Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
<PAGE>
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
PaineWebber and UBS
Combining two premier firms serving
private and institutional clients
globally
July 12, 2000
<PAGE>
-----------------------------------------------------------------------------
This presentation contains forward-looking statements. These forward-looking
statements are found in various places throughout this presentation and
include, without limitation, statements concerning the financial conditions,
results of operations and businesses of UBS and PaineWebber and, assuming the
consummation of the merger, a combined UBS and PaineWebber, as well as the
expected timing and benefits of the merger. While these forward-looking
statements represent our judgments and future expectations concerning the
development of our business and the timing and benefits of the merger, a
number of risks, uncertainties and other important factors could cause actual
developments and results to differ materially from our expectations. These
factors include, but are not limited to, those listed in UBS's 1999 Annual
Report on Form 20-F and PaineWebber's 1999 Annual Report on Form 10-K, as well
as the failure of the UBS or PaineWebber stockholders to approve the
transaction; the risk that the UBS and PaineWebber businesses will not be
successfully integrated; the costs related to the transaction; the inability
to obtain, or meet conditions imposed for, governmental approvals for the
transaction; the risk that anticipated synergies will not be obtained or not
obtained within the time anticipated; and other key factors that we have
indicated could adversely affect our businesses and financial performance
contained in our past and future filings and reports, including those with the
United States Securities and Exchange Commission (the "SEC").
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 1]
<PAGE>
Contents
------------------------------------------------------------------------------
The vision Donald Marron 3
Trasaction Summary Marcel Ospel 9
UBS Marcel Ospel 12
PaineWebber Joseph Grano 19
Strategic Rationale
Private Clients Joesph Grano 30
Institutional Clients Markus Granziol 32
Financials Luqman Arnold 37
Share Vision Marcel Ospel/Donald Marron 46
Appendix
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 2]
<PAGE>
The Vision
------------------------------------------------------------------------------
Donald Marron
Chairman and Chief Executive Officer, Paine Webber Group Inc.
Chairman Designate, UBS North America
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 3]
<PAGE>
PaineWebber 2Q flash results(1)
------------------------------------------------------------------------------
o Net revenues $1,411 million
o Pre-tax income(2) $242 million
o Diluted EPS $0.95 per share
o Return on common equity 18.9%
Notes:
1 Excludes J.C. Bradford merger related costs
2 Income before taxes and minority interest
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 4]
<PAGE>
The vision
------------------------------------------------------------------------------
o Said 1990s was "Decade of the individual investor"
-- This decade: the "Decade of the Global Individual"
-- Two perspectives:
1) US trends replicated around the world
2) Increased cross-border investing
o Partnering with the world's largest private bank
o Broader array of products and services for gathering assets of affluent
clients
-- Global capabilities: research, trading, banking and FX
-- Financial strength and capital for new products
-- Banking and lending services
-- Structured products
-- Specialized high net-worth products
Seamless transition for clients and employees
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 5]
<PAGE>
PaineWebber business overview
------------------------------------------------------------------------------
o Most affluent client base among US brokers
-- Average account size 40% higher than closest competitors(1)
o 1999 financial highlights
-- $5.3 billion in net revenues (76% from private clients)
-- $1.0 billion in pretax income (95% derived from US operations)
o Fourth largest private client group in the US
-- 8,554 financial advisors in 385 offices
-- $484 billion in client assets entrusted to the firm
-- $189 billion in fee based assets
-- $73 billion in proprietary assets under management
o Institutional operations
-- Significant position in US institutional and corporate arena
Note:
1 Source: Goldma Sachs Research
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 6]
<PAGE>
A growth firm in a growth industry
------------------------------------------------------------------------------
A $33 trillian investment marketplace (Bar Charts)
[Graphic Omitted, See PDF file]
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 7]
<PAGE>
A powerful strategic fit
------------------------------------------------------------------------------
o The premier global institution serving private clients
o Leading institutional client franchise
o Excellent blend of content and distribution and mutually
enhancing businesses
o Shared business philosophy: commitment to clients' interests and personal
service
o Growth and high quality earnings
-- Top line revenue growth
-- Quality fee-based revenue stream
-- Strong asset growth
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 8]
<PAGE>
Transaction summary
------------------------------------------------------------------------------
Marcel Ospel
Chief Executive Officer, UBS AG
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 9]
<PAGE>
The transaction
------------------------------------------------------------------------------
o Merger of PaineWebber and UBS
o US$73.50 per share; total consideration US$10.8 billion(1)
o 50% cash, 50% shares
o Premium of 47% over PaineWebber's closing price of $49.9375 on
July 10, 2000
o 2000E fully diluted P/E multiple of 18.1x(2)
o Cash EPS accretive in 2001 and growing thereafter
o Recommended unanimously by the Board of PaineWebber and with the
committed support of its two largest shareholders, General Electric and
Yasuda Mutual Life
Notes:
1 Excluding potential consideration for vested options that may be
exercised and employee incentive payments
2 IBES ocnsensus estimates of $4.07 share
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 10]
<PAGE>
Transaction timetable
------------------------------------------------------------------------------
o Recommended by PaineWebber Board of Directors
o PaineWebber shareholders vote to approve transaction
o UBS shareholders vote to approve issue of new shares
o Deal expected to close 4Q 2000
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 11]
<PAGE>
UBS
------------------------------------------------------------------------------
Marcel Ospel
Chief Executive Officer, UBS AG
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 12]
<PAGE>
Second quarter flash results
------------------------------------------------------------------------------
UBS will provide full 2Q financial results on August 22, 2000 as scheduled.
Following are preliminary 2Q results to provide transparency to investors in
light of this transaction.
2Q00 1Q00 2Q00/1Q00 2Q99 2Q00/2Q99
CHF million
------------------------------------------------------------------------------
Adj. Group Post Tax
Profit 2163 2216 -2% 926 134%
------------------------------------------------------------------------------
Notes:
1 2Q00 adjusted for additional US Global Settlement provision of CHF150
million pre-tax
2 2Q99 adjusted for divestments of Swiss Life stake and international
Global Trade Finance totalling CHF1690 million pre-tax
o The best first half ever-results up 82% at the bottom line
o Second quarter very nearly as strong as the record first quarter
o Preliminary indications are that net new money and asset growth are
disappointing
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 13]
<PAGE>
Segmental analysis
------------------------------------------------------------------------------
CHF million 2Q00 1Q00 2Q00/1Q00 2Q99 2Q00/2Q99
Business Unit Pre Tax Profits
===============================================================================
UBS Switzerland 1415 1587 -11% 1063 33%
Private & Corporate Clients 521 492 6% 296 76%
Private Banking 894 1095 -18% 767 17%
UBS Warburg 1175 1319 -11% 438 168%
Corporate & Institutional 1362 1445 -6% 506 169%
Private Equity (UBS Capital) -39 114 9
Private Clients -60 -177 -77
e-services -88 -63 0
UBS Asset Management 103 109 -6% 92 12%
Institutional AM 62 79 -22% 82 -24%
Funds/GAM 41 30 37% 10 310%
Corporate Center 125 -107 -276
===============================================================================
Notes:
1 2Q00 adjusted for additional US Global Settlement provision of CHF150
million pre-tax
2 2Q99 adjusted for divestments of Swiss Life stake and international
Global Trade Finance totalling CHF1690 million pre-tax
o Sustained strong performance in Private & Corporate Clients unit
o Private Banking down 18% on 1Q00 through lower activity levels
o Corporate and Institutional Clients almost matched 1Q00
o Significant improvement in credit loss expense
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 14]
<PAGE>
Strategic vision
------------------------------------------------------------------------------
UBS has been looking to leverage its broad range of content
[GRAPHIC OMITTED]
[ab & 3rd party content]
PaineWebber brings new affluent client franchises in the US
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 15]
<PAGE>
Leading client base in all major wealth centers
------------------------------------------------------------------------------
Proforma UBS Proforma UBS and PaineWebber
assets by client domicile(1) assets by client domicile(1)
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
Source: UBS Group analysis
Note:
1 High Net Worth and Affluent Clients only
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 16]
<PAGE>
UBS facts
------------------------------------------------------------------------------
o Global, integrated investment services firm offering
-- the full range of wealth management, asset management, investment
banking and securities services
-- to the full spectrum of clients
The world's largest private bank
o Top ten financial services firm by market capitalization-- $62 billion
dollars
o Strong credit ratings
S&P AA+
Moody's Aa1
Fitch/IBCA AAA
o Total client assets of US$1 trillion
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 17]
<PAGE>
The world's largest private bank
------------------------------------------------------------------------------
[GRAPHIC OMITTED]
(Bar Chart Client assets (US))
* Includes loans and deposits
** International private clients only
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 18]
<PAGE>
PaineWebber
------------------------------------------------------------------------------
Joseph Grano
President, PaineWebber Incorporated
CEO Designate, UBS Warburg Private Clients Worldwide
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 19]
<PAGE>
PaineWebber organization
------------------------------------------------------------------------------
PaineWebber Group
Private Client Clearing Asset Capital
Services Management Markets
o Strong o Execution and o Mitchell o Consistently
distribution clearing Hutchins Asset top 10 US
capabilities services to Management and equity research
-- over 8,500 correspondent DSI ranking
financial broker-dealers International
advisors Management o Significant
-- over 380 equities
offices o Stock lending o Third-party AuM and fixed income
products of income
US$73 billion franchises
o $484 billion in
client assets o Leader in
mortgage-backed
and asset-
backed
securities
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 20]
<PAGE>
PaineWebber business overview
------------------------------------------------------------------------------
o Most affluent client base among US brokers
-- Average account size 40% higher than closest competitors(1)
o 1999 financial highlights
-- $5.3 billion in net revenues (76% from private clients)
-- $1.0 billion in pretax income (95% derived from US operations)
o Fourth largest private client group in the US
-- 8,554 financial advisors in 385 offices
-- $484 billion in client assets entrusted to the firm
-- $189 billion in fee based assets
-- $73 billion in proprietary assets under management
o Institutional operations
-- Significant position in US institutional and corporate arena
Note:
1 Source: Goldman Sachs Research
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 21]
<PAGE>
A growth firm in a growth industry
------------------------------------------------------------------------------
A $33 trillion investment marketplace
US Household PaineWebber
financial assets ($ trillion) client assets ($ billion)
[GRAPHIC OMITTED, SEE PDF FILE]
Source: Federal Reserve
o A growing share of a growing market
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 22]
<PAGE>
Distinctive focus
------------------------------------------------------------------------------
Focused exclusively on the affluent
1999 investable assets 20003 investable assets
($19.2 trillion) ($31.6 trillion)
[GRAPHIC OMITTED, SEE PDF FILE]
Source: Federal Reserve
Core 7% of households Core 11% of households
= =
Affluent 65% of investable assets Affluent 78% of investable assets
Note: Core Affluent defined as households wiht $5000,000+ in investable
assets
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 23]
<PAGE>
Financial advisor to the affluent
------------------------------------------------------------------------------
[GRAPHIC OMITTED, SEE PDF FILE]
(Bar Graph)
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 24]
<PAGE>
Accelerating asset growth
------------------------------------------------------------------------------
[GRAPHIC OMITTED, SEE PDF FILE]
(Bar Graph)
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 25]
<PAGE>
PaineWebber--Leading e-services innovator
------------------------------------------------------------------------------
Actual personalization versus mass customization
First firm to provide:
o Summary of all accounts in household on homepage (affluent households have
multiple accounts)
o FA influence in client online experience
o Online managed account performance reporting
o Time-weighted performance reporting across all household accounts or
selected portfolios
PaineWebber's e-services enable financial advisor to materially influence
client online experience--content, collaboration, functionality.
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 26]
<PAGE>
Highly rated internet asset gathering portal
------------------------------------------------------------------------------
PaineWebber EDGE: leading internet portal
[GRAPHIC OMITTED, SEE PDF FILE]
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 27]
<PAGE>
Highly productive private client advisors
------------------------------------------------------------------------------
5-Year
CAGR
===========================================================
PaineWebber 8.7%
Smith Barney 8.3%
AG Edwards 7.0%
Merrill Lynch 5.3%
Prudential 3.4%
Morgan Stanley DW 2.5%
===========================================================
o #1 in productivity growth per financial advisor over the last five years
o #3 in productivity per financial advisor
Source: Securities Industry Association
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 28]
<PAGE>
Strong momentum
------------------------------------------------------------------------------
Key financial results(1)
[GRAPHIC OMITTED, SEE PDF FILE]
(Bar Graph)
Note:
1 Excludes one-time charges
2 Before taxes and minority interest
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 29]
<PAGE>
Strategic rationale
------------------------------------------------------------------------------
Private clients
Joseph Grano
President, PaineWebber Incorporated
CEO Designate, UBS Warburg Private Clients Worldwide
Institutional clients
Markus Granziol
Chairman and Chief Executive Officer, UBS Warburg
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 30]
<PAGE>
Premium content for private clients
------------------------------------------------------------------------------
o Leading global research platform
-- UBS #3 in Europe, #3 in Asia and #4 globally(1)
-- PaineWebber #8 overall in the US(1)
-- Over 600 equity analysts, covering over 4000 companies
-- Was 65% coverage of S&P 500, now 90% coverage
-- Was 60% coverage of NASDAQ 100, now 80% coverage
o Leading edge wealth management techniques
o Expertise in the use of technology to enhance relationships
o Access to new issues globally
o Access to private equity, structured product solutions and alternative
investments
o Wider asset management choice--"best of breed"
Note:
1 Institutional Investor Analyst Rankings
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 31]
<PAGE>
Strategic rationale
------------------------------------------------------------------------------
Private clients
Joseph Grano
President, PaineWebber Incorporated
CEO Designate, UBS Warburg Private Clients Worldwide
Institutional clients
Markus Granziol
Chairman and Chief Executive Officer, UBS Warburg
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 32]
<PAGE>
Enhanced service for institutional clients
------------------------------------------------------------------------------
o Powerful US equity distribution franchise
-- will stimulate growth of investment banking business
-- strong "calling card"
o Significant US institutional equities and fixed income franchises
-- quality fixed income research merged with a broader
fixed income product range
-- structured products and derivatives
o Leading global research platform
-- UBS #3 in Europe, #3 in Asia and #4 globally
-- PaineWebber #8 overall in the US
-- Over 600 equity analysts, covering over 4000 companies
-- Was 65% coverage of S&P 500, now 90% coverage
-- Was 60% coverage of NASDAQ 100, now 80% coverage
o Access to new issues globally
o Access to additional capital for client facilitation
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 33]
<PAGE>
Combining leading e-services innovators
------------------------------------------------------------------------------
UBS, as one of the leaders in Europe for developing client-serving
technology...
Servicing the client through the Internet
o Investment Banking Online
o Ranked #1 in Switzerland and #5 in Europe by BlueSky
o European e-services initiative
Understanding and responding to the needs of the New Economy
o Ranked #2 for understanding the "New Economy"(1)
#3 for Best Web Site(1)
Note:
1 Primark Extel survey
... and PaineWebber, a proven leading-edge IT player
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 34]
<PAGE>
PaineWebber contributes global scale...
------------------------------------------------------------------------------
UBS Warburg
"Individual clients"
Corporate & PaineWebber
Instituional Private Clients
UBS Capital UBS Warburg
e-services
Mitchell Hutchins
[] UBS Assets Management
[] PaineWebber Clearing Services
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 35]
<PAGE>
PaineWebber brand and management
------------------------------------------------------------------------------
PaineWebber is a powerful and complementary brand name with "household name"
recognition across the US
-- PaineWebber brand will be retained for private clients in North
America
o All other brands will be unaffected
o Full existing PaineWebber management committee has agreed to continue in
their leadership positions
o PaineWebber Management Committee
-- Joseph Grano, President
-- Mark Sutton, Private Clients
-- Regina Dolan, Chief Administrative Officer
-- Margo Alexander, Mitchell Hutchins
-- Steven Baum, Capital Markets
-- Robert Silver, IT/Ops
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 36]
<PAGE>
Financials
------------------------------------------------------------------------------
Luqman Arnold
Chief Financial Officer, UBS AG
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 37]
<PAGE>
Strategic and financial transparency
------------------------------------------
o UBS listed its global registered shares on the NYSE in May 2000
o Ticker symbol: UBS
o Primary objective to use shares for tax-free mergers in the US
o Explicit as to how we would look at strategic opportunities
-- Strategically obvious
-- Cultural fit
-- Meet financial tests
o Financial tests
-- Cash EPS
-- Cash return on investment > WACC
-- Cash return on invested equity > cost of equity
o Returns on this transaction are attractive. The cultural fit is strong
and the strategic logic is powerful
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 38]
<PAGE>
Financial details
------------------------------------------------------------------------------
Deal structure 50% cash, 50% global registered shares
(tax-free offer)
Offer price per share US$73.50
Exchange ratio 1 PaineWebber share = 0.4954 UBS share =
US$73.50 in cash
Dividends Holders of record of UBS shares as at
9-30-2000 will receive a pro rata interim 2000
dividend All shareholders (including new
shares issued) will receive a 3-month pro rata
2000 dividend
Total
Fully diluted scenario (US$bn)
------------------------------------------------------------------------------
Consideration(1) 12.4
Value of 42.3m new shares issued(2) 6.2
Cash/senior debt 4.7
Financing through Tier 1 preference 1.5
shares
==============================================================================
Notes:
1 Assuming all options exercised
2 Assumed @ CHF240 (US$146) per share
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 39]
<PAGE>
Financial details (continued)
------------------------------------------------------------------------------
US$m pre-tax
==============================================================================
Total incentive costs 875 Stock and cash set aside for key
PaineWebber professionals (over 3 years)
Total restructuring costs 400 Mainly relating to US integration
Annual synergies 425 Approximately 55% revenue, 45% costs
Phased 50% 2001, 100% 2002
Annual utilization of NOLs 100
==============================================================================
Note: Assumed tax rate is 35%
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 40]
<PAGE>
Synergies -- increasing revenues
------------------------------------------------------------------------------
o Increased sales of equity/fixed income products (including structured
products and derivatives) through the PaineWebber distribution system
o Unique global distribution capabilities and broader research coverage
will lead to more mandates for global securities offerings
o Leveraging UBS' private banking products to the high net worth clients of
PaineWebber
o Development of new private banking products for distribution through both
UBS' and PaineWebber's networks
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 41]
<PAGE>
Synergies -- reducing costs
------------------------------------------------------------------------------
o Reduction of financing costs of PaineWebber, benefiting from UBS' ratings
o Additional benefits through UBS' central treasury approach
o Opportunity to accelerate utilization of UBS' NOLs
o Cost savings in vendor management, procurement and some overlap in
operations
o Combined investment spending in e-services
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 42]
<PAGE>
Financial analysis
------------------------------------------------------------------------------
o Premium of 47% over PaineWebber's closing price of $49.9375 on July 10,
2000
o 2000E fully diluted P/E multiple of 18.1x(1)
o Cash EPS accretive in 2001 and growing thereafter
o Return on investment already exceeds weighted average cost of financing
of 6.4% in 2002
o Return on invested equity significantly exceeds cost of group equity in
2002
Note:
1 IBES consensus estimates of $4.09 per share
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 43]
<PAGE>
Positioned for higher market rating
------------------------------------------------------------------------------
Multiples(1) at 1 May 1998 Multiples(2) at 10 July 2000
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
Notes:
1 Based on 1998 estimated earnings
2 Based on 2000 estimated earnings
o Global reach and scale
o Combining premium content with private client and institutional
distribution
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 44]
<PAGE>
Impact on BIS Tier 1 capital ratio
------------------------------------------------------------------------------
o UBS views strong capitalization and ratings as core to its value
proposition
[GRAPHIC OMITTED, SEE PDF FILE]
o Our ratings remain unaffected
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 45]
<PAGE>
Shared vision
------------------------------------------------------------------------------
Marcel Ospel
Chief Executive Officer, UBS AG
Donald Marron
Chairman and Chief Executive Officer, Paine Webber Group Inc.
Chairman Designate, UBS North America
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 46]
<PAGE>
------------------------------------------------------------------------------
"-----------------------------------------------------------------------
Over the past 10 years, we have established PaineWebber as a leading
provider of financial advisory services to the fastest growing segment of
the world's largest market - affluent investors in the United States.
We are confident that these clients will increasingly seek the
diversified product range of a global financial services business and
believe that our merger with UBS will result in a powerful combination
well- positioned to meet those needs. Equally important, the blending of
these two dynamic organizations will provide exciting opportunities for
PaineWebber employees.
This is the right merger, with the right partner, at the right time.
-----------------------------------------------------------------------"
Donald B. Marron
Chairman and CEO, PaineWebber
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 47]
<PAGE>
------------------------------------------------------------------------------
"-----------------------------------------------------------------------
This deal is great news for the clients, employees and shareholders of
both UBS and PaineWebber. The combination of UBS' international reach and
product range with PaineWebber's leading position in the US market for
affluent and high net-worth individuals will create a global investment
services powerhouse.
We are delighted that PaineWebber's Board and executive management as
well as General Electric and Yasuda Mutual Life share our vision for the
future and look forward to welcoming PaineWebber into the UBS Group.
-----------------------------------------------------------------------"
Donald B. Marron
Chairman and CEO, PaineWebber
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 48]
<PAGE>
------------------------------------------------------------------------------
"-----------------------------------------------------------------------
As major shareowners of PaineWebber for five and a half years, we've
watched Donald Marron lead the firm to deliver earnings growth of over
30% per year. Equally impressive has been their growth in client assets
from less than $150 billion to almost $500 billion.
We're pleased with the merger of PaineWebber and UBS, which adds to the
strong global franchise UBS enjoys today, and dramatically increases its
US presence.
-----------------------------------------------------------------------"
John F. Welch, Jr.
Chairman and CEO, General Electric
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 49]
<PAGE>
Further information about proxy materials
------------------------------------------------------------------------------
UBS and PaineWebber will be filing a proxy statement/prospectus and other
relevant documents concerning the merger with the SEC. WE URGE INVESTORS TO
READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE
FILED WITH THE SEC, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors will
be able to obtain the documents free of charge at the SEC's website,
www.sec.gov. In addition, documents filed with the SEC by UBS will be
available free of charge from Investor Relations, UBS, Stockerstrasse 64,
Zurich. Documents filed with the SEC by PaineWebber will be available free of
charge from Assistant Secretary, Geraldine Banyai, 1285 Ave of the Americas,
New York, New York 10019.
PaineWebber and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the security holders of
PaineWebber in favor of the merger. The directors and executive officers of
PaineWebber include the following: D. B. Marron; M. Alexander; S. P. Baum; E.
G. Bewkes, Jr.; R. Braun; R. A. Dolan; F. P. Doyle; J. T. Fadden; J. J. Grano;
J. W. Kinnear; R. N. Kiyono; T. A. Levine; R. M. Loeffler; E. Randall III; H.
Rossovsky; K. Sekiguchi; R. H. Silver; M. B. Sutton; and J. R. Torell.
Collectively, as of February 4, 2000, the directors and executive officers of
PaineWebber may be deemed to beneficially own approximately 4.8% of the
outstanding shares of PaineWebber common stock. Security holders of
PaineWebber may obtain additional information regarding the interests of such
participants by reading the proxy statement/prospectus when it becomes
available.
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 50]
<PAGE>
Appendix
------------------------------------------------------------------------------
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 51]
<PAGE>
PaineWebber business groups
------------------------------------------------------------------------------
o Private Client Group
-- Domestic network of 385 branches, 8,554 financial advisors, more
than 2.5 million customers
-- Provides securities, options, futures, wrap-fee products, insurance
products to individual clients
-- Includes Municipal Securities Group which structures, sells and
trades tax-effective issues for municipal and public agency clients
(ranked #2 in the US)
o Asset Management Group
-- Trades as Mitchell Hutchins Asset Management and DSI International
Management
-- Provides advisory and fund management services to mutual funds,
institutions, pension funds, endowment funds, individuals and trusts
-- Third-party AuM at June 30, 2000 is US$73 billion
o Transaction Services Group
-- Provides execution and clearing services to correspondent
broker-dealers
-- Includes stock lending products
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 52]
<PAGE>
PaineWebber business groups (continued)
------------------------------------------------------------------------------
o Capital Markets Group
-- Research
-- Provides investment advice to individual and institutional
investors
-- Covers approximately 800 companies in 52 industries
-- Consistently ranked in top 10 by US institutional investor
surveys
-- Fixed Income
-- Sales and trading of fixed income products for domestic and
international clients
-- Significant market share in mortgaged-backed and asset-backed
securities
-- Equities
-- Sales and trading of listed and OTC securities
-- Commercial Real Estate
-- Full range of capital market services provided to real estate
clients
-- Investment Banking
-- Provides corporate finance, M&A and corporate services to
targeted industry groups
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 53]
<PAGE>
PaineWebber target segments
------------------------------------------------------------------------------
o Core Affluent Investors--households with >US$500k of investable assets
-- Growth potential of 18% p.a.
-- Looking to secure retirement
-- Aggressively applying technology to provide required level of
service
o Penta-Millionaires--"PaineWebber Vantage"
-- Strong growth potential in excess of 25% p.a.
-- Frequently small business owners
-- Expert wealth management counseling
-- Private equity and alternative investments
-- Advice on charitable donations
o Core Affluent Seniors--"PaineWebber Best
Years"
-- Important market with more modest growth potential at 9% p.a.
-- Estate planning, trusts and long-term care insurance
-- Tax-advantaged instruments
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 54]
<PAGE>
Organization description
------------------------------------------------------------------------------
o PaineWebber will be integrated into the UBS Warburg business group of UBS
o PaineWebber's Private Client group will absorb the existing UBS Warburg
Private Clients business unit and e-services initiative
-- PaineWebber will be responsible for all UBS's onshore Private Client
services globally, outside Switzerland
o PaineWebber's Asset Management group will remain together with the
Private Client group in order to retain their close links
o PaineWebber's Capital Markets group will be fully integrated into UBS
Warburg's Corporate & Institutional Clients business unit
o UBS Capital, UBS Switzerland, UBS Asset Management and UBS Corporate
Center will be unaffected
o On an ongoing basis, segment reporting for UBS Warburg will continue to
be split into four units
-- Corporate & Institutional Clients, UBS Capital, Private Clients and
Asset Management, and e- services
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 55]
<PAGE>
UBS organization
------------------------------------------------------------------------------
UBS GROUP
UBS Switerland UBS Asset UBS Warburg
Management
Private Banking Institutional Corporate and
Asset Institutional
Management clients
Private & Investment Private Clients
Corporate Funds
Clients
GAM e-services
Private Equity
[GRAPHICS OMITTED] [GRAPHIC OMITTED]
[Slide 56]
