-----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, OUZ0e1dgQjNJ/6W38vjCV1QVretH+UAS0mRsoP1G0CTgyP81jvMfFpb+5ec2LzXH yS1tHl4NvsZnLmJG+NFcPg== 0000950123-97-010746.txt : 19980102 0000950123-97-010746.hdr.sgml : 19980102 ACCESSION NUMBER: 0000950123-97-010746 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19971231 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-3 SEC ACT: SEC FILE NUMBER: 333-43585 FILM NUMBER: 97747632 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-3 1 PAINE WEBBER GROUP INC. 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 31, 1997 REGISTRATION NO. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ PAINE WEBBER GROUP INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ------------------------ DELAWARE 13-2760086 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1285 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019 (212) 713-2000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ THEODORE A. LEVINE SENIOR VICE PRESIDENT, GENERAL COUNSEL & SECRETARY PAINE WEBBER GROUP INC. 1285 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019 (212) 713-2879 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after this Registration Statement becomes effective. ------------------------ If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] ------------------------ CALCULATION OF REGISTRATION FEE ================================================================================
PROPOSED PROPOSED MAXIMUM MAXIMUM OFFERING AGGREGATE TITLE OF EACH CLASS OF AMOUNT TO BE PRICE PER OFFERING AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED UNIT PRICE REGISTRATION FEE - ----------------------------------------------------------------------------------------------------------- Common Stock, $1 par value......... 1,200,000 $33.50(1) $40,200,000 $11,859 ===========================================================================================================
(1) Calculated pursuant to Rule 457(c) on the basis of the average of the high low sales prices for the Common Stock on December 24, 1997, as reported on the New York Stock Exchange Consolidated Tape. Estimated solely for purposes of computing the registration fee. ------------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a)OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. ================================================================================ 2 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION PRELIMINARY PROSPECTUS DATED DECEMBER 31, 1997 PAINE WEBBER GROUP INC. (1,200,000) SHARES OF COMMON STOCK ($1 PAR VALUE) ------------------------ The Common Stock of Paine Webber Group Inc. (the "Company") is listed on the New York Stock Exchange and the Pacific Stock Exchange. The last reported sale price of the Company's Common Stock on the New York Stock Exchange Composite Tape on December 30, 1997 was $34 5/8 per share. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. This Prospectus relates to the issuance of shares of the Company's Common Stock to any of the limited partners in PW Partners 1993 Dedicated, L.P. (the "Partnership") (the "Limited Partners" and, together with the Partnership, the "Selling Securityholders") upon exercise of an option to purchase 1,440,000 shares of the Company's Common Stock at a per share exercise price of $12.45 held by the Partnership (the "Option"). The Limited Partners are employees or former employees of the Company, its wholly owned subsidiaries and its affiliates. This Prospectus relates to any resale of such shares by the Partnership and the Limited Partners and any resale by the Partnership and the Limited Partners of 288,000 shares of Common Stock that were previously issued to the Partnership. Such resales may be effected from time to time in transactions (which may include block transactions) on the New York or Pacific Stock Exchanges, in the over-the-counter market, in negotiated transactions, through the writing of options, or in a combination of such methods of sale, at fixed prices which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, or at negotiated prices. The Selling Securityholders may effect such transactions by selling such shares to or through dealers, underwriters or agents designated from time to time (which may include PaineWebber Incorporated). Such dealers, underwriters or agents may receive compensation in the form of discounts, concessions or commissions from the Selling Securityholders or the purchasers of such shares for whom they may act as agent or to whom they may sell as principal, or both (which compensation as to a particular agent, underwriter or broker might be in excess of customary commissions). All expenses incurred in connection with the issuance and the distribution of the shares offered, other than any underwriting discounts, commissions and concessions, will be borne by the Company and are estimated to be $22,259. To the extent required with respect to sales other than direct sales and customary brokerage transactions with customary commissions, the terms of the offering and sale by Selling Securityholders of shares of Common Stock in respect of which this Prospectus is delivered, including any initial public offering price, any discounts, commissions or concessions allowed, reallowed or paid to underwriters, dealers or agents and the proceeds to the Selling Securityholders and any other material terms will be set forth in a Supplement to this Prospectus. ------------------------ The date of this Prospectus is December , 1997. 3 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMPANY'S COMMON SHARES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK AND PACIFIC STOCK EXCHANGES, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). The registration statement of which this Prospectus forms a part, as well as reports, proxy statements and other information filed by the Company with the Commission can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C., 20549; at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade Center, New York, New York, 10048. In addition, copies of such material can be obtained upon written request from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such reports, proxy statements and other information concerning the Company can also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, and the Pacific Stock Exchange, 301 Pine Street, San Francisco, California 94104. Such material may also be accessed electronically by means of the Commission's home page on the Internet at http://www.sec.gov. The Company has filed with the Commission a registration statement on Form S-3 (herein, together with all amendments and exhibits, referred to as the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), relating to the shares of Common Stock offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement. INCORPORATION OF CERTAIN INFORMATION BY REFERENCE The following documents filed by the Company with the Commission pursuant to Section 13 of the Exchange Act are incorporated herein by reference: (i) the Annual Report on Form 10-K (including the portions of the Company's annual report to stockholders incorporated by reference therein) for the year ended December 31, 1996 (the "1996 Form 10-K"); (ii) the Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997, June 30, 1997, September 30, 1997; (v) the Current Report on Form 8-K dated August 15, 1997; and (vi) the Current Report on Form 8-K dated December 30, 1997. All documents subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering of the securities offered hereby shall be deemed to be incorporated by reference into this Prospectus and to be part hereof from the date of filing of such documents. Any statement contained in the information or any document incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Prospectus to the extent that a statement contained herein or in any subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide, without charge to each person, including any beneficial owner, to whom a copy of this Prospectus is delivered, on the written or oral request of such person, a copy of any or all of the 2 4 documents referred above which are incorporated by reference into this Prospectus, other than certain exhibits to such documents. Requests for such copies should be directed to Assistant Secretary, Paine Webber Group Inc., 1285 Avenue of the Americas, New York, New York 10019 (Telephone: (212) 713-3224). THE COMPANY Paine Webber Group Inc. is a holding company which, together with its operating subsidiaries, forms one of the largest full-service securities and commodities firms in the industry. Founded in 1879, the Company employs approximately 16,433 people in 299 offices worldwide. The Company's principal line of business is to serve the investment and capital needs of individual, corporate, institutional and public agency clients through its broker-dealer subsidiary, PaineWebber Incorporated ("PaineWebber"), and other specialized subsidiaries. The Company holds memberships in all major securities and commodities exchanges in the United States, and makes a market in many securities traded on Nasdaq National Market or on other over-the-counter markets. Additionally, PaineWebber is a primary dealer in U.S. government securities. The Company is comprised of interrelated business groups, including Research, the Private Client Group, the Municipal Securities Group, Investment Banking, Asset Management, Global Fixed Income and Commercial Real Estate, and Global Equities and Transaction Services, which utilize common operational and administrative personnel and facilities. The Research Group provides investment advice to institutional and individual investors, and other business areas of the Company, on approximately 846 companies in 55 industry sectors. The Private Client Group consists primarily of a domestic branch office system and consumer product groups through which PaineWebber and certain other subsidiaries provide clients with financial services and products, including the purchase and sale of securities, option contracts, commodity and financial futures contracts, fixed income instruments, mutual funds, trusts and selected insurance products. The Company may act as a principal or agent in providing these services. Fees charged vary according to the size and complexity of a transaction, and the activity level of a client's account. The Municipal Securities Group originates, underwrites, sells and trades taxable and tax-exempt issues for municipal and public agency clients. Through the Investment Banking Group, the Company provides financial advice to, and raises capital for, a broad range of domestic and international corporate clients. Investment Banking manages and underwrites public and private offerings, participates as an underwriter in syndicates of public offerings managed by others, and provides advice in connection with mergers and acquisitions, restructurings and recapitalizations. The Asset Management group is comprised of Mitchell Hutchins Asset Management Inc. ("MHAM"), Mitchell Hutchins Institutional Investors Inc. ("MHII") and Mitchell Hutchins Investment Advisory division ("MHIA"). MHAM and MHII provide investment advisory and portfolio management services to pension and endowment funds. MHAM also provides investment advisory and portfolio management services to individuals and mutual funds. MHIA provides portfolio management services to individuals, trusts and institutions. Through the Global Fixed Income and Global Equities Groups, the Company places securities for, and executes trades on behalf of, institutional clients both domestically and internationally. In addition, the Company takes positions in both listed and over-the-counter equity securities and fixed income securities to facilitate client transactions or for the Company's own account. The Commercial Real Estate Group provides a full range of capital market services to real estate clients, including underwriting of debt and equity securities, principal lending activity, debt restructuring, property sales and bulk sales services, and a broad range of other advisory services. The Transaction Services Group includes correspondent services, prime brokerage and securities lending businesses, and specialist trading. Through Correspondent Services Corporation, the Company provides 3 5 execution and clearing services to broker-dealers in the U.S. and overseas. The Company also acts as a specialist responsible for executing transactions and maintaining an orderly market in certain securities. The Company's businesses operate in one of the nation's most highly regulated industries. Violations of applicable regulations can result in the revocation of broker-dealer licenses, the imposition of censures or fines, and the suspension or expulsion of a firm. The Company's businesses are regulated by various agencies, including the Commission, the NYSE, the Commodity Futures Trading Commission and the National Association of Securities Dealers, Inc. (the "NASD"). The Company's principal executive offices are located at 1285 Avenue of the Americas, New York, New York 10019 (Telephone: (212) 713-2000). For purposes of the foregoing description, all references to the "Company" refer collectively to Paine Webber Group Inc. and its operating subsidiaries, unless the context otherwise requires. USE OF PROCEEDS The Company will not receive any proceeds from the sale of shares of Common Stock by the Selling Securityholders. PLAN OF DISTRIBUTION The Company has issued 288,000 shares of its Common Stock and an option (the "Option") to purchase 1,440,000 shares of its Common Stock to a limited partnership whose limited partners consist of 62 key employees or former key employees of the Company, its subsidiaries and its affiliates, in transactions not involving a public offering (such individuals being referred to herein as the "Limited Partners" and, together with the Partnership, as the "Selling Securityholders"). The Option is exercisable at the option of the Partnership into the shares of the Company's Common Stock at a price of $12.45 per share. This Prospectus relates to the issuance of shares of Common Stock to the Partnership or any of the Limited Partners upon exercise of the Option. This Prospectus also relates to any resale of such shares by the Selling Securityholders and any resale by the Partnership or any of the Limited Partners of 288,000 shares of Common Stock that were previously issued to the Partnership. Such resales may be affected from time to time in transactions (which may include block transactions) on the New York or Pacific Stock Exchanges, in the over-the-counter market, in negotiated transactions, through the writing of options, or in a combination of such methods of sale, at fixed prices which may be changed, at market prices prevailing market prices, or at negotiated prices. The Selling Securityholders may effect such transactions by selling such shares to or through dealers, underwriters or agents designated from time to time (which may include PaineWebber). Such dealers, underwriters or agents may receive compensation in the form of discounts, concessions or commissions from the Selling Securityholders or the purchasers of such shares for whom they may act as agent or to whom they may sell as principal, or both (which compensation as to a particular agent, underwriter or broker might be in excess of customary commissions). In connection with the Selling Securityholders' sale of shares offered pursuant hereto, the Selling Securityholders and any agents, underwriters or brokers that participate with the Selling Securityholders in the distribution thereof may be deemed to be underwriters, and any commission received by them and any profit recognized by them on the resale of such shares might be deemed to be underwriting discounts and commissions under the Securities Act. All expenses incurred in connection with the issuance and the distribution of the shares offered, other than any underwriting discounts, commissions and concessions, will be borne by the Company. 4 6 Neither the delivery of this Prospectus nor any action taken by any Selling Securityholder shall be deemed or treated as an admission that any of them is an underwriter within the meaning of the Securities Act. SELLING SECURITYHOLDERS The Limited Partners include 62 individuals who are employees or former employees of the Company, and who may offer and sell an aggregate of 1,200,000 shares pursuant to this Prospectus. To the extent required with respect to sales other than customary brokerage transactions by such Selling Securityholders with customary commissions, the terms of the offering and sale by Selling Securityholders of shares of Common Stock in respect of which this Prospectus is delivered, including any initial public offering price, any discounts, commissions or concessions allowed, reallowed or paid to underwriters, dealers or agents, and the proceeds to the Selling Securityholders and any other material terms will be set forth in a Supplement to this Prospectus. Because the shares of Common Stock may be offered in whole or in part from time to time by the Selling Securityholders, no estimate can be given as to the number of shares of Common Stock to be offered for sale or the number that will be held by the Selling Securityholders upon termination of such offerings. DESCRIPTION OF CAPITAL STOCK COMMON STOCK The Company is authorized under its Certificate of Incorporation to issue 200,000,000 shares of Common Stock, par value $1 per share. At the close of business on December 26, 1997, there were 140,454,000 shares of Common Stock outstanding. At that date, the Company had reserved authorized shares of Common Stock as follows: 38,224,000 shares for issuance upon exercise of employee stock options and stock awards and 1,505,000 shares for issuances upon conversion of its 6% Convertible Preferred Stock. The holders of shares of Common Stock are entitled to one vote for each share on all matters upon which stockholders have the right to vote. Shares of Common Stock do not have any preemptive rights, are not subject to redemption and do not have the benefit of any sinking fund. Holders of shares of Common Stock are not liable for further calls or assessments. They are entitled to receive such dividends as may be declared by the Board of Directors of the Company out of funds legally available therefor and to share pro rata in any distribution to other holders of shares of Common Stock. Shares of Common Stock are subject to all the preferences, rights and powers of shares of the Series Preferred Stock set forth in the Company's Certificate of Incorporation or in any resolution establishing a series of the Series Preferred Stock. The payment of dividends on the Common Stock is subject to the prior payment of dividends on any outstanding Series Preferred Stock and is restricted by covenants in various loan agreements. At December 29, 1997, the Company was not restricted in the payment of dividends by the provisions of the net capital rules of the Commission of the New York Stock Exchange. At September 30, 1997, the equity of the Company's subsidiaries totaled approximately $2.1 billion. Of this amount approximately $406 million was not available for payment of such dividends and advances to the Company. Restrictions on other subsidiaries with respect to the amount of dividends they could declare or advances they could make to the Company are not material in the aggregate. The Transfer Agent and Registrar for the Common Stock is Chase Mellon Shareholders Services, New York, New York. PREFERRED STOCK Under the Company's Certificate of Incorporation, the Board of Directors is authorized to issue up to 20,000,000 shares of Series Preferred Stock (the "Series Preferred Stock") in one or more series with such rights, restrictions and qualifications, including any preferences, voting powers, dividend rights, and redemp- 5 7 tion, sinking fund and conversion rights, as the Board of Directors may determine by resolution. In December 1994, the Company issued 2,500,000 shares of 9% Cumulative Redeemable Preferred Stock (the "Preferred Stock") at $100 per share. In the event of any liquidation, dissolution or winding up of the Company, the holders of shares of the Preferred Stock will be entitled to receive, prior to any distribution to the holders of shares of Common Stock, an amount equal to $100 per share plus the sum of all accrued and unpaid dividends. Dividends on the Preferred Stock are cumulative and payable in quarterly installments at an annual rate of $9.00 per share. The holders of the Preferred Stock have no general voting rights. The Preferred Stock is redeemable, in whole or in part, at the option of the Company at $100 per share, on and after December 16, 1999. The Company's authorized capital also includes 669,000 shares of 6% Convertible Preferred Stock, none of which is outstanding. CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION AND BY-LAWS The Company's Restated Certificate of Incorporation and By-Laws contain certain provisions that are intended to enhance the likelihood of continuity and stability in the composition of the Company's Board of Directors and in the policies formulated by the Board and to discourage an unsolicited takeover of the Company if the Board determines that such takeover is not in the best interests of the Company and its stockholders. However, these provisions could have the effect of discouraging certain attempts to acquire the Company or remove incumbent management even if some or a majority of the Company's stockholders deemed such an attempt to be in their best interests. Pursuant to the Restated Certificates of Incorporation, the Board of Directors of the Company are divided into three classes serving staggered three-year terms. Directors can be removed from office only for cause (as defined in the Company's Restated Certificate of Incorporation) and only by the affirmative vote of the holders of a majority of the voting power of the then outstanding shares of stock of the Company entitled to vote generally in the election of the directors (the "Voting Stock"), voting together as a single class. Vacancies on the Board of Directors may only be filled by the remaining directors and not by the stockholders, except that in the case of newly created directorships, if the remaining directors fail to fill any such vacancy, the stockholders may do so at the next annual or special meeting called for that purpose. The By-laws establish an advance notice procedure with regard to the nomination, other than by or at the direction of the Board of Directors, of candidates for election as directors and with regard to certain matters to be brought before an annual meeting of stockholders of the Company. In general, notice must be received by the Company not less than 90 days prior to the meeting and must contain certain specified information concerning the person to be nominated or the matters to be brought before the meeting and concerning the stockholder submitting the proposal. Subject to the terms of any Preferred Stock, any action required or permitted to be taken by the stockholders of the Company must be taken at a duly called annual or special meeting of stockholders and may not be taken by written consent. Special meetings may only be called by the Board of Directors. The Restated Certificate of Incorporation also provides that in the case of certain mergers, sales of assets, issuances of securities, liquidations or dissolutions, or reclassifications or recapitalizations involving holders of stock representing 20% or more of the voting power of the then outstanding shares of Voting Stock, such transactions must be approved by (i) 80% of the combined voting power of the then outstanding Voting Stock and (ii) a majority of the then outstanding shares of Voting Stock held by Disinterested Stockholders (as defined in the Company's Restated Certificate of Incorporation), unless such transactions are approved by a majority of the Disinterested Directors (as defined in the Company's Restated Certificate of Incorporation) of the Company or unless certain minimum price, form of consideration and procedural requirements are satisfied. The affirmative vote of (i) 80% of the Combined voting power of the then outstanding shares of Voting Stock and (ii) in the case of the provisions referred to above relating to approvals of certain mergers, business 6 8 combinations and other similar transactions, a majority of the combined voting power of the then outstanding shares of Voting Stock held by the Disinterested Stockholders is required to amend certain provisions of the Company's Restated Certificate of Incorporation, including the provisions referred to above relating to the classification of the Board, filling vacancies on the Board, prohibiting stockholder action by written consent, prohibiting the calling of special meeting by stockholders, approval of amendments to the Company's By-laws and approval of certain mergers, business combinations and other similar transactions. The requirement of a supermajority vote to approve certain corporate transactions and certain amendments to the Restated Certificate of Incorporation and By-laws of the Company could enable a minority of the Company's stockholders to exercise veto powers over such transactions and amendments. The Restated Certificate of Incorporation also provides that, to the fullest extent permitted by the Delaware General Corporation Law, a director of the Company shall not be liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director. LEGAL OPINION The legality of the shares of Common Stock offered hereby has been passed upon by Theodore A. Levine, Senior Vice President, General Counsel and Secretary of the Company who owns beneficially 50,950 shares of Common Stock and has options to purchase an additional 214,125 shares that are not currently exercisable. EXPERTS The consolidated financial statements of the Company for the year ended December 31, 1996, incorporated by reference in the Company's Annual Report (Form 10-K) have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. 7 9 ====================================================== NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. ------------------------ TABLE OF CONTENTS
PAGE Available Information.................. 2 Incorporation of Certain Information by Reference............................ 2 The Company............................ 3 Use of Proceeds........................ 4 Plan of Distribution................... 4 Selling Securityholders................ 5 Description of Capital Stock........... 5 Certain Provisions of the Restated Certificate of Incorporation and By- laws................................. 6 Legal Opinion.......................... 7 Experts................................ 7
====================================================== ====================================================== PAINE WEBBER GROUP INC. 1,200,000 SHARES COMMON STOCK ($1 PAR VALUE) ------------------------ PROSPECTUS ======================== DECEMBER , 1997 ====================================================== 10 PART II INFORMATION NOT REQUIRED IN PROSPECTUS. ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth all expenses payable by the Registrant in connection with the issuance and distribution of the securities being registered. All the amounts shown are estimates, except for the registration fee. Registration Fee............................................... $11,859.00 Fees and Expenses of Accountants............................... $ 2,400.00 Fees and Expenses of Counsel................................... $ 5,000.00 Miscellaneous.................................................. $ 3,000.00 Total................................................ $22,259.00
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 102 of the General Corporation Law of the State of Delaware gives corporations the power to eliminate or limit the personal liability of directors under certain circumstances. Section 145 of the General Corporation Law of the State of Delaware gives corporations the power to indemnify directors and officers under certain circumstances. Article IX of the Restated Certificate of Incorporation (relating to the elimination of personal liability of directors of the Company) of Paine Webber Group Inc. is hereby incorporated by reference to Exhibit 3.1 hereto. Article VII of Paine Webber Group Inc.'s By-Laws (relating to indemnification of directors and officers of the Company) is hereby incorporated by reference to Exhibit 3.2 hereto. The Company also maintains directors and officers liability and corporate reimbursement insurance which provides for coverage against loss arising from claims made against directors and officers in their capacity as such. The general scope of coverage is any breach of duty, neglect, error, misstatement, misleading statement or omission. Such policy does not exclude liabilities under the Securities Act of 1933. The Company also maintains fiduciary liability insurances for losses in connection with claims made against directors of officers for violation of any of the responsibilities, obligations or duties imposed upon fiduciaries under the Employee Retirement Income Security Act of 1974. ITEM 16. EXHIBITS. The following Exhibits are filed as part of this Registration Statement: 3.1 -- Restated Certificate of Incorporation of the Registrant, as filed with the Office of the Secretary of State of the State of Delaware on May 4, 1987 (incorporated by reference to Exhibit 3.1 of Registrant's Registration Statement No. 33-52695 on Form S-3 filed with the SEC on October 16, 1995). 3.2 -- By-laws of the Registrant as amended March 1, 1988 (incorporated by reference to Exhibit 3.2 of Registrant's Registration Statement No. 33-52695 on Form S-3 filed with the SEC on October 16, 1995). 4.4 -- Option Agreement dated as of January 6, 1994 by and between the Registrant and PW Partners 1993 Dedicated L.P. 5 -- Opinion of Theodore A. Levine, in respect of the legality of the Securities registered hereunder, containing the consent of such counsel. 23.1 -- Consent of Ernst & Young LLP. 23.2 -- Consent of Counsel. The consent of Theodore A. Levine is included in his opinion filed herewith as Exhibit 5. 25 -- Power of Attorney (set forth on the signature pages of this Registration Statement).
II-1 11 ITEM 17. UNDERTAKINGS. The undersigned Registrant hereby undertakes: (a)(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement: provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or 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 herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions described under Item 15 above, or otherwise, 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 Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-2 12 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-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of New York, State of New York, on December 29, 1997. PAINE WEBBER GROUP INC. (Registrant) By: /s/ DONALD B. MARRON -------------------------------------- (Donald B. Marron, Chairman of the Board and Chief Executive Officer) POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints DONALD B. MARRON, WILLIAM NOLAN and REGINA 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 thereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement and Power of Attorney have 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 December 29, 1997 - --------------------------------------------- Executive Officer and (Donald B. Marron) Director (principal executive officer) /s/ REGINA DOLAN Senior Vice President and December 29, 1997 - --------------------------------------------- Chief Financial Officer (Regina Dolan) (principal financial and accounting officer) Director December , 1997 - --------------------------------------------- (T. Stanton Armour) /s/ E. GARRETT BEWKES, JR. Director December 29, 1997 - --------------------------------------------- (E. Garrett Bewkes, Jr.) Director December , 1997 - --------------------------------------------- (Reto Braun)
II-3 13
SIGNATURE TITLE DATE - --------------------------------------------- ---------------------------- ------------------ /s/ JOHN A. BULT Director December 29, 1997 - --------------------------------------------- (John A. Bult) /s/ JOSEPH J. GRANO, JR. Director December 29, 1997 - --------------------------------------------- (Joseph J. Grano, Jr.) /s/ FRANK P. DOYLE Director December 29, 1997 - --------------------------------------------- (Frank P. Doyle) /s/ JAMES W. KINNEAR Director December 29, 1997 - --------------------------------------------- (James W. Kinnear) /s/ NAOSHI KIYONO Director December 29, 1997 - --------------------------------------------- (Naoshi Kiyono) Director December , 1997 - --------------------------------------------- (Robert M. Loeffler) /s/ EDWARD RANDALL, III Director December 29, 1997 - --------------------------------------------- (Edward Randall, III) /s/ HENRY ROSOVSKY Director December 29, 1997 - --------------------------------------------- (Henry Rosovsky) /s/ YOSHINAO SEKI Director December 29, 1997 - --------------------------------------------- (Yoshinao Seki) Director December , 1997 - --------------------------------------------- (John R. Torell III)
II-4 14 EXHIBIT INDEX
EXHIBIT PAGE NO. DESCRIPTION NUMBER - ------ ------------------------------------------------------------------------- 3.1 -- Restated Certificate of Incorporation of the Registrant, as filed with the Office of the Secretary of State of the State of Delaware on May 4, 1987 (incorporated by reference to Exhibit 3.1 of Registrant's Registration Statement No. 33-52695 on Form S-3 filed with the SEC on October 16, 1995)........................................ 3.2 -- By-laws of the Registrant as amended March 1, 1988 (incorporated by reference to Exhibit 3.2 of Registrant's Registration Statement No. 33-52695 on Form S-3 filed with the SEC on October 16, 1995)........................ 4.4 -- Option Agreement dated as of January 6, 1994 by and between the Registrant and PW Partners 1993 Dedicated L.P. .................................................... 5 -- Opinion of Theodore A. Levine, in respect of the legality of the Securities registered hereunder, containing the consent of such counsel.................................. 23.1 -- Consent of Ernst & Young LLP............................. 23.2 -- Consent of Counsel. The consent of Theodore A. Levine is included in his opinion filed herewith as Exhibit 5...... 25 -- Power of Attorney (set forth on the signature pages of this Registration Statement).............................
EX-4.4 2 OPTION AGREEMENT 1 Exhibit 4.4 OPTION AGREEMENT AGREEMENT, dated as of January 6, 1994 (the "Effective Date"), by and between PAINE WEBBER GROUP INC., a Delaware corporation (the "Company"), and PW PARTNERS 1993 DEDICATED L.P., a Delaware limited partnership (the "Partnership"). WHEREAS, it is in the best interests of the Company and its affiliates to encourage their key employees to become shareholders of the Company: WHEREAS, the Partnership has been created to offer an opportunity to certain key employees of the Company and its direct and indirect wholly-owned subsidiaries as limited partners of the Partnership (together with their permitted Successors in Interests under the Partnership Agreement (as hereinafter defined), the "Limited Partners") to acquire shares of the Common Stock, $1.00 par value per share, of PWG (the "Common Stock"); and WHEREAS, the Company has authorized the grant to the Partnership of an option to purchase shares of Common Stock; NOW, THEREFORE, to effectuate the foregoing, the Company and the Partnership agree as follows: 1. Definitions. "General Partner" shall mean PaineWebber Partners Inc. 2 "Market Price", as of a particular date, shall mean the last sale price of one share of Common Stock, as officially reported on the composite tape with respect to the principal national securities exchange on which the Common Stock is at the time listed or admitted to trading, for such date (or, if there shall have been no sale on such exchange on such date, on the next preceding date on which the Common Stock was traded), or if the Common Stock shall not be thus listed or admitted to trading on any national securities exchange, then the last sale price of the Common Stock for such date, if it is a national market issue, or the average of the last bid and asked prices for such date, in either case as reported by the National Association of Securities Dealers automated quotation system ("NASDAQ"), or if not traded on NASDAQ by the National Quotation Bureau, Inc. If at any time the Common Stock is not listed on any exchange or quoted in the domestic over-the-counter market, the "Market Price" shall be deemed to be the fair market value thereof as of the date as of which the determination is to be made, as determined by a nationally recognized investment banking firm selected by the Company. "Option" shall have the meaning set forth in Section 2 below. "Optionholder" means the person or persons who are entitled to exercise the Option in accordance with this Agreement. 3 "Partnership Agreement" shall mean the Limited Partnership Agreement of the Partnership dated as of January 6, 1994 among the General Partner and the Limited Partners. "Securities Act" shall mean the Securities Act of 1933, as amended. "Trading Day" shall mean a day on which the principal securities exchange on which the Common Stock is listed is open for trading or, if the Common Stock is traded only in the domestic over-the-counter market, a day on which trading is conducted in such market or, if the Common Stock is not listed on any exchange or quoted in the domestic over-the-counter market, a day on which PaineWebber Incorporated is open for business. 2. Grant of Option. The Company hereby grants to the Partnership (the "Optionholder") an option to purchase from the Company 1,000,000 shares of Common Stock (the "Option Shares") at a price of $28.00 per share (as such price may be adjusted pursuant to the terms of this Agreement, the "Exercise Price"), at any time or from time to time before the close of business on December 31, 2003; provided, however, if the Partnership acquires fewer than 200,000 shares of Common Stock (the "Initial Shares") as of the Effective Date from the Company, the number of Option Shares shall be reduced so that the ratio of Option Shares to Initial Shares as of the 4 4 Effective Date will be five to one, with any fraction Option Share resulting from such reduction being rounded to one. The option to purchase the Option Shares and each option to purchase a lesser number of Option Shares that is transferred pursuant to Section 5 are referred to herein separately or collectively, as the case may be, as the "Option." The Option shall be evidenced by a certificate (the "Option Certificate") issued and delivered to the Optionholder upon the execution and delivery of this Agreement. 3. Exercise of Option. (a) The Option may be exercised in whole or in part by delivery to the Secretary of the Company at its principal office (presently 1285 Avenue of the Americas, New York, New York 10019) of the attached Notice of Election to Exercise Option (the "Exercise Notice"), duly executed by the Optionholder and specifying the number of Option Shares as to which the Option is being exercised (the "Acquired Shares"), and the Option Certificate, subject to delivery to the Company within five Trading Days thereafter of a certified or bank cashier's check or wire transfer of funds in the amount of the aggregate Exercise Price for the Acquired Shares. The exercise of the Option shall be deemed to have been effected as of the close of business on the date on which the Exercise Notice is delivered pursuant to this Section 3 (the "Exercise Date") and title to the Acquired Shares shall be vested in 5 5 the Optionholder on the Exercise Date, subject to delivery of the amount of the aggregate Exercise Price for the Acquired Shares within the period specified above. (b) Certificates for the Acquired Shares shall be delivered to the Optionholder within five Trading Days after the Exercise Date, provided that the Company shall have received the amount of the aggregate Exercise Price. If the Option is not exercised as to all the Option Shares which may be purchased thereunder (as adjusted pursuant to Section 7), the Company shall return the Option Certificate to the Optionholder with an endorsement of the number of Option Shares purchased. (c) The Option may be exercised only as to whole shares of Common Stock unless a fractional share is subject to the Option and the Option is exercised in full. No certificate shall be delivered to the Optionholder evidencing any fractional share of Common Stock as to which the Option is exercised. Instead, the Company shall pay to the Optionholder in cash an amount equal to a corresponding fraction of the Market Price of one share of Common Stock as of the Exercise Date. (d) Unless the Acquired Shares may at the time of acquisition be lawfully sold to the Optionholder in accordance with a then currently effective registration statement under the Securities Act, the Optionholder shall 6 6 provide the Company, as a condition to the delivery of any stock certificates, with a statement that the Optionholder is acquiring such Acquired Shares for investment purposes only and not with a view to any distribution or public offering of such shares. The Acquired Shares may not be sold, transferred or otherwise disposed of until (i) a registration statement with respect to the Acquired Shares to be delivered under the Option is declared effective or (ii) the Company receives an opinion of counsel reasonably satisfactory to the Company that such transfer will be exempt from registration under the Securities Act. (e) Each certificate for Acquired Shares shall, unless such shares are then the subject of an effective registration statement under the Securities Act, bear the following legend: "The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, and may not be sold or transferred except pursuant to an effective registration under such Act or an exemption from such registration." Any certificate issued at any time in exchange or substitution for a certificate for Acquired Shares bearing such legend shall also bear such legend unless (i) such shares are then the subject of an effective registration statement under the Securities Act or (ii) in the opinion of Company counsel or other counsel reasonably satisfactory to 7 7 the Company, the transfer of such shares is exempt from registration under the Securities Act. 4. Exercisability; Expiration. The Option shall not be exercisable until the Applicable Date as determined in accordance with the Partnership Agreement, except that if the Applicable Date is accelerated (other than pursuant to Section 7.02(b) of the Partnership Agreement) by the General Partner in accordance with Section 7.01(a) of the Partnership Agreement, the Option shall not be exercisable until the later of (i) December 10, 1994 and (ii) the date to which the Applicable Date is accelerated by the General Partner in accordance with Section 7.01(a) of the Partnership Agreement. The Option shall be exercisable on and after any date to which the Applicable Date is accelerated under Section 7.02(b) of the Partnership Agreement as a result of a Change in Control and the declaration of the Operative Date (as such terms are defined in the Partnership Agreement) or as a result of the commencement of a tender offer described in Section 7.02(b)(ii) of the Partnership Agreement. Unless previously exercised in full, the Option shall expire at the close of business on the first to occur of the following: (a) December 31, 2003; (b) If the Option is held by the Partnership, the purchase of the interest of a Limited Partner in the Partnership by the Partnership or the General Partner, 8 with respect to the number of shares subject to the Option held by the Partnership, if any, that are then allocable to such Limited Partner; (c) If an interest in the Option is held by a Limited Partner, the purchase of such interest of such Limited Partner by the Partnership or the General Partner; and (d) In the event of the liquidation, dissolution or winding-up of the Company as a result of a sale of all or substantially all of the Company's assets or otherwise, the record date for determining holders of Common Stock entitled to receive any distribution upon such liquidation, dissolution or winding-up. The Company shall give the Optionholder notice of any such liquidation, dissolution or winding-up at least 20 days before such record date, but failure to do so shall not affect the validity of the action taken or extend the right to exercise the Option. 5. TRANSFER OF OPTION. (a) An interest in the Option may be transferred at any time, in whole or in part, to one or more of the Limited Partners, provided that each such transfer is permitted by and is in accordance with, and subject to, the Partnership Agreement. Following any such transfer (i) references to the Optionholder in this Agreement shall be deemed to refer to 9 9 the Limited Partner to whom such transfer is made, with respect to the number of shares of Common Stock as to which he is thereafter entitled to exercise the Option, and (ii) the Option so transferred and any shares of Common Stock received by a Limited Partner upon exercise thereof shall remain subject to all applicable provisions of the Partnership Agreement. The Option held by a Limited Partner shall not be transferable by the Limited Partner in whole or in part other than by will or the laws of descent and distribution. Any Option Certificate issued upon transfer of the Option as permitted by this Section 5(a) shall bear the following legend (appropriately modified if the shares of Common Stock to be delivered upon exercise of the Option are then the subject of an effective registration statement under the Securities Act): "This Option and the shares of common stock to be delivered upon exercise of this Option have not been registered under the Securities Act of 1933 and may be transferred only in accordance with the provisions of Section 5 of the Option Agreement dated as of January 6, 1994 between Paine Webber Group Inc. and PW Partners 1993 Dedicated L.P." (b) Except as expressly provided in Section 5(a), neither the Option nor any interest in the Option may be transferred by the Optionholder. (c) The Company shall maintain, at its office at the address set forth in or subsequently changed pursuant to 10 10 Section 10(e), records for the registration and registration of transfer of the Option. Subject to the provisions of Section 5(a), the Option shall be transferred, in whole or in part, upon the surrender of an Option Certificate, together with the attached assignment form, duly executed by the registered holder of the Option or his duly authorized agent or attorney, at such office. Upon such surrender, the Company shall execute and deliver a new Option Certificate or Certificates in the name of the assignee or assignees and in the number of shares specified in such assignment, and the Option Certificate so surrendered shall be cancelled. 6. Merger or Consolidation. (a) In the event of (i) a merger or consolidation in which the Company is not the surviving or continuing corporation, or (ii) a merger or consolidation in which the Company is the surviving or continuing entity and the Common Stock is changed into or exchanged for cash or any other property, the Optionholder shall be entitled to receive, upon exercise of the Option at any time after the effective date of such merger or consolidation, in lieu of Common Stock, the stock, other securities, cash or property which a holder of the number of shares of Common Stock to be delivered upon exercise of the Option immediately prior to such transaction would have been entitled to receive upon the effectiveness of such merger or consolidation. The Company shall give the 11 11 Optionholder notice of any merger or consolidation involving the Company at least 20 days before the record date for such transaction, but failure to do so shall not affect the validity of the action taken. (b) The provisions of this Section 6 shall apply in a similar manner to any merger or consolidation of a type specified in Section 6(a) involving a successor corporation to the Company, if immediately prior thereto the Optionholder is entitled to receive, upon exercise of the Option, stock or other securities of such corporation. 7. Adjustment of Number of Shares and Exercise Price. (a) If any of the following events shall occur prior to the exercise in full or expiration of the Option: (i) a dividend is paid or any other distribution on the Common Stock is made in shares of Common Stock; (ii) the outstanding shares of Common Stock are subdivided into a greater number of shares; (iii) the outstanding shares of Common Stock are combined into a smaller number of shares; or (iv) the outstanding shares of Common Stock are changed into or exchanged for a different number or kind of capital stock or other securities of the Company, through reorganization, merger, consolidation, recapitalization, reclassification, capital adjustment or otherwise; 12 12 then the number and kind of shares of capital stock or other securities of the Company subject to the Option shall be appropriately adjusted so that after the record date for determination of the holders of Common Stock entitled to participate in any such event, the Optionholder shall be entitled to receive upon exercise of the Option such kind and number of shares of stock or securities as it would have been entitled to receive had it owned the shares of Common Stock to be delivered upon exercise of the Option on such record date. The Exercise Price shall be adjusted so that after such record date it equals (x) the aggregate Exercise Price under the Option, divided by (y) the number of shares of Common Stock or other securities to be delivered under the Option immediately after such record date. No such adjustments shall change the aggregate Exercise Price under the Option. (b) If the holders of outstanding shares of Common Stock shall at any time be offered any rights or warrants to subscribe for or purchase additional shares of Common Stock at a price per share less than the Market Price as of the record date for determination of stockholders entitled to such rights, the Exercise Price in effect immediately prior to such record date shall be adjusted by being multiplied by a fraction of which (i) the numerator is the number of shares of Common Stock outstanding on such record date plus the 13 13 number of shares which the aggregate offering price of the total number of shares so offered would purchase at such Market Price and (ii) the denominator is the number of shares of Common Stock outstanding on such record date plus the number of additional shares of Common Stock offered for subscription or purchase. Such adjustment shall be effective immediately after such record date. (c) If securities (other than Common Stock) or assets (other than cash dividends) of the Company, or rights or warrants to subscribe to securities of the Company other than Common Stock, are at any time distributed to the holders of outstanding shares of Common Stock, the Exercise Price in effect immediately prior to the record date for determination of stockholders entitled to receive such distribution shall be adjusted by being multiplied by a fraction of which (i) the numerator is the Market Price as of such record date less the then fair market value (as determined by the Board of Directors of the Company, whose determination shall be conclusive) of the securities or assets so distributed to the holder of one share of Common Stock or of the subscription rights or warrants applicable to one share of Common Stock and (ii) the denominator is such Market Price. Such adjustment shall be effective immediately after such record date. 14 14 (d) The Company shall give the Optionholder notice of the occurrence of any of the events specified in Sections 7(a), 7(b) or 7(c) at least 20 days before the record date for such transaction, but failure to do so shall not affect the validity of the action taken. (e) Upon each adjustment of the Exercise Price pursuant to Sections 7(b) or 7(c), the number of shares of Common Stock thereafter to be delivered upon exercise of the Option shall be equal to the result obtained by dividing the aggregate Exercise Price under the Option immediately prior to such adjustment by the Exercise Price in effect immediately after such adjustment. (f) Upon any adjustment of the number of shares of Common Stock subject to the Option or the Exercise Price, the Company shall give the Optionholder prompt written notice of the adjustment, setting forth in detail the method of calculation and the facts upon which the calculation is based. (g) The provisions of this Section 7 shall apply in a similar manner to any of the events specified in Sections 7(a), 7(b) and 7(c) involving stock or other securities of a successor corporation to the Company, if as of the record date for such transaction the Optionholder is entitled to receive, upon exercise of the Option, such stock or other securities. 15 15 8. Investment Representation. The Optionholder represents to the Company that it is acquiring the Option for investment purposes only and not with a view to any distribution or public offering of the Option or the shares of Common Stock to be delivered upon exercise of the Option. 9. Corporate Proceedings. (a) The Company has taken all corporate actions necessary to be taken by it to authorize the execution and delivery of the Option and delivery of the shares of Common Stock to be delivered thereunder. (b) All shares of Common Stock delivered upon the exercise of the Option will be duly and validly issued, fully-paid and nonassessable. 10. Miscellaneous. (a) Stockholder Rights. Prior to the exercise of the Option, the Optionholder shall not be entitled to any rights as a stockholder of the Company with respect to the shares of Common Stock to be delivered under the Option. (b) Replacement of Option Certificate. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of an Option Certificate and, in the case of such mutilation, upon surrender or cancellation of such Option Certificate, the Company at its expense shall execute and deliver in lieu 16 16 thereof a new Option Certificate of like tenor for the number of shares of Common Stock then to be delivered under the Option. (c) Successors and Assigns. The Company may not assign or transfer its obligations under the Option, except pursuant to a merger or consolidation in which (i) the Company is not the surviving or continuing entity and (ii) the surviving or continuing entity assumes such obligations either contractually or as a matter of law. (d) Amendment or Waiver. Any amendment or modification of this Agreement must be in writing and signed by (i) an authorized officer of the General Partner, if the Partnership is then an Optionholder, (ii) each of the Limited Partners, if any, who is then an Optionholder and would be affected by such amendment, and (iii) an authorized officer of the Company. A waiver of any provision of this Agreement must be in writing and signed by an authorized officer of the General partner, if the partnership is then an Optionholder, and each Limited Partner from whom a waiver is sought or by an authorized officer of the Company, as the case may be. (e) Notices. Any notice herein required or permitted to be given shall be in writing and shall be deemed to have been given when delivered personally or sent by certified or registered mail, postage prepaid, return receipt 17 17 requested, duly addressed to the party concerned at the address indicated below or to such other address as such party may subsequently give notice of: If to the Company: Paine Webber Group Inc. 1285 Avenue of the Americas New York, New York 10019 One Copy Attention: Secretary One Copy Attention: Treasurer If to the Partnership: PW Partners 1993 Dedicated L.P. c/o PaineWebber Partners Inc. 1285 Avenue of the Americas New York, New York 10019 Attention: General Partner If to a Limited Partner: At the address for such Limited Partner on the books of the Partnership (f) Headings. The section headings contained in the Option are for convenience only and shall not in any way affect the meaning or construction of this Agreement. (g) Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. 18 18 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above. PAINE WEBBER GROUP INC. By: /s/ Pierce R. Smith ----------------------------- Title: PW PARTNERS 1993 DEDICATED L.P. By: PAINEWEBBER PARTNERS INC. (General Partner) By: /s/ Donald M. Schwartz ----------------------------- Title: President 19 NOTICE OF ELECTION TO EXERCISE OPTION To: Paine Webber Group Inc. _______________________, the registered holder of an option granted under the Option Agreement dated as of December 29, 1993 between you and PW Partners 1993 Dedicated L.P. (the "Option Agreement") and evidenced by the attached Option Certificate, hereby elects to exercise its right to purchase from you _____ shares of common stock, $1.00 par value per share, of PaineWebber Group Inc. Payment of the aggregate Exercise Price (as defined in the Option Agreement) of such shares will be made within the period specified in the Option Agreement. ___________________________________ (Name of Optionholder) Dated: 20 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ________________________ the rights of the undersigned under the Option Agreement dated as of December 31, 1993 between Paine Webber Group Inc. (the "Company") and PW Partners 1993 Dedicated L.P. with respect to the purchase of __________ shares of the Common Stock, $1.00 par value, of Paine Webber Group Inc., and appoints ______________________________ attorney to transfer said rights on the books of the Company, with full power of substitution. _______________________ [Name of Optionholder] Dated: EX-5 3 OPINION OF THEODORE A. LEVINE 1 EXHIBIT 5 December 29, 1997 Board of Directors Paine Webber Group Inc. 1285 Avenue of the Americas New York, New York 10019 1,200,000 SHARES PAINE WEBBER GROUP INC. COMMON STOCK Dear Sirs: I have examined and am familiar with the Certificate of Incorporation of Paine Webber Group Inc., a Delaware corporation ("Paine Webber"), and the By-laws of Paine Webber. I am also familiar with the corporate proceedings taken by Paine Webber to authorize the issuance and sale of 1,200,000 shares of Common Stock, par value $1 per share, of Paine Webber (the "Common Stock"). I have also examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as I have deemed necessary or appropriate for purposes of this opinion. Based on the foregoing, I am of the opinion that, under the laws of the State of Delaware, the shares of Common Stock have been duly authorized and, when issued and sold, in accordance with the corporate proceedings referred to above, will be legally issued, fully paid and nonassessable. I know that I am referred to under the heading "Legal Opinion" in the prospectus forming a part of the Registration Statement on Form S-3 relating to the shares of Common Stock, and I hereby consent to such use of my name in such Registration Statement. Very truly yours, TAL/mas EX-23.1 4 CONSENT OF ERNST & YOUNG LLP 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-3) and the related Prospectus of Paine Webber Group Inc. for the registration of 1,200,000 shares of its Common Stock and to the incorporation by reference therein of our report dated February 3, 1997, 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, 1996, filed with the Securities and Exchange Commission. ERNST & YOUNG LLP New York, New York December 31, 1997 -----END PRIVACY-ENHANCED MESSAGE-----