<PAGE>
Registration No. 2-74667
Registration No.811-3301
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No.
Post-Effective Amendment No. 28 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 30 [X]
(Check appropriate box or boxes)
--------------------------------
SEPARATE ACCOUNT NO. 301
of
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(Exact Name of Registrant)
--------------------------
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
(Name of Depositor)
1290 Avenue of the Americas, New York, New York 10104
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: 1-(800) 248-2138
--------------------------
HOPE E. ROSENBAUM-WERNER
VICE PRESIDENT AND COUNSEL
The Equitable Life Assurance Society of the United States
1290 Avenue of the Americas, New York, New York 10104
(Names and Addresses of Agents for Service)
---------------------------------------------------------
Please send copies of all communications to:
PETER E. PANARITES
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W., Suite 825
Washington, D.C. 20036
--------------------------------------------
<PAGE>
Approximate Date of Proposed Public Offering: Continuous
It is proposed that this filing will become effective (check
appropriate box):
[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485.
[X] On May 1, 1997 pursuant to paragraph (b) of Rule 485.
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485.
[ ] On (date) pursuant to paragraph (a)(1) of Rule 485.
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485.
[ ] On (date) pursuant to paragraph (a)(3) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for
previously filed post-effective amendment.
-----------------------------
The Registrant has registered an indefinite number of securities under
the Securities Act of 1933 pursuant to Rule 24f-2.
The Rule 24f-2 Notice of the Registrant for fiscal year 1996 was filed
on February 27, 1997.
<PAGE>
CROSS REFERENCE SHEET
SHOWING LOCATION OF INFORMATION IN PROSPECTUS
---------------------------------------------
FORM N-4 ITEM PROSPECTUS CAPTION
- ------------- ------------------
1. Cover Page Cover Page
2. Definitions Summary - Questions and Answers
3. Synopsis Summary - Questions and Answers
4. Condensed Financial Certificate
Information Provisions - Investment of
Contributions in the Investment
Divisions
5. General Description of Equitable; Our Separate
Registrant, Depositor and Account
Portfolio Companies
6. Deductions and Expenses Deductions and Charges
7. General Description of Certificate Provisions
Variable Annuity Contracts
8. Annuity Period Certificate Provisions
9. Death Benefit Certificate Provisions - Death and
Disability Benefits
10. Purchases and Contract Value Certificate Provisions
11. Redemptions Certificate Provisions -
Retirement Benefits
12. Taxes Federal Income Tax Aspects of the
Retirement Programs
13. Legal Proceedings Not Applicable
14. Table of Contents of the Table of Contents of the
Statement of Additional Statement of Additional
Information Information
<PAGE>
CROSS REFERENCE SHEET
SHOWING LOCATION OF INFORMATION
IN STATEMENT OF ADDITIONAL INFORMATION
--------------------------------------
STATEMENT OF ADDITIONAL
FORM N-4 ITEM INFORMATION CAPTION
- ------------- -----------------------
15. Cover Page Cover Page
16. Table of Contents Table of Contents
17. General Information Part 3: Reorganization
18. Services Not Applicable
19. Purchase of Certificate
Securities Being Provisions - Transfers
Offered Among the Investment Options in
the Prospectus
20. Underwriters Our Separate Account - the Trust
in the Prospectus
21. Calculation of Comparative Investment
Performance Data Performance in the Prospectus
22. Annuity Payments Not Applicable
23. Financial Statements Financial Statements
<PAGE>
PROSPECTUS
CERTIFICATES AND GROUP ANNUITY CONTRACTS
FUNDED THROUGH THE INVESTMENT FUNDS OF
SEPARATE ACCOUNT NO. 301
OF
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
1290 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10104
- -----------------------------------------------------------------------------
This prospectus describes certificates and group annuity contracts which are
designed for use in connection with IRAs, TSAs, SEPs and SIMPLEs, all
qualifying for favorable tax treatment under the Internal Revenue Code of
1986, as amended.
Contributions may be put into one or more of twelve Investment Options:
<TABLE>
<CAPTION>
SEPARATE ACCOUNT INVESTMENT FUNDS GENERAL ACCOUNT OPTIONS
<S> <C> <C>
o Money Market o Common Stock o 1 Year Guaranteed
o Intermediate Government o Aggressive Stock Rate Account
Securities o Global o 3 Year Guaranteed
o High Yield o Conservative Investors Rate Account
o Balanced o Growth Investors
o Growth & Income
</TABLE>
Each of the Investment Funds invests in shares of a corresponding portfolio
(PORTFOLIO) of The Hudson River Trust (TRUST), a mutual fund whose shares are
purchased by the separate accounts of insurance companies. The prospectus for
the Trust directly follows this Prospectus and describes the investment
objectives, policies and risks of the Trust's Portfolios.
This prospectus provides information that you should know before investing,
and should be read and retained for future reference. This prospectus is not
valid unless it is attached to a current prospectus for the Trust, which you
should also read carefully.
For further information and assistance, you should contact our Administrative
Office at P.O. Box 2468, G.P.O., New York, New York 10116. You may also call
the following toll-free number: 1-800-248-2138.
A Statement of Additional Information (SAI), dated May 1, 1997, has been
filed with the Securities and Exchange Commission. The SAI has been
incorporated by reference into this prospectus. The SAI is available at no
charge by writing to the above address or by calling the telephone number
listed above. The table of contents to the SAI appears on page 20 of this
prospectus. You may also request an SAI for the Trust.
- -----------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS MAY 1, 1997.
Copyright 1997 The Equitable Life Assurance Society of the United States. All
rights reserved.
<PAGE>
TABLE OF CONTENTS
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PAGE
- -----------------------------------------------------------------------------
SUMMARY--QUESTIONS AND ANSWERS ................................... 3
Fee Table ....................................................... 5
Example ......................................................... 6
Summary of Unit Values .......................................... 6
EQUITABLE LIFE ................................................... 7
OUR SEPARATE ACCOUNT ............................................. 7
The Trust ....................................................... 8
CERTIFICATE PROVISIONS ........................................... 10
Participants, Certificate Owners and Annuitants ................. 10
Contributions ................................................... 10
Investment of Contributions in the Investment Funds ............ 10
Guaranteed Rate Accounts ........................................ 11
Withdrawals ..................................................... 12
Transfers Among the Investment Options .......................... 12
Death and Disability Benefits ................................... 13
Retirement Benefits ............................................. 13
Revocation Rights ............................................... 15
Miscellaneous ................................................... 15
COMPARATIVE INVESTMENT PERFORMANCE ............................... 15
Annual Percent Changes in Unit Value ............................ 16
Annualized Rates of Return ...................................... 16
FEDERAL INCOME TAX ASPECTS OF THE RETIREMENT PROGRAMS ........... 17
Tax-Sheltered Annuity Arrangements (TSAs) ....................... 17
Individual Retirement Annuities (IRAs) .......................... 17
IRAs Under Simplified Employee Pension Plans (SEPs) ............ 17
DEDUCTIONS AND CHARGES ........................................... 17
Participant Service Charge ...................................... 17
Administration Charge ........................................... 18
Other Expenses .................................................. 18
Deductions and Expenses of the Trust ............................ 18
Expense Limitations ............................................. 18
Fixed Annuity Administrative Charge ............................. 18
SEP/SIMPLE Enrollment Fee ....................................... 18
Guaranteed Rate Account Premature Withdrawal Charge ............ 18
Charge for Premium or Applicable Taxes .......................... 18
VOTING RIGHTS .................................................... 19
Trust Voting Rights ............................................. 19
How We Determine a Participant's Voting Shares .................. 19
How Trust Shares Are Voted ...................................... 19
Voting Privileges of Participants in Other Separate Accounts ... 19
Separate Account Voting Rights .................................. 19
Changes in Applicable Law ....................................... 20
REPORTS .......................................................... 20
REGULATION ....................................................... 20
ADDITIONAL INFORMATION ........................................... 20
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION ........ 20
2
<PAGE>
SUMMARY--QUESTIONS
AND ANSWERS
WHAT RETIREMENT PROGRAMS ARE OFFERED UNDER THE CERTIFICATES AND CONTRACTS?
In this prospectus we describe group annuity contracts and certificates
issued under group annuity contracts that are used in connection with
retirement programs that qualify for Federal tax benefits under the Internal
Revenue Code of 1986, as amended (the CODE). Individuals who make
contributions or for whom contributions are made are Participants. We offer
IRAs, TSAs, SEPs and SIMPLEs under a group annuity contract between Equitable
Life and the Chase Manhattan Bank, N.A. (CHASE) as the Contract Holder.
Individual certificates are issued to each Participant to describe the
Participant's interest under the contract. In summary, the retirement
programs we offer are:
o Individual retirement annuities (IRAS) for eligible individuals which
qualify for favorable tax treatment under Code Section 408(b);
o Tax-sheltered annuity arrangements (TSAS) for employees of tax-exempt
organizations and public schools which qualify for favorable tax
treatment under Code Section 403(b); and
o Simplified employee pension plans (SEPS) sponsored by sole
proprietorships, partnerships and corporations. Contributions for each
eligible employee are made by an employer to the IRA certificate issued
to the employee. Each individual Participant covered by the SEP is the
owner and annuitant of the IRA certificate set up on his or her behalf.
o Savings Incentive Match Plan for Employees (SIMPLE) plans sponsored by
sole proprietorships, partnerships and corporations. Under a SIMPLE plan,
an employee can elect to have the employer contribute part of his or her
pay to a special form of IRA called a "SIMPLE IRA." In addition, the
employer is required to make an additional contribution, either matching
or non-elective.
For more information about these tax favored programs, see "Federal Income
Tax Aspects of the Retirement Programs" and, in the SAI, "Part 1--Federal Tax
Considerations of the Retirement Programs."
WHAT ARE THE AVAILABLE INVESTMENT OPTIONS?
Twelve options are available for the investment of contributions. The ten
INVESTMENT FUNDS of SEPARATE ACCOUNT No. 301 are the Money Market,
Intermediate Government Securities, High Yield, Balanced, Growth & Income,
Common Stock, Aggressive Stock, Global, Conservative Investors and Growth
Investors Funds. Additionally, a one-year and a three-year Guaranteed Rate
Account, which are part of our General Account, are available. The
Conservative Investors and Growth Investors Funds are Asset Allocation
Options.
Each of the Investment Funds invests in a corresponding Portfolio of the
Trust. Collectively, the ten Investment Funds and the Guaranteed Rate
Accounts are called the "INVESTMENT OPTIONS" or "OPTIONS." The availability
of Investment Options to Participants may be limited in some cases.
Participants should check with their employers or plan trustees.
HOW ARE CONTRIBUTIONS MADE AND INVESTED?
Contributions should be made by check or money order payable to Equitable
Life. Contributions under the certificates may be made at any time by the
Participant or, in the case of a TSA, SEP or SIMPLE IRA, by the employer on
the Participant's behalf. An employer may arrange to have contributions
deducted from a Participant's salary and in these cases will automatically
transfer those amounts deducted to us for investment as directed by the
Participant. Only in the case of an IRA or SEP/SIMPLE certificate can the
Participant make contributions to us directly (by completing the appropriate
form and enclosing the payment).
Contributions will be allocated to the Investment Options pursuant to
instructions we receive from the Participant. See "Certificate
Provisions--Investment of Contributions in the Investment Funds." In the SAI,
see "Part 2--The Guaranteed Rate Accounts" for details.
3
<PAGE>
IS THERE A MINIMUM CONTRIBUTION AMOUNT?
There is no minimum contribution amount; however, if a Participant is
contributing through an employer, the employer may have a minimum. See
"Certificate Provisions--Contributions."
CAN THE ALLOCATION OF CONTRIBUTIONS AMONG THE INVESTMENT OPTIONS BE CHANGED?
The Participant may change the allocation of contributions among the
Investment Options as often as the Participant wishes by telephone. See
"Certificate Provisions--Contributions." Changing the allocation of
contributions does not cause a reallocation of amounts previously invested.
CAN AMOUNTS BE TRANSFERRED AMONG THE INVESTMENT OPTIONS?
All or part of a Participant's Account Balance in one Investment Fund may be
transferred to any other Investment Fund as often as the Participant wishes
and without charge or tax liability. Transfers from the Guaranteed Rate
Accounts are subject to special rules. Instructions to transfer amounts among
the Options must be made in writing, unless we have the Participant's
authorization to accept telephone transfers. Transferring amounts does not
affect the allocation of future contributions. For more information regarding
restrictions and other matters, see "Certificate Provisions--Transfers Among
the Investment Options" and, in the SAI, "Part 2--The Guaranteed Rate
Accounts."
WHAT RETIREMENT OPTIONS ARE AVAILABLE?
At retirement, a Participant may choose to receive monthly fixed annuity
payments funded through our General Account, periodic distributions from the
Investment Options, a lump sum or a combination of these benefits. For more
information, see "Certificate Provisions--Retirement Benefits."
WHAT ARE THE DEATH AND DISABILITY BENEFITS?
If a Participant becomes disabled or dies before the Participant's retirement
date as defined in the certificate (RETIREMENT DATE), we will pay the Account
Balance as a disability benefit to the Participant or as a death benefit to a
beneficiary designated by the Participant. See "Certificate Provisions--Death
and Disability Benefits."
CAN WITHDRAWALS BE MADE UNDER THE CERTIFICATES?
Unless restricted by the retirement program under which the Participant is
covered or by provisions of the Code, all or any portion of the Participant's
Account Balance and, subject to penalty, the Participant's Guaranteed Rate
Account Cash Value may be withdrawn at any time prior to retirement. See in
the SAI, "Part 2--The Guaranteed Rate Accounts."
Withdrawals may result in adverse tax consequences, including a 10% penalty
on early withdrawals. Certain withdrawal restrictions apply to TSA
certificates. We urge each Participant to consult a tax advisor before making
a withdrawal. See "Certificate Provisions--Withdrawals" and "Federal Income
Tax Aspects of the Retirement Programs" and, in the SAI, "Part 1--Federal Tax
Considerations of the Retirement Programs" for more information.
CAN PARTICIPATION BE REVOKED?
The Participant has a right to revoke participation under a certificate. In
most states, the Participant must exercise this right within 10 days of
receipt of the certificate. The Participant should consult a tax advisor
before deciding to revoke, as cancellation may have adverse tax consequences.
See "Certificate Provisions--Revocation Rights"; and, in the SAI, see "Part
1--Federal Tax Considerations of the Retirement Programs."
WHAT IS EQUITABLE LIFE'S ADDRESS?
All communications to Equitable Life, except contributions, should be
addressed to Equitable Life 300+ Series, Box 2468, G.P.O., New York, New York
10116. Contribution checks should be addressed to Equitable Life 300+ Series,
P.O. Box 13871, Newark, New Jersey 07188-0871.
4
<PAGE>
FEE TABLE
The Table gives effect to generally applicable charges. The Table reflects
expenses of both the Separate Account and the Trust for the year ended
December 31, 1996. Certain expenses and fees shown in this Table may not
apply to each certificate. To determine whether a particular item in the
Table applies (and the actual amount, if any), consult the portion of the
prospectus indicated in the notes to the Table. Other charges, such as
enrollment fees and premium tax charges, may be applicable. See "Deductions
and Charges."
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVERNMENT HIGH
MARKET SECURITIES YIELD
-------- -------------- -------
<S> <C> <C> <C>
TRANSACTION EXPENSES
Sales Load on Purchases ------------- None ------------
Annual Participant
Service Charge (1) ---------- $30 maximum --------
SEPARATE ACCOUNT ANNUAL
EXPENSES (AS A
PERCENTAGE OF EACH
INVESTMENT FUND'S
AVERAGE VALUE)
Administration Charge 0.25% 0.25% 0.25%
Other Expenses 0.19% 0.27% 0.45%
Total Separate
Account Annual
Expenses 0.44% 0.52% 0.70%
TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF
EACH PORTFOLIO'S
AVERAGE NET ASSETS)
Management Fees 0.35% 0.50%(2) 0.60%
Other Expenses 0.04% 0.09% 0.06%
Total Trust Annual
Expenses (4) 0.39% 0.59% 0.66%
TOTAL SEPARATE ACCOUNT
AND TRUST ANNUAL EXPENSE
BEFORE APPLICABLE
REIMBURSEMENT 0.83% 1.11% 1.36%
EXPENSE REIMBURSEMENT -- 0.15% --
TOTAL SEPARATE ACCOUNT
AND TRUST ANNUAL
EXPENSES AFTER
APPLICABLE
REIMBURSEMENT (3) 0.83% 0.96% 1.36%
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
GROWTH & COMMON AGGRESSIVE CONSERVATIVE GROWTH
BALANCED INCOME STOCK STOCK GLOBAL INVESTORS INVESTORS
---------- ---------- -------- ------------ -------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
TRANSACTION EXPENSES
Sales Load on Purchases ----------------------------------- None ----------------------------------------
Annual Participant
Service Charge (1) ------------------------------- $30 maximum -------------------------------------
SEPARATE ACCOUNT ANNUAL
EXPENSES (AS A
PERCENTAGE OF EACH
INVESTMENT FUND'S
AVERAGE VALUE)
Administration Charge 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses 0.17% 0.49% 0.15% 0.25% 0.29% 1.03% 0.69%
Total Separate
Account Annual
Expenses 0.42% 0.74% 0.40% 0.50% 0.54% 1.28% 0.94%
TRUST ANNUAL EXPENSES
(AS A PERCENTAGE OF
EACH PORTFOLIO'S
AVERAGE NET ASSETS)
Management Fees 0.42% 0.55% 0.38% 0.55% 0.65% 0.48% 0.53%
Other Expenses 0.05% 0.05% 0.03% 0.03% 0.08% 0.07% 0.06%
Total Trust Annual
Expenses (4) 0.47% 0.60% 0.41% 0.58% 0.73% 0.55% 0.59%
TOTAL SEPARATE ACCOUNT
AND TRUST ANNUAL EXPENSE
BEFORE APPLICABLE
REIMBURSEMENT 0.89% 1.34% 0.81% 1.08% 1.27% 1.83% 1.53%
EXPENSE REIMBURSEMENT -- -- -- -- -- -- --
TOTAL SEPARATE ACCOUNT
AND TRUST ANNUAL
EXPENSES AFTER
APPLICABLE
REIMBURSEMENT (3) 0.89% 1.34% 0.81% 1.08% 1.27% 1.83% 1.53%
</TABLE>
- --------------
(1) See "Deductions and Charges--Participant Service Charge."
(2) The annual amount of Management Fees applicable to the
Intermediate Government Securities Portfolio is limited to 0.35%
of the value of the Portfolio's average daily assets. This
limitation is a contractual right for Participants who enrolled in
the program prior to May 1, 1987 and cannot be changed without
their consent. Equitable Life has voluntarily agreed to impose
this limitation for all other Participants and reserves the right
to discontinue it at any time. See "Deductions and
Charges--Expense Limitations."
(3) The amounts shown in the Table under "Separate Account Annual
Expenses" and under "Trust Annual Expenses" for the Money Market,
Intermediate Government Securities, Balanced and Common Stock
Funds, when added together, are limited by the certificates and
contracts to 1% of the value of the Money Market Fund's average
daily net assets and 1.5% of the value of the Common Stock,
Intermediate Government Securities or Balanced Funds' average
daily net assets. For the High Yield, Aggressive Stock and Global
Funds, Equitable Life applies a voluntary expense limitation at an
effective annual rate of 1.5% of average daily net assets of each
Fund. See "Deductions and Charges--Expense Limitations."
(4) Effective May 1, 1997, a new Investment Advisory Agreement was
entered into between The Hudson River Trust and Alliance Capital
Management L.P., The Hudson River Trust's Investment Advisor,
which effected changes in The Hudson River Trust's management fee
and expense structure.
The tables above reflecting The Hudson River Trust's expenses are
based on Portfolio average net assets for the year ended December
31, 1996 and have been restated to reflect (i) the fees that would
have been paid to Alliance if the current advisory agreement had
been in effect as of January 1, 1996 and (ii) estimated accounting
expenses for the year ending December 31, 1997.
5
<PAGE>
EXAMPLE. The purpose of this Table is to assist the Participant in
understanding the various costs and expenses which the Participant may bear
directly or indirectly under your certificate. The Table reflects expenses of
both the Separate Account and the Trust.
The examples below show the expenses that the Participant would pay, assuming
a single investment of $1,000 in each Investment Fund listed and a 5% annual
return on assets(1). Applicable expenses are the same whether or not the
Participant withdraws all or part of the Account Balance at the end of each
time period shown. These figures are based on the expenses set forth in the
preceding table after applicable expense reimbursements. For purposes of
these examples, the Participant Service Charge is computed by applying a
Participant Service Charge of $12 to the average number of Participants for
the year, divided by the average Fund assets for the same period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
Money Market ....................... $ 8.94 $27.92 $ 48.48 $107.70
Intermediate Government Securities 10.26 32.01 55.51 122.87
High Yield ......................... 14.32 44.50 76.85 168.25
Balanced ........................... 9.55 29.81 51.73 114.73
Growth & Income .................... 14.11 43.88 75.79 166.03
Common Stock ....................... 8.73 27.29 47.40 105.35
Aggressive Stock ................... 11.48 35.77 61.96 136.69
Global ............................. 13.41 41.70 72.09 158.21
Conservative Investors ............. 19.08 58.99 101.36 219.13
Growth Investors ................... 16.04 49.76 85.78 186.95
</TABLE>
These examples should not be considered a representation of past or future
expenses for each Investment Fund or Portfolio. Actual expenses may be
greater or less than those shown above. Similarly, the annual rate of return
assumed in the examples is not an estimate or guarantee of future investment
performance.
- -------------------
(1) An Account Balance could not be converted to an annuity at the end of
any of the periods shown in the examples. For any form of annuity
distribution, the minimum amount applied must be $2,000, and the
minimum initial annuity payment must be at least $20. See "Certificate
Provisions--Retirement Benefits." In some cases, charges for state
premium or other taxes will be deducted from the amount applied.
SUMMARY OF UNIT VALUES. Unit Values for the Money Market, Intermediate
Government Securities, Balanced and Common Stock Funds shown in the table
below include periods prior to June 1987, when four open-end managed separate
accounts (PREDECESSOR SEPARATE ACCOUNTS) were reorganized into the Separate
Account in unit investment trust form. The Unit Value for each Predecessor
Separate Account was established at $10.00 on February 5, 1982, the date that
contributions of Participants were first allocated to those separate
accounts.
The Unit Values shown are the same as they would have been if the Separate
Account had operated as a unit investment trust investing in the Trust for
all the periods shown, as currently reported in the Trust's prospectus and
Statement of Additional Information. Because the High Yield, Aggressive Stock
and Global Funds do not have corresponding Predecessor Separate Accounts, no
unit values are presented for them prior to June 1987. Because the Growth &
Income, Conservative Investors and Growth Investors Funds do not have
corresponding Predecessor Separate Accounts, no unit values are presented for
them prior to May 1994.
6
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------
UNIT VALUES
---------------------------------------
INTERMEDIATE
MONEY GOVERNMENT HIGH
MARKET SECURITIES* YIELD
LAST BUSINESS DAY OF FUND FUND FUND
- -------------------- ------------- -------------- --------
<S> <C> <C> <C>
December 1986 ....... $15.26 $21.86 --
December 1987 ....... 16.14 22.41 $10.41
December 1988 ....... 17.23 23.63 11.60
December 1989 ....... 18.73 27.19 11.67
December 1990 ....... 20.17 28.79 11.11
December 1991 ....... 21.29 32.73 13.84
December 1992 ....... 21.93 34.34 15.40
December 1993 ....... 22.48 37.77 18.84
December 1994 ....... 23.32 36.13 18.18
December 1995 ....... 24.55 40.82 21.67
December 1996 ....... 25.77 42.20 26.45
Number of Units
Outstanding at
December 31, 1996
(000's) ............ 804 130 107
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
UNIT VALUES
-------------------------------------------------------------------------------------
COMMON AGGRESSIVE
BALANCED STOCK STOCK GLOBAL GROWTH & CONSERVATIVE GROWTH
LAST BUSINESS DAY OF FUND FUND FUND FUND INCOME INVESTORS INVESTORS
- -------------------- ---------- -------- ------------ -------- ---------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
December 1986 ....... $24.57 $ 28.00 -- -- -- -- --
December 1987 ....... 23.88 29.88 $ 8.59 $ 8.58 -- -- --
December 1988 ....... 27.04 33.04 8.70 9.58 -- -- --
December 1989 ....... 33.91 40.94 12.47 11.97 -- -- --
December 1990 ....... 33.76 35.87 13.34 11.23 -- -- --
December 1991 ....... 47.50 51.55 23.43 14.20 -- -- --
December 1992 ....... 45.92 52.97 22.54 14.01 -- -- --
December 1993 ....... 51.38 65.89 26.14 18.40 -- -- --
December 1994 ....... 47.03 64.13 24.95 19.25 $ 9.92 $ 9.92 $ 9.79
December 1995 ....... 56.07 84.56 32.67 22.76 12.21 11.79 12.23
December 1996 ....... 62.36 104.68 39.73 25.95 14.55 12.25 13.64
Number of Units
Outstanding at
December 31, 1996
(000's) ............ 559 692 187 214 231 71 105
</TABLE>
*Prior to September 6, 1991, the Bond Fund.
EQUITABLE LIFE
Equitable Life is a New York stock life insurance company that has been in
business since 1859. For more than 100 years we have been among the largest
life insurance companies in the United States. Equitable Life has been
selling annuities since the turn of the century. Our Home Office is located
at 1290 Avenue of the Americas, New York, New York 10104. We are authorized
to sell life insurance and annuities in all fifty states, the District of
Columbia, Puerto Rico and the Virgin Islands. We maintain local offices
throughout the United States. We are one of the nation's leading pension fund
managers.
Equitable Life is a wholly-owned subsidiary of The Equitable Companies
Incorporated (HOLDING COMPANY). The largest stockholder of the Holding
Company is AXA-UAP ("AXA"). As of January 1, 1997, AXA beneficially owns
63.8% of the outstanding shares of common stock of the Holding Company
(assuming conversion of the convertible preferred stock held by AXA). Under
its investment arrangements with Equitable Life and the Holding Company, AXA
is able to exercise significant influence over the operations and capital
structure of the Holding Company and its subsidiaries, including Equitable
Life. AXA, a French Company, is the holding company for an international
group of insurance and related financial service companies.
Equitable Life, the Holding Company and their subsidiaries managed
approximately $239.8 billion of assets as of December 31, 1996, including
third party assets of approximately $184.8 billion. These assets are
primarily managed for retirement and annuity programs for businesses,
tax-exempt organizations and individuals. This broad customer base includes
nearly half the Fortune 100, more than 42,000 small businesses, state and
local retirement funds in more than half the 50 states, approximately 250,000
employees of educational and non-profit institutions, as well as nearly
500,000 individuals. Millions of Americans are covered by Equitable Life's
annuity, life, health and pension contracts.
OUR SEPARATE ACCOUNT
The aggregate assets of all the Investment Funds are held in our Separate
Account No. 301, which was established on October 19, 1981 under the New York
Insurance Law. The Separate Account is organized as a unit investment trust
registered with the Securities and Exchange Commission (SEC) under the
Investment Company Act of 1940 (1940 ACT). This registration does not involve
any supervision by the SEC of the management or investment policies of the
Separate Account.
The Separate Account currently has ten investment funds: a Money Market Fund,
an Intermediate Government Securities Fund, a High Yield Fund, a Balanced
Fund, a Growth & Income Fund, a Common Stock Fund, an Aggressive Stock Fund,
a Global Fund, a Conservative Investors Fund and a Growth Investors Fund,
each of which invests in shares of a corresponding Portfolio of the Trust.
7
<PAGE>
The assets of the Separate Account are our property. The certificates provide
that the portion of the Separate Account's assets equal to the reserves and
other contract liabilities with respect to the Separate Account will not be
chargeable with liabilities arising out of any other business we may conduct.
Accordingly, income, gains or losses, whether or not realized, from assets of
the Separate Account are credited to or charged against the Separate Account
without regard to Equitable's other income, gains or losses. We are the
issuer of the certificates and the obligations set forth therein, other than
those of Participants or employers, are ours.
In addition to contributions made under the certificates described in this
Prospectus, we may allocate to the Separate Account monies received under
other agreements or annuity contracts. Each Participant will participate in
the Separate Account in proportion to the amount in the Separate Account
attributable to such Participant's certificate. We may transfer to our
General Account any of the Separate Account's assets that are in excess of
the reserves and other liabilities relating to the certificates described in
this prospectus or certain other contracts.
We reserve the right, subject to compliance with applicable law, including
approval of the Participants, if required, (1) to cause the registration or
deregistration of the Separate Account under the Investment Company Act of
1940, (2) to operate the Separate Account under the direction of a committee
and to discharge such committee at any time, (3) to restrict or eliminate any
voting rights of Participants or other persons who have voting rights as to
the Separate Account, (4) to add, change or remove the designated investment
company, (5) to add, change or remove Investment Funds, (6) to combine any
two or more Investment Funds, (7) to transfer assets from any one of the
Investment Funds to another Investment Fund, and (8) to operate the Separate
Account or one or more of the Investment Funds by making direct investments
or investments in any other form Equitable Life in its sole discretion
determines.
We may make other changes in the certificates that do not reduce any Cash
Value, Account Balance, Annuity Value or Annuity Benefit or other accrued
rights or benefits.
EQ Financial Consultants, Inc. (EQ FINANCIAL), a wholly-owned subsidiary of
Equitable Life, performs all sales functions for the Separate Account and may
be deemed to be its principal underwriter under the 1940 Act. EQ Financial is
also the principal underwriter of The Hudson River Trust. EQ Financial is
registered with the SEC as a broker-dealer under the Securities Exchange Act
of 1934 (EXCHANGE ACT) and is a member of the National Association of
Securities Dealers, Inc. EQ Financial's principal business address is 1755
Broadway, New York, New York 10019. The offering described in the prospectus
will be made through registered representatives of EQ Financial.
THE TRUST
The Trust is an open-end, diversified management investment company, more
commonly called a mutual fund. As a "series" type of mutual fund, it issues
several different series of stock, each of which relates to a different
Portfolio of the Trust. The Trust has twelve different Portfolios.
Participants may invest in any of ten Investment Funds of the Separate
Account, which, in turn, invest in corresponding Portfolios of the Trust. The
Trust commenced operations in June 1987. The Trust does not impose a sales
charge or "load" for buying and selling its shares. All dividend
distributions from the Trust are reinvested in full and fractional shares of
the Portfolio to which they relate.
More detailed information about the Trust, its investment objectives,
policies, restrictions, risks, expenses and all other aspects of its
operations, appears in its prospectus, which is the second part of this
booklet, or in its statement of additional information.
The Trust's Investment Adviser. The Trust is advised by Alliance Capital
Management L.P. (ALLIANCE), which is registered with the SEC as an investment
adviser under the Investment Advisers Act of 1940. On December 31, 1996,
Alliance was managing over $182.7 billion in assets. Alliance acts as an
investment adviser to various separate accounts and general accounts of
Equitable Life and other affiliated insurance companies. Alliance also
provides management and consulting services to mutual funds, endowment funds,
insurance companies,
8
<PAGE>
foreign entities, qualified and non-tax qualified corporate funds, public and
private pension and profit-sharing plans, foundations and tax-exempt
organizations.
Alliance's main office is located at 1345 Avenue of the Americas, New York, New
York 10105. Alliance, a publicly-traded limited partnership, is indirectly
majority-owned by Equitable Life.
The advisory fee payable by the Trust is based on the following annual
percentages of the value of each Portfolio's daily average net assets:
<TABLE>
<CAPTION>
DAILY AVERAGE NET
-------------------------------------------------------------------
ASSETS
FIRST NEXT NEXT NEXT
$750 $750 $1 $2.5 THERE-
PORTFOLIO MILLION MILLION BILLION BILLION AFTER
- ---------------- ----------------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Money Market..... 0.350% 0.325% 0.300% 0.280% 0.270%
Intermediate
Government
Securities...... 0.500% 0.475% 0.450% 0.430% 0.420%
High Yield....... 0.600% 0.575% 0.550% 0.530% 0.520%
Balanced......... 0.450% 0.400% 0.350% 0.325% 0.300%
Growth & Income . 0.550% 0.525% 0.500% 0.480% 0.470%
Common Stock..... 0.475% 0.425% 0.375% 0.355% 0.345%*
Aggressive
Stock........... 0.625% 0.575% 0.525% 0.500% 0.475%
Global........... 0.675% 0.600% 0.550% 0.530% 0.520%
Conservative
Investors....... 0.475% 0.425% 0.375% 0.350% 0.325%
Growth
Investors....... 0.550% 0.500% 0.450% 0.425% 0.400%
</TABLE>
- ------------
* On assets in excess of $10 billion, the management fee for the Common Stock
Portfolio is reduced to 0.335% of average daily net assets.
Investment Policies of the Trust's Portfolios. Each Portfolio has a different
investment objective which it tries to achieve by following separate
investment policies. The objectives and policies of each Portfolio will
affect its return and its risks. There is no guarantee that these objectives
will be achieved.
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT POLICY OBJECTIVE
- ---------------- -------------------------- ------------------------
<S> <C> <C>
Money Market Primarily high quality High level of current
short-term money market income while preserving
instruments assets and maintaining
liquidity
Intermediate Primarily debt securities High current income con-
Government Secu- issued or guaranteed by sistent with relative
rities the U.S. Government, its stability of principal
agencies and instrumen-
talities. Each investment
will have a final maturity
of not more than 10 years
or a duration not exceed-
ing that of a 10-year
Treasury note
High Yield Primarily a diversified High return by maximiz-
mix of high yield, fixed ing current income and,
income securities involv- to the extent consistent
ing greater volatility of with that objective,
price and risk of princi- capital appreciation
pal and income than high
quality fixed income secu-
rities. The medium and
lower quality debt securi-
ties in which the Portfo-
lio may invest are known
as "junk bonds"
Balanced Primarily common stocks, High return through a
publicly-traded debt secu- combination of current
rities and high quality income and capital ap-
money market instruments preciation
Growth & Income Primarily income producing High total return
common stocks and securi- through a combination of
ties convertible into com- current income and capi-
mon stocks tal appreciation
Common Stock Primarily common stock and Long-term growth of
other equity-type instru- capital and increasing
ments income
Aggressive Stock Primarily common stocks Long-term growth of
and other equity-type se- capital
curities issued by medium
and other smaller sized
companies with strong
growth potential
Global Primarily equity securi- Long-term growth of
ties of non-United States capital
as well as United States
companies
ASSET ALLOCATION SERIES:
Conservative In- Diversified mix of pub- High total return with-
vestors licly traded fixed-income out, in the adviser's
and equity securities; as- opinion, undue risk to
set mix and security se- principal
lection primarily based
upon factors expected to
reduce risk
Growth Investors Diversified mix of High total return con-
publicly-traded, fixed in- sistent with the advis-
come and equity securi- er's determination of
ties; asset mix and secu- reasonable risk
rity selection based upon
factors expected to in-
crease possibility of high
long-term return
</TABLE>
9
<PAGE>
CERTIFICATE PROVISIONS
An employer may, in certain circumstances, limit a Participant's rights under
a certificate. The Participant should check the provisions of the employer's
plan or agreements with the Participant to see if there are any such
limitations and, if so, what they are.
PARTICIPANTS, CERTIFICATE OWNERS AND ANNUITANTS
Individuals who make contributions or individuals for whom contributions are
made under certificates are Participants. Each Participant is also an
Annuitant, meaning the person upon whose life the certificate is issued and
the person who is entitled to receive benefit payments. Each Participant is
also the owner of the certificate. Under an IRA, a Participant's spouse may
also become a Participant by establishing a separate spousal IRA. In such
case, we will issue a separate certificate to the spouse.
CONTRIBUTIONS
Frequency and Amount. In the case of an IRA, SEP or SIMPLE, the Participant
or employer makes contributions by completing the appropriate contribution
form and enclosing the payment. There is no minimum contribution amount
except for any established by an employer for contributions made by payroll
deductions. Contributions should be sent by check or money order to Equitable
Life 300+ Series and made payable to Equitable Life.
Contributions made by payroll deduction must be sent to us by the
Participant's employer.
Annual contributions to a retirement program may be subject to maximum limits
imposed by the Code. See the SAI, "Part 1--Federal Tax Considerations of the
Retirement Programs" for a discussion of these limitations. We do not monitor
whether or not the contributions made under any of the retirement programs
may be in excess of the maximum limits imposed by the Code, but we reserve
the right to refuse contributions we believe to be in excess of such maximum
levels.
Subject to any restrictions imposed by an employer's retirement program,
rollover and direct transfer contributions will be accepted. See the SAI,
"Part 1--Federal Tax Considerations of the Retirement Programs" for details.
Allocation of Contributions. The Participant, by written instructions to us,
will designate how each contribution will be allocated among the Investment
Options. The Participant may use our telephone service (Account Investment
Management (AIM) System) to change the future allocation for contributions.
Requests for changes in allocations among the Investment Options will become
effective on the date of the receipt. Checks accompanied by an allocation
change request will be invested in accordance with that request. Changes in
the allocation of future contributions have no effect on amounts already
invested.
Discontinuance and Resumption of Contributions. A Participant is under no
obligation to continue making contributions. If contributions made by or on
behalf of a Participant are discontinued, participation under the certificate
will remain in effect, and, except for SEP/SIMPLE certificates, contributions
can be resumed at any time. However, we reserve the right to close a
Participant's Account if no contributions are made within 120 days of the
issue date of the certificate.
We also reserve the right to close a Participant's Account and pay any
Account Balance if contributions are discontinued for at least three years
from the date of the last contribution, and either (1) the Account Balance
does not exceed $2,000 or (2) the annuity which the existing Account Balance
would purchase at the Participant's Retirement Date would be less than $20
per month based on the current annuity rates in effect under the certificate.
INVESTMENT OF CONTRIBUTIONS IN THE INVESTMENT FUNDS
Business Day. Generally, a business day is any day Equitable Life is open and
the New York Stock Exchange is open for trading. We may close due to
emergency conditions. Generally, no transactions are processed if we are
closed. A business day ends at 4:00 p.m. Eastern time.
Purchase of Units in the Investment Funds. Contributions are invested on the
date of receipt, provided they are received by us on an Equitable Life
business day and are
10
<PAGE>
correctly payable and accompanied by a properly completed contribution form.
We may retain contributions accompanied by an incomplete contribution form
for five business days while we attempt to obtain the information required to
complete the form. Contributions will be invested immediately after the
contribution form is complete.
The portion of each contribution allocated to an Investment Fund will be used
to purchase Units in that Fund. The number of Units purchased by a
contribution to an Investment Fund is calculated by dividing the amount of
the contribution by the Investment Fund's Unit Value on the business day we
receive the contribution. See "How We Determine the Unit Value" below. The
number of Units purchased will not vary, however, because of any subsequent
fluctuation in the Unit Value.
The value of the Unit fluctuates with the investment performance of the
corresponding Portfolio of the Trust, which reflects the investment income
and realized and unrealized capital gains and losses of the Fund and Trust
expenses and charges. Unit Values also reflect the deductions and charges
made to the Investment Funds of the Separate Account. See "Deductions and
Charges."
On any given day, the value you have in any Investment Fund of our Separate
Account is the Unit Value times the number of Units credited to you in that
Investment Fund.
How We Determine the Unit Value. Unit Values for the Investment Funds of our
Separate Account are determined at the end of each business day.
The Unit Value of any Investment Fund for any business day is equal to the
Unit Value for the preceding business day multiplied by the Net Investment
Factor for that Investment Fund on that business day.
A Net Investment Factor for each Investment Fund is determined every business
day as follows:
o First, we take the value of the shares belonging to the Investment Fund
in the corresponding Portfolio of the Trust at the close of business that
day (before giving effect to any amounts allocated to or withdrawn from
the Investment Fund for that day). For this purpose, we use the share
value reported to us by the Portfolio.
o Then, we divide this amount by the value of the amounts in the Investment
Fund at the close of business on the preceding business day (after giving
effect to any amounts allocated or withdrawn for that day).
o Finally, we subtract any daily charge for fees or expenses payable by the
Investment Fund, other than the participant service charge (see
"Deductions and Charges").
Illustration of Changes in Unit Values. Generally, if on a particular
Business Day investment income and realized and unrealized capital gains
exceed realized and unrealized capital losses and any expense charges, the
Unit Value would be greater than the value for the previous period.
For example, assume that at the close of trading on a Monday, the value of an
Investment Fund's assets is $2,500,000, and the Unit Value is $10. If on the
next business day, Tuesday, the investment income and realized and unrealized
capital gains exceed realized and unrealized losses by $7,500, and the daily
accrual for expenses charged to the Trust is $50, the Unit Value for that day
would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C>
1. Unit Value for Monday ........... $10
2. Value of assets at close of
business on Monday .............. $2,500,000
3. Excess of investment income and
realized and unrealized capital
gains over realized and
unrealized losses ............... $7,500
4. Daily accrual for expenses
(administration charges and
certain expenses borne directly
by the Investment Funds) charged
to the Investment Fund .......... $50
5. Value of assets, less charge for
expenses, at close of business
day on Tuesday, (2) + (3) -(4) .. $2,507,450
6. Net Investment Factor (5)
divided by (2) .................. 1.00298
7. Unit Value for Tuesday
(1) X (6) ....................... $10.0298
</TABLE>
If, on the other hand, the realized and unrealized losses exceeded investment
income and realized and unrealized capital gains on that day by $7,500, the
Unit Value for Tuesday would have been $9.9698.
GUARANTEED RATE ACCOUNTS
Contributions to a Guaranteed Rate Account are credited with interest at a
fixed rate
11
<PAGE>
for one-year and three-year periods. The amount of the contribution is
guaranteed by us (before deduction of any applicable participant service
charge). The effective guaranteed annual rate will always be at least 3%. New
one and three-year Guarantees will be offered each quarter, with the new
Guaranteed Rates generally being announced at least 10 days before the
beginning of the quarter. Contributions are permitted at any time.
Withdrawals or transfers prior to maturity are restricted and are also
subject to a premature withdrawal charge, except under certain limited
circumstances.
For more information on the Guaranteed Rate Accounts, see "Part 2: The
Guaranteed Rate Accounts" in the SAI.
WITHDRAWALS
All or part of the Participant's Account Balance in the Investment Funds of
the Separate Account plus the Participant's Guaranteed Rate Account Cash
Values may be withdrawn by submitting the proper form to us. A TSA and a
SIMPLE IRA retirement program may require spousal consent prior to withdrawal
or may otherwise restrict such withdrawals.
Withdrawals, regardless of the type of contract, will generally have Federal
tax consequences, which may include penalties if withdrawals are made prior
to age 59 1/2. A Participant should consult with a tax advisor, as well as
review the provisions of the retirement program before making a withdrawal.
See the SAI, "Part I--Federal Tax Considerations of the Retirement Programs."
Generally, the request for a withdrawal is sent directly to us by the
Participant. In the case of certain TSAs, the Participant notifies the
employer, who will submit the Participant's request to us.
The request for a partial withdrawal should specify the dollar amount of the
withdrawal and the Investment Option from which the withdrawal should be
made. If not specified, the withdrawal will be made from each Investment
Option on a pro rata basis.
Withdrawals pursuant to a periodic distribution option from the Investment
Funds will be subject to certain restrictions described below under
"Retirement Benefits." Withdrawals are subject to Federal income tax
withholding. For more information, see "Part I--Federal Tax Considerations of
the Retirement Programs" in the SAI.
The request for a withdrawal should be made on the form supplied by us for
that purpose and sent to us. If a full withdrawal is requested, the
Participant's certificate should accompany the withdrawal request.
Withdrawals are made by reducing the number of Units the Participant has in
each Investment Fund from which withdrawals are to be made. For each
Investment Fund, the number of Units deducted is determined by dividing the
dollar amount of the withdrawal by that Fund's Unit Value on the business day
we receive a correctly completed withdrawal request. Withdrawals which result
in a total remaining Account Balance of less than $100 may be considered a
request to surrender unless we are told by the Participant to keep the
account active.
Except as stated under "Miscellaneous--Deferment Provisions," we will pay all
single sum payments from the Investment Funds within seven days after the
date as of which the amount of the payment is determined.
For TSAs, restrictions on distributions (whether by withdrawal, surrender or
annuitization) apply to the amount of the Participant's salary reduction
(elective deferral contributions and related earnings). These restrictions do
not apply to such amounts as of December 31, 1988 (or to the extent such
amounts were carried over from a prior TSA). To take advantage of this
grandfathering for transferred amounts, the participant or employer must
notify us in writing of the December 31, 1988 account balance. Distributions
of restricted salary reduction amounts may be made only if the Participant
attains age 59 1/2, dies, is disabled, separates from service or incurs a
financial hardship. Hardship distributions are limited to the amount actually
contributed under a salary reduction agreement, without earnings.
TRANSFERS AMONG THE INVESTMENT OPTIONS
Participants may transfer all or a portion of their Account Balances in one
Investment Fund to any other Investment Fund at any time without charge or
tax liability. Participants may make transfers using the AIM System.
Procedures have been established by Equitable Life that are considered to be
reasonable and are designed to confirm that instructions communicated by
telephone are genuine.
12
<PAGE>
Such procedures include requiring certain personal identification information
prior to acting on telephone instructions and providing written confirmation
of instructions communicated by telephone. If Equitable Life does not employ
reasonable procedures to confirm that instructions communicated by telephone
are genuine, it may be liable for any losses arising out of any action on its
part or any failure or omission to act as a result of its own negligence,
lack of good faith, or willful misconduct. In light of the procedures
established, Equitable Life will not be liable for following telephone
instructions that it reasonably believes to be genuine. We may discontinue
the telephone transfer service at any time without notice.
If amounts are transferred from one Investment Fund to another Investment
Fund, Units in one Investment Fund are "sold" and new Units are "purchased"
in the second Investment Fund. We will make the transfer as of the business
day on which the transfer request is received.
Transfers from the Guaranteed Rate Accounts are subject to special rules set
forth in the SAI. Participants may not transfer amounts from the Guaranteed
Rate Accounts during the Open Period. Thereafter, transfers made before the
maturity of a GRA will be subject to a penalty. Transfers will not change the
allocation of any future contributions to the Investment Options.
DEATH AND DISABILITY BENEFITS
For either a death or disability payment, the Account Balance is determined
as of the business day we receive written notification and proof of death or
disability.
If we receive notification of a Participant's death prior to the
Participant's Retirement Date, we will pay the Participant's Account Balance
to the designated beneficiary, subject to any restrictions under a TSA
retirement program. If the designated beneficiary is the Participant's
surviving spouse, the distribution of the Account Balance need not commence
until the earlier of (1) the date the Participant would have attained age 70
1/2 or (2) the date the surviving spouse elects payment to commence.
Depending on the Participant's election, the death benefit will be paid as a
single sum, as periodic payments, as an annuity or as a combination of the
three. If no death benefit election is in effect, the beneficiary may elect a
single sum or an alternate form of benefit payment within the time limit
prescribed in the Code. Different elections may have different tax
consequences. Distributions received by a beneficiary are generally given the
same tax treatment the Participant would have received if distribution had
been made to the Participant. See the SAI, "Part 1--Federal Tax
Considerations of the Retirement Programs" for more information.
In the case of disability prior to a Participant's Retirement Date, the
Account Balance will be paid to the Participant, subject to any restrictions
under a TSA retirement program.
RETIREMENT BENEFITS
Retirement. Upon enrollment, Participants are asked to specify a Retirement
Date when retirement benefits are expected to begin. If the Participant fails
to specify a Retirement Date, we will assume it is age 65. The Retirement
Date can be changed at any time but must be on the first day of a calendar
month. It may be changed by written notice to us and will become effective on
the date it is received.
Distributions generally must commence no later than April 1st of the calendar
year following the year in which the Participant attains age 70 1/2. Once
required distributions begin, subsequent required distributions must be made
by December 31st of each calendar year. Special rules may apply to a TSA
participant regarding when minimum distributions must commence from the value
of the TSA. These rules are discussed more fully in the SAI.
Forms of Retirement Benefits. Subject to the provisions of the retirement
program under which the Participant is covered, at the Participant's
Retirement Date the Participant's Account Balance in the Investment Funds and
the Guaranteed Rate Account Cash Values are applied to provide a retirement
benefit as a single sum, a periodic distribution option, a fixed annuity or a
combination of these options. The Participant's Guaranteed Rate Accounts will
not be subject to the premature withdrawal charge if either of the following
13
<PAGE>
options is elected: (1) a fixed annuity or (2) a periodic distribution option
whereby payments are made over a period of greater than three years.
Unless a TSA retirement program specifies differently, if the Participant has
not elected a retirement benefit before the Retirement Date selected, the
Normal Form of Annuity Benefit will be purchased. In the case of certain
TSAs, the Participant may be required to elect a joint and survivor annuity
payout unless the Participant's spouse consents in writing to a contrary
election. Participants should ask their employers whether this requirement is
applicable.
If the Participant has not already selected a form of annuity six months
before the Retirement Date, we will send an appropriate notification form on
which the Participant may indicate the type of annuity desired or confirm to
us that the Normal Form of Annuity Benefit is to be purchased. If we do not
receive a completed notification form on or before the Retirement Date, the
Participant's Account Balances and Guaranteed Rate Account Cash Values will
remain invested until we have received written instructions.
Normal Form of Annuity Benefit. The Normal Form of Annuity Benefit payable is
the Full Cash Refund Annuity. This is a fixed annuity for the lifetime of the
Annuitant. The Participant's beneficiary will receive a cash refund if, at
the Participant's death, the total annuity payments do not equal the amount
that was applied to provide the annuity. The refund equals the difference
between the amount applied to purchase the annuity and the annuity payments
actually received.
Once fixed annuity payments commence, the amount of each payment does not
change. The minimum amount of the fixed payments is determined from tables in
the certificate which show monthly payments for each $1,000 applied (after
deduction of any applicable taxes and the fixed annuity administrative fee
described below) and depends on the form of annuity selected and the age of
the Annuitant. If our group annuity rates for payment of proceeds or our rate
for single premium immediate annuities then in effect at the Participant's
Retirement Date should produce a larger payment, these rates will apply in
lieu of the minimum rates shown in the tables. We may change the amount of
the monthly payments shown in the certificates for new Participants.
Periodic Distribution Option. This option is designed to pay out the
Participant's entire Account Balance in monthly, quarterly, semi-annual or
annual installment payments over a minimum three-year period (as you or your
beneficiary may specify). This period may not generally exceed applicable
life expectancy limitations as described in the SAI under "Part 1--Federal
Tax Considerations of the Retirement Programs."
The amount of each payment can be calculated in one of two ways: either the
Participant can specify a dollar amount or a time period. If a time period,
the payment is determined by dividing the remaining Account Balances by the
number of remaining payments. Withdrawals are made pro-rata from each
Investment Option. Such periodic payments may currently be made from the
Guaranteed Rate Accounts without premature withdrawal charge; however, we
retain the right to suspend such distributions from the Guaranteed Rate
Accounts in the future.
An initial monthly payment of at least $50 is required under the Periodic
Distribution Option. After installment payments have begun, Participants may
continue to transfer amounts among the Investment Options as they prefer. By
written notice to us, the Participant may make a partial withdrawal or elect
to stop the installment payments and receive the Account Balance in a single
sum.
Election of Other Annuities or Optional Retirement Benefits. The
Participant's Account Balance may be used to provide forms of fixed annuities
(other than the Normal Form of Annuity Benefit) that are offered by us,
including joint and survivor annuities. Payments made under life or joint
life annuities which do not specify a minimum distribution period terminate
with the death of the last surviving annuitant.
A participant may, therefore, specify a minimum distribution period whereby
benefits would continue to a beneficiary. A participant
14
<PAGE>
may not specify a minimum distribution period that is greater than the
participant's life expectancy or the life expectancy of the beneficiary. If
the beneficiary is someone other than the Participant's spouse, payments to
the surviving beneficiary must be limited as prescribed in Proposed Treasury
Regulations. See "Part 1--Federal Tax Considerations of the Retirement
Programs" in the SAI.
Once a life annuity takes effect, the Annuitant may not redeem or change it
to any other form of benefit. If payment under an annuity continues to a
beneficiary, the beneficiary will have the right to redeem the annuity for
its commuted value. An annuity is available only if the amount to be applied
is $2,000 or more and would result in an initial payment of at least $20.
REVOCATION RIGHTS
The Participant can revoke participation under a certificate and the
certificate may be cancelled by returning it to us within 10 days (or longer
if your state requires) after receipt by the Participant. We will refund all
contributions made or, if greater, with respect to contributions allocated to
the Investment Options, we will refund the Participant's Account Balance,
computed on the business day we receive the certificate.
The Participant should consult a tax advisor before deciding to revoke, as
cancellation may have adverse tax consequences. For more complete
information, see "Part 1--Federal Tax Considerations of the Retirement
Programs" in the SAI.
MISCELLANEOUS
Assignment. Unless contrary to applicable law, the certificate, or any rights
to any payment thereunder, may not be assigned, sold, discontinued or pledged
as collateral to any person other than to us.
Beneficiaries. The Participant may name the beneficiary at the time of
enrollment. The beneficiary can be changed any time during the Participant's
lifetime. See "Part 1--Federal Tax Considerations of the Retirement Programs"
in the SAI for spousal consent limitations for certain TSAs.
Deferment Provisions. Assuming we have been properly notified of a death,
disability or other withdrawal, we will normally make payment of the Account
Balance within seven days. However, we may defer payments from the Investment
Funds for any period during which (1) the New York Stock Exchange is closed
or trading on it is restricted, (2) sale of securities or determination of
the fair value of the Investment Fund assets is not reasonably practicable
because of an emergency or (3) the SEC by order permits postponement for the
protection of persons having interests in the Investment Funds.
Disqualification. In the event that a retirement program funded under the
certificates offered by this prospectus fails to qualify under the Code for
the tax-favored status for which it was purchased, we have the right to
terminate the certificate and pay to the Participant, plan trustee or any
other designated payee the sum of the Investment Fund Account Balances and
the Guaranteed Rate Account Cash Value less any deduction for Federal income
tax payable by us as a result of that non-qualification.
Contract Holder. IRA, TSA, SEP and SIMPLE certificates are issued under group
annuity contracts between us and Chase, as Trustee or Custodian. The sole
responsibility of Chase is to serve as party to the contracts. It has no
responsibility for the administration of these programs, for payments to the
Investment Options or to Participants, or for any distributions or duties
under these contracts. Under certain circumstances, we may make changes in
the certificates and contracts as described under "Changes in Applicable
Law."
COMPARATIVE INVESTMENT PERFORMANCE
The tables below show comparisons between the performance of the Money
Market, Common Stock, Intermediate Government Securities (previously, the
Bond Fund), Balanced, High Yield, Aggressive Stock, Global, Growth & Income,
Growth Investors and Conservative Investors Funds and the performances of the
Standard & Poor's 500 Stock Index (S&P 500) and the Lehman
Government/Corporate Bond Index (Lehman).
The S&P 500 and Lehman indices represent unmanaged groups of securities
15
<PAGE>
widely regarded by investors as representative of the stock and bond markets
in general. The comparisons should be considered in light of the investment
policies and objectives of each of the Investment Funds (which are
substantially similar to the investment policies and objectives of the
corresponding portfolios of the Trust). Since the Investment Funds do not
distribute dividends or interest, the market indices have been adjusted to
reflect reinvestment of dividends and interest to provide comparability.
Because of the continually changing portfolio mix of the Balanced Fund, the
comparisons with specific market indices are of limited use.
The performance information shown in the tables does not represent the actual
experience of amounts invested by a particular Participant. The amount and
timing of the Participant's investment also affect individual performance as
does the participant service charge. The performance of the Investment Funds
shown in the tables reflects the deduction of asset-based charges but does
not show the effect of the participant service charge. As unmanaged groups of
securities, the market indices do not reflect deductions of any asset-based
charges for investment management, administration or other expenses.
ANNUAL PERCENT CHANGES IN UNIT VALUE
<TABLE>
<CAPTION>
INTERMEDIATE
GOVERNMENT
MONEY SECURITIES HIGH
DECEMBER 31 MARKET (A) YIELD
- ----------------- ------ ------------ -------
<S> <C> <C> <C>
1986 ............. 5.9% 18.5% --
1987 ............. 5.8 2.5 4.0(b)%
1988 ............. 6.7 5.4 11.4
1989 ............. 8.7 15.1 0.6
1990 ............. 7.7 5.9 -4.8
1991 ............. 5.6 13.7 24.6
1992 ............. 3.0 4.9 11.3
1993 ............. 2.5 10.0 22.3
1994.............. 3.8 -4.3 -3.5
1995.............. 5.3 13.0 19.2
1996.............. 4.9 3.4 22.0
Five years ending
December 31,
1996............. 3.9 5.9 13.8
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
COMMON AGGRESSIVE GROWTH GROWTH CONSERVATIVE
DECEMBER 31 BALANCED STOCK STOCK GLOBAL & INCOME INVESTORS INVESTORS S&P 500 LEHMAN
- ----------------- -------- ------ ---------- --------- -------- --------- ------------ ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1986 ............. 12.7% 15.9% -- -- -- -- -- 18.7% 15.6%
1987 ............. -2.8 6.7 -15.2(C)% -14.3(B)% -- -- -- 5.3 2.3
1988 ............. 13.2 10.6 1.3 11.7 -- -- -- 16.6 7.6
1989 ............. 25.4 23.9 43.3 24.9 -- -- -- 31.7 14.2
1990 ............. -0.4 -12.4 7.0 -6.2 -- -- -- -3.1 8.3
1991 ............. 40.7 43.7 75.6 26.4 -- -- -- 30.5 16.1
1992 ............. -3.3 2.7 -3.8 -1.3 -- -- -- 7.6 7.6
1993 ............. 11.9 24.4 16.0 31.3 -- -- -- 10.0 11.0
1994.............. -8.1 -2.6 -4.1 4.9 -1.2(D)% -3.1(D)% -1.1(D)% 1.3 -3.5
1995.............. 19.2 31.9 30.9 18.2 23.1 24.9 18.8 37.5 19.2
1996.............. 11.2 23.8 21.6 14.0 19.2 11.6 3.9 23.0 2.9
FIVE YEARS ENDING
DECEMBER 31,
1996............. 5.6 15.2 11.1 12.8 -- -- -- 15.2 7.2
</TABLE>
ANNUALIZED RATES OF RETURN--DECEMBER 31, 1996
<TABLE>
<CAPTION>
DATE OF INCEPTION INCEPTION 10 YEARS
----------------- ----------- ----------
<S> <C> <C> <C>
Money Market ........... February 5, 1982 6.6% 5.4%
Intermediate Government
Securities (a) ........ February 5, 1982 10.1 6.8
High Yield ............. June 2, 1987 10.7 --
Balanced ............... February 5, 1982 13.1 9.8
Common Stock ........... February 5, 1982 17.1 14.1
Aggressive Stock ....... June 1, 1987 15.5 --
Global ................. June 2, 1987 10.5 --
Growth & Income ........ May 1, 1994 15.1 --
Growth Investors ....... May 1, 1994 12.3 --
Conservative Investors May 1, 1994 7.9 --
S&P 500 ................ N/A N/A 15.3
Lehman ................. N/A N/A 8.4
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
5 YEARS 3 YEARS 2 YEARS 1 YEAR
--------- --------- --------- --------
<S> <C> <C> <C> <C>
Money Market ........... 3.9% 4.7% 5.1% 4.9%
Intermediate Government
Securities (a) ........ 5.9 3.8 8.1 3.4
High Yield ............. 13.8 12.0 20.6 22.0
Balanced ............... 5.6 6.8 15.2 11.2
Common Stock ........... 15.2 16.7 27.8 23.8
Aggressive Stock ....... 11.1 15.1 26.2 21.6
Global ................. 12.8 12.2 16.1 14.0
Growth & Income ........ -- -- 2.1 19.2
Growth Investors ....... -- -- 18.1 11.6
Conservative Investors -- -- 11.1 3.9
S&P 500 ................ 15.2 19.7 30.0 23.0
Lehman ................. 7.2 5.8 10.8 2.9
</TABLE>
- --------------
(a) Prior to September 6, 1991, the Bond Fund.
(b) From June 2, 1987, the date contributions were first allocated to these
Funds.
(c) From June 1, 1987, the date contributions were first allocated to the
Fund.
(d) From May 1, 1994, the date contributions were first allocated to the
Fund.
Rates of return are time weighted and include reinvestment of investment
income. The annualized rate assumes an investment of the same amount invested
at the beginning of each year with the percentage demonstrating the effective
annual rate over the period shown.
PAST PERFORMANCE IS NOT A GUARANTEE OR INDICATION OF FUTURE PERFORMANCE. NO
PROVISIONS HAVE BEEN MADE FOR THE EFFECT OF TAXES ON INCOME AND GAINS, OR ANY
TAX PENALTIES, UPON DISTRIBUTION.
16
<PAGE>
FEDERAL INCOME TAX ASPECTS OF THE RETIREMENT PROGRAMS
TAX-SHELTERED ANNUITY ARRANGEMENTS (TSAS)
An employee of a public educational institution or a tax-exempt organization
described in Code Section 501(c)(3) may exclude from Federal gross income for
a tax year contributions made to a TSA by the employer in that year subject
to the limitations provided in the Code and in related regulations. When the
employee makes withdrawals or surrenders the certificate, generally the full
amount will be included in income. Premature withdrawals may be subject to a
10% Federal tax penalty. In addition, TSA amounts relating to salary
reduction agreements cannot be distributed prior to age 59 1/2, death,
disability, separation from service or hardship. In the event of hardship,
only the salary reduction contributions can be distributed.
INDIVIDUAL RETIREMENT ANNUITIES (IRAS)
A working individual may make deductible or non-deductible contributions to
an IRA until age 70 1/2. Generally, $2,000 is the maximum amount of
deductible and nondeductible contributions which may be made to all IRAs by
an individual in any taxable year. The above limit may be less where the
individual's earnings are below the applicable amount. These limits do not
apply to rollover or custodian-to-custodian contributions into an IRA.
Subject to the rules of the Code an individual and a nonworking spouse can
together contribute annually an aggregate maximum of $4,000 to IRAs for the
individual and the spouse (but no more than $2,000 to any one IRA
certificate). There is no tax on amounts credited to an IRA until the amounts
are withdrawn from the certificate. Except where nondeductible contributions
have been made, distributions from IRAs are fully includible in gross income.
The taxable portion of certain early withdrawals may be subject to a 10%
Federal tax penalty.
IRAS UNDER SIMPLIFIED EMPLOYEE
PENSION PLANS (SEPS AND SIMPLES)
An employer can establish a SEP for its employees and can make contributions
to a SEP for each eligible employee. An IRA funding a SEP is, like other
IRAs, owned by the Participant. Most of the rules applicable to IRAs also
apply. A major difference is the amount of permissible contributions. An
employer can annually contribute an amount for an employee up to the lesser
of $24,000 or 15% of the employee's compensation, (determined without taking
into account the employer's contribution to the SEP). This $24,000 maximum,
based on the 1997 statutory compensation limit of $160,000, may be further
adjusted for cost of living changes in future years.
An eligible employer may establish a "SIMPLE" plan to make contributions to
special individual retirement accounts or individual retirement annuities for
its employees ("SIMPLE IRAs"). A SIMPLE IRA is a form of IRA, owned by the
Participant, and generally the rules applicable to IRAs discussed above and
in the SAI apply. There are differences in the amount and type of permissible
contributions (employee salary reduction contributions of up to $6,000 may be
made in 1997; the employer must make contributions, generally a
dollar-for-dollar match up to 3% of compensation). Also, employees who have
not participated in the employer's SIMPLE IRA plan for at least two full
years may be subject to an increased penalty tax on withdrawals or transfers
of SIMPLE IRA funds.
Further discussion of tax aspects of TSA, IRA, SEP and SIMPLE IRA
contributions, distributions and other matters is available in the SAI.
DEDUCTIONS AND CHARGES
The deductions and charges discussed below apply during the accumulation
period and if either the periodic distribution option or the fixed annuity
option is elected.
Participant Service Charge. On the last day of each calendar quarter, a
charge will be made against the Account Balance of each Participant as a
reimbursement for administrative expenses unrelated to sales, such as
salaries, rent, postage, telephone, travel, legal, actuarial and accounting
costs, office equipment and stationery. This charge is $15 per year for SEP
and SIMPLE IRAs certificates. The charge for IRA and TSA certificates or
contracts will not exceed $30 annually and will be deducted from the amounts
held in the Investment Options in accordance with Equitable Life's
administrative procedures then in effect.
The participant service charge applicable to a certificate depends on several
factors. It will vary depending on (1) the method by which payment is made to
us (payroll deduction
17
<PAGE>
or direct contribution), (2) the number of Participants contributing through
the same payroll deduction facility or group,(3) the total contributions
received from an affiliated group, (4) the nature of the group purchasing the
certificates, (5) the extent to which an employer provides services that
would otherwise be provided by us, and (6) other circumstances which may have
an impact on administrative expenses. We reserve the right to change this
charge upon advance written notice, or to impose the charge on a less or more
frequent basis, but in no case will it exceed $30 per year.
Administration Charge. Administrative expenses are charged directly to each
Investment Fund at the effective annual rate of 0.25% of the value of each
Investment Fund's assets attributable to the certificates. The charge is
designed as a reimbursement for administrative expenses not covered by the
participant service charge. This charge is reflected in the computation of
Unit Values.
Other Expenses. Certain additional costs and expenses are also charged
directly to the Investment Funds. These include, among other things, certain
expenses incurred in the operation of the Separate Account and the Investment
Funds, taxes, interest, SEC charges and certain related expenses including
printing of registration statements and amendments, outside auditing and
legal expenses and recordkeeping. These expenses are reflected in the Unit
Value. See "Certificate Provisions--Investment of Contributions in the
Investment Funds."
Deductions and Expenses of the Trust. Deductions and expenses paid out of the
assets of the Portfolios of the Trust are described in the prospectus for the
Trust attached hereto and also detailed in the Fee Table in this prospectus.
There are no deductions or charges for sales expenses made from contributions
received by us or upon any withdrawals.
Expense Limitations. If in any calendar year the aggregate expenses of the
Money Market, Common Stock, Intermediate Government Securities or Balanced
Funds (including investment advisory fees and certain other Trust expenses
attributable to assets of such Investment Fund invested in a Portfolio of the
Trust, and asset-based charges for administration and expenses borne directly
by the Investment Funds, but excluding interest, taxes, brokerage and
extraordinary expenses permitted by appropriate state regulatory authorities)
exceed 1% of the value of the Money Market Fund's average daily net assets,
or 1.5% of the value of the Common Stock, Intermediate Government Securities
and Balanced Fund's average daily net assets, Equitable Life will reimburse
that Fund for the excess. This expense limitation cannot be changed without
the Participant's consent. In addition, Equitable Life reimburses the High
Yield, Aggressive Stock and Global Funds for aggregate expenses in excess of
a voluntary expense limitation of 1.5% of the value of each Fund's average
daily net assets. The voluntary expense limitation may be discontinued by
Equitable Life at its discretion.
Also, if the annual amount of management fees applicable to the Money Market
and Intermediate Government Securities Funds exceeds 0.35% of the average
daily net asset value of either Fund, Equitable Life will reimburse that Fund
for such excess. This expense limitation is a contractual right for
Participants who enrolled prior to May 1, 1987 and cannot be changed without
the consent of those Participants. Equitable Life has voluntarily agreed to
impose this expense limitation for Participants who enrolled after May 1,
1987 and reserves the right to discontinue this at any time.
Fixed Annuity Administrative Charge. If a Participant elects the fixed
annuity option at retirement, an annuitization fee of up to $350 (depending
upon the date of enrollment in the program, as provided in your certificate)
will be deducted from the amount applied to purchase the annuity to reimburse
for administrative expenses associated with processing the application for
the annuity and with issuing each monthly payment. We may give any
Participant a better annuity purchase rate than those currently guaranteed
for the Program. The annuity administrative charge may be greater than $350
in that case, unless otherwise provided in your certificate.
SEP/SIMPLE Enrollment Fee. A non-refundable fee of $25 will be charged upon
the enrollment of each Participant. It can either be paid by the employer or
deducted from the first contribution.
Guaranteed Rate Account Premature Withdrawal Charge. There is a charge for
most withdrawals made before the maturity date of the Guaranteed Rate
Account. This charge equals 7% of the amount withdrawn, or, if less, interest
earned. See the SAI, "Part 2--The Guaranteed Rate Accounts."
Charge for Premium or other Applicable Taxes. In certain jurisdictions, a
charge for
18
<PAGE>
premium or other applicable tax currently ranging up to a maximum of 5% on
the amounts applied to purchase an annuity is imposed. Such taxes will
depend, among other things, on the Participant's place of residence,
applicable laws and the retirement option elected by the Participant. We
reserve the right to deduct a charge for premium or other applicable taxes
based on the Participant's place of residence at the Participant's Retirement
Date. If an annuity option is elected, we reserve the right to deduct a
charge for any premium or other applicable taxes from the amount applied to
purchase the annuity or from contributions. If the periodic distribution
option is elected, a charge for any premium or other taxes will be deducted
from each payment when made. No charge for premium or other applicable taxes
will be applicable if a single sum is elected.
VOTING RIGHTS
TRUST VOTING RIGHTS
As explained previously, contributions allocated to the Investment Funds are
invested in shares of the corresponding Portfolios of the Trust. Since we own
the assets of the Separate Account, we are the legal owner of the shares and,
as such, have the right to vote on certain matters. Among other things, we
may vote:
o to elect the Trust's Board of Trustees,
o to ratify the selection of independent auditors for the Trust, and
o on any other matters described in the Trust's current prospectus or
requiring a vote by shareholders under the 1940 Act or by other law.
Even though we own the shares, we give Participants the opportunity to
instruct us how to vote the number of shares attributable to the
Participant's certificate. We will vote those shares at meetings of Trust
shareholders according to such instructions. If we do not receive
instructions in time from all Participants, we will vote shares for which no
instructions have been received in a Portfolio in the same proportion as we
vote shares for which we have received instructions in that Portfolio. We
will also vote any Trust shares that we are entitled to vote directly due to
amounts we have accumulated in an Investment Fund in the same proportions
that Participants vote.
HOW WE DETERMINE A PARTICIPANT'S VOTING SHARES
A Participant can participate in voting only on matters concerning a
Portfolio in which the Participant's assets have been invested. We determine
the number of Trust shares in each Investment Fund that are attributable to a
certificate by dividing the amount of the Account Balance allocated to that
Investment Fund by the net asset value of one share of the corresponding
Portfolio of the Trust as of the record date for the Trust's shareholder
meeting. (Fractional shares are counted). The record date for this purpose
must be no more than 60 days before the meeting of the Trust. During payment
under a periodic distribution option, as the amounts are paid out and the
Account Balance allocated to the Investment Funds declines, the number of
votes will decrease correspondingly.
We will send proxy material and a form for giving us voting instructions to
each Participant who has a voting interest. Votes may be cast in person or by
proxy.
HOW TRUST SHARES ARE VOTED
All Trust shares are entitled to one vote. Voting generally is on a
Portfolio-by-Portfolio basis except that shares will be voted on an aggregate
basis when required by the 1940 Act (including, without limitation, election
of Trustees and ratification of the selection of auditors). However, if the
Trustees determine that shareholders in a Portfolio are not affected by a
particular matter, then such shareholders generally would not be entitled to
vote on such matter.
VOTING PRIVILEGES OF PARTICIPANTS IN OTHER SEPARATE ACCOUNTS
Currently, we control the Trust. Trust shares are held by other separate
accounts of ours and by separate accounts of insurance companies affiliated
or unaffiliated with us. Shares held by these separate accounts will probably
be voted according to the instructions of the owners of insurance policies
and contracts issued by those insurance companies. This will dilute the
effect of the voting instructions of Participants.
SEPARATE ACCOUNT VOTING RIGHTS
Under the 1940 Act, certain actions (such as some of those described under
"Changes in Applicable Law") may require Participant approval. In that case,
a Participant will
19
<PAGE>
be entitled to one vote for every unit the Participant has in the Investment
Funds of our Separate Account. We will cast votes attributable to any amounts
we have in the Investment Funds of our Separate Account in the same
proportions as votes cast by Participants.
CHANGES IN APPLICABLE LAW
The voting rights we describe in this prospectus are created under applicable
Federal securities laws. To the extent that those laws or the regulations
promulgated under those laws eliminate the necessity to submit matters for
approval by persons having voting rights in separate accounts of insurance
companies, we reserve the right to proceed in accordance with those laws or
regulations.
REPORTS
Before payments start under a certificate, reports will be sent to the
Participant at least annually showing as of a specified date (1) the number
of units credited to each Investment Fund under the certificate, (2) the Unit
Values, (3) the Account Balance of each Investment Fund and Guaranteed Rate
Account and the total and (4) the Cash Values of the Guaranteed Rate
Accounts. Similar reports will be sent to persons receiving payments under
the periodic distribution option. All transactions will be individually
confirmed.
As required by the 1940 Act, each Participant will be sent semi-annually a
report containing financial statements and a list of the portfolio securities
of each Portfolio of the Trust.
REGULATION
We are subject to regulation and supervision by the Insurance Department of
the State of New York which periodically examines our affairs. We are also
subject to the insurance laws and regulations of all jurisdictions in which
we are authorized to do business. The certificates and contracts have been
filed with and approved by the Insurance Department of the State of New York.
Its regulation and approval do not, however, involve any supervision of the
investment policies of the Investment Funds or the Trust or of the selection
of any investments except to determine compliance with the Insurance Laws of
New York.
We are required to submit annual statements of our operations, including
financial statements, to the insurance departments of the various
jurisdictions in which we do business for purposes of determining solvency
and compliance with local insurance laws and regulations.
ADDITIONAL INFORMATION
A Registration Statement under the Securities Act of 1933 has been filed with
the SEC relating to the offering described in this prospectus. This
prospectus does not include all the information included in the Registration
Statement, certain portions of which, including the SAI, have been omitted
pursuant to the rules and regulations of the SEC. The omitted information may
be obtained by requesting a copy of the registration statement from the SEC's
principal office in Washington, D.C., upon payment of the SEC's prescribed
fees, or by accessing the SEC's Electronic Data Gathering, Analysis and
Retrieval (EDGAR) System. A free copy of the SAI may be obtained by calling
the toll-free number on the first page of this prospectus or by submitting
the coupon below.
- -----------------------------------------------------------------------------
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION
- -----------------------------------------------------------------------------
Part 1--Federal Tax Considerations of the Retirement Programs
Part 2--The Guaranteed Rate Accounts
Part 3--Reorganization
Part 4--Experts
Part 5--Money Market Fund Yield Information
Part 6--Financial Statements
- -----------------------------------------------------------------------------
PLEASE SEND ME A FREE COPY OF THE
STATEMENT OF ADDITIONAL INFORMATION.
Equitable Life 300+ Series
Box 2468 G.P.O.
New York, New York 10116
ATTN: SAI Request for Separate Account
No. 301
---------------------------------------------------------------------------
Name
---------------------------------------------------------------------------
Address
---------------------------------------------------------------------------
City State Zip
20
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1997
----------------
CERTIFICATES AND
GROUP ANNUITY CONTRACTS
FUNDED THROUGH THE INVESTMENT FUNDS OF
SEPARATE ACCOUNT NO. 301
OF
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
- -----------------------------------------------------------------------------
TABLE OF CONTENTS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
Part 1 -Federal Tax Considerations of the Retirement Programs. 2
Part 2 -The Guaranteed Rate Accounts.......................... 14
Part 3 -Reorganization........................................ 19
Part 4 -Experts............................................... 19
Part 5 -Money Market Fund Yield Information................... 19
Part 6 -Financial Statements.................................. 20
</TABLE>
- -----------------------------------------------------------------------------
This Statement of Additional Information (SAI) is not a prospectus. It should
be read in conjunction with the Separate Account No. 301 prospectus, dated
May 1, 1997.
A copy of the prospectus to which this SAI relates is available at no charge
by writing to Equitable Life 300 + Series at P. O. Box 2468, G.P.O. New York,
New York 10116 or by calling 1-800-248-2138.
Copyright 1997 The Equitable Life Assurance Society of the United States.
All rights reserved.
<PAGE>
PART 1--FEDERAL TAX
CONSIDERATIONS OF THE
RETIREMENT PROGRAMS
- ------------------------------------------------------------------------------
The Internal Revenue Code of 1986, as amended (the Code), describes how a
retirement program can qualify for tax-favored status. In general, assuming
that the requirements and limitations of the applicable provisions of the
Code are adhered to by Participants and employers, contributions made under a
retirement program are deductible and will not be taxable to Participants
until benefits are distributed. In addition certain retirement plans may be
subject to The Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which is administered by The Department of Labor ("DOL").
This Section generally provides current Federal tax information with respect
to contributions, distributions and annuity payments under the various
tax-favored retirement programs utilizing the Investment Options described in
the prospectus, although some information on other provisions is also
provided. You should be aware that Federal tax laws and ERISA are continually
under review by the Congress, and any changes in those laws, or in the
regulations interpreting those laws, may affect the tax treatment of amounts
invested in the certificate. Because of the complexity of the law and the
fact that the tax results will vary according to the actual circumstances of
the individual involved, we cannot provide detailed tax information in this
SAI. This SAI does not provide detailed tax information and does not address
state and local income taxes and other taxes, or federal gift and estate
taxes. Not every certificate has every feature discussed in this Part. The
provisions of the code and ERISA are highly complex. For complete information
on these provisions, as well as all other federal, state, local and other tax
considerations, qualified legal and tax advisors should be consulted.
TAX SHELTERED ANNUITY ARRANGEMENTS (TSAS)
Under the provisions of Section 403(b) of the Code, an employee of a public
educational institution or a tax-exempt organization described in Section
501(c)(3) of the Code may exclude from Federal gross income contributions
made on the employee's behalf to a TSA.
Except in the case of a rollover or direct transfer contribution from another
TSA, tax-deferred contributions to a TSA must be made by the employer, which
forwards all the contributions made on behalf of the Participant to us for
investment in accordance with the Participant's directions.
Commonly, some or all of the contributions made to the TSA are made under a
salary reduction agreement between the employee and the employer. These
contributions are called "salary reduction" or "elective deferral"
contributions. However, a TSA can also be wholly or partially funded through
nonelective employer contributions or after-tax contributions.
Annual contributions to TSAs made through the employer's payroll are limited.
Generally, the contribution limit is the lowest of the following: (1) the
annual "exclusion allowance" for the employee, (2) the annual limit under
Section 415 of the Code on employer contributions to defined contribution
plans and (3) the annual limit on all elective deferrals.
If contributions to a TSA exceed the applicable limit in any year, the excess
will be included in the Participant's gross income and taxed as ordinary
income. In certain situations discussed below, excess contributions may be
distributed to avoid tax penalties.
In general, the "exclusion allowance" for any Participant for a taxable year
is equal to the excess, if any, of (1) the amount determined by multiplying
20 percent of the Participant's includable compensation, as defined in the
Code, by the number of years of employment with the employer, over (2) the
amounts contributed by the employer to tax-favored retirement plans
(including TSAs, qualified plans and eligible deferred compensation plans of
state and local governments and tax-exempt organizations, also
2
<PAGE>
- ------------------------------------------------------------------------------
known as "457 Plans" or "EDC Plans"), which were excludable from the
employee's federal gross income for any prior tax year.
The overall contribution limit referred to above applicable to qualified
defined contribution plans under Section 415 of the Code is 25% of the
Participant's compensation in a calendar year (or in any other 12-month
period chosen by the Participant) up to a maximum contribution of $30,000. In
1997, compensation or earned income in excess of $160,000 cannot be
considered in calculating contributions to the plan. This amount may be
further adjusted for cost of living changes in future years.
Special limits on contributions apply to anyone who participates in more than
one qualified plan or who controls another trade or business. There is also
an overall limit on the total amount of contributions and benefits under all
tax-favored retirement programs in which a person participates.
Employees of certain tax-exempt organizations (educational institutions,
hospitals, home health care agencies, health and welfare service agencies and
churches) may make an irrevocable election to increase the exclusion
allowance by applying one of three special limitations as provided under the
Code. Employees of church organizations are eligible for further special
elections which will increase either the overall contribution limit or the
exclusion allowance applicable to the employee.
The maximum amount of "salary reduction" or "elective deferral"
contributions, including those made under 401(k) plans, for example, are
generally limited to $9,500 a year. Note, however, that the maximum salary
reduction contribution that may be made by a Participant who participates
both in a TSA arrangement and an EDC plan will be limited to the maximum
allowed under Section 457 of the Code (i.e., generally $7,500).
Special rules may apply to increase this limit in the case of an educational
organization, hospital, home health service agency, health and welfare
service agency, church or certain church related organizations.
Any excess deferral contributions which are not withdrawn by April 15
following the year of the deferral may cause the Certificate to fail to be
treated as a TSA.
Limitations on Distributions
The Code sets forth certain withdrawal restrictions which apply to the salary
reduction portion of a TSA certificate (including earnings), contributed
after December 31, 1988 and earnings on the account balance as of December
31, 1988. Withdrawals (whether by withdrawal, surrender of the contract or
annuitization) of restricted amounts may be made only if the Participant
attains age 59 1/2, dies, is disabled, separates from service or suffers a
financial hardship. Hardship withdrawals are limited to the amount actually
contributed under the salary reduction contributions, without earnings.
Minimum Distributions
Distributions of benefits accruing after 1986 (including earnings on pre-1987
contributions) must commence no later than April 1st of the calendar year
following the later of the calendar year in which the Participant attains age
70 1/2 or retires from service with the employer sponsoring the TSA. Once
required distributions begin, subsequent distributions must be made by
December 31st of each calendar year. TSA benefits which accrued prior to 1987
must be distributed commencing at age 75. Proposed Treasury regulations
provide that in order for these special minimum distribution rules to apply
to a participant, the issuer of the TSA must keep records of the pre-1987
account balance and make changes to that amount as necessary. To the extent a
Participant takes a distribution in order to comply with the minimum
distribution rules, and the amount of the distribution is in excess of the
amount the Code requires the Participant to receive for that particular year,
the issuer of the TSA must decrease the pre-1987 account balance by the
amount of that excess. Additional distribution rules may apply, and you
should consult your tax advisor regarding the timing of distributions from
your certificate.
The distributions may be in the form of a life annuity, a joint and survivor
annuity, or other
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periodic or lump sum form of payment which does not extend beyond the life or
life expectancy of the Participant or the lives or joint life expectancies of
the Participant and a beneficiary and which satisfies certain minimum
distribution and incidental benefit rules under the Code. If a Participant
dies before beginning required distributions, distributions under the
contract or certificate must be completed within five years after death,
unless payments begin within one year of death and are made over the life (or
a period certain which does not extend beyond the life expectancy) of the
beneficiary. If the Participant's spouse is the beneficiary, distributions
need not commence until the deceased Participant would have attained age 70
1/2. In the alternative, the surviving spouse may elect to roll over the
death benefit into his or her own individual retirement arrangement (IRA). If
a Participant dies after required payments have begun, post-death payments
must be made at least as rapidly as payments made before the death of the
Participant.
Failure to make required distributions may cause the disqualification of the
TSA. Disqualification results in current taxation of the Participant's entire
benefit. In addition, a 50% penalty tax is imposed on the difference between
the required distribution amount and the amount actually distributed.
Distributions from TSAs
Amounts held under TSAs are generally not subject to federal income tax until
benefits are distributed. Distributions received by a beneficiary are
generally given the same tax treatment the Participant would have received if
distribution had been made to the Participant.
If a certificate is surrendered for its value, the amount received that
exceeds the Participant's tax basis, if any, for the certificate is treated
as ordinary income to the Participant. The Participant may have a basis in
the certificate if the employer made contributions which were required to be
included in the employee's gross income in the year of the employer's
contribution, for example.
The amount of any partial distribution from a TSA prior to the annuity
starting date is generally treated as ordinary income by the Participant
except to the extent that the distribution is treated as a withdrawal of
after-tax contributions. Distributions are normally treated as pro rata
withdrawals of after-tax contributions and earnings on those contributions.
If the employer's program allowed withdrawals prior to separation from
service as of May 5, 1986, however, all after-tax contributions made prior to
January 1, 1987 may be withdrawn tax-free prior to withdrawing any taxable
amounts.
Where a Participant elects to receive benefits in the form of an annuity, the
amount of each annuity payment received by a Participant after retirement is
treated as ordinary income except to the extent that the Participant has a
cost basis in the certificate.
If an annuity distribution option is elected, any basis will be recovered as
each payment is received by dividing the investment in the contract by an
expected return determined under an IRS table prescribed for qualified
annuities. The amount of each payment not excluded from income under this
exclusion ratio is fully taxable. The full amount of the payments received
after the cost basis of the annuity is recovered is fully taxable. If the
participant dies before recovering basis and there is a refund feature under
the annuity, the beneficiary of the refund may recover the remaining cost
basis as payments are made. If the participant (and beneficiary under a joint
and survivor annuity) die prior to recovering the full cost basis of the
annuity, a deduction is allowed on the participant's (or beneficiary's) final
tax return.
Distributions from a TSA will be subject to a 10% penalty tax unless the
distribution is made on or after the Participant's death, disability or
attainment of age 59 1/2. The penalty tax will also not apply if the
Participant (i) separates from service and elects a payout over his or her
life or life expectancy (or joint and survivor lives or life expectancies),
(ii) reaches age 55 and separates from service, or (iii) uses the
distribution to pay certain extraordinary medical expenses.
Tax Free Rollovers and Transfers
Any distribution from a TSA which is an "eligible rollover distribution" may
be rolled over into another eligible retirement plan, either as a direct
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rollover or a rollover within 60 days of receiving the distribution. To the
extent a distribution is rolled over, it remains tax deferred.
A distribution from a TSA may be rolled over to another TSA which will accept
rollover contributions or an IRA. Death benefits received by a spousal
beneficiary may only be rolled over to an IRA.
The taxable portion of most distributions will be eligible for rollover,
except as specifically excluded under the Code. Distributions which cannot be
rolled over generally include periodic payments for life or for a period of
10 years or more, and minimum distributions required under Section 401(a)(9)
of the Code (discussed above). Eligible rollover distributions are discussed
in greater detail under "Federal and State Income Tax Withholding", below,
including rules requiring 20% income tax withholding applicable to certain
distributions from TSAs.
Amounts held under TSAs may be directly transferred to another TSA issuer in
a tax-free transaction, provided that the successor TSA contains the same or
greater restrictions as the original TSA.
The value of a TSA is generally includible in the Participant's taxable
estate. Any portion of a TSA payable to the Participant's spouse is eligible
for the estate tax marital deduction and, as such, could pass free of Federal
estate tax.
INDIVIDUAL RETIREMENT ANNUITIES
This SAI contains portions of the information which the Internal Revenue
Service (IRS) requires to be disclosed to an individual who purchases an IRA.
Required information also appears in various sections of the prospectus.
Further information on IRA tax matters can be obtained from any IRS district
office. Additional information regarding IRAs, including a discussion of
required distributions, can be found in Internal Revenue Service Publication
590, entitled "Individual Retirement Arrangements (IRAs)," which is generally
updated annually.
The Code permits employees and self-employed individuals to make deductible
and nondeductible "regular" contributions out of earnings to an IRA.
Contributions may also be made on behalf of a nonworking spouse. The Code
also permits tax-free rollover contributions (direct or indirect) of certain
distributions from tax-qualified or plans or other IRAs to an IRA. In certain
cases, direct custodian-to-custodian transfers may also be made between IRAs.
See "Rollovers" under this section for further information. An individual's
interest in the IRA must be nonforfeitable and nontransferable. An individual
retirement annuity is subject to the requirements of applicable insurance
laws for annuity contracts.
Special rules govern required distributions of a Participant's IRA. These
rules also cover required distributions if the Participant or designated
beneficiary dies before the entire interest has been distributed. See
"Distributions" under this section.
We have received approval of our IRA certificate from the IRS. The approval
is a determination only that the form of the IRA on the date submitted
satisifies the requirements of the Code and is not a determination of the
merits of the certificate as an investment.
Revocation
A Participant can revoke a certificate issued as an IRA in accordance with
the terms and directions stated in the prospectus under "Certificate
Provisions -- Revocation Rights." Before deciding to revoke, the Participant
should consult with a tax advisor as to any adverse tax consequences which
may result from revocation. If the IRA certificate is revoked, an individual
may set up and contribute to a new IRA if at the time the individual meets
the requirements for contributing to an IRA, as discussed below under
"Contributions."
Contributions
The following discussion pertains to regular IRA contributions. The limits
discussed in this section do not apply to rollover or direct
custodian-to-custodian contributions into an IRA. See "Rollovers and
Transfers," below.
Generally, $2,000 is the maximum amount of deductible and nondeductible
contributions which an individual may make to all of his or her IRAs
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in any taxable year. The above limit may be less where the individual's
earnings are below the applicable amount.
An individual and a nonworking spouse can together contribute annually an
aggregate of $4,000 to IRAs for the individual and the spouse. An IRA
certificate is set up for each spouse and the working spouse may contribute a
total of $4,000 to the certificates (but no more than $2,000 to either
certificate). A working spouse may elect to be treated as having no
compensation in order to be eligible for a spousal IRA. The nonworking spouse
owns his or her own IRA contract, even if the working spouse provides all of
the contributions.
The amount of IRA contribution for a tax year that an individual can deduct
depends on whether the individual (or the individual's spouse, if a joint
return is filed) is covered by an employer-sponsored tax-favored retirement
plan (including a qualified plan, TSA, SEP or SIMPLE IRA, but not an EDC
plan).
If neither the Participant nor the Participant's spouse are covered during
any part of the taxable year by a tax-favored retirement plan (including a
pension or profit-sharing plan, TSA or simplified employee pension), then
each working spouse may make a deductible contribution up to the lesser of
100% of compensation or $2,000, regardless of his or her adjusted gross
income (AGI). In certain cases, individuals covered by a tax-favored
retirement plan include persons eligible to participate in the plan although
not actually participating. Whether or not a person is covered by a
tax-favored retirement plan will be reported on the employee's Form W-2.
If the Participant is single and covered by a retirement plan during any part
of the taxable year, the IRA deduction phases out with AGI between $25,000
and $35,000. If the Participant is married and files a joint return, and
either the Participant or the spouse is covered by a tax-favored retirement
plan during any part of the taxable year, the IRA deduction phases out with
AGI between $40,000 and $50,000. If the Participant is married, files a
separate return and is covered by a tax-favored retirement plan during any
part of the taxable year, the IRA deduction phases out with AGI between $0
and $10,000. Married individuals filing separate returns must take into
account the retirement plan coverage of the other spouse, unless the couple
has lived apart for the entire taxable year. If AGI is below the phase-out
range, a Participant is entitled to the maximum allowable deduction. In
computing the partial IRA deduction the Participant must round to the nearest
$10. The permissible deduction for IRA contributions is a minimum of $200 if
AGI is less than the amount at which the deduction entirely phases out.
For Participants covered by, or treated as covered by, a tax-favored
retirement plan, the deduction for IRA contributions may be computed using
one of two methods. Under the first method, the Participant determines his or
her AGI and subtracts $25,000 if the Participant is a single person, $40,000
if the Participant is married and filing jointly with the spouse, or $0 if
the Participant is married, filing separately and either the Participant or
the Participant's spouse is covered by a tax-favored retirement plan. (If the
couple has lived apart the entire taxable year and their filing status is
married filing separately, the retirement plan coverage of the Participant's
spouse can be ignored.) The resulting amount is the Participant's "Excess
AGI". The Participant then applies the following formula:
$10,000--Excess AGI
- ------------------- X Maximum = IRA
$10,000 Allowable IRA Deduction Limit
Deduction
Under the second method, the Participant determines his or her "Excess AGI"
and refers to the following chart originally prepared by the IRS to determine
his or her deduction.
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IRS CHART
ESTIMATED DEDUCTION TABLE
If your maximum allowable deduction is $2,000, use this table to estimate
the amount of your contribution which will be deductible.
<TABLE>
<CAPTION>
EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION
- ------------ ----------- ------------ -----------
<S> <C> <C> <C>
$ 0 $2,000 $2,600 $1,480
50 1,990 2,650 1,470
100 1,980 2,700 1,460
150 1,970 2,750 1,450
200 1,960 2,800 1,440
250 1,950 2,850 1,430
300 1,940 2,900 1,420
350 1,930 2,950 1,410
400 1,920 3,000 1,400
450 1,910 3,050 1,390
500 1,900 3,100 1,380
550 1,890 3,150 1,370
600 1,880 3,200 1,360
650 1,870 3,250 1,350
700 1,860 3,300 1,340
750 1,850 3,350 1,330
800 1,840 3,400 1,320
850 1,830 3,450 1,310
900 1,820 3,500 1,300
950 1,810 3,550 1,290
1,000 1,800 3,600 1,280
1,050 1,790 3,650 1,270
1,100 1,780 3,700 1,260
1,150 1,770 3,750 1,250
1,200 1,760 3,800 1,240
1,250 1,750 3,850 1,230
1,300 1,740 3,900 1,220
1,350 1,730 3,950 1,210
1,400 1,720 4,000 1,200
1,450 1,710 4,050 1,190
1,500 1,700 4,100 1,180
1,550 1,690 4,150 1,170
1,600 1,680 4,200 1,160
1,650 1,670 4,250 1,150
1,700 1,660 4,300 1,140
1,750 1,650 4,350 1,130
1,800 1,640 4,400 1,120
1,850 1,630 4,450 1,110
1,900 1,620 4,500 1,100
1,950 1,610 4,550 1,090
2,000 1,600 4,600 1,080
2,050 1,590 4,650 1,070
2,100 1,580 4,700 1,060
2,150 1,570 4,750 1,050
2,200 1,560 4,800 1,040
2,250 1,550 4,850 1,030
2,300 1,540 4,900 1,020
2,350 1,530 4,950 1,010
2,400 1,520 5,000 1,000
2,450 1,510 5,050 990
2,500 1,500 5,100 980
2,550 1,490 5,150 970
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
EXCESS AGI EXCESS AGI DEDUCTION EXCESS AGI DEDUCTION
- ------------ ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
$ 0 $5,200 $960 $ 7,800 $440
50 5,250 950 7,850 430
100 5,300 940 7,900 420
150 5,350 930 7,950 410
200 5,400 920 8,000 400
250 5,450 910 8,050 390
300 5,500 900 8,100 380
350 5,550 890 8,150 370
400 5,600 800 8,200 360
450 5,650 870 8,250 350
500 5,700 860 8,300 340
550 5,750 850 8,350 330
600 5,800 840 8,400 320
650 5,850 830 8,450 310
700 5,900 820 8,500 300
750 5,950 810 8,550 290
800 6,000 800 8,600 280
850 6,050 790 8,650 270
900 6,100 780 8,700 260
950 6,150 770 8,750 250
1,000 6,200 760 8,800 240
1,050 6,250 750 8,850 230
1,100 6,300 740 8,900 220
1,150 6,350 730 8,950 210
1,200 6,400 720 9,000 200
1,250 6,450 710 9,050 200
1,300 6,500 700 9,100 200
1,350 6,550 690 9,150 200
1,400 6,600 680 9,200 200
1,450 6,650 670 9,250 200
1,500 6,700 660 9,300 200
1,550 6,750 650 9,350 200
1,600 6,800 640 9,400 200
1,650 6,850 630 9,450 200
1,700 6,900 620 9,500 200
1,750 6,950 610 9,550 200
1,800 7,000 600 9,600 200
1,850 7,050 590 9,650 200
1,900 7,100 580 9,700 200
1,950 7,150 570 9,750 200
2,000 7,200 560 9,800 200
2,050 7,250 550 9,850 200
2,100 7,300 540 9,900 200
2,150 7,350 530 9,950 200
2,200 7,400 520 10,000 0
2,250 7,450 510
2,300 7,500 500
2,350 7,550 490
2,400 7,600 480
2,450 7,650 470
2,500 7,700 460
2,550 7,750 450
</TABLE>
Excess AGI = Your AGI minus $25,000 for single persons, $40,000 for married
persons filing jointly, and $0 for married persons filing separately.
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IRA contributions for a taxable year may be made up to the time prescribed
for filing a Federal tax return for that taxable year (without extensions).
No contributions are allowed for the taxable year in which an individual
attains age 70-1/2 or any tax year thereafter. An individual age 70-1/2 or
over, however, can contribute and deduct up to the lesser of $2,000 or 100%
of compensation to a spousal IRA on behalf of a non-working spouse until the
year such spouse reaches age 70-1/2.
A Participant not eligible to deduct part or all of the IRA contribution may
still make nondeductible contributions on which earnings will accumulate on a
tax-deferred basis. The deductible and nondeductible contributions to the
Participant's IRA (or the non-working spouse's IRA) may not, however,
together exceed the maximum $2,000 per person limit. See "Excess
Contributions." Participants must keep their own records of deductible and
nondeductible contributions in order to prevent double taxation on the
distribution of previously taxed amounts. See "Distributions." A Participant
making nondeductible contributions in any taxable year, or receiving amounts
from any IRA to which he has made nondeductible contributions, will be
penalized unless he files required information with the IRS. Moreover,
Participants making nondeductible IRA contributions must retain all income
tax returns and records pertaining to such contributions until interests in
all IRAs are fully distributed.
Excess Contributions
Excess contributions to an IRA are subject to a 6% excise tax for the year in
which made and for each year thereafter until withdrawn. In the case of
"regular" IRA contributions any contribution in excess of the lesser of
$2,000 or 100% of compensation or earned income is an "excess contribution,"
(without regard to the deductibility or nondeductibility of IRA contributions
under this limit). Also, any "regular" contributions made after the
Participant reaches age 70 1/2 are excess contributions. In the case of
rollover IRA contributions, excess contributions are amounts which are not
eligible to be rolled over (for example, after-tax contributions to a
qualified plan or minimum distributions required to be made after age 70
1/2). An excess contribution (rollover or "regular") which is withdrawn
before the time for filing the Participant's Federal income tax return for
the tax year (including extensions) is not includable in income and does not
result in the "early distribution" 10% penalty tax (discussed below under
"Distributions"), provided the net earnings attributable to the excess
contributions are also withdrawn and no tax deduction is taken for the excess
contributions. The withdrawn earnings on the excess contributions would,
however, be includable in the Participant's gross income for the tax year in
which the excess contributions were made and would also be subject to the
early distribution 10% penalty tax.
If excess contributions are not withdrawn before the time for filing the
Participant's Federal income tax return for the taxable year (including
extensions), excess "regular" contributions may still be withdrawn after that
time if the IRA contributions for the taxable year did not exceed $2,000 and
no tax deduction was taken for the excess contribution; in that event the
excess contributions will not be includable in income and will not be subject
to the early distribution 10% penalty tax. Lastly, excess "regular"
contributions may also be removed by underutilizing the allowable
contribution limits for a later year. If excess rollover contributions are
not withdrawn before the time for filing the Participant's Federal tax return
for the year (including extensions) and the excess contribution occurred as a
result of incorrect information provided by a qualified plan, any such excess
amount can be withdrawn if no tax deduction was taken for the excess
contribution. As above, excess rollover contributions withdrawn under those
circumstances would not be includable in gross income and would not be
subject to the early distribution 10% penalty tax.
Distributions
Income or gains attributable to any IRA contributions are not subject to
Federal income tax until benefits are distributed. Except as discussed below,
the amount of any distribution from an IRA is fully includable by the
Participant in gross income. Distributions from an IRA are taxable as
ordinary income and are not entitled to the special
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five-year averaging rules for certain distributions from tax-qualified
retirement plans.
If the Participant makes nondeductible IRA contributions, such contributions
are recovered tax-free when distributions are made. The Participant must keep
records of all nondeductible contributions. At the end of each tax year in
which the Participant takes a distribution, the Participant determines a
ratio of the total nondeductible IRA contributions (less any amounts
previously withdrawn tax-free) to the total account balances of all IRAs held
by the Participant at the end of the tax year (including rollover IRAs) plus
all IRA distributions made during such tax year. The resulting ratio is then
multiplied by all distributions from the IRA during that tax year to
determine the non-taxable portion of such distribution.
The taxable portion of IRA distributions are subject to an additional 10%
federal income tax penalty unless the distribution is made (1) on or after
the Participant's death, (2) because the Participant has become disabled, (3)
on or after the date when the Participant reaches age 59 1/2, or (4) at least
annually in the form of a substantially equal periodic payout over the
Participant's life or life expectancy (or joint and survivor lives or life
expectancies). Also not subject to penalty tax are IRA distributions used to
pay certain extraordinary medical expenses or medical insurance premiums for
defined unemployed individuals.
Distributions generally must commence no later than April 1 of the calendar
year following the calendar year in which the Participant attains age 701/2.
Subsequent required distributions must be made by December 31st of each year.
If the prescribed minimum amount required is not distributed in any year, a
50% excise tax is imposed on the amount by which the minimum required to be
distributed exceeds the amount actually distributed.
Distributions can generally be made (1) in a lump sum payment, (2) over the
life of the Participant, (3) over the joint lives of the Participant and his
or her designated beneficiary, (4) over a period not extending beyond the
life expectancy of the Participant or (5) over a period not extending beyond
the joint life expectancies of the Participant and his or her designated
beneficiary.
If the Participant dies after required distributions have begun, payment of
the remaining interest must be made at least as rapidly as under the method
used prior to the Participant's death. If a Participant dies before required
distributions have begun, payment of the entire interest must be made within
five years of death (other than payments to the surviving spouse) unless
payment is made to a designated beneficiary over a period which begins within
one year of the Participant's death and does not extend beyond the
beneficiary's life expectancy.
If the surviving spouse is the designated beneficiary, the spouse may delay
the commencement of such payments up until the individual would have attained
age 70-1/2. In the alternative, a surviving spouse may elect to roll over the
inherited IRA into the surviving spouse's own IRA. If a surviving spouse
elects to rollover the inherited IRA into the surviving spouse's own IRA, no
distribution is required until after the spouse attains age 70-1/2.
Distributions received by a beneficiary are generally given the same tax
treatment the Participant would have received if distribution had been made
to the Participant.
We are not permitted to make distributions from a certificate before the
retirement date unless a request has been made. It is the Participant's
responsibility to comply with the minimum distribution rules described above.
Because of the adverse tax consequences, including penalties and potential
IRA disqualification, which may result if the distribution requirements are
not met, a tax adviser should be consulted.
Rollovers and Transfers
Under the conditions and limitations of the Code, an individual may elect for
each IRA once every twelve-month period to make a rollover among IRAs
(including transfers from retirement bonds purchased before 1983). Direct
custodian-to-custodian transfers may be made more frequently than once a
year. A participant may request that amounts rolled over from a
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qualified plan or a TSA, or from an IRA attributable solely to qualified plan
or TSA distributions and earnings thereon be accumulated in a separate
"conduit" IRA certificate to facilitate a subsequent rollover to another
qualified plan or TSA which will accept rollover contributions. We will
maintain separate accounting of all such amounts.
Rollover contributions must be transferred to the certificate either as a
direct rollover of an "eligible rollover distribution" or as a rollover by
the individual plan participant or owner of the IRA. In the latter cases, the
rollover must be made within 60 days of the date the proceeds from another
IRA or an eligible rollover distribution from a qualified plan or TSA were
received.
The taxable portion of any distribution (except for a required minimum
distribution under Section 401(a) (9) of the Code) from a qualified plan or
TSA may be rolled over tax-free to an IRA, unless the distribution is one of
a series of substantially equal periodic payments made (not less frequently
than annually) (1) for the life (or life expectancy) of the participant or
the joint lives (or joint life expectancies) of the participant and his or
her designated beneficiary, or (2) for a specified period of ten years or
more.
The same tax-free treatment applies to amounts withdrawn from the certificate
and rolled over into other IRAs unless the distribution was received under an
inherited IRA. No deduction is allowed for any contribution to an inherited
IRA. However, surviving spouses of original IRA owners will be exempted from
these restrictions.
Prohibited Transactions
If a Participant engages in a "prohibited transaction" with the IRA or
borrows money under or by use of the IRA, the IRA will cease to be an IRA as
of the first day of the taxable year in which the transaction occurred, and
the Participant must include in gross income for that year an amount equal to
the fair market value of the IRA as of that first day. Also, an additional
excise tax equal to 10% of the amount included in the gross income will
result if the Participant has not yet attained age 59-1/2 prior to the first
day.
Miscellaneous
The designation by a Participant of a beneficiary to whom the IRA will become
payable at or after the Participant's death is not considered a transfer
subject to Federal gift tax.
We describe the methods of computing and allocating earnings on contributions
in the prospectus under "Investment of Contributions in the Investment Funds"
and in this SAI under "The Guaranteed Rate Account." We describe the types of
charges and the amount of the charges that may be made in the prospectus
under "Deductions and Charges."
Further information on IRA tax matters can be obtained from any District
Office of the IRS.
IRAS UNDER SIMPLIFIED EMPLOYEE PENSION PLANS (SEP)
When an employer establishes a SEP for its employees, contributions for each
eligible employee can be made to an IRA certificate for that employee (SEP).
The employee may also make his or her own IRA contributions to that SEP
certificate. See "IRA Contributions" above.
Contributions. Due to statutory limits, in 1997 an employer can annually
contribute an amount for an employee up to the lesser of $24,000 or 15% of
the employee's compensation, determined without taking into account the
employer's contribution to the SEP. This $24,000 maximum, based on the
statutory compensation limit of $160,000, may be further adjusted for cost of
living changes in future years. These limits may be reduced by contributions
made by the employer to other qualified plans. The employer must make a
contribution for each employee who has reached age 21 and has worked for the
employer during at least three of the preceding five years. Contributions are
not required for employees who (1) earn less than $400 in 1997, (2) are
covered by a collective bargaining agreement or (3) are non-resident aliens
who receive no earned income from sources within the United States.
Employer contributions must be made under a written program which provides
that (i) withdrawals are permitted, (ii) contributions are made under an
allocation formula and (iii)
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contributions bear a uniform relationship to compensation, not in excess of
$160,000 in 1997, which may be further adjusted for cost of living changes in
future years. Contributions cannot discriminate in favor of highly
compensated employees. Contributions to the SEP may be integrated with Social
Security; call our toll-free number for assistance.
Except as otherwise indicated in this section, all of the IRA rules discussed
above, including those relating to revocation, distributions and penalties
for early, minimum and excess distributions, apply to SEPs.
SIMPLE IRAS
An eligible employer may establish a "SIMPLE" plan to make contributions to
special individual retirement accounts or individual retirement annuities for
its employees ("SIMPLE IRAs"). A SIMPLE IRA is a form of IRA owned by the
Participant, and generally the rules applicable to IRAs discussed above
apply. There are differences in the amount and type of permissible
contributions (employee salary reduction contributions of up to $6,000 may be
made in 1997; the employer must make contributions, generally a
dollar-for-dollar match up to 3% of compensation). Also, employees who have
not participated in the employer's SIMPLE IRA plan for at least two full
years may be subject to an increased penalty tax on withdrawals or transfers
of SIMPLE IRA funds.
The employer cannot maintain any other qualified plan, SEP or TSA arrangement
if it makes contributions under a SIMPLE IRA plan. (Eligible employers may
maintain EDC plans.)
An employer establishing a SIMPLE plan should consult its tax advisor
concerning the various technical rules applicable to establishing and
maintaining SIMPLE IRA plans. For example, the definition of employee's
"compensation" varies depending on whether it is used in the context of
employer eligibility, employee participation, and employee or employer
contributions.
Participation must be open to all employees who received at least $5,000 in
compensation from the employer in any two preceding years (they do not have
to be consecutive years) and who are reasonably expected to receive at least
$5,000 in compensation during the year. (Certain collective bargaining unit
and alien employees may be excluded.)
The only kinds of contributions which may be made to a SIMPLE IRA are (i)
contributions under a salary reduction agreement entered into between the
employer and the participating employee and (ii) required employer
contributions (employer matching contributions or employer nonelective
contributions). (Direct transfer and rollover contributions from other SIMPLE
IRAs, but not regular IRAs, may also be made.) Salary reduction contributions
can be any percentage of compensation (or a specific dollar amount, if the
employer's plan permits) but are limited to $6,000 in 1997. The $6,000
elective deferral limit may be indexed for cost of living adjustments in
future years.
Generally, the employer is required to make matching contributions on behalf
of each eligible employee in an amount equal to the salary reduction
contributions, up to 3% of the employee's compensation.
Unless specifically otherwise mentioned, for example, regarding differences
in funding and potential penalty tax on distributions, the rules discussed
above under IRAs also apply to SIMPLE IRAs.
Amounts contributed to SIMPLE IRAs are not currently taxable to employees.
Only the employer can deduct SIMPLE IRA contributions, not the employee. An
employee eligible to participate in a SIMPLE IRA is treated as an active
participant in an employer plan and thus may not be able to deduct (fully)
regular contributions to his/her own IRA.
As with IRAs in general, contributions and earnings accumulate tax deferred
until withdrawn and are then fully taxable. There are no withdrawal
restrictions applicable to SIMPLE IRAs. However, because of the level of
employer involvement, SIMPLE IRA plans are subject to ERISA. See ERISA
matters below.
Amounts withdrawn from a SIMPLE IRA can be rolled over to another SIMPLE IRA,
or to a regular IRA. No rollovers from a SIMPLE IRA to a
11
<PAGE>
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regular IRA are permitted for individuals under age 59 1/2 who have not
participated in the employer's SIMPLE IRA for two full years. Also, for such
individuals, any amounts withdrawn from a SIMPLE IRA are not only fully
taxable but are subject to a 25% additional federal income tax penalty. (The
exceptions to penalty application for death, disability and attainment of age
59 1/2 apply).
LIMITS ON DISTRIBUTIONS
The Code imposes a 15% excise tax on a participant's aggregate excess
distributions from all tax-favored retirement plans. The excise tax is in
addition to the ordinary income tax due, but is reduced by the amount (if
any) of the early distribution penalty tax imposed by the Code. This tax is
temporarily suspended for distributions to the participant for the years
1997, 1998 and 1999. However, the excise tax continues to apply for estate
tax purposes. In certain cases the estate tax imposed on a deceased
participant's estate will be increased if the accumulated value of the
participant's interest in tax-favored retirement plans is excessive. The
aggregate accumulations will be subject to excise tax in 1997 if they exceed
the present value of a hypothetical life annuity paying $160,000 a year.
PENALTIES FOR EXCESS DEFERRALS
If an individual's aggregate elective deferrals under 401(k) plans, and TSAs
exceed the permitted elective deferral limit in any taxable year ($9,500 in
1997) the individual will be taxed twice on the excess deferral--once in the
year of the deferral and again when a distribution occurs. If, in the case of
a TSA, the individual notifies the affected plan or plans and, by April 15 of
the following year, receives a distribution of the excess deferral and
related income and the individual takes a withdrawal of the excess amount by
April 15 following the year of the deferral, the excess deferral will only be
taxed in the year of deferral. Any related income will be taxed in the year
of the distribution. The distribution of the excess deferral plus income is
not treated as a withdrawal of restricted funds from a TSA, is not subject to
the 10% penalty tax on early retirement distributions from the TSAs and IRAs
and, with respect to TSAs, is not an eligible rollover distribution subject
to 20% mandatory federal income tax withholding discussed below. If excess
deferrals remain in the plan, the plan may be disqualified.
FEDERAL AND STATE INCOME TAX WITHHOLDING
Equitable may be required to withhold Federal income tax on the taxable
portion of pension and annuity payments.
Unless the pension or annuity payment is an "eligible rollover distribution"
from a TSA, the recipient generally may elect not to be subject to income tax
withholding. The rate of withholding will depend on the type of distribution
and, in certain cases, the amount of the distribution. Compare "Elective
Withholding" and "Mandatory Withholding from TSAs," below.
Certain states have indicated that pension and annuity withholding will apply
to payments made to residents. Generally, an election out of Federal
withholding will also be considered an election out of state withholding. In
some states, a recipient may elect out of state withholding, even if Federal
withholding applies. It is not clear whether such states will require
mandatory withholding with respect to eligible rollover distributions
(described below). If you need more information concerning a particular
state, consult your tax advisor.
Special withholding rules apply to foreign recipients and United States
citizens residing outside the United States. See your tax advisor if you may
be affected by such rules.
Elective Withholding
Requests not to withhold Federal income tax must be made in writing prior to
receiving benefits under the contract. We will provide forms for this
purpose. No election out of withholding is valid unless the recipient
provides us with the correct taxpayer identification number and a United
States residence address.
If a recipient does not have sufficient income tax withheld or does not make
sufficient estimated income tax payments, the recipient may incur penalties
under the estimated income tax rules. Recipients should consult their tax
advisors to determine whether they should elect out of
12
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withholding. Periodic payments are generally subject to wage-bracket type
withholding (as if such payments were wages by an employer to an employee)
unless the recipient elects no withholding. If a recipient does not elect out
of withholding or does not specify the number of withholding exemptions,
withholding will generally be made as if the recipient is married and claiming
three withholding exemptions. There is an annual threshold of taxable income
from periodic payments which is exempt from withholding based on this
assumption. For 1996 a recipient of periodic payments (e.g., monthly or annual
payments) which total less than $14,075 for the year will generally be exempt
from Federal income tax withholding, unless the recipient specifies a different
choice of withholding exemption.
A withholding election may be revoked at any time and remains effective until
revoked. If a recipient fails to provide a correct taxpayer identification
number, withholding is made as if the recipient is single with no exemptions.
A recipient of a partial or total non-periodic distribution (other than an
"eligible rollover distribution" discussed below) will generally be subject
to withholding at a flat 10% rate. A recipient who provides a United States
residence address and a correct taxpayer identification number will generally
be permitted to elect not to have tax withhold.
All recipients receiving periodic and non-periodic payments will be further
notified of the withholding requirements and of their right, if any, to make
withholding elections.
Mandatory Withholding From TSAs
All "eligible rollover distributions" from TSAs are subject to mandatory
federal income taxwithholding of 20% unless the employee elects to have the
distribution directly rolled over to another TSA or an IRA. The following are
not eligible rollover distributions subject to mandatory 20% withholding:
o any distribution to the extent that the distribution is a "required minimum
distribution" under Section 401(a)(9) of the Code;
o any distribution which is one of a series of substantially equal periodic
payments made (not less frequently than annually (1) for the life (or life
expectancy) of the employee or the joint lives (or joint life expectancies)
of the employee and his or her designated beneficiary, or (2) for a
specified period of 10 years or more;
o certain corrective distributions under Code Section 402(g); and
o a distribution to a beneficiary other than to a surviving spouse or to a
current or former spouse under a qualified domestic relations order.
If a distribution is made to a plan participant's surviving spouse, or to a
current or former spouse under a qualified domestic relations order, the
distribution may be an eligible rollover distribution, subject to mandatory
20% withholding, unless one of the exceptions described above applies.
If a distribution is not an "eligible rollover distribution," the rules on
elective withholding described above, apply.
ERISA MATTERS
Certain TSAs and SIMPLE IRAs may be subject to some or all rules applicable
to ERISA plans. For TSAs subject to ERISA (but not SIMPLE IRAs) if a
Participant is married at the time a withdrawal or other distribution is
requested under the Certificate, spousal consent is required. In addition,
unless the Participant elects otherwise with the written consent of the
spouse, the retirement benefits payable under the plan or arrangement must be
paid in the form of a "qualified joint and survivor annuity" (QJSA). A QJSA
is an annuity payable for the life of the Participant with a survivor annuity
for the life of the spouse in an amount which is not less than one-half of
the amount payable to the Participant during his or her lifetime. In
addition, a married Participant's beneficiary must be the spouse, unless the
spouse consents in writing to the designation of a different beneficiary.
Section 404(c) of ERISA, and the related DOL regulation, provide that if a
plan participant or beneficiary exercises control over the assets in his or
her plan account, plan fiduciaries will not be
13
<PAGE>
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liable for any loss that is the direct and necessary result of the plan
participant's or beneficiary's exercise of control. As a result, if the plan
complies with Section 404(c) and the DOL regulation thereunder, the plan
participant can make and is responsible for the results of his or her own
investment decisions. Section 404(c) plans must provide, among other things
that a broad range of investment choices are available to plan participants
and beneficiaries and must provide such plan participants and beneficiaries
with enough information to make informed investment decisions. Compliance
with the Section 404(c) regulation is completely voluntary by the plan
sponsor, and the plan sponsor may choose not to comply with Section 404(c).
The Equitable 300 Series TSA and SIMPLE IRA programs provide the broad range
of investment choices and information needed in order to meet the
requirements of the Section 404(c) regulation. If the plan is intended to be
a Section 404(c) plan, it is, however, the plan sponsor's responsibility to
see that the requirements of the DOL regulation are met. Equitable Life shall
not be responsible if a plan fails to meet the requirements of Section
404(c).
IMPACT OF TAXES TO EQUITABLE
The certificates provide that we may charge the Investment Funds for taxes or
set up reserves for that purpose. In computing Unit Values in the Investment
Funds, no charge for Federal income taxes is presently contemplated on the
income and gains of the Investment Funds attributable to the certificates.
PART 2--THE GUARANTEED RATE ACCOUNTS
Contributions to a Guaranteed Rate Account become part of our General
Account, which supports all of our insurance and annuity guarantees as well
as our general obligations. The General Account, as part of our insurance and
annuity operations, is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions in which we are authorized to do business, as discussed
in the prospectus under "Regulation." Because of applicable exemptive and
exclusionary provisions, interests in the General Account have not been
registered under the Securities Act of 1933 (1933 ACT) nor is the General
Account an investment company under the Investment Company Act of 1940 (1940
ACT). Accordingly, neither the General Account nor any interests therein are
subject to regulation under the 1933 Act or the 1940 Act, and we have been
advised that the staff of the Securities and Exchange Commission has not made
a review of the disclosures which are included in this SAI for your
information and which relate to the General Account and the Guaranteed Rate
Accounts. These disclosures, however, may be subject to certain generally
applicable provisions of the Federal securities laws relating to the accuracy
and completeness of statements made in prospectuses and SAIs.
THE GUARANTEES
Contributions to a Guaranteed Rate Account are credited with interest at a
fixed rate for a specified period. The amount of the contribution is
guaranteed by us (before deduction of any applicable participant service
charge). The effective guaranteed annual rate will always be at least 3%.
New one-year and three-year Guarantees will be offered each quarter.
Generally 10 days before the beginning of the quarter, we will announce the
one-year and three-year Guarantee Rates, that is, the fixed interest rate
expressed as an effective annual interest rate, which will apply to
contributions made throughout the open period for each Guarantee. The open
period will be the calendar quarter (CONTRIBUTION QUARTER) unless during that
quarter we close the Guarantee and instead offer a new Guarantee at a
different Guarantee Rate for the remainder of the Contribution Quarter. We
reserve the right to close a Guarantee at any time based on market
conditions. Contributions made during the open period will not be affected by
subsequent rate changes and will continue to receive the Guaranteed Rate
until the maturity date for that Guarantee. All Guarantees of the same
duration which are opened during a Contribution Quarter mature on the same
day. After the last day of the Contribution Quarter, however, no further
contributions may be applied to that Guarantee.
14
<PAGE>
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Contributions allocated to a Guaranteed Rate Account during the next
Contribution Quarter would be allocated to the Guarantees being offered
during that subsequent quarter at the new Guarantee Rates in accordance with
instructions. The new Guarantee Rates may be obtained by calling us at the
number listed on the front of this SAI.
We may offer Guarantees with different maturities and different rates during
a particular calendar quarter. Currently, we offer Guarantees of one and
three year maturities.
We may offer additional or different maturities in future Contribution
Quarters.
CONTRIBUTIONS
Contributions to a Guaranteed Rate Account are permitted at any time. There
is no minimum contribution; however, if you are contributing through an
employer, your employer may have a minimum.
Contributions to the Guaranteed Rate Accounts are credited until maturity
with the interest rate in effect on the date of receipt. The rate is
expressed as an effective annual rate, reflecting daily compounding and the
deduction of the participant service charge, described under "Deductions and
Charges," in the prospectus.
Written requests for changes in the percentage of contributions to be
allocated to a Guaranteed Rate Account will become effective on the date of
receipt. Alternatively, allocation or contribution instructions may be made
by telephone through the AIM System.
MATURING GUARANTEES
At the end of a Guarantee, unless we are instructed otherwise, the amount
accumulated will be automatically contributed to a new Guarantee of similar
duration, or, if no Guarantee of similar duration is then being offered, to
the Guarantee of the shortest duration then being offered.
Amounts in maturing Guarantees may be allocated to one or more other
Investment Funds by using the AIM System. Instructions must be received prior
to the maturity of the Guarantee and will apply to all maturing Guarantees
until other instructions are received.
PREMATURE WITHDRAWALS OR TRANSFERS
Transfers may not be made from one Guarantee to another. Transfers may also
not be made from a Guarantee during the open period for that Guarantee. In
the case of a trustee-to-trustee transfer during the open period, there will
be a premature withdrawal charge.
Amounts in the Guaranteed Rate Accounts will be withdrawn or transferred on a
last in-first out basis unless otherwise specified by the Participant. All
other amounts withdrawn or transferred will be subject to a withdrawal charge
in an amount equal to (1) 7% of the amount withdrawn or transferred
(including the amount of the withdrawal charge) or, if less, (2) the amount
of the Participant's accumulated interest attributable to the amount
withdrawn or transferred (calculated as provided in the certificate). The
withdrawal charge will be deducted from the remaining amounts in the
Participant's Guarantee after the withdrawal or transfer payment is
processed, or from the withdrawn or transferred amount if remaining amounts
are insufficient.
This charge for premature withdrawals from a Guaranteed Rate Account is never
applied against the amount of the Participant's contributions. Also, the
charge for premature withdrawals does not apply:
o at maturity of the Guarantee;
o from withdrawals due to death or disability;
o when the installment option is elected; or
o when an annuity retirement option is elected.
It does apply to any other premature withdrawal or transfer, including
withdrawals on retirement.
15
<PAGE>
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Example: $2,000 is contributed to the Guaranteed Rate Account on January 1,
with the contribution being directed to a three-year Guarantee with a
Guarantee Rate of 4%. On December 31, a premature withdrawal is made of
$1,000 from the Guaranteed Rate Account. The maximum Participant Service
Charge applicable to the Participant is $30 per year ($7.50 per quarter). The
withdrawal charge will be calculated as follows:
<TABLE>
<CAPTION>
PARTICIPANT
SERVICE
DATE CONTRIBUTION INTEREST CHARGE
- ------- -------------- ---------- -------------
<S> <C> <C> <C>
1/1 $2,000 -- --
3/31 -- $19.71 $7.50
6/30 -- 19.83 7.50
9/30 -- 19.95 7.50
12/31 -- 20.07 7.50
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
PREMATURE
AMOUNT WITHDRAWAL CHECK ACCOUNT
DATE REQUESTED CHARGE AMOUNT BALANCE
- ------- ----------- ------------ -------- -----------
<S> <C> <C> <C> <C>
1/1 -- -- -- $2,000.00
3/31 -- -- -- 2,012.21
6/30 -- -- -- 2,024.54
9/30 -- -- -- 2,036.09
12/31 $1,000 $26.00* $1,000 1,023.56
</TABLE>
- ------------
* The lesser of (a) 7% ($75.27) of the amount withdrawn (including the
amount of the withdrawal charge) or (b) the amount of the Participant's
accumulated interest ($26.00) attributable to that same amount.
- -----------------------------------------------------------------------------
The example assumes that each quarter contains the same number of days and
that each transaction occurs on a business day.
CASH VALUE
The Account Balance of a Guaranteed Rate Account is equal to the value of the
contributions and transfers assigned to each Guarantee then current, less
transfers out of the Guaranteed Rate Account, partial withdrawals and
applicable participant service charges, plus accrued interest. Because
withdrawals before the end of a Guarantee are subject to a premature
withdrawal charge, we use the term "Cash Value" to mean the Account Balance
of a Guaranteed Rate Account less any applicable premature withdrawal charge.
The Cash Value is the amount that would be paid to the Participant if the
Participant withdrew the entire Account Balance of a Guaranteed Rate Account
before the end of the Guarantees to which contributions were directed.
16
<PAGE>
TABLE I
ACCOUNT BALANCES AND CASH VALUES
(ASSUMING $1,000 CONTRIBUTIONS MADE ANNUALLY ON THE ENROLLMENT DATE)
<TABLE>
<CAPTION>
CASH VALUE ACCOUNT BALANCE
--------------------------- ---------------------------
ATTAINED 3% 6% 3% 6%
AGE MINIMUM ILLUSTRATED MINIMUM ILLUSTRATED
YEAR END GUARANTEE RATE GUARANTEE RATE
- ---------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
1 $ 999.66 $ 999.66 $ 999.66 $ 1,029.33
2 2,000.00 2,000.00 2,029.32 2,120.42
3 3,000.00 3,047.59 3,089.86 3,276.98
4 4,000.00 4,187.72 4,182.22 4,502.93
5 5,000.00 5,396.26 5,307.36 5,802.44
6 6,013.60 6,677.32 6,466.24 7,179.91
7 7,123.70 8,035.23 7,659.89 8,640.04
8 8,267.10 9,474.63 8,889.35 10,187.77
9 9,444.80 11,000.38 10,155.70 11,828.37
10 10,657.83 12,617.68 11,460.03 13,567.40
11 11,907.25 14,332.03 12,803.50 15,410.78
12 13,194.16 16,149.23 14,187.27 17,364.76
13 14,519.67 18,075.46 15,612.55 19,435.98
14 15,884.95 20,117.27 17,080.59 21,631.47
15 17,291.19 22,281.58 18,592.68 23,958.69
16 18,739.61 24,575.75 20,150.12 26,425.54
17 20,231.49 27,007.58 21,754.29 29,040.40
18 21,768.12 29,585.31 23,406.58 31,812.16
19 23,350.85 32,317.70 25,108.44 34,750.22
20 24,981.07 35,214.04 26,861.36 37,864.56
21 26,660.19 38,284.17 28,666.87 41,165.77
22 28,389.68 41,538.50 30,526.54 44,665.05
23 30,171.06 44,988.08 32,442.00 48,374.28
24 32,005.88 48,644.65 34,414.92 52,306.07
25 33,895.74 52,520.60 36,447.04 56,473.77
26 35,842.30 56,629.12 38,540.11 60,891.52
27 37,847.26 60,984.14 40,695.98 65,574.34
28 39,912.37 65,600.47 42,916.52 70,538.14
29 42,039.43 70,493.77 45,203.68 75,799.76
30 44,230.30 75,680.68 47,559.46 81,377.07
31 46,486.89 81,178.79 49,985.91 87,289.03
32 48,811.19 87,006.80 52,485.15 93,555.70
33 51,205.21 93,184.49 55,059.37 100,198.37
34 53,671.06 99,732.83 57,710.81 107,239.61
35 56,210.88 106,674.08 60,441.80 114,703.31
36 58,826.89 114,031.80 63,254.72 122,614.84
37 61,521.38 121,830.99 66,152.03 131,001.06
38 64,296.71 130,098.12 69,136.25 139,890.45
39 67,155.30 138,861.29 72,210.00 149,313.21
40 70,099.65 148,150.24 75,375.97 159,301.34
41 73,132.33 157,996.54 78,636.91 169,888.75
42 76,255.99 168,433.61 81,995.68 181,111.41
43 79,473.35 179,496.90 85,455.22 193,007.42
44 82,787.24 191,224.00 89,018.54 205,617.20
45 86,200.55 203,654.71 92,688.76 218,983.56
46 89,716.25 216,831.28 96,469.09 233,151.91
47 93,337.43 230,798.43 100,362.83 248,170.35
48 97,067.24 245,603.61 104,373.38 264,089.91
49 100,908.94 261,297.11 108,504.24 280,964.63
50 104,865.90 277,932.21 112,759.03 298,851.84
</TABLE>
17
<PAGE>
TABLE II
ACCOUNT BALANCES AND CASH VALUES
(ASSUMING A SINGLE CONTRIBUTION OF $1,000 AND NO FURTHER CONTRIBUTION)
<TABLE>
<CAPTION>
CASH VALUE ACCOUNT BALANCE
-------------------------- --------------------------
ATTAINED 3% 6% 3% 6%
AGE MINIMUM ILLUSTRATED MINIMUM ILLUSTRATED
YEAR END GUARANTEE RATE GUARANTEE RATE
- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
1 $999.66 $1,000.00 $999.66 $1,029.33
2 999.32 1,000.00 999.32 1,060.42
3 998.96 1,016.84 998.96 1,093.38
4 998.60 1,049.33 998.60 1,128.31
5 998.22 1,083.77 998.22 1,165.34
6 997.83 1,120.27 997.83 1,204.59
7 997.43 1,158.96 997.43 1,246.20
8 997.02 1,199.98 997.02 1,290.30
9 996.60 1,243.46 996.60 1,337.05
10 996.16 1,289.54 996.16 1,386.60
11 995.71 1,338.39 995.71 1,439.13
12 995.25 1,390.17 995.25 1,494.81
13 994.77 1,445.06 994.77 1,553.83
14 994.28 1,503.24 994.28 1,616.39
15 993.77 1,564.92 993.77 1,682.70
16 993.25 1,630.29 993.25 1,753.00
17 992.71 1,699.58 992.71 1,827.51
18 992.16 1,773.04 992.16 1,906.49
19 991.59 1,850.90 991.59 1,990.21
20 991.00 1,933.43 991.00 2,078.95
21 990.39 2,020.91 990.39 2,173.02
22 989.77 2,113.64 989.77 2,272.73
23 989.13 2,211.94 989.13 2,378.43
24 988.47 2,316.13 988.47 2,490.46
25 987.79 2,426.57 987.79 2,609.22
26 987.09 2,543.65 987.09 2,735.10
27 986.36 2,667.74 986.36 2,868.54
28 985.62 2,799.28 985.62 3,009.98
29 984.85 2,938.72 984.85 3,159.91
30 984.06 3,086.52 984.06 3,318.84
31 983.25 3,243.19 983.25 3,487.30
32 982.41 3,409.26 982.41 3,665.87
33 981.55 3,585.29 981.55 3,855.15
34 980.66 3,771.88 980.66 4,055.79
35 979.74 3,969.68 979.74 4,268.47
36 978.80 4,179.34 978.80 4,493.91
37 977.82 4,401.58 977.82 4,732.88
38 976.82 4,637.15 976.82 4,986.18
39 975.79 4,886.85 975.79 5,254.68
40 974.73 5,151.54 974.73 5,539.29
41 973.64 5,432.11 973.64 5,840.98
42 972.51 5,729.52 972.51 6,160.77
43 971.35 6,044.77 971.35 6,499.75
44 970.16 6,378.93 970.16 6,859.07
45 968.93 6,733.15 968.93 7,239.94
46 967.66 7,108.61 967.66 7,643.67
47 966.35 7,506.61 966.35 8,071.62
48 965.01 7,928.48 965.01 8,525.25
49 963.63 8,375.67 963.63 9,006.10
50 962.20 8,849.69 962.20 9,515.79
</TABLE>
18
<PAGE>
PART 3--REORGANIZATION
- -----------------------------------------------------------------------------
Prior to May 1, 1987, the Separate Account was one of four separate accounts
used to fund benefits under the certificates. Each of these predecessor
separate accounts, which included a Money Market Account, a Stock Account, a
Bond Account and a Balanced Account (collectively, the Predecessor Separate
Accounts), was organized as an open-end management investment company, with
its own investment objectives and policies. Effective May 1, 1987, with the
approval of Contract Owners, we reorganized the Predecessor Separate Accounts
into one separate account (Separate Account No. 301, referred to as the
Separate Account) in unit investment trust form with investment divisions. In
connection with the reorganization, all of the investment-related assets and
liabilities of the Predecessor Separate Accounts were transferred to the
corresponding Funds of Prism Investment Trust ("Prism"), in exchange for
shares in the Funds. In addition, we created an Aggressive Stock Fund, a High
Yield Fund and a Global Fund. The reorganization did not change the Account
Balances under existing certificates. As of September 6, 1991, each of the
above-listed Investment Funds of the Separate Account invests in shares of a
corresponding Portfolio of the Trust. Previously, the Investment Funds had
invested in shares of Prism. Shares of Prism's Money Market, Common Stock,
Balanced, Aggressive Stock, High Yield and Global Funds formerly held by the
Separate Account, were replaced by shares of the corresponding Portfolios of
the Trust; and the Investment Fund which had invested in the Bond Fund of
Prism now invests (as the Intermediate Government Securities Fund) in shares
of the Intermediate Government Securities Portfolio of the Trust.
PART 4--EXPERTS
- -----------------------------------------------------------------------------
The financial statements as of December 31, 1996 and for each of the two years
in the period then ended for the Separate Account and the financial statements
as of December 31, 1996 and December 31, 1995 and for each of the three years
ended December 31, 1996 for Equitable Life have been audited by Price
Waterhouse LLP, as stated in its reports. These financial statements included
in this SAI have been so included in reliance on the reports of Price
Waterhouse LLP, independent accountants, given the authority of such firm as
experts in accounting and auditing.
PART 5--MONEY MARKET FUND YIELD INFORMATION
- -----------------------------------------------------------------------------
The Money Market Fund calculates yield information for seven-day periods. The
seven-day current yield calculation is based on a hypothetical Account
Balance with one Unit at the beginning of the period. To determine the
seven-day rate of return, the net change in the Unit Value is computed by
subtracting the Unit Value at the beginning of the period from a Unit Value,
exclusive of capital changes, at the end
of the period.
The net change is then reduced by the average administrative charge factor
(explained below). This reduction is made to recognize the deduction of the
participant service charge, which is not reflected in the unit value. See
"Deductions and Charges--Participant Service Charge" in the prospectus. Unit
Values reflect all other accrued expenses of the Money Market Fund.
The adjusted net change is divided by the Unit Value at the beginning of the
period to obtain the adjusted base period rate of return. This seven-day
adjusted base period return is then multiplied by 365/7 to produce an
annualized seven-day current yield figure carried to the nearest
one-hundredth of one percent.
The actual dollar amount of the participant service charge that is deducted
from the Money Market Fund will vary for each Participant depending upon how
the Account Balance is allocated among the Investment Options. To determine
the effect of the participant service charge on the yield, we start with the
total dollar amount of the charges deducted from the Fund on the last day of
the prior quarter. This amount is multiplied by 7/91.25 to produce an average
participant service charge factor which is used in all weekly yield
computations for the ensuing quarter. The average administrative charge is
then divided by the number of Money Market Fund Units as of the
19
<PAGE>
- -----------------------------------------------------------------------------
end of the prior calendar quarter, and the resulting quotient is deducted
from the net change in Unit Value for the seven-day period.
The effective yield is obtained by modifying the current yield to give effect
to the compounding nature of the Money Market Fund's investments, as follows:
the unannualized adjusted base period return is compounded by adding one to
the adjusted base period return, raising the sum to a power equal to 365
divided by 7, and subtracting one from the result, i.e., effective yield =
(base period return + 1) (365)/7 -1.
The Money Market Fund yields will fluctuate daily. Accordingly, yields for
any given period are not necessarily representative of future results. In
addition, the value of Units of the Money Market Fund will fluctuate and not
remain constant.
The Money Market Fund yields reflect charges that are not normally reflected
in the yields of other investments and therefore may be lower when compared
with yields of other investments. Money Market Fund yields should not be
compared to the return on fixed rate investments which guarantee rates of
interest for specified periods, such as the Guaranteed Rate Accounts or bank
deposits. The yield should not be compared to the yield of money market funds
made available to the general public because their yields usually are
calculated on the basis of a constant $1 price per share and they pay out
earnings in dividends which accrue on a daily basis.
The seven-day current yield for the Money Market Fund was 4.50% for the
period ended December 31, 1996. The effective yield for that period was
4.56%. Because these yields reflect the deduction of Separate Account
expenses, including the participant service charge, they are lower than the
corresponding yield figures for the Money Market Portfolio which reflect only
the deduction of Trust-level expenses.
PART 6--FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------
The financial statements of Equitable Life included herein should be
considered only as bearing upon the ability of Equitable Life to meet its
obligations under the certificates. The financial statements begin on the
following page.
20
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and Contractowners of Separate Account No. 301
of The Equitable Life Assurance Society of the United States
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets present fairly,
in all material respects, the financial position of the Money Market Fund,
Common Stock Fund, Intermediate Government Securities Fund, Balanced Fund, High
Yield Fund, Aggressive Stock Fund, Global Fund, Growth Investors Fund,
Conservative Investors Fund and Growth & Income Fund, separate investment funds
of The Equitable Life Assurance Society of the United States ("Equitable Life")
Separate Account No. 301 at December 31, 1996, the results of each of their
operations and changes in each of their net assets for the periods indicated,
in conformity with generally accepted accounting principles. These financial
statements are the responsibility of Equitable Life's managament; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of shares in The Hudson
River Trust at December 31, 1996 with the transfer agent, provide a reasonable
basis for the opinion expressed above. The unit value information presented in
Note 5 for the year ended December 31, 1992 and for each of the periods
indicated prior thereto, were audited by other independent accountants whose
report dated February 16, 1993 expressed an unqualified opinion on the
financial statements containing such information.
Price Waterhouse LLP
New York, New York
February 10, 1997
FSA-1
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT NO. 301
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY COMMON GOVERNMENT
MARKET STOCK SECURITIES BALANCED
FUND FUND FUND FUND
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments in shares of
The Hudson River Trust,
at market value (Note 1)
Cost: $20,759,853 ...... $20,726,015
60,185,384 ...... $72,448,085
5,922,957 ....... $5,507,714
33,896,408 ...... $34,869,025
2,822,411 .......
7,511,977 .......
4,971,174 .......
1,454,022 .......
867,092 ..........
3,065,567 .......
Due from Equitable Life's
General Account ............ 97,571 257,595 786 176
----------- ----------- ------------ -----------
Total assets ................ 20,823,586 72,705,680 5,508,500 34,869,201
----------- ----------- ------------ -----------
LIABILITIES:
Payable for The Hudson River
Trust shares purchased .... 96,613 257,594 50 158
Accrued expenses ............ 12,874 36,759 3,971 20,565
----------- ----------- ------------ -----------
Total liabilities ........... 109,487 294,353 4,021 20,723
----------- ----------- ------------ -----------
NET ASSETS ATTRIBUTABLE TO
CONTRACT OWNERS............. $20,714,099 $72,411,327 $5,504,479 $34,848,478
=========== =========== ============ ===========
Units Outstanding at
December 31, 1996 .......... 803,933 691,721 130,434 558,869
=========== =========== ============ ===========
Unit Value at December 31,
1996 (Note 5) .............. $ 25.77 $ 104.68 $ 42.20 $ 62.36
=========== =========== ============ ===========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
HIGH AGGRESSIVE GROWTH CONSERVATIVE GROWTH &
YIELD STOCK GLOBAL INVESTORS INVESTORS INCOME
FUND FUND FUND FUND FUND FUND
---------- ---------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in shares of
The Hudson River Trust,
at market value (Note 1)
Cost: $20,759,853 ......
60,185,384 ......
5,922,957 .......
33,896,408 ......
2,822,411 ....... $2,829,425
7,511,977 ....... $7,447,884
4,971,174 ....... $5,556,154
1,454,022 ....... $1,428,763
867,092 .......... $875,386
3,065,567 ....... $3,362,700
Due from Equitable Life's
General Account ............ -- 131 38 -- -- --
---------- ---------- ---------- ---------- ------------ ----------
Total assets ................ 2,829,425 7,448,015 5,556,192 1,428,763 875,386 3,362,700
---------- ---------- ---------- ---------- ------------ ----------
LIABILITIES:
Payable for The Hudson River
Trust shares purchased .... -- 131 38 -- -- --
Accrued expenses ............ 2,081 4,905 3,544 1,419 1,071 2,005
---------- ---------- ---------- ---------- ------------ ----------
Total liabilities ........... 2,081 5,036 3,582 1,419 1,071 2,005
---------- ---------- ---------- ---------- ------------ ----------
NET ASSETS ATTRIBUTABLE TO
CONTRACT OWNERS............. $2,827,344 $7,442,979 $5,552,610 $1,427,344 $874,315 $3,360,695
========== ========== ========== ========== ============ ==========
Units Outstanding at
December 31, 1996 .......... 106,886 187,356 213,987 104,609 71,356 230,908
========== ========== ========== ========== ============ ==========
Unit Value at December 31,
1996 (Note 5) .............. $ 26.45 $ 39.73 $ 25.95 $ 13.64 $ 12.25 $ 14.55
========== ========== ========== ========== ============ ==========
</TABLE>
See Notes to Financial Statements.
FSA-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT NO. 301
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY COMMON GOVERNMENT
MARKET STOCK SECURITIES BALANCED
FUND FUND FUND FUND
---------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
INCOME AND EXPENSE:
Investment Income:
Dividends from The Hudson River
Trust (Note 1):.................. $1,037,717 $ 538,392 $ 325,655 $1,086,003
---------- ----------- ------------ ----------
Expenses (Note 2):
Administrative fees............... 52,478 160,003 14,820 86,691
Recordkeeping charges............. 25,899 61,325 12,572 38,544
Professional fees................. 5,068 15,428 1,456 8,442
Printing and mailing expenses .... 6,221 18,939 1,787 10,363
Miscellaneous..................... 291 881 84 483
---------- ----------- ------------ ----------
Total expenses................... 89,957 256,576 30,719 144,523
Less: Reimbursement for excess
expense limitation................ 10,867 -- 8,879 18
---------- ----------- ------------ ----------
Net expenses..................... 79,090 256,576 21,840 144,505
---------- ----------- ------------ ----------
NET INVESTMENT INCOME (LOSS) ....... 958,627 281,816 303,815 941,498
---------- ----------- ------------ ----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 1): ..........
Realized gain (loss) on
investments....................... 59,696 1,311,014 (194,292) 411,154
Realized gain distribution from
The Hudson River Trust............ -- 7,232,565 -- 2,827,694
---------- ----------- ------------ ----------
Net Realized Gain (Loss)......... 59,696 8,543,579 (194,292) 3,238,848
---------- ----------- ------------ ----------
Change in unrealized
appreciation/(depreciation) of
investments....................... (16,202) 4,909,576 80,606 (521,010)
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS.............. 43,494 13,453,155 (113,686) 2,717,838
---------- ----------- ------------ ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS.......... $1,002,121 $13,734,971 $ 190,129 $3,659,336
========== =========== ============ ==========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
HIGH AGGRESSIVE GROWTH CONSERVATIVE GROWTH &
YIELD STOCK GLOBAL INVESTORS INVESTORS INCOME
FUND FUND FUND FUND FUND FUND
-------- ---------- -------- --------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSE:
INVESTMENT INCOME:
DIVIDENDS FROM THE HUDSON RIVER
TRUST (NOTE 1):.................. $238,702 $ 17,261 $ 92,505 $ 32,933 $ 35,250 $ 39,914
-------- ---------- -------- --------- ------------ --------
EXPENSES (NOTE 2):
ADMINISTRATIVE FEES............... 5,940 18,432 12,941 3,408 2,043 5,057
RECORDKEEPING CHARGES............. 9,314 14,054 11,786 8,481 7,905 8,891
PROFESSIONAL FEES................. 571 1,785 1,253 329 196 473
PRINTING AND MAILING EXPENSES .... 700 2,191 1,538 404 241 580
MISCELLANEOUS..................... 32 102 72 19 10 26
-------- ---------- -------- --------- ------------ --------
TOTAL EXPENSES................... 16,557 36,564 27,590 12,641 10,395 15,027
LESS: REIMBURSEMENT FOR EXCESS
EXPENSE LIMITATION................ 10 -- -- -- -- --
-------- ---------- -------- --------- ------------ --------
NET EXPENSES..................... 16,547 36,564 27,590 12,641 10,395 15,027
-------- ---------- -------- --------- ------------ --------
NET INVESTMENT INCOME (LOSS) ....... 222,155 (19,303) 64,915 20,292 24,855 24,887
-------- ---------- -------- --------- ------------ --------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 1): ..........
REALIZED GAIN (LOSS) ON
INVESTMENTS....................... (363) 452,409 113,758 59,737 21,791 108,071
REALIZED GAIN DISTRIBUTION FROM
THE HUDSON RIVER TRUST............ 169,177 1,392,759 247,535 170,554 19,334 160,976
-------- ---------- -------- --------- ------------ --------
NET REALIZED GAIN (LOSS)......... 168,814 1,845,168 361,293 230,291 41,125 269,047
-------- ---------- -------- --------- ------------ --------
CHANGE IN UNREALIZED
APPRECIATION/(DEPRECIATION) OF
INVESTMENTS....................... 70,493 (541,744) 240,914 (98,089) (35,434) 74,966
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS.............. 239,307 1,303,424 602,207 132,202 5,691 344,013
-------- ---------- -------- --------- ------------ --------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS.......... $461,462 $1,284,121 $667,122 $152,494 $ 30,546 $368,900
======== ========== ======== ========= ============ ========
</TABLE>
See Notes to Financial Statements.
FSA-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT NO. 301
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
MONEY MARKET FUND COMMON STOCK FUND
------------------------ ------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
FROM OPERATIONS:
Net investment income ....... $ 958,627 $ 1,033,317 $ 281,816 $ 486,318
Net realized gain (loss) on
investments................. 59,696 (19,514) 8,543,579 4,093,898
Change in unrealized
appreciation (depreciation)
of investments ............. (16,202) 94,984 4,909,576 9,414,798
----------- ----------- ----------- -----------
Net increase in net assets
from operations............. 1,002,121 1,108,787 13,734,971 13,995,014
----------- ----------- ----------- -----------
FROM CONTRACT OWNER
TRANSACTIONS (NOTES 3 AND 4):
Contributions and Transfers:
Contributions .............. 1,652,784 2,601,421 4,029,542 1,421,806
Transfers from other Funds . 5,736,734 4,608,307 5,281,055 4,213,931
Transfers from Guaranteed
Interest Rate Account .... 1,248,903 907,069 321,524 307,286
----------- ----------- ----------- -----------
Total...................... 8,638,421 8,116,797 9,632,121 5,943,023
----------- ----------- ----------- -----------
Withdrawals and Transfers:
Withdrawals ................ 2,915,123 5,489,199 3,426,595 3,230,995
Transfers to other Funds .. 6,816,252 5,748,048 4,407,325 4,124,230
Transfers to Guaranteed
Interest Rate Account...... 56,409 1,059,744 51,149 117,782
Participant service charge . 14,400 20,934 16,200 21,099
----------- ----------- ----------- -----------
Total...................... 9,802,184 12,317,925 7,901,269 7,494,106
----------- ----------- ----------- -----------
Net increase (decrease) in
net assets from Contract
Owner transactions......... (1,163,763) (4,201,128) 1,730,852 (1,551,083)
----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET
ASSETS ATTRIBUTABLE TO
CONTRACT OWNERS.............. (161,642) (3,092,341) 15,465,823 12,443,931
NET ASSETS, BEGINNING OF YEAR
ATTRIBUTABLE TO CONTRACT
OWNERS....................... 20,875,741 23,968,082 56,945,504 44,501,573
----------- ----------- ----------- -----------
NET ASSETS, END OF YEAR
(NOTE 1) ATTRIBUTABLE TO
CONTRACT OWNERS.............. $20,714,099 $20,875,741 $72,411,327 $56,945,504
=========== =========== =========== ===========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
INTERMEDIATE
GOVERNMENT
SECURITIES FUND BALANCED FUND HIGH YIELD FUND
---------------------- ------------------------ ---------------------
1996 1995 1996 1995 1996 1995
---------- ---------- ----------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
FROM OPERATIONS:
Net investment income ....... $ 303,815 $ 337,137 $ 941,498 $ 927,794 $ 222,155 $ 160,959
Net realized gain (loss) on
investments................. (194,292) (97,203) 3,238,848 1,128,385 168,814 (15,169)
Change in unrealized
appreciation (depreciation)
of investments ............. 80,606 497,322 (521,010) 3,701,929 70,493 136,740
---------- ---------- ----------- ----------- ---------- ---------
Net increase in net assets
from operations............. 190,129 737,256 3,659,336 5,758,108 461,462 282,530
---------- ---------- ----------- ----------- ---------- ---------
FROM CONTRACT OWNER
TRANSACTIONS (NOTES 3 AND 4):
Contributions and Transfers:
Contributions .............. 152,473 244,146 614,825 868,908 146,990 103,661
Transfers from other Funds . 406,548 269,464 224,015 378,163 650,181 181,040
Transfers from Guaranteed
Interest Rate Account .... 29,829 13,289 184,830 103,813 25,965 43,136
---------- ---------- ----------- ----------- ---------- ---------
Total...................... 588,850 526,899 1,023,670 1,350,884 823,136 327,837
---------- ---------- ----------- ----------- ---------- ---------
Withdrawals and Transfers:
Withdrawals ................ 695,654 543,094 2,625,584 3,332,214 77,388 91,857
Transfers to other Funds .. 804,638 311,766 1,752,837 912,130 261,722 73,378
Transfers to Guaranteed
Interest Rate Account...... 12,000 163,916 52,823 288,178 1,489 11,060
Participant service charge . 939 1,487 7,225 10,445 345 424
---------- ---------- ----------- ----------- ---------- ---------
Total...................... 1,513,231 1,020,263 4,438,469 4,542,967 340,944 176,719
---------- ---------- ----------- ----------- ---------- ---------
Net increase (decrease) in
net assets from Contract
Owner transactions......... (924,381) (493,364) (3,414,799) (3,192,083) 482,192 151,118
---------- ---------- ----------- ----------- ---------- ---------
INCREASE (DECREASE) IN NET
ASSETS ATTRIBUTABLE TO
CONTRACT OWNERS.............. (734,252) 243,892 244,537 2,566,025 943,654 433,648
NET ASSETS, BEGINNING OF YEAR
ATTRIBUTABLE TO CONTRACT
OWNERS....................... 6,238,731 5,994,839 34,603,941 32,037,916 1,883,690 1,450,042
---------- ---------- ----------- ----------- ---------- ---------
NET ASSETS, END OF YEAR
(NOTE 1) ATTRIBUTABLE TO
CONTRACT OWNERS.............. $5,504,479 $6,238,731 $34,848,478 $34,603,941 $2,827,344 $1,883,690
========== ========== =========== =========== ========== =========
</TABLE>
See Notes to Financial Statements.
FSA-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT NO. 301
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
AGGRESSIVE STOCK FUND GLOBAL FUND
---------------------- ----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income
(loss)....................... $ (19,303) $ (14,321) $ 64,915 $ 50,097
Net realized gain on
investments ................ 1,845,168 894,090 361,293 192,825
Change in unrealized
appreciation (depreciation)
of investments ............. (541,744) 439,966 240,914 435,771
---------- ---------- ---------- ----------
Net increase in net assets
from operations ............ 1,284,121 1,319,735 667,122 678,693
---------- ---------- ---------- ----------
FROM CONTRACT OWNER
TRANSACTIONS (NOTES 3 AND 4):
Contributions and Transfers:
Contributions .............. 406,531 554,849 138,950 395,914
Transfers from other Funds . 2,923,402 3,743,211 1,005,748 1,465,044
Transfers from Guaranteed
Interest Rate Account .... 98,695 119,098 67,007 77,476
---------- ---------- ---------- ----------
Total...................... 3,428,628 4,417,158 1,211,705 1,938,434
Withdrawals and Transfers:
Withdrawals ................ 453,535 321,607 252,398 230,523
Transfers to other Funds .. 3,016,856 2,701,872 638,557 1,525,712
Transfers to Guaranteed
Interest Rate Account...... 18,220 8,485 500 48,671
Participant service charge . 1,108 1,224 742 1,017
---------- ---------- ---------- ----------
Total...................... 3,489,719 3,033,188 892,197 1,805,923
---------- ---------- ---------- ----------
Net increase in net assets
from Contract Owner
transactions .............. (61,091) 1,383,970 319,508 132,511
---------- ---------- ---------- ----------
INCREASE (DECREASE) IN NET
ASSETS ATTRIBUTABLE TO
CONTRACT OWNERS ............. 1,223,030 2,703,705 986,630 811,204
NET ASSETS, BEGINNING OF YEAR
ATTRIBUTABLE TO CONTRACT
OWNERS....................... 6,219,949 3,516,244 4,565,980 3,754,776
---------- ---------- ---------- ----------
NET ASSETS, END OF YEAR
(NOTE 1) ATTRIBUTABLE TO
CONTRACT OWNERS.............. $7,442,979 $6,219,949 $5,552,610 $4,565,980
========== ========== ========== ==========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
GROWTH CONSERVATIVE GROWTH &
INVESTORS FUND INVESTORS FUND INCOME FUND
---------------------- ------------------- ---------------------
1996 1995 1996 1995 1996 1995
---------- ---------- -------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income
(loss)....................... $ 20,292 $ 15,597 $ 24,855 $ 25,237 $ 24,887 $ 27,407
Net realized gain on
investments ................ 230,291 35,369 41,125 10,508 269,047 24,033
Change in unrealized
appreciation (depreciation)
of investments ............. (98,089) 80,196 (35,434) 58,432 74,966 227,245
---------- ---------- -------- --------- ---------- ---------
Net increase in net assets
from operations ............ 152,494 131,162 30,546 94,177 368,900 278,685
---------- ---------- -------- --------- ---------- ---------
FROM CONTRACT OWNER
TRANSACTIONS (NOTES 3 AND 4):
Contributions and Transfers:
Contributions .............. 160,032 496,380 97,989 308,750 399,075 213,755
Transfers from other Funds . 372,192 379,453 176,578 892,949 1,492,294 318,466
Transfers from Guaranteed
Interest Rate Account .... 32,473 25,060 16,550 620 40,086 17,921
---------- ---------- -------- --------- ---------- ---------
Total...................... 564,697 900,893 291,117 1,202,319 1,931,455 550,142
Withdrawals and Transfers:
Withdrawals ................ 212,724 124,794 127,152 100,865 428,697 111,599
Transfers to other Funds .. 217,358 133,088 205,845 804,834 147,357 114,971
Transfers to Guaranteed
Interest Rate Account...... -- -- -- -- -- 2,489
Participant service charge . 166 201 83 107 174 201
---------- ---------- -------- --------- ---------- ---------
Total...................... 430,248 258,083 333,080 905,806 576,228 229,260
---------- ---------- -------- --------- ---------- ---------
Net increase in net assets
from Contract Owner
transactions .............. 134,449 642,810 (41,963) 296,513 1,355,227 320,882
---------- ---------- -------- --------- ---------- ---------
INCREASE (DECREASE) IN NET
ASSETS ATTRIBUTABLE TO
CONTRACT OWNERS ............. 286,943 773,972 (11,417) 390,690 1,724,127 599,567
NET ASSETS, BEGINNING OF YEAR
ATTRIBUTABLE TO CONTRACT
OWNERS....................... 1,140,401 366,429 885,732 495,042 1,636,568 1,037,001
---------- ---------- -------- --------- ---------- ---------
NET ASSETS, END OF YEAR
(NOTE 1) ATTRIBUTABLE TO
CONTRACT OWNERS.............. $1,427,344 $1,140,401 $874,315 $ 885,732 $3,360,695 $1,636,568
========== ========== ======== ========= ========== =========
</TABLE>
See Notes to Financial Statements.
FSA-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT NO. 301
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. General
The Equitable Life Assurance Society of the United States (Equitable Life)
Separate Account No. 301 (the Account) is organized as a unit investment
trust, a type of investment company, and is registered with the Securities
and Exchange Commission under the Investment Company Act of 1940. The
Account is used to fund benefits under certain group annuity contracts and
certificates (Contracts) in connection with individual retirement
annuities and tax-sheltered annuity arrangements. The Account has ten
investment funds (Funds): the Money Market Fund, the Common Stock Fund,
the Intermediate Government Securities Fund, the Balanced Fund, the High
Yield Fund, the Aggressive Stock Fund, the Global Fund, the Growth
Investors Fund, the Conservative Investors Fund, and the Growth & Income
Fund. The assets in each Fund are invested in Class IA shares of a
corresponding portfolio (Portfolio), of a mutual fund, The Hudson River
Trust (Trust). The Trust is an open-end, diversified, management
investment company that invests the assets of separate accounts of
insurance companies. Each Portfolio has separate investment objectives.
The net assets of the Account are not chargeable with liabilities arising
our of any other business Equitable Life may conduct. The excess of assets
over reserves and other contract liabilities, if any, in the Account are
beneficially owned by Equitable Life and may be transferred to Equitable
Life's General Account.
2. Significant Accounting Policies
The accompanying financial statements are prepared in conformity with
generally accepted accounting principles (GAAP). The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Investments are made in shares of the Trust and are valued at the net
asset values per share of the respective Portfolios. The net asset value
is determined by the Trust using the market or fair value of the
underlying assets of the Portfolio.
Investment transactions are recorded on the trade date. Realized gains and
losses include gains and losses on redemptions of the Trust's shares
(determined on the identified cost basis) and Trust distributions
representing the net realized gains on Trust investment transactions.
Dividends are recorded at the end of each quarter on the ex-dividend date.
Capital gains are distributed by the Trust at the end of each year.
No Federal income tax based on net income or realized and unrealized
capital gains is currently applicable to Contracts participating in the
Account by reason of applicable provisions of the Internal Revenue Code
and no Federal income tax payable by Equitable Life is expected to affect
the unit value of Contracts participating in the Account. Accordingly, no
provision for income taxes is required.
3. Asset Charges
The following charges are made directly against the assets of the Account
and are reflected daily in the computation of the unit values of the
Contracts:
o Administrative fees are charged at an effective annual rate of 0.25%
of the net assets of each Fund.
FSA-6
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT NO. 301
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996
(Continued)
o Direct operating expenses are paid to cover expenses attributable to
the operations of each Fund.
Under the Contracts, Equitable Life reimburses the Money Market Fund, the
Common Stock Fund, the Intermediate Government Securities Fund and the
Balanced Fund for the excess of the aggregate expense charges of the Fund
(including investment advisory fees and certain other Trust expenses
attributable to assets of such Fund invested in a Portfolio of the Trust
and the asset-based charges of the Fund, as described above) which during
any calendar year exceed 1.5% of the average daily net assets of the
Common Stock Fund, the Intermediate Government Securities Fund and the
Balanced Fund and 1.0% of the Money Market Fund. In addition, Equitable
Life reimburses the High Yield Fund, the Aggressive Stock Fund and the
Global Fund for aggregate expenses in excess of a 1.5% (effective annual
rate) voluntary expense limitation of each Fund's average daily net
assets. The voluntary expense limitation may be discontinued by Equitable
Life at its discretion.
Also, if the annual amount of management fees applicable to the Money
Market Fund and the Intermediate Government Securities Fund exceeds 0.35%
of the average daily net asset value of either Fund, Equitable Life will
reimburse the related Fund for such excess. This expense limitation is a
contractual right for Participants who enrolled prior to May 1, 1987 and
cannot be changed without the consent of those Participants. Equitable
Life has voluntarily agreed to impose this expense limitation for
Participants who enrolled after May 1, 1987 and reserves the right to
discontinue this at any time.
Effective March 21, 1994, administrative services for the Account are
being provided by Equitable Life. Prior thereto, the services were
provided by a third party.
A quarterly Participant Service Charge for administrative expense is made
for each participant at the end of each calendar quarter before retirement
date. The portion of this charge allocable to the Funds is made by
reducing the units of each Fund owned by a participant under a Contract.
4. Contributions and Withdrawals:
Contributions allocated to the Account are not subject to sales expense.
Participants may transfer all or part of the cash value under the
Contracts from one Fund to another subject to certain limitations.
Transfers to the Guaranteed Interest Rate Account from the Account and
transfers of the cash value of the Guaranteed Interest Rate Account to the
Account may be made subject to certain limitations.
Full or partial withdrawals, including withdrawals of excess
contributions, may be made by participants.
FSA-7
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT NO. 301
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996
(Continued)
Units of the Account issued and redeemed during the periods indicated
were:
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
MONEY MARKET FUND
- -----------------
Issued ............................... 342,708 336,167
Redeemed.............................. 388,975 513,735
COMMON STOCK FUND
- -----------------
Issued ............................... 102,495 78,247
Redeemed.............................. 84,167 98,731
INTERMEDIATE GOVERNMENT SECURITIES
FUND
- ----------------------------------
Issued ............................... 14,284 13,616
Redeemed.............................. 36,700 26,688
BALANCED FUND
- -------------
Issued ............................... 17,640 26,172
Redeemed.............................. 75,972 90,190
HIGH YIELD FUND
- ---------------
Issued ............................... 34,258 16,056
Redeemed.............................. 14,281 8,900
AGGRESSIVE STOCK FUND
- ---------------------
Issued ............................... 93,501 160,037
Redeemed.............................. 96,541 110,544
GLOBAL FUND
- -----------
Issued ............................... 49,937 94,486
Redeemed.............................. 36,549 88,914
GROWTH INVESTORS FUND
- ---------------------
Issued ............................... 44,307 79,498
Redeemed.............................. 32,950 23,679
CONSERVATIVE INVESTORS FUND
- ---------------------------
Issued ............................... 25,117 113,203
Redeemed.............................. 28,851 87,995
GROWTH & INCOME FUND
- --------------------
Issued ............................... 141,519 49,981
Redeemed.............................. 44,640 20,466
</TABLE>
FSA-8
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT NO. 301
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996
(Continued)
5. Accumulation Unit Values
Shown below is unit value information for the periods shown.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
--------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MONEY MARKET FUND
- -----------------
Unit value, beginning of
year........................ $ 24.55 $23.32 $22.48 $21.93 $21.29 $20.17 $18.73 $17.23 $16.14 $15.26
Unit value, end of year .... $ 25.77 $24.55 $23.32 $22.48 21.93 $21.29 $20.17 $18.73 $17.23 $16.14
Number of units outstanding,
end of year (000's) ........ 804 850 1,028 1,035 1,301 1,528 1,919 1,708 1,379 1,353
COMMON STOCK FUND
- -----------------
Unit value, beginning of
year........................ $ 84.56 $64.13 $65.89 $52.97 $51.55 $35.87 $40.94 $33.04 $29.88 $28.00
Unit value, end of year .... $104.68 $84.56 $64.13 $65.89 $52.97 $51.55 $35.87 $40.94 $33.04 $29.88
Number of units outstanding,
end of year (000's) ........ 692 673 694 715 736 790 930 963 978 1,008
INTERMEDIATE GOVERNMENT
SECURITIES FUND
- -----------------------
Unit value, beginning of
year........................ $ 40.82 $36.13 $37.77 $34.34 $32.73 $28.79 $27.19 $23.63 $22.41 $21.86
Unit value, end of year .... $ 42.20 $40.82 $36.13 $37.77 $34.34 $32.73 $28.79 $27.19 $23.63 $22.41
Number of units outstanding,
end of year (000's) ........ 130 153 166 188 184 177 242 223 196 176
BALANCED FUND
- -------------
Unit value, beginning of
year........................ $ 56.07 $47.03 $51.38 $45.92 $47.50 $33.76 $33.91 $27.04 $23.88 $24.57
Unit value, end of year .... $ 62.36 $56.07 $47.03 $51.38 $45.92 $47.50 $33.76 $33.91 $27.04 $23.88
Number of units outstanding,
end of year (000's) ........ 559 617 681 756 827 949 1,217 1,260 1,220 1,258
JUNE 2,
1987* TO
DECEMBER 31,
HIGH YIELD FUND 1987
- --------------- ------------
Unit value, beginning of
year........................ $ 21.67 $18.18 $18.84 $15.40 $13.84 $11.11 $11.67 $11.60 $10.41 $10.01
Unit value, end of year .... $ 26.45 $21.67 $18.18 $18.84 $15.40 $13.84 $11.11 $11.67 $11.60 $10.41
Number of units outstanding,
end of year (000's) ........ 107 87 80 78 53 27 16 18 22 7
AGGRESSIVE STOCK FUND
- ---------------------
Unit value, beginning of
year........................ $ 32.67 $24.95 $26.14 $22.54 $23.43 $13.34 $12.47 $ 8.70 $ 8.59 $10.13
Unit value, end of year...... $ 39.73 $32.67 $24.95 $26.14 $22.54 $23.43 $13.34 $12.47 $ 8.70 $8.59
Number of units outstanding,
end of year (000's) ........ 187 190 141 125 156 125 48 27 9 16
GLOBAL FUND
- -----------
Unit value, beginning of
year........................ $ 22.76 $19.25 $18.40 $14.01 $14.20 $11.23 $11.97 $ 9.58 $ 8.58 $10.01
Unit value, end of year .... $ 25.95 $22.76 $19.25 $18.40 $14.01 $14.20 $11.23 $11.97 $ 9.58 $8.58
Number of units outstanding,
end of year (000's) ........ 214 201 195 153 55 42 32 19 12 7
</TABLE>
- ------------
* Date on which participant contributions were first allocated to the Fund.
FSA-9
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT NO. 301
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1996
(Continued)
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31, MAY 2, 1994* TO
------------------ DECEMBER 31,
1996 1995 1994
-------- -------- ---------------
<S> <C> <C> <C>
GROWTH INVESTORS FUND
- ---------------------
Unit value, beginning of
year......................... $12.23 $ 9.79 $10.00
Unit value, end of year ..... $13.64 $12.23 $ 9.79
Number of units outstanding,
end of year (000's) ......... 105 93 37
CONSERVATIVE INVESTORS FUND
- ---------------------------
Unit value, beginning of
year......................... $11.79 $ 9.92 $10.00
Unit value, end of year ..... $12.25 $11.79 $ 9.92
Number of units outstanding,
end of year (000's) ......... 71 75 50
GROWTH & INCOME FUND
- --------------------
Unit value, beginning of
year......................... $12.21 $ 9.92 $10.00
Unit value, end of year ..... $14.55 $12.21 $ 9.92
Number of units outstanding,
end of year (000's) ......... 231 134 105
</TABLE>
- ------------
* Date on which participant contributions were first allocated to the Fund.
FSA-10
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholder of
The Equitable Life Assurance Society of the United States
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of earnings, of shareholder's equity and of cash flows
present fairly, in all material respects, the financial position of The
Equitable Life Assurance Society of the United States and its subsidiaries
("Equitable Life") at December 31, 1996 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of Equitable Life's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
As discussed in Note 2 to the consolidated financial statements, Equitable Life
changed its methods of accounting for long-duration participating life
insurance contracts and long-lived assets in 1996, for loan impairments in 1995
and for postemployment benefits in 1994.
Price Waterhouse LLP
New York, New York
February 10
F-1
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Available for sale, at estimated fair value................. $ 18,077.0 $ 15,899.9
Mortgage loans on real estate................................. 3,133.0 3,638.3
Equity real estate............................................ 3,297.5 3,916.2
Policy loans.................................................. 2,196.1 1,976.4
Investment in and loans to affiliates......................... 685.0 636.6
Other equity investments...................................... 597.3 621.1
Other invested assets......................................... 288.7 706.1
----------------- -----------------
Total investments......................................... 28,274.6 27,394.6
Cash and cash equivalents....................................... 538.8 774.7
Deferred policy acquisition costs............................... 3,104.9 3,075.8
Amounts due from discontinued GIC Segment....................... 996.2 2,097.1
Other assets.................................................... 2,552.2 2,718.1
Closed Block assets............................................. 8,495.0 8,582.1
Separate Accounts assets........................................ 29,646.1 24,566.6
----------------- -----------------
TOTAL ASSETS.................................................... $ 73,607.8 $ 69,209.0
================= =================
LIABILITIES
Policyholders' account balances................................. $ 21,865.6 $ 21,911.2
Future policy benefits and other policyholders' liabilities..... 4,416.6 4,007.3
Short-term and long-term debt................................... 1,766.9 1,899.3
Other liabilities............................................... 2,785.1 3,380.7
Closed Block liabilities........................................ 9,091.3 9,221.4
Separate Accounts liabilities................................... 29,598.3 24,531.0
----------------- -----------------
Total liabilities......................................... 69,523.8 64,950.9
----------------- -----------------
Commitments and contingencies (Notes 10, 12, 13, 14 and 15)
SHAREHOLDER'S EQUITY
Common stock, $1.25 par value 2.0 million shares
authorized, issued and outstanding............................ 2.5 2.5
Capital in excess of par value.................................. 3,105.8 3,105.8
Retained earnings............................................... 798.7 788.4
Net unrealized investment gains................................. 189.9 396.5
Minimum pension liability....................................... (12.9) (35.1)
----------------- -----------------
Total shareholder's equity................................ 4,084.0 4,258.1
----------------- -----------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY...................... $ 73,607.8 $ 69,209.0
================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ----------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Universal life and investment-type product policy fee
income................................................ $ 874.0 $ 788.2 $ 715.0
Premiums................................................ 597.6 606.8 625.6
Net investment income................................... 2,175.9 2,088.2 1,998.6
Investment (losses) gains, net.......................... (9.8) 5.3 91.8
Commissions, fees and other income...................... 1,081.8 897.1 847.4
Contribution from the Closed Block...................... 125.0 143.2 137.0
----------------- ----------------- -----------------
Total revenues.................................... 4,844.5 4,528.8 4,415.4
----------------- ----------------- -----------------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders' account balances.... 1,270.2 1,248.3 1,201.3
Policyholders' benefits................................. 1,317.7 1,008.6 914.9
Other operating costs and expenses...................... 2,048.0 1,775.8 1,857.7
----------------- ----------------- -----------------
Total benefits and other deductions............... 4,635.9 4,032.7 3,973.9
----------------- ----------------- -----------------
Earnings from continuing operations before Federal
income taxes, minority interest and cumulative
effect of accounting change........................... 208.6 496.1 441.5
Federal income taxes.................................... 9.7 120.5 100.2
Minority interest in net income of consolidated
subsidiaries.......................................... 81.7 62.8 50.4
----------------- ----------------- -----------------
Earnings from continuing operations before
cumulative effect of accounting change................ 117.2 312.8 290.9
Discontinued operations, net of Federal income taxes.... (83.8) - -
Cumulative effect of accounting change, net of Federal
income taxes.......................................... (23.1) - (27.1)
----------------- ----------------- -----------------
Net Earnings............................................ $ 10.3 $ 312.8 $ 263.8
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ----------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Common stock, at par value, beginning and end of year......... $ 2.5 $ 2.5 $ 2.5
----------------- ----------------- -----------------
Capital in excess of par value, beginning of year as
previously reported......................................... 2,913.6 2,913.6 2,613.6
Cumulative effect on prior years of retroactive restatement
for accounting change....................................... 192.2 192.2 192.2
----------------- ----------------- -----------------
Capital in excess of par value, beginning of year as restated. 3,105.8 3,105.8 2,805.8
Additional capital in excess of par value..................... - - 300.0
----------------- ----------------- -----------------
Capital in excess of par value, end of year................... 3,105.8 3,105.8 3,105.8
----------------- ----------------- -----------------
Retained earnings, beginning of year as previously reported... 781.6 484.0 217.6
Cumulative effect on prior years of retroactive restatement
for accounting change....................................... 6.8 (8.4) (5.8)
----------------- ----------------- -----------------
Retained earnings, beginning of year as restated.............. 788.4 475.6 211.8
Net earnings.................................................. 10.3 312.8 263.8
----------------- ----------------- -----------------
Retained earnings, end of year................................ 798.7 788.4 475.6
----------------- ----------------- -----------------
Net unrealized investment gains (losses), beginning of year
as previously reported...................................... 338.2 (203.0) 131.9
Cumulative effect on prior years of retroactive restatement
for accounting change....................................... 58.3 (17.5) 12.7
----------------- ----------------- -----------------
Net unrealized investment gains (losses), beginning of
year as restated............................................ 396.5 (220.5) 144.6
Change in unrealized investment (losses) gains................ (206.6) 617.0 (365.1)
----------------- ----------------- -----------------
Net unrealized investment gains (losses), end of year......... 189.9 396.5 (220.5)
----------------- ----------------- -----------------
Minimum pension liability, beginning of year.................. (35.1) (2.7) (15.0)
Change in minimum pension liability........................... 22.2 (32.4) 12.3
----------------- ----------------- -----------------
Minimum pension liability, end of year........................ (12.9) (35.1) (2.7)
----------------- ----------------- -----------------
TOTAL SHAREHOLDER'S EQUITY, END OF YEAR....................... $ 4,084.0 $ 4,258.1 $ 3,360.7
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ----------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Net earnings.................................................. $ 10.3 $ 312.8 $ 263.8
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Interest credited to policyholders' account balances........ 1,270.2 1,248.3 1,201.3
Universal life and investment-type policy fee income........ (874.0) (788.2) (715.0)
Investment losses (gains)................................... 9.8 (5.3) (91.8)
Change in Federal income taxes payable...................... (197.1) 221.6 38.3
Other, net.................................................. 364.4 127.3 (19.4)
----------------- ----------------- -----------------
Net cash provided by operating activities..................... 583.6 1,116.5 677.2
----------------- ----------------- -----------------
Cash flows from investing activities:
Maturities and repayments................................... 2,275.1 1,897.4 2,323.8
Sales....................................................... 8,964.3 8,867.1 5,816.6
Return of capital from joint ventures and limited
partnerships.............................................. 78.4 65.2 39.0
Purchases................................................... (12,559.6) (11,675.5) (7,564.7)
Decrease (increase) in loans to discontinued GIC Segment.... 1,017.0 1,226.9 (40.0)
Other, net.................................................. 56.7 (624.7) (478.1)
----------------- ----------------- -----------------
Net cash (used) provided by investing activities.............. (168.1) (243.6) 96.6
----------------- ----------------- -----------------
Cash flows from financing activities:
Policyholders' account balances:
Deposits.................................................. 1,925.4 2,586.5 2,082.5
Withdrawals............................................... (2,385.2) (2,657.1) (2,864.4)
Net decrease in short-term financings....................... (.3) (16.4) (173.0)
Additions to long-term debt................................. - 599.7 51.8
Repayments of long-term debt................................ (124.8) (40.7) (199.8)
Proceeds from issuance of Alliance units.................... - - 100.0
Payment of obligation to fund accumulated deficit of
discontinued GIC Segment.................................. - (1,215.4) -
Capital contribution from the Holding Company............... - - 300.0
Other, net.................................................. (66.5) (48.4) 26.5
----------------- ----------------- -----------------
Net cash (used) by financing activities....................... (651.4) (791.8) (676.4)
----------------- ----------------- -----------------
Change in cash and cash equivalents........................... (235.9) 81.1 97.4
Cash and cash equivalents, beginning of year.................. 774.7 693.6 596.2
----------------- ----------------- -----------------
Cash and Cash Equivalents, End of Year........................ $ 538.8 $ 774.7 $ 693.6
================= ================= =================
Supplemental cash flow information
Interest Paid............................................... $ 109.9 $ 89.6 $ 34.9
================= ================= =================
Income Taxes (Refunded) Paid................................ $ (10.0) $ (82.7) $ 49.2
================= ================= =================
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) ORGANIZATION
The Equitable Life Assurance Society of the United States ("Equitable
Life") converted to a stock life insurance company on July 22, 1992 and
became a wholly owned subsidiary of The Equitable Companies
Incorporated (the "Holding Company"). Equitable Life's insurance
business is conducted principally by Equitable Life and its wholly
owned life insurance subsidiary, Equitable Variable Life Insurance
Company ("EVLICO"). Effective January 1, 1997, EVLICO was merged into
Equitable Life, which will continue to conduct the Company's insurance
business. Equitable Life's investment management business, which
comprises the Investment Services segment, is conducted principally by
Alliance Capital Management L.P. ("Alliance"), Equitable Real Estate
Investment Management, Inc. ("EREIM") and Donaldson, Lufkin & Jenrette,
Inc. ("DLJ"), an investment banking and brokerage affiliate. AXA-UAP
("AXA"), a French holding company for an international group of
insurance and related financial services companies, is the Holding
Company's largest shareholder, owning approximately 60.8% at December
31, 1996 (63.6% assuming conversion of Series E Convertible Preferred
Stock held by AXA and 54.4% if all securities convertible into, and
options on, common stock were to be converted or exercised).
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
-----------------------------------------------------
The accompanying consolidated financial statements are prepared in
conformity with generally accepted accounting principles ("GAAP").
The accompanying consolidated financial statements include the accounts
of Equitable Life and its wholly owned life insurance subsidiaries
(collectively, the "Insurance Group"); non-insurance subsidiaries,
principally Alliance, an investment advisory subsidiary, and EREIM, a
real estate investment management subsidiary; and those partnerships
and joint ventures in which Equitable Life or its subsidiaries has
control and a majority economic interest (collectively, including its
consolidated subsidiaries, the "Company"). The Company's investment in
DLJ is reported on the equity basis of accounting. Closed Block assets
and liabilities and results of operations are presented in the
consolidated financial statements as single line items (see Note 6).
Unless specifically stated, all disclosures contained herein supporting
the consolidated financial statements exclude the Closed Block related
amounts.
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
All significant intercompany transactions and balances have been
eliminated in consolidation other than intercompany transactions and
balances with the Closed Block and the discontinued Guaranteed Interest
Contract ("GIC") Segment (see Note 7).
The years "1996," "1995" and "1994" refer to the years ended December
31, 1996, 1995 and 1994, respectively.
F-6
<PAGE>
Certain reclassifications have been made in the amounts presented for
prior periods to conform these periods with the 1996 presentation.
Closed Block
------------
As of July 22, 1992, Equitable Life established the Closed Block for
the benefit of certain classes of individual participating policies for
which Equitable Life had a dividend scale payable in 1991 and which
were in force on that date. Assets were allocated to the Closed Block
in an amount which, together with anticipated revenues from policies
included in the Closed Block, was reasonably expected to be sufficient
to support such business, including provision for payment of claims,
certain expenses and taxes, and for continuation of dividend scales
payable in 1991, assuming the experience underlying such scales
continues.
Assets allocated to the Closed Block inure solely to the benefit of the
holders of policies included in the Closed Block and will not revert to
the benefit of the Holding Company. The plan of demutualization
prohibits the reallocation, transfer, borrowing or lending of assets
between the Closed Block and other portions of Equitable Life's General
Account, any of its Separate Accounts or to any affiliate of Equitable
Life without the approval of the New York Superintendent of Insurance
(the "Superintendent"). Closed Block assets and liabilities are carried
on the same basis as similar assets and liabilities held in the General
Account. The excess of Closed Block liabilities over Closed Block
assets represents the expected future post-tax contribution from the
Closed Block which would be recognized in income over the period the
policies and contracts in the Closed Block remain in force.
Discontinued Operations
-----------------------
In 1991, the Company's management adopted a plan to discontinue the
business operations of the GIC Segment, consisting of the Group
Non-Participating Wind-Up Annuities ("Wind-Up Annuities") and
Guaranteed Interest Contract ("GIC") lines of business. The Company
established a pre-tax provision for the estimated future losses of the
GIC line of business and a premium deficiency reserve for the Wind-Up
Annuities. Subsequent losses incurred have been charged to the two loss
provisions. Management reviews the adequacy of the allowance and
reserve each quarter. During the fourth quarter 1996 review, management
determined it was necessary to increase the allowance for expected
future losses of the GIC Segment. Management believes the loss
provisions for GIC contracts and Wind-Up Annuities at December 31, 1996
are adequate to provide for all future losses; however, the
determination of loss provisions continues to involve numerous
estimates and subjective judgments regarding the expected performance
of discontinued operations investment assets. There can be no assurance
the losses provided for will not differ from the losses ultimately
realized (See Note 7).
Accounting Changes
------------------
In 1996, the Company changed its method of accounting for long-duration
participating life insurance contracts, primarily within the Closed
Block, in accordance with the provisions prescribed by Statement of
Financial Accounting Standards ("SFAS") No. 120, "Accounting and
Reporting by Mutual Life Insurance Enterprises and by Insurance
Enterprises for Certain Long-Duration Participating Contracts". The
effect of this change, including the impact on the Closed Block, was to
increase earnings from continuing operations before cumulative effect
of accounting change by $19.2 million, net of Federal income taxes of
$10.3 million for 1996. The financial statements for 1995 and 1994 have
been retroactively restated for the change which resulted in an
increase (decrease) in earnings before cumulative effect of accounting
change of $15.2 million, net of Federal income taxes of $8.2 million,
and $(2.6) million, net of Federal income tax benefit of $1.0 million,
respectively. Shareholder's equity increased $199.1 million as of
January 1, 1994 for the effect of
F-7
<PAGE>
retroactive application of the new method. (See "Deferred Policy
Acquisition Costs," "Policyholders' Account Balances and Future Policy
Benefits" and Note 6.)
The Company implemented SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of," as of
January 1, 1996. The statement requires long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or
changes in circumstances indicate the carrying value of such assets may
not be recoverable. Effective with SFAS No. 121's adoption, impaired
real estate is written down to fair value with the impairment loss
being included in investment gains (losses), net. Before implementing
SFAS No. 121, valuation allowances on real estate held for the
production of income were computed using the forecasted cash flows of
the respective properties discounted at a rate equal to the Company's
cost of funds. The adoption of the statement resulted in the release of
valuation allowances of $152.4 million and recognition of impairment
losses of $144.0 million on real estate held and used. Real estate
which management has committed to disposing of by sale or abandonment
is classified as real estate to be disposed of. Valuation allowances on
real estate to be disposed of continue to be computed using the lower
of estimated fair value or depreciated cost, net of disposition costs.
Implementation of the SFAS No. 121 impairment requirements relative to
other assets to be disposed of resulted in a charge for the cumulative
effect of an accounting change of $23.1 million, net of a Federal
income tax benefit of $12.4 million, due to the writedown to fair value
of building improvements relating to facilities being vacated beginning
in 1996.
In the first quarter of 1995, the Company adopted SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan". This statement
applies to all loans, including loans restructured in a troubled debt
restructuring involving a modification of terms. This statement
addresses the accounting for impairment of a loan by specifying how
allowances for credit losses should be determined. Impaired loans
within the scope of this statement are measured based on the present
value of expected future cash flows discounted at the loan's effective
interest rate, at the loan's observable market price or the fair value
of the collateral if the loan is collateral dependent. The Company
provides for impairment of loans through an allowance for possible
losses. The adoption of this statement did not have a material effect
on the level of these allowances or on the Company's consolidated
statements of earnings and shareholder's equity.
Beginning coincident with issuance of SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," implementation
guidance in November 1995, the Financial Accounting Standards Board
("FASB") permitted companies a one-time opportunity, through December
31, 1995, to reassess the appropriateness of the classification of all
securities held at that time. On December 1, 1995, the Company
transferred $4,794.9 million of securities classified as held to
maturity to the available for sale portfolio. As a result, consolidated
shareholder's equity increased by $149.4 million, net of deferred
policy acquisition costs ("DAC"), amounts attributable to participating
group annuity contracts and deferred Federal income taxes.
In the fourth quarter of 1994 (effective as of January 1, 1994), the
Company adopted SFAS No. 112, "Employers' Accounting for Postemployment
Benefits," which required employers to recognize the obligation to
provide postemployment benefits. Implementation of this statement
resulted in a charge for the cumulative effect of accounting change of
$27.1 million, net of a Federal income tax benefit of $14.6 million.
New Accounting Pronouncements
-----------------------------
The FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation," which permits entities to recognize as expense over the
vesting period the fair value of all stock-based awards on the date of
grant or, alternatively, to continue to apply the provisions of
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for
Stock Issued to Employees," and related interpretations. Companies
which elect to continue
F-8
<PAGE>
to apply APB Opinion No. 25 must provide pro forma net income
disclosures for employee stock option grants made in 1995 and future
years as if the fair-value-based method defined in SFAS No. 123 had
been applied. The Company accounts for stock option plans sponsored by
the Holding Company, DLJ and Alliance in accordance with the provisions
of APB Opinion No. 25 (see Note 21).
In June 1996, the FASB issued SFAS No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities".
SFAS No. 125 specifies the accounting and reporting requirements for
transfers of financial assets, the recognition and measurement of
servicing assets and liabilities and extinguishments of liabilities.
SFAS No. 125 is effective for transactions occurring after December 31,
1996 and is to be applied prospectively. In December 1996, the FASB
issued SFAS No. 127, "Deferral of the Effective Date of Certain
Provisions of FASB Statement No. 125," which defers for one year the
effective date of provisions relating to secured borrowings and
collateral and transfers of financial assets that are part of
repurchase agreements, dollar-roll, securities lending and similar
transactions. Management has not yet determined the effect of
implementing SFAS No. 125.
Valuation of Investments
------------------------
Fixed maturities identified as available for sale are reported at
estimated fair value. The amortized cost of fixed maturities is
adjusted for impairments in value deemed to be other than temporary.
Mortgage loans on real estate are stated at unpaid principal balances,
net of unamortized discounts and valuation allowances. Effective with
the adoption of SFAS No. 114 on January 1, 1995, the valuation
allowances are based on the present value of expected future cash flows
discounted at the loan's original effective interest rate or the
collateral value if the loan is collateral dependent. However, if
foreclosure is or becomes probable, the measurement method used is
collateral value. Prior to the adoption of SFAS No. 114, the valuation
allowances were based on losses expected by management to be realized
on transfers of mortgage loans to real estate (upon foreclosure or
in-substance foreclosure), on the disposition or settlement of mortgage
loans and on mortgage loans management believed may not be collectible
in full. In establishing valuation allowances, management previously
considered, among other things the estimated fair value of the
underlying collateral.
Real estate, including real estate acquired in satisfaction of debt, is
stated at depreciated cost less valuation allowances. At the date of
foreclosure (including in-substance foreclosure), real estate acquired
in satisfaction of debt is valued at estimated fair value. Impaired
real estate is written down to fair value with the impairment loss
being included in investment gains (losses) net. Valuation allowances
on real estate available for sale are computed using the lower of
current estimated fair value or depreciated cost, net of disposition
costs. Prior to the adoption of SFAS No. 121, valuation allowances on
real estate held for the production of income were computed using the
forecasted cash flows of the respective properties discounted at a rate
equal to the Company's cost of funds.
Policy loans are stated at unpaid principal balances.
Partnerships and joint venture interests in which the Company does not
have control and a majority economic interest are reported on the
equity basis of accounting and are included either with equity real
estate or other equity investments, as appropriate.
Common stocks are carried at estimated fair value and are included in
other equity investments.
F-9
<PAGE>
Short-term investments are stated at amortized cost which approximates
fair value and are included with other invested assets.
Cash and cash equivalents includes cash on hand, amounts due from banks
and highly liquid debt instruments purchased with an original maturity
of three months or less.
All securities are recorded in the consolidated financial statements on
a trade date basis.
Investment Results and Unrealized Investment Gains (Losses)
-----------------------------------------------------------
Net investment income and realized investment gains and losses
(collectively, "investment results") related to certain participating
group annuity contracts which are passed through to the contractholders
are reflected as interest credited to policyholders' account balances.
Realized investment gains and losses are determined by specific
identification and are presented as a component of revenue. Valuation
allowances are netted against the asset categories to which they apply
and changes in the valuation allowances are included in investment
gains or losses.
Unrealized investment gains and losses on fixed maturities available
for sale and equity securities held by the Company are accounted for as
a separate component of shareholder's equity, net of related deferred
Federal income taxes, amounts attributable to the discontinued GIC
Segment, participating group annuity contracts, and DAC related to
universal life and investment-type products and participating
traditional life contracts.
Recognition of Insurance Income and Related Expenses
----------------------------------------------------
Premiums from universal life and investment-type contracts are reported
as deposits to policyholders' account balances. Revenues from these
contracts consist of amounts assessed during the period against
policyholders' account balances for mortality charges, policy
administration charges and surrender charges. Policy benefits and
claims that are charged to expense include benefit claims incurred in
the period in excess of related policyholders' account balances.
Premiums from participating and non-participating traditional life and
annuity policies with life contingencies generally are recognized as
income when due. Benefits and expenses are matched with such income so
as to result in the recognition of profits over the life of the
contracts. This match is accomplished by means of the provision for
liabilities for future policy benefits and the deferral and subsequent
amortization of policy acquisition costs.
For contracts with a single premium or a limited number of premium
payments due over a significantly shorter period than the total period
over which benefits are provided, premiums are recorded as income when
due with any excess profit deferred and recognized in income in a
constant relationship to insurance in force or, for annuities, the
amount of expected future benefit payments.
Premiums from individual health contracts are recognized as income over
the period to which the premiums relate in proportion to the amount of
insurance protection provided.
Deferred Policy Acquisition Costs
---------------------------------
The costs of acquiring new business, principally commissions,
underwriting, agency and policy issue expenses, all of which vary with
and are primarily related to the production of new business, are
deferred.
F-10
<PAGE>
DAC is subject to recoverability testing at the time of policy issue
and loss recognition testing at the end of each accounting period.
For universal life products and investment-type products, DAC is
amortized over the expected total life of the contract group (periods
ranging from 15 to 35 years and 5 to 17 years, respectively) as a
constant percentage of estimated gross profits arising principally from
investment results, mortality and expense margins and surrender charges
based on historical and anticipated future experience, updated at the
end of each accounting period. The effect on the amortization of DAC of
revisions to estimated gross profits is reflected in earnings in the
period such estimated gross profits are revised. The effect on the DAC
asset that would result from realization of unrealized gains (losses)
is recognized with an offset to unrealized gains (losses) in
consolidated shareholder's equity as of the balance sheet date.
For participating traditional life policies (substantially all of which
are in the Closed Block), DAC is amortized over the expected total life
of the contract group (40 years) as a constant percentage based on the
present value of the estimated gross margin amounts expected to be
realized over the life of the contracts using the expected investment
yield. At December 31, 1996, the expected investment yield ranged from
7.30% grading to 7.68% over 13 years. Estimated gross margin includes
anticipated premiums and investment results less claims and
administrative expenses, changes in the net level premium reserve and
expected annual policyholder dividends. Deviations of actual results
from estimated experience are reflected in earnings in the period such
deviations occur. The effect on the DAC asset that would result from
realization of unrealized gains (losses) is recognized with an offset
to unrealized gains (losses) in consolidated shareholder's equity as of
the balance sheet date.
For non-participating traditional life and annuity policies with life
contingencies, DAC is amortized in proportion to anticipated premiums.
Assumptions as to anticipated premiums are estimated at the date of
policy issue and are consistently applied during the life of the
contracts. Deviations from estimated experience are reflected in
earnings in the period such deviations occur. For these contracts, the
amortization periods generally are for the total life of the policy.
For individual health benefit insurance, DAC is amortized over the
expected average life of the contracts (10 years for major medical
policies and 20 years for disability income ("DI") products) in
proportion to anticipated premium revenue at time of issue. In the
fourth quarter of 1996, the DAC related to DI contracts issued prior to
July 1993 was written off.
Policyholders' Account Balances and Future Policy Benefits
----------------------------------------------------------
Policyholders' account balances for universal life and investment-type
contracts are equal to the policy account values. The policy account
values represent an accumulation of gross premium payments plus
credited interest less expense and mortality charges and withdrawals.
For participating traditional life policies, future policy benefit
liabilities are calculated using a net level premium method on the
basis of actuarial assumptions equal to guaranteed mortality and
dividend fund interest rates. The liability for annual dividends
represents the accrual of annual dividends earned. Terminal dividends
are accrued in proportion to gross margins over the life of the
contract.
For non-participating traditional life insurance policies, future
policy benefit liabilities are estimated using a net level premium
method on the basis of actuarial assumptions as to mortality,
persistency and interest established at policy issue. Assumptions
established at policy issue as to mortality and persistency are based
on the Insurance Group's experience which, together with interest and
expense assumptions, include a margin
F-11
<PAGE>
for adverse deviation. When the liabilities for future policy benefits
plus the present value of expected future gross premiums for a product
are insufficient to provide for expected future policy benefits and
expenses for that product, DAC is written off and thereafter, if
required, a premium deficiency reserve is established by a charge to
earnings. Benefit liabilities for traditional annuities during the
accumulation period are equal to accumulated contractholders' fund
balances and after annuitization are equal to the present value of
expected future payments. Interest rates used in establishing such
liabilities range from 2.25% to 11.5% for life insurance liabilities
and from 2.25% to 13.5% for annuity liabilities.
During the fourth quarter of 1996, a loss recognition study on
participating group annuity contracts and conversion annuities
("Pension Par") was completed which included management's revised
estimate of assumptions, including expected mortality and future
investment returns. The study's results prompted management to
establish a premium deficiency reserve which decreased earnings from
continuing operations and net earnings by $47.5 million ($73.0 million
pre-tax).
Individual health benefit liabilities for active lives are estimated
using the net level premium method, and assumptions as to future
morbidity, withdrawals and interest. Benefit liabilities for disabled
lives are estimated using the present value of benefits method and
experience assumptions as to claim terminations, expenses and interest.
During the fourth quarter of 1996, the Company completed a loss
recognition study of the DI business which incorporated management's
revised estimates of future experience with regard to morbidity,
investment returns, claims and administration expenses and other
factors. The study indicated DAC was not recoverable and the reserves
were not sufficient. Earnings from continuing operations and net
earnings decreased by $208.0 million ($320.0 million pre-tax) as a
result of strengthening DI reserves by $175.0 million and writing off
unamortized DAC of $145.0 million. The determination of DI reserves
requires making assumptions and estimates relating to a variety of
factors, including morbidity and interest rates, claims experience and
lapse rates based on then known facts and circumstances. Such factors
as claim incidence and termination rates can be affected by changes in
the economic, legal and regulatory environments and work ethic. While
management believes its DI reserves have been calculated on a
reasonable basis and are adequate, there can be no assurance reserves
will be sufficient to provide for future liabilities.
Claim reserves and associated liabilities for individual disability
income and major medical policies were $711.8 million and $639.6
million at December 31, 1996 and 1995, respectively (excluding $175.0
million of reserve strengthening in 1996). Incurred benefits (benefits
paid plus changes in claim reserves) and benefits paid for individual
DI and major medical policies (excluding $175.0 million of reserve
strengthening in 1996) are summarized as follows:
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Incurred benefits related to current year.......... $ 189.0 $ 176.0 $ 188.6
Incurred benefits related to prior years........... 69.1 67.8 28.7
----------------- ---------------- -----------------
Total Incurred Benefits............................ $ 258.1 $ 243.8 $ 217.3
================= ================ =================
Benefits paid related to current year.............. $ 32.6 $ 37.0 $ 43.7
Benefits paid related to prior years............... 153.3 137.8 132.3
----------------- ---------------- -----------------
Total Benefits Paid................................ $ 185.9 $ 174.8 $ 176.0
================= ================ =================
</TABLE>
F-12
<PAGE>
Policyholders' Dividends
------------------------
The amount of policyholders' dividends to be paid (including those on
policies included in the Closed Block) is determined annually by
Equitable Life's Board of Directors. The aggregate amount of
policyholders' dividends is related to actual interest, mortality,
morbidity and expense experience for the year and judgment as to the
appropriate level of statutory surplus to be retained by Equitable
Life.
Equitable Life is subject to limitations on the amount of statutory
profits which can be retained with respect to certain classes of
individual participating policies that were in force on July 22, 1992
which are not included in the Closed Block and with respect to
participating policies issued subsequent to July 22, 1992. Excess
statutory profits, if any, will be distributed over time to such
policyholders and will not be available to Equitable Life's
shareholder. Earnings in excess of limitations, if any, would be
accrued as policyholders' dividends.
At December 31, 1996, participating policies, including those in the
Closed Block, represent approximately 24.2% ($52.3 billion) of directly
written life insurance in force, net of amounts ceded.
Federal Income Taxes
--------------------
The Company files a consolidated Federal income tax return with the
Holding Company and its non-life insurance subsidiaries. Current
Federal income taxes were charged or credited to operations based upon
amounts estimated to be payable or recoverable as a result of taxable
operations for the current year. Deferred income tax assets and
liabilities were recognized based on the difference between financial
statement carrying amounts and income tax bases of assets and
liabilities using enacted income tax rates and laws.
Separate Accounts
-----------------
Separate Accounts are established in conformity with the New York State
Insurance Law and generally are not chargeable with liabilities that
arise from any other business of the Insurance Group. Separate Accounts
assets are subject to General Account claims only to the extent the
value of such assets exceeds the Separate Accounts liabilities.
Assets and liabilities of the Separate Accounts, representing net
deposits and accumulated net investment earnings less fees, held
primarily for the benefit of contractholders, and for which the
Insurance Group does not bear the investment risk, are shown as
separate captions in the consolidated balance sheets. The Insurance
Group bears the investment risk on assets held in one Separate Account,
therefore, such assets are carried on the same basis as similar assets
held in the General Account portfolio. Assets held in the other
Separate Accounts are carried at quoted market values or, where quoted
values are not available, at estimated fair values as determined by the
Insurance Group.
The investment results of Separate Accounts on which the Insurance
Group does not bear the investment risk are reflected directly in
Separate Accounts liabilities. For 1996, 1995 and 1994, investment
results of such Separate Accounts were $2,970.6 million, $1,963.2
million and $665.2 million, respectively.
Deposits to Separate Accounts are reported as increases in Separate
Accounts liabilities and are not reported in revenues. Mortality,
policy administration and surrender charges on all Separate Accounts
are included in revenues.
F-13
<PAGE>
3) INVESTMENTS
The following tables provide additional information relating to fixed
maturities and equity securities:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
----------------- ----------------- ---------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
DECEMBER 31, 1996
-----------------
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 13,645.2 $ 451.5 $ 121.0 $ 13,975.7
Mortgage-backed.................... 2,015.9 11.2 20.3 2,006.8
U.S. Treasury securities and
U.S. government and
agency securities................ 1,539.4 39.2 19.3 1,559.3
States and political subdivisions.. 77.0 4.5 - 81.5
Foreign governments................ 302.6 18.0 2.2 318.4
Redeemable preferred stock......... 139.1 3.3 7.1 135.3
----------------- ----------------- ---------------- ---------------
Total Available for Sale............... $ 17,719.2 $ 527.7 $ 169.9 $ 18,077.0
================= ================= ================ ===============
Equity Securities:
Common stock......................... $ 98.7 $ 49.3 $ 17.7 $ 130.3
================= ================= ================ ===============
December 31, 1995
-----------------
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 10,910.7 $ 617.6 $ 118.1 $ 11,410.2
Mortgage-backed.................... 1,838.0 31.2 1.2 1,868.0
U.S. Treasury securities and
U.S. government and
agency securities................ 2,257.0 77.8 4.1 2,330.7
States and political subdivisions.. 45.7 5.2 - 50.9
Foreign governments................ 124.5 11.0 .2 135.3
Redeemable preferred stock......... 108.1 5.3 8.6 104.8
----------------- ----------------- ---------------- ---------------
Total Available for Sale............... $ 15,284.0 $ 748.1 $ 132.2 $ 15,899.9
================= ================= ================ ===============
Equity Securities:
Common stock......................... $ 97.3 $ 49.1 $ 18.0 $ 128.4
================= ================= ================ ===============
</TABLE>
For publicly traded fixed maturities and equity securities, estimated
fair value is determined using quoted market prices. For fixed
maturities without a readily ascertainable market value, the Company
has determined an estimated fair value using a discounted cash flow
approach, including provisions for credit risk, generally based upon
the assumption such securities will be held to maturity. Estimated fair
value for equity securities, substantially all of which do not have a
readily ascertainable market value, has been determined by the Company.
Such estimated fair values do not necessarily represent the values for
which these securities could have been sold at the dates of the
consolidated balance sheets. At December 31, 1996
F-14
<PAGE>
and 1995, securities without a readily ascertainable market value
having an amortized cost of $3,915.7 million and $3,748.9 million,
respectively, had estimated fair values of $4,024.6 million and
$3,981.8 million, respectively.
The contractual maturity of bonds at December 31, 1996 is shown below:
AVAILABLE FOR SALE
------------------------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
---------------- -----------------
(IN MILLIONS)
Due in one year or less........... $ 539.6 $ 542.5
Due in years two through five..... 2,776.2 2,804.0
Due in years six through ten...... 6,044.7 6,158.1
Due after ten years............... 6,203.7 6,430.3
Mortgage-backed securities........ 2,015.9 2,006.8
---------------- -----------------
Total............................. $ 17,580.1 $ 17,941.7
================ =================
Bonds not due at a single maturity date have been included in the above
table in the year of final maturity. Actual maturities will differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
The Insurance Group's fixed maturity investment portfolio includes
corporate high yield securities consisting of public high yield bonds,
redeemable preferred stocks and directly negotiated debt in leveraged
buyout transactions. The Insurance Group seeks to minimize the higher
than normal credit risks associated with such securities by monitoring
the total investments in any single issuer or total investment in a
particular industry group. Certain of these corporate high yield
securities are classified as other than investment grade by the various
rating agencies, i.e., a rating below Baa or National Association of
Insurance Commissioners ("NAIC") designation of 3 (medium grade), 4 or
5 (below investment grade) or 6 (in or near default). At December 31,
1996, approximately 14.20% of the $17,563.7 million aggregate amortized
cost of bonds held by the Insurance Group were considered to be other
than investment grade.
In addition to its holdings of corporate high yield securities, the
Insurance Group is an equity investor in limited partnership interests
which primarily invest in securities considered to be other than
investment grade.
The Company has restructured or modified the terms of certain fixed
maturity investments. The fixed maturity portfolio includes amortized
costs of $5.5 million and $15.9 million at December 31, 1996 and 1995,
respectively, of such restructured securities. These amounts include
fixed maturities which are in default as to principal and/or interest
payments, are to be restructured pursuant to commenced negotiations or
where the borrowers went into bankruptcy subsequent to acquisition
(collectively, "problem fixed maturities") of $2.2 million and $1.6
million as of December 31, 1996 and 1995, respectively. Gross interest
income that would have been recorded in accordance with the original
terms of restructured fixed maturities amounted to $1.4 million, $3.0
million and $7.5 million in 1996, 1995 and 1994, respectively. Gross
interest income on these fixed maturities included in net investment
income aggregated $1.3 million, $2.9 million and $6.8 million in 1996,
1995 and 1994, respectively.
F-15
<PAGE>
Investment valuation allowances and changes thereto are shown below:
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Balances, beginning of year........................ $ 325.3 $ 284.9 $ 355.6
SFAS No. 121 release............................... (152.4) - -
Additions charged to income........................ 125.0 136.0 51.0
Deductions for writedowns and
asset dispositions............................... (160.8) (95.6) (121.7)
----------------- ---------------- -----------------
Balances, End of Year.............................. $ 137.1 $ 325.3 $ 284.9
================= ================ =================
Balances, end of year comprise:
Mortgage loans on real estate.................... $ 50.4 $ 65.5 $ 64.2
Equity real estate............................... 86.7 259.8 220.7
----------------- ---------------- -----------------
Total.............................................. $ 137.1 $ 325.3 $ 284.9
================= ================ =================
</TABLE>
At December 31, 1996, the carrying values of investments held for the
production of income which were non-income producing for the twelve
months preceding the consolidated balance sheet date were $25.0 million
of fixed maturities and $2.6 million of mortgage loans on real estate.
At December 31, 1996 and 1995, mortgage loans on real estate with
scheduled payments 60 days (90 days for agricultural mortgages) or more
past due or in foreclosure (collectively, "problem mortgage loans on
real estate") had an amortized cost of $12.4 million (0.4% of total
mortgage loans on real estate) and $87.7 million (2.4% of total
mortgage loans on real estate), respectively.
The payment terms of mortgage loans on real estate may from time to
time be restructured or modified. The investment in restructured
mortgage loans on real estate, based on amortized cost, amounted to
$388.3 million and $531.5 million at December 31, 1996 and 1995,
respectively. These amounts include $1.0 million and $3.8 million of
problem mortgage loans on real estate at December 31, 1996 and 1995,
respectively. Gross interest income on restructured mortgage loans on
real estate that would have been recorded in accordance with the
original terms of such loans amounted to $35.5 million, $52.1 million
and $44.9 million in 1996, 1995 and 1994, respectively. Gross interest
income on these loans included in net investment income aggregated
$28.2 million, $37.4 million and $32.8 million in 1996, 1995 and 1994,
respectively.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------
1996 1995
------------------- -------------------
(IN MILLIONS)
<S> <C> <C>
Impaired mortgage loans with provision for losses.................. $ 340.0 $ 310.1
Impaired mortgage loans with no provision for losses............... 122.3 160.8
------------------- -------------------
Recorded investment in impaired mortgage loans..................... 462.3 470.9
Provision for losses............................................... 46.4 62.7
------------------- -------------------
Net Impaired Mortgage Loans........................................ $ 415.9 $ 408.2
=================== ===================
</TABLE>
F-16
<PAGE>
Impaired mortgage loans with no provision for losses are loans where
the fair value of the collateral or the net present value of the
expected future cash flows related to the loan equals or exceeds the
recorded investment. Interest income earned on loans where the
collateral value is used to measure impairment is recorded on a cash
basis. Interest income on loans where the present value method is used
to measure impairment is accrued on the net carrying value amount of
the loan at the interest rate used to discount the cash flows. Changes
in the present value attributable to changes in the amount or timing of
expected cash flows are reported as investment gains or losses.
During 1996 and 1995, respectively, the Company's average recorded
investment in impaired mortgage loans was $552.1 million and $429.0
million. Interest income recognized on these impaired mortgage loans
totaled $38.8 million and $27.9 million for 1996 and 1995,
respectively, including $17.9 million and $13.4 million recognized on a
cash basis.
The Insurance Group's investment in equity real estate is through
direct ownership and through investments in real estate joint ventures.
At December 31, 1996 and 1995, the carrying value of equity real estate
available for sale amounted to $345.6 million and $255.5 million,
respectively. For 1996, 1995 and 1994, respectively, real estate of
$58.7 million, $35.3 million and $189.8 million was acquired in
satisfaction of debt. At December 31, 1996 and 1995, the Company owned
$771.7 million and $862.7 million, respectively, of real estate
acquired in satisfaction of debt.
Depreciation of real estate is computed using the straight-line method
over the estimated useful lives of the properties, which generally
range from 40 to 50 years. Accumulated depreciation on real estate was
$587.5 million and $662.4 million at December 31, 1996 and 1995,
respectively. Depreciation expense on real estate totaled $91.8
million, $121.7 million and $117.0 million for 1996, 1995 and 1994,
respectively. As a result of the implementation of SFAS No. 121, during
1996 no depreciation expense has been recorded on real estate available
for sale.
F-17
<PAGE>
4) JOINT VENTURES AND PARTNERSHIPS
Summarized combined financial information of real estate joint ventures
(34 and 38 individual ventures as of December 31, 1996 and 1995,
respectively) and of limited partnership interests accounted for under
the equity method, in which the Company has an investment of $10.0
million or greater and an equity interest of 10% or greater is as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1996 1995
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
FINANCIAL POSITION
Investments in real estate, at depreciated cost........................ $ 1,883.7 $ 2,684.1
Investments in securities, generally at estimated fair value........... 2,430.6 2,459.8
Cash and cash equivalents.............................................. 98.0 489.1
Other assets........................................................... 427.0 270.8
---------------- -----------------
Total assets........................................................... 4,839.3 5,903.8
---------------- -----------------
Borrowed funds - third party........................................... 1,574.3 1,782.3
Borrowed funds - the Company........................................... 137.9 220.5
Other liabilities...................................................... 415.8 593.9
---------------- -----------------
Total liabilities...................................................... 2,128.0 2,596.7
---------------- -----------------
Partners' Capital...................................................... $ 2,711.3 $ 3,307.1
================ =================
Equity in partners' capital included above............................. $ 806.8 $ 902.2
Equity in limited partnership interests not included above............. 201.8 212.8
Other.................................................................. 9.8 8.9
---------------- -----------------
Carrying Value......................................................... $ 1,018.4 $ 1,123.9
================ =================
</TABLE>
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Revenues of real estate joint ventures............. $ 348.9 $ 463.5 $ 537.7
Revenues of other limited partnership interests.... 386.1 242.3 103.4
Interest expense - third party..................... (111.0) (135.3) (114.9)
Interest expense - the Company..................... (30.0) (41.0) (36.9)
Other expenses..................................... (282.5) (397.7) (430.9)
----------------- ---------------- -----------------
Net Earnings....................................... $ 311.5 $ 131.8 $ 58.4
================= ================ =================
Equity in net earnings included above.............. $ 73.9 $ 49.1 $ 18.9
Equity in net earnings of limited partnerships
interests not included above..................... 35.8 44.8 25.3
Other.............................................. .9 1.0 1.8
----------------- ---------------- -----------------
Total Equity in Net Earnings....................... $ 110.6 $ 94.9 $ 46.0
================= ================ =================
</TABLE>
F-18
<PAGE>
5) NET INVESTMENT INCOME AND INVESTMENT GAINS (LOSSES)
The sources of net investment income are summarized as follows:
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities.................... $ 1,307.4 $ 1,151.1 $ 1,036.5
Mortgage loans on real estate....... 303.0 329.0 385.7
Equity real estate.................. 442.4 560.4 561.8
Other equity investments............ 94.3 76.9 36.1
Policy loans........................ 160.3 144.4 122.7
Other investment income............. 217.4 273.0 322.4
----------------- ---------------- -----------------
Gross investment income........... 2,524.8 2,534.8 2,465.2
----------------- ---------------- -----------------
Investment expenses............... 348.9 446.6 466.6
----------------- ---------------- -----------------
Net Investment Income............... $ 2,175.9 $ 2,088.2 $ 1,998.6
================= ================ =================
Investment gains (losses), net, including changes in the valuation
allowances, are summarized as follows:
</TABLE>
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................... $ 60.5 $ 119.9 $ (14.3)
Mortgage loans on real estate...................... (27.3) (40.2) (43.1)
Equity real estate................................. (79.7) (86.6) 20.6
Other equity investments........................... 18.9 12.8 75.9
Issuance and sales of Alliance Units............... 20.6 - 52.4
Other.............................................. (2.8) (.6) .3
----------------- ---------------- -----------------
Investment (Losses) Gains, Net..................... $ (9.8) $ 5.3 $ 91.8
================= ================ =================
</TABLE>
Writedowns of fixed maturities amounted to $29.9 million, $46.7 million
and $30.8 million for 1996, 1995 and 1994, respectively, and writedowns
of equity real estate subsequent to the adoption of SFAS No. 121
amounted to $23.7 million for the year ended December 31, 1996.
For 1996, 1995 and 1994, respectively, proceeds received on sales of
fixed maturities classified as available for sale amounted to $8,353.5
million, $8,206.0 million and $5,253.9 million. Gross gains of $154.2
million, $211.4 million and $65.2 million and gross losses of $92.7
million, $64.2 million and $50.8 million, respectively, were realized
on these sales. The change in unrealized investment (losses) gains
related to fixed maturities classified as available for sale for 1996,
1995 and 1994 amounted to $(258.0) million, $1,077.2 million and
$(742.2) million, respectively.
During each of 1995 and 1994, one security classified as held to
maturity was sold. During the eleven months ended November 30, 1995 and
the year ended December 31, 1994, respectively, twelve and six
securities so classified were transferred to the available for sale
portfolio. All actions were taken as a result of a significant
F-19
<PAGE>
deterioration in creditworthiness. The aggregate amortized costs of the
securities sold were $1.0 million and $19.9 million with a related
investment gain of $-0- million and $.8 million recognized in 1995 and
1994, respectively; the aggregate amortized cost of the securities
transferred was $116.0 million and $42.8 million with gross unrealized
investment losses of $3.2 million and $3.1 million charged to
consolidated shareholder's equity for the eleven months ended November
30, 1995 and the year ended December 31, 1994, respectively. On
December 1, 1995, the Company transferred $4,794.9 million of
securities classified as held to maturity to the available for sale
portfolio. As a result, unrealized gains on fixed maturities increased
$395.6 million, offset by DAC of $126.5 million, amounts attributable
to participating group annuity contracts of $39.2 million and deferred
Federal income taxes of $80.5 million.
For 1996, 1995 and 1994, investment results passed through to certain
participating group annuity contracts as interest credited to
policyholders' account balances amounted to $136.7 million, $131.2
million and $175.8 million, respectively.
In 1996, Alliance acquired the business of Cursitor-Eaton Asset
Management Company and Cursitor Holdings Limited (collectively,
"Cursitor") for approximately $159.0 million. The purchase price
consisted of $94.3 million in cash, 1.8 million of Alliance's publicly
traded units ("Alliance Units"), 6% notes aggregating $21.5 million
payable ratably over four years, and substantial additional
consideration which will be determined at a later date. The excess of
the purchase price, including acquisition costs and minority interest,
over the fair value of Cursitor's net assets acquired resulted in the
recognition of intangible assets consisting of costs assigned to
contracts acquired and goodwill of approximately $122.8 million and
$38.3 million, respectively, which are being amortized over the
estimated useful lives of 20 years. The Company recognized an
investment gain of $20.6 million as a result of the issuance of
Alliance Units in this transaction. At December 31, 1996, the Company's
ownership of Alliance Units was approximately 57.3%.
In 1994, Alliance sold 4.96 million newly issued Alliance Units to
third parties at prevailing market prices. The Company continues to
hold its 1% general partnership interest in Alliance. The Company
recognized an investment gain of $52.4 million as a result of these
transactions.
F-20
<PAGE>
Net unrealized investment gains (losses), included in the consolidated
balance sheets as a component of equity and the changes for the
corresponding years, are summarized as follows:
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Balance, beginning of year as restated............. $ 396.5 $ (220.5) $ 144.6
Changes in unrealized investment (losses) gains.... (297.6) 1,198.9 (856.7)
Changes in unrealized investment losses
(gains) attributable to:
Participating group annuity contracts.......... - (78.1) 40.8
DAC............................................ 42.3 (216.8) 273.6
Deferred Federal income taxes.................. 48.7 (287.0) 177.2
----------------- ---------------- -----------------
Balance, End of Year............................... $ 189.9 $ 396.5 $ (220.5)
================= ================ =================
Balance, end of year comprises:
Unrealized investment gains (losses) on:
Fixed maturities............................... $ 357.8 $ 615.9 $ (461.3)
Other equity investments....................... 31.6 31.1 7.7
Other, principally Closed Block................ 53.1 93.1 (5.1)
----------------- ---------------- -----------------
Total........................................ 442.5 740.1 (458.7)
Amounts of unrealized investment (gains)
losses attributable to:
Participating group annuity contracts........ (72.2) (72.2) 5.9
DAC.......................................... (52.0) (94.3) 122.4
Deferred Federal income taxes................ (128.4) (177.1) 109.9
----------------- ---------------- -----------------
Total.............................................. $ 189.9 $ 396.5 $ (220.5)
================= ================ =================
</TABLE>
F-21
<PAGE>
6) CLOSED BLOCK
Summarized financial information of the Closed Block follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1996 1995
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets
Fixed Maturities:
Available for sale, at estimated fair value (amortized cost,
$3,820.7 and $3,662.8)...................................... $ 3,889.5 $ 3,896.2
Mortgage loans on real estate................................... 1,380.7 1,368.8
Policy loans.................................................... 1,765.9 1,797.2
Cash and other invested assets.................................. 336.1 440.9
DAC............................................................. 876.5 792.6
Other assets.................................................... 246.3 286.4
----------------- -----------------
Total Assets.................................................... $ 8,495.0 $ 8,582.1
================= =================
Liabilities
Future policy benefits and policyholders' account balances...... $ 8,999.7 $ 8,923.5
Other liabilities............................................... 91.6 297.9
----------------- -----------------
Total Liabilities............................................... $ 9,091.3 $ 9,221.4
================= =================
</TABLE>
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Premiums and other revenue......................... $ 724.8 $ 753.4 $ 798.1
Investment income (net of investment
expenses of $27.3, $26.7 and $19.0).............. 546.6 538.9 523.0
Investment losses, net............................. (5.5) (20.2) (24.0)
----------------- ---------------- -----------------
Total revenues............................... 1,265.9 1,272.1 1,297.1
----------------- ---------------- -----------------
Benefits and Other Deductions
Policyholders' benefits and dividends.............. 1,106.3 1,077.6 1,121.6
Other operating costs and expenses................. 34.6 51.3 38.5
----------------- ---------------- -----------------
Total benefits and other deductions.......... 1,140.9 1,128.9 1,160.1
----------------- ---------------- -----------------
Contribution from the Closed Block................. $ 125.0 $ 143.2 $ 137.0
================= ================ =================
</TABLE>
In the fourth quarter of 1996, the Company adopted SFAS No. 120, which
prescribes the accounting for individual participating life insurance
contracts, most of which are included in the Closed Block. The
implementation of SFAS No. 120 resulted in an increase (decrease) in
the contribution from the Closed Block of $27.5 million, $18.8 million
and $(14.0) million in 1996, 1995 and 1994, respectively.
F-22
<PAGE>
The fixed maturity portfolio, based on amortized cost, includes $.4
million and $4.3 million at December 31, 1996 and 1995, respectively,
of restructured securities which includes problem fixed maturities of
$.3 million and $1.9 million, respectively.
During the eleven months ended November 30, 1995, one security
classified as held to maturity was sold and ten securities classified
as held to maturity were transferred to the available for sale
portfolio. All actions resulted from significant deterioration in
creditworthiness. The amortized cost of the security sold was $4.2
million. The aggregate amortized cost of the securities transferred was
$81.3 million with gross unrealized investment losses of $.1 million
transferred to equity. At December 1, 1995, $1,750.7 million of
securities classified as held to maturity were transferred to the
available for sale portfolio. As a result, unrealized gains of $88.5
million on fixed maturities were recognized, offset by DAC amortization
of $52.6 million.
At December 31, 1996 and 1995, problem mortgage loans on real estate
had an amortized cost of $4.3 million and $36.5 million, respectively,
and mortgage loans on real estate for which the payment terms have been
restructured had an amortized cost of $114.2 million and $137.7
million, respectively. At December 31, 1996 and 1995, the restructured
mortgage loans on real estate amount included $.7 million and $8.8
million, respectively, of problem mortgage loans on real estate.
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1996 1995
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Impaired mortgage loans with provision for losses......... $ 128.1 $ 106.8
Impaired mortgage loans with no provision for losses...... .6 10.1
---------------- -----------------
Recorded investment in impaired mortgages................. 128.7 116.9
Provision for losses...................................... 12.9 17.9
---------------- -----------------
Net Impaired Mortgage Loans............................... $ 115.8 $ 99.0
================ =================
</TABLE>
During 1996 and 1995, respectively, the Closed Block's average recorded
investment in impaired mortgage loans was $153.8 million and $146.9
million, respectively. Interest income recognized on these impaired
mortgage loans totaled $10.9 million and $5.9 million for 1996 and
1995, respectively, including $4.7 million and $1.3 million recognized
on a cash basis.
Valuation allowances amounted to $13.8 million and $18.4 million on
mortgage loans on real estate and $3.7 million and $4.3 million on
equity real estate at December 31, 1996 and 1995, respectively.
Writedowns of fixed maturities amounted to $12.8 million, $16.8 million
and $15.9 million for 1996, 1995 and 1994, respectively. As of January
1, 1996, the adoption of SFAS No. 121 resulted in the recognition of
impairment losses of $5.6 million on real estate held and used.
Many expenses related to Closed Block operations are charged to
operations outside of the Closed Block; accordingly, the contribution
from the Closed Block does not represent the actual profitability of
the Closed Block operations. Operating costs and expenses outside of
the Closed Block are, therefore, disproportionate to the business
outside of the Closed Block.
F-23
<PAGE>
7) DISCONTINUED OPERATIONS
Summarized financial information of the GIC Segment follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1996 1995
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets
Mortgage loans on real estate........... $ 1,111.1 $ 1,485.8
Equity real estate...................... 925.6 1,122.1
Other invested assets................... 474.0 665.2
Other assets............................ 226.1 579.3
----------------- -----------------
Total Assets............................ $ 2,736.8 $ 3,852.4
================= =================
Liabilities
Policyholders' liabilities.............. $ 1,335.9 $ 1,399.8
Allowance for future losses............. 262.0 164.2
Amounts due to continuing operations.... 996.2 2,097.1
Other liabilities....................... 142.7 191.3
----------------- -----------------
Total Liabilities....................... $ 2,736.8 $ 3,852.4
================= =================
</TABLE>
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Investment income (net of investment expenses
of $127.5, $153.1 and $183.3).................... $ 245.4 $ 323.6 $ 394.3
Investment (losses) gains, net..................... (18.9) (22.9) 26.8
Policy fees, premiums and other income............. .2 .7 .4
----------------- ---------------- -----------------
Total revenues..................................... 226.7 301.4 421.5
Benefits and other deductions...................... 250.4 326.5 443.2
Losses charged to allowance for future losses...... (23.7) (25.1) (21.7)
----------------- ---------------- -----------------
Pre-tax loss from operations....................... - - -
Pre-tax loss from strengthening of the
allowance for future losses...................... (129.0) - -
Federal income tax benefit......................... 45.2 - -
----------------- ---------------- -----------------
Loss from Discontinued Operations.................. $ (83.8) $ - $ -
================= ================ =================
</TABLE>
In 1991, management adopted a plan to discontinue the business
operations of the GIC Segment consisting of group non-participating
Wind-Up Annuities and the GIC lines of business. The loss allowance and
premium deficiency reserve of $569.6 million provided for in 1991 were
based on management's best judgment at that time.
The Company's quarterly process for evaluating the loss provisions
applies the current period's results of the discontinued operations
against the allowance, re-estimates future losses, and adjusts the
provisions, if appropriate. Additionally, as part of the Company's
annual planning process which takes place in the fourth
F-24
<PAGE>
quarter of each year, investment and benefit cash flow projections are
prepared. These updated assumptions and estimates resulted in the need
to strengthen the loss provisions by $129.0 million, resulting in a
post-tax charge of $83.8 million to discontinued operations' results in
the fourth quarter of 1996.
Management believes the loss provisions for Wind-Up Annuities and GIC
contracts at December 31, 1996 are adequate to provide for all future
losses; however, the determination of loss provisions continues to
involve numerous estimates and subjective judgments regarding the
expected performance of discontinued operations investment assets.
There can be no assurance the losses provided for will not differ from
the losses ultimately realized. To the extent actual results or future
projections of the discontinued operations differ from management's
current best estimates and assumptions underlying the loss provisions,
the difference would be reflected in the consolidated statements of
earnings in discontinued operations. In particular, to the extent
income, sales proceeds and holding periods for equity real estate
differ from management's previous assumptions, periodic adjustments to
the loss provisions are likely to result.
In January 1995, continuing operations transferred $1,215.4 million in
cash to the GIC Segment in settlement of its obligation to provide
assets to fund the accumulated deficit of the GIC Segment.
Subsequently, the GIC Segment remitted $1,155.4 million in cash to
continuing operations in partial repayment of borrowings by the GIC
Segment. No gains or losses were recognized on these transactions.
Amounts due to continuing operations at December 31, 1996, consisted of
$1,080.0 million borrowed by the discontinued GIC Segment offset by
$83.8 million representing an obligation of continuing operations to
provide assets to fund the accumulated deficit of the GIC Segment.
Investment income included $88.2 million of interest income for 1994 on
amounts due from continuing operations. Benefits and other deductions
include $114.3 million, $154.6 million and $219.7 million of interest
expense related to amounts borrowed from continuing operations in 1996,
1995 and 1994, respectively.
Valuation allowances amounted to $9.0 million and $19.2 million on
mortgage loans on real estate and $20.4 million and $77.9 million on
equity real estate at December 31, 1996 and 1995, respectively. As of
January 1, 1996, the adoption of SFAS No. 121 resulted in a release of
existing valuation allowances of $71.9 million on equity real estate
and recognition of impairment losses of $69.8 million on real estate
held and used. Writedowns of fixed maturities amounted to $1.6 million,
$8.1 million and $17.8 million for 1996, 1995 and 1994, respectively
and writedowns of equity real estate subsequent to the adoption of SFAS
No. 121 amounted to $12.3 million for 1996.
The fixed maturity portfolio, based on amortized cost, includes $6.2
million and $15.1 million at December 31, 1996 and 1995, respectively,
of restructured securities. These amounts include problem fixed
maturities of $.5 million and $6.1 million at December 31, 1996 and
1995, respectively.
At December 31, 1996 and 1995, problem mortgage loans on real estate
had amortized costs of $7.9 million and $35.4 million, respectively,
and mortgage loans on real estate for which the payment terms have been
restructured had amortized costs of $208.1 million and $289.3 million,
respectively.
F-25
<PAGE>
Impaired mortgage loans (as defined under SFAS No. 114) along with the
related provision for losses were as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1996 1995
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Impaired mortgage loans with provision for losses....... $ 83.5 $ 105.1
Impaired mortgage loans with no provision for losses.... 15.0 18.2
---------------- -----------------
Recorded investment in impaired mortgages............... 98.5 123.3
Provision for losses.................................... 8.8 17.7
---------------- -----------------
Net Impaired Mortgage Loans............................. $ 89.7 $ 105.6
================ =================
</TABLE>
During 1996 and 1995, the GIC Segment's average recorded investment in
impaired mortgage loans was $134.8 million and $177.4 million,
respectively. Interest income recognized on these impaired mortgage
loans totaled $10.1 million and $4.5 million for 1996 and 1995,
respectively, including $7.5 million and $.4 million recognized on a
cash basis.
At December 31, 1996 and 1995, the GIC Segment had $263.0 million and
$310.9 million, respectively, of real estate acquired in satisfaction
of debt.
8) SHORT-TERM AND LONG-TERM DEBT
Short-term and long-term debt consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1996 1995
----------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Short-term debt.................................... $ 174.1 $ -
----------------- -----------------
Long-term debt:
Equitable Life:
6.95% surplus notes scheduled to mature 2005..... 399.4 399.3
7.70% surplus notes scheduled to mature 2015..... 199.6 199.6
Eurodollar notes, 10.5% due 1997................. - 76.2
Zero coupon note, 11.25% due 1997................ - 120.1
Other............................................ .5 16.3
----------------- -----------------
Total Equitable Life......................... 599.5 811.5
----------------- -----------------
Wholly Owned and Joint Venture Real Estate:
Mortgage notes, 4.92% - 12.50% due through 2006.. 968.6 1,084.4
----------------- -----------------
Alliance:
Other............................................ 24.7 3.4
----------------- -----------------
Total long-term debt............................... 1,592.8 1,899.3
----------------- -----------------
Total Short-term and Long-term Debt................ $ 1,766.9 $ 1,899.3
================= =================
</TABLE>
F-26
<PAGE>
Short-term Debt
---------------
Equitable Life has a $350.0 million bank credit facility available to
fund short-term working capital needs and to facilitate the securities
settlement process. The credit facility consists of two types of
borrowing options with varying interest rates. The interest rates are
based on external indices dependent on the type of borrowing and at
December 31, 1996 range from 5.73% (the London Interbank Offering Rate
("LIBOR") plus 22.5 basis points) to 8.25% (the prime rate). There were
no borrowings outstanding under this bank credit facility at December
31, 1996.
Equitable Life has a commercial paper program with an issue limit of
$500.0 million. This program is available for general corporate
purposes used to support Equitable Life's liquidity needs and is
supported by Equitable Life's existing $350.0 million five-year bank
credit facility. There were no borrowings outstanding under this
program at December 31, 1996.
In February 1996, Alliance entered into a new $250.0 million five-year
revolving credit facility with a group of banks which replaced its
$100.0 million revolving credit facility and its $100.0 million
commercial paper back-up revolving credit facility. Under the new
revolving credit facility, the interest rate, at the option of
Alliance, is a floating rate generally based upon a defined prime rate,
a rate related to the LIBOR or the Federal Funds rate. A facility fee
is payable on the total facility. The revolving credit facility will be
used to provide back-up liquidity for commercial paper to be used under
Alliance's $100.0 million commercial paper program, to fund commission
payments to financial intermediaries for the sale of Class B and C
shares under Alliance's mutual fund distribution system, and for
general working capital purposes. As of December 31, 1996, Alliance had
not issued any commercial paper under its $100.0 million commercial
paper program and there were no borrowings outstanding under Alliance's
revolving credit facility.
At December 31, 1996, long-term debt expected to mature in 1997
totaling $174.1 million was reclassified as short-term debt.
Long-term Debt
--------------
Several of the long-term debt agreements have restrictive covenants
related to the total amount of debt, net tangible assets and other
matters. The Company is in compliance with all debt covenants.
On December 18, 1995, Equitable Life issued, in accordance with Section
1307 of the New York Insurance Law, $400.0 million of surplus notes
having an interest rate of 6.95% scheduled to mature in 2005 and $200.0
million of surplus notes having an interest rate of 7.70% scheduled to
mature in 2015 (together, the "Surplus Notes"). Proceeds from the
issuance of the Surplus Notes were $596.6 million, net of related
issuance costs. The unamortized discount on the Surplus Notes was $1.0
million at December 31, 1996. Payments of interest on or principal of
the Surplus Notes are subject to prior approval by the Superintendent.
The Company has pledged real estate, mortgage loans, cash and
securities amounting to $1,406.4 million and $1,629.7 million at
December 31, 1996 and 1995, respectively, as collateral for certain
long-term debt.
At December 31, 1996, aggregate maturities of the long-term debt based
on required principal payments at maturity for 1997 and the succeeding
four years are $494.9 million, $316.7 million, $19.7 million, $5.4
million, $0 million, respectively, and $946.7 million thereafter.
F-27
<PAGE>
9) FEDERAL INCOME TAXES
A summary of the Federal income tax expense (benefit) in the
consolidated statements of earnings is shown below:
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Federal income tax expense (benefit):
Current............................... $ 97.9 $ (11.7) $ 4.0
Deferred.............................. (88.2) 132.2 96.2
----------------- ---------------- -----------------
Total................................... $ 9.7 $ 120.5 $ 100.2
================= ================ =================
</TABLE>
The Federal income taxes attributable to consolidated operations are
different from the amounts determined by multiplying the earnings
before Federal income taxes and minority interest by the expected
Federal income tax rate of 35%. The sources of the difference and the
tax effects of each are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Expected Federal income tax expense..... $ 73.0 $ 173.7 $ 154.5
Non-taxable minority interest........... (28.6) (22.0) (17.6)
Differential earnings amount............ - - (16.8)
Adjustment of tax audit reserves........ 6.9 4.1 (4.6)
Equity in unconsolidated subsidiaries... (32.3) (19.4) (12.5)
Other................................... (9.3) (15.9) (2.8)
----------------- ---------------- -----------------
Federal Income Tax Expense.............. $ 9.7 $ 120.5 $ 100.2
================= ================ =================
</TABLE>
Prior to the date of demutualization, Equitable Life reduced its
deduction for policyholder dividends by the differential earnings
amount. This amount was computed, for each tax year, by multiplying
Equitable Life's average equity base, as determined for tax purposes,
by an estimate of the excess of an imputed earnings rate for stock life
insurance companies over the average mutual life insurance companies'
earnings rate. The differential earnings amount for each tax year was
subsequently recomputed when actual earnings rates were published by
the Internal Revenue Service. As a stock life insurance company,
Equitable Life no longer is required to reduce its policyholder
dividend deduction by the differential earnings amount, but
differential earnings amounts for pre-demutualization years were still
being recomputed in 1994.
The components of the net deferred Federal income tax account are as
follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1996 December 31, 1995
--------------------------------- ---------------------------------
ASSETS LIABILITIES Assets Liabilities
--------------- ---------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
DAC, reserves and reinsurance.......... $ - $ 166.0 $ - $ 304.4
Investments............................ - 328.6 - 326.9
Compensation and related benefits...... 259.2 - 293.0 -
Other.................................. - 1.8 - 32.3
--------------- ---------------- --------------- ---------------
Total.................................. $ 259.2 $ 496.4 $ 293.0 $ 663.6
=============== ================ =============== ===============
</TABLE>
F-28
<PAGE>
The deferred Federal income taxes impacting operations reflect the net
tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts
used for income tax purposes. The sources of these temporary
differences and the tax effects of each are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
DAC, reserves and reinsurance......... $ (156.2) $ 63.3 $ 12.0
Investments........................... 78.6 13.0 89.3
Compensation and related benefits..... 22.3 30.8 10.0
Other................................. (32.9) 25.1 (15.1)
----------------- ---------------- -----------------
Deferred Federal Income Tax
(Benefit) Expense................... $ (88.2) $ 132.2 $ 96.2
================= ================ =================
</TABLE>
The Internal Revenue Service is in the process of examining the Holding
Company's consolidated Federal income tax returns for the years 1989
through 1991. Management believes these audits will have no material
adverse effect on the Company's results of operations.
10) REINSURANCE AGREEMENTS
The Insurance Group assumes and cedes reinsurance with other insurance
companies. The Insurance Group evaluates the financial condition of its
reinsurers to minimize its exposure to significant losses from
reinsurer insolvencies. The effect of reinsurance (excluding group life
and health) is summarized as follows:
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Direct premiums.................................... $ 461.4 $ 474.2 $ 476.7
Reinsurance assumed................................ 177.5 171.3 180.5
Reinsurance ceded.................................. (41.3) (38.7) (31.6)
----------------- ---------------- -----------------
Premiums........................................... $ 597.6 $ 606.8 $ 625.6
================= ================ =================
Universal Life and Investment-type Product
Policy Fee Income Ceded.......................... $ 48.2 $ 44.0 $ 27.5
================= ================ =================
Policyholders' Benefits Ceded...................... $ 54.1 $ 48.9 $ 20.7
================= ================ =================
Interest Credited to Policyholders' Account
Balances Ceded................................... $ 32.3 $ 28.5 $ 25.4
================= ================ =================
</TABLE>
Effective January 1, 1994, all in force business above $5.0 million was
reinsured. During 1996, the Company's retention limit on joint
survivorship policies was increased to $15.0 million. The Insurance
Group also reinsures the entire risk on certain substandard
underwriting risks as well as in certain other cases.
The Insurance Group cedes 100% of its group life and health business to
a third party insurance company. Premiums ceded totaled $2.4 million,
$260.6 million and $241.0 million for 1996, 1995 and 1994,
respectively. Ceded death and disability benefits totaled $21.2
million, $188.1 million and $235.5 million for 1996, 1995 and 1994,
respectively. Insurance liabilities ceded totaled $652.4 million and
$724.2 million at December 31, 1996 and 1995, respectively.
F-29
<PAGE>
11) EMPLOYEE BENEFIT PLANS
The Company sponsors qualified and non-qualified defined benefit plans
covering substantially all employees (including certain qualified
part-time employees), managers and certain agents. The pension plans
are non-contributory. Equitable Life's and EREIM's benefits are based
on a cash balance formula or years of service and final average
earnings, if greater, under certain grandfathering rules in the plans.
Alliance's benefits are based on years of credited service, average
final base salary and primary social security benefits. The Company's
funding policy is to make the minimum contribution required by the
Employee Retirement Income Security Act of 1974.
Components of net periodic pension cost (credit) for the qualified and
non-qualified plans are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 33.8 $ 30.0 $ 30.3
Interest cost on projected benefit obligations..... 120.8 122.0 111.0
Actual return on assets............................ (181.4) (309.2) 24.4
Net amortization and deferrals..................... 43.4 155.6 (142.5)
----------------- ---------------- -----------------
Net Periodic Pension Cost (Credit)................. $ 16.6 $ (1.6) $ 23.2
================= ================ =================
</TABLE>
The funded status of the qualified and non-qualified pension plans is
as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1996 1995
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Actuarial present value of obligations:
Vested.................................................. $ 1,672.2 $ 1,642.4
Non-vested.............................................. 10.1 10.9
---------------- -----------------
Accumulated Benefit Obligation............................ $ 1,682.3 $ 1,653.3
================ =================
Plan assets at fair value................................. $ 1,626.0 $ 1,503.8
Projected benefit obligation.............................. 1,765.5 1,743.0
---------------- -----------------
Projected benefit obligation in excess of plan assets..... (139.5) (239.2)
Unrecognized prior service cost........................... (17.9) (25.5)
Unrecognized net loss from past experience different
from that assumed....................................... 280.0 368.2
Unrecognized net asset at transition...................... 4.7 (7.3)
Additional minimum liability.............................. (19.3) (51.9)
---------------- -----------------
Prepaid Pension Cost...................................... $ 108.0 $ 44.3
================ =================
</TABLE>
The discount rate and rate of increase in future compensation levels
used in determining the actuarial present value of projected benefit
obligations were 7.5% and 4.25%, respectively, at December 31, 1996 and
7.25% and 4.50%, respectively, at December 31, 1995. As of January 1,
1996 and 1995, the expected long-term rate of return on assets for the
retirement plan was 10.25% and 11%, respectively.
F-30
<PAGE>
The Company recorded, as a reduction of shareholder's equity, an
additional minimum pension liability of $12.9 million and $35.1
million, net of Federal income taxes, at December 31, 1996 and 1995,
respectively, representing the excess of the accumulated benefit
obligation over the fair value of plan assets and accrued pension
liability.
The pension plan's assets include corporate and government debt
securities, equity securities, equity real estate and shares of Group
Trusts managed by Alliance.
Prior to 1987, the qualified plan funded participants' benefits through
the purchase of non-participating annuity contracts from Equitable
Life. Benefit payments under these contracts were approximately $34.7
million, $36.4 million and $38.1 million for 1996, 1995 and 1994,
respectively.
The Company provides certain medical and life insurance benefits
(collectively, "postretirement benefits") for qualifying employees,
managers and agents retiring from the Company on or after attaining age
55 who have at least 10 years of service. The life insurance benefits
are related to age and salary at retirement. The costs of
postretirement benefits are recognized in accordance with the
provisions of SFAS No. 106. The Company continues to fund
postretirement benefits costs on a pay-as-you-go basis and, for 1996,
1995 and 1994, the Company made estimated postretirement benefits
payments of $18.9 million, $31.1 million and $29.8 million,
respectively.
The following table sets forth the postretirement benefits plan's
status, reconciled to amounts recognized in the Company's consolidated
financial statements:
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 5.3 $ 4.0 $ 3.9
Interest cost on accumulated postretirement
benefits obligation.............................. 34.6 34.7 28.6
Net amortization and deferrals..................... 2.4 (2.3) (3.9)
----------------- ---------------- -----------------
Net Periodic Postretirement Benefits Costs......... $ 42.3 $ 36.4 $ 28.6
================= ================ =================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1996 1995
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Accumulated postretirement benefits obligation:
Retirees................................................ $ 381.8 $ 391.8
Fully eligible active plan participants................. 50.7 50.4
Other active plan participants.......................... 60.7 64.2
---------------- -----------------
493.2 506.4
Unrecognized prior service cost........................... 50.5 56.3
Unrecognized net loss from past experience different
from that assumed and from changes in assumptions....... (150.5) (181.3)
---------------- -----------------
Accrued Postretirement Benefits Cost...................... $ 393.2 $ 381.4
================ =================
</TABLE>
F-31
<PAGE>
At January 1, 1994, medical benefits available to retirees under age 65
are the same as those offered to active employees and medical benefits
will be limited to 200% of 1993 costs for all participants.
The assumed health care cost trend rate used in measuring the
accumulated postretirement benefits obligation was 9.5% in 1996,
gradually declining to 3.5% in the year 2009 and in 1995 was 10%,
gradually declining to 3.5% in the year 2008. The discount rate used in
determining the accumulated postretirement benefits obligation was
7.50% and 7.25% at December 31, 1996 and 1995, respectively.
If the health care cost trend rate assumptions were increased by 1%,
the accumulated postretirement benefits obligation as of December 31,
1996 would be increased 7%. The effect of this change on the sum of the
service cost and interest cost would be an increase of 8%.
12) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivatives
-----------
The Insurance Group primarily uses derivatives for asset/liability risk
management and for hedging individual securities. Derivatives mainly
are utilized to reduce the Insurance Group's exposure to interest rate
fluctuations. Accounting for interest rate swap transactions is on an
accrual basis. Gains and losses related to interest rate swap
transactions are amortized as yield adjustments over the remaining life
of the underlying hedged security. Income and expense resulting from
interest rate swap activities are reflected in net investment income.
The notional amount of matched interest rate swaps outstanding at
December 31, 1996 was $649.9 million. The average unexpired terms at
December 31, 1996 range from 2.2 to 2.7 years. At December 31, 1996,
the cost of terminating outstanding matched swaps in a loss position
was $8.3 million and the unrealized gain on outstanding matched swaps
in a gain position was $11.4 million. The Company has no intention of
terminating these contracts prior to maturity. During 1996, 1995 and
1994, net gains (losses) of $.2 million, $1.4 million and $(.2)
million, respectively, were recorded in connection with interest rate
swap activity. Equitable Life has implemented an interest rate cap
program designed to hedge crediting rates on interest-sensitive
individual annuities contracts. The outstanding notional amounts at
December 31, 1996 of contracts purchased and sold were $5,050.0 million
and $500.0 million, respectively. The net premium paid by Equitable
Life on these contracts was $22.5 million and is being amortized
ratably over the contract periods ranging from 3 to 5 years. Income and
expense resulting from this program are reflected as an adjustment to
interest credited to policyholders' account balances.
Substantially all of DLJ's business related to derivatives is by its
nature trading activities which are primarily for the purpose of
customer accommodations. DLJ's derivative activities consist primarily
of option writing and trading in forward and futures contracts.
Derivative financial instruments have both on-and-off balance sheet
implications depending on the nature of the contracts. DLJ's
involvement in swap contracts is not significant.
Fair Value of Financial Instruments
-----------------------------------
The Company defines fair value as the quoted market prices for those
instruments that are actively traded in financial markets. In cases
where quoted market prices are not available, fair values are estimated
using present value or other valuation techniques. The fair value
estimates are made at a specific point in time, based on available
market information and judgments about the financial instrument,
including estimates of timing, amount of expected future cash flows and
the credit standing of counterparties. Such estimates do not reflect
any premium or discount that could result from offering for sale at one
time the Company's entire holdings of a particular financial
instrument, nor do they consider the tax impact of the realization of
F-32
<PAGE>
unrealized gains or losses. In many cases, the fair value estimates
cannot be substantiated by comparison to independent markets, nor can
the disclosed value be realized in immediate settlement of the
instrument.
Certain financial instruments are excluded, particularly insurance
liabilities other than financial guarantees and investment contracts.
Fair market value of off-balance-sheet financial instruments of the
Insurance Group was not material at December 31, 1996 and 1995.
Fair value for mortgage loans on real estate are estimated by
discounting future contractual cash flows using interest rates at which
loans with similar characteristics and credit quality would be made.
Fair values for foreclosed mortgage loans and problem mortgage loans
are limited to the estimated fair value of the underlying collateral if
lower.
The estimated fair values for the Company's liabilities under GIC and
association plan contracts are estimated using contractual cash flows
discounted based on the T. Rowe Price GIC Index Rate for the
appropriate duration. For durations in excess of the published index
rate, the appropriate Treasury rate is used plus a spread equal to the
longest duration GIC rate spread published.
The estimated fair values for those group annuity contracts which are
classified as universal life type contracts are measured at the
estimated fair value of the underlying assets. The estimated fair
values for single premium deferred annuities ("SPDA") are estimated
using projected cash flows discounted at current offering rates. The
estimated fair values for supplementary contracts not involving life
contingencies ("SCNILC") and annuities certain are derived using
discounted cash flows based upon the estimated current offering rate.
Fair value for long-term debt is determined using published market
values, where available, or contractual cash flows discounted at market
interest rates. The estimated fair values for non-recourse mortgage
debt are determined by discounting contractual cash flows at a rate
which takes into account the level of current market interest rates and
collateral risk. The estimated fair values for recourse mortgage debt
are determined by discounting contractual cash flows at a rate based
upon current interest rates of other companies with credit ratings
similar to the Company. The Company's fair value of short-term
borrowings approximates their carrying value.
F-33
<PAGE>
The following table discloses carrying value and estimated fair value
for financial instruments not otherwise disclosed in Notes 3, 6 and 7:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------------
1996 1995
--------------------------------- ---------------------------------
CARRYING ESTIMATED Carrying Estimated
VALUE FAIR VALUE Value Fair Value
--------------- ---------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Consolidated Financial Instruments:
-----------------------------------
Mortgage loans on real estate.......... $ 3,133.0 $ 3,394.6 $ 3,638.3 $ 3,973.6
Other joint ventures................... 467.0 467.0 492.7 492.7
Policy loans........................... 2,196.1 2,221.6 1,976.4 2,057.5
Policyholders' account balances:
Association plans.................... 78.1 77.3 101.0 100.0
Group annuity contracts.............. 2,141.0 1,954.0 2,335.0 2,395.0
SPDA................................. 1,062.7 1,065.7 1,265.8 1,272.0
Annuities certain and SCNILC......... 654.9 736.2 646.4 716.7
Long-term debt......................... 1,592.8 1,557.7 1,899.3 1,962.9
Closed Block Financial Instruments:
-----------------------------------
Mortgage loans on real estate.......... 1,380.7 1,425.6 1,368.8 1,461.4
Other equity investments............... 105.0 105.0 151.6 151.6
Policy loans........................... 1,765.9 1,798.0 1,797.2 1,891.4
SCNILC liability....................... 30.6 34.9 34.8 39.6
GIC Segment Financial Instruments:
----------------------------------
Mortgage loans on real estate.......... 1,111.1 1,220.3 1,485.8 1,666.1
Fixed maturities....................... 42.5 42.5 107.4 107.4
Other equity investments............... 300.5 300.5 455.9 455.9
Guaranteed interest contracts.......... 290.7 300.5 329.0 352.0
Long-term debt......................... 102.1 102.2 135.1 136.0
</TABLE>
13) COMMITMENTS AND CONTINGENT LIABILITIES
The Company has provided, from time to time, certain guarantees or
commitments to affiliates, investors and others. These arrangements
include commitments by the Company, under certain conditions: to make
capital contributions of up to $244.9 million to affiliated real estate
joint ventures; to provide equity financing to certain limited
partnerships of $205.8 million at December 31, 1996, under existing
loan or loan commitment agreements; and to provide short-term financing
loans which at December 31, 1996 totaled $14.6 million. Management
believes the Company will not incur any material losses as a result of
these commitments.
F-34
<PAGE>
Equitable Life is the obligor under certain structured settlement
agreements which it had entered into with unaffiliated insurance
companies and beneficiaries. To satisfy its obligations under these
agreements, Equitable Life owns single premium annuities issued by
previously wholly owned life insurance subsidiaries. Equitable Life has
directed payment under these annuities to be made directly to the
beneficiaries under the structured settlement agreements. A contingent
liability exists with respect to these agreements should the previously
wholly owned subsidiaries be unable to meet their obligations.
Management believes the satisfaction of those obligations by Equitable
Life is remote.
At December 31, 1996, the Insurance Group had $51.6 million of letters
of credit outstanding.
14) LITIGATION
A number of lawsuits has been filed against life and health insurers in
the jurisdictions in which Equitable Life and its subsidiaries do
business involving insurers' sales practices, alleged agent misconduct,
failure to properly supervise agents, and other matters. Some of the
lawsuits have resulted in the award of substantial judgments against
other insurers, including material amounts of punitive damages, or in
substantial settlements. In some states, juries have substantial
discretion in awarding punitive damages. Equitable Life, EVLICO and The
Equitable of Colorado, Inc. ("EOC"), like other life and health
insurers, from time to time are involved in such litigation. To date,
no such lawsuit has resulted in an award or settlement of any material
amount against the Company. Among litigations pending against Equitable
Life, EVLICO and EOC of the type referred to in this paragraph are the
litigations described in the following eight paragraphs.
An action entitled Golomb et al. v. The Equitable Life Assurance
Society of the United States was filed on January 20, 1995 in New York
County Supreme Court. The action purports to be brought on behalf of a
class of persons insured after 1983 under Lifetime Guaranteed Renewable
Major Medical Insurance Policies issued by Equitable Life (the
"policies"). The complaint alleges that premium increases for these
policies after 1983, all of which were filed with and approved by the
New York State Insurance Department and certain other state insurance
departments, breached the terms of the policies, and that statements in
the policies and elsewhere concerning premium increases constituted
fraudulent concealment, misrepresentations in violation of New York
Insurance Law Section 4226 and deceptive practices under New York
General Business Law Section 349. The complaint seeks a declaratory
judgment, injunctive relief restricting the methods by which Equitable
Life increases premiums on the policies in the future, a refund of
premiums, and punitive damages. Plaintiffs also have indicated that
they will seek damages in an unspecified amount. Equitable Life moved
to dismiss the complaint in its entirety on the grounds that it fails
to state a claim and that uncontroverted documentary evidence
establishes a complete defense to the claims. On May 29, 1996, the New
York County Supreme Court entered a judgment dismissing the complaint
with prejudice. Plaintiffs have filed a notice of appeal of that
judgment.
In January 1996, separate actions were filed in Pennsylvania and Texas
state courts (entitled, respectively, Malvin et al. v. The Equitable
Life Assurance Society of the United States and Bowler et al. v. The
Equitable Life Assurance Society of the United States), making claims
similar to those in the New York action described above. The Texas
action also claims that Equitable Life misrepresented to Texas
policyholders that the Texas Insurance Department had approved
Equitable Life's rate increases. These actions are asserted on behalf
of proposed classes of Pennsylvania issued or renewed policyholders and
Texas issued or renewed policyholders, insured under the policies. The
Pennsylvania and Texas actions seek compensatory and punitive damages
and injunctive relief restricting the methods by which Equitable Life
increases premiums in the future based on the common law and statutes
of those states. On February 9, 1996, Equitable Life removed the
Pennsylvania action, Malvin, to the United States District Court for
the Middle District of Pennsylvania. Following the decision granting
Equitable Life's motion to dismiss the New York action
F-35
<PAGE>
(Golomb), on the consent of the parties the District Court ordered an
indefinite stay of all proceedings in the Pennsylvania action, pending
either party's right to reinstate the proceeding, and ordered that for
administrative purposes the case be deemed administratively closed. On
February 2, 1996, Equitable Life removed the Texas action, Bowler, to
the United States District Court for the Northern District of Texas. On
May 20, 1996, the plaintiffs in Bowler amended their complaint by
adding allegations of misrepresentation regarding premium increases on
other types of guaranteed renewable major medical insurance policies
issued by Equitable Life up to and including 1983. On July 1, 1996,
Equitable Life filed a motion for summary judgment dismissing the first
amended complaint in its entirety. In August, 1996, the court granted
plaintiffs leave to file a supplemental complaint on behalf of a
proposed class of Texas policyholders claiming unfair discrimination,
breach of contract and other claims arising out of alleged differences
between premiums charged to Texas policyholders and premiums charged to
similarly situated policyholders in New York and certain other states.
Plaintiffs seek refunds of alleged overcharges, exemplary or additional
damages citing Texas statutory provisions which among other things,
permit two times the amount of actual damage plus additional penalties
if the acts complained of are found to be knowingly committed, and
injunctive relief. Equitable Life has also filed a motion for summary
judgment dismissing the supplemental complaint in its entirety.
Plaintiffs also obtained permission to add another plaintiff to the
first amended and supplemental complaints. Plaintiffs have opposed both
motions for summary judgment and requested that certain issues be found
in their favor. Equitable Life is in the process of replying.
On May 22, 1996, a separate action entitled Bachman v. The Equitable
Life Assurance Society of the United States, was filed in Florida state
court making claims similar to those in the previously reported Golomb
action. The Florida action is asserted on behalf of a proposed class of
Florida issued or renewed policyholders insured after 1983 under
Lifetime Guaranteed Renewable Major Medical Insurance Policies issued
by Equitable Life. The Florida action seeks compensatory and punitive
damages and injunctive relief restricting the methods by which
Equitable Life increases premiums in the future based on various common
law claims. On June 20, 1996, Equitable Life removed the Florida action
to Federal court. Equitable Life has answered the complaint, denying
the material allegations and asserting certain affirmative defenses. On
December 6, 1996, Equitable Life filed a motion for summary judgment
and plaintiff is expected to file its response to that motion shortly.
On November 6, 1996, a proposed class action entitled Fletcher, et al.
v. The Equitable Life Assurance Society of the United States, was filed
in California Superior Court for Fresno County, making substantially
the same allegations concerning premium rates and premium rate
increases on guaranteed renewable policies made in the Bowler action.
The complaint alleges, among other things, that differentials between
rates charged California policyholders and policyholders in New York
and certain other states, and the methods used by Equitable Life to
calculate premium increases, breached the terms of its policies, that
Equitable Life misrepresented and concealed the facts pertaining to
such differentials and methods in violation of California law, and that
Equitable Life also misrepresented that its rate increases were
approved by the California Insurance Department. Plaintiffs seek
compensatory damages in an unspecified amount, rescission, injunctive
relief and attorneys' fees. Equitable Life removed the action to
Federal court; plaintiff has moved to remand the case to state court.
Although the outcome of any litigation cannot be predicted with
certainty, particularly in the early stages of an action, the Company's
management believes that the ultimate resolution of the Golomb, Malvin,
Bowler, Bachman and Fletcher litigations should not have a material
adverse effect on the financial position of the Company. Due to the
early stage of such litigations, the Company's management cannot make
an estimate of loss, if any, or predict whether or not such litigations
will have a material adverse effect on the Company's results of
operations in any particular period.
F-36
<PAGE>
An action was instituted on April 6, 1995 against Equitable Life and
its wholly owned subsidiary, EOC, in New York state court, entitled
Sidney C. Cole et al. v. The Equitable Life Assurance Society of the
United States and The Equitable of Colorado, Inc., No. 95/108611 (N. Y.
County). The action is brought by the holders of a joint survivorship
whole life policy issued by EOC. The action purports to be on behalf of
a class consisting of all persons who from January 1, 1984 purchased
life insurance policies sold by Equitable Life and EOC based upon their
allegedly uniform sales presentations and policy illustrations. The
complaint puts in issue various alleged sales practices that plaintiffs
assert, among other things, misrepresented the stated number of years
that the annual premium would need to be paid. Plaintiffs seek damages
in an unspecified amount, imposition of a constructive trust, and seek
to enjoin Equitable Life and EOC from engaging in the challenged sales
practices. On June 28, 1996, the court issued a decision and order
dismissing with prejudice plaintiff's causes of action for fraud,
constructive fraud, breach of fiduciary duty, negligence, and unjust
enrichment, and dismissing without prejudice plaintiff's cause of
action under the New York State consumer protection statute. The only
remaining causes of action are for breach of contract and negligent
misrepresentation. Plaintiffs made a motion for reargument with respect
to this order, which was submitted to the court in October 1996. This
motion was denied by the court on December 16, 1996.
On May 21, 1996, an action entitled Elton F. Duncan, III v. The
Equitable Life Assurance Society of the United States, was commenced
against Equitable Life in the Civil District Court for the Parish of
Orleans, State of Louisiana. The action is brought by an individual who
purchased a whole life policy. Plaintiff alleges misrepresentations
concerning the extent to which the policy was a proper replacement
policy and the number of years that the annual premium would need to be
paid. Plaintiff purports to represent a class consisting of all persons
who purchased whole life or universal life insurance policies from
Equitable Life from January 1, 1982 to the present. Plaintiff seeks
damages, including punitive damages, in an unspecified amount. On July
26, 1996, an action entitled Michael Bradley v. Equitable Variable Life
Insurance Company, was commenced in New York state court. The action is
brought by the holder of a variable life insurance policy issued by
EVLICO. The plaintiff purports to represent a class consisting of all
persons or entities who purchased one or more life insurance policies
issued by EVLICO from January 1, 1980. The complaint puts at issue
various alleged sales practices and alleges misrepresentations
concerning the extent to which the policy was a proper replacement
policy and the number of years that the annual premium would need to be
paid. Plaintiff seeks damages, including punitive damages, in an
unspecified amount and also seeks injunctive relief prohibiting EVLICO
from canceling policies for failure to make premium payments beyond the
alleged stated number of years that the annual premium would need to be
paid. On September 21, 1996 Equitable Life, EVLICO and EOC made a
motion to have this proceeding moved from Kings County Supreme Court to
New York County for joint trial or consolidation with the Cole action.
The motion was denied by the court on January 9, 1997. On January 10,
1997, plaintiffs moved for certification of a nationwide class
consisting of all persons or entities who were sold one or more life
insurance products on a "vanishing premium" basis and/or were allegedly
induced to purchase additional policies from EVLICO, using the cash
value accumulated in existing policies, from January 1, 1980 through
and including December 31, 1996. Plaintiffs further moved to have
Michael Bradley designated as the class representative. Discovery
regarding class certification is underway.
On December 12, 1996, an action entitled Robert E. Dillon v. The
Equitable Life Assurance Society of the United States and The Equitable
of Colorado, was commenced in the United States District Court for the
Southern District of Florida. The action is brought by an individual
who purchased a joint whole life policy from EOC. The complaint puts at
issue various alleged sales practices and alleges misrepresentations
concerning the alleged impropriety of replacement policies issued by
Equitable Life and EOC and alleged misrepresentations regarding the
number of years premiums would have to be paid on the defendants'
policies. Plaintiff brings claims for breach of contract, fraud,
negligent misrepresentation, money had and received, unjust enrichment
and imposition of a constructive trust. Plaintiff purports to represent
two classes
F-37
<PAGE>
of persons. The first is a "contract class," consisting of all persons
who purchased whole or universal life insurance policies from Equitable
Life and EOC and from whom Equitable Life and EOC have sought
additional payments beyond the number of years allegedly promised by
Equitable Life and EOC. The second is a "fraud class," consisting of
all persons with an interest in policies issued by Equitable Life and
EOC at any time since October 1, 1986. Plaintiff seeks damages in an
unspecified amount, and also seeks injunctive relief attaching
Equitable Life's and EOC's profits from their alleged sales practices.
Equitable Life's and EOC's time to answer or move with respect to the
complaint has been extended until February 24, 1997. Although the
outcome of litigation cannot be predicted with certainty, particularly
in the early stages of an action, the Company's management believes
that the ultimate resolution of the Cole, Duncan, Bradley and Dillon
litigations should not have a material adverse effect on the financial
position of the Company. Due to the early stages of such litigations,
the Company's management cannot make an estimate of loss, if any, or
predict whether or not any such litigation will have a material adverse
effect on the Company's results of operations in any particular period.
On January 3, 1996, an amended complaint was filed in an action
entitled Frank Franze Jr. and George Busher, individually and on behalf
of all others similarly situated v. The Equitable Life Assurance
Society of the United States, and Equitable Variable Life Insurance
Company, No. 94-2036 in the United States District Court for the
Southern District of Florida. The action was brought by two individuals
who purchased variable life insurance policies. The plaintiffs purport
to represent a nationwide class consisting of all persons who purchased
variable life insurance policies from Equitable Life and EVLICO since
September 30, 1991. The basic allegation of the amended complaint is
that Equitable Life's and EVLICO's agents were trained not to disclose
fully that the product being sold was life insurance. Plaintiffs allege
violations of the Federal securities laws and seek rescission of the
contracts or compensatory damages and attorneys' fees and expenses. The
court denied Equitable Life and EVLICO's motion to dismiss the amended
complaint on September 24, 1996. Equitable Life and EVLICO have
answered the amended complaint, denying the material allegations and
asserting certain affirmative defenses. Currently, the parties are
conducting discovery in connection with plaintiffs' attempt to certify
a class. On January 9, 1997, an action entitled Rosemarie Chaviano,
individually and on behalf of all others similarly situated v. The
Equitable Life Assurance Society of the United States, and Equitable
Variable Life Insurance Company, was filed in Massachusetts state court
making claims similar to those in the Franze action and alleging
violations of the Massachusetts securities laws. The plaintiff purports
to represent all persons in Massachusetts who purchased variable life
insurance contracts from Equitable Life and EVLICO from January 9, 1993
to the present. The Massachusetts action seeks rescission of the
contracts or compensatory damages, attorneys' fees, expenses and
injunctive relief. Although the outcome of any litigation cannot be
predicted with certainty, particularly in the early stages of an
action, the Company's management believes that the ultimate resolution
of the litigations discussed in this paragraph should not have a
material adverse effect on the financial position of the Company. Due
to the early stages of such litigation, the Company's management cannot
make an estimate of loss, if any, or predict whether or not any such
litigation will have a material adverse effect on the Company's results
of operations in any particular period.
Equitable Life recently responded to a subpoena from the U.S.
Department of Labor ("DOL") requesting copies of any third-party
appraisals in Equitable Life's possession relating to the ten largest
properties (by value) in the Prime Property Fund ("PPF"). PPF is an
open-end, commingled real estate separate account of Equitable Life for
pension clients. Equitable Life serves as investment manager in PPF and
has retained EREIM as advisor. In early 1995, the DOL commenced a
national investigation of commingled real estate funds with pension
investors, including PPF. The investigation now appears to be focused
principally on appraisal and valuation procedures in respect of fund
properties. The most recent request from the DOL seems to reflect, at
least in part, an interest in the relationship between the valuations
for those properties reflected in appraisals prepared for local
property tax proceedings and the valuations used by PPF for other
F-38
<PAGE>
purposes. At no time has the DOL made any specific allegation that
Equitable Life or EREIM has acted improperly and Equitable Life and
EREIM believe that any such allegation would be without foundation.
While the outcome of this investigation cannot be predicted with
certainty, in the opinion of management, the ultimate resolution of
this matter should not have a material adverse effect on the Company's
consolidated financial position or results of operations in any
particular period.
Equitable Casualty Insurance Company ("Casualty"), an indirect wholly
owned subsidiary of Equitable Life, is party to an arbitration
proceeding that commenced in August 1995. The proceeding relates to a
dispute among Casualty, Houston General Insurance Company ("Houston
General") and GEICO General Insurance Company ("GEICO General")
regarding the interpretation of a reinsurance agreement. The
arbitration panel issued a final award in favor of Casualty and GEICO
General on June 17, 1996. Casualty and GEICO General moved in the
pending Texas state court action, with Houston General's consent, for
an order confirming the arbitration award and entering judgment
dismissing the action. The motion was granted on January 29, 1997. The
parties have also stipulated to the dismissal without prejudice of a
related Texas Federal court action brought by Houston General against
GEICO General and Equitable Life. In connection with confirmation of
the arbitration award, Houston General paid to Casualty approximately
$839,600 in settlement of certain reimbursement claims by Casualty
against Houston General.
On July 25, 1995, a Consolidated and Supplemental Class Action
Complaint ("Complaint") was filed against the Alliance North American
Government Income Trust, Inc. (the "Fund"), Alliance and certain other
defendants affiliated with Alliance, including the Holding Company,
alleging violations of Federal securities laws, fraud and breach of
fiduciary duty in connection with the Fund's investments in Mexican and
Argentine securities. The Complaint, which seeks certification of a
plaintiff class of persons who purchased or owned Class A, B or C
shares of the Fund from March 27, 1992 through December 23, 1994, seeks
an unspecified amount of damages, costs, attorneys' fees and punitive
damages. The principal allegations of the Complaint are that the Fund
purchased debt securities issued by the Mexican and Argentine
governments in amounts that were not permitted by the Fund's investment
objective, and that there was no shareholder vote to change the
investment objective to permit purchases in such amounts. The Complaint
further alleges that the decline in the value of the Mexican and
Argentine securities held by the Fund caused the Fund's net asset value
to decline to the detriment of the Fund's shareholders. On September
26, 1996, the United States District Court for the Southern District of
New York granted the defendants' motion to dismiss all counts of the
complaint. On October 11, 1996, plaintiffs filed a motion for
reconsideration of the court's decision granting defendants' motion to
dismiss the Complaint. On November 25, 1996, the court denied
plaintiffs' motion for reconsideration. On October 29, 1996, plaintiffs
filed a motion for leave to file an amended complaint. The principal
allegations of the proposed amended complaint are that the Fund did not
properly disclose that it planned to invest in mortgage-backed
derivative securities and that two advertisements used by the Fund
misrepresented the risks of investing in the Fund. Plaintiffs also
reiterated allegations in the Complaint that the Fund failed to hedge
against the risks of investing in foreign securities despite
representations that it would do so. Alliance believes that the
allegations in the Complaint are without merit and intends to
vigorously defend against these claims. While the ultimate outcome of
this matter cannot be determined at this time, management of Alliance
does not expect that it will have a material adverse effect on
Alliance's results of operations or financial condition.
On January 26, 1996, a purported purchaser of certain notes and
warrants to purchase shares of common stock of Rickel Home Centers,
Inc. ("Rickel") filed a class action complaint against Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJSC") and certain other
defendants for unspecified compensatory and punitive damages in the
United States District Court for the Southern District of New York. The
suit was brought on behalf of the purchasers of 126,457 units
consisting of $126,457,000 aggregate principal amount of 13 1/2% senior
notes due 2001 and 126,457 warrants to purchase shares of common stock
of Rickel issued
F-39
<PAGE>
by Rickel in October 1994. The complaint alleges violations of Federal
securities laws and common law fraud against DLJSC, as the underwriter
of the units and as an owner of 7.3% of the common stock of Rickel, Eos
Partners, L.P., and General Electric Capital Corporation, each as
owners of 44.2% of the common stock of Rickel, and members of the Board
of Directors of Rickel, including a DLJSC Managing Director. The
complaint seeks to hold DLJSC liable for alleged misstatements and
omissions contained in the prospectus and registration statement filed
in connection with the offering of the units, alleging that the
defendants knew of financial losses and a decline in value of Rickel in
the months prior to the offering and did not disclose such information.
The complaint also alleges that Rickel failed to pay its semi-annual
interest payment due on the units on December 15, 1995 and that Rickel
filed a voluntary petition for reorganization pursuant to Chapter 11 of
the United States Bankruptcy Code on January 10, 1996. DLJSC intends to
defend itself vigorously against all of the allegations contained in
the complaint. Although there can be no assurance, DLJ does not believe
the outcome of this litigation will have a material adverse effect on
its financial condition. Due to the early stage of this litigation,
based on the information currently available to it, DLJ's management
cannot make an estimate of loss, if any, or predict whether or not such
litigation will have a material adverse effect on DLJ's results of
operations in any particular period.
In October 1995, DLJSC was named as a defendant in a purported class
action filed in a Texas State Court on behalf of the holders of $550.0
million principal amount of subordinated redeemable discount debentures
of National Gypsum Corporation ("NGC") canceled in connection with a
Chapter 11 plan of reorganization for NGC consummated in July 1993. The
named plaintiff in the State Court action also filed an adversary
proceeding in the Bankruptcy Court for the Northern District of Texas
seeking a declaratory judgment that the confirmed NGC plan of
reorganization does not bar the class action claims. Subsequent to the
consummation of NGC's plan of reorganization, NGC's shares traded for
values substantially in excess of, and in 1995 NGC was acquired for a
value substantially in excess of, the values upon which NGC's plan of
reorganization was based. The two actions arise out of DLJSC's
activities as financial advisor to NGC in the course of NGC's Chapter
11 reorganization proceedings. The class action complaint alleges that
the plan of reorganization submitted by NGC was based upon projections
by NGC and DLJSC which intentionally understated forecasts, and
provided misleading and incorrect information in order to hide NGC's
true value and that defendants breached their fiduciary duties by,
among other things, providing false, misleading or incomplete
information to deliberately understate the value of NGC. The class
action complaint seeks compensatory and punitive damages purportedly
sustained by the class. The Texas State Court action, which had been
removed to the Bankruptcy Court, has been remanded back to the state
court, which remand is being opposed by DLJSC. DLJSC intends to defend
itself vigorously against all of the allegations contained in the
complaint. Although there can be no assurance, DLJ does not believe
that the ultimate outcome of this litigation will have a material
adverse effect on its financial condition. Due to the early stage of
such litigation, based upon the information currently available to it,
DLJ's management cannot make an estimate of loss, if any, or predict
whether or not such litigation will have a material adverse effect on
DLJ's results of operations in any particular period.
In November and December 1995, DLJSC, along with various other parties,
was named as a defendant in a number of purported class actions filed
in the U.S. District Court for the Eastern District of Louisiana. The
complaints allege violations of the Federal securities laws arising out
of a public offering in 1994 of $435.0 million of first mortgage notes
of Harrah's Jazz Company and Harrah's Jazz Finance Corp. The complaints
seek to hold DLJSC liable for various alleged misstatements and
omissions contained in the prospectus dated November 9, 1994. DLJSC
intends to defend itself vigorously against all of the allegations
contained in the complaints. Although there can be no assurance, DLJ
does not believe that the ultimate outcome of this litigation will have
a material adverse effect on its financial condition. Due to the early
stage of this
F-40
<PAGE>
litigation, based upon the information currently available to it, DLJ's
management cannot make an estimate of loss, if any, or predict whether
or not such litigation will have a material adverse effect on DLJ's
results of operations in any particular period.
In addition to the matters described above, Equitable Life and its
subsidiaries and DLJ and its subsidiaries are involved in various legal
actions and proceedings in connection with their businesses. Some of
the actions and proceedings have been brought on behalf of various
alleged classes of claimants and certain of these claimants seek
damages of unspecified amounts. While the ultimate outcome of such
matters cannot be predicted with certainty, in the opinion of
management no such matter is likely to have a material adverse effect
on the Company's consolidated financial position or results of
operations.
15) LEASES
The Company has entered into operating leases for office space and
certain other assets, principally data processing equipment and office
furniture and equipment. Future minimum payments under noncancelable
leases for 1997 and the succeeding four years are $113.7 million,
$110.6 million, $100.3 million, $72.3 million, $59.3 million and $427.3
million thereafter. Minimum future sublease rental income on these
noncancelable leases for 1997 and the succeeding four years are $9.8
million, $6.0 million, $4.5 million, $2.4 million, $.8 million and $.1
million thereafter.
At December 31, 1996, the minimum future rental income on noncancelable
operating leases for wholly owned investments in real estate for 1997
and the succeeding four years are $263.0 million, $242.1 million,
$219.8 million, $194.3 million, $174.6 million and $847.1 million
thereafter.
16) OTHER OPERATING COSTS AND EXPENSES
Other operating costs and expenses consisted of the following:
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Compensation costs................................. $ 647.3 $ 595.9 $ 687.5
Commissions........................................ 329.5 314.3 313.0
Short-term debt interest expense................... 8.0 11.4 19.0
Long-term debt interest expense.................... 137.3 108.1 98.3
Amortization of policy acquisition costs........... 405.2 317.8 313.4
Capitalization of policy acquisition costs......... (391.9) (391.0) (410.9)
Rent expense, net of sub-lease income.............. 113.7 109.3 116.0
Other.............................................. 798.9 710.0 721.4
----------------- ---------------- -----------------
Total.............................................. $ 2,048.0 $ 1,775.8 $ 1,857.7
================= ================ =================
</TABLE>
During 1996, 1995 and 1994, the Company restructured certain operations
in connection with cost reduction programs and recorded pre-tax
provisions of $24.4 million, $32.0 million and $20.4 million,
respectively. The amounts paid during 1996, associated with cost
reduction programs, totaled $17.7 million. At December 31, 1996, the
liabilities associated with cost reduction programs amounted to $44.5
million. The 1996 cost reduction program included restructuring costs
related to the consolidation of insurance operations' service centers.
The 1995 cost reduction program included relocation expenses, including
the accelerated amortization of building improvements associated with
the relocation of the home office. The 1994 cost
F-41
<PAGE>
reduction program included costs associated with the termination of
operating leases and employee severance benefits in connection with the
consolidation of 16 insurance agencies. Amortization of DAC included
$145.0 million writeoff of DAC related to DI contracts in the fourth
quarter of 1996.
17) INSURANCE GROUP STATUTORY FINANCIAL INFORMATION
Equitable Life is restricted as to the amounts it may pay as dividends
to the Holding Company. Under the New York Insurance Law, the
Superintendent has broad discretion to determine whether the financia1
condition of a stock life insurance company would support the payment
of dividends to its shareholders. For 1996, 1995 and 1994, statutory
net (loss) earnings totaled $(351.1) million, $(352.4) million and
$67.5 million, respectively. No amounts are expected to be available
for dividends from Equitable Life to the Holding Company in 1997.
At December 31, 1996, the Insurance Group, in accordance with various
government and state regulations, had $21.9 million of securities
deposited with such government or state agencies.
Accounting practices used to prepare statutory financial statements for
regulatory filings of stock life insurance companies differ in certain
instances from GAAP. The New York Insurance Department (the
"Department") recognizes only statutory accounting practices for
determining and reporting the financial condition and results of
operations of an insurance company, for determining its solvency under
the New York Insurance Law, and for determining whether its financial
condition warrants the payment of a dividend to its stockholders. No
consideration is given by the Department to financial statements
prepared in accordance with GAAP in making such determinations. The
following reconciles the Company's statutory change in surplus and
capital stock and statutory surplus and capital stock determined in
accordance with accounting practices prescribed by the Department with
net earnings and equity on a GAAP basis.
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Net change in statutory surplus and capital stock.. $ 56.0 $ 78.1 $ 292.4
Change in asset valuation reserves................. (48.4) 365.7 (285.2)
----------------- ---------------- -----------------
Net change in statutory surplus, capital stock
and asset valuation reserves..................... 7.6 443.8 7.2
Adjustments:
Future policy benefits and policyholders'
account balances............................... (298.5) (66.0) (5.3)
DAC.............................................. (13.3) 73.2 97.5
Deferred Federal income taxes.................... 108.0 (158.1) (58.7)
Valuation of investments......................... 289.8 189.1 45.2
Valuation of investment subsidiary............... (117.7) (188.6) 396.6
Limited risk reinsurance......................... 92.5 416.9 74.9
Contribution from the Holding Company............ - - (300.0)
Issuance of surplus notes........................ - (538.9) -
Postretirement benefits.......................... 28.9 (26.7) 17.1
Other, net....................................... 12.4 115.1 (44.0)
GAAP adjustments of Closed Block................. (9.8) 15.7 (9.5)
GAAP adjustments of discontinued GIC
Segment........................................ (89.6) 37.3 42.8
----------------- ---------------- -----------------
Net Earnings of the Insurance Group................ $ 10.3 $ 312.8 $ 263.8
================= ================ =================
</TABLE>
F-42
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Statutory surplus and capital stock................ $ 2,258.9 $ 2,202.9 $ 2,124.8
Asset valuation reserves........................... 1,297.5 1,345.9 980.2
----------------- ---------------- -----------------
Statutory surplus, capital stock and asset
valuation reserves............................... 3,556.4 3,548.8 3,105.0
Adjustments:
Future policy benefits and policyholders'
account balances............................... (1,305.0) (1,006.5) (940.5)
DAC.............................................. 3,104.9 3,075.8 3,219.4
Deferred Federal income taxes.................... (306.1) (452.0) (29.4)
Valuation of investments......................... 286.8 417.7 (794.1)
Valuation of investment subsidiary............... (782.8) (665.1) (476.5)
Limited risk reinsurance......................... (336.5) (429.0) (845.9)
Issuance of surplus notes........................ (539.0) (538.9) -
Postretirement benefits.......................... (314.4) (343.3) (316.6)
Other, net....................................... 126.3 4.4 (79.2)
GAAP adjustments of Closed Block................. 783.7 830.8 740.4
GAAP adjustments of discontinued GIC
Segment........................................ (190.3) (184.6) (221.9)
----------------- ---------------- -----------------
Equity of the Insurance Group...................... $ 4,084.0 $ 4,258.1 $ 3,360.7
================= ================ =================
</TABLE>
18) BUSINESS SEGMENT INFORMATION
The Company has two major business segments: Insurance Operations and
Investment Services. Interest expense related to debt not specific to
either business segment is presented as Corporate interest expense.
Information for all periods is presented on a comparable basis.
The Insurance Operations segment offers a variety of traditional,
variable and interest-sensitive life insurance products, disability
income, annuity products, mutual fund and other investment products to
individuals and small groups and administers traditional participating
group annuity contracts with conversion features, generally for
corporate qualified pension plans, and association plans which provide
full service retirement programs for individuals affiliated with
professional and trade associations. This segment includes Separate
Accounts for individual insurance and annuity products.
The Investment Services segment provides investment fund management,
primarily to institutional clients. This segment includes the Company's
equity interest in DLJ and Separate Accounts which provide various
investment options for group clients through pooled or single group
accounts.
Intersegment investment advisory and other fees of approximately $127.5
million, $124.1 million and $135.3 million for 1996, 1995 and 1994,
respectively, are included in total revenues of the Investment Services
segment. These fees, excluding amounts related to the discontinued GIC
Segment of $15.7 million, $14.7 million and $27.4 million for 1996,
1995 and 1994, respectively, are eliminated in consolidation.
F-43
<PAGE>
<TABLE>
<CAPTION>
1996 1995 1994
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Insurance operations............................... $ 3,742.9 $ 3,614.6 $ 3,507.4
Investment services................................ 1,126.1 949.1 935.2
Consolidation/elimination.......................... (24.5) (34.9) (27.2)
----------------- ---------------- -----------------
Total.............................................. $ 4,844.5 $ 4,528.8 $ 4,415.4
================= ================ =================
Earnings (loss) from continuing operations
before Federal income taxes, minority interest
and cumulative effect of accounting change
Insurance operations............................... $ (36.6) $ 303.1 $ 327.5
Investment services................................ 311.9 224.0 227.9
Consolidation/elimination.......................... .2 (3.1) .3
----------------- ---------------- -----------------
Subtotal..................................... 275.5 524.0 555.7
Corporate interest expense......................... (66.9) (27.9) (114.2)
----------------- ---------------- -----------------
Total.............................................. $ 208.6 $ 496.1 $ 441.5
================= ================ =================
</TABLE>
DECEMBER 31,
------------------------------------
1996 1995
---------------- -----------------
(IN MILLIONS)
Assets
Insurance operations........... $ 60,464.9 $ 56,720.5
Investment services............ 13,542.5 12,842.9
Consolidation/elimination...... (399.6) (354.4)
---------------- -----------------
Total.......................... $ 73,607.8 $ 69,209.0
================ =================
F-44
<PAGE>
19) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The quarterly results of operations for 1996 and 1995, are summarized
below:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
----------------- ----------------- ------------------ ------------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
1996
----
Total Revenues................ $ 1,169.7 $ 1,193.6 $ 1,193.6 $ 1,287.6
================= ================= ================== ==================
Earnings (Loss) from
Continuing Operations
before Cumulative Effect
of Accounting Change........ $ 94.8 $ 87.1 $ 93.2 $ (157.9)
================= ================= ================== ==================
Net Earnings (Loss)........... $ 71.7 $ 87.1 $ 93.2 $ (241.7)
================= ================= ================== ==================
1995
----
Total Revenues................ $ 1,079.1 $ 1,164.0 $ 1,138.8 $ 1,146.9
================= ================= ================== ==================
Net Earnings.................. $ 66.3 $ 101.7 $ 100.2 $ 44.6
================= ================= ================== ==================
</TABLE>
The quarterly results of operations for 1996 and 1995 have been
restated to reflect the Company's accounting change adopted in the
fourth quarter of 1996 for long-duration participating life contracts
in accordance with the provisions prescribed by SFAS No. 120. Net
earnings for the three months ended December 31, 1996 includes a charge
of $339.3 million related to writeoffs of DAC on DI contracts of $94.3
million, reserve strengthening on DI business of $113.7 million,
pension par of $47.5 million and the discontinued GIC Segment of $83.8
million.
20) INVESTMENT IN DLJ
On December 15, 1993, the Company sold a 61% interest in DLJ to the
Holding Company for $800.0 million in cash and securities. The excess
of the proceeds over the book value in DLJ at the date of sale of
$340.2 million has been reflected as a capital contribution. In 1995,
DLJ completed the initial public offering ("IPO") of 10.58 million
shares of its common stock, which included 7.28 million of the Holding
Company's shares in DLJ, priced at $27 per share. Concurrent with the
IPO, the Company contributed equity securities to DLJ having a market
value of $21.2 million. Upon completion of the IPO, the Company's
ownership percentage was reduced to 36.1%. The Company's ownership
interest will be further reduced upon the issuance of common stock
after the vesting of forfeitable restricted stock units acquired by
and/or the exercise of options granted to certain DLJ employees. DLJ
restricted stock units represents forfeitable rights to receive
approximately 5.2 million shares of DLJ common stock through February
2000.
The results of operations of DLJ are accounted for on the equity basis
and are included in commissions, fees and other income in the
consolidated statements of earnings. The Company's carrying value of
DLJ is included in investment in and loans to affiliates in the
consolidated balance sheets.
F-45
<PAGE>
Summarized balance sheets information for DLJ, reconciled to the
Company's carrying value of DLJ, are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
1996 1995
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Assets:
Trading account securities, at market value............................ $ 15,728.1 $ 10,821.3
Securities purchased under resale agreements........................... 20,598.7 18,748.2
Broker-dealer related receivables...................................... 16,525.9 13,023.7
Other assets........................................................... 2,651.0 1,983.3
---------------- -----------------
Total Assets........................................................... $ 55,503.7 $ 44,576.5
================ =================
Liabilities:
Securities sold under repurchase agreements............................ $ 29,378.3 $ 26,744.8
Broker-dealer related payables......................................... 19,409.7 12,915.5
Short-term and long-term debt.......................................... 2,704.5 1,742.0
Other liabilities...................................................... 2,164.0 1,750.5
---------------- -----------------
Total liabilities...................................................... 53,656.5 43,152.8
Cumulative exchangeable preferred stock................................ - 225.0
DLJ's company-obligated mandatorily redeemed preferred
securities of subsidiary trust holding solely debentures of DLJ...... 200.0 -
Total shareholders' equity............................................. 1,647.2 1,198.7
---------------- -----------------
Total Liabilities, Cumulative Exchangeable Preferred Stock and
Shareholders' Equity................................................. $ 55,503.7 $ 44,576.5
================ =================
DLJ's equity as reported............................................... $ 1,647.2 $ 1,198.7
Unamortized cost in excess of net assets acquired in 1985
and other adjustments................................................ 23.9 40.5
The Holding Company's equity ownership in DLJ.......................... (590.2) (499.0)
Minority interest in DLJ............................................... (588.6) (324.3)
---------------- -----------------
The Company's Carrying Value of DLJ.................................... $ 492.3 $ 415.9
================ =================
</TABLE>
F-46
<PAGE>
Summarized statements of earnings information for DLJ reconciled to the
Company's equity in earnings of DLJ is as follows:
<TABLE>
<CAPTION>
1996 1995
---------------- -----------------
(IN MILLIONS)
<S> <C> <C>
Commission, fees and other income...................................... $ 1,818.2 $ 1,325.9
Net investment income.................................................. 1,074.2 904.1
Dealer, trading and investment gains, net.............................. 598.4 528.6
---------------- -----------------
Total revenues......................................................... 3,490.8 2,758.6
Total expenses including income taxes.................................. 3,199.5 2,579.5
---------------- -----------------
Net earnings........................................................... 291.3 179.1
Dividends on preferred stock........................................... 18.7 19.9
---------------- -----------------
Earnings Applicable to Common Shares................................... $ 272.6 $ 159.2
================ =================
DLJ's earnings applicable to common shares as reported................. $ 272.6 $ 159.2
Amortization of cost in excess of net assets acquired in 1985.......... (3.1) (3.9)
The Holding Company's equity in DLJ's earnings......................... (107.8) (90.4)
Minority interest in DLJ............................................... (73.4) (6.5)
---------------- -----------------
The Company's Equity in DLJ's Earnings................................. $ 88.3 $ 58.4
================ =================
</TABLE>
21) ACCOUNTING FOR STOCK-BASED COMPENSATION
The Holding Company sponsors a stock option plan for employees of
Equitable Life. DLJ and Alliance each sponsor their own stock option
plans for certain employees. The Company elected to continue to account
for stock-based compensation using the intrinsic value method
prescribed in APB Opinion No. 25. Had compensation expense of the
Company's stock option incentive plans for options granted after
December 31, 1994 been determined based on the estimated fair value at
the grant dates for awards under those plans, the Company's pro forma
net earnings for 1996 and 1995 would have been as follows:
1996 1995
--------------- ---------------
(IN MILLIONS)
Net Earnings
As Reported......... $ 10.3 $ 312.8
Pro Forma........... $ 3.2 $ 311.3
F-47
<PAGE>
The fair value of options and units granted after December 31, 1994,
used as a basis for the above pro forma disclosures, was estimated as
of the date of grants using Black-Scholes option pricing models. The
option and unit pricing assumptions for 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
HOLDING COMPANY DLJ ALLIANCE
------------------------- -------------------------- -----------------------------
1996 1995 1996 1995 1996 1995
----------- ----------- ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dividend yield........... 0.80% 0.96% 1.54% 1.85% 8.0% 8.0%
Expected volatility...... 20.00% 20.00% 25.00% 25.00% 23.00% 23.00%
Risk-free interest rate.. 5.92% 6.83% 6.07% 5.86% 5.80% 6.00%
Expected Life............ 5 YEARS 5 years 5 YEARS 5 years 7.43 YEARS 7.43 years
Weighted fair value
per option granted..... $6.94 $5.90 $9.35 - $2.69 $2.24
</TABLE>
A summary of the Holding Company and DLJ stock option plans and
Alliance's Unit option plans are as follows:
<TABLE>
<CAPTION>
HOLDING COMPANY DLJ ALLIANCE
----------------------------- ----------------------------- -----------------------------
Options Options Options
Outstanding Outstanding Outstanding
Weighted Weighted Weighted
Average Average Average
Shares Exercise Shares Exercise Units Exercise
(In Millions) Price (In Millions) Price (In Millions) Price
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance as of
January 1, 1994........ 6.1 - 3.2
Granted................ .7 - 1.2
Exercised.............. - - (.5)
Forfeited.............. - - (.1)
------------- ------------- -------------
Balance as of
December 31, 1994...... 6.8 - 3.8
Granted................ .4 9.2 1.8
Exercised.............. (.1) - (.5)
Expired................ (.1) - -
Forfeited.............. (.3) - (.3)
------------- ------------- -------------
Balance as of
December 31, 1995...... 6.7 $20.27 9.2 $27.00 4.8 $17.72
Granted................ .7 $24.94 2.1 $32.54 .7 $25.12
Exercised.............. (.1) $19.91 - - (.4) $13.64
Expired................ (.6) $20.21 - - - -
Forfeited.............. - - (.2) $27.00 (.1) $19.32
------------- ------------- -------------
Balance as of
December 31, 1996...... 6.7 $20.79 11.1 $28.06 5.0 $19.07
============= ============= ============= ============= ============= =============
</TABLE>
F-48
<PAGE>
Information with respect to stock and unit options outstanding and
exercisable at December 31, 1996 is as follows:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------------------------------------------------------------------- --------------------------------------
Weighted
Average Weighted Weighted
Range of Number Remaining Average Number Average
Exercise Outstanding Contractual Exercise Exercisable Exercise
Prices (In Millions) Life (Years) Price (In Millions) Price
--------------------- ----------------- --------------- ----------------- ------------------- ----------------
<S> <C> <C> <C> <C> <C>
Holding
Company
---------------------
$18.125-$27.75 6.7 7.00 $20.79 3.4 $20.18
================= =============== ================= =================== ================
DLJ
---------------------
$27.00-$33.50 11.1 9.00 $28.06 - -
================= =============== ================= =================== ================
Alliance
---------------------
$ 6.0625-$15.9375 1.3 4.76 $12.97 1.2 $12.58
$16.3125-$19.75 1.1 8.19 $19.13 .2 $18.69
$19.875 -$19.875 1.0 7.36 $19.88 .4 $19.88
$20.75 -$24.375 .9 8.46 $22.05 .3 $21.84
$24.375 -$25.125 .7 9.96 $25.13 - -
----------------- -------------------
$ 6.0625-$25.125 5.0 7.43 $19.07 2.1 $15.84
================= =============== ================= =================== ================
</TABLE>
F-49
<PAGE>
PART C
OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B.
1. Separate Account No. 301:
- Statements of Assets and Liabilities for the Year Ended
December 31, 1996;
- Statements of Operations for the Year Ended December 31, 1996
- Statements of Changes in Net Assets for the Years Ended
December 31, 1996 and 1995
- Notes to Financial Statements
- Report of Independent Accountants - Price Waterhouse
2. The Equitable Life Assurance Society of the United States:
- Report of Independent Accountants - Price Waterhouse
- Consolidated Balance Sheets as of December 31, 1996 and 1995
- Consolidated Statements of Earnings for Years Ended December 31,
1996, 1995 and 1994
- Consolidated Statements of Equity for Years Ended December 31,
1996, 1995 and 1994
- Consolidated Statements of Cash Flows for Years Ended December
31, 1996, 1995 and 1994
- Notes to Consolidated Financial Statements
(b) Exhibits.
The following exhibits are filed herewith:
1. (a) Resolutions of the Board of Directors of The Equitable Life
Assurance Society of the United States ("Equitable")
authorizing the establishment of the Registrant, previously
filed with this Registration Statement No. 2-74667 on
September 19, 1986.
(b) Resolutions of the Board of Directors of Equitable dated
July 17, 1986 authorizing the reorganization of Separate
Account Nos. 301, 302, 303 and 304 into one continuing
separate account, incorporated by reference to Exhibit 1(d)
to the Registration Statement on Form N-14 of Separate
Account 301 of Equitable and Prism Investment Trust
(formerly Harmony Investment Trust) (No. 33-8802).
2. Not applicable.
3. (a) Form of Sales Agreement, previously filed with this
Registration Statement No. 2-74667 on September 19, 1986.
(b) Sales Agreement among Equitable, Separate Account No. 301
and Equitable Variable Life Insurance Company, as principal
underwriter for The Hudson River Trust, previously filed
with this Registration Statement No. 2-74667 on April 29,
1993.
C-1
<PAGE>
(c) Distribution and Servicing Agreement among Equico
Securities, Inc.,("Equico") Equitable and Equitable
Variable dated as of May 1, 1994, previously filed with
this Registration Statement No. 2-74667 on April 4, 1995.
(d) Distribution Agreement by and between The Hudson River
Trust and Equico dated as of January 1, 1995, previously
filed with this Registration Statement No. 2-74667 on April
4, 1995.
(e) Sales Agreement among Equico, Equitable and Equitable's
Separate Account A, Separate Account No. 301 and Separate
Account No. 51 dated as of January 1, 1995, previously
filed with this Registration Statement No. 2-74667 on April
4, 1995.
4. (a) (1) Form of group variable annuity contract, as amended
(TSA), previously filed with this Registration
Statement No. 2-74667 on April 24, 1987.
(2) Rider No. PF 94,177 to group variable annuity contract,
as amended (TSA), previously filed with this
Registration Statement No. 2-74667 on April 15, 1988.
(b) (1) Form of group variable annuity certificate, as amended
(TSA), previously filed with this Registration
Statement No. 2-74667 on April 24, 1987.
(2) Rider No. PF 94,178 to group variable annuity
certificate, as amended (TSA), previously filed with
this Registration Statement No. 2-74667 on April 15,
1988.
(c) (1) Rider No. PF 94,189 to group variable annuity contract,
as amended (TSA), previously filed with this
Registration Statement No. 2-74667 on April 17, 1990.
(2) Rider No. PF 94,188 to group variable annuity
certificate, as amended (TSA), previously filed with
this Registration Statement. No. 2-74667 on April 17,
1990.
(d) (1) Form of group variable annuity contract, as amended
(IRA), previously filed with this Registration
Statement No. 2-74667 on April 24, 1987.
(2) Rider No. PF 96,000 to group variable annuity contract,
as amended (IRA), previously filed with this
Registration Statement No. 2-74667 on April 15, 1988.
(3) Rider No. PF 10,000 to group variable annuity contract,
as amended (IRA), previously filed with this
Registration Statement No. 2-74667 on December 14,
1993.
(e) (1) Form of group variable annuity certificate, as amended
(IRA), previously filed with this Registration
Statement No. 2-74667 on April 24, 1987.
(2) Rider No. PF 96,100 to group variable annuity
certificate, as amended (IRA), previously filed with
this Registration Statement No. 2-74667 on April 15,
1988.
C-2
<PAGE>
(3) Rider No. PF 10,001 to group variable annuity
certificate, as amended (IRA), previously filed with
this Registration Statement No. 2-74667 on December 14,
1993.
(f) Plan of Operations, as amended, previously filed with this
Registration Statement No. 2-74667 on April 24, 1987.
5. (a) Form of application for group variable annuity contract, as
amended (TSA), previously filed with this Registration
Statement No. 2-74667 on April 15, 1988.
(b) Form of participant enrollment for group variable annuity
contract, as amended (IRA), previously filed with this
Registration Statement No. 2-74667 on April 15, 1988.
6. (a) Certificate of incorporation of Equitable incorporated
herein by reference to Exhibit 3(a) to the Registration
Statement on Form S-1 (No. 2-43529).
(b) Copy of the Amended Charter of Equitable, adopted September
21, 1989, previously filed with this Registration Statement
No. 2-74667 on April 28, 1992.
(c) Form of the Charter of Equitable previously filed with this
Registration Statement No. 2-74667 on July 22, 1992.
(d) Copy of the Restated Charter of Equitable, adopted August
6, 1992, previously filed with this Registration Statement
No. 2-74667 on April 29, 1993.
(e) By-Laws of Equitable incorporated herein by reference to
Exhibit 3(b)(2) to Post-Effective Amendment No. 4 to the
Registration Statement in File No. 2-56232.
(f) By-Laws of Equitable as amended January 9, 1985, previously
filed with this Registration Statement No. 2-74667 on
September 19, 1986.
(g) By-Laws of Equitable, as amended through July 1, 1988,
previously filed with this Registration Statement No.
2-74667 on April 19, 1989.
(h) Form of By-Laws of Equitable previously filed with this
Registration Statement No. 2-74667 on July 22, 1992.
(i) By-Laws of Equitable, as amended through July 22, 1992,
previously filed with this Registration Statement No.
2-74667 on April 29, 1993.
(j) Copy of the Certificate of Amendment of the Restated
Charter of Equitable, adopted November 18, 1993, previously
filed with this Registration Statement No. 2-74667 on April
29, 1996.
(h) By-Laws of The Equitable Life Assurance Society of the
United States, as amended November 21, 1996.
C-3
<PAGE>
(i) Copy of the Restated Charter of The Equitable Life
Assurance Society of the United States, as amended January
1, 1997.
7. Not applicable.
8. (a) Agreement, dated as of March 15, 1985, between Integrity
Life Insurance Company ("Integrity") and Equitable for
cooperative and joint use of personnel, property and
services, previously filed with this Registration Statement
No. 2-74667 on September 19, 1986.
(b) Administration and Servicing Agreement, dated as of May 1,
1987, by and between Equitable and Integrity, previously
filed with this Registration Statement No. 2-74667 on May
4, 1987.
(c) Amendment, dated September 30, 1988, to Administration and
Servicing Agreement by and between Equitable and Integrity,
previously filed with this Registration Statement No.
2-74667 on April 19, 1989.
9. (a) Opinion of Hebert P. Shyer, Executive Vice President and
General Counsel of Equitable, previously filed with this
Registration Statement No. 2-74667 on November 6, 1983.
(b) Opinion of Hebert P. Shyer, Executive Vice President and
General Counsel of Equitable, as to the legality of the
securities being registered, previously filed with this
Registration Statement No. 2-74667 on April 24, 1987.
10. (a) Consent of Price Waterhouse LLP.
(b) Powers of Attorney.
11. Not applicable.
12. Not applicable.
13. Not applicable.
27. Financial Data Schedule.
C-4
<PAGE>
Item 25: Directors and Officers of Equitable.
Set forth below is information regarding the directors and principal
officers of Equitable. Equitable's address is 1290 Avenue of the
Americas, New York, New York 10104. The business address of the
persons whose names are preceded by an asterisk is that of Equitable.
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
- ---------------- ---------
DIRECTORS
Claude Bebear Director
AXA-UAP
23, Avenue Matignon
75008 Paris, France
Christopher J. Brocksom Director
AXA Equity & Law
Elbury 9
Weedon Lane
Buckinghamshire HP 6505
England
Francoise Colloc'h Director
AXA-UAP
23, Avenue Matignon
75008 Paris, France
Henri de Castries Director
AXA-UAP
23, Avenue Matignon
75008 Paris, France
Joseph L. Dionne Director
The McGraw-Hill Companies
1221 Avenue of the Americas
New York, NY 10020
William T. Esrey Director
Sprint Corporation
P.O. Box 11315
Kansas City, MO 64112
Jean-Rene Fourtou Director
Rhone-Poulenc S.A.
25 Quai Paul Doumer
92408 Courbevoie Cedex,
France
C-5
<PAGE>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH EQUITABLE
- ---------------- --------------
Norman C. Francis Director
Xavier University of Louisiana
7325 Palmetto Street
New Orleans, LA 70125
Donald J. Greene Director
LeBouef, Lamb, Greene & MacRae
125 West 55th Street
New York, NY 10019-4513
John T. Hartley Director
Harris Corporation
1025 NASA Boulevard
Melbourne, FL 32919
John H.F. Haskell, Jr. Director
Dillion, Read & Co., Inc.
535 Madison Avenue
New York, NY 10028
Mary R. (Nina) Henderson Director
CPC International, Inc.
International Plaza
P.O. Box 8000
Englewood Cliffs, NJ 07632-9976
W. Edwin Jarmain Director
Jarmain Group Inc.
121 King Street West
Suite 2525
Toronto, Ontario M5H 3T9,
Canada
G. Donald Johnston, Jr. Director
184-400 Ocean Road
John's Island
Vero Beach, FL 32963
Winthrop Knowlton Director
Knowlton Brothers, Inc.
530 Fifth Avenue
New York, NY 10036
Arthur L. Liman Director
Paul, Weiss, Rifkind, Wharton &
Garrison
1285 Avenue of the Americas
New York, NY 10019
C-6
<PAGE>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH EQUITABLE
- ---------------- --------------
George T. Lowy Director
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Didier Pineau-Valencienne Director
Schneider S.A.
64/70 Avenue Jean-Baptiste Clement
92646 Boulogne-Billancourt Cedex
France
George J. Sella, Jr. Director
P.O. Box 397
Newton, NJ 07860
Dave H. Williams Director
Alliance Capital Management Corporation
1345 Avenue of the Americas
New York, NY 10105
OFFICER-DIRECTORS
- -----------------
*James M. Benson President and Director (until
5/1/97)
*William T. McCaffrey Senior Executive Vice President,
Chief Operating Officer and Director
*Joseph J. Melone Chairman of the Board, Chief
Executive Officer and Director;
President (effective 5/1/97)
OTHER OFFICERS
- --------------
*A. Frank Beaz Senior Vice President
*Leon Billis Senior Vice President
*Harvey Blitz Senior Vice President and Deputy
Chief Financial Officer
*Kevin R. Byrne Vice President and Treasurer
*Jerry M. de St. Paer Executive Vice President
*Gordon G. Dinsmore Senior Vice President
*Alvin H. Fenichel Senior Vice President and
Controller
C-7
<PAGE>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH EQUITABLE
- ---------------- --------------
*Paul J. Flora Senior Vice President and Auditor
*Robert E. Garber Executive Vice President and General
Counsel
*Donald R. Kaplan Vice President and Chief Compliance
Officer and Associate General
Counsel
*Michael S. Martin Senior Vice President
*Peter D. Noris Executive Vice President and Chief
Investment Officer
*Anthony C. Pasquale Senior Vice President
*Pauline Sherman Vice President, Secretary and
Associate General Counsel
*Samuel B. Shlesinger Senior Vice President
*Richard V. Silver Senior Vice President and Deputy
General Counsel
*Jose Suquet Executive Vice President and Chief
Agency Officer
*Stanley B. Tulin Senior Executive Vice President
and Chief Financial Officer
C-8
<PAGE>
Item 26. Persons Controlled by or Under Common Control with Equitable or
Registrant
Separate Account No. 301 of The Equitable Life Assurance Society of
the United States (the "Separate Account") is a separate account of Equitable.
Equitable, a New York stock life insurance company, is a wholly owned
subsidiary of The Equitable Companies Incorporated (the "Holding Company"), a
publicly traded company.
The largest stockholder of the Holding Company is AXA-UAP. As of
January 1, 1997, AXA-UAP beneficially owned 63.8% of the outstanding common
stock of the Holding Company (assuming conversion of the convertible preferred
stock held by AXA-UAP). Under its investment arrangements with Equitable Life
and the Holding Company, AXA-UAP is able to exercise significant influence over
the operations and capital structure of the Holding Company and its
subsidiaries, including Equitable Life. AXA-UAP, a French company, is the
holding company for an international group of insurance and related financial
services companies.
C-9
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
The Equitable Companies Incorporated (l991) (Delaware)
Donaldson, Lufkin & Jenrette, Inc. (1993) (Delaware) (44.1%) (See
Addendum B(1) for subsidiaries)
The Equitable Life Assurance Society of the United States (1859)
(New York) (a)(b)
The Equitable of Colorado, Inc. (l983) (Colorado)
EVLICO, INC. (1995) (Delaware)
EVLICO East Ridge, Inc. (1995) (California)
GP/EQ Southwest, Inc. (1995) (Texas) (5.885%)
Franconom, Inc. (1985) (Pennsylvania)
Frontier Trust Company (1987) (North Dakota)
Gateway Center Buildings, Garage, and Apartment Hotel, Inc.
(inactive) (pre-l970) (Pennsylvania)
Equitable Deal Flow Fund, L.P.
Equitable Managed Assets (Delaware)
EREIM LP Associates (99%)
EML Associates, L.P. (19.8%)
Alliance Capital Management L.P. (2.71% limited partnership
interest)
ACMC, Inc. (1991) (Delaware)(s)
Alliance Capital Management L.P. (1988) (Delaware)
(49.09% limited partnership interest)
EVCO, Inc. (1991) (New Jersey)
EVSA, Inc. (1992) (Pennsylvania)
Prime Property Funding, Inc. (1993) (Delaware)
Wil Gro, Inc. (1992) (Pennsylvania)
Equitable Underwriting and Sales Agency (Bahamas) Limited (1993)
(Bahamas)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-10
<PAGE>
The Equitable Companies Incorporated (cont.)
Donaldson Lufkin & Jenrette, Inc.
The Equitable Life Assurance Society of the United States (cont.)
Fox Run Inc. (1994) (Massachusetts)
STCS, Inc. (1992) (Delaware)
CCMI Corporation (1994) (Maryland)
FTM Corporation (1994) (Maryland)
HVM Corporation (1994) (Maryland)
Equitable BJVS, Inc. (1992) (California)
Equitable Rowes Wharf, Inc. (1995) (Massachusetts)
GP/EQ Southwest, Inc. (1995) (Texas) (94.132%)
Camelback JVS, Inc. (1995) (Arizona)
ELAS Realty, Inc. (1996) (Delaware)
Equitable Realty Assets Corporation (1983) (Delaware)
100 Federal Street Realty Corporation (Massachusetts)
Equitable Structured Settlement Corporation (1996) (Delaware)
Equitable Holding Corporation (1985) (Delaware)
EQ Financial Consultants, Inc. (formerly
Equico Securities, Inc.) (l97l) (Delaware) (a) (b)
ELAS Securities Acquisition Corp. (l980) (Delaware)
100 Federal Street Funding Corporation (Massachusetts)
EquiSource of New York, Inc. (1986) (New York) (See
Addendum A for subsidiaries)
Equitable Casualty Insurance Company (l986) (Vermont)
EREIM LP Corp. (1986) (Delaware)
EREIM LP Associates (1%)
EML Associates (.02%)
Six-Pac G.P., Inc. (1990) (Georgia)
Equitable Distributors, Inc. (1988) (Delaware) (a)
(a) Registered Broker/Dealer b) Registered Investment Advisor
C-11
<PAGE>
The Equitable Companies Incorporated (cont.)
Donaldson Lufkin & Jenrette, Inc.
The Equitable Life Assurance Society of the United States (cont.)
Equitable Holding Corporation (cont.)
Equitable JVS, Inc. (1988) (Delaware)
Astor/Broadway Acquisition Corp. (1990) (New York)
Astor Times Square Corp. (1990) (New York)
PC Landmark, Inc. (1990) (Texas)
Equitable JVS II, Inc. (1994) (Maryland)
EJSVS, Inc. (1995) (New Jersey)
Donaldson, Lufkin & Jenrette, Inc. (1985 by EIC; 1993 by EQ and
EHC) (Delaware) (36.1%) (See Addendum B(1) for
subsidiaries)
JMR Realty Services, Inc. (1994) (Delaware)
Equitable Investment Corporation (l97l) (New York)
Stelas North Carolina Limited Partnership (50% limited
partnership interest) (l984)
Equitable JV Holding Corporation (1989) (Delaware)
Alliance Capital Management Corporation (l991) (Delaware) (b)
(See Addendum B(2) for subsidiaries)
Equitable Capital Management Corporation (l985) (Delaware) (b)
Alliance Capital Management L.P. (1988) (Delaware)
(14.67% limited partnership interest)
EQ Services, Inc. (1992) (Delaware)
Equitable Agri-Business, Inc. (1984) Delaware
Equitable Real Estate Investment Management, Inc. (l984)
(Delaware) (b) (See Addendum B(3) for subsidiaries)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-12
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM A - SUBSIDIARY
OF EQUITABLE HOLDING CORPORATION
HAVING MORE THAN FIVE SUBSIDIARIES
----------------------------------------------------
EquiSource of New York, Inc. (formerly Traditional Equinet Business Corporation
of New York) has the following subsidiaries that are brokerage companies to
make available to Equitable Agents within each state traditional (non-equity)
products and services not manufactured by Equitable:
EquiSource of Alabama, Inc. (1986) (Alabama)
EquiSource of Arizona, Inc. (1986) (Arizona)
EquiSource of Arkansas, Inc. (1987) (Arkansas)
EquiSource Insurance Agency of California, Inc. (1987) (California)
EquiSource of Colorado, Inc. (1986) (Colorado)
EquiSource of Delaware, Inc. (1986) (Delaware)
EquiSource of Hawaii, Inc. (1987) (Hawaii)
EquiSource of Maine, Inc. (1987) (Maine)
EquiSource Insurance Agency of Massachusetts, Inc. (1988) (Massachusetts)
EquiSource of Montana, Inc. (1986) (Montana)
EquiSource of Nevada, Inc. (1986) (Nevada)
EquiSource of New Mexico, Inc. (1987) (New Mexico)
EquiSource of Pennsylvania, Inc. (1986) (Pennsylvania)
EquiSource Insurance Agency of Utah, Inc. (1986) (Utah)
EquiSource of Washington, Inc. (1987) (Washington)
EquiSource of Wyoming, Inc. (1986) (Wyoming)
C-13
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM B - INVESTMENT SUBSIDIARIES
HAVING MORE THAN FIVE SUBSIDIARIES
--------------------------------------------
Donaldson, Lufkin & Jenrette, Inc. has the following subsidiaries, and
approximately 150 other subsidiaries, most of which are special purpose
subsidiaries (the number fluctuates according to business needs):
Donaldson, Lufkin & Jenrette, Securities Corporation (1985)
(Delaware) (a) (b)
Wood, Struthers & Winthrop Management Corp. (1985) (Delaware) (b)
Autranet, Inc. (1985) (Delaware) (a)
DLJ Real Estate, Inc.
DLJ Capital Corporation (b)
DLJ Mortgage Capital, Inc. (1988) (Delaware)
Column Financial, Inc. (1993) (Delaware) (50%)
Alliance Capital Management Corporation (as general partner) (b)has the
following subsidiaries:
Alliance Capital Management L.P. (1988) (Delaware) (b)
Alliance Capital Management Corporation of Delaware, Inc.
(Delaware)
Alliance Fund Services, Inc. (Delaware) (a)
Alliance Fund Distributors, Inc. (Delaware) (a)
Alliance Capital Oceanic Corp. (Delaware)
Alliance Capital Management Australia Pty. Ltd. (Australia)
Meiji - Alliance Capital Corp. (Delaware) (50%)
Alliance Capital (Luxembourg) S.A. (99.98%)
Alliance Eastern Europe Inc. (Delaware)
Alliance Barra Research Institute, Inc. (Delaware) (50%)
Alliance Capital Management Canada, Inc. (Canada) (99.99%)
Alliance Capital Management (Brazil) Llda
Alliance Capital Global Derivatives Corp. (Delaware)
Alliance International Fund Services S.A. Luxembourg)
Alliance Capital Management (India) Ltd. (Delaware)
Alliance Capital Mauritius Ltd.
Alliance Corporate Finance Group, Incorporated (Delaware)
Equitable Capital Diversified Holdings, L.P. I
Equitable Capital Diversified Holdings, L.P. II
Curisitor Alliance L.L.C. (Delaware)
Curisitor Holdings Limited (UK)
Alliance Capital Management (Japan), Inc.
Alliance Capital Management (Asia) Ltd.
Alliance Capital Management (Turkey), Ltd.
Cursitor Alliance Management Limited (UK)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-14
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM B - (CONT.)
INVESTMENT SUBSIDIARIES
HAVING MORE THAN FIVE SUBSIDIARIES
Equitable Real Estate Investment Management, Inc. (b) has the following
subsidiaries:
Equitable Realty Portfolio Management, Inc. (1984) (Delaware)
EQK Partners (100% general partnership interest)
Compass Management and Leasing Co. (formerly EREIM, Inc.) (1984)
(Colorado)
Equitable Real Estate Capital Markets, Inc. (1987) (Delaware)
(a)
EPPNLP Corp. (1987) (Delaware)
Equitable Pacific Partners Corp. (1987) (Delaware)
Equitable Pacific Partners Limited Partnership
EREIM Managers Corp. (1986) (Delaware)
ML/EQ Real Estate Portfolio, L.P.
EML Associates, L.P. (80%)
Compass Retail, Inc. (1990) (Delaware)
Compass Management and Leasing, Inc. (1991) (Delaware)
CJVS, Inc. (1994) (California)
Compass Cayman (1996) (Cayman Islands)
Compass Management and Leasing (UK) Limited
Column Financial, Inc. (1993) (Delaware) (50%)
Buckhead Strategic Corp. (1994) (Delaware)
Buckhead Strategic Fund, L.P.
BH Strategic Co. I, L.P.
BH Strategic Co. II, L.P.
BH Strategic Co. III, L.P.
BH Strategic Co. IV, L.P.
Community Funding, Inc. (1994) (Delaware)
Community Mortgage Fund, L.P. (1994) (Delaware)
Buckhead Strategic Corp., II (1995) (Delaware)
Buckhead Strategic Fund L.P. II
Buckhead Co. I, L.P.
Buckhead Co. II, L.P.
Buckhead Co. III, L.P.
HYDOC, L.L.C.
Headwind Holding Corp.
Buckhead Co. IV, L.P.
Tricon Corp.
Tricon, L.P.
Equitable Real Estate Hyperion Capital Advisors LLC (1995)
(Delaware)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-15
<PAGE>
AXA GROUP CHART
The information listed below is dated as of December 31, 1996; percentages
shown represent voting power. The name of the owner is noted when AXA
indirectly controls the company.
AXA INSURANCE AND REINSURANCE BUSINESS HOLDING
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Axa Assurances Iard France 99%
Axa Assurances Vie France 100% by Axa and Axa Courtage
Vie
Axa Courtage Iard France 99.9% by Axa and Axa
Assurances Iard
Axa Courtage Vie France 99.4% by Axa and Axa
Assurances Iard and Axa
Courtage Iard
Alpha Assurances Vie France 100%
Axa Direct France 100%
Direct Assurances Iard France 100% by Axa Direct
Direct Assurance Vie France 100% by Axa Direct
Axa Direkt Versicherung A.G. Germany 100% owned by Axa Direct
Axiva France 100% by Axa and Axa Courtage
Vie
Defense Civile France 95%
Societe Francaise d'Assistance France 100% by SFA Holding
Monvoisin Assurances France 99.9% by different companies
and Mutuals
Societe Beaujon France 99.9%
Lor Finance France 99.9%
Jour Finance France 100% by Alpha Assurances Iard
and by Axa Assurances Iard
Compagnie Auxiliaire pour le France 99.8% by Societe Beaujon
Commerce and l'Industrie
C.F.G.A. France 99.96% owned by Mutuals and
Finaxa
Axa Global Risks France 100% owned by Axa and Mutuals
Saint Bernard Diffusion France 94.92% owned by Direct
Assurances Iard
Sogarep France 95%, (100% with Mutuals)
Argovie France 100% by Axiva and SCA Argos
Finargos France 70.5% owned by Axiva
C-16
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Astral Finance France 99.33% by Axa Courtage Vie
Argos France N.S.
Finaxa Belgium Belgium 100%
Axa Belgium Belgium 26.8% by Axa(SA) and 72.6% by
Finaxa Belgium
De Kortrijske Verzekering Belgium 99.8% by Axa Belgium
Juris Belgium 100% owned by Finaxa Belgium
Finaxa Luxembourg Luxembourg 100%
Axa Assurance IARD Luxembourg Luxembourg 99.9%
Axa Assurance Vie Luxembourg Luxembourg 99.9%
Axa Aurora Spain 50% owned by Axa
Aurora Polar SA de Seguros y Spain 99.4% owned by Axa Aurora
Reaseguros
Axa Vida SA de Seguros y Spain 89.82% owned by Aurora Polar
Reaseguros 5% by Axa
Axa Gestion de Seguros y Spain 99.1% owned by Axa Aurora
Reaseguros
Hilo Direct Seguros Spain 99.9% by Axa Aurora
Axa Assicurazioni Italy 100% owned by Axa
Eurovita Italy 30% owned by Axa Assicurazioni
Axa Equity & Law plc U.K. 99.9% owned by Axa
Axa Equity & Law Life U.K. 100% by Axa Equity & Law plc
Assurance Society
Axa Equity & Law International U.K. 100% owned by Axa Equity & Law
Life Assurance Society
Axa Leven The Nether- 100% by Axa Equity & Law Life
lands Assurance Society
Axa Insurance U.K. 100% owned by Axa
Axa Global Risks U.K. 100% owned by Axa Global Risks
(France)
Axa Canada Canada 100% owned by Axa
Boreal Insurance Canada 100% owned by Gestion Fracapar
Axa Assurances Inc. Canada 100% owned by Axa Canada
C-17
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Axa Insurance Inc. Canada 100% owned by Axa Canada and
Axa Assurance Inc.
Anglo Canada General Insurance Canada 100% owned by Axa Canada
Cy
Axa Pacific Insurance Canada 100% by Boreal Insurance
Boreal Assurances Agricoles Canada 100% by Boreal Insurance
Sime Axa Berhad Malaysia 30% owned by Axa and Axa
Reassurance
Axa Sime Investment Holdings Singapore 50%
Pte Ltd
Axa Sime Assurance Hong Kong 100% owned by Axa Sime Invt.
Holdings Pte Ltd
Axa Sime Assurance Singapore 100% owned by Axa Sime Invt
Holdings Pte Ltd
Axa Life Insurance Hong Kong 100%
PT Asuransi Axa Indonesia Indonesia 80%
Equitable Cies Incorp. U.S.A. 60.8% between Axa, 44.69%
Financiere 45, 3.8%,
Lorfinance 7.6% and Axa Equity
& Law Life Association Society
4.8%
Equitable Life Assurance of U.S.A. 100% owned by Equitable Cies
the USA Inc.
National Mutual Holdings Ltd Australia 51% between Axa, 42.1% and Axa
Equity & Law Life Assurance
Society 8.9%
The National Mutual Life Australia 100% owned by National Mutual
Association of Australasia Ltd Holdings Ltd
National Mutual International Australia 100% owned by National Mutual
Pty Ltd Holdings Ltd
National Mutual (Bermuda) Ltd Australia 100% owned by National Mutual
International Pty Ltd
National Mutual Asia Ltd Australia 55% owned by National Mutual
Holdings Ltd and 20% by Datura
Ltd and 13% by National Mutual
Life Association of
Australasia
Australian Casualty & Life Ltd Australia 100% owned by National Mutual
Holdings Ltd
National Mutual Health Australia 100% owned by National Mutual
Insurance Pty Ltd Holdings Ltd
C-18
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Axa Reassurance France 100% owned by Axa, Axa
Assurances Iard and Axa Global
Risks
Axa Re Finance France 80% owned by Axa Reassurance
Axa Re Vie France 99.9% owned by Axa Reassurance
Axa Cessions France 100% by Axa
Axa Re Mexico Mexico 100% owned by Axa Reassurance
Axa Re Asia Singapore 100% owned by Axa Reassurance
Axa Re U.K. Plc U.K. 100% owned by Axa Re U.K.
Holding
Axa Re U.K. Holding U.K. 100% owned by Axa Reassurance
Axa Re U.S.A. U.S.A. 100% owned by Axa America
and Axa Reassurance
Axa America U.S.A. 100% owned by Axa Reassurance
International Technology U.S.A. 80% owned by Axa America
Underwriters Inc. (INTEC)
Axa Re Life U.S.A. 100% owned by Axa Re Vie
C.G.R.M. Monaco 100% owned by Axa Reassurance
Axa Life Insurance Japan 100% owned by Axa
Dongbu Axa Life Insurance Korea 50% owned by Axa
Co Ltd
Axa Oyak Hayat Sigota Turkey 60% owned by Axa
Oyak Sigorta Turkey 11% owned by Axa
C-19
<PAGE>
AXA FINANCIAL BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Compagnie Financiere de Paris France 96.9%, (100% with Mutuals)
(C.F.P.)
Axa Banque France 98.7% owned by C.F.P.
Financiere 78 France 100% owned by C.F.P.
Axa Credit France 65% owned by C.F.P.
Axa Gestion Interessement France 100% owned by Axa Asset
Management Europe
Compagnie Europeenne de Credit France 100% owned by C.F.P.
(C.E.C.)
Fidei France 20.7% owned by C.F.P. and
10.8% by Axamur
Societe de Placements France 98.58% with Mutuals
Selectionnes S.P.S.
Presence et Initiative France 100% with Mutuals
Vamopar France 100% owned by Societe Beaujon
Financiere Mermoz France 100%
Axa Asset Management Europe France 100%
Axa Asset Management France 100% owned by Axa Asset
Partenaires Management Europe
Axa Asset Management Conseils France 100% owned by Axa Asset
Management Europe
Axa Asset Management France 100% owned by Axa Asset
Distribution Management Europe
Axa Equity & Law Home Loans U.K. 100% owned by Axa Equity & Law
Plc
Axa Equity & Law Commercial U.K. 100% owned by Axa Equity & Law
Plc Loans
C-20
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Alliance Capital Management U.S.A. 59% held by ELAS
Donaldson Lufkin & Jenrette U.S.A. 44.1% owned by Equitable Cies
Inc. and 36.1% by Equitable
Holding Cies
National Mutual Funds Australia 100% owned by National
Management (Global) Ltd Holdings Ltd
National Mutual Funds USA 100% by National Mutual Funds
Management North America Management (Global) Ltd.
Holding Inc.
Cogefin Luxembourg 100% owned by Axa Belgium
Financiere 45 France 99.8% owned by Axa
Mofipar France 99.76% owned by Axa
ORIA France 100% owned by Axa Millesimes
Axa Oeuvres d'Art France 100% by Mutuals
Axa Cantenac Brown France 100% by Societe Beaujon
Axa Suduiraut France 99.6% owned by Societe Beaujon
Colisee Acti Finance 2 France 100% owned by Axa Assurances
Iard Mutuelle
C-21
<PAGE>
AXA REAL ESTATE BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
C.I.P.M. France 97.8% with Mutuals
Fincosa France 100% owned by C.I.P.M.
Prebail France 100% owned by Societe Beaujon
and C.F.P.
Axamur France 100% by different companies
and Mutuelles
Parigest France 100% by the Mutuals, C.I.P.M.
and Fincosa
Parimmo France 100% by the insurance
companies and Mutuals
S.G.C.I. France 100% by different companies
and Mutuelles
Transaxim France 100% owned by S.G.C.I. and
C.P.P.
Compagnie Parisienne de France 100% owned by S.G.C.I.
Participations
Monte Scopando France 100% owned by C.P.P.
Matipierre France 100% by different companies
Securimmo France 87.12% by different companies
and Mutuals
Paris Orleans France 100% by Axa Courtage Iard
Colisee Bureaux France 100% by different companies
and Mutuals
Colisee Premiere France 100% by different companies
and Mutuals
Colisee Laffitte France 100% by Colisee Bureaux
Foniere Carnot Laforge France 100% by Colisee Premiere
Parc Camoin France 100% by Colisee Premiere
Delta Point du Jour France 100% owned by Matipierre
Paroi Nord de l'Arche France 100% owned by Matipierre
Falival France 100% owned by Axa Reassurance
Compagnie du Gaz d'Avignon France 99% owned by Axa Ass Iard
Ahorro Familiar France 42.2% owned by Axa Assurances
Iard
Fonciere du Val d'Oise France 100% owned by C.P.P.
Sodarec France 100% owned by C.P.P.
C-22
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Centrexpo France 100% owned by C.P.P.
Fonciere de la Vile du Bois France 100% owned by Centrexpo
Colisee Seine France 100% owned by different
companies
Translot France 100% owned by SGCI
S.N.C. Dumont d'Urville France 100% owned by Colisee Premiere
Colisee Federation France 100% by SGCI
Colisee Saint Georges France 100% by SGCI
Drouot Industrie France 50% by SGCI and 50% by Axamur
Colisee Vauban France 99.6% by Matipierre
Fonciere Colisee France 100% by Matipierre and
different companies
Axa Pierre S.C.I. France 97.6% owned by different
companies and Mutuals
Axa Millesimes France 85.2% owned by AXA and the
Mutuals
Chateau Suduirault France 100% owned by Axa Millesimes
Diznoko Hongrie 95% owned by Axa Millesimes
Compagnie Fonciere Matignon France 100% by different companies
and Mutuals
Equitable Real Estate U.S.A. 100% owned by ELAS
Investment
Quinta do Noval Vinhos S.A. Portugal 99.6% owned by Axa Millesimes
C-23
<PAGE>
OTHER AXA BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
A.N.F. France 95.4% owned by Finaxa
Lucia France 20.6% owned by Axa Assurances
Iard and 8.6% by Mutuals
Schneider S.A. France 10.4%
C-24
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
NOTES
-----
1. The year of formation or acquisition and state or country of incorporation
of each affiliate is shown.
2. The chart omits certain relatively inactive special purpose real estate
subsidiaries, partnerships, and joint ventures formed to operate or
develop a single real estate property or a group of related properties,
and certain inactive name-holding corporations.
3. All ownership interests on the chart are 100% common stock ownership
except: (a) The Equitable Companies Incorporated's 44.1% interest in
Donaldson, Lufkin & Jenrette, Inc. and Equitable Holding Corporation's
36.1% interest in same; (b) as noted for certain partnership interests;
(c) Equitable Life's ACMC, Inc.'s and Equitable Capital Management
Corporation's limited partnership interests in Alliance Capital Management
L.P.; (d) as noted for certain subsidiaries of Alliance Capital Management
Corp. of Delaware, Inc.; (e) Treasurer Robert L. Bennett's 20% interest in
Compass Management and Leasing Co. (formerly EREIM, Inc.); and (f) DLJ
Mortgage Capital's and Equitable Real Estate's respective ownerships, 50%
each in Column Financial, Inc.
4. The operational status of the entities shown as having been formed or
authorized but "not yet fully operational" should be checked with the
appropriate operating areas, especially for those that are start-up
situations.
5. The following entities are not included in this chart because, while they
have an affiliation with The Equitable, their relationship is not the
ongoing equity-based form of control and ownership that is characteristic
of the affiliations on the chart, and, in the case of the first two
entities, they are under the direction of at least a majority of "outside"
trustees:
The Equitable Funds
The Hudson River Trust
EQ Advisors Trust
Separate Accounts
6. This chart was last revised on April 1, 1997.
C-25
<PAGE>
Item 27. Number of Contractowners
As of March 31, 1997 qualified annuity contracts covering 5,830
participants had been issued by the registrant.
Item 28. Indemnification
(a) Indemnification of Principal Underwriter: to the extent permitted
by law of the State of New York and subject to all applicable
requirements thereof, Equitable undertook to indemnify each of
its directors and officers who is made or threatened to be made a
party to any action or proceeding, whether civil or criminal, by
reason of the fact that he, his testator or intestate, is or was
a director or officer of Equitable.
(b) Undertaking: insofar as indemnification for liability arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, 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 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
Item 29. Principal Underwriters
(a) EQ Financial Consultants, Inc. ("EQ Financial"), a wholly-owned
subsidiary of Equitable, is the principal underwriter and
depositor for its Separate Account No. 301, Separate Account A,
Separate Account I and Separate Account FP. EQ Financial's
principal business address is 1755 Broadway, NY, NY 10019.
(b) See Item 25.
(c) Not applicable.
C-26
<PAGE>
Item 30. Location of Accounts and Records
The records required to be maintained by Section 31(a) of the Company
Act of 1940 and Rules 31a-1 to 31a-3 promulgated thereunder, are maintained by
Equitable at 200 Plaza Drive, Secaucus, New Jersey 07094
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant hereby undertakes:
(a) to file a post-effective amendment to this registration statement
as frequently as is necessary to ensure that the audited
financial statements in the registration statement are never more
than 16 months old for so long as payments under the variable
annuity contracts may be accepted;
(b) to include either (1) as part of any application to purchase a
contract offered by the prospectus, a space that an applicant can
check to request a Statement of Additional Information, or (2) a
postcard or similar written communication affixed to or included
in the prospectus that the applicant can remove to send for a
Statement of Additional Information;
(c) to deliver any Statement of Additional Information and any
financial statements required to be made available under this
Form promptly upon written or oral request; and
(d) Equitable represents that the fees and charges deducted under
the Contract described in this Registration Statement, in the
aggregate, are reasonable in relation to the services rendered,
the expenses to be incurred, and the risks assumed by Equitable
under the Contract. Equitable bases its representation on its
assessment of all of the facts and circumstances, including such
relevant factors as: the nature and extent of such services,
expenses and risks, the need for Equitable to earn a profit, the
degree to which the Contract includes innovative features, and
regulatory standards for the grant of exemptive relief under the
Investment Company Act of 1940 used prior to October 1996,
including the range of industry practice.
The Registrant hereby represents that it is relying on the November
28, 1988 no-action letter (Ref. No. IP-6-88) relating to variable annuity
contracts offered as funding vehicles for retirement plans meeting the
requirements of Section 403(b) of the Internal Revenue Code. Registrant further
represents that it complies with the provisions of paragraphs (1) - (4) of that
letter.
C-27
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant certifies that it meets the requirements of
Securities Act Rule 485(b) for effectiveness of this amended Registration
Statement and has caused this amended Registration Statement to be signed on
its behalf in the City and State of New York, on this 25th day of April, 1997.
SEPARATE ACCOUNT NO. 301 of
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
(Registrant)
By: The Equitable Life Assurance
Society of the United States
By: /s/ Naomi J. Weinstein
----------------------
Naomi J. Weinstein
Vice President
C-28
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, the Depositor certifies
that it meets the requirements of Securities Act Rule 485(b) for effectiveness
of this amended Registration Statement and has caused this amended Registration
Statement to be signed on its behalf, in the City and State of New York, on the
25th day of April, 1997.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
(Depositor)
By: /s/ Naomi J. Weinstein
----------------------
Naomi J. Weinstein
Vice President
As required by the Securities Act of 1933 amended this registration
statement has been signed by the following persons in the capacities and on the
date indicated:
PRINCIPAL EXECUTIVE OFFICERS:
Joseph J. Melone Chairman of the Board, Chief Executive
Officer and Director
James M. Benson President and Director
William T. McCaffrey Senior Executive Vice President, Chief
Operating Officer and Director
PRINCIPAL FINANCIAL OFFICER:
Stanley B. Tulin Senior Executive Vice President and
Chief Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
/s/ Alvin H. Fenichel
- ---------------------
Alvin H. Fenichel Senior Vice President and
April 25, 1997 Controller
DIRECTORS:
Claude Bebear Jean-Rene Fourtou Winthrop Knowlton
James M. Benson Norman C. Francis Arthur L. Liman
Chrisopher Brocksom Donald J. Greene George T. Lowy
Francoise Colloc'h John T. Hartley William T. McCaffrey
Henri de Castries John H.F. Haskell, Jr. Joseph J. Melone
Joseph L. Dionne Mary R. (Nina) Henderson Didier Pineau-Valencienne
William T. Esrey W. Edwin Jarmain George J. Sella, Jr.
G. Donald Johnston, Jr. Dave H. Williams
/s/ Naomi J. Weinstein
- ----------------------
Naomi J. Weinstein
Attorney-in-Fact
April 25, 1997
C-29
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. PAGE NO.
- ----------- --------
6(h) By-Laws of The Equitable Life Assurance Society
of the United States, as amended November 21,
1996.
6(i) Restated Charter of The Equitable Life Assurance
Society of the United States, as amended January
1, 1997.
10(a) Consent of Price Waterhouse LLP.
10(b) Powers of Attorney.
27 Financial Data Schedule.
C-30
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF
THE UNITED STATES
BY-LAWS
-------
As Amended November 21, 1996
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF
THE UNITED STATES
BY-LAWS
-------
Table of Contents
ARTICLE I SHAREHOLDERS................................................ 1
Section 1.1 Annual Meetings............................................ 1
Section 1.2 Notice of Meetings; Waiver................................. 1
Section 1.3 Organization; Procedure.................................... 2
Section 1.4 Action Without a Meeting................................... 2
ARTICLE II BOARD OF DIRECTORS.......................................... 2
Section 2.1 Regular Meetings........................................... 2
Section 2.2 Special Meetings........................................... 2
Section 2.3 Independent Directors; Quorum.............................. 2
Section 2.4 Notice of Meetings......................................... 3
Section 2.5 Newly Created Directorships;
Vacancies................................................ 3
Section 2.6 Presiding Officer.......................................... 3
Section 2.7 Telephone Participation in
Meetings; Action by Consent
Without Meeting.......................................... 3
ARTICLE III COMMITTEES.................................................. 4
Section 3.1 Committees................................................. 4
Section 3.2 Authority of Committees.................................... 5
Section 3.3 Quorum and Manner of Acting................................ 5
Section 3.4 Removal of Members......................................... 6
Section 3.5 Vacancies.................................................. 6
Section 3.6 Subcommittees.............................................. 6
Section 3.7 Alternate Members of Committees............................ 6
Section 3.8 Attendance of Other Directors.............................. 6
<PAGE>
ARTICLE IV OFFICERS.................................................... 6
Section 4.1 Chairman of the Board...................................... 6
Section 4.2 Vice-Chairman of the Board................................. 7
Section 4.3 President.................................................. 7
Section 4.4 Chief Executive Officer.................................... 7
Section 4.5 Secretary.................................................. 7
Section 4.6 Other Officers............................................. 8
ARTICLE V CAPITAL STOCK............................................... 8
Section 5.1 Transfers of Stock;
Registered Shareholders.................................. 8
Section 5.2 Transfer Agent and Registrar............................... 9
ARTICLE VI EXECUTION OF INSTRUMENTS..................................... 9
Section 6.1 Execution of Instruments................................... 9
Section 6.2 Facsimile Signatures of
Former Officers.......................................... 10
Section 6.3 Meaning of Term "Instruments".............................. 10
ARTICLE VII GENERAL..................................................... 10
Section 7.1 Reports of Committees...................................... 10
Section 7.2 Independent Certified
Public Accountants....................................... 10
Section 7.3 Directors' Fees............................................ 10
Section 7.4 Indemnification of Directors,
Officers and Employees................................... 10
Section 7.5 Waiver of Notice........................................... 11
Section 7.6 Company.................................................... 11
ARTICLE VIII AMENDMENT OF BY-LAWS....................................... 11
Section 8.1 Amendment of By-Laws....................................... 11
Section 8.2 Notice of Amendment........................................ 12
<PAGE>
BY-LAWS
OF
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
ARTICLE I
---------
SHAREHOLDERS
------------
Section 1.1. Annual Meetings. The annual meeting of the shareholders
of the Company for the election of Directors and for the transaction of such
other business as properly may come before such meeting shall be held at the
principal office of the Company on the third Wednesday in the month of May at
3:00 P.M., local time, or at such other place, within or without the State of
New York, or on such other earlier or later date in April or May or at such
other hour as may be fixed from time to time by resolution of the Board of
Directors and set forth in the notice or waiver of notice of the meeting.
[Business Corporation Law Secs. 602(a), (b)]*
Section 1.2. Notice of Meetings; Waiver. The Secretary or any
Assistant Secretary shall cause written notice of the place, date and hour of
each meeting of the shareholders, and, in the case of a special meeting, the
purpose or purposes for which such meeting is called and by or at whose
direction such notice is being issued, to be given, personally or by first
class mail, not fewer than ten nor more than fifty days before the date of the
meeting to each shareholder of record entitled to vote at such meeting.
No notice of any meeting of shareholders need be given to any
shareholder who submits a signed waiver of notice, in person or by proxy,
whether before or after the meeting or who attends the meeting, in person or by
proxy, without protesting prior to its conclusion the lack of notice of such
meeting. [Business Corporation Law Secs. 605, 606]
- --------------
* Citations are to the Business Corporation Law and Insurance Law of the State
of New York, as in effect on [date of adoption], and are inserted for reference
only, and do not constitute a part of the By-Laws.
<PAGE>
Section 1.3. Organization; Procedure. At every meeting of shareholders
the presiding officer shall be the Chairman of the Board or, in the event of
his or her absence or disability, the President or, in his or her absence, any
officer of the Company designated by the shareholders. The order of business
and all other matters of procedure at every meeting of shareholders may be
determined by such presiding officer. The Secretary, or in the event of his or
her absence or disability, an Assistant Secretary or, in his or her absence, an
appointee of the presiding officer, shall act as Secretary of the meeting.
Section 1.4. Action Without a Meeting. Any action required or
permitted to be taken by shareholders may be taken without a meeting on written
consent signed by the holders of all the outstanding shares entitled to vote on
such action. [Business Corporation Law Sec. 615]
ARTICLE II
----------
BOARD OF DIRECTORS
------------------
Section 2.1. Regular Meetings. Regular meetings of the Board of
Directors shall be held at the principal office of the Company on the third
Thursday of each month, except January and August, unless a change in place or
date is ordered by the Board of Directors. The first regular meeting of the
Board of Directors following the annual meeting of the shareholders of the
Company is designated as the Annual Meeting. [Business Corporation Law Sec.
710]
Section 2.2. Special Meetings. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board, the
President, or two directors. [Business Corporation Law Sec. 710]
Section 2.3. Independent Directors; Quorum. Not less than one-third of
the Board of Directors shall be persons who are not officers or employees of
the Company or of any entity controlling, controlled by, or under common
control with the Company and who are not beneficial owners of a controlling
interest in the voting stock of the Company or of any such entity.
A majority of the entire Board of Directors, including at least one
Director who is not an officer or employee of the Company or of any entity
controlling, controlled by, or under common control with the Company and who is
not a beneficial owner of a controlling interest in the voting stock of the
Company
<PAGE>
or of any such entity, shall constitute a quorum for the transaction of
business at any regular or special meeting of the Board of Directors, except as
otherwise prescribed by these By-Laws. Except as otherwise prescribed by law,
the Charter of the Company, or these By-Laws, the vote of a majority of the
Directors present at the time of the vote, if a quorum is present at such time,
shall be the act of the Board of Directors. A majority of the Directors
present, whether or not a quorum is present, may adjourn any meeting from time
to time and from place to place. As used in these By-Laws "entire Board of
Directors" means the total number of directors which the Company would have if
there were no vacancies. [Business Corporation Law Secs. 707, 708; Insurance
Law Sec. 1202]
Section 2.4. Notice of Meetings. Notice of a regular meeting of the
Board of Directors need not be given. Notice of a change in the time or place
of a regular meeting of the Board of Directors shall be given to each Director
at least five days in advance thereof in writing and by telephone or telecopy.
Notice of each special meeting of the Board of Directors shall be given to each
Director at least 24 hours prior to the special meeting, personally or by
telephone or telegram or telecopy, and shall state in general terms the purpose
or purposes of the meeting. Any such notice for a regular or special meeting
not specifically required by this Section 2.4 to be given by telephone or
telecopy shall be deemed given to a director when sent by mail, telegram,
cablegram or radiogram addressed to such director at his or her address
furnished to the Secretary. Notice of an adjourned regular or special meeting
of the Board of Directors shall be given if and as determined by a majority of
the directors present at the time of the adjournment, whether or not a quorum
is present. [Business Corporation Law Sec. 711]
Section 2.5. Newly Created Directorships; Vacancies. Any newly created
directorships resulting from an increase in the number of Directors and
vacancies occurring in the Board of Directors for any reasons (including
vacancies resulting from the removal of a Director without cause) shall be
filled by the shareholders of the Company. [Business Corporation Law Sec. 705;
Insurance Law Sec. 4211]
Section 2.6. Presiding Officer. In the absence or inability to act of
the Chairman of the Board at any regular or special meeting of the Board of
Directors, any Vice-Chairman of the Board, or the President, as designated by
the chief executive officer, shall preside at such meeting. In the absence or
inability to act of all of such officers, the Board of Directors shall select
from among their number present a presiding officer.
Section 2.7. Telephone Participation in Meetings; Action by Consent
Without Meeting. Any Director may participate in a meeting of the Board
<PAGE>
or any committee thereof by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time, and such participation shall
constitute presence in person at such meeting; provided that one meeting of the
Board each year shall be held without the use of such conference telephone or
similar communication equipment. When time is of the essence, but not in lieu
of a regularly scheduled meeting of the Board of Directors, any action required
or permitted to be taken by the Board or any committee thereof may be taken
without a meeting if all members of the Board or such committee, as the case
may be, consent in writing to the adoption of a resolution authorizing the
action and such written consents and resolution are filed with the minutes of
the Board or such committee, as the case may be. [Business Corporation Law Sec.
708]
ARTICLE III
-----------
COMMITTEES
----------
Section 3.1. Committees. (a) The Board of Directors, by resolution
adopted by a majority of the entire Board of Directors, may establish from
among its members an Executive Committee of the Board composed of three or more
Directors. Not less than one-third of the members of such committee shall be
persons who are not officers or employees of the Company or of any entity
controlling, controlled by, or under common control with the Company and who
are not beneficial owners of a controlling interest in the voting stock of the
Company or of any such entity.
(b) The Board of Directors, by resolution adopted by a majority of the
entire Board of Directors, shall establish from among its members one or more
committees with authority to discharge the responsibilities enumerated in this
subsection (b). Each such committee shall be composed of three or more
Directors and shall be comprised solely of Directors who are not officers or
employees of the Company or of any entity controlling, controlled by, or under
common control with the Company and who are not beneficial owners of a
controlling interest in the voting stock of the Company or of any such entity.
Such committee or committees shall have responsibility for:
(i) Recommending to the Board of Directors candidates for nomination
for election by the shareholders to the Board of Directors;
<PAGE>
(ii) Evaluating the performance of officers deemed by any such
committee to be principal officers of the Company and recommending their
selection and compensation;
(iii) Recommending the selection of independent certified public
accountants;
(iv) Reviewing the scope and results of the independent audit and of
any internal audit; and
(v) Reviewing the Company's financial condition.
(c) The Board of Directors, by resolution adopted from time to time by
a majority of the entire Board of Directors, may establish from among its
members one or more additional committees of the Board, each composed of five
or more Directors. Not less than one-third of the members of each such
committee shall be persons who are not officers or employees of the Company or
of any entity controlling, controlled by, or under common control with the
Company and who are not beneficial owners of a controlling interest in the
voting stock of the Company or of any such entity. [Business Corporation Law
Sec. 712; Insurance Law Sec. 1202]
Section 3.2. Authority of Committees. Each committee shall have all
the authority of the Board of Directors, to the extent permitted by law and
provided in the resolution creating such committee, provided, however, that no
committee shall have authority as to the following matters:
(a) the submission to shareholders of any action as to which
shareholder approval is required by law;
(b) the filling of vacancies in the Board of Directors or in any
committee thereof;
(c) the fixing of compensation of the Directors for serving on the
Board of Directors or any committee thereof;
(d) the amendment or repeal of the By-Laws, or the adoption of new
By-Laws; or
(e) the amendment or repeal of any resolution of the Board of
Directors unless such resolution of the Board of Directors by its terms
provides that it may be so amended or repealed.
<PAGE>
Section 3.3. Quorum and Manner of Acting. A majority of the total
membership that a committee would have if there were no vacancies (including at
least one Director who is not an officer or employee of the Company or of any
entity controlling, controlled by, or under common control with the Company and
who is not a beneficial owner of a controlling interest in the voting stock of
the Company or of any such entity) shall constitute a quorum for the
transaction of business. The vote of a majority of the members present at the
time of the vote, if a quorum is present at such time, shall be the act of such
committee. Except as otherwise prescribed by these By-Laws or by the Board of
Directors, each committee may elect a chairman from among its members, fix the
times and dates of its meetings, and adopt other rules of procedure.
Section 3.4. Removal of Members. Any member (and any alternate member)
of a committee may be removed by vote of a majority of the entire Board of
Directors.
Section 3.5. Vacancies. Any vacancy occurring in any committee for any
reason may be filled by vote of a majority of the entire Board of Directors.
Section 3.6. Subcommittees. Any committee may appoint one or more
subcommittees from its members. Any such subcommittee may be charged with the
duty of considering and reporting to the appointing committee on any matter
within the responsibility of the committee appointing such subcommittee but
cannot act in place of the appointing committee.
Section 3.7. Alternate Members of Committees. The Board of Directors
may designate, by resolution adopted by a majority of the entire Board of
Directors, one or more directors as alternate members of any committee who may
replace any absent member or members at a meeting of such committee. [Business
Corporation Law Sec. 712]
Section 3.8. Attendance of Other Directors. Except as otherwise
prescribed by the Board of Directors, members of the Board of Directors may
attend any meeting of any committee.
ARTICLE IV
----------
OFFICERS
--------
Section 4.1. Chairman of the Board. The Board of Directors may at a
regular or special meeting elect from among their number a Chairman of the
<PAGE>
Board who shall hold office, at the pleasure of the Board of Directors, until
the next Annual Meeting.
The Chairman of the Board shall preside at all meetings of the Board
of Directors and also shall exercise such powers and perform such duties as may
be delegated or assigned to or required of him or her by these By-Laws or by or
pursuant to authorization of the Board of Directors.
Section 4.2. Vice-Chairman of the Board. The Board of Directors may at
a regular or special meeting elect from among their number one or more
Vice-Chairmen of the Board who shall hold office, at the pleasure of the Board
of Directors, until the next Annual Meeting.
The Vice-Chairmen of the Board shall exercise such powers and perform
such duties as may be delegated or assigned to or required of them by these
By-Laws or by or pursuant to authorization of the Board of Directors or by the
Chairman of the Board.
Section 4.3. President. The Board of Directors shall at a regular or
special meeting elect from among their number a President who shall hold
office, at the pleasure of the Board of Directors, until the next Annual
Meeting and until the election of his or her successor.
The President shall exercise such powers and perform such duties as
may be delegated or assigned to or required of him or her by these By-Laws or
by or pursuant to authorization of the Board of Directors or (if the President
is not the chief executive officer) by the chief executive officer. The
President and Secretary may not be the same person.
Section 4.4. Chief Executive Officer. The Chairman of the Board or the
President shall be the chief executive officer of the Company as the Board of
Directors from time to time shall determine, and the Board of Directors from
time to time may determine who shall act as chief executive officer in the
absence or inability to act of the then incumbent.
Subject to the control of the Board of Directors, and to the extent
not otherwise prescribed by these By-Laws, the chief executive officer shall
have plenary power over all departments, officers, employees, and agents of the
Company, and shall be responsible for the general management and direction of
all the business and affairs of the Company.
<PAGE>
Section 4.5. Secretary. The Board of Directors shall at a regular or
special meeting elect a Secretary who shall hold office, at the pleasure of the
Board of Directors, until the next Annual Meeting and until the election of his
or her successor.
The Secretary shall issue notices of the meetings of the shareholders
and the Board of Directors and its committees, shall keep the minutes of the
meetings of the shareholders and the Board of Directors and its committees and
shall have custody of the Company's corporate seal and records. The Secretary
shall exercise such powers and perform such other duties as relate to the
office of the Secretary, and also such powers and duties as may be delegated or
assigned to or required of him or her by or pursuant to authorization of the
Board of Directors or by the Chairman of the Board or (if the Chairman of the
Board is not the chief executive officer) the chief executive officer.
Section 4.6. Other Officers. The Board of Directors may elect such
other officers as may be deemed necessary for the conduct of the business of
the Company. Each such officer elected by the Board of Directors shall exercise
such powers and perform such duties as may be delegated or assigned to or
required of him or her by the Board of Directors or the chief executive
officer, and shall hold office until the next Annual Meeting, but at any time
may be suspended by the chief executive officer or by the Board of Directors,
or removed by the Board of Directors. [Business Corporation Law Secs. 715, 716]
ARTICLE V
---------
CAPITAL STOCK
-------------
Section 5.1. Transfers of Stock; Registered Shareholders. (a) Shares
of stock of the Company shall be transferable only upon the books of the
Company kept for such purpose upon surrender to the Company or its transfer
agent or agents of a certificate (unless such shares shall be uncertificated
shares) representing shares, duly endorsed or accompanied by appropriate
evidence of succession, assignment or authority to transfer. Within a
reasonable time after the transfer of uncertificated shares, the Company shall
send to the registered owner thereof a written notice containing the
information required to be set forth or stated on certificates.
(b) Except as otherwise prescribed by law, the Board of Directors may
make such rules, regulations and conditions as it may deem expedient concerning
the subscription for, issue, transfer and registration of, shares of stock.
<PAGE>
Except as otherwise prescribed by law, the Company, prior to due presentment
for registration of transfer, may treat the registered owner of shares as the
person exclusively entitled to vote, to receive notifications, and otherwise to
exercise all the rights and powers of an owner. [Business Corporation Law Sec.
508(d), (f); Insurance Law Sec. 4203]
Section 5.2 Transfer Agent and Registrar. The Board of Directors may
appoint one or more transfer agents and one or more registrars, and may require
all certificates representing shares to bear the signature of any such transfer
agents or registrars. The same person may act as transfer agent and registrar
for the Company.
ARTICLE VI
----------
EXECUTION OF INSTRUMENTS
------------------------
Section 6.1. Execution of Instruments. (a) Any one of the following,
namely, the Chairman of the Board, any Vice-Chairman of the Board, the
President, any Vice-President (including a Deputy or Assistant Vice-President
or any other Vice-President designated by a number or a word or words added
before or after the title Vice-President to indicate his or her rank or
responsibilities), the Secretary, or the Treasurer, or any officer, employee or
agent designated by or pursuant to authorization of the Board of Directors or
any committee created under these By-Laws, shall have power in the ordinary
course of business to enter into contracts or execute instruments on behalf of
the Company (other than checks, drafts and other orders drawn on funds of the
Company deposited in its name in banks) and to affix the corporate seal. If any
such instrument is to be executed on behalf of the Company by more than one
person, any two or more of the foregoing or any one or more of the foregoing
with an Assistant Secretary or an Assistant Treasurer shall have power to
execute such instrument and affix the corporate seal.
(b) The signature of any officer may be in facsimile on any such
instrument if it shall also bear the actual signature, or personally inscribed
initials, of an officer, employee or agent empowered by or pursuant to the
first sentence of this Section to execute such instrument, provided that the
Board of Directors or a committee thereof may authorize the issuance of
insurance contracts and annuity contracts on behalf of the Company bearing the
facsimile signature of an officer without the actual signature or personally
inscribed initials of any person.
<PAGE>
(c) All checks, drafts and other orders drawn on funds of the Company
deposited in its name in banks shall be signed only pursuant to authorization
of and in accordance with rules prescribed from time to time by the Board of
Directors or a committee thereof, which rules may permit the use of facsimile
signatures.
Section 6.2. Facsimile Signatures of Former Officers. If any officer
whose facsimile signature has been placed upon any instrument shall have ceased
to be such officer before such instrument is issued, it may be issued with the
same effect as if he or she had been such officer at the time of its issue.
Section 6.3. Meaning of Term "Instruments". As used in this Article
VI, the term "instruments" includes, but is not limited to, contracts and
agreements, checks, drafts and other orders for the payment of money, transfers
of bonds, stocks, notes and other securities, and powers of attorney, deeds,
leases, releases of mortgages, satisfactions and all other instruments entitled
to be recorded in any jurisdiction.
ARTICLE VII
-----------
GENERAL
-------
Section 7.1. Reports of Committees. Reports of any committee charged
with responsibility for supervising or making investments shall be submitted at
the next meeting of the Board of Directors. Reports of other committees of the
Board of Directors shall be submitted at a regular meeting of the Board of
Directors as soon as practicable, unless otherwise directed by the Board of
Directors.
Section 7.2 Independent Certified Public Accountants. The books and
accounts of the Company shall be audited throughout each year by such
independent certified public accountants as shall be selected by the Board of
Directors.
Section 7.3. Directors' Fees. The Directors shall be paid such fees
for their services in any capacity as may have been authorized by the Board of
Directors. No Director who is a salaried officer of the Company shall receive
any fees for serving as a Director of the Company. [Business Corporation Law
Sec. 713(e)]
<PAGE>
Section 7.4. Indemnification of Directors, Officers and Employees. (a)
To the extent permitted by the law of the State of New York and subject to all
applicable requirements thereof:
(i) any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that he or
she, or his or her testator or intestate, is or was a director, officer or
employee of the Company shall be indemnified by the Company;
(ii) any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that he or
she, or his or her testator or intestate serves or served any other
organization in any capacity at the request of the Company may be
indemnified by the Company; and
(iii) the related expenses of any such person in any of said
categories may be advanced by the Company.
(b) To the extent permitted by the law of the State of New York, the
Company may provide for further indemnification or advancement of expenses by
resolution of shareholders of the Company or the Board of Directors, by
amendment of these By-Laws, or by agreement. [Business Corporation Law Secs.
721-726; Insurance Law Sec. 1216]
Section 7.5. Waiver of Notice. Notice of any meeting of the Board of
Directors or any committee thereof shall not be required to be given to any
Director who submits a signed waiver of notice whether before or after the
meeting, or who attends the meeting without protesting, prior to or at its
commencement, the lack of notice to him. [Business Corporation Law Sec. 711(c)]
Section 7.6. Company. The term "Company" in these By-Laws means The
Equitable Life Assurance Society of the United States.
ARTICLE VIII
------------
AMENDMENT OF BY-LAWS
--------------------
Section 8.1. Amendment of By-Laws. Subject to Section 1210 of the
Insurance Law of the State of New York, all By-Laws of the Corporation,
<PAGE>
whether adopted by the Board of Directors or the shareholders, shall be subject
to amendment, alteration or repeal, and new By-Laws may be made, either
(a) by the shareholders at any annual or special meeting of
shareholders the notice of which shall have specified or summarized the
proposed amendment, alteration, repeal or new By-Laws, or
(b) by resolution adopted by the Board of Directors at any regular or
special meeting, the notice or waiver of notice of which, unless none is
required hereunder, shall have specified or summarized the proposed
amendment, alteration, repeal or new By-Laws,
provided, however, that the shareholders may at any time provide in the By-Laws
that any specified provision or provisions of the By-Laws may be amended,
altered or repealed only in the manner specified in the foregoing clause (a), in
which event such provision or provisions shall be subject to amendment,
alteration or repeal only in such manner. [Business Corporation Law Sec. 601(a);
Insurance Law Sec. 1210]
Section 8.2. Notice of Amendment. If any By-Law regulating an
impending election of directors is adopted, amended or repealed by the Board of
Directors, there shall be set forth in the notice of the next meeting of
shareholders for the election of directors the By-Law so adopted, amended or
repealed, together with a concise statement of the changes made. [Business
Corporation Law Sec. 601 (b).]
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF
THE UNITED STATES
RESTATED CHARTER
----------------
As Amended January 1, 1997
<PAGE>
RESTATED CHARTER
OF
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
ARTICLE I
The name of the corporation shall continue to be The Equitable Life
Assurance Society of the United States.
ARTICLE II
The principal office of the corporation shall be located in the City
of New York, County of New York, State of New York.
ARTICLE III
(a) The business to be transacted by the corporation shall be the
kinds of insurance business specified in Paragraphs 1, 2 and 3 of Subsection
(a) of Section 1113 of the Insurance Law of the State of New York, as follows:
(1) "Life insurance": every insurance upon the lives of human
beings, and every insurance appertaining thereto, including the
granting of endowment benefits, additional benefits in the event of
death by accident, additional benefits to safeguard the contract from
lapse, accelerated payments of part or all of the death benefit or a
special surrender value upon diagnosis (A) of terminal illness defined
as a life expectancy of twelve months or less, or (B) of a medical
condition requiring extraordinary medical care or treatment regardless
of life expectancy, or provide a special surrender value, upon total
and permanent disability of the insured, and optional modes of
settlement of proceeds. "Life insurance" also includes additional
benefits to safeguard the contract against lapse in the event of
unemployment of the insured. Amounts paid the insurer for life
insurance and proceeds applied under optional modes of settlement or
under dividend options may be allocated by the insurer
<PAGE>
to one or more separate accounts pursuant to section four thousand two
hundred forty of the Insurance Law of the State of New York;
(2) "Annuities": all agreements to make periodical payments for a
period certain or where the making or continuance of all or some of a
series of such payments, or the amount of any such payment, depends
upon the continuance of human life, except payments made under the
authority of paragraph (1) above. Amounts paid the insurer to provide
annuities and proceeds applied under optional modes of settlement or
under dividend options may be allocated by the insurer to one or more
separate accounts pursuant to section four thousand two hundred forty
of the Insurance Law of the State of New York;
(3) "Accident and health insurance": (i) insurance against death
or personal injury by accident or by any specified kind or kinds of
accident and insurance against sickness, ailment or bodily injury,
including insurance providing disability benefits pursuant to article
nine of the workers' compensation law, except as specified in item
(ii) hereof; and (ii) non-cancellable disability insurance, meaning
insurance against disability resulting from sickness, ailment or
bodily injury (but excluding insurance solely against accidental
injury) under any contract which does not give the insurer the option
to cancel or otherwise terminate the contract at or after one year
from its effective date or renewal date;
and any amendments to such paragraphs or provisions in substitution therefor
which may be hereafter adopted; such other kind or kinds of business now or
hereafter authorized by the laws of the State of New York to stock life
insurance companies; and such other kind or kinds of business to the extent
necessarily or properly incidental to the kind or kinds of insurance business
which the corporation is authorized to do.
(b) The corporation shall also have all other rights, powers, and
privileges now or hereafter authorized or granted by the Insurance Law of the
State of New York or any other law or laws of the State of New York to stock
life insurance companies having power to do the kind or kinds of business
hereinabove referred to and any and all other rights, powers, and privileges of
a corporation now or hereafter granted by the laws of the State of New York and
not prohibited to such stock life insurance companies.
- 2 -
<PAGE>
ARTICLE IV
The business of the corporation shall be managed under the direction
of the Board of Directors.
ARTICLE V
(a) The Board of Directors shall consist of not less than 13 (except
for vacancies temporarily unfilled) nor more than 36 Directors, as may be
determined from time to time by a vote of a majority of the entire Board of
Directors. No decrease in the number of Directors shall shorten the term of any
incumbent Director.
(b) The Board of Directors shall have the power to adopt from time to
time such By-Laws, rules and regulations for the governance of the officers,
employees and agents and for the management of the business and affairs of the
corporation, not inconsistent with this Charter and the laws of the State of
New York, as may be expedient, and to amend or repeal such by-laws, rules and
regulations, except as provided in the By-Laws.
(c) Any or all of the Directors may be removed at any time, either for
or without cause, by vote of the shareholders.
(d) No Director shall be personally liable to the corporation or any
of its shareholders for damages for any breach of duty as a Director; provided,
however, that the foregoing provision shall not eliminate or limit (i) the
liability of a Director if a judgment or other final adjudication adverse to
him or her establishes that his or her acts or omissions were in bad faith or
involved intentional misconduct or that he or she personally gained in fact a
financial profit or other advantage to which he or she was not legally
entitled, or were acts or omissions which (a) he or she knew or reasonably
should have known violated the Insurance Law of the State of New York or (b)
violated a specific standard of care imposed on Directors directly, and not by
reference, by a provision of the Insurance Law of the State of New York (or any
regulations promulgated thereunder) or (c) constituted a knowing violation of
any other law; or (ii) the liability of a Director for any act or omission
prior to September 21, 1989.
- 3 -
<PAGE>
ARTICLE VI
(a) The Directors of the corporation shall be elected at each annual
meeting of shareholders of the corporation in the manner prescribed by law. The
annual meeting of shareholders shall be held at such place, within or without
the State of New York, and at such time as may be fixed by or under the
By-Laws. At each annual meeting of shareholders, directors shall be elected to
hold office for a term expiring at the next annual meeting of shareholders.
(b) Newly created directorships resulting from an increase in the
number of Directors and vacancies occurring in the Board of Directors shall be
filled by vote of the shareholders.
(c) Each Director shall be at least twenty-one years of age, and at
all times a majority of the Directors shall be citizens and residents of the
United States, and not less than three of the Directors shall be residents of
the State of New York.
(d) The Board of Directors shall elect such officers as are provided
for in the By-Laws at the first meeting of the Board of Directors following
each annual meeting of the shareholders. In the event of the failure to elect
officers at such meeting, officers may be elected at any regular or special
meeting of the Board of Directors. A vacancy in any office may be filled by the
Board of Directors at any regular or special meeting.
ARTICLE VII
The duration of the corporate existence of the corporation shall be
perpetual.
ARTICLE VIII
The amount of the capital of the corporation shall be $2,500,000, and
shall consist of 2,000,000 Common Shares, par value $1.25 per share.
- 4 -
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 28 to the Registration
Statement No. 2-74667 on Form N-4 (the "Registration Statement") of our
report dated February 10, 1997 relating to the financial statements of The
Equitable Life Assurance Society of the United States Separate Account No.
301 for the year ended December 31, 1996, and our report dated February 10,
1997 relating to the consolidated financial statements of The Equitable Life
Assurance Society of the United States for the year ended December 31, 1996,
which reports appear in such Statement of Additional Information, and to the
incorporation by reference of our reports into the Prospectus which
constitutes part of this Registration Statement. We also consent to the
reference to us under the heading "Experts" in the Statement of Additional
Information.
/s/ Price Waterhouse LLP
- ------------------------
Price Waterhouse LLP
New York, New York
April 25, 1997
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 24th day of February, 1997
/s/ Claude Bebear
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 6th day of February, 1997
/s/ James M. Benson
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Christopher Brocksom
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
Francoise Colloc'h
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Henri de Castries
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Joseph L. Dionne
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ William T. Esrey
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 24th day of February, 1997
/s/ Alvin H. Fenichel
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Jean-Rene Fourou
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 11th day of February, 1997
/s/ Norman C. Francis
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Donald J. Greene
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ John T. Hartley
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 19th day of February, 1997
/s/ John H.F. Haskell, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 11th day of February, 1997
/s/ W. Edwin Jarmain
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of February, 1997
/s/ G. Donald Johnston, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Winthrop Knowlton
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Arthur L. Liman
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ George T. Lowy
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ William T. McCaffrey
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ Joseph J. Melone
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 20th day of February, 1997
/s/ George J. Sella, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 3rd day of February, 1997
/s/ Dave H. Williams
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Donald R. Kaplan, Pauline
Sherman, Michael F. McNelis, Naomi J. Weinstein, Maureen K. Wolfson, Mildred
Oliver, Jerome S. Golden and Dennis D. Witte and each of them (with full power
to each of them to act alone), his or her true and lawful attorney-in-fact and
agent, with full power of substitution to each, for him or her and on his or
her behalf and in his or her name, place and stead, to execute and file any of
the documents referred to below relating to registrations under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act
of 1940 with respect to any insurance or annuity contracts or other agreements
providing for allocation of amounts to Separate Accounts of the Company, and
related units or interests in Separate Accounts: registration statements on any
form or forms under the Securities Act of 1933 and the Investment Company Act
of 1940 and annual reports on any form or forms under the Securities Exchange
Act of 1934, and any and all amendments and supplements thereto, with all
exhibits and all instruments necessary or appropriate in connection therewith,
each of said attorneys-in-fact and agents and his, her or their substitutes
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
this 28th day of February, 1997
/s/ Stanley B. Tulin
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000356076
<NAME> SEP ACCT 301 ELAS
<SERIES>
<NUMBER> 02
<NAME> COMMON STOCK DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 60,185,384
<INVESTMENTS-AT-VALUE> 72,448,085
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 257,595
<TOTAL-ASSETS> 72,705,680
<PAYABLE-FOR-SECURITIES> 257,594
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 36,759
<TOTAL-LIABILITIES> 294,353
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 72,411,327
<DIVIDEND-INCOME> 538,392
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 256,576
<NET-INVESTMENT-INCOME> 281,816
<REALIZED-GAINS-CURRENT> 8,543,579
<APPREC-INCREASE-CURRENT> 4,909,576
<NET-CHANGE-FROM-OPS> 13,734,971
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 281,816
<DISTRIBUTIONS-OF-GAINS> 13,453,155
<DISTRIBUTIONS-OTHER> 1,730,582
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 15,465,823
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000356076
<NAME> SEP ACCT 301 ELAS
<SERIES>
<NUMBER> 01
<NAME> MONEY MARKET DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 20,759,853
<INVESTMENTS-AT-VALUE> 20,726,015
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 95,571
<TOTAL-ASSETS> 20,823,586
<PAYABLE-FOR-SECURITIES> 96,613
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12,874
<TOTAL-LIABILITIES> 109,487
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 20,714,099
<DIVIDEND-INCOME> 1,037,717
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 79,090
<NET-INVESTMENT-INCOME> 958,627
<REALIZED-GAINS-CURRENT> 59,696
<APPREC-INCREASE-CURRENT> (16,202)
<NET-CHANGE-FROM-OPS> 1,002,121
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 958,627
<DISTRIBUTIONS-OF-GAINS> 43,494
<DISTRIBUTIONS-OTHER> (1,163,763)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 161,642
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 06
<CIK> 0000356076
<NAME> SEP ACCT 301 ELAS
<SERIES>
<NUMBER> 06
<NAME> AGRESSIVE STOCK DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 7,511,977
<INVESTMENTS-AT-VALUE> 7,447,884
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 131
<TOTAL-ASSETS> 7,448,015
<PAYABLE-FOR-SECURITIES> 131
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,905
<TOTAL-LIABILITIES> 5,036
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 7,442,979
<DIVIDEND-INCOME> 17,261
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 36,564
<NET-INVESTMENT-INCOME> (19,303)
<REALIZED-GAINS-CURRENT> 1,845,168
<APPREC-INCREASE-CURRENT> (541,744)
<NET-CHANGE-FROM-OPS> 1,284,121
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (19,303)
<DISTRIBUTIONS-OF-GAINS> 1,303,424
<DISTRIBUTIONS-OTHER> (61,091)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,223,030
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000356076
<NAME> SEP ACCT 301 ELAS
<SERIES>
<NUMBER> 04
<NAME> BALANCED DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 33,896,408
<INVESTMENTS-AT-VALUE> 34,869,025
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 176
<TOTAL-ASSETS> 34,869,201
<PAYABLE-FOR-SECURITIES> 158
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 20,565
<TOTAL-LIABILITIES> 20,723
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 34,848,478
<DIVIDEND-INCOME> 1,086,003
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 144,505
<NET-INVESTMENT-INCOME> 941,498
<REALIZED-GAINS-CURRENT> 3,238,848
<APPREC-INCREASE-CURRENT> (521,010)
<NET-CHANGE-FROM-OPS> 3,659,336
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 941,498
<DISTRIBUTIONS-OF-GAINS> 2,717,838
<DISTRIBUTIONS-OTHER> (3,414,799)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 244,537
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000356076
<NAME> SEP ACCT 301 ELAS
<SERIES>
<NUMBER> 05
<NAME> HIGH YIELD DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 2,822,411
<INVESTMENTS-AT-VALUE> 2,829,425
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,829,425
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,081
<TOTAL-LIABILITIES> 2,081
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,827,344
<DIVIDEND-INCOME> 238,702
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 16,547
<NET-INVESTMENT-INCOME> 222,155
<REALIZED-GAINS-CURRENT> 168,814
<APPREC-INCREASE-CURRENT> 70,493
<NET-CHANGE-FROM-OPS> 461,462
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 222,155
<DISTRIBUTIONS-OF-GAINS> 239,307
<DISTRIBUTIONS-OTHER> 482,192
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 943,654
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000356076
<NAME> SEP ACCT 301 ELAS
<SERIES>
<NUMBER> 07
<NAME> GLOBAL DIVISON
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 4,971,174
<INVESTMENTS-AT-VALUE> 5,556,154
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 38
<TOTAL-ASSETS> 5,556,192
<PAYABLE-FOR-SECURITIES> 38
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,544
<TOTAL-LIABILITIES> 3,582
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 5,552,610
<DIVIDEND-INCOME> 92,505
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 27,590
<NET-INVESTMENT-INCOME> 64,915
<REALIZED-GAINS-CURRENT> 361,293
<APPREC-INCREASE-CURRENT> 240,914
<NET-CHANGE-FROM-OPS> 667,122
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 64,915
<DISTRIBUTIONS-OF-GAINS> 602,207
<DISTRIBUTIONS-OTHER> 319,508
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 986,630
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
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