-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OYePl2rdbpBr2GWj8Sw5yr4zsG6Y9or+1KLuODIUJEqQnk0EOJPlrDsdeSlOD+O/ PIEDhI83I7aWd/5JxicODw== 0000950123-96-002875.txt : 19960606 0000950123-96-002875.hdr.sgml : 19960606 ACCESSION NUMBER: 0000950123-96-002875 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19960605 EFFECTIVENESS DATE: 19960624 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PAINE WEBBER GROUP INC CENTRAL INDEX KEY: 0000075754 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 132760086 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-05269 FILM NUMBER: 96577203 BUSINESS ADDRESS: STREET 1: 1285 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2127132000 FORMER COMPANY: FORMER CONFORMED NAME: PAINE WEBBER INC DATE OF NAME CHANGE: 19840523 S-8 1 PAINE WEBBER GROUP INC. FORM S-8 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 5, 1996 REGISTRATION STATEMENT NO. 33- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ PAINE WEBBER GROUP INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 13-2760086 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER) INCORPORATION OR ORGANIZATION)
1285 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019 (ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES) ------------------------ PAINE WEBBER GROUP INC. 1994 STOCK AWARD PLAN (FULL TITLE OF THE PLAN) ------------------------ THEODORE A. LEVINE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY PAINE WEBBER GROUP INC. 1285 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019 (212) 713-2879 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ------------------------ CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE - ----------------------------------------------------------------------------------------------------- Common Stock ($1 par value)......... 7,500,000 $21.125 $158,437,500 $54,634 - ----------------------------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------------------------
(1) The aggregate maximum number of shares of Common Stock which may be granted or awarded under the Plan during the following three calendar years (or any part of any such calendar year) during which the Plan is effective. Also being registered pursuant to Rule 416 are such additional indeterminate number of shares of Common Stock as may be required to cover possible antidilution adjustments under the Plan. (2) The calculation is made solely for the purpose of determining the amount of the registration fee and is computed upon the basis of the average of the high and low prices reported in the consolidated reporting system as of June 3, 1996. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents filed with the Commission by the Registrant are incorporated by reference in this Prospectus as of its effective date: a. The Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1995; filed with the Commission on March 29, 1996; b. The Registrant's Quarterly Reprt on Form 10-Q for the quarter ended March 31, 1996; c. The description of the Common Stock set forth in the Registrant's registration statement on Form 8 as filed with the Securities and Exchange Commission, under Section 12 of the Exchange Act, including Amendment No. 4 thereto dated January 30, 1986, and any other amendment or report filed under the Exchange Act for the purpose of updating such description. All documents subsequently filed by the Registrant or the Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing of such documents. The consolidated financial statements and schedules of the Registrant incorporated by reference in the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995 have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such financial statements are, and audited financial statements to be included in subsequently filed documents will be, incorporated herein in reliance upon the reports of Ernst & Young LLP pertaining to such financial statements to the extent covered by consents filed with the Securities and Exchange Commission given upon the authority of such firm as experts in accounting and auditing. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. The legality of the securities offered hereby has been passed upon for the Registrant by Theodore A. Levine, Vice President and General Counsel of Registrant, who owns beneficially 55,888 shares of Registrant's Common Stock (of which 40,575 are Restricted Stock) and options to purchase 144,000 shares of Common Stock. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Reference is made to Section 145 of the General Corporation Law of the State of Delaware which provides for indemnification of directors or officers of a corporation in certain circumstances. Under Article VII of the By-laws of the registrant, filed as Exhibit 3.2 to the Registrant's Registration Statement No. 33-52695 on Form S-3 filed with the Securities and Exchange Commission on October 16, 1995, which Exhibit is incorporated herein by reference, the registrant has the power to and under certain circumstances is required to indemnify its directors or officers. The registrant also maintains directors and officers liability and corporate reimbursement insurance which provides for coverage against loss arising from claims made against directors and officers in their capacity as such. The general scope of coverage is any breach of duty, neglect, error, misstatement, misleading statement or omission. Such policy does not exclude liabilities under the Securities Act of 1933, as amended. The registrant also maintains fiduciary liability insurance for losses in connection with claims made against directors or officers for violation of any of the responsibilities, obligations or duties imposed upon fiduciaries under the Employee Retirement Income Act of 1974 ("ERISA"). 1 3 ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. 4.1 Paine Webber Group Inc. 1994 Stock Award Plan 4.2 Form of Stock Option Agreement 4.3 Form of Restricted Stock Unit Agreement 4.4 Form of Restricted Stock Agreement 5 Opinion of Theodore A. Levine as to Legality of Securities being Registered 23.1 Consent of Ernst & Young LLP 23.2 Consent of Theodore A. Levine (set forth in Exhibit 5 Opinion) 24 Power of Attorney (set forth on the signature pages of this Registration Statement)
ITEM 9. UNDERTAKINGS. (a) 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, represents a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities 2 4 (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-8 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 May 31, 1996. PAINE WEBBER GROUP INC. (Registrant) By /s/ DONALD B. MARRON ------------------------------------ Donald B. Marron Chairman of the Board and Chief Executive Officer 3 5 POWER OF ATTORNEY KNOWN ALL MEN BY THESE PRESENT, that each person whose signature appears below constitutes and appoints DONALD B. MARRON, PIERCE R. SMITH and REGINA A. DOLAN, and each of them (with full power to each of them to act alone), his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and Power of Attorney has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - ------------------------------------------ ----------------------------------- ------------- /s/ DONALD B. MARRON Chairman of the Board, Chief May 31, 1996 - ------------------------------------------ Executive Officer and Director Donald B. Marron (principal executive officer) /s/ REGINA A. DOLAN Vice President and Chief Financial May 31, 1996 - ------------------------------------------ Officer (principal financial and Regina A. Dolan accounting officer) Director May , 1996 - ------------------------------------------ T. Stanton Armour /s/ E. GARRETT BEWKES, JR. Director May 31, 1996 - ------------------------------------------ E. Garrett Bewkes, Jr. /s/ JOHN A. BULT Director May 31, 1996 - ------------------------------------------ John A. Bult /s/ RETO BRAUN Director May 31, 1996 - ------------------------------------------ Reto Braun /s/ FRANK P. DOYLE Director May 31, 1996 - ------------------------------------------ Frank P. Doyle /s/ NAOSHI KIYONO Director May 31, 1996 - ------------------------------------------ Naoshi Kiyono /s/ JOSEPH J. GRANO, JR. Director May 31, 1996 - ------------------------------------------ Joseph J. Grano, Jr. /s/ JOHN E. KILGORE, JR. Director May 31, 1996 - ------------------------------------------ John E. Kilgore, Jr.
4 6
SIGNATURE TITLE DATE - ------------------------------------------ ----------------------------------- ------------- /s/ JAMES W. KINNEAR Director May 31, 1996 - ------------------------------------------ James W. Kinnear /s/ ROBERT M. LOEFFLER Director May 31, 1996 - ------------------------------------------ Robert M. Loeffler /s/ EDWARD RANDALL, III Director May 31, 1996 - ------------------------------------------ Edward Randall, III /s/ HENRY ROSOVSKY Director May 31, 1996 - ------------------------------------------ Henry Rosovsky /s/ YOSHINAO SEKI Director May 31, 1996 - ------------------------------------------ Yoshinao Seki
5 7 EXHIBIT INDEX
SEQUENTIALLY EXHIBIT NUMBERED NUMBER DESCRIPTION PAGE - ------ -------------------------------------------------------------------------- ------------ 4.1 Paine Webber Group Inc. 1994 Stock Award Plan............................. 4.2 Form of Stock Option Agreement............................................ 4.3 Form of Restricted Stock Unit Agreement................................... 4.4 Form of Restricted Stock Agreement........................................ 5 Opinion of Theodore A. Levine as to Legality of Securities being Registered................................................................ 23.1 Consent of Ernst & Young.................................................. 23.2 Consent of Theodore A. Levine (set forth in Exhibit 5 Opinion)............ 24 Power of Attorney (set forth on the signature pages of this Registration Statement)................................................................
EX-4.1 2 1994 STOCK AWARD PLAN 1 EXHIBIT 4.1 PAINE WEBBER GROUP INC. 1994 STOCK AWARD PLAN 2 PAINE WEBBER GROUP INC. 1994 STOCK AWARD PLAN
PAGE ---- 1. Purpose............................................................................. 1 2. Definitions......................................................................... 1 3. Administration...................................................................... 1 (a) Authority of the Committee.................................................... 1 (b) Manner of Exercise of Committee Authority..................................... 1 (c) Limitation of Liability....................................................... 2 4. Stock Subject to Plan............................................................... 2 5. Eligibility......................................................................... 2 6. Specific Terms of Awards............................................................ 2 (a) General....................................................................... 2 (b) Options....................................................................... 2 (c) Stock Appreciation Rights..................................................... 3 (d) Restricted Stock.............................................................. 3 (e) Restricted Units.............................................................. 4 (f) Bonus Stock and Awards in Lieu of Cash Obligations............................ 4 (g) Dividend Equivalents.......................................................... 5 (h) Other Stock-Based Awards...................................................... 5 7. Certain Provisions Applicable to Awards............................................. 5 (a) Stand-Alone, Additional, Tandem, and Substitute Awards........................ 5 (b) Performance Conditions........................................................ 5 (c) Term of Awards................................................................ 5 (d) Form and Timing of Payment Under Awards; Deferrals............................ 5 8. General Provisions.................................................................. 6 (a) Compliance With Legal and Other Requirements.................................. 6 (b) Limits on Transferability; Beneficiaries...................................... 6 (c) Adjustments................................................................... 6 (d) Taxes......................................................................... 7 (e) Changes to the Plan and Awards................................................ 7 (f) Limitation on Rights Conferred Under Plan..................................... 7 (g) Unfunded Status of Awards; Creation of Trusts................................. 7 (h) Nonexclusivity of the Plan.................................................... 7 (i) Payments in the Event of Forfeitures; Fractional Shares....................... 7 (j) Governing Law................................................................. 8 (k) Effective Date................................................................ 8
3 PAINE WEBBER GROUP INC. 1994 STOCK AWARD PLAN 1. Purpose. The purpose of this 1994 Stock Award Plan (the "Plan") is to assist Paine Webber Group Inc. ("PaineWebber") and its subsidiaries in attracting, retaining, and rewarding high-quality employees, enabling such employees to acquire or increase a proprietary interest in PaineWebber in order to strengthen the mutuality of interests between such employees and PaineWebber's stockholders, and providing such employees with performance incentives to expend their maximum efforts in the creation of long-term stockholder value. 2. Definitions. The definitions of awards under the Plan, including Options, SARs (including Limited SARS), Restricted Stock, Restricted Units, Stock granted as a bonus or in lieu of other awards, Dividend Equivalents, and Other Stock-Based Awards are set forth in Section 6 of the Plan. Such awards, together with any other right or interest granted to a Participant under the Plan, are termed "Awards." The following additional terms shall be defined as set forth below: (a) "Board" shall mean PaineWebber's Board of Directors. (b) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions and regulations thereto. (c) "Committee" shall mean the Compensation Committee of the Board of Directors of PaineWebber or such other Board committee as may be designated by the Board to administer the Plan. (d) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time, including rules thereunder and successor provisions and regulations thereto. (e) "Fair Market Value" shall mean the fair market value of Stock, Awards, or other property as determined by the Committee or under procedures established by the Committee. Unless otherwise determined by the Committee, the Fair Market Value of Stock as of any given date shall be the mean between the high and low sales prices of Stock on the stock exchange or market on which Stock is primarily traded on the date as of which such value is being determined or, if there shall be no sale on that date, then on the basis of the average of the means between the high and low sales prices of Stock on the nearest date before and the nearest date after the date on which such value is being determined. (f) "ISO" shall mean any Option intended to be and designated as an incentive stock option within the meaning of Section 422 of the Code. (g) "Participant" shall mean a person who, as an employee of PaineWebber or a subsidiary, has been granted an Award under the Plan. (h) "Stock" shall mean PaineWebber's Common Stock, par value $1.00 per share, and such other securities as may be substituted (or resubstituted) for Stock pursuant to Section 4. (i) "PaineWebber" shall mean Paine Webber Group Inc. 3. Administration. (a) Authority of the Committee. The Plan shall be administered by the Committee, no member of which shall be eligible to participate in the Plan. The Committee shall have full and final authority, in each case subject to and consistent with the provisions of the Plan, to select Participants, grant Awards, determine the type, number, and other terms and conditions of, and all other matters relating to, Awards, prescribe Award agreements (which need not be identical for each Participant) and rules and regulations for the administration of the Plan, construe and interpret the Plan and Award agreements and correct defects, supply omissions, or reconcile inconsistencies therein, and to make all other decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan. (b) Manner of Exercise of Committee Authority. Any action of the Committee shall be final, conclusive, and binding on all persons, including PaineWebber, its subsidiaries, Participants, persons 4 claiming rights from or through a Participant, and stockholders. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. The Committee may delegate to officers or managers of PaineWebber or any subsidiary, or committees thereof, the authority, subject to such terms as the Committee shall determine, to perform administrative functions and such other functions as the Committee may determine. (c) Limitation of Liability. The Committee may appoint agents to assist it in administering the Plan. The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or employee of PaineWebber or a subsidiary, PaineWebber's independent certified public accountants, consultants or any other agent assisting in the administration of the Plan. Members of the Committee and any officer or employee of PaineWebber or a subsidiary acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by PaineWebber with respect to any such action or determination. 4. Stock Subject to Plan. Subject to adjustment as provided in Section 8(c), the total number of shares of Stock reserved and available for issuance in connection with Awards under the Plan in each calendar year during any part of which the Plan is in effect shall be 3,750,000; provided that such number shall be increased in any calendar year by the number of shares of Stock which were available in such previous calendar years but which are neither subject to outstanding Awards nor were previously delivered to a Participant in settlement of Awards. Notwithstanding anything to the contrary, no more than 5,000,000 shares of Stock shall be available for grants of ISOs or Stock Appreciation Rights in tandem with ISOs. When Awards are granted and while they are outstanding, shares relating to an Award will be counted against the limitation set forth in this Section 4. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute awards), and make adjustments if the number of shares actually distributed differs from the number of shares previously counted in connection with an Award. Shares subject to an Award that is forfeited or settled in cash or otherwise terminated without a distribution of shares to the Participant, including shares withheld in payment of taxes relating to Awards and the number of shares equal to the number of shares surrendered in payment of the exercise price of Options (or any other Awards in the nature of purchase rights) or taxes relating to Awards, will again be available for Awards under the Plan. Any shares delivered under the Plan may consist, in whole or in part, of authorized and unissued shares or treasury shares. 5. Eligibility. All salaried employees of PaineWebber and its subsidiaries are eligible to be granted Awards under the Plan. 6. Specific Terms of Awards. (a) General. Awards may be granted on the terms and conditions set forth in this Section 6. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 8(e)), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of employment by the Participant. The Committee shall retain full power to accelerate or waive, at any time, any term or condition of an Award that is not mandatory under the Plan. Except in cases in which the Committee is specifically authorized to require other forms of consideration by the Plan, or to the extent other forms of consideration must be paid to satisfy the requirements of the Delaware General Corporation Law, only services may be required as consideration for the grant (but not the exercise) of any Award. (b) Options. The Committee is authorized to grant Options to Participants on the following terms and conditions: (i) Exercise Price. The exercise price per share of Stock purchasable under an Option shall be determined by the Committee, provided that such exercise price shall be not less than the Fair 2 5 Market Value of a share on the date of grant of such Option except as provided under Section 7(a) hereof. (ii) Time and Method of Exercise. The Committee shall, at the date of grant or thereafter, determine the time or times at which or the circumstances under which an Option may be exercised in whole or in part, the methods by which such exercise price may be paid or deemed to be paid, the form of such payment, including, without limitation, cash, Stock, other Awards or awards issued under other PaineWebber plans, or other property (including notes or other contractual obligations of Participants to make payment on a deferred basis, such as through "cashless exercise" arrangements, to the extent permitted by applicable law), and the methods by or forms in which Stock will be delivered or deemed to be delivered to Participants. (iii) ISOs. The terms of any ISO granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code, including but not limited to the requirements that no ISO shall be granted more than ten years after the effective date of the Plan, no ISO shall be exercisable more than ten years after the date of grant, and ISOs shall not be transferable otherwise than by will or the laws of descent and distribution and shall be exercisable, during the Participant's lifetime, only by the Participant. (c) Stock Appreciation Rights. The Committee is authorized to grant Stock Appreciation Rights ("SARs") to Participants on the following terms and conditions: (i) Right to Payment. An SAR shall confer on the Participant to whom it is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of Stock on the date of exercise (or, if the Committee shall so determine in the case of any such right other than one related to an ISO, the Fair Market Value of one share at any time during a specified period before or after the date of exercise, or, in the case of a "Limited SAR" the Fair Market Value determined by reference to amounts paid or payable in connection with a change in control of PaineWebber, as specified by the Committee), over (B) the grant price of the SAR as determined by the Committee as of the date of grant of the SAR. (ii) Other Terms. The Committee shall, at the date of grant or thereafter, determine the time or times at which and the circumstances under which an SAR may be exercised in whole or in part, the method of exercise, method of settlement, form of consideration payable in settlement, method by or forms in which Stock will be delivered or deemed to be delivered to Participants, whether or not an SAR shall be in tandem or in combination with any other Award, and any other terms and conditions of any SAR. Limited SARs that may only be exercised in connection with a change in control or other event as specified by the Committee may be granted on such terms, not inconsistent with this Section 6(c), as the Committee may determine. Limited SARs may be either freestanding or in tandem with other Awards. (d) Restricted Stock. The Committee is authorized to grant Restricted Stock to Participants on the following terms and conditions: (i) Issuance and Restrictions. Restricted Stock shall be subject to such restrictions on transferability and other restrictions, if any, as the Committee may impose, which restrictions may lapse separately or in combination at such times, under such circumstances, in such installments, or otherwise, as the Committee may determine at the date of grant or thereafter. Except to the extent restricted under the terms of the Plan and any Award agreement relating to the Restricted Stock, a Participant granted Restricted Stock shall have all of the rights of a stockholder including, without limitation, the right to vote Restricted Stock and the right to receive dividends thereon. During the restricted period applicable to the Restricted Stock, subject to Section 8(b) below, the Restricted Stock may not be sold, transferred, pledged, margined or otherwise encumbered by the Participant. (ii) Forfeiture. Except as otherwise determined by the Committee, upon termination of employment during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited and reacquired by PaineWebber; provided that the Committee may 3 6 provide, by rule or regulation or in any Award agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Restricted Stock. (iii) Certificates for Stock. Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Stock are registered in the name of the Participant, the Committee may require such certificates to bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock, with PaineWebber to retain physical possession of the certificates and/or the Participant to deliver a stock power to PaineWebber, endorsed in blank, relating to the Restricted Stock. (iv) Dividends. Unless otherwise determined by the Committee, Stock distributed in connection with a Stock split or Stock dividend, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed. As a condition to the grant of an Award of Restricted Stock, the Committee may require that any cash dividends paid on a share of Restricted Stock be automatically reinvested in additional shares of Restricted Stock or applied to the purchase of additional Awards under the Plan. (e) Restricted Units. The Committee is authorized to grant Restricted Units ("RUs") to Participants which are rights to receive stock, cash or a combination thereof at the end of a specified deferral period, subject to the following terms and conditions: (i) Award and Restrictions. Satisfaction of an RU Award will occur upon expiration of the deferral period specified for an Award of RUs by the Committee (or, if permitted by the Committee, as elected by the Participant). In addition, RUs shall be subject to such restrictions as the Committee may impose, if any, which restrictions may lapse at the expiration of the deferral period or at earlier specified times, separately or in combination, in installments, or otherwise, as the Committee may determine. RU Awards may be satisfied by delivery of Stock, cash equal in value to the Fair Market Value of Stock covered by the RU Award, or a combination thereof, as determined by the Committee at the date of grant or thereafter. (ii) Forfeiture. Except as otherwise determined by the Committee, upon termination of employment (as determined under criteria established by the Committee) during the applicable deferral period or portion thereof to which forfeiture conditions apply (as provided in the Award agreement evidencing the RUs), all RUs that are at that time subject to deferral (other than a deferral at the election of the Participant) shall be forfeited; provided that the Committee may provide, by rule or regulation or in any Award agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to RUs will be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of RUs. (iii) Dividend Equivalents. Unless otherwise determined by the Committee at date of grant, Dividend Equivalents on the specified number of shares of stock covered by the RU Award will be paid with respect to RU Awards either at the dividend payment date in cash or in shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends, or the payment of such dividends shall be deferred and/or the amount or value thereof automatically reinvested in additional RUs, other Awards, or other investment vehicles, as the Committee shall determine or permit the Participant to elect. Unless otherwise determined by the Committee, Stock distributed in connection with a Stock split or Stock dividend, and other property distributed as a dividend, shall be subject to restrictions, a risk of forfeiture, and/or deferral to the same extent as the RUs with respect to which such Stock or other property has been distributed. (f) Bonus Stock and Awards in Lieu of Cash Obligations. The Committee is authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu of PaineWebber obligations to pay cash or 4 7 deliver other property under other plans or compensatory arrangements. Stock or Awards granted hereunder shall be subject to such other terms as shall be determined by the Committee. (g) Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents to a Participant, entitling the Participant to receive cash, Stock, other Awards, or other property equal in value to dividends paid with respect to a specified number of shares of Stock, or other periodic payments. Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award. The Committee may provide that Dividend Equivalents will be paid or distributed when accrued or will be deemed to have been reinvested in additional Stock, Awards, or other investment vehicles as the Committee may specify. (h) Other Stock-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, as deemed by the Committee to be consistent with the purposes of the Plan, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment contingent upon performance of PaineWebber or any other factors designated by the Committee, and Awards valued by reference to the book value of Stock or the value of securities of or the performance of specified subsidiaries. The Committee shall determine the terms and conditions of such Awards. Stock delivered pursuant to an Award in the nature of a purchase right granted under this Section 6(h) shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, cash, Stock, other Awards, or other property, as the Committee shall determine. Cash awards, as an element of or supplement to any other Award under the Plan, may also be authorized pursuant to this Section 6(h). 7. Certain Provisions Applicable to Awards. (a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or award granted under any plan of PaineWebber, any subsidiary, or any business entity to be acquired by PaineWebber or a subsidiary, or any other right of a Participant to receive payment from PaineWebber or any subsidiary. Such additional, tandem, and substitute or exchange Awards may be granted at any time. If an Award is granted in substitution or exchange for another Award or award, the Committee shall require the surrender of such other Award or award in consideration for the grant of the new Award. In addition, grants of Awards in lieu of cash compensation, including in lieu of cash amounts payable under other plans of PaineWebber, in which the value of Stock subject to the Award is equivalent in value to the cash compensation (for example, RUs or Restricted Stock), or in which the exercise price, grant price, or purchase price of the Award in the nature of a right that may be exercised is equal to Fair Market Value of the underlying Stock minus the value of the cash compensation surrendered (for example, Options granted with an exercise price "discounted" by the amount of the cash compensation surrendered), are specifically authorized. (b) Performance Conditions. The right of a Participant to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to such performance conditions as may be specified by the Committee. Any Award subject to such conditions may be denominated "performance shares," "performance units," or any other title deemed appropriate by the Committee. (c) Term of Awards. The term of each Award shall be for such period as may be determined by the Committee; provided that in no event shall the term of any ISO or any SAR granted in tandem thereunder exceed a period of ten years (or such shorter period as may be required under Section 422 of the Code). (d) Form and Timing of Payment Under Awards; Deferrals. Subject to the terms of the Plan and any applicable Award agreement, payments to be made by PaineWebber or a subsidiary upon the exercise of an Option or other Award or settlement of an Award may be made in such forms as the Committee shall determine, including, without limitation, cash, Stock, other Awards, or other property, 5 8 and may be made in a single payment or transfer, in installments, or on a deferred basis. The settlement of any Award may be accelerated, and cash paid in lieu of Stock in connection with such settlement, in the discretion of the Committee or upon occurrence of one or more specified events, including a change in control as defined by the Committee. Installment or deferred payments may be required by the Committee (subject to Section 8(e) of the Plan) or permitted at the election of the Participant. Payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents in respect of installment or deferred payments denominated in Stock. 8. General Provisions. (a) Compliance With Legal and Other Requirements. PaineWebber may, in its discretion, postpone the issuance or delivery of Stock under any Award until completion of such registration or qualification of such Stock or other required action under any federal or state law, rule, or regulation, listing or other required action with respect to any stock exchange or automated quotation system upon which the Stock or other PaineWebber securities are listed or designated, or compliance with any other contractual obligation of PaineWebber, as PaineWebber may consider appropriate, and may require any Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of Stock in compliance with applicable laws, rules, and regulations, listing or designation, or other contractual obligations. (b) Limits on Transferability Beneficiaries. No Award or other right or interest of a Participant under the Plan shall be pledged, encumbered, or hypothecated to or in favor or subject to any lien, obligation, or liability of such Participant to any party other than PaineWebber or a subsidiary, or assigned or transferred by such Participant otherwise than by will or the laws of descent and distribution, and such Awards and rights shall be exercisable during the lifetime of the Participant only by the Participant or his or her guardian or legal representative. Notwithstanding the foregoing, subject to the transferability restrictions applicable to derivative securities under Rule 16b-3 of the Exchange Act and the limits on the transferability of Options under any registration statement in effect and applicable to the grant and exercise of such Options, the Committee may, in its sole discretion, provide that Awards or other rights or interests of a Participant granted pursuant to the Plan be transferable, without consideration, to immediate family members (i.e., children, grandchildren or spouse), to trusts for the benefit of such immediate family members and to partnerships in which such family members are the only parties. The Committee may attach to such transferability feature such terms and conditions as it deems advisable. In addition, a Participant may, in the manner established by the Committee, designate a beneficiary (which may be a person or a trust) to exercise the rights of the Participant, and to receive any distribution, with respect to any Award upon the death of the Participant. A beneficiary, guardian, legal representative, or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award agreement applicable to such Participant, except as otherwise determined by the Committee, and to any additional restrictions deemed necessary or appropriate by the Committee. (c) Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Stock, or other property), recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, liquidation, dissolution or other similar corporate transaction or event, affects the Stock such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the rights of Participants under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and kind of shares of Stock which may thereafter be issued in connection with Awards (including the limitations set forth in Section 4), (ii) the number and kind of shares of Stock issued or issuable in respect of outstanding Awards, and (iii) the exercise price, grant price, or purchase price relating to any Award or, if deemed appropriate, make provision for payment of cash or other property with respect to any outstanding Award; provided, in each case, that, with respect to ISOs, no such adjustment shall be authorized or made to the extent that such authority would cause the Plan or the ISO to violate Section 422 of the Code. In addition, the Committee is authorized to make adjustments in the 6 9 terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, events described in the preceding sentence) affecting PaineWebber or any subsidiary or the financial statements of PaineWebber or any subsidiary, or any division or unit, or in response to changes in applicable laws, regulations, accounting principles, tax rates and regulations or business conditions in view of the Committee's assessment of the business strategy of PaineWebber, any subsidiary, division or unit thereof, performance of comparable organizations, economic and business conditions, personal performance of a Participant, and any other circumstances deemed relevant. (d) Taxes. PaineWebber or any subsidiary is authorized to withhold from any Award granted, any payment relating to an Award under the Plan, including from a distribution of Stock, or any payroll or other payment to a Participant, amounts of withholding and other taxes due in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable PaineWebber and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. This authority shall include authority for PaineWebber to withhold or receive Stock or other property and to make cash payments in respect thereof in satisfaction of a Participant's tax obligations, either on a mandatory or elective basis in the discretion of the Committee. (e) Changes to the Plan and Awards. The Board may amend, alter, suspend, discontinue, or terminate the Plan or the Committee's authority to grant Awards under the Plan without the consent of stockholders or Participants, provided that, without the consent of an affected Participant, no such Board action may materially and adversely affect the rights of such Participant under any Award theretofore granted to him or her. The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue, or terminate, any Award theretofore granted and any Award agreement relating thereto; provided that, without the consent of an affected Participant, no such Committee action may materially and adversely affect the rights of such Participant under such Award. (f) Limitation on Rights Conferred Under Plan. Neither the Plan nor any action taken hereunder shall be construed as (i) giving any Participant or employee the right to continue as a Participant or employee of PaineWebber or a subsidiary, (ii) interfering in any way with the right of PaineWebber or a subsidiary to terminate any Participant's or employee's employment at any time, (iii) giving a Participant or employee any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and employees, or (iv) conferring on a Participant any of the rights of a stockholder of PaineWebber unless and until the Participant has validly exercised an Option or Stock is otherwise duly issued or transferred to the Participant in accordance with the terms of the Award. (g) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute an "unfunded" plan for incentive and deferred compensation. With respect to any payments payable to a Participant or obligation to issue Stock pursuant to an Award, nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of PaineWebber; provided that the Committee may authorize the creation of trusts and deposit therein cash, Stock, other Awards, or other property, or make other arrangements, to meet PaineWebber's obligations under the Plan. Such trusts or other arrangements shall be consistent with the "unfunded" status of the Plan unless the Committee otherwise determines with the consent of each affected Participant. The trustee of such trusts may be authorized to dispose of trust assets and reinvest the proceeds in alternative investments, subject to such terms and conditions as the Committee may specify and in accordance with applicable law. (h) Nonexclusivity of the Plan. The adoption of the Plan by the Board shall not be construed as creating any limitation on the power of the Board to adopt such other incentive arrangements as it may deem desirable. (i) Payments In the Event of Forfeitures; Fractional Shares. Unless otherwise determined by the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid cash or other consideration, the Participant shall be repaid the amount of such cash or other consideration. No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of such 7 10 fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated. (j) Governing Law. The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan, and any Award agreement shall be determined in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of laws, and applicable federal law. (k) Effective Date. The Plan shall become effective on February 22, 1994, and shall remain effective until terminated by the Board. 8
EX-4.2 3 STOCK OPTION AGREEMENT 1 EXHIBIT 4.2 PAINEWEBBER STOCK OPTION AGREEMENT UNDER THE 1994 STOCK AWARD PLAN PAINEWEBBER STOCK OPTION AGREEMENT (the "Agreement"), effective as of (the "Effective Date"), between Paine Webber Group Inc. ("PaineWebber") and the individual whose signature appears below (the "Participant"). The Compensation Committee of the Board of Directors of PaineWebber (the "Committee") has awarded to the Participant the option to purchase the number of shares of Stock set forth below (the "Option") under the PaineWebber 1994 Executive Stock Award Plan (the "Plan"), subject to the terms and conditions of the Plan and this Agreement (including the Stock Option Terms and Conditions attached hereto). The Option awarded hereby is a non-qualified stock option and not an "incentive stock option" as defined in Section 422 of the Code. The Option will first become exercisable at the time or times specified in Section 3 of the attached Stock Option Terms and Conditions, and will be subject to expiration, including early expiration (i.e., forfeiture) in the event of the termination of the Participant's employment in certain circumstances, as specified in Section 2(a) hereof. 1. PARTICIPANT: Name __________________________________________________________________ Address _______________________________________________________________ Social Security Number ________________________________________________ 2. CERTAIN OPTION TERMS: Total Number of Shares Purchasable Upon Exercise ______________________ Exercise Price Per Share ______________________________________________ Date of Grant _________________________________________________________ IN WITNESS WHEREOF, PaineWebber and the Participant have duly executed this Agreement, as of the Effective Date stated above. PAINE WEBBER GROUP INC. PARTICIPANT By _________________________________ By _________________________________ Name _______________________________ Name _______________________________ Title ______________________________
Enclosures: Stock Option Terms and Conditions for 1994 Stock Award Plan 1994 Stock Award Plan Document 2 STOCK OPTION TERMS AND CONDITIONS OF STOCK OPTION AGREEMENT UNDER THE 1994 STOCK AWARD PLAN 1. Acceptance of Option; Incorporation of Plan Provisions. The Participant hereby accepts the Option subject to the terms and conditions set forth in this Agreement and consents to and agrees to comply with such terms and conditions. All of the terms and conditions of the Plan are hereby incorporated by reference in this Agreement as though fully set forth herein. Terms defined in the Plan but not in this Agreement shall have the meanings set forth in the Plan. To the extent of any conflict between the provisions of this Agreement and those of the Plan, the provisions of the Plan shall govern. Participant acknowledges receipt of a copy of the Plan. This Option is granted for no consideration other than the services of Participant and Participant's agreements set forth herein. 2. Expiration of Option. (a) The Option will expire at the earliest of the following: (i) Ten years after the Date of Grant (i.e., the close of business on the day before the tenth anniversary of the Date of Grant); (ii) One year after the Participant's death; (iii) One year after the Participant's "Disability" (as defined in the PaineWebber tax qualified defined benefit pension plan applicable to the Participant) resulting in a termination of Participant's employment by PaineWebber; (iv) One year after the Participant's voluntary retirement from employment by PaineWebber ("Retirement") on or after his or her "Normal Retirement Date" (as defined in such pension plan); (v) One year after the Participant's early retirement with the consent of the Committee from employment by PaineWebber ("Retirement); (vi) Immediately upon the termination of Participant's employment by PaineWebber for "Cause" (as hereinafter defined); and (vii) Three months after the Participant's termination of employment by PaineWebber for reasons other than death, Disability, or Retirement. (b) For purposes of this Agreement, the term "Cause" shall mean (i) the willful and continued failure by Participant to perform substantially his or her duties with PaineWebber (other than such failure resulting from the Participant's incapacity due to physical or mental illness) or (ii) the engaging by Participant in illegal conduct, including but not limited to the violation, in the sole opinion of the Committee, of any state or federal securities, commodities, or insurance statute or regulation, or (iii) the engaging by Participant in conduct in violation, in the sole opinion of the Committee, of any provision of the constitution, by-laws, or rules or regulations of any securities or commodities or insurance exchange or association of which PaineWebber is now or may later become a member or in violation of the Code of Conduct or published policies of PaineWebber, or (iv) the willful engaging by Participant in any act of serious dishonesty which adversely affects, or in the sole opinion of the Committee, could in the future adversely affect, the value, reliability or performance of the Participant to PaineWebber (including any misrepresentations by Participant to PaineWebber of prior production levels or any prior or existing customer complaint, or regulatory, administrative, civil or criminal matter affecting Participant's employment). For purposes of this definition, no act, or failure to act, on the part of the Participant shall be considered "willful" unless done, or omitted to be done, by the Participant in bad faith and without reasonable belief that his or her action or omission was in, or not opposed to, the best interest of PaineWebber. 3. Times at Which Option May be Exercised. (a) Participant may only exercise the Option to purchase Stock at such times and to the extent that the Option has become exercisable. Except as provided in this Section 3(a) and Section 3(b) hereof, the Option 3 may not be exercised to purchase any Stock until the date one year after the "Date of Grant" appearing in this Agreement (the "Date of Grant"). On each of the first, second, and third anniversaries of the Date of Grant, the Option will become cumulatively exercisable for one-third of the total number of shares of Stock (rounded to the nearest whole share), subject to accelerated exercisability as provided in this Section 3(a) and Section 3(b) hereof. The foregoing notwithstanding, the Option will become immediately exercisable in the event of a "Change in Control" as hereinafter defined. (b) The provisions of Section 3(a) notwithstanding, in the event of the death, Disability, or Retirement of the Participant, the Option may be exercised immediately in full. In the event of termination of the Participant's employment by PaineWebber or its subsidiaries for any other reason, the Option may be exercised prior to its expiration only to the extent that the Option was exercisable on the date of such termination. (c) "Change in Control" shall mean the occurrence of any of the following events: (i) Any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than PaineWebber, a subsidiary, any trustee or other fiduciary holding securities under an employee benefit plan of PaineWebber or a subsidiary, or any corporation owned, directly or indirectly, by the stockholders of PaineWebber in substantially the same proportions as their contemporaneous ownership of voting securities of PaineWebber, is or becomes a "20% Beneficial Owner." For purposes of this provision, a "20% Beneficial Owner" shall mean a person who is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of PaineWebber representing 20% or more of the combined voting power of PaineWebber's then-outstanding voting securities; provided that (A) the term "20% Beneficial Owner" shall not include any Beneficial Owner who has crossed such 20% percent threshold solely as a result of an acquisition of securities directly from PaineWebber, or solely as a result of an acquisition by PaineWebber of PaineWebber securities, until such time thereafter as such person acquires additional voting securities other than directly from PaineWebber and, after giving effect to such acquisition, such person would constitute a 20% Beneficial Owner; and (B) with respect to any person who is and remains eligible to file a Schedule 13G pursuant to Rule 13d-1(b)(1) under the Exchange Act with respect to PaineWebber securities, there shall be excluded from the number of securities deemed to be beneficially owned by such person for purposes of determining whether such person is a 20% Beneficial Owner a number of securities representing 10% of the combined voting power of PaineWebber's then-outstanding voting securities; (ii) During any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of PaineWebber, together with any new director (other than a director designated by a person who has entered into an agreement with PaineWebber to effect a transaction described in paragraph (i), (iii), or (iv) hereof) whose election by the Board or nomination for election by PaineWebber's stockholders was approved by a vote of at least two-thirds ( 2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved (the "Continuing Directors"), cease for any reason to constitute at least a majority thereof; (iii) The stockholders of PaineWebber approve a merger, consolidation, recapitalization, or reorganization of PaineWebber, or a reverse stock split of any class of voting securities of PaineWebber, or the consummation of any such transaction if stockholder approval is not obtained, other than any such transaction which would result in at least 80% of the total voting power represented by the voting securities of PaineWebber or the surviving entity outstanding immediately after such transaction being beneficially owned by persons who together beneficially owned at least 80% of the combined voting power of the voting securities of PaineWebber outstanding immediately prior to such transaction, with the relative voting power of each such continuing holder compared to the voting power of each other continuing holder not substantially altered as a result of the transaction; provided that, for purposes of this paragraph (iii), such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such 80% threshold (or to substantially preserve such relative voting 2 4 power) is due solely to the acquisition of voting securities by an employee benefit plan of PaineWebber or its subsidiaries, such surviving entity, or of any subsidiary of PaineWebber or such surviving entity; (iv) The stockholders of PaineWebber approve a plan of complete liquidation of PaineWebber or an agreement for the sale or disposition by PaineWebber of all or substantially all of PaineWebber's assets (or any transaction having a similar effect); or (v) Any other event which the Board of Directors (or the Committee, if and to the extent that the Committee must exercise sole discretion over the matter in order to comply with applicable requirements of Rule 16b-3 under the Exchange Act), determines shall constitute a Change in Control for purposes of this Agreement; provided that a Change in Control shall not be deemed to have occurred under this Agreement if, prior to the occurrence of a specified event that would otherwise constitute a Change in Control under paragraphs (i) through (iv) hereof, the Continuing Directors of PaineWebber then in office, by a majority vote thereof, determine that the occurrence of such specified event shall not be deemed to be a Change in Control hereunder or shall not be deemed to be a Change in Control with respect to a particular Participant under this Agreement if the Change in Control results from actions or events in which such Participant is a participant in a capacity other than solely as an officer, employee or director of PaineWebber or its subsidiaries. 4. Nontransferability. Neither the Option or other right of the Participant relating thereto shall be pledged, encumbered, or hypothecated to or in favor or subject to any lien, obligation, or liability of such Participant to any party other than PaineWebber or a subsidiary, or assigned. Unless otherwise determined by the Committee in accordance with Section 8(b) of the Plan, the Option or other right of the Participant relating thereto shall not be transferred by the Participant otherwise than by will or the laws of descent and distribution, and such Option and right shall be exercisable during the lifetime of the Participant only by the Participant or his or her guardian or legal representative. The Participant shall be entitled to designate a beneficiary(ies) who may exercise the Option or other right upon the death of the Participant. 5. Manner of Exercise of Option. (a) In order to exercise all or any part of the Option, the Participant must give written notice to PaineWebber, signed by the Participant. That notice should be sent or delivered to: Paine Webber Group Inc. 1285 Avenue of the Americas New York, NY 10019 Attention: Executive Vice President, Administration The notice should refer to this Option (including the Date of Grant), and the notice should include the following information: (i) The number of shares of Stock for which the Option is being exercised; (ii) The name or names of the persons in whose names the certificate(s) for the shares of Stock issuable upon exercise should be registered; and (iii) The address to which such certificate(s) should be sent or delivered. In addition to such notice, the Participant must include a check payable to "Paine Webber Group Inc." for the total exercise price of the number of shares to be purchased upon exercise of the Option, unless an approved alternative payment method is then permitted under the Plan. An approved alternative payment method will be for the Participant to pay all or a part of such exercise price by delivering and transferring to PaineWebber that number of shares of Stock previously acquired by the Participant (and owned for the period of six months before the date of exercise) with an aggregate Fair Market Value (determined in accordance with the Plan) equal to the aggregate exercise price of that number of shares of Stock for which the Option is being exercised or such lesser portion of the aggregate purchase price as may be specified by the Participant. 3 5 Upon satisfaction of all applicable requirements for the exercise of the Option (including those under Section 6 relating to taxes), a certificate or certificates for the number of shares of Stock purchased will be issued in the denominations and registered in the names of the persons set forth by the Participant on the notice, and such certificate(s) will be delivered to the Participant or as directed by the Participant. (b) Unless otherwise determined by the Committee, upon exercise in which the exercise price is paid by delivering and transferring to PaineWebber previously acquired Stock, the Participant may defer receipt of Stock pursuant to a valid election filed under the Deferred Compensation Plan and otherwise in accordance with such rules as the Committee may from time to time approve. 6. Taxes. Upon the exercise of the Option, PaineWebber shall be entitled to require as a condition of delivery of Stock that the Participant remit or, in appropriate cases (including cases in which taxation of the Participant is deferred), agree to remit when due an amount sufficient to satisfy all federal, state and local withholding and employment tax requirements relating to such exercise. Subject to the approval of the Committee, the Participant will be entitled to elect to have PaineWebber withhold from the Stock to be delivered upon the exercise of the Option, or to elect to deliver to PaineWebber from shares of Stock owned separately by the Participant, a sufficient number of such shares of Stock to satisfy the federal, state and local withholding and employment tax obligations relating to the Participant's exercise of the Option (and the Company's withholding obligations) to the extent, if any, permitted under rules and regulations adopted by the Committee and in effect at the time of such exercise. In such case, the Shares withheld or the shares surrendered will be valued at the Fair Market Value determined in accordance with the Plan. 7. Adjustments. The number of shares purchasable upon exercise of the Option, and other terms hereof, shall be appropriately adjusted, in the discretion of the Committee, in accordance with Section 8(c) of the Plan. 8. Limitation of Rights Conferred under the Plan. Neither the grant of the Option nor anything in this Agreement or the Plan shall be construed as (i) giving the Participant or employee the right to continue as a Participant or employee of PaineWebber or a subsidiary, (ii) interfering in any way with the right of PaineWebber or a subsidiary to terminate the Participant's or employee's employment at any time, (iii) giving the Participant or employee any claim to be granted any Option or other Award under the Plan or to be treated uniformly with other Participants and employees, or (iv) conferring on the Participant any of the rights of a stockholder of PaineWebber unless and until the Participant has validly exercised an Option. 9. Miscellaneous. (a) This Agreement shall bind and inure to the benefit of the Participant and his or her executors or administrators, heirs and personal and legal representatives, and to PaineWebber and its successors and assigns. (b) This Agreement shall be construed and enforced in accordance with Section 8(j) of the Plan. (c) This Agreement, together with the Plan, sets forth the entire agreement between the parties with respect to the subject matter hereof, and there are no agreements, understandings, warranties or representations, written, express or implied, between them with respect to the Option other than as set forth herein or therein. (d) When used herein, "PaineWebber" shall mean Paine Webber Group Inc. and shall include any corporation which, at the time of reference, is a subsidiary of Paine Webber Group Inc. within the meaning of Section 424(f) of the Code. (e) Except as otherwise expressly provided in this Agreement, this Agreement may not be modified, amended or terminated except by a writing signed by both parties hereto. No waiver of any provision hereof shall be effective unless evidenced by a writing signed by the party against whom it is sought to be enforced. No waiver of any breach of any term hereof shall be construed as a waiver of any subsequent breach of such term or as a waiver of any other term hereof. 4
EX-4.3 4 RESTRICTED STOCK UNIT AGREEMENT 1 EXHIBIT 4.3 PAINEWEBBER RESTRICTED STOCK UNIT AGREEMENT UNDER THE 1994 STOCK AWARD PLAN PAINEWEBBER RESTRICTED STOCK UNIT AGREEMENT (the "Agreement"), effective as of (the "Effective Date"), between Paine Webber Group Inc. ("PaineWebber") and the individual whose signature appears below (the "Participant"). The Compensation Committee of the Board of Directors of PaineWebber (the "Committee") has awarded to Participant the number of Restricted Stock Units ("RSUs") set forth below under the PaineWebber 1994 Stock Award Plan (the "Plan"), subject to the terms, definitions, and conditions of the Plan and this Agreement (including the RSU Terms and Conditions attached hereto). The RSUs awarded hereby are subject to forfeiture in the event of the termination of Participant's employment prior to the expiration of the Restricted Period specified below opposite such number of RSUs, as specified in Section 4(a) and (b) hereof. Upon expiration of the Restricted Period specified below opposite RSUs, PaineWebber will distribute to the Participant one share of Stock for each such RSU, subject to any deferral period mandated by the Committee and/or elected by the Participant under the PaineWebber Deferred Compensation Plan. The expiration of the Restricted Period (and any subsequent deferral period) is subject to acceleration as specified in Section 4(a) hereof. 1. PARTICIPANT: Name __________________________________________________________________ Address _______________________________________________________________ Social Security Number ________________________________________________ 2. TOTAL NUMBER OF RSUs GRANTED: 3. RESTRICTED PERIODS: NUMBER OF RESTRICTED PERIOD RSUS END DATE - --------- ----------------- - --------- ----------------- - --------- ----------------- - --------- ----------------- IN WITNESS WHEREOF, PaineWebber and the Participant have duly executed this Agreement, as of the Effective Date stated above. 2 PAINE WEBBER GROUP INC. PARTICIPANT By _________________________________ By _________________________________ Name _______________________________ Name _______________________________ Title ______________________________ Enclosures: Restricted Stock Unit Terms and Conditions for 1994 Stock Award Plan 1994 Stock Award Plan Document 3 RESTRICTED STOCK UNIT TERMS AND CONDITIONS OF THE RESTRICTED STOCK UNIT AGREEMENT UNDER THE 1994 STOCK AWARD PLAN 1. Acceptance of RSUs; Incorporation of Plan Provisions. The Participant hereby accepts the RSUs subject to the terms and conditions set forth in this Agreement and consents to and agrees to comply with such terms and conditions. All of the terms and conditions of the Plan are hereby incorporated by reference in this Agreement as though fully set forth herein. Terms defined in the Plan but not in this Agreement shall have the meanings set forth in the Plan. To the extent of any conflict between the provisions of this Agreement and those of the Plan, the provisions of the Plan shall govern. Participant acknowledges receipt of a copy of the Plan. 2. Rights Under RSUs Generally. The RSUs awarded hereunder to the Participant, together with such additional RSUs (if any) credited to the Participant pursuant to Section 5 hereof, entitle the Participant to receive, upon expiration of the Restricted Period applicable to each such RSU (as specified on the signature page of this Agreement and in Sections 4 and 6 hereof, delivery by PaineWebber of one share of PaineWebber's Stock for each such RSU not theretofore forfeited, subject to mandatory deferral by the Committee and/or elective deferral by the Participant under the PaineWebber Deferred Compensation Plan. Until such Stock is issued or transferred and delivered in settlement of RSUs, the Participant shall have no rights of a stockholder (including no rights to vote or receive dividends or distributions) with respect to RSUs or the Stock that may ultimately be issued or transferred and delivered in settlement of the RSUs. The Participant will, however, be entitled to receive payments of dividend equivalents with respect to such RSUs as provided in Section 5 hereof, subject to elective deferral by the Participant under the PaineWebber Deferred Compensation Plan. 3. Nontransferability. The rights of the Participant with respect to RSUs may not be assigned or transferred, otherwise than by will or the laws of descent and distribution, except that the Participant shall be entitled to designate in writing the beneficiary to receive distributions, if any, under this Agreement in the event of the Participant's death. 4. Expiration of Restricted Period. (a) The Restricted Period will end ("vesting" will occur) with respect the number of RSUs specified in this Agreement on the date designated as "Restricted Period End Date" opposite such number of RSUs on the signature page of this Agreement. The foregoing notwithstanding, the Restricted Period applicable to all RSUs under this Agreement shall expire on an accelerated basis at the time the Participant's employment with PaineWebber terminates as a result of his or her (i) death, (ii) "Disability" (as defined in the PaineWebber tax qualified defined benefit pension plan applicable to the Participant), or (iii) voluntary retirement on or after his or her "Normal Retirement Date" (as defined in such pension plan) or early retirement with the consent of the Committee from employment by PaineWebber ("Retirement"), and such Restricted Period shall expire on an accelerated basis upon the occurrence of a Change in Control (as defined below). (b) In the event that, prior to the expiration of the Restricted Period applicable to RSUs, the Participant shall cease to be an employee of PaineWebber for any reason other than death, Disability, or Retirement, such RSUs shall automatically be forfeited by the Participant. (c) "Change in Control" shall mean the occurrence of any of the following events: (i) Any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than PaineWebber, any trustee or other fiduciary holding securities under an employee benefit plan of PaineWebber, or any corporation owned, directly or indirectly, by the stockholders of PaineWebber in substantially the same proportions as their contemporaneous ownership of voting securities of PaineWebber, is or becomes a "20% Beneficial Owner." For purposes of this provision, a "20% Beneficial Owner" shall mean a person who is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of PaineWebber representing 20% or more of the combined voting power of PaineWebber's then-outstanding voting securities; provided that (A) the term 4 "20% Beneficial Owner" shall not include any Beneficial Owner who has crossed such 20% percent threshold solely as a result of an acquisition of securities directly from PaineWebber, or solely as a result of an acquisition by PaineWebber of PaineWebber securities, until such time thereafter as such person acquires additional voting securities other than directly from PaineWebber and, after giving effect to such acquisition, such person would constitute a 20% Beneficial Owner, and (B) with respect to any person who is and remains eligible to file a Schedule 13G pursuant to Rule 13d-1(b)(1) under the Exchange Act with respect to PaineWebber securities, there shall be excluded from the number of securities deemed to be beneficially owned by such person for purposes of determining whether such person is a 20% Beneficial Owner a number of securities representing 10% of the combined voting power of PaineWebber's then-outstanding voting securities; (ii) During any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of PaineWebber, together with any new director (other than a director designated by a person who has entered into an agreement with PaineWebber to effect a transaction described in paragraph (i), (iii), or (iv) hereof whose election by the Board or nomination for election by PaineWebber's stockholders was approved by a vote of at least two-thirds ( 2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved (the "Continuing Directors"), cease for any reason to constitute at least a majority thereof; (iii) The stockholders of PaineWebber approve a merger, consolidation, recapitalization, or reorganization of PaineWebber, or a reverse stock split of any class of voting securities of PaineWebber, or the consummation of any such transaction if stockholder approval is not obtained, other than any such transaction which would result in at least 80% of the total voting power represented by the voting securities of PaineWebber or the surviving entity outstanding immediately after such transaction being beneficially owned by persons who together beneficially owned at least 80% of the combined voting power of the voting securities of PaineWebber outstanding immediately prior to such transaction, with the relative voting power of each such continuing holder compared to the voting power of each other continuing holder not substantially altered as a result of the transaction; provided that, for purposes of this paragraph (iii), such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such 80% threshold (or to substantially preserve such relative voting power) is due solely to the acquisition of voting securities by an employee benefit plan of PaineWebber, such surviving entity, or of any subsidiary of such surviving entity; (iv) The stockholders of PaineWebber approve a plan of complete liquidation of PaineWebber or an agreement for the sale or disposition by PaineWebber of all or substantially all of PaineWebber's assets (or any transaction having a similar effect); or (v) Any other event which the Board of Directors (or the Compensation Committee of the Board of Directors, if and to the extent that the Compensation Committee must exercise sole discretion over the matter in order to comply with applicable requirements of Rule 16b-3 under the Exchange Act), determines shall constitute a Change in Control for purposes of this Agreement; provided that a Change in Control shall not be deemed to have occurred under this Agreement if, prior to the occurrence of a specified event that would otherwise constitute a Change in Control under paragraphs (i) through (iv) hereof, the Continuing Directors of PaineWebber then in office, by a majority vote thereof, determine that the occurrence of such specified event shall not be deemed to be a Change in Control hereunder or shall not be deemed to be a Change in Control with respect to a particular Participant under this Agreement if the Change in Control results from actions or events in which such Participant is a participant in a capacity other than solely as an officer, employee or director of PaineWebber. (d) The Participant may elect to defer the delivery at the end of the Restricted Period of PaineWebber Stock representing vested RSUs if and to the extent permitted by the Committee pursuant to the PaineWebber Deferred Compensation Plan. The Committee shall, in its sole discretion, have the right at any time to mandatorily defer such delivery and cause to be deemed credited an equivalent number of shares of Common Stock to a deferral account of the Participant under the PaineWebber Deferred Compensation Plan. 2 5 No action of the Committee under this Section 4(d) shall have the effect of accelerating or extending the vesting of a Participant's Award hereunder and any credit to the deferral account of the Participant under the PaineWebber Deferred Compensation Plan shall be subject to the same terms and conditions with regard to vesting as set forth in Section 4(a) hereof. 5. Dividend Equivalents. (a) In the event of an ordinary cash dividend payable on Stock the record date of which is prior to forfeiture or settlement of RSUs, PaineWebber shall pay to the Participant an amount equal to the amount of ordinary cash dividends paid as a dividend on each share of Stock multiplied by the number of such RSUs credited to the Participant at the record date for such dividend. Such amounts shall be paid by PaineWebber at the same time that the corresponding cash dividend on shares of Stock is paid to the PaineWebber stockholders. If so mandated by the Committee or elected by the Participant under the PaineWebber Deferred Compensation Plan, such amounts will not be paid to the Participant, but will instead be deemed to be reinvested in additional RSUs in accordance with Section 5(d) hereof, which RSUs will be subject to no Restricted Period, but to the deferral period mandated by the Committee and/or elected by the Participant under the PaineWebber Deferred Compensation Plan. (b) In the event of an extraordinary cash dividend or a non-cash dividend or distribution in the form of property other than Stock payable on Stock the record date of which is prior to forfeiture or settlement of RSUs, PaineWebber shall credit to the Participant the amount of such extraordinary cash dividend or the fair market value at such record date of the property other than Stock paid as a dividend or distribution on each share of Stock multiplied by the number of such RSUs credited to the Participant at such record date. Such amount will be deemed to be reinvested in additional RSUs in accordance with Section 5(d) hereof, which RSUs will be subject to the same Restricted Period (if any) and to the same mandatory and/or elective deferral period, if any, as applied to the RSUs with respect to which such payment was credited. (c) In the event of a dividend or distribution in the form of Stock payable on Stock the record date of which is prior to forfeiture or settlement of RSUs, PaineWebber shall credit to the Participant the number of RSUs equal to the number of whole or fractional shares of Stock paid as a dividend or distribution on each share of Stock multiplied by the number of such RSUs credited to the Participant at the record date for such dividend or distribution. Such additional RSUs will be subject to the same Restricted Period, if any, and to the same mandatory and/or elective deferral period, if any, as applied to the RSUs with respect to which such additional RSUs were credited. (d) Dividend equivalent amounts deemed to be reinvested under Section 5(a) or 5(b) entitle the Participant to be credited with a number of additional RSUs at the date any such dividend or distribution is paid on Stock equal to the per-share amount of the dividend or distribution multiplied by the number of RSUs credited to the Participant at the record date for such dividend or distribution divided by the Fair Market Value per share of Stock determined in accordance with the Plan on the dividend or distribution payment date. 6. Settlement. RSUs not theretofore forfeited under Section 4(b) shall be settled by delivery as promptly as practicable following the expiration of the Restricted Period and any mandatory and/or elective deferral period of one share of Stock for each RSU with respect to which the Restricted Period and any mandatory and/or elective deferral period has lapsed. Upon settlement of any RSU, such RSU will be cancelled. 7. Taxes. Upon expiration of the Restricted Period under Section 4(a) hereof and any mandatory and/or elective deferral period under the PaineWebber Deferred Compensation Plan, PaineWebber shall be entitled as a condition of the delivery of Stock representing the RSUs to the Participant that the Participant remit or, in appropriate cases (including cases in which taxation of the Participant is deferred), agree to remit when due an amount sufficient to satisfy all federal, state and local withholding and employment tax requirements relating to such delivery. Subject to the approval of the Committee, the Participant will be entitled to elect to have PaineWebber withhold from the Stock to be delivered or elect to deliver to PaineWebber from shares of Stock owned separately by the Participant, a sufficient number of such shares of 3 6 Stock to satisfy the federal, state and local withholding and employment tax obligations relating to the expiration of the Restricted Period and any deferral period and the delivery of Stock (and the Company's withholding obligations) to the extent, if any, permitted under rules and regulations adopted by the Committee and in effect at the time of such expiration. In such case, the Stock withheld or the Stock surrendered will be valued at the Fair Market Value determined in accordance with the Plan. 8. Adjustments. The number of RSUs credited to the Participant, and the kind of security to be delivered in settlement thereof, shall be appropriately adjusted, in the discretion of the Committee, to reflect transactions specified in Section 8(c) of the Plan affecting Stock other than dividends (which result in payments or crediting of additional RSUs under Section 5 hereof). 9. Employment of Participant. Neither the grant of the RSUs nor anything in this Agreement or the Plan shall (i) be construed as a commitment, guarantee, agreement or understanding of any kind that PaineWebber will continue to employ the Participant or employee, or (b) interfere in any way with the right of PaineWebber to terminate the Participant's or employee's employment at any time. 10. Miscellaneous. (a) This Agreement shall bind and inure to the benefit of the Participant and his or her executors or administrators, heirs and personal and legal representatives, and to PaineWebber and its successors and assigns. (b) This Agreement shall be construed and enforced in accordance with Section 8(j) of the Plan. (c) This Agreement, together with the Plan, sets forth the entire agreement between the parties with respect to the subject matter hereof, and there are no agreements, understandings, warranties or representations, written, express or implied, between them with respect to the RSUs other than as set forth herein or therein. (d) When used herein, "PaineWebber" shall mean Paine Webber Group Inc. and shall include any corporation which, at the time of reference, is a subsidiary of PaineWebber within the meaning of Section 424(f) of the Code. (e) Except as otherwise expressly provided in this Agreement, this Agreement may not be modified, amended or terminated except by a writing signed by both parties hereto provided that PaineWebber, upon notice to the Participant, may unilaterally amend this Agreement in any way that does not extend the Restricted Period or materially adversely affect the Participant's rights in or to the RSUs awarded hereunder. No waiver of any provision hereof shall be effective unless evidenced by a writing signed by the party against whom it is sought to be enforced. No waiver of any breach of any term hereof shall be construed as a waiver of any subsequent breach of such term or as a waiver of any other term hereof. 4 EX-4.4 5 RESTRICTED STOCK AGREEMENT 1 EXHIBIT 4.4 PAINEWEBBER RESTRICTED STOCK AGREEMENT UNDER THE 1994 STOCK AWARD PLAN PAINEWEBBER RESTRICTED STOCK AGREEMENT (the "Agreement"), effective as of (the "Effective Date"), between Paine Webber Group Inc. ("PaineWebber") and the individual whose signature appears below (the "Participant"). The Compensation Committee of the Board of Directors of PaineWebber (the "Committee") has awarded to Participant the number of shares of PaineWebber Stock (the "Award Shares," which includes any additional Award Shares acquired under Section 5) set forth below as Restricted Stock under the PaineWebber 1994 Stock Award Plan (the "Plan"), subject to the terms, definitions, and conditions of the Plan and this Agreement (including the Restricted Stock Terms and Conditions attached hereto). The Award Shares of Restricted Stock granted hereby are subject to forfeiture in the event of the termination of Participant's employment prior to the expiration of the Restricted Period specified below opposite such number of Award Shares, as specified in Section 4(a) and (b) hereof. Upon expiration of the Restricted Period, all restrictions on the Award Shares under the Plan and this Agreement will lapse, and PaineWebber will cause to be delivered one or more certificates representing the Award Shares to Participant. The expiration of the Restricted Periods is subject to acceleration as specified in Section 4(a) hereof. 1. PARTICIPANT: Name __________________________________________________________________ Address _______________________________________________________________ Social Security Number ________________________________________________ 2. TOTAL NUMBER AWARD SHARES GRANTED: ____________________________________ 3. RESTRICTED PERIODS: NUMBER OF RESTRICTED PERIOD AWARD SHARES END DATE - ------------ ----------------- - ------------ ----------------- - ------------ ----------------- - ------------ ----------------- 2 IN WITNESS WHEREOF, PaineWebber and the Participant have duly executed this Agreement, as of the Effective Date stated above. PAINE WEBBER GROUP INC. PARTICIPANT By ________________________________ By ________________________________ Name ______________________________ Name ______________________________ Title _____________________________ Enclosures: Restricted Stock Terms and Conditions for 1994 Stock Award Plan 1994 Stock Award Plan Document 3 RESTRICTED STOCK TERMS AND CONDITIONS OF THE RESTRICTED STOCK AGREEMENT UNDER THE 1994 STOCK AWARD PLAN 1. Acceptance of Award Shares: Incorporation of Plan Provisions. (a) The Participant hereby accepts the Award Shares subject to the terms and conditions set forth in this Agreement and consents to and agrees to comply with such terms and conditions. All of the terms and conditions of the Plan are hereby incorporated by reference in this Agreement as though fully set forth herein. Terms defined in the Plan but not in this Agreement shall have the meanings set forth in the Plan. To the extent of any conflict between the provisions of this Agreement and those of the Plan, the provisions of the Plan shall govern. Participant acknowledges receipt of a copy of the Plan. (b) To facilitate the operation of the Plan and secure the restrictions thereof and hereof, PaineWebber has entered into an agreement with Mellon Bank Corporation (together with its successors and assigns, the "Agent") pursuant to which the Agent, as custodian, will hold on behalf and for the benefit of the Participant the certificate(s) representing the Award Shares and deliver them as provided herein (the "Custodianship Agreement"); and the Participant acknowledges and consents to the delivery of the certificate(s) representing the Award Shares to the Agent. Until delivered to the Participant by the Agent, the Award Shares shall be evidenced by one or more certificates registered in the name of the Agent or its nominee (which may be held in the form of a single certificate representing all Award Shares held by the Agent for some or all recipients of similar awards under the Plan and other plans of PaineWebber). The Participant agrees to execute such other instruments and documents, and take such further action, as may be requested from time to time by PaineWebber or the Agent to maintain such registration or to effectuate or enforce the restrictions hereunder. (c) The Award Shares awarded as Restricted Stock to the Participant under this Agreement are awarded in consideration of past services of the Participant, and in consideration of the services to be performed by the Participant during the Restricted Period. The Committee hereby determines that the aggregate value of such past services of Participant serving as consideration for the Award Shares is equal to the aggregate par value of the Award Shares. 2. Rights as a Stockholder. Subject to the terms and provisions of the Delaware General Corporation Law and of this Agreement, the Participant shall have all of the rights of a beneficial owner of the Award Shares, including the right to vote or direct the voting of the Award Shares and to receive all ordinary cash dividends with respect thereto; provided that, if any extraordinary cash dividend or any non-cash dividend or distribution is made with respect to Award Shares prior to the expiration of the Restricted Period, such dividend will not be paid to the Participant directly but instead will be subject to Section 5 hereof, and in other cases of changes affecting the Award Shares any property representing the Award Shares will remain subject to Section 7 hereof. 3. Transfer Restrictions. During the applicable Restricted Period, the Award Shares, the rights of the Participant with respect thereto, and this Agreement may not be assigned, transferred, sold, margined, optioned, pledged or otherwise encumbered or disposed of by the Participant or by the Agent on behalf of the Participant (collectively, a "Transfer") unless otherwise determined by the Committee. PaineWebber will not be required to recognize or to record any Transfer or attempted Transfer of any Award Shares in violation of the foregoing restrictions, and any such Transfer or attempted Transfer shall be null and void unless otherwise determined by the Committee. The certificate(s) representing the Award Shares shall bear such restrictive legends as PaineWebber may deem appropriate to reflect any restrictions applicable to the Award Shares, including the foregoing and any restrictions on transfer applicable under the Securities Act of 1933, as amended. 4. Expiration of Restricted Period. (a) The Restricted Period will expire ("vesting" will occur) with respect the number of Award Shares specified in this Agreement (and any additional Award Shares relating thereto acquired under Section 5) on the date designated as "Restricted Period End Date" opposite such number of Award Shares on the signature page of this Agreement. The foregoing notwithstanding, the Restricted Period applicable to all Award Shares 4 under this Agreement shall expire on an accelerated basis at the time the Participant's employment with PaineWebber terminates as a result of his or her (i) death, (ii) "Disability" (as defined in the PaineWebber tax qualified defined benefit pension plan applicable to the Participant), or (iii) voluntary retirement on or after his or her "Normal Retirement Date" (as defined in such pension plan) or early retirement with the consent of the Committee from employment by PaineWebber or its subsidiaries ("Retirement"), and such Restricted Period shall expire on an accelerated basis upon the occurrence of a Change in Control (as defined below). As promptly as practicable following the expiration of the Restricted Period, PaineWebber shall cause the certificate(s) representing the Award Shares on which the restrictions have lapsed to be released by the Agent and transferred and delivered by the Agent to the Participant free of such restrictions, subject to the terms of Section 6 hereof and to any restrictions under Section 8(a) of the Plan. (b) In the event that, prior to the expiration of the Restricted Period applicable to Award Shares, the Participant shall cease to be an employee of PaineWebber for any reason other than death, Disability, or Retirement, such Award Shares (including any additional Award Shares relating thereto acquired under Section 5 hereof) shall automatically be forfeited by the Participant. Participant hereby acknowledges and consents that the Agent, upon such a forfeiture, shall, on behalf of the Participant, relinquish, forfeit and transfer such Award Shares to PaineWebber without any further action on the part of the Participant. (c) "Change in Control" shall mean the occurrence of any of the following events: (i) Any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than PaineWebber, any trustee or other fiduciary holding securities under an employee benefit plan of PaineWebber, or any corporation owned, directly or indirectly, by the stockholders of PaineWebber in substantially the same proportions as their contemporaneous ownership of voting securities of PaineWebber, is or becomes a "20% Beneficial Owner." For purposes of this provision, a "20% Beneficial Owner" shall mean a person who is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of PaineWebber representing 20% or more of the combined voting power of PaineWebber's then-outstanding voting securities; provided that (A) the term "20% Beneficial Owner" shall not include any Beneficial Owner who has crossed such 20% percent threshold solely as a result of an acquisition of securities directly from PaineWebber, or solely as a result of an acquisition by PaineWebber of PaineWebber securities, until such time thereafter as such person acquires additional voting securities other than directly from PaineWebber and, after giving effect to such acquisition, such person would constitute a 20% Beneficial Owner, and (B) with respect to any person who is and remains eligible to file a Schedule 13G pursuant to Rule 13d-1(b)(1) under the Exchange Act with respect to PaineWebber securities, there shall be excluded from the number of securities deemed to be beneficially owned by such person for purposes of determining whether such person is a 20% Beneficial Owner a number of securities representing 10% of the combined voting power of PaineWebber's then-outstanding voting securities; (ii) During any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of PaineWebber, together with any new director (other than a director designated by a person who has entered into an agreement with PaineWebber to effect a transaction described in paragraph (i), (iii), or (iv) hereof) whose election by the Board or nomination for election by PaineWebber's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved (the "Continuing Directors"), cease for any reason to constitute at least a majority thereof; (iii) The stockholders of PaineWebber approve a merger, consolidation, recapitalization, or reorganization of PaineWebber, or a reverse stock split of any class of voting securities of PaineWebber, or the consummation of any such transaction if stockholder approval is not obtained, other than any such transaction which would result in at least 80% of the total voting power represented by the voting securities of PaineWebber or the surviving entity outstanding immediately after such transaction being beneficially owned by persons who together beneficially owned at least 80% of the combined voting power of the voting securities of PaineWebber outstanding immediately prior to such transaction, with the 2 5 relative voting power of each such continuing holder compared to the voting power of each other continuing holder not substantially altered as a result of the transaction; provided that, for purposes of this paragraph (iii), such continuity of ownership (and preservation of relative voting power) shall be deemed to be satisfied if the failure to meet such 80% threshold (or to substantially preserve such relative voting power) is due solely to the acquisition of voting securities by an employee benefit plan of PaineWebber, such surviving entity, or of any subsidiary of such surviving entity; (iv) The stockholders of PaineWebber approve a plan of complete liquidation of PaineWebber or an agreement for the sale or disposition by PaineWebber of all or substantially all of PaineWebber's assets (or any transaction having a similar effect); or (v) Any other event which the Board of Directors (or the Compensation Committee of the Board of Directors, if and to the extent that the Compensation Committee must exercise sole discretion over the matter in order to comply with applicable requirements of Rule 16b-3 under the Exchange Act), determines shall constitute a Change in Control for purposes of this Agreement; provided that a Change in Control shall not be deemed to have occurred under this Agreement if, prior to the occurrence of a specified event that would otherwise constitute a Change in Control under paragraphs (i) through (iv) hereof, the Continuing Directors of PaineWebber then in office, by a majority vote thereof, determine that the occurrence of such specified event shall not be deemed to be a Change in Control hereunder or shall not be deemed to be a Change in Control with respect to a particular Participant under this Agreement if the Change in Control results from actions or events in which such Participant is a participant in a capacity other than solely as an officer, employee or director of PaineWebber. 5. Other Dividends. (a) In the event of an extraordinary cash dividend or a non-cash dividend or distribution in the form of property other than Stock payable on Award Shares the record date of which is prior to the expiration of the Restricted Period applicable to such Award Shares, PaineWebber shall retain the amount of such extraordinary cash dividend or such other property and, in lieu of delivery thereof, shall award to the Participant additional shares of Restricted Stock having a Fair Market Value at the record date of the dividend or distribution equal to the amount of cash and fair market value (as determined by the Committee) of such property paid as a dividend or distribution on each share of Stock multiplied by the number of Award Shares as to which the Restricted Period had not expired at the record date thereof. Such additional Award Shares will be subject to the same Restriction Period and the terms and conditions of this Agreement as applied to the Award Shares with respect to which such dividend or distribution was made. (b) In the event of a dividend or distribution in the form of Stock payable on Award Shares the record date of which is prior to the expiration of the Restricted Period applicable to such Award Shares, the Stock issued or delivered as such dividend or distribution shall be deemed to be additional Award Shares, and shall be subject to the same Restricted Period and the terms and conditions of this Agreement as applied to the Award Shares with respect to which such dividend or distribution was made. 6. Taxes. Upon expiration of the Restricted Period under Section 4(a) hereof or simultaneously with the filing with the Internal Revenue Service of the election permitted to be made under Section 83(b) of the Code with respect to Award Shares, PaineWebber shall be entitled to require as a condition of the delivery of Stock representing the Award Shares to the Participant that the Participant remit, or agree to remit when due, an amount sufficient to satisfy all federal state or local withholding and employment tax requirements relating to such expiration or filing of such election. Furthermore, PaineWebber shall have the right to deduct and withhold from any dividends or other distributions paid with respect to Award Shares any applicable withholding and employment taxes. Subject to approval of the Committee, the Participant will be entitled to elect to have PaineWebber withhold from the Stock to be delivered or elect to deliver to PaineWebber from shares of Stock owned separately by the Participant, a sufficient number of shares of Stock to satisfy the federal, state and local withholding and employment tax obligations of the Participant relating to the expiration of the Restricted Period or filing of an election with the Internal Revenue Service (and the Company's withholding obligation) to the extent, if any, permitted under rules and regulations adopted by the 3 6 Committee and in effect at the time of such expiration or filing of such election. In such case, the Stock withheld or Stock surrendered will be valued at the Fair Market Value determined in accordance with the Plan. 7. Adjustments. In the event of any transaction specified in Section 8(c) of the Plan affecting Stock other than dividends (which are subject to Section 5 hereof), any property into which the Award Shares are changed or distributed in additional to Award Shares shall be subject to the same Restricted Period and the terms and conditions of this Agreement as would have then applied to the Award Shares. 8. Employment of Participant. Neither the grant of the Award Shares nor anything in this Agreement or the Plan shall (i) be construed as a commitment, guarantee, agreement or understanding of any kind that PaineWebber will continue to employ the Participant or employee, or (b) interfere in any way with the right of PaineWebber to terminate the Participant's or employee's employment at any time. 9. Miscellaneous. (a) This Agreement shall bind and inure to the benefit of the Participant and his or her executors or administrators, heirs and personal and legal representatives, and to PaineWebber and its successors and assigns. (b) This Agreement shall be construed and enforced in accordance with Section 8(j) of the Plan. (c) This Agreement, together with the Plan, sets forth the entire agreement between the parties with respect to the subject matter hereof, and there are no agreements, understandings, warranties or representations, written, express or implied, between them with respect to the Award Shares other than as set forth herein or therein. (d) When used herein, "PaineWebber" shall mean Paine Webber Group Inc. and shall include any corporation which, at the time of reference, is a subsidiary of PaineWebber within the meaning of Section 424(f) of the Code. (e) Except as otherwise expressly provided in this Agreement, this Agreement may not be modified, amended or terminated except by a writing signed by both parties hereto provided that PaineWebber, upon notice to the Participant, may unilaterally amend this Agreement in any way that does not extend the Restricted Period or materially adversely affect the Participant's rights in or to the Award Shares. No waiver of any provision hereof shall be effective unless evidenced by a writing signed by the party against whom it is sought to be enforced. No waiver of any breach of any term hereof shall be construed as a waiver of any subsequent breach of such term or as a waiver of any other term hereof. 4 EX-5 6 OPINION OF THEODORE A. LEVINE 1 EXHIBIT 5 June 5, 1996 Board of Directors Paine Webber Group Inc. 1285 Avenue of the Americas New York, New York 10019 RE: Registration Statement On Form S-8 1994 Stock Award Plan Dear Sirs: In connection with the registration statement on Form S-8 of Paine Webber Group., a Delaware corporation (the "Company"), being filed with the Securities and Exchange Commission on about June 5, 1996 and relating to the offering of shares of the Company's common stock, par value $1 per share (the "Stock"), under the Company's 1994 Stock Award Plan (the "Plan"), I have examined the Company's corporate records, certificates and other documents and instruments and have considered such questions of law as I deemed necessary to render this opinion. On the basis of the foregoing, I am of the opinion that, under the laws of the State of Delaware, the Stock has been duly authorized and, when issued and paid for pursuant to the Plan, will be legally issued, fully paid and nonassessable. I consent to the filing of this opinion as an exhibit to the above-mentioned registration statement. Very truly yours, THEODORE A. LEVINE General Counsel EX-23.1 7 OPINION OF ERNST & YOUNG 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm as experts in "Item 3., Incorporation of Documents by Reference" of the Registration Statement (Form S-8) pertaining to the Paine Webber Group Inc. 1994 Stock Award Plan for the registration of 7,500,000 shares of its common stock and to the incorporation by reference therein of our report dated January 31, 1996, 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, 1995, filed with the Securities and Exchange Commission. ERNST & YOUNG LLP New York, New York June 5, 1996
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