC (or a successor Clearing Agency) or any other nominee, the
Preferred Securities will be redeemed from, and the distribution of the proceeds
of such redemption will be made to, each Clearing Agency Participant (or person
on whose behalf such nominee holds such securities) in accordance with the
procedures applied by such agency or nominee.
(iii) Subject to paragraph 9 hereof, if the Trust gives a
Redemption/Distribution Notice in respect of a redemption of Preferred
Securities as provided in this paragraph 4 (which notice will be irrevocable)
then (A) while the Preferred Securities are in book-entry only form, by 12:00
noon, New York City time, on the redemption date, provided that PWG has paid the
Property Trustee in immediately available funds a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Property Trustee will deposit irrevocably with DTC (or any successor Clearing
Agency) funds sufficient to pay the applicable Redemption Price with respect to
the Preferred Securities and will give DTC (or any successor Clearing Agency)
irrevocable instructions and authority to pay the Redemption Price to the
Holders of the Preferred Securities and (B) if the Preferred Securities are
issued in definitive form, and provided that PWG has paid the Property Trustee
in immediately available funds a sufficient amount of cash in connection with
the related redemption or maturity of the Debentures, the Property Trustee will
pay the relevant Redemption Price to the Holders of such Preferred Securities by
check mailed to the address of the relevant Holder appearing on the books and
records of the
<PAGE> 72
10
Trust on the redemption date. If a Redemption/Distribution Notice shall have
been given and funds deposited as required, if applicable, then immediately
prior to the close of business on the redemption date, Distributions will cease
to accrue on the Preferred Securities called for redemption, such Preferred
Securities will no longer be deemed to be outstanding and all rights of Holders
of such Preferred Securities so called for redemption will cease, except the
right of the Holders of such Preferred Securities to receive the Redemption
Price, but without interest on such Redemption Price. Neither the Trustees nor
the Trust shall be required to register or cause to be registered the transfer
of any Preferred Securities which have been so called for redemption. If any
date fixed for redemption of Preferred Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. If PWG fails to repay Debentures on maturity or on
the date fixed for redemption or if payment of the Redemption Price in respect
of Preferred Securities is improperly withheld or refused and not paid either by
the Property Trustee or, pursuant to the Preferred Securities Guarantee, by PWG,
Distributions on such Preferred Securities will continue to accrue, from the
original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to DTC or its nominee (or any successor Clearing
Agency or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holders of
the Preferred Securities.
(v) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Preferred Securities will no longer be deemed
to be outstanding, and (ii) certificates representing Preferred Securities will
be deemed to represent beneficial interests in the Debentures having an
aggregate principal amount equal to the stated liquidation amount of, and
bearing accrued and unpaid
<PAGE> 73
11
interest equal to accrued and unpaid Distributions on, such Preferred Securities
until such certificates are presented to PWG or its agent for transfer or
reissuance.
(vi) If a partial redemption of the Preferred Securities would result
in the delisting of the Preferred Securities by any national securities exchange
or other organization on which the Preferred Securities are then listed, the
Company pursuant to the Indenture will only redeem Debentures in whole and, as a
result, the Trust would only redeem the Preferred Securities in whole.
(vii) Subject to the foregoing and applicable law (including, without
limitation, United States Federal securities laws), PWG or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
5. Voting Rights. (a) Except as provided under paragraph 5(b) below and
as otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) If any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than in connection
with the distribution of Debentures held by the Property Trustee, upon the
occurrence of a Special Event or Voluntary Distribution, or in connection with
the redemption of Preferred Securities as a consequence of a redemption of
Debentures, then the Holders of outstanding Securities will be entitled to vote
on such amendment or proposal as a class and such amendment or proposal shall
not be effective except with the approval of the Holders of Securities
representing 66-2/3% in liquidation amount of such Securities; provided,
however, that (A) if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or the Common Securities,
then only the affected class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of 66-2/3% in liquidation amount of such class of Securities and (B)
amendments to the Declaration
<PAGE> 74
12
shall be subject to such further requirements as are set forth in Sections 12.01
and 12.02 of the Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided that where such amendment, modification or
termination of the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures affected
thereby, the Property Trustee may only vote with respect to that amendment,
modification or termination as directed by, in the case of clause (1) above, the
vote of Holders of Securities representing such specified percentage of the
aggregate liquidation amount of the Securities, or, in the case of clause (2)
above, each Holder of Securities affected thereby; and provided further that the
Property Trustee shall be under no obligation to take any action in accordance
with the directions of the Holders of Securities unless the Property Trustee
shall have received, at the expense of the Sponsor, an opinion of nationally
recognized independent tax counsel recognized as expert in such matters to the
effect that the Trust will not be classified for United States Federal income
tax purposes as an association taxable as a corporation or a partnership on
account of such action and will be treated as a grantor trust for United States
Federal income tax purposes following such action.
Subject to Section 2.06 of the Declaration, and the provisions of this
and the next succeeding paragraph, the Holders of a Majority in liquidation
amount of the Preferred Securities, voting separately as a class, shall have the
right to (A) on behalf of all Holders of Preferred Securities, waive any past
default that is waivable under the Declaration (subject to, and in accordance
with, the Declaration) and (B) direct the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee, or exercising
any trust or power conferred upon the Property Trustee under the Declaration,
including
<PAGE> 75
13
the right to direct the Property Trustee, as the holder of the Debentures, to
(i) direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive
any past default that is waivable under Section 6.06 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable; provided that where the taking of any
action under the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures affected
thereby, the Property Trustee may only take such action if directed by, in the
case of clause (1) above, the vote of Holders of Preferred Securities
representing such specified percentage of the aggregate liquidation amount of
the Preferred Securities, or, in the case of clause (2) above, each Holder of
Preferred Securities affected thereby. The Property Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the Property
Trustee or the Debenture Trustee as set forth above, the Property Trustee shall
be under no obligation to take any of the foregoing actions at the direction of
the Holders of Preferred Securities unless the Property Trustee shall have
received, at the expense of the Sponsor, an opinion of nationally recognized
independent tax counsel recognized as expert in such matters to the effect that
the Trust will not be classified for United States Federal income tax purposes
as an association taxable as a corporation or a partnership on account of such
action and will be treated as a grantor trust for United States federal income
tax purposes following such action. If the Property Trustee fails to enforce its
rights under the Declaration (including, without limitation, its rights, powers
and privileges as a holder of the Debentures under the Indenture), any Holder of
Preferred Securities may, to the extent permitted by law, after a period of 30
days has elapsed from such Holder's written request to the Property Trustee to
enforce such rights, institute a legal proceeding directed against PWG to
enforce the Property Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Property Trustee or any other Person.
Notwithstanding the foregoing, if an Event of
<PAGE> 76
14
Default has occurred and is continuing and such event is attributable to the
failure of PWG to pay interest or principal on the Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption, the
redemption date), then a Holder of Preferred Securities may directly institute
suit against PWG for enforcement of payment to such Holder of the principal of
or interest on Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities held by such Holder on or after
the respective due date specified in the Debentures. The Holders of Preferred
Securities will not be able to exercise directly against PWG any other remedy
available to the Holders of the Debentures unless the Property Trustee first
fails to do so.
A waiver of an Indenture Event of Default by the Property Trustee at
the direction of the Holders of the Preferred Securities will constitute a
waiver of the corresponding Event of Default under the Declaration in respect of
the Securities.
Any required approval or direction of Holders of Preferred Securities
may be given at a separate meeting of Holders of Preferred Securities convened
for such purpose, at a meeting of all of the Holders of Securities of the Trust
or pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities in accordance
with the Declaration.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities at such time that are owned by PWG or by any
<PAGE> 77
15
entity directly or indirectly controlling or controlled by or under direct or
indirect common control with PWG shall not be entitled to vote or consent and
shall, for purposes of such vote or consent, be treated as if they were not
outstanding.
Holders of the Preferred Securities will have no rights to increase or
decrease the number of Trustees or to appoint, remove or replace a Trustee,
which voting rights are vested exclusively in the Holders of the Common
Securities.
6. Pro Rata Treatment. A reference in these terms of the Preferred
Securities to any payment, distribution or treatment as being "pro rata" shall
mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
7. Ranking. The Preferred Securities rank pari passu and payment
thereon will be made pro rata with the Common Securities except that where an
Event of Default occurs and is continuing, the rights of Holders of Preferred
Securities to payment in respect of Distributions and payments upon liquidation,
redemption or otherwise rank in priority to the rights of Holders of the Common
Securities.
8. Mergers, Consolidations or Amalgamations. The Trust may not
consolidate, amalgamate, merge with or into, or be replaced by, or sell,
transfer or lease all or substantially all its properties and assets to, any
Person.
9. Transfer, Exchange, Method of Payments. Payment of Distributions and
payments on redemption of the
<PAGE> 78
16
Preferred Securities will be payable, the transfer of the Preferred Securities
will be registrable, and Preferred Securities will be exchangeable for Preferred
Securities of other denominations of a like aggregate liquidation amount, at the
principal corporate trust office of the Property Trustee in The City of New
York; provided that payment of Distributions may be made at the option of the
Regular Trustees on behalf of the Trust by check mailed to the address of the
Persons entitled thereto and that the payment on redemption of any Preferred
Security will be made only upon surrender of such Preferred Security to the
Property Trustee.
10. Acceptance of Indenture and Preferred Guarantee. Each Holder of
Preferred Securities, by the acceptance thereof, agrees to the provisions of (i)
the Preferred Guarantee, including the subordination provisions thereof and (ii)
the Indenture and the Debentures, including the subordination provisions of the
Indenture.
11. No Preemptive Rights. The Holders of Preferred Securities shall
have no preemptive rights to subscribe to any additional Preferred Securities or
Common Securities.
12. Miscellaneous. These terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the Indenture
to a Holder without charge on written request to the Trust at its principal
place of business.
<PAGE> 79
ANNEX I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT--THIS PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS
EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF
THIS PREFERRED SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF
DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TO THE TRUST OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC OR ANY SUCCESSOR DEPOSITARY AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC OR ANY SUCCESSOR DEPOSITARY, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL, SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Preferred Securities:
Number:
CUSIP NO.: [ ]
<PAGE> 80
2
Certificate Evidencing Preferred Securities
of
PWG Capital Trust [ ]
[ ]% Preferred Trust Securities
(liquidation amount $25 per Preferred Security)
PWG Capital Trust [ ], a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
(the "Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the [ ]% Preferred Trust Securities (liquidation amount $25 per
Preferred Security) (the "Preferred Securities"). The transfer of Preferred
Securities is registrable on the books and records of the Trust, in person or by
a duly authorized attorney, upon surrender of this certificate duly endorsed and
in proper form for registration of transfer. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities are set forth in, and this certificate and the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Declaration of Trust of
the Trust dated as of [ ], as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of Preferred Securities
as set forth in Exhibit B thereto. The Preferred Securities and the Common
Securities issued by the Trust pursuant to the Declaration represent undivided
beneficial interests in the assets of the Trust, including the Debentures (as
defined in the Declaration) issued by Paine Webber Group Inc., a Delaware
corporation ("PWG"), to the Trust pursuant to the Indenture referred to in the
Declaration. The Holder is entitled to the benefits of the Guarantee Agreement
of PWG dated as of [ ] (the "Guarantee"), to the extent provided therein. The
Trust will furnish a copy of the Declaration, the Guarantee and the Indenture to
the Holder without charge, upon written request to the Trust, at its principal
place of business or registered office.
The Holder of this Certificate, by accepting this
Certificate, is deemed to have (i) agreed to the terms of
<PAGE> 81
3
the Indenture and the Debentures, including that the Debentures are subordinate
and junior in right of payment to all Senior Indebtedness (as defined in the
Indenture) as and to the extent provided in the Indenture and (ii) agreed to the
terms of the Guarantee, including that the Guarantee is subordinate and junior
in right of payment to all other indebtedness, liabilities and obligations of
PWG, including the Debentures, except those made pari passu or subordinate by
their terms, and senior to all capital stock now or hereafter issued by PWG and
to any guarantee now or hereafter entered into by PWG in respect of any of its
capital stock.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed
this certificate this day of .
PWG Capital Trust [ ],
by
----------------------------------
Name:
Title: Regular Trustee
by
----------------------------------
Name:
Title: Regular Trustee
Dated:
Countersigned and Registered:
The Chase Manhattan Bank, as
Transfer Agent and Registrar
by
------------------------------
Authorized Officer
<PAGE> 82
4
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification
number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
----------------------------
Signature:
------------------------
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE> 83
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.01 of the Amended and Restated
Declaration of Trust of PWG Capital Trust [ ] dated as of [ ] (as amended from
time to time, the "Declaration"), the designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth below (each capitalized term used but not defined
herein having the meaning set forth in the Declaration):
1. Designation and Number. Common Securities of the Trust with
an aggregate liquidation amount in the assets of the Trust of up to [ ] Dollars
($[ ] ) (including up to [ ] Dollars ($[ ] ) issuable upon exercise of the
overallotment option set forth in the Underwriting Agreement) and a liquidation
amount in the assets of the Trust of $25 per Common Security are hereby
designated as "[ ]% Common Trust Securities". The Common Security Certificates
evidencing the Common Securities shall be substantially in the form attached
hereto as Annex I, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice. The Common
Securities are to be issued and sold to Paine Webber Group Inc. ("PWG"). In
connection with the issuance and sale of the Preferred Securities and the Common
Securities, the Trust will purchase, as trust assets, Debentures of PWG having
an aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and the Common Securities so issued, and bearing interest
at an annual rate equal to the annual Distribution rate on the Preferred
Securities and the Common Securities and having payment and redemption
provisions which correspond to the payment and redemption provisions of the
Preferred Securities and the Common Securities.
2. Distributions. (a) Distributions payable on each Common
Security will be fixed at a rate per annum of [ ]% (the "Coupon Rate") of the
stated liquidation amount of $25 per Common Security. Distributions in arrears
for more than one calendar quarter will bear interest at the rate per annum of [
]% thereof (to the extent permitted by applicable law), compounded quarterly.
The term "Distributions" as used in these terms means such periodic cash
distributions and any such interest payable unless otherwise stated. A
Distribution will be made by the Property Trustee only to the extent that
interest payments are made in respect of the Debentures held by the Property
<PAGE> 84
2
Trustee. The amount of Distributions payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months, and for any Distribution
period shorter than a 30-day period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days
elapsed.
(b) Distributions on the Common Securities will be cumulative,
will accrue from [ ] , and will be payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year, commencing on March 31,
1999, except as otherwise described below, but only if and to the extent that
interest payments are made in respect of the Debentures held by the Property
Trustee. So long as PWG is not in default in the payment of interest on the
Debentures, PWG shall have the right under the Indenture for the Debentures to
defer payments of interest by extending the interest payment period from time to
time on the Debentures for a period not to exceed 20 consecutive quarterly
interest periods (each, an "Extension Period"), provided, however, that an
Extension Period may not extend beyond the maturity of the Debentures. During
any such Extension Period, monthly Distributions will continue to accrue with
interest thereon (to the extent permitted by applicable law) at the rate of [ ]%
per annum, compounded quarterly. Prior to the termination of any such Extension
Period, PWG may further extend such Extension Period; provided that such
Extension Period, together with all such previous and further extensions
thereof, may not exceed 20 consecutive quarterly interest periods. Upon the
termination of any Extension Period and the payment of all amounts then due, PWG
may commence a new Extension Period, subject to the above requirements. Payments
of accrued Distributions will be payable to Holders of Common Securities as they
appear on the books and records of the Trust on the record date for the first
interest payment date occurring at or after the end of the Extension Period.
(c) Distributions on the Common Securities will be payable
promptly by the Property Trustee (or other Paying Agent) upon receipt of
immediately available funds to the Holders thereof as they appear on the books
and records of the Trust on the relevant record dates which will be one Business
Day prior to the relevant Distribution date unless the Preferred Securities are
no longer in book-entry only form, in which event the relevant record dates will
be the fifteenth (15th) day of the month in which the relevant
<PAGE> 85
3
Distribution date occurs, which record and payment dates correspond to the
record and interest payment dates for the Debentures. Distributions payable on
any Common Securities that are not punctually paid on any Distribution date as a
result of PWG having failed to make the corresponding interest payment on the
Debentures will forthwith cease to be payable to the Person in whose name such
Common Security is registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such Common
Security is registered on the special record date established by the Regular
Trustees, which record date shall correspond to the special record date or other
specified date determined in accordance with the Indenture; provided, however,
that Distributions shall not be considered payable on any Distribution payment
date falling within an Extension Period unless PWG has elected to make a full or
partial payment of interest accrued on the Debentures on such Distribution
payment date. Subject to any applicable laws and regulations and the provisions
of the Declaration, each payment in respect of the Common Securities will be
made as described in paragraph 9 hereof. If any date on which Distributions are
payable on the Common Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
(d) All Distributions paid with respect to the Common
Securities and the Preferred Securities will be paid pro rata to the Holders
thereof entitled thereto. If an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities with
respect to Distributions.
(e) In the event that there is any money or other property
held by or for the Trust that is not accounted for under the Declaration, such
money or property shall be distributed pro rata among the Holders of the
Preferred Securities and the Common Securities.
3. Liquidation Distribution Upon Dissolution. In the event of
any voluntary or involuntary dissolution, winding-up or termination of the
Trust, the Holders of the
<PAGE> 86
4
Preferred Securities and Common Securities at the date of the dissolution,
winding-up or termination, as the case may be, will be entitled to receive pro
rata solely out of the assets of the Trust available for distribution to Holders
of Preferred Securities and the Common Securities, after satisfaction of
liabilities to creditors, an amount equal to the aggregate of the stated
liquidation amount of $25 per Preferred Security and Common Security plus
accrued and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution, winding-up or termination, and after satisfaction of liabilities to
creditors, Debentures in an aggregate principal amount equal to the aggregate
stated liquidation amount of such Preferred Securities and Common Securities,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on such Preferred Securities and Common Securities, shall
be distributed pro rata to the Holders of the Preferred Securities and Common
Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and the Common Securities
shall be paid, subject to the next paragraph, on a pro rata basis.
Holders of Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution pro rata with Holders of
Preferred Securities, except that, if an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to such Liquidation Distribution.
4. Redemption and Distribution of Debentures. The Preferred
Securities and the Common Securities may only be redeemed if Debentures having
an aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and the Common Securities are repaid, redeemed or
distributed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part,
whether at maturity or upon redemption at any time or from time to time on or
after [ ], the proceeds of such repayment will be promptly applied to
<PAGE> 87
5
redeem pro rata Preferred Securities and Common Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
repaid, upon not less than 30 nor more than 60 days notice, at a redemption
price of $25 per Preferred Security and Common Security plus an amount equal to
accrued and unpaid Distributions thereon to the date of redemption, payable in
cash (the "Redemption Price"). The date of any such repayment of Preferred
Securities and Common Securities shall be established to coincide with the
repayment or redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and
Common Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed pro rata and, with respect to the Common Securities
to be redeemed, as described in paragraph 4(e)(ii) below. If a partial
redemption would result in the delisting of the Preferred Securities by any
national securities exchange or other organization on which the Preferred
Securities are then listed, PWG, pursuant to the Indenture, will only redeem
Debentures in whole and the Trust will only redeem the Common Securities in
whole.
(c) If, at any time, a Tax Event or an Investment Company
Event (each, as hereinafter defined and, each, a "Special Event") shall occur
and be continuing, the Regular Trustees shall, unless the Debentures are
redeemed in the limited circumstances described below, dissolve the Trust and,
after satisfaction of creditors, cause Debentures held by the Property Trustee
having an aggregate principal amount equal to the aggregate stated liquidation
amount of, and bearing accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as, the Preferred
Securities and the Common Securities, to be distributed to the Holders of the
Preferred Securities and the Common Securities on a pro rata basis in
liquidation of such Holders' interests in the Trust, within 90 days following
the occurrence of such Special Event (the "90 Day Period"); provided, however,
that in the case of the occurrence of a Tax Event, as a condition of such
dissolution and distribution, the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on any then
applicable published revenue rulings of the Internal Revenue Service, to the
effect that the Holders of the Preferred
<PAGE> 88
6
Securities will not recognize any gain or loss for United States Federal income
tax purposes as a result of the dissolution of the Trust and distribution of
Debentures; and provided further that, if at the time there is available to PWG
or the Regular Trustees, on behalf of the Trust, the opportunity to eliminate,
within such 90 Day Period, the Special Event by taking some ministerial action,
such as filing a form or making an election, or pursuing some other similar
reasonable measure that has no adverse effect on the Trust, PWG or the Holders
of the Preferred Securities (a "Ministerial Action"), PWG or the Regular
Trustees, on behalf of the Trust, will pursue such Ministerial Action in lieu of
dissolution.
If in the case of the occurrence of a Tax Event, (i) the
Regular Trustees have received an opinion (a "Redemption Tax Opinion") of
nationally recognized independent tax counsel experienced in such matters that,
as a result of a Tax Event, there is more than an insubstantial risk that PWG
would be precluded from deducting the interest on the Debentures for United
States Federal income tax purposes even if the Debentures were distributed to
the Holders of Preferred Securities and Common Securities in liquidation of such
Holders' interest in the Trust as described in this paragraph 4(c) or (ii) the
Regular Trustees shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the Trust, PWG shall have the right
at any time, upon not less than 30 nor more than 60 days notice, to redeem the
Debentures in whole or in part for cash at the Redemption Price within 90 days
following the occurrence of such Tax Event, and, promptly following such
redemption, Preferred Securities and Common Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
redeemed will be redeemed by the Trust at the Redemption Price on a pro rata
basis; provided, however, that, if at the time there is available to PWG or the
Regular Trustees on behalf of the Trust, the opportunity to eliminate, within
such 90 Day Period, the Tax Event by taking some Ministerial Action, PWG or the
Holders of the Preferred Securities, PWG or the Regular Trustees, on behalf of
the Trust, will pursue such measure in lieu of redemption; and provided further,
that PWG shall have no right to redeem the Debentures while the Regular
Trustees, on behalf of the Trust, are pursuing such Ministerial Action. The
Common Securities will be redeemed pro rata with the Preferred Securities,
except that if an Event of Default under the Indenture has occurred and
<PAGE> 89
7
is continuing, the Preferred Securities will have a priority over the Common
Securities with respect to payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have
obtained an opinion of nationally recognized independent tax counsel experienced
in such matters (a "Dissolution Tax Opinion") to the effect that, on or after [
], as a result of (a) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, (b)
any amendment to, or change (including any announced prospective change) in, an
interpretation or application of any such laws or regulations by any legislative
body, court, governmental agency or regulatory authority (including the
enactment of any legislation and the publication of any judicial decision or
regulatory determination), (c) any interpretation or pronouncement that provides
for a position with respect to such laws or regulations that differs from the
theretofore generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or effective or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after [ ], there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date thereof, subject to United States Federal
income tax with respect to income accrued or received on the Debentures, (ii)
the Trust is, or will be within 90 days of the date thereof, subject to more
than a de minimis amount of taxes, duties or other governmental charges or (iii)
interest payable by PWG to the Trust on the Debentures is not, or within 90 days
of the date thereof will not be, deductible by PWG for United States Federal
income tax purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of nationally recognized independent counsel
experienced in practice under the Investment Company Act that, as a result of
the occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law"), there is more than
an insubstantial risk that the Trust is or will be considered an Investment
Company which is required to be
<PAGE> 90
8
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after [ ].
(d) At any time, the Company may elect to cause the
dissolution of the trust and the distribution of the Debentures (a "Voluntary
Distribution") by delivery of notice to the Regular Trustees of such election,
which notice shall be accompanied by a No Recognition Opinion. The Regular
Trustees, upon receipt of such notice and such No Recognition Opinion shall
dissolve the Trust and, after satisfaction of creditors of the trust, the
Regular Trustee shall cause Debentures held by the Property Trustee having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
and bearing accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as, the Preferred
Securities and the Common Securities, to be distributed to the Holders of the
Preferred Securities and the Common Securities on a pro rata basis in
liquidation of such Holders' interests in the Trust, within 90 days following
the receipt of such notice (the "90 Day Period").
(e) The Trust may not redeem fewer than all the outstanding
Common Securities unless all accrued and unpaid Distributions have been paid on
all Common Securities for all quarterly Distribution periods terminating on or
prior to the date of redemption.
(f)(i) Notice of any redemption of, or notice of distribution
of Debentures in exchange for, the Preferred Securities and the Common
Securities (a "Redemption/Distribution Notice") will be given by the Regular
Trustees on behalf of the Trust by mail to each Holder of Preferred Securities
and Common Securities to be redeemed or exchanged not less than 30 nor more than
60 days prior to the date fixed for redemption or exchange thereof. For purposes
of the calculation of the date of redemption or exchange and the dates on which
notices are given pursuant to this paragraph (f)(i), a Redemption/Distribution
Notice shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of Preferred Securities and Common
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Preferred Securities and Common Securities at the address of each
such Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either
<PAGE> 91
9
thereof with respect to any Holder shall affect the validity of the redemption
or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Common
Securities are to be redeemed, the Common Securities to be redeemed will be
redeemed pro rata from each Holder of Common Securities (subject to adjustment
to eliminate fractional Common Securities).
(iii) If the Trust gives a Redemption/Distribution Notice in
respect of a redemption of Common Securities as provided in this paragraph 4
(which notice will be irrevocable), then immediately prior to the close of
business on the redemption date, provided that PWG has paid to the Property
Trustee in immediately available funds a sufficient amount of cash in connection
with the related redemption or maturity of the Debentures, Distributions will
cease to accrue on the Common Securities called for redemption, such Common
Securities will no longer be deemed to be outstanding and all rights of Holders
of such Common Securities so called for redemption will cease, except the right
of the Holders of such Common Securities to receive the Redemption Price, but
without interest on such Redemption Price. Neither the Trustees nor the Trust
shall be required to register or cause to be registered the transfer of any
Common Securities which have been so called for redemption. If any date fixed
for redemption of Common Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect of Common Securities
is improperly withheld or refused and not paid by the Property Trustee,
Distributions on such Common Securities will continue to accrue, from the
original redemption date to the date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to the Holders of the Common Securities.
<PAGE> 92
10
(v) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Common Securities will no longer be deemed to
be outstanding and (ii) any certificates representing Common Securities will be
deemed to represent beneficial interests in the Debentures having an aggregate
principal amount equal to the stated liquidation amount of, and bearing accrued
and unpaid interest equal to accrued and unpaid Distributions on, such Common
Securities until such certificates are presented to PWG or its agent for
transfer or reissuance.
5. Voting Rights. (a) Except as provided under paragraph 5(b)
below and as otherwise required by law and the Declaration, the Holders of the
Common Securities will have no voting rights.
(b) Holders of Common Securities have the sole right under the
Declaration to increase or decrease the number of Trustees, and to appoint,
remove or replace a Trustee, any such increase, decrease, appointment, removal
or replacement to be approved by Holders of Common Securities representing a
Majority in liquidation amount of the Common Securities.
If any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than in connection
with the distribution of Debentures held by the Property Trustee, upon the
occurrence of a Special Event or a Voluntary Distribution, or in connection with
the redemption of Common Securities as a consequence of a redemption of
Debentures, then the Holders of outstanding Securities will be entitled to vote
on such amendment or proposal as a class and such amendment or proposal shall
not be effective except with the approval of the Holders of Securities
representing 66-2/3% in liquidation amount of such Securities; provided,
however, that (A) if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or the Common Securities,
then only the affected class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of 66-2/3% in liquidation amount of such class of Securities, (B) the
rights of Holders of Common
<PAGE> 93
11
Securities under Article V of the Declaration to increase or decrease the number
of, and to appoint, replace or remove, Trustees shall not be amended without the
consent of each Holder of Common Securities, and (C) amendments to the
Declaration shall be subject to such further requirements as are set forth in
Sections 12.01 and 12.02 of the Declaration.
In the event the consent of the Property Trustee as the holder
of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Property Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination. The
Property Trustee shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of the Securities
voting together as a single class; provided that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures
affected thereby, the Property Trustee may vote only with respect to that
amendment, modification or termination as directed by, in the case of clause (1)
above, the vote of Holders of Securities representing such specified percentage
of the aggregate liquidation amount of the Securities, or, in the case of clause
(2) above, each Holder of Securities affected thereby; and provided, further,
that the Property Trustee shall be under no obligation to take any action in
accordance with the directions of the Holders of the Securities unless the
Property Trustee shall have received, at the expense of the Sponsor, an opinion
of nationally recognized independent tax counsel recognized as an expert in such
matters to the effect that the Trust will not be classified for United States
Federal income tax purposes as an association taxable as a corporation or a
partnership on account of such action and will be treated as a grantor trust for
United States Federal income tax purposes following such action.
Subject to Section 2.06 of the Declaration and the provisions
of this and the next succeeding paragraph, the Holders of a Majority in
liquidation amount of the Common Securities, voting separately as a class, shall
have the right to (A) on behalf of all Holders of Common Securities,
<PAGE> 94
12
waive any past default that is waivable under the Declaration (subject to, and
in accordance with, the Declaration) and (B) direct the time, method and place
of conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee, as holder of
the Debentures, to (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising any
trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default and its consequences that is waivable
under Section 6.06 of the Indenture, or (iii) exercise any right to rescind or
annul a declaration that the principal of all the Debentures shall be due and
payable; provided that where the taking of any action under the Indenture
requires the consent or vote of (1) holders of Debentures representing a
specified percentage greater than a majority in principal amount of the
Debentures or (2) each holder of Debentures affected thereby, the Property
Trustee may take such action only if directed by, in the case of clause (1)
above, the vote of Holders of Common Securities representing such specified
percentage of the aggregate liquidation amount of the Common Securities, or, in
the case of clause (2) above, each Holder of Common Securities affected thereby.
Pursuant to this paragraph, the Property Trustee shall not revoke, or take any
action inconsistent with, any action previously authorized or approved by a vote
of the Holders of the Preferred Securities, and shall not take any action in
accordance with the direction of the Holders of the Common Securities under this
paragraph if the action is prejudicial to the Holders of Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee or the Debenture
Trustee as set forth above, the Property Trustee shall be under no obligation to
take any of the foregoing actions at the direction of the Holders of Common
Securities unless the Property Trustee shall have received, at the expense of
the Sponsor, an opinion of nationally recognized independent tax counsel
recognized as expert in such matters to the effect that the Trust will not be
classified for United States Federal income tax purposes as an association
taxable as a corporation or a partnership on account of such action and will be
treated as a grantor trust for United States income tax purposes following such
action.
<PAGE> 95
13
Notwithstanding any other provision of these terms, each
Holder of Common Securities will be deemed to have waived any Event of Default
with respect to the Common Securities and its consequences until all Events of
Default with respect to the Preferred Securities have been cured, waived by the
Holders of Preferred Securities as provided in the Declaration or otherwise
eliminated, and until all Events of Default with respect to the Preferred
Securities have been so cured, waived by the Holders of Preferred Securities or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Declaration or of the Securities. In the event
that any Event of Default with respect to the Preferred Securities is waived by
the Holders of Preferred Securities as provided in the Declaration, the Holders
of Common Securities agree that such waiver shall also constitute the waiver of
such Event of Default with respect to the Common Securities for all purposes
under the Declaration without any further act, vote or consent of the Holders of
the Common Securities.
A waiver of an Indenture Event of Default by the Property
Trustee at the direction of the Holders of the Preferred Securities will
constitute a waiver of the corresponding Event of Default under the Declaration
in respect of the Securities.
Any required approval of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities of the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
<PAGE> 96
14
No vote or consent of the Holders of Common Securities will be
required for the Trust to redeem and cancel Common Securities in accordance with
the Declaration.
6. Pro Rata Treatment. A reference in these terms of the
Common Securities to any payment, distribution or treatment as being "pro rata"
shall mean pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Preferred Securities pro rata according to the aggregate
liquidation amount of Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
7. Ranking. The Common Securities rank pari passu and payment
thereon will be made pro rata with the Preferred Securities except that where an
Event of Default occurs and is continuing, the rights of Holders of Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption or otherwise are subordinate to the rights of Holders of the
Preferred Securities.
8. Mergers, Consolidations or Amalgamations. The Trust may not
consolidate, amalgamate, merge with or into, or be replaced by, or sell,
transfer or lease all or substantially all its properties and assets to, any
Person.
9. Transfers, Exchanges, Method Payments. Payment of
Distributions and payments on redemption of the Common Securities will be
payable, the transfer of the Common Securities will be registrable, and Common
Securities will be exchangeable for Common Securities of other denominations of
a like aggregate liquidation amount, at the principal corporate trust office of
the Property Trustee in The City of New York; provided that payment of
Distributions may be made at the option of the Regular Trustees on behalf
<PAGE> 97
15
of the Trust by check mailed to the address of the Persons entitled thereto and
that the payment on redemption of any Common Security will be made only upon
surrender of such Common Security to the Property Trustee. Notwithstanding the
foregoing, transfers of Common Securities are subject to conditions set forth in
Section 9.01(c) of the Declaration.
10. Acceptance of Indenture. Each Holder of Common Securities,
by the acceptance thereof, agrees to the provisions of the Indenture and the
Debentures, including the subordination provisions thereof.
11. No Preemptive Rights. The Holders of Common Securities
shall have no preemptive rights to subscribe to any additional Common Securities
or Preferred Securities.
12. Miscellaneous. These terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the Indenture
to a Holder without charge on written request to the Trust at its principal
place of business.
<PAGE> 98
Annex I
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Number: Common Securities:
Certificate Evidencing Common Securities
of
PWG Capital Trust [ ]
[ ]% Common Trust Securities
(liquidation amount $25 per Common Security)
PWG Capital Trust [ ], a business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that Paine Webber Group
Inc. (the "Holder") is the registered owner of common securities of the
Trust representing undivided beneficial interests in the assets of the Trust
designated the "[ ]% Common Trust Securities" (liquidation amount $25 per Common
Security) (the "Common Securities"). The transfer of Common Securities is
registrable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for registration of transfer and satisfaction of the other
conditions set forth in the Declaration (as defined below) including, without
limitation, Section 9.01(c) thereof. The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Declaration of Trust of the Trust
dated as of [ ], as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of Common Securities as
set forth in Exhibit C thereto. The Common Securities and the Preferred
Securities issued by the Trust pursuant to the Declaration represent undivided
beneficial interests in the assets of the Trust, including the Debentures (as
defined in the Declaration) issued by Paine Webber Group Inc., a Delaware
corporation, to the Trust pursuant to the Indenture referred to in the
<PAGE> 99
2
Declaration. The Trust will furnish a copy of the Declaration and the Indenture
to the Holder without charge upon written request to the Trust at its principal
place of business or registered office.
The Holder of this Certificate, by accepting this Certificate,
is deemed to have agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment to
all Senior Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture.
<PAGE> 100
3
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed
this certificate this day of .
PWG Capital Trust [ ],
by_________________________
Name:
Title: Regular Trustee
by_________________________
Name:
Title: Regular Trustee
Dated:
Countersigned and Registered:
The Chase Manhattan Bank, as
Transfer Agent and Registrar
by_____________________________
Authorized Officer
<PAGE> 101
4
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax identification
number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
agent to transfer this Common Security Certificate on the
books of the Trust. The agent may substitute another to act
for him or her.
Date:
------------------------------
Signature:
------------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
<PAGE> 1
EXHIBIT 4.11
================================================================================
PAINE WEBBER GROUP INC.
and
THE CHASE MANHATTAN BANK
as Trustee
----------------------
[ ] SUPPLEMENTAL INDENTURE
Dated as of [ ]
to the
INDENTURE
Dated as of December 9, 1996
----------------------
[ ]% Junior Subordinated Debentures
Due [ ]
================================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
General Terms and Conditions of
the Series [ ]% Debentures
SECTION 1.01.............................................................. 3
SECTION 1.02.............................................................. 3
SECTION 1.03.............................................................. 5
ARTICLE II
Optional Redemption of the Series
[ ]% Debentures
SECTION 2.01.............................................................. 6
SECTION 2.02.............................................................. 6
SECTION 2.03.............................................................. 8
ARTICLE III
Extension of Interest Payment Period
SECTION 3.01.............................................................. 9
SECTION 3.02.............................................................. 10
SECTION 3.03.............................................................. 10
ARTICLE IV
Covenants Applicable to Series [ ]% Debentures
SECTION 4.01.............................................................. 11
SECTION 4.02.............................................................. 11
SECTION 4.03.............................................................. 11
SECTION 4.04.............................................................. 12
ARTICLE V
Form of Series [ ]% Debentures
SECTION 5.01.............................................................. 12
<PAGE> 3
Contents, p. 2
Page
ARTICLE VI
Original Issue of Series [ ]% Debentures
SECTION 6.01............................................................ 25
ARTICLE VII
Miscellaneous Provisions
SECTION 7.01............................................................ 25
SECTION 7.02............................................................ 25
SECTION 7.03............................................................ 25
SECTION 7.04............................................................ 26
<PAGE> 4
[ ] SUPPLEMENTAL INDENTURE, dated as of [ ]
(this "[ ] Supplemental Indenture"), between PAINE
WEBBER GROUP INC., a corporation duly organized and
existing under the laws of the State of Delaware
(hereinafter sometimes referred to as the "Company")
and THE CHASE MANHATTAN BANK, a New York banking
corporation, as trustee (hereinafter sometimes
referred to as the "Trustee") under the Indenture
dated as of December 9, 1996, between the Company and
the Trustee (the "Indenture"); as set forth in
Section 7.01 hereto and except as otherwise set forth
herein, all terms used and not defined herein are
used as defined in the Indenture).
WHEREAS the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of its junior subordinated debentures
(the "Debentures"), said Debentures to be issued from time to time in series as
might be determined by the Company under the Indenture, in an unlimited
aggregate principal amount which may be authenticated and delivered thereunder
as in the Indenture provided;
WHEREAS, pursuant to the terms of the Indenture, the Company desires
to provide for the establishment of a new series of its Debentures to be known
as its [ ]% Junior Subordinated Debentures due [ ] (said series being
hereinafter referred to as the "Series [ ]% Debentures"), the form of such
Series [ ]% Debentures and the terms, provisions and conditions thereof to be as
provided in the Indenture and this [ ] Supplemental Indenture;
WHEREAS the Company has caused to be formed PWG Capital Trust [ ]
(the "Trust") as a business trust under the Business Trust Act of the State of
Delaware (12 Del. Code Sec. 801 et seq.) pursuant to a declaration of trust
dated as of [ ] (the "Original Declaration"), and the filing of a certificate of
trust with the Secretary of State of the State of Delaware on [ ];
WHEREAS the Original Declaration is to be amended and restated in
its entirety pursuant to an Amended and Restated Declaration of Trust dated as
of [ ] (such Amended and Restated Declaration of Trust, as amended from time to
time, the "Declaration of Trust");
<PAGE> 5
2
WHEREAS the Trust desires to issue its [ ]% Preferred Trust
Securities (the "Preferred Securities") and sell such Preferred Securities to
initial purchasers;
WHEREAS, in connection with such purchases of Preferred Securities
and the related purchase by the Company of the Common Securities (as defined in
the Declaration of Trust) of the Trust, the Trust will purchase as trust assets
Series [ ]% Debentures;
WHEREAS, pursuant to the Declaration of Trust, the legal title to
the Series [ ]% Debentures shall be held by and in the name of The Chase
Manhattan Bank or its successor under the Declaration of Trust, as Property
Trustee (the "Property Trustee"), in trust for the benefit of holders of the
Preferred Securities and the Common Securities;
WHEREAS, upon (i) the occurrence of a Special Event (as defined in
the Declaration of Trust), the Regular Trustees (as defined in the Declaration
of Trust) of the Trust shall, unless the Series [ ]% Debentures are redeemed as
described herein, dissolve the Trust and cause to be distributed to the holders
of the Preferred Securities and Common Securities, on a pro rata basis
(determined as provided in the terms of the Preferred Securities and Common
Securities attached as Exhibits B and C to the Declaration of Trust), Series [
]% Debentures; (ii) the occurrence of a Voluntary Distribution (as defined in
the Declaration of Trust), the Regular Trustee shall dissolve the Trust and
cause to be distributed to the holders of the Preferred Securities and the
Common Securities, on such pro rata basis, Series [ ]% Debentures; and (iii) in
connection with a Liquidation Distribution (as defined in the Declaration of
Trust), the Regular Trustees may cause to be distributed to holders of Preferred
Securities and Common Securities, on such pro rata basis, Series [ ]% Debentures
(each a "Dissolution Event"); and
WHEREAS the Company desires and has requested the Trustee to join
with it in the execution and delivery of this [ ] Supplemental Indenture, and
all requirements necessary to make this [ ] Supplemental Indenture a valid
instrument, enforceable in accordance with its terms, and to make the Series [
]% Debentures, when executed by the Company and authenticated and delivered by
the Trustee, the valid obligations of the Company, have been performed and
fulfilled, and the
<PAGE> 6
3
execution and delivery of this Supplemental Indenture and the Series [ ]%
Debentures have been in all respects duly authorized.
NOW, THEREFORE, in consideration of the purchase and acceptance of
the Series [ ]% Debentures by the holders thereof, and for the purpose of
setting forth, as provided in the Indenture, the form of the Series [ ]%
Debentures and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
ARTICLE I
General Terms and Conditions of
the Series [ ]% Debentures
SECTION 1.01. There shall be and is hereby authorized a series of
Debentures designated the "[ ]% Junior Subordinated Debentures Due [ ]", limited
in aggregate principal amount to $[ ]. The Series [ ]% Debentures shall mature
and the principal thereof shall be due and payable, together with all accrued
and unpaid interest thereon, including Compounded Interest (as defined below) on
[ ].
SECTION 1.02. (a) Except as provided in Section 1.02(b), the Series
[ ]% Debentures shall be issued in definitive registered certificated form
without interest coupons. Principal and interest on the Series [ ]% Debentures
issued in certificated form will be payable, the transfer of such Series [ ]%
Debentures will be registrable and such Series [ ]% Debentures will be
exchangeable for Series [ ]% Debentures bearing identical terms and provisions
at the office or agency of the Company in the Borough of Manhattan, The City and
State of New York; provided, however, that payment of interest may be made at
the option of the Company by check mailed to the registered holder at such
address as shall appear in the Debenture register and that the payment of
principal with respect to the Series [ ]% Debentures will only be made upon
surrender of the Series [ ]% Debentures to the Trustee. Notwithstanding the
foregoing, so long as the Property Trustee is the record holder of Series [ ]%
Debentures, the payment of the principal of, and interest (including
<PAGE> 7
4
Compounded Interest, if any) on, the Series [ ]% Debentures held of record by
the Property Trustee will be made by the Company in immediately available funds
on the payment date therefor to the Property Account (as defined in the
Declaration of Trust) established and maintained by the Property Trustee
pursuant to the Declaration of Trust.
(b) In connection with a Dissolution Event:
(i) Series [ ]% Debentures in certificated form in an
aggregate principal amount equal to the aggregate liquidation amount of
all Preferred Securities held in book-entry form may be presented to
the Trustee by the Property Trustee in exchange for a Global Debenture
representing such Series [ ]% Debentures, such Global Debenture to be
registered in the name of the Depositary, or its nominee, and delivered
by the Trustee to the Depositary pursuant to the instructions of the
Regular Trustees (as defined in the Declaration of Trust) for crediting
to the accounts of the Depositary's participants. The Company, upon any
such presentation, shall execute a Global Debenture representing the
Series [ ]% Debentures in such aggregate principal amount and deliver
the same to the Trustee for authentication and delivery in accordance
with the Indenture and this [ ] Supplemental Indenture. Payments on the
Series [ ]% Debentures issued as a Global Debenture will be made to the
Depositary.
(ii) If any Preferred Securities are held in non book-entry
certificated form ("Non Book-Entry Preferred Securities"), Series [ ]%
Debentures in certificated form in an aggregate principal amount equal
to the aggregate liquidation amount of any such Non Book-Entry
Preferred Securities may be presented to the Trustee by the Property
Trustee, and any Preferred Security Certificate (as defined in the
Declaration of Trust) held in non book-entry certificated form will be
deemed to represent beneficial interests in such Series [ ]% Debentures
presented to the Trustee by the Property Trustee having an aggregate
principal amount equal to the aggregate liquidation amount of the Non
Book-Entry Preferred Securities represented by such Preferred Security
Certificate until such Preferred Security Certificate is presented to
the Debenture Registrar for registration of transfer or reissuance, at
which time
<PAGE> 8
5
such Preferred Security Certificate will be canceled and a Series [ ]%
Debenture, registered in the name of the holder of such Preferred
Security Certificate or the transferee of the holder of such Preferred
Security Certificate, as the case may be, with an aggregate principal
amount equal to the aggregate liquidation amount of the Preferred
Security Certificate canceled will be executed by the Company and
delivered to the Trustee for authentication and delivery in accordance
with the Indenture and this [ ] Supplemental Indenture. On issue of
such Series [ ]% Debentures, Series [ ]% Debentures with an equivalent
aggregate principal amount that were presented by the Property Trustee
to the Trustee will be deemed to have been canceled.
SECTION 1.03. Each Series [ ]% Debenture will bear interest at the
rate of [ ]% per annum from [ ] until the principal thereof becomes due and
payable, and on any overdue principal, and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, compounded quarterly, payable (subject to
the provisions of Article III) quarterly in arrears on the [first] day of each
calendar quarter (each, an "Interest Payment Date", commencing on [ ]), to the
Person in whose name such Series [ ]% Debenture (or one or more Predecessor
Debentures) is registered at the close of business on the regular record date
for such interest installment, which, except as set forth below, shall be, in
respect of any Series [ ]% Debentures represented by a Global Debenture or of
which the Property Trustee is the registered holder, the close of business on
the Business Day next preceding the Interest Payment Date with respect to such
interest installment. Notwithstanding the foregoing sentence, if the Preferred
Securities are no longer in book-entry only form or if, pursuant to the
provisions of Section 2.11(c) of the Indenture, the Series [ ]% Debentures are
no longer represented solely by a Global Debenture, the regular record date for
such interest installment shall be the close of business on the fifteenth day of
[the month immediately preceding] the month in which the Interest Payment Date
with respect to such interest installment occurs. Any installment of interest
not punctually paid or duly provided for shall forthwith cease to be payable to
the registered holder of a Series [ ]% Debenture on such regular record date and
may be paid to the
<PAGE> 9
6
Person in whose name such Series [ ]% Debenture (or one or more Predecessor
Debentures) is registered at the close of business on a special record date to
be fixed by the Trustee for the payment of such defaulted interest, notice
whereof to be given to the registered holders of the Series [ ]% Debentures not
less than 10 days prior to such special record date, or may be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Series [ ]% Debentures may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in
the Indenture.
The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months and for any period shorter
than a 30-day period for which interest is computed, the amount of interest
payable will be computed on the basis of the actual number of days elapsed. In
the event that any date on which interest is payable on the Series [ ]%
Debentures is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
ARTICLE II
Optional Redemption of the Series
[ ]% Debentures
SECTION 2.01. Except as provided in Section 2.02, Series [ ]%
Debentures may not be redeemed by the Company prior to [ ]. Subject to the terms
of Article III of the Indenture, the Company shall have the right to redeem the
Series [ ]% Debentures, in whole or in part, at any time or from time to time,
on or after [ ], at a redemption price equal to 100% of the principal amount to
be redeemed plus any accrued and unpaid interest thereon, including Compounded
Interest, if any, to the date of such redemption (the "Optional Redemption
Price"). Any redemption pursuant to this Section will be made upon not less than
30 nor more than 60 days' notice.
<PAGE> 10
7
SECTION 2.02. If, at any time, a Tax Event (as defined below) shall
occur or be continuing and (i) the Regular Trustees and the Company shall have
received an opinion (a "Redemption Tax Opinion") of nationally recognized
independent tax counsel experienced in such matters that, as a result of such
Tax Event, there is more than an insubstantial risk that the Company would be
precluded from deducting the interest on the Series [ ]% Debentures for United
States Federal income tax purposes even if the Series [ ]% Debentures were
distributed to the holders of Preferred Securities and Common Securities in
liquidation of such holders' interest in the Trust as set forth in the
Declaration of Trust or (ii) the Regular Trustees shall have been informed by
such tax counsel that a No Recognition Opinion (as defined below) cannot be
delivered to the Trust, the Company shall have the right, upon not less than 30
or more than 60 days notice, to redeem the Series [ ]% Debentures in whole or in
part for cash at the Optional Redemption Price within 90 days following the
occurrence of such Tax Event; provided, however, that, if at the time there is
available to the Company or the Regular Trustees, on behalf of the Trust, the
opportunity to eliminate, within such 90-day period, such Tax Event by taking
some ministerial action ("Ministerial Action"), such as filing a form or making
an election, or pursuing some other similar reasonable measure that has no
adverse effect on the Trust, the Company or the holders of the Preferred
Securities, then the Company or the Regular Trustees, on behalf of the Trust,
will pursue such measure in lieu of redemption; and provided further that the
Company shall have no right to redeem the Series [ ]% Debentures while the
Regular Trustees, on behalf of the Trust, are pursuing any such Ministerial
Action.
"Tax Event" means that the Regular Trustees and the Company shall
have obtained an opinion of nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that on
or after [ ] as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change (including any announced prospective
change) in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of
<PAGE> 11
8
any legislation and the publication of any judicial decision or regulatory
determination), (c) any interpretation or pronouncement that provides for a
position with respect to such laws or regulations that differs from the
theretofore generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or effective or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after March 11, 1997, there is more than an insubstantial risk that (i) the
Trust, is, or will be within 90 days of the date thereof, subject to United
States Federal income tax with respect to income accrued or received on the
Series [ ]% Debentures, (ii) the Trust is, or will be within 90 days of the date
thereof, subject to more than a de minimis amount of other taxes, duties or
other governmental charges or (iii) interest payable by the Company to the Trust
on the Series [ ]% Debentures is not, or within 90 days of the date thereof will
not be, deductible by the Company for United States Federal income tax purposes.
"No Recognition Opinion" means an opinion of nationally recognized
independent tax counsel experienced in such matters, which opinion may rely on
any then applicable published revenue rulings of the Internal Revenue Service,
to the effect that the holders of the Preferred Securities will not recognize
any gain or loss for United States Federal income tax purposes as a result of a
dissolution of the Trust and distribution of the Series [ ]% Debentures as
provided in the Declaration of Trust.
SECTION 2.03. If the Series [ ]% Debentures are only partially
redeemed pursuant to this Article II, the Series [ ]% Debentures will be
redeemed pro rata or by lot or by any other equitable method chosen by the
Trustee; provided that if, at the time of redemption, any Series [ ]% Debentures
are represented by a Global Debenture, the Depositary shall determine the
principal amount of such Series [ ]% Debentures held by each Debentureholder to
be redeemed in accordance with its customary procedures. Notwithstanding the
foregoing, if a partial redemption of the Series [ ]% Debentures would result in
the delisting of the Preferred Securities by any national securities exchange on
which the Preferred Securities are then listed, the Company shall not be
permitted to effect such partial redemption and will only redeem the Series [ ]%
Debentures in whole.
<PAGE> 12
9
ARTICLE III
Extension of Interest Payment Period
SECTION 3.01. So long as the Company is not in default in the
payment of interest on the Series [ ]% Debentures, the Company shall have the
right, at any time during the term of the Series [ ]% Debentures, from time to
time to extend the interest payment period of the Series [ ]% Debentures for a
period not exceeding 20 consecutive quarterly interest periods (an "Extended
Interest Payment Period"); provided, however, that at the end of any such period
the Company shall pay all interest accrued and unpaid thereon (together with
interest on such accrued and unpaid interest at the rate of [ ]% per annum, to
the extent permitted by applicable law, compounded quarterly ("Compounded
Interest")); and provided, further that an Extended Interest Payment Period may
not extend beyond the maturity of the Series [ ]% Debentures. During any
Extended Interest Payment Period, the Company shall not declare or pay any
dividends on, or redeem, purchase, acquire or make a distribution or liquidation
payment with respect to, any of its common stock or preferred stock or make any
payments on guarantees with respect thereto; provided, however, that the
foregoing restrictions shall not apply to (i) dividends, redemptions, purchases,
acquisitions, distributions or payments made by the Company by way of issuance
of shares of its capital stock, (ii) payments of accrued dividends by the
Company upon the redemption, exchange or conversion of any preferred stock of
the Company as may be outstanding from time to time in accordance with the terms
of such preferred stock or (iii) cash payments made by the Company in lieu of
delivering fractional shares upon the redemption, exchange or conversion of any
preferred stock of the Company as may be outstanding from time to time in
accordance with the terms of such preferred stock. Prior to the termination of
any Extended Interest Payment Period, the Company may pay all or any portion of
the interest accrued on the Series [ ]% Debentures on any Interest Payment Date
to holders of record on the regular record date for such Interest Payment Date
or from time to time further extend such Extended Interest Payment Period;
provided that such Extended Interest Payment Period together with all such
previous and further extensions thereof may not exceed 20 consecutive quarterly
interest periods. Upon the termination of any
<PAGE> 13
10
Extended Interest Payment Period and upon the payment of all accrued and unpaid
interest then due, together with Compounded Interest, the Company may select a
new Extended Interest Payment Period. No interest shall be due and payable
during an Extended Interest Payment Period, except at the end thereof. At the
end of any Extended Interest Payment Period, the Company shall pay all interest
accrued and unpaid on the Series [ ]% Debentures, including any Compounded
Interest, to the holders in whose names the Series [ ]% Debentures are
registered on the Debenture Register on the regular record date for the first
Interest Payment Date occurring at or after the end of the Extended Interest
Payment Period.
SECTION 3.02. (a) So long as the Property Trustee is the sole record
holder of the Series [ ]% Debentures, at the time the Company selects an
Extended Interest Payment Period, the Company shall give both the Property
Trustee and the Trustee written notice of its selection of such Extended
Interest Payment Period at least one Business Day prior to the earlier of (i)
the next succeeding date on which distributions on the Preferred Securities are
payable and (ii) the date on which the Trust is required to give notice of the
record or payment date for such distribution to the New York Stock Exchange (if
the Preferred Securities are then listed thereon) or other applicable
self-regulatory organization or to holders of the Preferred Securities, but in
any event not less than one Business Day prior to such record date. The Company
shall cause the Trust to give notice to the holders of the Preferred Securities
of the Company's selection of such Extended Interest Payment Period.
(b) If as a result of a Dissolution Event, Series [ ]% Debentures
have been distributed to holders of Preferred Securities and Common Securities,
at the time the Company selects an Extended Interest Payment Period, the Company
shall give the holders of the Series [ ]% Debentures and the Trustee written
notice of its selection of such Extended Interest Payment Period at least 10
Business Days prior to the earlier of (i) the next succeeding Interest Payment
Date or (ii) the date the Company is required to give notice of the record or
payment date for such interest payment to the New York Stock Exchange (if the
Series [ ]% Debentures are then listed thereon) or other applicable
self-regulatory organization or to holders of the Series [ ]% Debentures.
<PAGE> 14
11
SECTION 3.03. The calendar quarter in which any notice is given
pursuant to Section 3.02 shall be counted as one of the 20 consecutive quarterly
interest periods permitted in the maximum Extended Interest Payment Period
permitted under this Article III.
ARTICLE IV
Covenants Applicable to Series [ ]% Debentures
SECTION 4.01. So long as any Preferred Securities remain
outstanding, the Company will not declare or pay any dividends on, or redeem,
purchase, acquire or make a distribution or liquidation payment with respect to,
any of its common stock or preferred stock or make any payments on guarantees
with respect thereto if at such time (i) the Company shall be in default with
respect to its Guarantee Payments (as defined in the Guarantee Agreement dated
as of [ ] (the "Guarantee Agreement"), between the Company and The Chase
Manhattan Bank, as Guarantee Trustee) or other payment obligations under the
Guarantee Agreement or (ii) there shall have occurred any Event of Default under
the Indenture with respect to the Series [ ]% Debentures; provided, however,
that the foregoing restrictions shall not apply to (i) dividends, redemptions,
purchases, acquisitions, distributions or payments made by the Company by way of
issuance of shares of its capital stock, (ii) payments of accrued dividends by
the Company upon the redemption, exchange or conversion of any preferred stock
of the Company as may be outstanding from time to time in accordance with the
terms of such preferred stock or (iii) cash payments made by the Company in lieu
of delivering fractional shares upon the redemption, exchange or conversion of
any preferred stock of the Company as may be outstanding from time to time in
accordance with the terms of such preferred stock.
SECTION 4.02. In connection with the distribution of the Series [ ]%
Debentures to the holders of the Preferred Securities upon a Dissolution Event,
the Company will use its best efforts to list such Series [ ]% Debentures on the
New York Stock Exchange or on such other exchange as the Preferred Securities
are then listed.
SECTION 4.03. The Company covenants and agrees for the benefit of
the holders of the Preferred Securities
<PAGE> 15
12
to comply fully with all its obligations and agreements under the Declaration of
Trust, including, without limitation, its obligations under Article IV thereof.
SECTION 4.04. Prior to the distribution of Series [ ]% Debentures to
the holders of Preferred Securities upon a Dissolution Event, the Company
covenants and agrees for the benefit of the holders of the Preferred Securities
(i) to remain the sole direct or indirect owner of all Common Securities issued
by the Trust and not to cause or permit the Common Securities to be transferred
except to the extent permitted by the Declaration of Trust; provided that any
permitted successor of the Company under the Indenture may succeed to the
Company's ownership of such Common Securities and (ii) to use reasonable efforts
to cause the Trust to continue to be treated as a grantor trust for United
States Federal income tax purposes, except in connection with a distribution of
the Series [ ]% Debentures as provided in the Declaration of Trust.
ARTICLE V
Form of Series [ ]% Debentures
SECTION 5.01. The Series [ ]% Debentures and the Trustee's
Certificate of Authentication to be endorsed thereon are to be substantially in
the following forms:
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS A GLOBAL DEBENTURE, INSERT: This Debenture is a
Global Debenture within the meaning of the Indenture hereinafter referred to and
is registered in the name of a Depositary or a nominee of a Depositary. This
Debenture is exchangeable for Debentures registered in the name of a Person
other than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture (other than a
transfer of this Debenture 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) may be registered except in such limited
circumstances.
UNLESS THIS GLOBAL DEBENTURE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY
<PAGE> 16
13
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
DEBENTURE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY, ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No.: $
CUSIP No.: [ ]
PAINE WEBBER GROUP INC.
[ ]% JUNIOR SUBORDINATED DEBENTURE
DUE [ ]
Paine Webber Group Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein referred to as the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to , or
registered assigns, the principal sum of Dollars on [ ] and to pay
interest on said principal sum from [ ], or from the most recent interest
payment date (each such date, an "Interest Payment Date") to which interest has
been paid or duly provided for, quarterly (subject to deferral as set forth
herein) in arrears on the [first] day of each calendar quarter commencing [ ],
at the rate of [ ]% per annum, until the principal hereof shall have become due
and payable, and on any overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum, compounded quarterly. The amount of
interest payable for any period will be computed on the basis of a 360-day year
of twelve 30-day months and for any period shorter than a 30-day period for
which interest is computed, the amount of interest payable will be computed on
the basis of the actual number of days elapsed. In the
<PAGE> 17
14
event that any date on which interest is payable on this Debenture is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture
referred to on the reverse side hereof, be paid to the Person in whose name this
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on the regular record date for such interest installment, which shall
be the close of business on the Business Day next preceding such Interest
Payment Date; provided, however, that if the Preferred Securities are no longer
in book-entry only form or if, pursuant to the provisions of Section 2.11(c) of
the Indenture, the Series [ ]% Debentures are no longer represented solely by a
Global Debenture, the regular record date shall be the close of business on the
fifteenth day of [the month immediately preceding] the month in which such
Interest Payment Date occurs. Any such interest installment not punctually paid
or duly provided for shall forthwith cease to be payable to the registered
holder of this Debenture on such regular record date, and may be paid to the
Person in whose name this Debenture (or one or more Predecessor Debentures) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof to be given
to the registered holders of this series of Debentures not less than 10 days
prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Series [ ]% Debentures may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in the Indenture. The
principal of, and the interest on, this Debenture shall be payable at the office
or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City and State of New York in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the registered holder at
such address as shall appear in the Debenture Register and that
<PAGE> 18
15
the payment of principal will only be made upon the surrender of this Debenture
to the Trustee. Notwithstanding the foregoing, so long as the record holder of
this Debenture is the Property Trustee (as defined in the Indenture), the
payment of the principal of, and interest on, this Debenture will be made to
such account of the Property Trustee as may be designated by the Property
Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness and will rank pari passu with
the Junior Subordinated Debt Securities issued by the Company and sold to PWG
Capital Trust I on December 9, 1996 [,] [and] the Junior Subordinated Debt
Securities issued by the Company and sold to PWG Capital Trust II on March 14,
1997 [,] [and ], and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact, for any and all such
purposes. Each Debentureholder, by his acceptance hereof hereby waives all
notice of the acceptance of the subordination provisions contained herein and in
the Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such Holder upon such
provisions.
Unless the Certificate of Authentication hereon has been executed by
the Trustee referred to on the reverse side hereof, this Debenture shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
<PAGE> 19
16
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Date:
PAINE WEBBER GROUP INC.,
by __________________________________
Name:
Title:
Attest:
______________________________
Secretary
<PAGE> 20
17
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described
in the within-mentioned Indenture.
The Chase Manhattan Bank, The Chase Manhattan Bank,
as Trustee, as Trustee,
by ____________________________________
or as Authentication Agent
by _______________________ by ____________________________________
Authorized Officer Authorized Officer
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debentures of
the Company (herein sometimes referred to as the "Debentures"), all issued or to
be issued in one or more series under and pursuant to an Indenture dated as of
December 9, 1996, duly executed and delivered between the Company and The Chase
Manhattan Bank, a New York banking corporation, as Trustee (herein referred to
as the "Trustee"), as supplemented by the [ ] Supplemental Indenture dated as of
[ ], between the Company and the Trustee (said Indenture as so supplemented
being hereinafter referred to as the "Indenture"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the Debentures, and, to the
extent specifically set forth in the Indenture, the holders of Senior
Indebtedness and Preferred Securities. By the terms of the Indenture, the
Debentures are issuable in series which may vary as to amount, date of maturity,
rate of interest and in other respects as in the Indenture
<PAGE> 21
18
provided. This series of Debentures is designated the [ ]% Junior Subordinated
Debentures due [ ] (the "Series [ ]% Debentures") and is limited in aggregate
principal amount as specified in said [ ] Supplemental Indenture.
Except as provided in the next paragraph, the Series [ ]% Debentures
may not be redeemed by the Company prior to [ ]. The Company shall have the
right to redeem the Series [ ]% Debentures, in whole or in part, at any time or
from time to time on or after [ ] (an "Optional Redemption"), at a redemption
price equal to 100% of the principal amount to be redeemed plus any accrued and
unpaid interest, including any Compounded Interest, thereon to the date of such
redemption. Any redemption pursuant to this paragraph will be made upon not less
than 30 nor more 60 days notice. If the Debentures are only partially redeemed
by the Company pursuant to an Optional Redemption, the Series [ ]% Debentures
will be redeemed pro rata or by lot or by any other equitable method chosen by
the Trustee; provided that if, at the time of redemption, any Series [ ]%
Debentures are represented by a Global Debenture, the Depository shall determine
the principal amount of such Series [ ]% Debentures held by each holder of
Series [ ]% Debentures to be redeemed in accordance with its customary
procedures.
If, at any time, a Tax Event (as defined below) shall occur or be
continuing and, (i) the Regular Trustees and the Company shall have received an
opinion (a "Redemption Tax Opinion") of nationally recognized independent tax
counsel experienced in such matters that, as a result of such Tax Event, there
is more than an insubstantial risk that the Company would be precluded from
deducting the interest on the Series [ ]% Debentures for United States Federal
income tax purposes even if the Series [ ]% Debentures were distributed to the
holders of Preferred Securities and Common Securities in liquidation of such
holders' interest in the Trust as set forth in the Declaration of Trust or (ii)
the Regular Trustees shall have been informed by such tax counsel that No
Recognition Opinion (as defined below) cannot be delivered to the Trust, the
Company shall have the right, upon not less than 30 or more than 60 days notice,
to redeem the Series [ ]% Debentures in whole or in part for cash at the
Optional Redemption Price within 90 days following the occurrence of such Tax
Event; provided, however, that, if at the time
<PAGE> 22
19
there is available to the Company or the Regular Trustees, on behalf of the
Trust, the opportunity to eliminate, within such 90-day period, such Tax Event
by taking some ministerial action ("Ministerial Action"), such as filing a form
or making an election, or pursuing some other similar reasonable measure which
has no adverse effect on the Trust, the Company or the holders of the Preferred
Securities, the Company or the Regular Trustees, on behalf of the Trust, will
pursue such measure in lieu of redemption; and provided further that the Company
shall have no right to redeem the Series [ ]% Debentures while the Regular
Trustees, on behalf of the Trust, are pursuing any such Ministerial Action.
"Tax Event" means that the Regular Trustees and the Company shall
have obtained an opinion of nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that on
or after [ ] as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change (including any announced prospective
change) in, an interpretation or application of any such laws or regulations by
any legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination), (c) any interpretation or pronouncement
that provides for a position with respect to such laws or regulations that
differs from the theretofore generally accepted position or (d) any action taken
by any governmental agency or regulatory authority, which amendment or change is
enacted, promulgated, issued or effective or which interpretation or
pronouncement is issued or announced or which action is taken, in each case on
or after [ ], there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date thereof, subject to United States Federal
income tax with respect to income accrued or received on the Series [ ]%
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges or (iii) interest payable by the Company to the Trust on
the Series [ ]% Debentures is not, or within 90 days of the date thereof will
not be, deductible by the Company for United States Federal income tax purposes.
<PAGE> 23
20
"No Recognition Opinion" means an opinion of nationally recognized
independent tax counsel experienced in such matters, which opinion may rely on
any then applicable published revenue rulings of the Internal Revenue Service,
to the effect that the holders of the Preferred Securities will not recognize
any gain or loss for United States Federal income tax purposes as a result of a
dissolution of the Trust and distribution of the Series 8.08% Debentures as
provided in the Declaration of Trust.
If the Debentures are only partially redeemed by the Company
pursuant to an Optional Redemption or as a result of a Tax Event as described
above, the Debentures will be redeemed pro rata or by lot or by any other
equitable method chosen by the Trustee. Notwithstanding the foregoing, if a
partial redemption of the Series [ ]% Debentures would result in the delisting
of the Preferred Securities by any national securities exchange on which the
Preferred Securities are then listed, the Company shall not be permitted to
effect such partial redemption and will only redeem the Series [ ]% Debentures
in whole.
In the event of redemption of this Debenture in part only, a new
Series [ ]% Debenture or Debentures will be issued for the unredeemed portion
hereof in the name of the holder hereof upon the cancelation of this Debenture.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Series [ ]% Debentures
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of the Series [ ]% Debentures upon compliance by the Company
with certain conditions set forth therein.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the time
outstanding, as defined in Section 8.04 of the Indenture, (and, in the case of
any series of Debentures held as trust assets of a PWG Capital Trust and with
respect to which a Security Exchange has not theretofore occurred, such consent
<PAGE> 24
21
of holders of the Preferred Securities and the Common Securities of such PWG
Capital Trust as may be required under the Declaration of Trust of such PWG
Capital Trust), to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or of modifying in any manner the
rights of the holders of any series of Debentures; provided, however, that no
such supplemental indenture shall (i) extend the fixed maturity of any
Debentures of any series, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any premium
payable upon the redemption thereof, without the consent of the holder of each
Debenture so affected or (ii) reduce the aforesaid percentage of Debentures, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Debenture (and, in the case of any
series of Debentures held as trust assets of a PWG Capital Trust and with
respect to which a Security Exchange has not theretofore occurred, such consent
of the holders of the Preferred Securities and the Common Securities of such PWG
Capital Trust as may be required under the Declaration of Trust of such PWG
Capital Trust) then outstanding and affected thereby. The Indenture also
contains provisions permitting the Holders of a majority in aggregate principal
amount of the Debentures of a series at the time outstanding affected thereby
(subject, in the case of any series of Debentures held as trust assets of a PWG
Capital Trust and with respect to which a Security Exchange has not theretofore
occurred, to such consent of holders of Preferred Securities and Common
Securities of such PWG Capital Trust as may be required under the Declaration of
Trust of such PWG Capital Trust), on behalf of the holders of the Debentures of
such series, to waive any past default in the performance of any of the
covenants contained in the Indenture, or established pursuant to the Indenture
with respect to such series and its consequences, except a default in the
payment of the principal of, or premium, if any, or interest on, any of the
Debentures of such series. Any such consent or waiver by the registered holder
of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Debenture and of any Debenture issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise),
<PAGE> 25
22
irrespective of whether or not any notation of such consent or waiver is made
upon this Debenture.
Subject to Section 13.11 of the Indenture, no reference herein to
the Indenture (other than such Section) and no provision of this Debenture 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 Debenture at the time and place, at the rate and in the money
herein prescribed.
So long as the Company is not in default in the payment of interest
on the Series [ ]% Debentures, the Company shall have the right, at any time
during the term of the Series [ ]% Debentures, from time to time to extend the
interest payment period of the Series [ ]% Debentures for a period not exceeding
20 consecutive quarterly interest periods (an "Extended Interest Payment
Period"); provided, however, that at the end of any such period the Company
shall pay all interest accrued and unpaid thereon, together with any Compounded
Interest; and provided, further that an Extended Interest Payment Period may not
extend beyond the maturity of the Series [ ]% Debentures. During any Extended
Interest Payment Period, the Company shall not declare or pay any dividends on,
or redeem, purchase, acquire or make a distribution or liquidation payment with
respect to, any of its common stock or preferred stock, or make any payments on
guarantees with respect thereto; provided, however, that the foregoing
restrictions shall not apply to (i) dividends, redemptions, purchases,
acquisitions, distributions or payments made by the Company by way of issuance
of shares of its capital stock, (ii) payments of accrued dividends by the
Company upon the redemption, exchange or conversion of any preferred stock of
the Company as may be outstanding from time to time in accordance with the terms
of such preferred stock or (iii) cash payments made by the Company in lieu of
delivering fractional shares upon the redemption, exchange or conversion of any
preferred stock of the Company as may be outstanding from time to time in
accordance with the terms of such preferred stock. Prior to the termination of
any Extended Interest Payment Period, the Company may pay all or any portion of
the interest accrued on the Series [ ]% Debentures on any Interest Payment Date
to holders of record on the regular record date for such Interest Payment Date
or from time to time further extend such Extended Interest Payment Period;
provided that such Extended
<PAGE> 26
23
Interest Payment Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarterly interest periods. Upon the
termination of any Extended Interest Payment Period and upon the payment of all
accrued and unpaid interest then due, together with Compounded Interest, the
Company may select a new Extended Interest Payment Period. No interest shall be
due and payable during an Extended Interest Payment Period, except at the end
thereof. At the end of any Extended Interest Payment Period, the Company shall
pay all interest accrued and unpaid on the Series [ ]% Debentures, including any
Compounded Interest which shall be payable to the holders in whose names the
Series [ ]% Debentures are registered on the Debenture Register on the regular
record date for the first Interest Payment Date occurring on or after the end of
the Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Debenture Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Company
designated for such purpose in the Borough of Manhattan, The City and State of
New York, accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company or the Debenture Registrar duly executed by the
registered holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Series [ ]% Debentures of authorized denominations and
for the same aggregate principal amount will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and any Debenture
Registrar may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and interest due hereon and for all other purposes, and neither
the Company nor the Trustee nor any
<PAGE> 27
24
paying agent nor any Debenture Registrar shall be affected by any notice to the
contrary.
No recourse under or upon any obligation, covenant or agreement of
the Indenture, or of this Debenture, or for any claim based thereon or hereon,
or otherwise in respect thereof or hereof shall be had against any incorporator,
stockholder, officer or director, past, present or future, as such, of the
Company or of any predecessor or successor corporation, either directly or
through the Company or any such predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this
Debenture and the obligations represented hereunder are solely corporate
obligations, and that no such personal liability whatever shall attach to, or is
or shall be incurred by, the incorporators, stockholders, officers or directors,
as such, of the Company or of any predecessor or successor corporation, or any
of them, because of the creation of this indebtedness, or under or by reason of
the obligations covenants or agreements contained in the Indenture or this
Debenture or implied therefrom; and that any and all such personal liability of
every name and nature, either at common law or in equity or by constitution or
statute, and any and all such rights and claims against every such incorporator,
stockholder, officer or director, as such, because of the creation of this
indebtedness, or under or by reason of the obligations, covenants or agreements
contained in the Indenture or in this Debenture or implied therefrom, are hereby
expressly waived and released by the acceptance hereof and as a condition of,
and as a consideration for, the execution of the Indenture and the issuance of
this Debenture.
[IF THE DEBENTURE IS A GLOBAL DEBENTURE INSERT: This Global
Debenture is exchangeable for Debentures in definitive form under certain
limited circumstances set forth in the Indenture.]
The Series [ ]% Debentures are issuable only in registered form
without interest coupons in denominations of $25 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations [IF THE
DEBENTURE IS A GLOBAL DEBENTURE, INSERT: herein and] therein set forth, Series
[ ]% Debentures are exchangeable for a like aggregate principal amount of Series
[ ]% Debentures
<PAGE> 28
25
of a different authorized denomination, as requested by the holder surrendering
the same.
Terms used and not defined in this Debenture shall have the meanings
assigned to them in the Indenture.
ARTICLE VI
Original Issue of Series [ ]% Debentures
SECTION 6.01. Series [ ]% Debentures in the aggregate principal
amount equal to $[ ], may, upon execution of this [ ] Supplemental Indenture, be
executed by the Company and delivered to the Trustee for authentication, and the
Trustee shall thereupon authenticate and make available for delivery said Series
[ ]% Debentures to or upon the written order of the Company, signed by its
Chairman of the Board, its Vice-Chairman of the Board, its President or any Vice
President and by its Treasurer or any Assistant Treasurer or its Controller or
any Assistant Controller or its Secretary or any Assistant Secretary, without
any further action by the Company.
ARTICLE VII
Miscellaneous Provisions
SECTION 7.01. Except as otherwise expressly provided in this [ ]
Supplemental Indenture or in the form of Series [ ]% Debenture or otherwise
clearly required by the context hereof or thereof, all terms used herein or in
said form of Series [ ]% Debenture that are defined in the Indenture shall have
the several meanings respectively assigned to them thereby.
SECTION 7.02. The Indenture, as supplemented by this [ ]
Supplemental Indenture, is in all respects ratified and confirmed. This [ ]
Supplemental Indenture shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.
SECTION 7.03. The recitals herein contained are made by the Company
and not by the Trustee, and the Trustee
<PAGE> 29
26
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this [ ] Supplemental
Indenture.
SECTION 7.04. This [ ] Supplemental Indenture may be executed in any
number of counterparts each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this [ ]
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
PAINE WEBBER GROUP INC.,
by __________________________________
Name:
Title:
Attest:
__________________________
Name:
Title:
<PAGE> 30
27
THE CHASE MANHATTAN BANK, as
Trustee,
by __________________________________
Name:
Title:
Attest:
__________________________
Name:
Title:
<PAGE> 1
EXHIBIT 4.13
GUARANTEE AGREEMENT
OF
PWG Capital Trust [ ]
Dated as of [ ], 19[ ]
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions................................................................. 2
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application................ 5
SECTION 2.02. Lists of Holders of Preferred
Securities.................................. 6
SECTION 2.03. Reports by the Guarantee Trustee................ 6
SECTION 2.04. Periodic Reports to Guarantee
Trustee..................................... 6
SECTION 2.05. Evidence of Compliance with
Conditions Precedent........................ 6
SECTION 2.06. Events of Default; Waiver....................... 7
SECTION 2.07. Disclosure of Information....................... 7
SECTION 2.08. Conflicting Interest............................ 7
ARTICLE III
Powers, Duties and Rights of Guarantee Trustee
SECTION 3.01. Powers and Duties of the Guarantee
Trustee..................................... 7
SECTION 3.02. Certain Rights and Duties of the
Guarantee Trustee........................... 9
SECTION 3.03. Not Responsible for Recitals or
Issuance of Guarantee....................... 12
ARTICLE IV
Guarantee Trustee
SECTION 4.01. Qualifications.................................. 12
SECTION 4.02. Appointment, Removal and Resignation
of Guarantee Trustee........................ 13
ARTICLE V
Guarantee
SECTION 5.01. Guarantee....................................... 14
<PAGE> 3
2
Page
----
SECTION 5.02. Waiver of Notice......................... 14
SECTION 5.03. Obligations Not Affected................. 14
SECTION 5.04. Enforcement of Guarantee ................ 15
SECTION 5.05. Guarantee of Payment..................... 16
SECTION 5.06. Subrogation.............................. 16
SECTION 5.07. Independent Obligations.................. 16
ARTICLE VI
Limitation of Transactions; Subordination
SECTION 6.01. Limitation of Transactions............... 17
SECTION 6.02. Subordination............................ 17
ARTICLE VII
Termination.......................................................... 18
ARTICLE VIII
Limitation of Liability; Indemnification
SECTION 8.01. Exculpation.............................. 18
SECTION 8.02. Indemnification.......................... 19
ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns................... 20
SECTION 9.02. Amendments............................... 20
SECTION 9.03. Notices.................................. 20
SECTION 9.04. Genders.................................. 21
SECTION 9.05. Benefit.................................. 21
SECTION 9.06. Governing Law............................ 21
SECTION 9.07. Counterparts............................. 21
SECTION 9.08. Exercise of Overallotment Option......... 21
<PAGE> 4
GUARANTEE AGREEMENT dated as of [ ], between
Paine Webber Group Inc., a Delaware corporation (the
"Guarantor"), and The Chase Manhattan Bank, a New
York banking corporation, as the initial Guarantee
Trustee (as defined herein) for the benefit of the
Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of PWG
Capital Trust [ ], a Delaware business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration") dated as of [ ], among the trustees named therein,
Paine Webber Group Inc., as Sponsor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer may issue
up to $[ ] aggregate liquidation amount of its [ ]% Preferred Trust Securities
(the "Preferred Securities") representing preferred undivided beneficial
interests in the assets of the Issuer and having the terms set forth in Exhibit
B to the Declaration, of which $[ ] aggregate liquidation amount of Preferred
Securities are being issued as of the date hereof by the Issuer pursuant to the
Underwriting Agreement (as defined in the Declaration); and
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, to pay to the Holders the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the purchase by the
initial purchasers thereof of Preferred Securities, which purchase the Guarantor
hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers
this Guarantee Agreement for the benefit of the Holders from time to time.
<PAGE> 5
2
ARTICLE I
Definitions
(a) Capitalized terms used in this Guarantee Agreement but not
defined in the preamble above have the respective meanings assigned to them in
this Article I.
(b) A term defined anywhere in this Guarantee Agreement has
the same meaning throughout.
(c) All references to "this Guarantee Agreement" are to this
Guarantee Agreement as modified, supplemented or amended from time to time.
(d) All references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified.
(e) A term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires.
(f) A reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer, having the terms set
forth in Exhibit C to the Declaration.
"Covered Person" means any Holder.
"Debentures" means the series of Junior Subordinated
Debentures issued by the Guarantor under the Indenture to the Property Trustee
and entitled the "[ ]% Junior Subordinated Debentures due 20[ ]".
"Distributions" has the meaning set forth in Exhibit B to the
Declaration.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under
<PAGE> 6
3
this Guarantee Agreement; provided, however, that except with respect to such a
default resulting from a failure to pay any Guarantee Payment, such default
shall have continued for more than 30 days.
"Guarantee Payments" shall mean the following Distributions
and other payments, without duplication, with respect to the Preferred
Securities, to the extent not made or paid by the Issuer: (i) any accrued and
unpaid Distributions that are required to be paid on the Preferred Securities,
but only if and to the extent that in each case the Guarantor has made a payment
to the Property Trustee of interest on the Debentures, (ii) the redemption
price, including all accrued and unpaid Distributions to the date of redemption
(the "Redemption Price"), with respect to any Preferred Securities called for
redemption by the Issuer, but only if and to the extent that in each case the
Guarantor has made a payment to the Property Trustee of interest or principal on
the Debentures, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
distribution of Debentures to Holders or the redemption of all the Preferred
Securities upon the maturity or redemption of the Debentures as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Issuer has funds available therefor, and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
upon liquidation of the Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Chase Manhattan Bank until a
Successor Guarantee Trustee has been appointed and accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any entity directly or indirectly controlling
or controlled by or under direct or indirect common control with the Guarantor.
"Indemnified Person" means the Guarantee Trustee,
any Affiliate of the Guarantee Trustee, and any officers,
<PAGE> 7
4
directors, shareholders, members, partners, employees, representatives or agents
of the Guarantee Trustee.
"Indenture" means the Indenture dated as of December 9, 1996,
between the Guarantor and The Chase Manhattan Bank, as trustee, as supplemented
by the [ ] Supplemental Indenture thereto dated as of [ ], pursuant to which the
Debentures are to be issued.
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Liquidation Distribution" has the meaning set forth in the
definition of Guarantee Payments.
"Majority in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class who are the
record owners of Preferred Securities whose aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) represents more than 50% of the aggregate
liquidation amount of all outstanding Preferred Securities.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning set forth in the first
WHEREAS clause above.
"Property Trustee" means the Person acting as Property Trustee
under the Declaration.
"Redemption Price" has the meaning set forth in the definition
of Guarantee Payments.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any officer of the Guarantee Trustee with responsibility for the
administration of this Guarantee Agreement and also means, with respect to a
particular
<PAGE> 8
5
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of, and familiarity with, the particular
subject.
"66-2/3% in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class who are the
record owners of Preferred Securities whose aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) represents 66-2/3% or more of the aggregate
liquidation amount of all outstanding Preferred Securities.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as a Guarantee Trustee under
Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This
Guarantee Agreement is subject to the provisions of the Trust Indenture Act that
are required to be part of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(c) The application of the Trust Indenture Act to this
Guarantee Agreement shall not affect the nature of the Preferred Securities as
equity securities representing preferred undivided beneficial interests in the
assets of the Issuer.
SECTION 2.02. Lists of Holders of Preferred Securities. (a)
The Guarantor shall provide the Guarantee Trustee with such information as is
required under Section 312(a) of the Trust Indenture Act at the times and in the
manner provided in Section 312(a).
<PAGE> 9
6
(b) The Guarantee Trustee shall comply with its obligations
under Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Guarantee Trustee. Within 60 days
after May 15 of each year, the Guarantee Trustee shall provide to the Holders
such reports as are required by Section 313 of the Trust Indenture Act, if any,
in the form, in the manner and at the times provided by Section 313 of the Trust
Indenture Act. The Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to the Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee, the Commission and the
Holders, as applicable, such documents, reports and information as required by
Section 314(a)(1)-(3) (if any) of the Trust Indenture Act and the compliance
certificates required by Section 314(a)(4) and (c) of the Trust Indenture Act,
any such certificates to be provided in the form, in the manner and at the times
required by Section 314(a)(4) and (c) of the Trust Indenture Act (provided that
any certificate to be provided pursuant to Section 314(a)(4) of the Trust
Indenture Act shall be provided within 120 days of the end of each fiscal year
of the Issuer).
SECTION 2.05. Evidence of Compliance with Conditions
Precedent. The Guarantor shall provide the Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Guarantee
Agreement which relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given pursuant to
Section 314(c) of the Trust Indenture Act shall comply with Section 314(e) of
the Trust Indenture Act.
SECTION 2.06. Events of Default; Waiver. (a) Subject to
Section 2.06(b), Holders may, by vote of at least a Majority in liquidation
amount of the Preferred Securities, (A) direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee, or (B) on
behalf of the Holders of all Preferred Securities, waive any past Event of
Default and its consequences. Upon such waiver, any such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Guarantee Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
<PAGE> 10
7
(b) The right of any Holder to receive payment of the
Guarantee Payments in accordance with this Guarantee Agreement, or to institute
suit for the enforcement of any such payment, shall not be impaired without the
consent of each such Holder.
SECTION 2.07. Disclosure of Information. The disclosure of
information as to the names and addresses of the Holders in accordance with
Section 312 of the Trust Indenture Act, regardless of the source from which such
information was derived, shall not be deemed to be a violation of any existing
law or any law hereafter enacted which does not specifically refer to Section
312 of the Trust Indenture Act, nor shall the Guarantee Trustee be held
accountable by reason of mailing any material pursuant to a request made under
Section 312(b) of the Trust Indenture Act.
SECTION 2.08. Conflicting Interest. The Declaration shall be
deemed to be specifically described in this Guarantee Agreement for the purposes
of clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE III
Powers, Duties and Rights of Guarantee Trustee
SECTION 3.01. Powers and Duties of the Guarantee Trustee. (a)
This Guarantee Agreement shall be held by the Guarantee Trustee in trust for the
benefit of the Holders. The Guarantee Trustee shall not transfer its right,
title and interest in this Guarantee Agreement to any Person except a Successor
Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Guarantee Trustee or to a Holder exercising his or her
rights pursuant to Section 5.04. The right, title and interest of the Guarantee
Trustee to this Guarantee Agreement shall vest automatically in each Person who
may hereafter be appointed as Guarantee Trustee in accordance with Article IV.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered.
(b) If an Event of Default occurs and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) This Guarantee Agreement and all moneys received by the
Property Trustee hereunder in respect of the
<PAGE> 11
8
Guarantee Payments will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of or for the benefit of the Guarantee
Trustee or its agents or their creditors.
(d) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, as their names and addresses appear upon the register,
notice of all Events of Default known to the Guarantee Trustee, unless such
Events of Default shall have been cured before the giving of such notice;
provided that, the Guarantee Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders. The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default except any Event of Default as to which the
Guarantee Trustee shall have received written notice or a Responsible Officer
charged with the administration of this Guarantee Agreement shall have obtained
written notice.
(e) The Guarantee Trustee shall not resign as a Trustee unless
a Successor Guarantee Trustee has been appointed and accepted that appointment
in accordance with Article IV.
SECTION 3.02. Certain Rights and Duties of the Guarantee
Trustee. (a) The Guarantee Trustee, before the occurrence of an Event of Default
and after the curing or waiving of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.06(a)),
the Guarantee Trustee shall exercise such of the rights and powers vested in it
by this Guarantee Agreement, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
<PAGE> 12
9
(b) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act or its own wilful misconduct, except
that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all Events of Default that may have occurred;
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement, and the Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement, and no implied covenants or obligations shall be
read into this Guarantee Agreement against the Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case
of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the
Guarantee Trustee, the Guarantee Trustee shall be under a duty
to examine the same to determine whether or not they conform
to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders as provided herein relating to the time,
method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own
<PAGE> 13
10
funds or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers, if it
shall have reasonable ground for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or liability is
not reasonably assured to it.
(c) Subject to the provisions of Section 3.02(a) and (b):
(i) whenever in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part and,
if the Trust is excluded from the definition of Investment Company solely by
reason of Rule 3a-7 under the Investment Company Act ("Rule 3a-7"), subject
to the requirements of Rule 3a-7, request and rely upon a certificate, which
shall comply with the provisions of Section 314(e) of the Trust Indenture
Act, signed by any authorized officer of the Guarantor;
(ii) the Guarantee Trustee (A) may consult with counsel (which
may be counsel to the Guarantor or any of its Affiliates and may include any
of its employees) selected by it in good faith and with due care and the
written advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon and in accordance with such advice and opinion and (B)
shall have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction;
(iii) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it in good faith and with due care;
(iv) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or
<PAGE> 14
11
direction of any Holders, unless such Holders shall have offered to the
Guarantee Trustee reasonable security and indemnity against the costs,
expenses (including attorneys' fees and expenses) and liabilities that might
be incurred by it in complying with such request or direction; provided that
nothing contained in this clause (iv) shall relieve the Guarantee Trustee of
the obligation, upon the occurrence of an Event of Default (which has not
been cured or waived) to exercise such of the rights and powers vested in it
by this Guarantee Agreement, and to use the same degree of care and skill in
such exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs; and
(v) any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders and the signature of the Guarantee Trustee
or its agents alone shall be sufficient and effective to perform any such
action; and no third party shall be required to inquire as to the authority
of the Guarantee Trustee to so act, or as to its compliance with any of the
terms and provisions of this Guarantee Agreement, both of which shall be
conclusively evidenced by the Guarantee Trustee's or its agent's taking such
action.
SECTION 3.03. Not Responsible for Recitals or Issuance of
Guarantee. The recitals contained in this Guarantee Agreement shall be taken as
the statements of the Guarantor and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representations as to the validity or sufficiency of this Guarantee Agreement.
ARTICLE IV
Guarantee Trustee
SECTION 4.01. Qualifications. (a) There shall at all times
be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor;
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers, having a
combined
<PAGE> 15
12
capital and surplus of at least $50,000,000, and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this Section
4.01(a)(ii), the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7 and to the extent Rule 3a-7
requires a trustee having certain qualifications to hold title to the
"eligible assets" (as defined in Rule 3a-7) of the Trust, possess those
qualifications.
If at any time the Guarantee Trustee shall cease to satisfy
the requirements of clauses (i),(ii) and (iii) above, the Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.02. If the Guarantee Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee
Trustee and the Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
SECTION 4.02. Appointment, Removal and Resignation of
Guarantee Trustee. (a) Subject to Section 4.02(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance
with Section 4.02(a) until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.01(a) has been
appointed and has accepted such appointment by written instrument executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the
Guarantee Trustee being removed.
(c) The Guarantee Trustee appointed to office shall hold
office until its successor shall have been appointed and until its removal or
resignation.
(d) The Guarantee Trustee may resign from office (without need
for prior or subsequent accounting) by an instrument (a "Resignation Request")
in writing signed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall take effect upon such delivery or upon
<PAGE> 16
13
such later date as is specified therein; provided, however, that no such
resignation of the Guarantee Trustee shall be effective until: (i) a Successor
Guarantee Trustee possessing the qualifications to act as Guarantee Trustee
under Section 4.01(a) has been appointed and has accepted such appointment by
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee; or (ii) until the assets of the
Trust have been completely liquidated and the proceeds thereof distributed to
the Holders, if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7.
(e) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.02 within 60
days after delivery to the Guarantor of a Resignation Request, the resigning
Guarantee Trustee may petition any court of competent jurisdiction for
appointment of a Successor Guarantee Trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint a Successor
Guarantee Trustee.
ARTICLE V
Guarantee
SECTION 5.01. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer), regardless of
any defense, right of set-off or counterclaim that the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.02. Waiver of Notice. The Guarantor hereby waives
notice of acceptance of this Guarantee Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Issuer or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and, to the extent permitted by law, all other notices and
demands.
SECTION 5.03. Obligations Not Affected. The obligations,
covenants, agreements and duties of the
<PAGE> 17
14
Guarantor under this Guarantee Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest
payment period on the Debentures), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the
Preferred Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstances whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.03 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
<PAGE> 18
15
SECTION 5.04. Enforcement of Guarantee. The Guarantor and the
Guarantee Trustee expressly acknowledge that (i) this Guarantee Agreement will
be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) Holders representing not less than a
Majority in liquidation amount of the Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available in respect of this Guarantee Agreement, including the giving of
directions to the Guarantee Trustee, or exercising any trust or other power
conferred upon the Guarantee Trustee under this Guarantee Agreement, and (iv) if
the Guarantee Trustee fails to enforce this Guarantee Agreement, any Holder may
institute a legal proceeding directly against the Guarantor to enforce its
rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other Person.
Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee
Payment, a Holder of Preferred Securities may directly institute a proceeding
against the Guarantor for enforcement of such Holder's right to receive payment
under the Guarantee. The Guarantor waives any right or remedy to require that
any action be brought first against the Issuer or any other person or entity
before proceeding directly against the Guarantor.
SECTION 5.05. Guarantee of Payment. This Guarantee Agreement
creates a guarantee of payment and not merely of collection. This Guarantee
Agreement will not be discharged except by payment of the Guarantee Payments in
full (without duplication of amounts theretofore paid by the Issuer).
SECTION 5.06. Subrogation. The Guarantor shall be subrogated
to all rights, if any, of the Holders against the Issuer in respect of any
amounts paid to the Holders by the Guarantor under this Guarantee Agreement;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this Guarantee Agreement. If any amount shall be paid to the Guarantor in
violation of the preceding sentence, the Guarantor agrees to hold such amount in
trust for the Holders and to pay over such amount to the Holders.
<PAGE> 19
16
SECTION 5.07. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Preferred Securities and that the Guarantor
shall be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence
of any event referred to in subsections (a) through (g), inclusive, of Section
5.03.
ARTICLE VI
Limitation of Transactions; Subordination
SECTION 6.01. Limitation of Transactions. So long as any
Preferred Securities remain outstanding, the Guarantor will not declare or pay
any dividends on, or redeem, purchase, acquire or make a distribution or
liquidation payment with respect to, any of its common stock or preferred stock
or make any guarantee payment with respect thereto if at such time (i) the
Guarantor shall be in default with respect to its Guarantee Payments or other
payment obligations hereunder, (ii) there shall have occurred any Event of
Default (as defined in the Declaration) or (iii) the Guarantor shall have given
notice of its selection of an Extension Period (as defined in the Indenture) and
such period, or any extension thereof, is continuing; provided, however, that
the foregoing restrictions will not apply to (i) dividends, redemptions,
purchases, acquisitions, distributions or payments made by the Guarantor by way
of issuance of shares of its capital stock, (ii) payments of accrued dividends
by the Guarantor upon the redemption, exchange or conversion of any preferred
stock of the Guarantor as may be outstanding from time to time in accordance
with the terms of such preferred stock or (iii) cash payments made by the
Guarantor in lieu of delivering fractional shares upon the redemption, exchange
or conversion of any preferred stock of the Guarantor as may be outstanding from
time to time in accordance with the terms of such preferred stock. In addition,
so long as any Preferred Securities remain outstanding, the Guarantor (i) will
remain the sole direct or indirect owner of all the outstanding Common
Securities and shall not cause or permit the Common Securities to be transferred
except to the extent such transfer is permitted under Section 9.01(c) of the
Declaration, provided that any permitted successor of the Guarantor under the
Indenture may succeed to the Guarantor's ownership of the Common Securities; and
(ii) will use reasonable efforts to cause the Issuer to continue to be treated
as a grantor trust for United States Federal income
<PAGE> 20
17
tax purposes, except in connection with a distribution of Debentures as provided
in the Declaration.
SECTION 6.02. Subordination. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other indebtedness,
liabilities and obligations of the Guarantor and any guarantees, endorsements or
other contingent obligations of the Guarantor in respect of such indebtedness,
liabilities or obligations, including the Debentures, except those made pari
passu or subordinate by their terms, and (ii) senior to all capital stock now or
hereafter issued by the Guarantor and to any guarantee now or hereafter entered
into by the Guarantor in respect of any of its capital stock. The Guarantor's
obligations under this Guarantee Agreement will rank pari passu with respect to
obligations under other guarantee agreements which it may enter into from time
to time to the extent that such agreements shall be entered into in
substantially the form hereof and provide for comparable guarantees by the
Guarantor of payment on preferred securities issued by other business trusts of
which the Guarantor holds the common securities.
ARTICLE VII
Termination
This Guarantee Agreement shall terminate and be of no further
force and effect upon full payment of the Redemption Price of all Preferred
Securities, or upon the distribution of Debentures to Holders in exchange for
all the Preferred Securities, or upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore payment
of any sums paid with respect to the Preferred Securities or this Guarantee
Agreement.
ARTICLE VIII
Limitation of Liability; Indemnification
SECTION 8.01. Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Guarantor or
any Covered Person for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Indemnified Person
<PAGE> 21
18
in good faith and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Guarantee Agreement or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or wilful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of assets,
liabilities, profits, losses or any other facts pertinent to the existence and
amounts of assets from which Distributions to Holders might properly be paid.
SECTION 8.02. Indemnification. (a) To the fullest extent
permitted by applicable law, the Guarantor shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission performed or omitted by
such Indemnified Person in good faith and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Guarantee Agreement, except that no Indemnified
Person shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by such Indemnified Person by reason of negligence or wilful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Guarantor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 8.02(a).
<PAGE> 22
19
ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns. All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assignees, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or conveyance,
transfer or lease of assets involving the Guarantor that is permitted under
Article Ten of the Indenture, the Guarantor shall not assign its obligations
hereunder.
SECTION 9.02. Amendments. Except with respect to any changes
which do not adversely affect the rights of Holders (in which case no consent of
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than 66-2/3% in liquidation amount of
the Preferred Securities. The provisions of Section 12.02 of the Declaration
concerning meetings of Holders shall apply to the giving of such approval.
SECTION 9.03 Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be in writing,
duly signed by the party giving such notice, and delivered, telecopied or mailed
by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the Holders:
Paine Webber Group Inc.
1285 Avenue of the Americas
New York, New York 10019
Facsimile No.: (212) 713-2116
Attention: General Counsel
<PAGE> 23
20
(b) if given to the Guarantee Trustee, to the address set
forth below or such other address as the Guarantee Trustee may give notice
of to the Holders:
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Facsimile No.: (212) 946-8158
Attention: Corporate Trust Administration
(c) if given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.04. Genders. The masculine, feminine and neuter
genders used herein shall include the masculine, feminine and neuter genders.
SECTION 9.05. Benefit. This Guarantee Agreement is solely for
the benefit of the Holders and, subject to Section 3.01(a), is not separately
transferable from the Preferred Securities.
SECTION 9.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).
SECTION 9.07. Counterparts. This Guarantee Agreement may be
executed in counterparts, each of which shall be an original; but such
counterparts shall together constitute one and the same instrument.
SECTION 9.08. Exercise of Overallotment Option. If and to the
extent that Preferred Securities are issued by the Issuer upon exercise of the
overallotment option referred to in the first WHEREAS clause, the Guarantor
agrees to give prompt notice thereof to the Guarantee
<PAGE> 24
21
Trustee, but the failure to give such notice shall not relieve the Guarantor of
any of its obligations hereunder.
This Guarantee Agreement is executed as of the day and year
first above written.
PAINE WEBBER GROUP INC.,
by
-------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Guarantee Trustee,
by
-------------------------
Name:
Title:
<PAGE> 1
Exhibit 5.1
November 12, 1998
Paine Webber Group Inc.
PWG Capital Trust III
PWG Capital Trust IV
PWG Capital Trust V
Preferred Trust Securities
Ladies and Gentlemen:
We have acted as counsel for Paine Webber Group Inc., a Delaware
corporation (the "Company"), and PWG Capital Trusts III, IV and V, each a
business trust created under the Delaware Business Trust Act of the State of
Delaware (each a "Trust"), in connection with the proposed issuance by each
Trust of its Preferred Trust Securities (the "Preferred Securities"), in each
case pursuant to the terms of its Declaration of Trust dated as of October 7,
1996, in the case of Trusts III and IV, and November 9, 1998, in the case of
Trust V (the "Declaration" of such Trust), as amended and restated by an Amended
and Restated Declaration of Trust (as so amended and restated, the "Amended
Declaration" of such Trust), among the Company, as sponsor, the trustees named
therein and the holders from time to time of undivided beneficial interests in
the assets of such Trust, to be dated as of the date of the initial issuance of
Preferred Securities by such Trust. Pursuant to a Guarantee Agreement (the
"Guarantee Agreement" with respect to such Trust), between the Company and The
Chase Manhattan Bank, as Trustee (the "Guarantee Trustee"), to be dated as of
the date of the initial issuance of Preferred Securities by such Trust, the
Preferred Securities will be guaranteed (the "Guarantees") by the Company with
respect to distributions and payments upon liquidation, redemption or otherwise,
as and to the extent set forth in such Guarantee Agreement. The assets of each
Trust will consist of a series of Junior Subordinated Debt Securities (the
"Junior Subordinated Debentures") of
<PAGE> 2
2
the Company which will be issued under the Indenture dated December 9, 1996 (the
"Base Indenture"), between the Company and The Chase Manhattan Bank, as Trustee
(the "Indenture Trustee"), as supplemented by a Supplemental Indenture with
respect to such series to be entered into by the Company and the Indenture
Trustee (the "Supplemental Indenture" and, together with the Base Indenture,
the "Indenture" with respect to such Trust) as of the date of the initial
issuance of Preferred Securities by such Trust.
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary or appropriate for the
purposes of this opinion, including: (a) the Restated Certificate of
Incorporation of the Company, as amended; (b) the By-laws of the Company; (c)
resolutions adopted by the Board of Directors of the Company on December 9, 1996
and November 4, 1998; (d) the Registration Statement on Form S-3 to be filed
with the Securities and Exchange Commission (the "Commission") on November 12,
1998 with respect to the registration of, among other securities, the Preferred
Securities, the Guarantees and certain backup obligations of the Company and the
Junior Subordinated Debentures (collectively, the "Securities") under the
Securities Act of 1933 (the "Securities Act") (such Registration Statement,
including the form of Prospectus relating to the Securities (the "Prospectus")
and the form of Prospectus Supplement relating to the Preferred Securities (the
"Prospectus Supplement") forming a part thereof, being hereinafter referred to
as the "Registration Statement"); (e) the Certificate of Trust of Trusts III and
IV, each dated October 7, 1996 and each filed with the Secretary of State of the
State of Delaware on October 7, 1996, and the Certificate of Trust of Trust V
dated November 9, l998 and filed with the Secretary of State of the State of
Delaware on November 10, 1998; (f) the Declaration of each Trust; (g) the form
of the Amended Declaration of each Trust; (h) the Base Indenture; (i) the form
of the Supplemental Indenture with respect to each Trust; (j) the form of
Preferred Security attached as Annex I to Exhibit B to the form of the Amended
Declaration of each Trust; (k) the form of Common Security attached as Annex I
to Exhibit C to the form of the Amended Declaration of each Trust; (l) the form
of Guarantee Agreement with respect to each Trust; and (m) the form of Junior
Subordinated Debenture set forth in Article V of the Supplemental Indenture with
respect to each Trust.
<PAGE> 3
3
Based on the foregoing, we are of opinion as follows:
1. Based solely on a certificate from the Secretary of State of the State
of Delaware, the Company is validly existing and in good standing under the laws
of the State of Delaware.
2. When a Guarantee Agreement with respect to a particular Trust has been
duly authorized, executed and delivered by the Company, assuming the due
authorization, execution and delivery thereof by the Guarantee Trustee, such
Guarantee Agreement and the Guarantees with respect to the Preferred Securities
of such Trust 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).
3. When (i) the Supplemental Indenture to be entered into in connection
with the issuance of a particular series of Junior Subordinated Debentures has
been duly authorized, executed and delivered by the Company, assuming the due
authorization, execution and delivery thereof by the Indenture Trustee, (ii) the
specific terms of a series of Junior Subordinated Debentures have been
established in conformity with the Indenture with respect to such Trust and
(iii) such series of Junior Subordinated Debentures has been duly authorized,
executed and delivered by the Company and authenticated in the manner provided
for in such Indenture and delivered against payment therefor as described in the
Prospectus and the applicable Prospectus Supplement, such Junior Subordinated
Debentures will constitute legal, valid and binding obligations of the Company,
entitled to the benefits of such 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
<PAGE> 4
4
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).
We are admitted to practice in the State of New York, and we express no
opinion as to any matters governed by any law other than the law of the State of
New York, the General Corporation Law of the State of Delaware and the Federal
law of the United States of America.
We know that we are referred to, as counsel who has passed upon the
validity of the Guarantees and the Junior Subordinated Debentures, in the
Prospectus relating to the Securities forming a part of the Registration
Statement, as well as to the use of this letter as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Cravath, Swaine & Moore
Paine Webber Group Inc.
1285 Avenue of the Americas
New York, NY 10019
PWG Capital Trust III
1285 Avenue of the Americas
New York, NY 10019
PWG Capital Trust IV
1285 Avenue of the Americas
New York, NY 10019
PWG Capital Trust V
1285 Avenue of the Americas
New York, NY 10019
404A
<PAGE> 1
Exhibit 5.2A
[RICHARDS, LAYTON & FINGER LETTERHEAD]
November 12, 1998
PWG Capital Trust III
c/o Paine Webber Group Inc.
1285 Avenue of the Americas
New York, New York 10019
Re: PWG Capital Trust III
Ladies and Gentlemen:
We have acted as special Delaware counsel for Paine Webber Group Inc., a
Delaware corporation ("Paine Webber") and PWG Capital Trust III, a Delaware
business trust (the "Trust"), in connection with the matters set forth herein.
At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of October 7, 1996
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on October 7, 1996;
(b) The Declaration of Trust of the Trust, dated as of October 7, 1996,
between Paine Webber and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on Form
S-3, including a preliminary prospectus (the "Prospectus"), relating to the %
Preferred Trust Securities of the Trust, representing preferred undivided
beneficial interests in the assets of the Trust (each, a "Preferred Security"
and collectively, the "Preferred Securities"), as filed by Paine Webber, the
Trust and others as set forth therein with the Securities and Exchange
Commission on November 12, 1998;
<PAGE> 2
PWG Capital Trust III
November 12, 1998
Page 2
(d) A form of Amended and Restated Declaration of Trust of the Trust, to
be entered into among Paine Webber, the trustees of the Trust named therein,
and the holders, from time to time, of undivided beneficial interests in the
assets of the Trust (the "Declaration"), filed as an exhibit to the
Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated the date hereof,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are used
as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed above, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to
be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
constitutes the entire agreement among the parties thereto with respect to the
subject matter thereof, including with respect to the creation, operation and
termination of the Trust, and that the Declaration and the Certificate are in
full force and effect and have not been amended, (ii) except to the extent
provided in paragraph 1 below, the due creation or due organization or due
formation, as the case may be, and valid existence in good standing of each
party to the documents examined by us under the laws of the jurisdiction
governing its creation, organization or formation, (iii) the legal capacity of
natural persons who are parties to the documents examined by us, (iv) that each
of the parties to the documents examined by us has the power and authority to
execute and deliver, and to perform its obligations under, such documents, (v)
the due authorization, execution and delivery by all parties thereto of all
documents examined by us, (vi) the receipt by each Person to whom a Preferred
Security is to be issued by the Trust (collectively, the "Preferred Security
Holders") of a Preferred Security Certificate for such Preferred Security and
the payment for the Preferred Security acquired by it, in accordance with the
Declaration and the Registration Statement, and (vii) that the Preferred
Securities are issued and sold to the Preferred Security Holders in accordance
with the Declaration and the Registration Statement. We have not participated in
the preparation of the Registration Statement and assume no responsibility for
its contents.
<PAGE> 3
PWG Capital Trust III
November 12, 1998
Page 3
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal
laws and rules and regulations relating thereto. Our opinions are rendered only
with respect to Delaware laws and rules, regulations and orders thereunder
which are currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del.C.
section 3801, et seq.
2. The Preferred Securities to be issued to the Preferred Security Holders
have been duly authorized by the Declaration and will be duly and validly
issued and, subject to the qualifications set forth in paragraph 3 below, fully
paid and nonassessable undivided beneficial interests in the assets of the
Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust, will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated, pursuant to the Declaration, to (i) provide indemnity
and security in connection with requests or directions to the Property Trustee
to exercise its rights and remedies under the Declaration, (ii) provide
indemnity and security in connection with and pay taxes or governmental charges
arising from transfers of Preferred Securities and the issuance of replacement
Preferred Security Certificates, and (iii) undertake as a party litigant to pay
costs in any suit for the enforcement of any right or remedy under the
Declaration or against the Property Trustee, to the extent provided in the
Declaration.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In addition, we hereby
consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger PA
EAM/DKD/sek
<PAGE> 1
Exhibit 5.2b
[RICHARDS, LAYTON & FINGER LETTERHEAD]
November 12, 1998
PWG Capital Trust IV
c/o Paine Webber Group, Inc.
1285 Avenue of the Americas
New York, New York 10019
Re: PWG Capital Trust IV
Ladies and Gentlemen:
We have acted as special Delaware counsel for Paine Webber Group, Inc., a
Delaware corporation ("Paine Webber") and PWG Capital Trust IV, a Delaware
business trust (the "Trust"), in connection with the matters set forth herein.
At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our examination of
documents has been limited to the examination of originals or copies of the
following:
(a) The Certificate of Trust of the Trust, dated as of October 7, 1996 (the
"Certificate"), as filed in the office of the Secretary of State of the State
of Delaware (the "Secretary of State") on October 7, 1996;
(b) The Declaration of Trust of the Trust, dated as of October 7, 1996,
between Paine Webber and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on Form S-3,
including a preliminary prospectus (the "Prospectus"), relating to the %
Preferred Trust Securities of the Trust, representing preferred undivided
beneficial interests in the assets of the Trust (each, a "Preferred Security"
and collectively, the "Preferred Securities"), as filed by Paine Webber, the
Trust and others as set forth therein with the Securities and Exchange
Commission on November 12, 1998;
<PAGE> 2
PWG Capital Trust IV
November 12, 1998
Page 2
(d) A form of Amended and Restated Declaration of Trust of the Trust, to be
entered into among Paine Webber, the trustees of the Trust named therein, and
the holders, from time to time, of undivided beneficial interests in the assets
of the Trust (the "Declaration"), filed as an exhibit to the Registration
Statement; and
(e) A Certificate of Good Standing for the Trust, dated the date hereof,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are used as
defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other than
the documents listed above, and we have assumed that there exists no provision
in any document that we have not reviewed that bears upon or is inconsistent
with the opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the foregoing
documents, the statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
constitutes the entire agreement among the parties thereto with respect to the
subject matter thereof, including with respect to the creation, operation and
termination of the Trust, and that the Declaration and the Certificate are in
full force and effect and have not been amended, (ii) except to the extent
provided in paragraph 1 below, the due creation or due organization or due
formation, as the case may be, and valid existence in good standing of each
party to the documents examined by us under the laws of the jurisdiction
governing its creation, organization or formation, (iii) the legal capacity of
natural persons who are parties to the documents examined by us, (iv) that each
of the parties to the documents examined by us has the power and authority to
execute and deliver, and to perform its obligations under, such documents, (v)
the due authorization, execution and delivery by all parties thereto of all
documents examined by us, (vi) the receipt by each Person to whom a Preferred
Security is to be issued by the Trust (collectively, the "Preferred Security
Holders") of a Preferred Security Certificate for such Preferred Security and
the payment for the Preferred Security acquired by it, in accordance with the
Declaration and the Registration Statement, and (vii) that the Preferred
Securities are issued and sold to the Preferred Security Holders in accordance
with the Declaration and the Registration Statement. We have not participated in
the preparation of the Registration Statement and assume no responsibility for
its contents.
<PAGE> 3
PWG Capital Trust IV
November 12, 1998
Page 3
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal
laws and rules and regulations relating thereto. Our opinions are rendered only
with respect to Delaware laws and rules, regulations and orders thereunder
which are currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
Section 3801, et seq.
2. The Preferred Securities to be issued to the Preferred Security
Holders have been duly authorized by the Declaration and will be duly and
validly issued and, subject to the qualifications set forth in paragraph 3
below, fully paid and nonassessable undivided beneficial interests in the
assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated, pursuant to the Declaration, to (i) provide indemnity
and security in connection with requests or directions to the Property Trustee
to exercise its rights and remedies under the Declaration, (ii) provide
indemnity and security in connection with and pay taxes or governmental charges
arising from transfers of Preferred Securities and the issuance of replacement
Preferred Security Certificates, and (iii) undertake as a party litigant to pay
costs in any suit for the enforcement of any right or remedy under the
Declaration or against the Property Trustee, to the extent provided in the
Declaration.
We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In addition, we hereby
consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.
Very truly yours,
EAM/DKD/sek
/s/ Richards, Layton & Finger, PA
<PAGE> 1
Exhibit 5.2C
[RICHARDS, LAYTON & FINGER LETTERHEAD]
November 12, 1998
PWG Capital Trust V
c/o Paine Webber Group Inc.
1285 Avenue of the Americas
New York, New York 10019
Re: PWG Capital Trust V
Ladies and Gentlemen:
We have acted as special Delaware counsel for Paine Webber Group Inc., a
Delaware corporation ("Paine Webber") and PWG Capital Trust V, a Delaware
business trust (the "Trust"), in connection with the matters set forth herein.
At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our examination
of documents has been limited to the examination of originals or copies of the
following:
(a) The Certificate of Trust of the Trust, dated as of November 9, 1998
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on November 10, 1998;
(b) The Declaration of Trust of the Trust, dated as of November 9, 1998,
between Paine Webber and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement") on Form S-3,
including a preliminary prospectus (the "Prospectus"), relating to the ___%
Preferred Trust Securities of the Trust, representing preferred undivided
beneficial interests in the assets of the Trust (each, a "Preferred Security"
and collectively, the "Preferred Securities"), as filed by Paine Webber, the
Trust and others as set forth therein with the Securities and Exchange
Commission on November 12, 1998;
<PAGE> 2
PWG Capital Trust V
November 12, 1998
Page 2
(d) A form of Amended and Restated Declaration of Trust of the Trust, to
be entered into among Paine Webber, the trustees of the Trust named therein, and
the holders, from time to time, of undivided beneficial interests in the assets
of the Trust (the "Declaration"), filed as an exhibit to the Registration
Statement; and
(e) A Certificate of Good Standing for the Trust, dated the date hereof,
obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are used
as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other than
the documents listed above, and we have assumed that there exists no provision
in any document that we have not reviewed that bears upon or is inconsistent
with the opinions stated herein. We have conducted no independent factual
investigation of our own but rather have relied solely upon the foregoing
documents, the statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
constitutes the entire agreement among the parties thereto with respect to the
subject matter thereof, including with respect to the creation, operation and
termination of the Trust, and that the Declaration and the Certificate are in
full force and effect and have not been amended, (ii) except to the extent
provided in paragraph 1 below, the due creation or due organization or due
formation, as the case may be, and valid existence in good standing of each
party to the documents examined by us under the laws of the jurisdiction
governing its creation, organization or formation, (iii) the legal capacity of
natural persons who are parties to the documents examined by us, (iv) that each
of the parties to the documents examined by us has the power and authority to
execute and deliver, and to perform its obligations under, such documents, (v)
the due authorization, execution and delivery by all parties thereto of all
documents examined by us, (vi) the receipt by each Person to whom a Preferred
Security is to be issued by the Trust (collectively, the "Preferred Security
Holders") of a Preferred Security Certificate for such Preferred Security and
the payment for the Preferred Security acquired by it, in accordance with the
Declaration and the Registration Statement, and (vii) that the Preferred
Securities are issued and sold to the Preferred Security Holders in accordance
with the Declaration and the Registration Statement. We have not participated in
the preparation of the Registration Statement and assume no responsibility for
its contents.
<PAGE> 3
PWG Capital Trust V
November 12, 1998
Page 3
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
Section 3801, et seq.
2. The Preferred Securities to be issued to the Preferred Security
Holders have been duly authorized by the Declaration and will be duly and
validly issued and, subject to the qualifications set forth in paragraph 3
below, fully paid and nonassessable undivided beneficial interests in the
assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated, pursuant to the Declaration, to (i) provide indemnity
and security in connection with requests or directions to the Property Trustee
to exercise its rights and remedies under the Declaration, (ii) provide
indemnity and security in connection with and pay taxes or governmental charges
arising from transfers of Preferred Securities and the issuance of replacement
Preferred Security Certificates, and (iii) undertake as a party litigant to pay
costs in any suit for the enforcement of any right or remedy under the
Declaration or against the Property Trustee, to the extent provided in the
Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger PA
EAM/DKD/sek
<PAGE> 1
Exhibit 5.3
PaineWebber Group, Inc.
1285 Avenue of the Americas
New York, NY 10019-6028
212 713-2879
Theodore A. Levine
General Counsel
Senior Vice President
Secretary
[PaineWebber Logo]
PaineWebber Incorporated
As the Underwriter named
in Schedule I of the
Underwriting Agreement
1285 Avenue of the Americas
New York, NY 10019
November 12, 1998
$600,000,000
PAINE WEBBER GROUP, INC.
DEBT SECURITIES
Dear Sirs;
I have examined and am familiar with the Restated Certificate of
Incorporation of Paine Webber Group Inc., a Delaware corporation (the
"Company"), and the By-Laws of the Company. I am also familiar with the
corporate proceedings taken by the Company to authorize the 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, 1998 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 $600,000,000.
<PAGE> 2
PaineWebber
-2-
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 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 relating to the Debt Securities forming a part of the Registration
Statement on Form S-3 relating to, among other securities, the Debt Securities
and I hereby consent to such use of my name in the Registration Statement.
Very truly yours,
/S/ Theodore A. Levine
TAL/mas
<PAGE> 1
Exhibit 8.1
[Letterhead of]
CRAVATH, SWAINE & MOORE
[New York Office]
November 12, 1998
Paine Webber Group Inc.
PWG Capital Trust III
Preferred Trust Securities
Dear Ladies and Gentlemen:
We have acted as counsel for Paine Webber Group Inc., a Delaware
corporation (the "Company"), and PWG Capital Trust III, a business trust created
under the Delaware Business Trust Act of the State of Delaware (the "Trust"), in
connection with the proposed issuance by the Trust of Preferred Trust Securities
(the "Preferred Securities") pursuant to the terms of a Declaration of Trust
dated as of October 7, 1996 (the "Declaration"), as amended and restated by an
Amended and Restated Declaration of Trust (as so amended and restated, the
"Amended Declaration"), among the Company, as sponsor, the trustees named
therein and the holders from time to time of undivided beneficial interests in
the assets of the Trust to be dated as of the date of the initial issuance of
Preferred Securities by the Trust. Pursuant to a Guarantee Agreement (the
"Guarantee Agreement"), between the Company and The Chase Manhattan Bank, as
Trustee (the "Guarantee Trustee"), to be dated as of the date of the initial
issuance of Preferred Securities by the Trust, the Preferred Securities will be
guaranteed (the "Guarantee") by the Company with respect to distributions and
payments upon liquidation, redemption or otherwise, as and to the extent set
forth in the Guarantee Agreement. The assets of the Trust will consist of a
series of Junior Subordinated Debt Securities (the "Junior Subordinated
Debentures") of the Company which will be issued under the Indenture (the "Base
Indenture"), entered into by the Company and The
<PAGE> 2
2
Chase Manhattan Bank, as Trustee (the "Indenture Trustee") on December 9, 1996,
as supplemented by a Supplemental Indenture with respect to such series to be
entered into by the Company and the Indenture Trustee (the "Supplemental
Indenture" and, together with the Base Indenture, the "Indenture") as of the
date of the initial issuance of Preferred Securities by the Trust.
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary or appropriate for the
purposes of this opinion, including: (a) the Restated Certificate of
Incorporation of the Company, as amended; (b) the By-laws of the Company; (c)
the Registration Statement on Form S-3 that will be filed with the Securities
and Exchange Commission (the "Commission") on November 12, 1998, with respect to
the registration of the Preferred Securities, the Guarantee and the Junior
Subordinated Debentures (collectively, the "Securities") under the Securities
Act of 1933 (the "Securities Act") (such Registration Statement, including the
form of Prospectus relating to the Securities (the "Prospectus") and the form of
Prospectus Supplement relating to the Preferred Securities (the "Prospectus
Supplement") forming a part thereof, being hereinafter referred to as the
"Registration Statement"); (d) the Certificate of Trust of the Trust dated
October 7, 1996, and filed with the Secretary of State of the State of Delaware
on October 7, 1996, (e) the Declaration; (f) the form of the Amended
Declaration; (g) the Base Indenture; (h) the form of the Supplemental Indenture;
(i) the form of Preferred Security attached as Annex I to Exhibit B to the form
of Amended Declaration; (j) the form of Common Security attached as Annex I to
Exhibit C to the form of Amended Declaration; (k) the form of Guarantee
Agreement; and (l) the form of Junior Subordinated Debenture set forth in
Article V of the Supplemental Indenture.
Based on the foregoing, we are of opinion that the statements set forth in
the Prospectus Supplement under the caption "Taxation", to the extent they
constitute matters of law, accurately describe the material United States
Federal income tax consequences to holders of the ownership and disposition of
the Preferred Securities of the Trust.
We do not express any opinion as to any laws other than the Federal income
tax laws of the United States of America.
We know that we are referred to in the Prospectus Supplement under the
caption "Taxation", and we hereby consent to such use of our name in the
Registration
<PAGE> 3
3
Statement, as well as to the use of this letter as an exhibit to the
Registration Statement.
Very truly yours,
Paine Webber Group Inc.
1285 Avenue of the Americas
New York, NY 10019
PWG Capital Trust III
1285 Avenue of the Americas
New York, NY 10019
WPC7
O
<PAGE> 1
EXHIBIT 23.4
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 Prospectuses of Paine Webber
Group Inc. and PWG Capital Trusts III, IV and V for the registration of
$600,000,000 of Senior Debt Securities, Subordinated Debt Securities and Junior
Subordinated Debt Securities of Paine Webber Group Inc., Preferred Securities of
PWG Capital Trusts III, IV and V and Guarantees of Preferred Securities of PWG
Capital Trusts III, IV and V issued by, and certain backup obligations of Paine
Webber Group Inc., and to the incorporation by reference therein of our report
dated January 30, 1998, with respect to the consolidated financial statements
and schedules of Paine Webber Group Inc. included or incorporated by reference
in its Annual Report (Form 10-K) for the year ended December 31, 1997, filed
with the Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
November 12, 1998
<PAGE> 1
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 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
Paine Webber Group Inc.
(Exact name of obligor as specified in its charter)
Delaware 13-2760086
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1285 Avenue of the Americas
New York, New York 10019
(Address of principal executive offices) (Zip Code)
Senior Debt Securities
Subordinated Debt Securities
Junior Subordinated Debt Securities
(Title of the indenture securities)
<PAGE> 2
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.
<PAGE> 3
- 2 -
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 10th day of November, 1998.
THE CHASE MANHATTAN BANK
By /s/ L. O'Brien
-------------------------------------------
L. O'Brien
Senior Trust Officer
<PAGE> 4
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.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
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
========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
<S> <C>
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 agreements 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
=========
</TABLE>
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 instructions
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> 1
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
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 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for
service)
PWG Capital Trust III
(Exact name of obligor as specified in its charter)
Delaware 13-7099830
(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)
Preferred Securities
(Title of the indenture securities)
<PAGE> 2
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> 3
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 10th day of November, 1998.
THE CHASE MANHATTAN BANK
By /s/ L. O'Brien
--------------------------------
L. O'Brien
Senior Trust Officer
- 3 -
<PAGE> 4
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.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Millions
<S> <C>
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 .................................... $120,281
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
========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
<S> <C>
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 agreements 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
=========
</TABLE>
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 instructions
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> 1
Exhibit 25.3
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 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
PWG CAPITAL TRUST IV
(Exact name of obligor as specified in its charter)
DELAWARE 13-7099831
(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)
--------------------------------------------
PREFERRED SECURITIES
(Title of the indenture securities)
<PAGE> 2
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> 3
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 10th day of November, 1998.
THE CHASE MANHATTAN BANK
By /s/ L. O'Brien
-----------------
/s/ L. O'Brien
Senior Trust Officer
- 3 -
<PAGE> 4
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.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C> <C>
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
========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
LIABILITIES
<S> <C> <C>
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
=========
</TABLE>
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 instructions
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> 1
Exhibit 25.4
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)
--------------------------------------------
PWG CAPITAL TRUST V
(Exact name of obligor as specified in its charter)
DELAWARE APPLIED FOR
(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)
----------------------------------------
PREFERRED SECURITIES
(Title of the indenture securities)
<PAGE> 2
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> 3
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 10th day of November, 1998.
THE CHASE MANHATTAN BANK
By /s/ L. O.Brien
----------------
L. O. Brien
Senior Trust Officer
- 3 -
<PAGE> 4
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.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C> <C>
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
========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
LIABILITIES
<S> <C> <C>
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
=========
</TABLE>
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 instructions
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> 1
Exhibit 25.5
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
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)
----------------------------------------
PREFERRED SECURITIES GUARANTEE
(PWG CAPITAL TRUST III)
(Title of the indenture securities)
<PAGE> 2
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> 3
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 10th day of November, 1998.
THE CHASE MANHATTAN BANK
By /s/ L. O.Brien
----------------------
L. O.Brien
Senior Trust Officer
- 3 -
<PAGE> 4
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.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C> <C>
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
========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
LIABILITIES
<S> <C> <C>
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
=========
</TABLE>
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 instructions
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> 1
Exhibit 25.6
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 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------------------------------
PAINE WEBBER GROUP INC.
(Exact name of obligor as specified in its charter)
DELAWARE 13-2760086
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(Address of principal executive offices) (Zip Code)
PREFERRED SECURITIES GUARANTEE
(PWG CAPITAL TRUST IV)
(Title of the indenture securities)
<PAGE> 2
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> 3
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 10th day of November, 1998.
THE CHASE MANHATTAN BANK
By /s/ L. O'Brien
------------------------
L. O'Brien
Senior Trust Officer
- 3 -
<PAGE> 4
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.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C> <C>
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
========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
LIABILITIES
<S> <C> <C>
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
=========
</TABLE>
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 instructions
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> 1
Exhibit 25.7
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 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------------------------------
PAINE WEBBER GROUP INC.
(Exact name of obligor as specified in its charter)
DELAWARE APPLIED FOR
(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)
PREFERRED SECURITIES GUARANTEE
(PWG CAPITAL TRUST V)
(Title of the indenture securities)
<PAGE> 2
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> 3
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 10th day of November, 1998.
THE CHASE MANHATTAN BANK
By /s/ L. O'Brien
--------------------
L. O'Brien
Senior Trust Officer
- 3 -
<PAGE> 4
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.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C> <C>
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
========
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
LIABILITIES
<S> <C> <C>
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
=========
</TABLE>
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 instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE )DIRECTORS
WILLIAM B. HARRISON, JR.)
-5-
