<PAGE>
Registration No. 333-
----------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. ___ [ ]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. [ ]
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: (212) 554-1234
------------
Anthony A. Dreyspool
Vice President and Associate General Counsel
The Equitable Life Assurance Society of the United States
1290 Avenue of the Americas, New York, New York 10104
(Name and Address of Agent for Service)
------------
Please send copies of all communications to:
PETER E. PANARITES
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W., Washington, D.C. 20036
------------
CALCULATION OF REGISTRATION FEE UNDER
THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Title of Securities Being Amount Being Proposed Maximum Proposed Maximum Amount of Registration
Registered Registered Offering Price per Unit* Aggregate Offering Price* Fee
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Units of Interest
Under Group Annuity
Contract $22,758,780 $.0003030303(1) $22,758,780(1) $6,896.60
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Estimated soley for purpose of determining the registration fee.
(1) The Contract does not provide for a predetermined amount or number of units
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this registration statement.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
CROSS REFERENCE SHEET
SHOWING LOCATION OF INFORMATION IN PROSPECTUS
FORM N-4 ITEM PROSPECTUS CAPTION
- ------------- ------------------
1. Cover Page ..................... Cover Page
2. Definitions .................... Not Applicable
3. Synopsis ....................... Summary
4. Condensed Financial
Information .................... Condensed Financial Information
5. General Description of
Registrant, Depositor and
Portfolio Company .............. Equitable and the Investment Managers-
Equitable; Conservative Investors and
Growth Investor Funds
6. Deductions and Expenses ........ Deductions and Charges
7. General Description of
Variable Annuity Contracts ..... The Program; Summary
8. Annuity Period ................. Provisions of the Contract and Services
We Provide/-Distributions and Benefit
Payment Options; Variable Annuity
Benefits Prospectus Supplement
9. Death Benefit .................. Provisions of the Contract and Services
We Provide/-Distributions and Benefit
Payment Options/-Participant Death
Benefits
10. Purchases and Contract Value ... Fund Performance/-Investment of
Contributions in the Funds
11. Redemptions .................... Provisions of the Contract and Services
We Provide/-Distributions and Benefit
Payment Options
12. Taxes .......................... Federal Income Tax Considerations
13. Legal Proceedings .............. Miscellaneous-Legal Proceedings
14. Table of Contents of
Additional Information ......... Table of Contents of the Statement of
Additional Information
<PAGE>
CROSS REFERENCE SHEET
SHOWING LOCATION OF INFORMATION IN STATEMENT OF ADDITIONAL INFORMATION
STATEMENT OF ADDITIONAL
FORM N-4 ITEM INFORMATION CAPTION
- ------------- -----------------------
1. Cover Page ..................... Cover Page
2. Table of Contents .............. Table of Contents
3. General Information and
History ........................ Equitable and the Investment Managers(1)
4. Services ....................... Not Applicable
5. Purchase of Securities Being
Offered ........................ Underwriter
6. Underwriters ................... Underwriter
7. Calculation of Performance
Data ........................... Fund Performance
8. Annuity Payments ............... Provisions of the Members Plans/
-Contributions to Qualified Plans;
Variable Annuity Benefits Prospectus
Supplement
9. Financial Statements ........... Financial Statements
- ---------------
(1) Contained in the Prospectus of the Members Retirement Program.
<PAGE>
[MEMBERS RETIREMENT PROGRAM LOGO]
-------------------------------------
MEMBERS
RETIREMENT PROGRAM
-------------------------------------
PROGRAM PROSPECTUS
DATED MAY 1, 1997
-------------------------------------
-------------------------------------
THE HUDSON RIVER TRUST PROSPECTUS
DATED MAY 1, 1997
-------------------------------------
-------------------------------------
EQ ADVISORS TRUST PROSPECTUS
DATED MAY 1, 1997
-------------------------------------
<PAGE>
- -----------------------------------------------------------------------------
PROSPECTUS
- -----------------------------------------------------------------------------
MAY 1, 1997
MEMBERS RETIREMENT PROGRAM
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Separate Account Units of interest under a group annuity contract with THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, 1290 Avenue of The
Americas, New York, New York 10104, which funds the Members Retirement
Program.
- -----------------------------------------------------------------------------
The contract currently provides for nine Investment Options:
SEPARATE ACCOUNTS GUARANTEED OPTIONS
o Alliance Growth Equity Fund o 3 year Guaranteed
o Alliance Aggressive Equity Fund Rate Account
o Alliance Balanced Fund o 5 year Guaranteed
o Alliance Global Fund Rate Account
o Alliance Conservative Investors Fund o Money Market
o Alliance Growth Investors Fund Guarantee Account
EFFECTIVE AUGUST 1, 1997, THE FOLLOWING ADDITIONAL INVESTMENT OPTIONS WILL BE
AVAILABLE:
o MFS Research Fund
o Warburg Pincus Small Company Value Fund
o T. Rowe Price Equity Income Fund
o Merrill Lynch World Strategy Fund
The Alliance Growth Equity, Alliance Aggressive Equity and Alliance Balanced
Funds are pooled separate accounts of Equitable (Nos. 4, 3 and 10,
respectively). See "Investment Choices--The Funds" in this prospectus for a
description of the investment objectives, policies and risks of those
accounts.
The Alliance Global Fund, Alliance Conservative Investors Fund, and the
Alliance Growth Investors Fund invest in shares of a corresponding portfolio
(Portfolio) of The Hudson River Trust, a mutual fund that invests the assets
of separate accounts of insurance companies. The prospectus for The Hudson
River Trust, which is attached to this prospectus, describes the investment
objectives, policies and risks of those Portfolios and should be read
carefully and retained for future reference. This prospectus is not valid
unless it is attached to a current prospectus for The Hudson River Trust.
The MFS Research Fund, Warburg Pincus Small Company Value Fund, T. Rowe Price
Equity Income Fund and the Merrill Lynch World Strategy Fund each invests in
shares of a corresponding portfolio (Portfolio) of the EQ Advisors Trust, a
mutual fund that invests in the assets of separate accounts of insurance
companies. The prospectus for the EQ Advisors Trust, which is attached to
this prospectus, describes the investment objectives, policies and risks of
those Portfolios and should be read carefully and retained for future
reference. This prospectus is not valid unless it is attached to a current
prospectus of the EQ Advisors 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.
- -----------------------------------------------------------------------------
THIS PROSPECTUS CONTAINS INFORMATION YOU SHOULD KNOW BEFORE INVESTING.
IT SHOULD BE READ CAREFULLY AND RETAINED FOR FUTURE REFERENCE.
A Statement of Additional Information (the "SAI") dated May 1, 1997 has been
filed with the Securities and Exchange Commission. The SAI is available free
of charge and may be obtained by mailing the SAI request form located at the
back of this prospectus or by calling, for current participants,
1-800-526-2701; for all others, 1-800-523-1125. Parts of the SAI have been
incorporated by reference into this prospectus. A table of contents for the
SAI appears on page 39 of this prospectus. Additional copies of the
prospectus may be obtained by calling the above-listed number.
Copyright 1997 by The Equitable Life Assurance Society of the United States.
All rights reserved.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C> <C>
I. Summary ............................................... 2
The Members Retirement Program ....................... 2
The Investment Options................................ 3
Contributions ........................................ 3
Transfers Among Investment Options ................... 3
Corresponding with the Program ....................... 4
Summary of Annual Fund Expenses ...................... 5
II. Condensed Fund Financial Information .................. 8
III. Investment Options .................................... 11
The Funds ............................................ 11
The Alliance Growth Equity Fund ..................... 11
The Alliance Aggressive Equity Fund ................. 12
The Alliance Balanced Fund .......................... 13
The Hudson River Trust............................... 13
The EQ Advisors Trust ............................... 14
Risks and Investment Techniques ..................... 15
The General Account Options .......................... 18
Guaranteed Rate Accounts ............................ 19
Premature Withdrawals and Transfers ................. 19
Money Market Guarantee Account ...................... 19
IV. Fund Performance ...................................... 20
Unmanaged Market Indices ............................. 20
How Performance Data are Presented ................... 21
Percent Changes in Fund Unit Values .................. 22
Average Annual Rates of Return ....................... 22
Growth of $10,000 Initial Investment ................. 23
Investment of Contributions in the Funds ............. 25
Purchase of Fund Units .............................. 25
Business Day ........................................ 25
How We Determine the Unit Value ..................... 25
V. Equitable Life and the Investment Managers ............ 26
Equitable Life ....................................... 26
The Separate Accounts ................................ 26
Investment Management of the Funds ................... 27
Voting Rights ........................................ 28
VI. Provisions of the Contract and Services We Provide .... 28
Adoption of the Program by Employers ................. 28
Employer Responsibilities ........................... 29
Contributions ........................................ 29
Employer Responsibilities ........................... 29
Allocation of Contributions by Participants ........ 29
Transfers Among Investment Options ................... 30
General Rules ....................................... 30
Payments or Withdrawals from the Funds ............... 30
Distributions and Benefit Payment Options ............ 30
Participant Benefits: Retirement, Disability
and Termination of Employment ...................... 30
Participant Withdrawals Prior to Retirement ........ 31
Participant Death Benefits .......................... 31
Benefit Payment Options ............................. 32
Loans to Participants ................................ 33
VII. Deductions and Charges ................................ 33
Members Retirement Plan (Pension and Profit
Sharing), Prototype Self-Directed Plan and
Investment Only Fees .............................. 33
VIII. Federal Income Tax Considerations ..................... 35
Distributions: Tax Consequences ..................... 35
IX. Miscellaneous ......................................... 37
X. Table of Contents of Statement of Additional
Information .......................................... 39
</TABLE>
[MEMBERS RETIREMENT PROGRAM LOGO]
- -------------------------------------------------------------------------------
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS.
- -------------------------------------------------------------------------------
<PAGE>
PART I: SUMMARY
The Members Retirement Program of The Equitable Life Assurance Society of the
United States ("Equitable Life") consists of retirement plans and trusts
through which members of certain groups and other eligible persons can
accumulate retirement savings for themselves and their employees. The Program
is sponsored by Equitable Life. The Trustee under the trusts is Chase
Manhattan Bank ("Chase"). At December 31, 1996, the combined value of the
assets in the Investment Options under the Program was $172.7 million, and
there were 9,435 participants. The Program is funded through a group annuity
contract issued by Equitable Life.
Equitable Life provides this prospectus which describes the Separate Accounts
and their Units of interest registered under the Securities Act of 1933
("1933 Act") and the General Account Options and other elements of the
Program which are not so registered. Whenever words like "we" and "our" are
used in the prospectus, they refer to Equitable Life. The terms "you" and
"your" refer to the participant or to the employer, as appropriate.
THE MEMBERS RETIREMENT PROGRAM
As an employer, you can use the Program to adopt the Members Retirement Plan,
or the Pooled Trust for individually designed plans or the Self-Directed
Prototype Plan.
o THE MEMBERS RETIREMENT PLAN--Under the Members Retirement Plan, a master
plan, you will automatically receive a full range of services from Equitable
Life, including a variety of Investment Options, plan-level and
participant-level recordkeeping, benefit payments and tax withholding and
reporting.
o The Members Retirement Plan is a defined contribution master plan which
can be adopted as a profit sharing plan (including optional 401(k) and
SIMPLE 401(k) features), a defined contribution pension plan or both.
The Plan is designed to comply with the requirements of Section 404(c)
of the Employee Retirement Income Security Act of 1974 ("ERISA").
o THE POOLED TRUST FOR MEMBERS RETIREMENT PLANS--a funding vehicle to be
used by those who have an individually designed qualified retirement plan.
The Pooled Trust is for investment only and can be used for both defined
benefit and defined contribution plans. We provide participant-level or
plan-level recordkeeping services for plan assets held in the Pooled Trust.
o THE SELF-DIRECTED PROTOTYPE PLAN--a defined contribution prototype plan
which can be used to combine the Program Investment Options with individual
investments such as stocks and bonds. Employers must also adopt the Pooled
Trust and maintain a minimum of $25,000 in the Trust at all times. We provide
recordkeeping services for plan assets held in the Pooled Trust.
2
<PAGE>
THE INVESTMENT OPTIONS
SEPARATE ACCOUNTS GUARANTEED OPTIONS
o Alliance Aggressive Equity Fund o 3-Year Guaranteed Rate
(Separate Account No. 3 (Pooled)) Account
o Alliance Growth Equity Fund o 5-Year Guaranteed Rate
(Separate Account No. 4 (Pooled)) Account
o Alliance Balanced Fund o Money Market Guarantee
(Separate Account No. 10 (Pooled)) Account
o Alliance Global Fund
(an Asset Allocation Option)
(Separate Account No. 51 (Pooled))
o Alliance Conservative Investors Fund
(an Asset Allocation Option)
(Separate Account No. 51 (Pooled))
AVAILABLE AUGUST 1, 1997:
o Alliance Growth Investors Fund
(Separate Account No. 51 (Pooled))
o MFS Research Fund
(Separate Account No. 66 (Pooled))
o Warburg Pincus Small Company Value Fund
(Separate Account No. 66 (Pooled))
o T. Rowe Price Equity Income Fund
(Separate Account No. 66 (Pooled))
o Merrill Lynch World Strategy Fund
(Separate Account No. 66 (Pooled))
The Separate Accounts operate like mutual funds or unit investment trusts
in many ways. However, because of exclusionary provisions, they are not
subject to regulation under the Investment Company Act of 1940 ("1940 Act").
The Hudson River Trust and EQ Advisors Trust whose shares are purchased by
Separate Account Nos. 51 and 66, respectively, are registered investment
companies under the 1940 Act.
CONTRIBUTIONS
o Contributions can be allocated to any one Option or divided among them
o Contributions may be made by check or money order payable to Equitable
Life
o Contributions must be sent along with a Contribution Remittance Form to
the address shown in Corresponding With the Program
o Contributions are credited on the day of receipt if they are accompanied
by properly completed forms; otherwise delays may occur
TRANSFERS AMONG INVESTMENT OPTIONS
o Generally, amounts may be transferred among the Investment Options at any
time
o Transfers may be made by telephone (on our Account Investment Management
(AIM) System)
o There is no charge for transfers and no tax liability
o Transfers from the Guaranteed Rate Accounts may not be made prior to
maturity. See Transfers Among Investment Options in Part VI
3
<PAGE>
<TABLE>
<CAPTION>
PLAN OR WHO SELECTS ARE LOANS WHEN ARE YOU
TRUST INVESTMENTS? AVAILABLE? ELIGIBLE FOR
DISTRIBUTIONS?
- -------------------- ------------------- --------------------- ---------------------
<S> <C> <C> <C>
Members Participant Yes, if permitted Upon retirement,
Retirement Plan under your Plan death, disability or
termination of
employment.
- -------------------- ------------------- --------------------- ---------------------
Pooled Trust for Participant or Yes, if permitted Benefits depend upon
Individually Trustee, as under your Plan the terms of your
Designed Plans specified under Plan.
your Plan.
- -------------------- ------------------- --------------------- ---------------------
Self-Directed Participant or Yes, if permitted Upon retirement,
Prototype Plan Trustee, as under your Plan death, disability or
specified under termination of
your Plan. employment.
- -------------------- ------------------- --------------------- ---------------------
</TABLE>
CORRESPONDING WITH THE PROGRAM
EXISTING PARTICIPANTS
o For regular mail (except contributions):
The Members Retirement Program
Box 2468 G.P.O.
New York, New York 10116
o For registered, certified or overnight mail
(except contributions):
The Members Retirement Program
c/o Equitable Life
200 Plaza Drive, Second Floor
Secaucus, New Jersey 07094
o For contribution checks ONLY:
The Members Retirement Program
P.O. Box 1599
Newark, New Jersey 07101-9764
o To reach the AIM System (24 hours a day) or an
Equitable Life Account Executive
(9 a.m. to 5 p.m. Eastern Time, Monday through Friday):
1-800-526-2701
FUTURE PARTICIPANTS
o To reach a Retirement Program Specialist
(9 a.m. to 5 p.m. Eastern Time, Monday through Friday):
1-800-523-1125, ext. 5009
(From Alaska, call 0-201-583-2395, collect)
o For regular mail:
The Members Retirement Program
c/o Equitable Life
Box 2011
Secaucus, New Jersey 07094
o For registered, certified or
overnight mail:
The Members Retirement Program
c/o Equitable Life
200 Plaza Drive, 2-B55
Secaucus, New Jersey 07094
4
<PAGE>
SUMMARY OF ANNUAL FUND EXPENSES
PARTICIPANT TRANSACTION EXPENSES
Transaction expenses are charges you pay when you buy or sell units of the
Funds.
<TABLE>
<CAPTION>
<S> <C>
Sales Load None
Deferred Sales Charge None
Surrender Fees None
Transfer or Exchange Fee None
</TABLE>
If you annuitize your account, premium taxes and other fees may apply.
ANNUAL FUND OPERATING EXPENSES
The Program is subject to deductions and charges, including record
maintenance and report, enrollment, program expense, and investment
management and financial accounting fees. Certain expenses are also borne
directly by the Funds, by The Hudson River Trust, in which Separate Account
No. 51 (Pooled) invests, and by the EQ Advisors Trust, in which Separate
Account No. 66 (Pooled) invests. For more information, see Part VII:
Deductions and Charges, The Hudson River Trust and the EQ Advisors Trust
prospectuses, which both accompany this prospectus.
The purpose of the tables below is to assist employers and participants in
understanding the various costs and expenses they bear directly or
indirectly. The expenses shown are based on the actual experience of the
Funds during the year ended December 31, 1996. Future expenses may be greater
or less than those shown below. Similarly, the annual rate of return assumed
in the example is not an estimate or guarantee of future performance. The
tables give effect to generally applicable charges. Other charges may also be
applicable, including enrollment, record maintenance and report fees. See
Part VII: Deductions and Charges.
ALLIANCE GROWTH EQUITY, AGGRESSIVE EQUITY AND BALANCED FUNDS
<TABLE>
<CAPTION>
INVESTMENT PROGRAM
MANAGEMENT FEE EXPENSE CHARGE OTHER TOTAL
-------------- -------------- ---------- -------
<S> <C> <C> <C> <C>
Alliance Growth Equity Fund 0.50% 1.00% 0.20%(1) 1.70%
Alliance Aggressive Equity
Fund 0.65% 1.00% 0.20%(1) 1.85%
Alliance Balanced Fund 0.50% 1.00% 0.25%(1) 1.75%
</TABLE>
ALLIANCE GLOBAL, CONSERVATIVE INVESTORS AND GROWTH INVESTORS FUNDS
<TABLE>
<CAPTION>
INVESTMENT PROGRAM
MANAGEMENT FEE EXPENSE CHARGE OTHER TOTAL
-------------- -------------- ---------- ----------
<S> <C> <C> <C> <C>
Alliance Global Fund 0.20%(2) 1.00% 0.29% 1.49%
Hudson River Trust 0.65%(3) -- 0.08%(3) 0.73%(3)
TOTAL 0.85% 1.00% 0.37% 2.22%
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PROGRAM
MANAGEMENT FEE EXPENSE CHARGE OTHER TOTAL
-------------- -------------- ---------- ----------
<S> <C> <C> <C> <C>
Alliance Conservative Investors
Fund 0.20%(2) 1.00% 0.25%(1) 1.45%
Hudson River Trust 0.48%(3) -- 0.07%(3) 0.55%(3)
TOTAL 0.68% 1.00% 0.32% 2.00%
Alliance Growth Investors Fund 0.20%(2) 1.00% 0.27%(1) 1.47%
Hudson River Trust 0.53%(3) -- 0.06%(3) 0.59%(3)
TOTAL 0.73% 1.00% 0.33% 2.06%
</TABLE>
MFS RESEARCH, WARBURG PINCUS SMALL COMPANY VALUE, T. ROWE PRICE EQUITY INCOME
AND MERRILL LYNCH WORLD STRATEGY FUNDS
<TABLE>
<CAPTION>
INVESTMENT PROGRAM 12B-1
MANAGEMENT FEE EXPENSE CHARGE OTHER* FEE TOTAL
-------------- -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
MFS Research Fund -- 1.00% 0.20%(1) -- 1.20%
EQ Advisors Trust 0.55%(4) -- 0.05%(4) 0.25%(4) 0.85%(4)
TOTAL 0.55% 1.00% 0.25% 0.25% 2.05%
Warburg Pincus Small Company
Value Fund -- 1.00% 0.20%(1) -- 1.20%
EQ Advisors Trust 0.65%(4) -- 0.10%(4) 0.25%(4) 1.00%(4)
TOTAL 0.65% 1.00% 0.30% 0.25% 2.20%
T. Rowe Price Equity Income Fund -- 1.00% 0.20%(1) -- 1.20%
EQ Advisors Trust 0.55%(4) -- 0.05%(4) 0.25%(4) 0.85%(4)
TOTAL 0.55% 1.00% 0.25% 0.25% 2.05%
Merrill Lynch World Strategy Fund -- 1.00% 0.20%(1) -- 1.20%
EQ Advisors Trust 0.70%(4) -- 0.25%(4) 0.25%(4) 1.20%(4)
TOTAL 0.70% 1.00% 0.45% 0.25% 2.40%
</TABLE>
- ------------
* After fee waivers or assumptions by EQ Financial consultants pursuant
to an expense limitation agreement. See the attached EQ Advisors Trust
Prospectus.
(1) Reflects the amount deducted for the daily accrual of direct expenses.
See How We Determine the Unit Value in Part IV.
(2) The Alliance Global, Conservative Investors and Growth Investors Funds
invest through Equitable's Separate Account No. 51 in corresponding
Portfolios of The Hudson River Trust. This charge represents only
financial accounting expenses for Separate Account No. 51.
(3) 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.
(4) The EQ Advisors Trust funds were not available in 1996, therefore,
these numbers reflect anticipated annualized expenses for 1997.
6
<PAGE>
EXAMPLE
A $1,000 investment in each Fund listed below would be subject to the
expenses indicated, assuming a 5% annual return. Applicable expenses are the
same whether or not you withdraw all or part of your Account Balance at the
end of each time period shown (1).
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- --------- --------- ----------
<S> <C> <C> <C> <C>
Alliance Growth Equity ............ $18.12 $56.09 $ 96.48 $209.09
Alliance Aggressive Equity ........ 19.33 59.76 102.67 221.80
Alliance Balanced ................. 18.63 57.62 99.06 214.41
Alliance Global ................... 23.56 72.53 124.06 265.00
Alliance Conservative Investors .. 21.35 65.86 112.91 242.62
Alliance Growth Investors ......... 21.95 67.68 115.97 248.78
MFS Research ...................... 21.85 67.38 -- --
Warburg Pincus Small Company Value 23.36 71.92 -- --
T. Rowe Price Equity Income ...... 21.85 67.38 -- --
Merrill Lynch World Strategy ..... 25.37 77.95 -- --
</TABLE>
[FN]
- ------------
(1) These calculations include all asset based charges plus a component for
record maintenance and report fees and enrollment fees. The component
is computed by aggregating such fees and dividing by the average assets
for the same period. See Members Retirement Plan (Pension and Profit
Sharing), Prototype Self Directed Plan and Investment Only Fees in Part
VII of this prospectus.
7
<PAGE>
PART II: CONDENSED FUND FINANCIAL INFORMATION
Your interest in the Funds under the Program is represented by Units. See How
We Determine the Unit Value in Part IV. The following tables give information
about income, expenses and capital changes in the Alliance Growth Equity Fund
(Separate Account No. 4 (Pooled)), the Alliance Aggressive Equity Fund
(Separate Account No. 3 (Pooled)), and the Alliance Balanced Fund (Separate
Account No. 10 (Pooled)) attributable to a Unit outstanding under the Program
for the periods indicated, along with other supplementary data. For 1996,
1995, 1994 and 1993 the tables have been audited by Price Waterhouse LLP,
independent accountants, as stated in their reports under Financial
Statements in the SAI. For years prior to 1993, such condensed financial
information was audited by other independent accountants. These tables should
be read in conjunction with the full Financial Statements. CONDENSED
FINANCIAL INFORMATION FOR THE ALLIANCE GLOBAL, CONSERVATIVE INVESTORS, AND
GROWTH INVESTORS PORTFOLIOS IS CONTAINED IN THE HUDSON RIVER TRUST PROSPECTUS
ACCOMPANYING THIS PROSPECTUS. ADDITIONAL COPIES OF THE HUDSON RIVER TRUST
PROSPECTUS AND ITS STATEMENT OF ADDITIONAL INFORMATION (SAI) MAY BE OBTAINED
BY CALLING AN ACCOUNT EXECUTIVE. THOSE FINANCIAL STATEMENTS, HOWEVER, DO NOT
REFLECT THE PROGRAM EXPENSE CHARGE AND THE DAILY ACCRUAL OF DIRECT EXPENSES
DEDUCTED FROM AMOUNTS HELD IN SEPARATE ACCOUNT NO. 51 (POOLED). UNIT VALUES
FOR THE ALLIANCE GLOBAL, CONSERVATIVE INVESTORS, AND GROWTH INVESTORS FUNDS
OF SEPARATE ACCOUNT NO. 51 (POOLED) ARE SHOWN BELOW AND DO REFLECT THE
PROGRAM EXPENSE CHARGE AND DAILY ACCRUAL OF DIRECT EXPENSES SO DEDUCTED. NO
TABLE IS SHOWN FOR SEPARATE ACCOUNT NO.66 (POOLED) BECAUSE THE SEPARATE
ACCOUNT WILL COMMENCE OPERATIONS ON AUGUST 1, 1997, AND THEREFORE, HAS NO
PRIOR 1996 FINANCIAL PERFORMANCE.
FULL FINANCIAL STATEMENTS. The Financial Statements of the Alliance Growth
Equity, Aggressive Equity and Balanced Funds and the Consolidated Financial
Statements of Equitable Life are contained in the SAI. The Financial
Statements of the Alliance Global, Conservative Investors and Growth
Investors Portfolios are contained in the SAI for the Hudson River Trust.
- -----------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED) of The Equitable Life Assurance Society of
the United States
ALLIANCE GROWTH EQUITY FUND--INCOME, EXPENSES AND CAPITAL CHANGES PER UNIT
OUTSTANDING THROUGHOUT THE YEARS INDICATED AND OTHER SUPPLEMENTARY DATA
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- ----------------------------------------- -----------------------------
1996 1995 1994
- ----------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Income.................................... $ 1.37 $ 1.84 $ 1.79
Expenses (Note A)......................... (3.82) (3.25) (2.76)
- ----------------------------------------- --------- --------- ---------
Net income (loss)......................... (2.45) (1.41) (.97)
Net realized and unrealized gain
(loss) on investments (Note B)........... 36.80 50.16 (3.76)
- ----------------------------------------- --------- --------- ---------
Net increase (decrease) in Alliance
Growth Equity Fund Unit Value............ 34.35 48.75 (4.73)
Alliance Growth Equity Fund Unit Value
(Note C):
Beginning of year....................... 209.90 161.15 165.88
- ----------------------------------------- --------- --------- ---------
End of year............................. $244.25 $209.90 $161.15
========================================= ========= ========= =========
Ratio of expenses to average net
assets attributable to the Program ...... 1.68% 1.74% 1.72%
Ratio of net income (loss) to average
net assets attributable to the Program .. (1.08)% (0.76)% (0.60)%
Number of Alliance Growth Equity Fund
Units outstanding at end of year
(000's).................................. 228 214 219
Portfolio turnover rate (Note D).......... 105% 108% 91%
========================================= ========= ========= =========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- ----------------------------------------- --------------------------------------------------------------------
1993* 1992 1991 1990 1989 1988 1987
- ----------------------------------------- --------- --------- --------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Income.................................... $ 1.75 $ 1.51 $ 1.37 $ 1.92 $ 1.70 $ 1.29 $ 1.25
Expenses (Note A)......................... (2.54) (2.22) (2.00) (1.56) (1.59) (1.21) (1.54)
- ----------------------------------------- --------- --------- --------- --------- --------- -------- ---------
Net income (loss)......................... (.79) (.71) (.63) .36 .11 .08 (.29)
Net realized and unrealized gain
(loss) on investments (Note B)........... 26.16 .77 47.67 (13.52) 31.92 9.94 2.77
- ----------------------------------------- --------- --------- --------- --------- --------- -------- ---------
Net increase (decrease) in Alliance
Growth Equity Fund Unit Value............ 25.37 .06 47.04 (13.16) 32.03 10.02 2.48
Alliance Growth Equity Fund Unit Value
(Note C):
Beginning of year....................... 140.51 140.45 93.41 106.57 74.54 64.52 62.04
- ----------------------------------------- --------- --------- --------- --------- --------- -------- ---------
End of year............................. $165.88 $140.51 $140.45 $ 93.41 $106.57 $74.54 $64.52
========================================= ========= ========= ========= ========= ========= ======== =========
Ratio of expenses to average net
assets attributable to the Program ...... 1.69% 1.65% 1.68% 1.64% 1.74% 1.73% 2.08%
Ratio of net income (loss) to average
net assets attributable to the Program .. (0.52)% (0.53)% (0.54)% 0.38% 0.11% 0.12% (0.40)%
Number of Alliance Growth Equity Fund
Units outstanding at end of year
(000's).................................. 208 212 189 47 48 63 69
Portfolio turnover rate (Note D).......... 82% 68% 66% 93% 113% 101% 121%
========================================= ========= ========= ========= ========= ========= ======== =========
</TABLE>
See notes following these tables.
8
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
of The Equitable Life Assurance Society of the United States
ALLIANCE AGGRESSIVE EQUITY FUND--INCOME, EXPENSES AND CAPITAL CHANGES PER
UNIT OUTSTANDING THROUGHOUT THE YEARS INDICATED AND OTHER SUPPLEMENTARY DATA
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1996 1995 1994
- ----------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Income.................................... $ .33 $ .24 $ .18
Expenses (Note A)......................... (.86) (.69) (.60)
- ----------------------------------------- --------- --------- ---------
Net investment income (loss).............. (.53) (.45) (.42)
Net realized and unrealized gain
(loss) on investments (Note B)........... 9.25 9.98 (1.32)
- ----------------------------------------- --------- --------- ---------
Net increase (decrease) in Alliance
Aggressive Equity Fund Unit Value ....... 8.72 9.53 (1.74)
Alliance Aggressive Equity Fund Unit
Value (Note C):
Beginning of year....................... 41.74 32.21 33.95
- ----------------------------------------- --------- --------- ---------
End of year............................. $50.46 $41.74 $32.21
========================================= ========= ========= =========
Ratio of expenses to average net assets
attributable to the Program.............. 1.80% 1.86% 1.86%
Ratio of net investment income (loss) to
average net assets attributable to
the Program.............................. (1.12)% (1.21)% (1.31)%
Number of Alliance Aggressive Equity
Fund Units outstanding at end
of year (000's).......................... 395 328 283
Portfolio turnover rate (Note D).......... 118% 137% 94%
========================================= ========= ========= =========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
1993* 1992 1991 1990 1989 1988 1987
- ----------------------------------------- --------- --------- --------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Income.................................... $ .26 $ .31 $ .29 $ .28 $ .29 $ .17 $ .17
Expenses (Note A)......................... (.57) (.50) (.41) (.27) (.24) (.20) (.28)
- ----------------------------------------- --------- --------- --------- -------- -------- --------- ---------
Net investment income (loss).............. (.31) (.19) (.12) .01 .05 (.03) (.11)
Net realized and unrealized gain
(loss) on investments (Note B)........... 4.25 (1.13) 14.52 1.17 4.85 .11 (.34)
- ----------------------------------------- --------- --------- --------- -------- -------- --------- ---------
Net increase (decrease) in Alliance
Aggressive Equity Fund Unit Value ....... 3.94 (1.32) 14.40 1.18 4.90 .08 (.45)
Alliance Aggressive Equity Fund Unit
Value (Note C):
Beginning of year....................... 30.01 31.33 16.93 15.75 10.85 10.77 11.22
- ----------------------------------------- --------- --------- --------- -------- -------- --------- ---------
End of year............................. $33.95 $30.01 $31.33 $16.93 $15.75 $10.85 $10.77
========================================= ========= ========= ========= ======== ======== ========= =========
Ratio of expenses to average net assets
attributable to the Program.............. 1.84% 1.74% 1.59% 1.65% 1.74% 1.71% 2.19%
Ratio of net investment income (loss) to
average net assets attributable to
the Program.............................. (1.02)% (0.66)% (0.48)% 0.07% 0.35% (0.23)% (0.84)%
Number of Alliance Aggressive Equity
Fund Units outstanding at end
of year (000's).......................... 249 229 150 13 5 3 2
Portfolio turnover rate (Note D).......... 83% 71% 63% 48% 92% 103% 227%
========================================= ========= ========= ========= ======== ======== ========= =========
</TABLE>
See notes following these tables.
9
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
of The Equitable Life Assurance Society of the United States
ALLIANCE BALANCED FUND--INCOME, EXPENSES AND CAPITAL CHANGES PER UNIT
OUTSTANDING THROUGHOUT THE YEARS INDICATED AND OTHER SUPPLEMENTARY DATA
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1996 1995 1994
- --------------------------------------- -------- -------- --------
<S> <C> <C> <C>
Income.................................. $ 1.00 $ .89 $ .74
Expenses (Note A)....................... (.48) (.43) (.40)
- --------------------------------------- -------- -------- --------
Net investment income .................. .52 .46 .34
Net realized and unrealized gain
(loss) on investments (Note B)......... 2.11 3.74 (2.60)
- --------------------------------------- -------- -------- --------
Net increase (decrease) in
Alliance Balanced Fund Unit Value ..... 2.63 4.20 (2.26)
Alliance Balanced Fund Unit Value (Note
C):
Beginning of year..................... 26.39 22.19 24.45
- --------------------------------------- -------- -------- --------
End of year........................... $29.02 $26.39 $22.19
======================================= ======== ======== ========
Ratio of expenses to average net assets
attributable to the Program............ 1.73% 1.79% 1.72%
Ratio of net investment income to
average net assets attributable to
the Program............................ 1.91% 1.90% 1.51%
Number of Alliance Balanced Fund Units
outstanding at end of year (000's) .... 476 458 446
Portfolio turnover rate (Note D) ....... 177% 170% 107%
======================================= ======== ======== ========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1993* 1992 1991 1990 1989 1988 1987
- --------------------------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Income.................................. $ .77 $ .79 $ .80 $ .94 $ .93 $ .72 $ .53
Expenses (Note A)....................... (.39) (.35) (.32) (.27) (.25) (.21) (.30)
- --------------------------------------- -------- -------- -------- -------- -------- -------- --------
Net investment income .................. .38 .44 .48 .67 .68 .51 .23
Net realized and unrealized gain
(loss) on investments (Note B)......... 2.00 (1.34) 6.04 (.98) 2.66 1.07 (1.10)
- --------------------------------------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease) in
Alliance Balanced Fund Unit Value ..... 2.38 (.90) 6.52 (.31) 3.34 1.58 (.87)
Alliance Balanced Fund Unit Value (Note
C):
Beginning of year..................... 22.07 22.97 16.45 16.76 13.42 11.84 12.71
- --------------------------------------- -------- -------- -------- -------- -------- -------- --------
End of year........................... $24.45 $22.07 $22.97 $16.45 $16.76 $13.42 $11.84
======================================= ======== ======== ======== ======== ======== ======== ========
Ratio of expenses to average net assets
attributable to the Program............ 1.70% 1.65% 1.67% 1.66% 1.73% 1.70% 2.12%
Ratio of net investment income to
average net assets attributable to
the Program............................ 1.61% 2.03% 2.47% 4.12% 4.38% 4.00% 1.66%
Number of Alliance Balanced Fund Units
outstanding at end of year (000's) .... 419 364 284 27 16 12 10
Portfolio turnover rate (Note D) ....... 102% 90% 114% 199% 175% 172% 238%
======================================= ======== ======== ======== ======== ======== ======== ========
</TABLE>
See notes below.
NOTES:
* Prior to July 22, 1993, Equitable Capital Management Corporation
(Equitable Capital) served as the investment adviser to the Fund. On
July 22, 1993, Alliance Capital Management L.P. acquired the business
and substantially all of the assets of Equitable Capital and became the
investment adviser to the Fund.
A. Enrollment fees are not included above and did not affect the Alliance
Growth Equity, Aggressive Equity or Balanced Fund Unit Values.
Enrollment fees were generally deducted from contributions to the
Program.
B. See Note 2 to Financial Statements of Separate Account Nos. 3 (Pooled),
4 (Pooled) and 10 (Pooled), which may be found in the SAI.
C. The value for an Alliance Growth Equity Fund Unit was established at
$10.00 on January 1, 1968 under the National Association of Realtors
Members Retirement Program (NAR Program). The NAR Program was merged
into the Members Retirement Program on December 27, 1984. The values
for an Alliance Aggressive Equity and a Balanced Fund Unit were
established at $10.00 on May 1, 1985, the date on which the Funds were
first made available under the Program.
D. The portfolio turnover rate includes all long-term U.S. Government
securities, but excludes all short-term U.S. Government securities and
all other securities whose maturities at the time of acquisition were
one year or less. Represents the annual portfolio turnover rate for the
entire Separate Account. Income, expenses, gains and losses shown above
pertain only to participants' accumulations attributable to the Program.
Other plans also participate in the Alliance Growth Equity, Aggressive
Equity and Balanced Funds and may have operating results and other
supplementary data different from those shown above.
10
<PAGE>
SEPARATE ACCOUNT NO. 51 (POOLED) UNIT VALUES
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
ALLIANCE CONSERVATIVE GROWTH
GLOBAL INVESTORS INVESTORS
FUND FUND FUND
---------- -------------- -----------
<S> <C> <C> <C>
Unit Value as of:
December 31, 1993........... $11.05 $10.22 $10.49
December 31, 1994........... $11.45 $ 9.62 $ 9.98
December 31, 1995 .......... $13.38 $11.39 $12.40
December 31, 1996 .......... $15.11 $11.81 $13.76
Number of Units Outstanding
at December 31, 1996
(000's) .................... 615 848 290
</TABLE>
PART III: INVESTMENT OPTIONS
Currently nine INVESTMENT OPTIONS are available under the Program. Six
Options are Funds--the Alliance Growth Equity Fund, the Alliance Aggressive
Equity Fund, the Alliance Balanced Fund, the Alliance Global Fund and two
Asset Allocation Options--the Alliance Conservative Investors Fund and the
Alliance Growth Investors Fund. The Alliance Growth Equity, Aggressive
Equity, Balanced, Global, Conservative Investors and Growth Investors Funds
were formerly known as the Growth Equity, Aggressive Equity, Balanced,
Global, Conservative Investors and Growth Investors Funds, respectively. The
Funds' objectives, policies and risks have remained the same. Three Options
are General Account Options--two Guaranteed Rate Accounts and the Money
Market Guarantee Account. AS OF AUGUST 1, 1997, FOUR ADDITIONAL FUNDS WILL BE
AVAILABLE--MFS RESEARCH, WARBURG PINCUS SMALL COMPANY VALUE, T. ROWE PRICE
EQUITY INCOME AND MERRILL LYNCH WORLD STRATEGY.
THE FUNDS
Each of the Funds has a different investment objective that it seeks to
achieve by following specific investment policies. We do not anticipate that
the investment objective of any of the Funds will change. We do, however,
have the right to change the investment objectives of the Alliance Growth
Equity, Aggressive Equity and Balanced Funds, subject to the approval of the
New York State Insurance Department. The investment objectives of the
Alliance Global, Conservative Investors and Growth Investors Funds can only
be changed by a majority vote of the shareholders of the corresponding
Portfolios of The Hudson River Trust. See Voting Rights under Part V:
Equitable Life and the Investment Managers below. None of the investment
objectives and policies of the MFS Research, Warburg Pincus Small Company
Value, T. Rowe Price Equity Income and Merrill Lynch World Strategy Funds of
the EQ Advisors Trust are fundamental and may be changed by the Board of
Trustees of the EQ Advisors Trust without the approval of shareholders. THERE
IS NO ASSURANCE THAT THE INVESTMENT OBJECTIVES OF ANY OF THE FUNDS WILL BE
MET OR THAT THE RISK TO PRINCIPAL OR VOLATILITY OF RETURN WILL BE AS
INDICATED. See Risks and Investment Techniques below.
THE ALLIANCE GROWTH EQUITY FUND
OBJECTIVE. The Alliance Growth Equity Fund seeks to achieve long-term growth
of capital by investing in the securities of carefully selected companies we
believe will share in the growth of our nation's economy--and those of other
leading industrialized countries--over a long period. The Alliance Growth
Equity Fund invests in securities of companies of any capitalization but is
generally invested primarily in securities of intermediate to large sized
companies.
11
<PAGE>
INVESTMENT POLICIES. The Alliance Growth Equity Fund invests primarily in
common stocks. Smaller amounts may be invested in other equity-type
securities, such as convertible preferred stocks or convertible debt
instruments. The Alliance Growth Equity Fund may use its assets to make
non-equity investments. These could include non-participating and
non-convertible preferred stocks, bonds and debentures. Some non-equity
investments may carry certain equity features such as conversion or exchange
rights or warrants for the acquisition of stocks of the same or different
issuers or participation based on revenues, sales or profits. If, in light of
economic conditions and the general level of stock prices, it appears that
the Fund's investment objective will not be met by buying equities and equity
type securities, non-equity investment may be substantial. The Fund may
invest up to 10% of its total assets in restricted securities.
The Alliance Growth Equity Fund may make temporary investments in government
obligations, short-term commercial paper and other money market instruments,
either directly or through our Separate Account No. 2A. While equity
investments will be made primarily in securities of United States companies
or foreign companies doing substantial business in the United States, up to
15% of the value of the Fund's assets may be invested in the securities of
established foreign companies without substantial business in the United
States. See Risks and Investment Techniques below for more information on
restricted securities, Separate Account No. 2A, securities of medium and
smaller sized companies, foreign securities, investment concentration, money
market investments and convertible securities.
THE ALLIANCE AGGRESSIVE EQUITY FUND
OBJECTIVE. The Alliance Aggressive Equity Fund seeks to achieve long-term
capital growth, consistent with investment quality. The Fund will attempt to
achieve this objective by investing primarily in securities of medium and
smaller sized companies (with capitalization generally between $50 million
and $1.5 billion) which we believe have greater growth potential than larger
companies.
INVESTMENT POLICIES. Most of the time, the Alliance Aggressive Equity Fund
will invest primarily in common stocks of medium and smaller sized companies.
The Fund may also invest in securities not generally defined as growth
stocks, but with unusual value or earnings potential. For example,
opportunities for capital growth exist from time to time in what are believed
to be cyclical industries, companies whose securities are temporarily
undervalued, special situations, younger but not widely known companies and
companies doing business in countries whose economies are expanding. The
Alliance Aggressive Equity Fund may invest in foreign companies without
substantial business in the United States. Industry diversification is not an
objective of the Alliance Aggressive Equity Fund and it may at times be less
diversified than a traditional equity portfolio. Some other equity-type
investments may also be made. The Fund may also invest in short-term debt
securities such as corporate notes, and temporary money market investments,
including our Separate Account No. 2A. Additionally, the Fund may invest up
to 10% of its total assets in restricted securities.
See Risks and Investment Techniques below for more information on foreign
securities, restricted securities, securities of medium and smaller sized
companies and money market investments. This Fund may hold investments with
greater growth potential and greater risks than those investments held by the
Alliance Growth Equity and Balanced Funds. Due to this Fund's aggressive
investment policies and less diversified investments, you should consider
limiting the amount allocated to this Fund, particularly as you near
retirement.
12
<PAGE>
THE ALLIANCE BALANCED FUND
OBJECTIVE. The Alliance Balanced Fund's investment objective is to achieve
both appreciation of capital and current income by investments in a
diversified portfolio of common stocks, other equity-type securities and
longer-term fixed income securities and current income by investments in
publicly traded debt securities and short-term money market instruments. The
investment mix is determined by the portfolio manager.
INVESTMENT POLICIES. It is anticipated that we will vary the portion of the
Alliance Balanced Fund's assets invested in each type of security in
accordance with our evaluation of economic conditions, the general level of
common stock prices, anticipated interest rates and other relevant
considerations, including our assessment of the risks associated with each
investment medium. The Fund is subject to the risk that we may incorrectly
predict changes in the relative values of the stock and bond markets. In
general, equity securities will comprise the greatest portion of the Balanced
Fund's assets. At the years ended December 31, 1987 through 1996, the
percentage of the Alliance Balanced Fund's assets invested in equity
securities (including equity-type securities such as convertible preferred
stocks or convertible debt instruments) has ranged from 43% to 86%. The
Fund's non-money market debt securities will consist primarily of
publicly-traded securities issued or guaranteed by the United States
Government or its agencies or instrumentalities and corporate fixed income
securities, including, but not limited to, bank obligations, notes,
asset-backed securities, mortgage pass-through obligations, collateralized
mortgage obligations, zero coupon bonds, and preferred stock. The Alliance
Balanced Fund may also buy debt securities with equity features such as
conversion or exchange rights or warrants for the acquisition of stock or
participations based on revenues, sales or profits. All non-money market debt
securities will be investment grade, at the time of acquisition, i.e., rated
BBB or higher by Standard & Poor's Corporation (S&P) or Baa or higher by
Moody's Investors Services, Inc. (Moody's) or, if unrated, will be of
comparable investment quality. The average maturity of the debt securities
held by the Alliance Balanced Fund will vary according to market conditions
and the stage of interest rate cycles. The Alliance Balanced Fund may also
realize gains on debt securities when such actions are considered
advantageous in light of existing market conditions. The Fund may invest up
to 10% of its total assets in restricted securities and may invest in foreign
companies without substantial business in the United States. The Alliance
Balanced Fund may invest in money market securities through our Separate
Account No. 2A or directly. The Alliance Balanced Fund may invest in put and
call options and trade in stock index or interest rate futures for hedging
purposes only. In option transactions, the economic benefit will be offset by
the cost of the option, while any loss would be limited to such cost. The
Fund also enters into hedging transactions. These transactions are undertaken
only when any required regulatory procedures have been completed and when
economic and market conditions indicate that such transactions would serve
the best interests of the Fund.
See Risks and Investment Techniques below for more information on foreign
securities, restricted securities, securities of medium and smaller sized
companies, debt instruments issued by Schedule B Banks, hedging transactions,
money market investments and convertible securities.
THE HUDSON RIVER TRUST
The Hudson River Trust is an open-end, diversified management investment
company, more commonly called a mutual fund. As a "series" type of mutual
fund, it includes various Portfolios, three of which are offered through this
Program. The Hudson River Trust commenced operations in January 1987. The
Hudson River Trust does not impose a sales charge or "load" for buying and
selling its shares. All dividend distributions from The Hudson River Trust
are reinvested in the Portfolio to which they relate. The Alliance Global,
Conservative Investors and Growth Investors Funds invest in corresponding
Portfolios of The Hudson River Trust.
13
<PAGE>
The Hudson River Trust prospectus accompanying this prospectus contains
information about the objectives, investment policies and special risks of
the Alliance Global, Conservative Investors and Growth Investors Portfolios.
YOU SHOULD CAREFULLY READ THE HUDSON RIVER TRUST PROSPECTUS BEFORE YOU
ALLOCATE CONTRIBUTIONS OR TRANSFER AMOUNTS TO THE ALLIANCE GLOBAL,
CONSERVATIVE INVESTORS OR GROWTH INVESTORS FUNDS.
ALLIANCE GLOBAL FUND OBJECTIVE. The Alliance Global Fund seeks to achieve
long-term growth of capital by investing primarily in equity securities of
non-United States as well as United States companies.
ALLIANCE CONSERVATIVE INVESTORS FUND OBJECTIVE. The Alliance Conservative
Investors Fund seeks to achieve high total return without, in the Fund
adviser's opinion, undue risk to principal. The Fund invests in a diversified
mix of publicly-traded, fixed income and equity securities. Asset mix and
security selection are primarily based upon factors expected to reduce risk.
ALLIANCE GROWTH INVESTORS FUND OBJECTIVE. The objective of the Alliance
Growth Investors Fund is high total return consistent with the Fund adviser's
determination of reasonable risk. The Fund invests in a diversified mix of
publicly-traded, fixed income and equity securities. Asset mix and security
selection are based upon factors expected to increase the possibility of high
long-term return.
THE EQ ADVISORS TRUST
The EQ Advisors Trust is a registered open-end management investment company
that offers a selection of professionally managed investment portfolios. The
EQ Advisors Trust commenced operations on May 1, 1997. As a "series" type of
mutual fund, the Trust issues shares of beneficial interest that are
currently divided among twelve Portfolios. Each Portfolio is a separate
series of the Trust with its own objective and policies. All of the
Portfolios, except for the Merrill Lynch World Strategy Portfolio, are
diversified for 1940 Act purposes. The EQ Advisors Trust does not impose
sales charges or "loads" for buying and selling their shares. The Trustees of
the Trust may establish additional Portfolios at any time.
The EQ Advisors Trust prospectus accompanying this prospectus contains
information about the objectives, investment policies and special risks of
the MFS Research, Warburg Pincus Small Company Value, T. Rowe Price Equity
Income and Merrill Lynch World Strategy Portfolios. YOU SHOULD CAREFULLY READ
THE EQ ADVISORS TRUST PROSPECTUS BEFORE YOU ALLOCATE CONTRIBUTIONS OR
TRANSFER AMOUNTS TO THESE FUNDS.
MFS RESEARCH FUND OBJECTIVE. The MFS Research Fund seeks to provide long-term
growth of capital and future income by investing a substantial portion of its
assets in common stock or securities convertible into common stock of
companies believed by the adviser to possess better than average prospects
for long-term growth.
WARBURG PINCUS SMALL COMPANY VALUE FUND OBJECTIVE. The Warburg Pincus Small
Company Value Fund seeks long-term capital appreciation by investing
primarily in a portfolio of equity securities of small capitalization
companies (companies having market capitalizations of $1 billion or less at
the time of initial purchase) that the adviser considers to be relatively
undervalued. Current income is a secondary consideration in selecting
portfolio investments.
14
<PAGE>
T. ROWE PRICE EQUITY INCOME FUND OBJECTIVE. The T. Rowe Price Equity Income
Fund seeks to provide substantial dividend income and also capital
appreciation by investing primarily in dividend paying common stocks of
established companies. Total return will consist primarily of dividend income
and secondarily of capital appreciation (or depreciation).
MERRILL LYNCH WORLD STRATEGY FUND OBJECTIVE. The Merrill Lynch World Strategy
Fund seeks a high total return by investing primarily in equity and fixed
income securities, including convertible securities of U.S. and foreign
issuers. Total investment return consists of interest, dividends, discount
accrual and capital changes, including changes in the value of non-dollar
denominated securities and other assets and liabilities resulting from
currency fluctuations. Investing in foreign securities involves special
considerations. The Portfolio may employ a variety of instruments and
techniques to enhance income and to hedge against market and currency risk.
RISKS AND INVESTMENT TECHNIQUES
You should be aware that any investment in securities carries with it a risk
of loss. The different investment objectives and policies of each Fund may
affect the return of each Fund. Additionally, there are market and financial
risks inherent in any securities investment. By market risks, we mean factors
which do not necessarily relate to a particular issuer but which affect the
way markets, and securities within those markets, perform. We sometimes
describe market risk in terms of volatility, that is, the range and frequency
of market value changes. Market risks include such things as changes in
interest rates, general economic conditions and investor perceptions
regarding the value of debt and equity securities. By financial risks we mean
factors associated with a particular issuer which may affect the price of its
securities, such as its competitive posture, its earnings and its ability to
meet its debt obligations. The risk factors and investment techniques
associated with the Alliance Growth Equity, Aggressive Equity and Balanced
Funds are stated below. See The Hudson River Trust prospectus for risk
factors and investment techniques associated with an investment in the
Alliance Global, Conservative Investors and Growth Investors Funds. See the
EQ Advisors Trust prospectus for risks and factors and investment techniques
associated with an investment in the MFS Research, Warburg Pincus Small
Company Value, T. Rowe Price Equity Income and Merrill Lynch World Strategy
Funds.
Mortgage Pass-Through Securities--The Alliance Balanced Fund may invest in
mortgage pass-through securities, which are securities representing interests
in pools of mortgages. Principal and interest payments made on the mortgages
in the pools are passed through to the holder of such securities.
Collateralized Mortgage Obligations--The Alliance Balanced Fund may invest in
collateralized mortgage obligations (CM0s). CMOs are debt securities
collateralized by underlying mortgage loans or pools of mortgage pass-through
securities and are generally issued by limited purpose finance subsidiaries
of U.S. Government instrumentalities. CMOs are not, however, mortgage
pass-through securities. Investors in CMOs are not owners of the underlying
mortgages, but are simply owners of a debt security backed by such pledged
assets.
Asset-Backed Securities--The Alliance Balanced Fund may purchase asset-backed
securities that represent either fractional interests or participation in
pools of leases, retail installment loans or revolving credit receivables
held by a trust or limited purpose finance subsidiary. Such asset-backed
securities may be secured by the underlying assets or may be unsecured.
The Alliance Balanced Fund may invest in other asset-backed securities that
may be developed in the future.
15
<PAGE>
Yankee Securities--The Alliance Balanced Fund may invest in Yankee
securities. Yankee securities are non-U.S. issuers that issue debt securities
that are denominated in U.S. dollars.
Zero-Coupon Bonds--The Alliance Balanced Fund may invest in zero-coupon
bonds. Such bonds may be issued directly by agencies and instrumentalities of
the U.S. Government or by private corporations. Zero-coupon bonds do not make
regular interest payments. Instead, they are sold at a deep discount from
their face value. As a result, their price can be very volatile when interest
rates change.
Repurchase Agreements--In repurchase agreements, the Alliance Balanced Fund
buys securities from a seller, usually a bank or brokerage firm, with the
understanding that the seller will repurchase the securities at a higher
price at a future date. During the term of the repurchase agreement the
Balanced Fund retains the securities subject to the repurchase agreement as
collateral. Such transactions afford an opportunity for the Fund to earn a
fixed rate of return on available cash at minimal market risk, although the
Fund may be subject to various delays and risks or loss if the seller is
unable to meet its obligation to repurchase.
Foreign Currency Forward Contracts--The Alliance Balanced Fund may enter into
contracts for the purchase or sale of a specific foreign currency at a future
date at a price set at the time of the contract. The Fund will enter into
such forward contracts for hedging purposes only.
Debt Securities Subject to Prepayment Risks--Mortgage pass-through securities
and certain collateralized mortgage obligations, asset-backed securities and
other debt instruments in which the Alliance Balanced Fund may invest are
subject to prepayments prior to their stated maturity. It is usually not
possible to accurately predict the rate at which prepayments will be made,
which rate may be affected, among other things, by changes in generally
prevailing market interest rates. If prepayments occur, the Fund suffers the
risk that it will not be able to reinvest the proceeds at as high a rate of
interest as it had previously been receiving. Also, the Fund will incur a
loss to the extent that prepayments are made for an amount that is less than
the value at which the security was then being carried by the fund. Moreover,
securities that may be prepaid tend to increase in value less during times of
declining interest rates, and to decrease in value more during times of
increasing interest rates, than do securities that are not subject to
prepayment.
When-Issued and Delayed Delivery Securities--The Alliance Balanced Fund may
purchase and sell securities on a when-issued or delayed delivery basis. In
these transactions, securities are purchased or sold by a Fund with payment
and delivery taking place in the future in order to secure what is considered
to be an advantageous price or yield to the Fund at the time of entering into
the transaction. However, the market value of such securities at the time of
settlement may be more or less than the purchase price then payable. The Fund
will sell on a forward settlement basis only securities it owns or has the
right to acquire.
Foreign Securities--The Alliance Growth Equity, Aggressive Equity and
Balanced Funds may make a limited portion of their investments in the
securities of established foreign companies which do not do substantial
business in the United States. For many foreign securities, there are
dollar-denominated American Depository Receipts (ADRs), which are traded in
the United States on exchanges or over-the-counter, and are issued by
domestic banks. The Funds may invest in foreign securities directly and
through ADRs and may hold some foreign securities outside of the U.S. ADRs do
not lessen the foreign exchange risk inherent in investing in the securities
of foreign issuers. However, by investing in ADRs rather than directly in
foreign issuers' stock, the Funds will avoid currency risks during the
settlement period for either purchases or sales. Foreign investments may
involve risks not present in
16
<PAGE>
domestic investments, such as changes in the political or economic climate of
countries in which companies do business. Foreign securities may be less
liquid or subject to greater price volatility than securities of domestic
issuers, and foreign accounting, auditing and disclosure standards may differ
from domestic standards. There may be less regulation in foreign countries of
stock exchanges, brokers, banks, and listed companies than in the United
States. The value of foreign investments may rise or fall because of changes
in currency exchange rates or exchange controls.
Restricted Securities--The Alliance Growth Equity, Aggressive Equity and
Balanced Funds may make investments in restricted securities. Restricted
securities are generally less liquid than registered securities and market
quotations for such securities may not be readily available. The Funds may
not be able to sell restricted securities except pursuant to registration
under applicable Federal and State securities laws or pursuant to Securities
and Exchange Commission rules which limit their sale to certain purchasers
and may require that they be held by the Funds for a specified period of time
prior to resale. Because of these restrictions, at times the Funds may not be
readily able to sell them at fair market value.
Securities of Medium and Smaller Sized Companies--The Alliance Aggressive
Equity Fund invests primarily in the securities of medium and smaller sized
companies, although the Alliance Growth Equity and Balanced Funds may also
make these investments. Medium and smaller sized companies may be dependent
on the performance of only one or two products. Such companies may be
vulnerable to competition from larger companies with greater resources and to
economic conditions affecting their market sector. Therefore, consistent
earnings may not be as likely in small companies as in large companies. Such
companies may also be more dependent on access to equity markets to raise
capital than larger companies with greater ability to support debt. Small and
intermediate sized companies may be new, without long business or management
histories, and perceived by the market as unproven. Their securities may be
held primarily by insiders or institutional investors, which may have an
impact on marketability. The price of these stocks may rise and fall more
frequently and to a greater extent than the overall market.
Investment Concentration--From time to time, the equity holdings in the
Alliance Growth Equity Fund may be concentrated in the securities of a
relatively small number of issuers. In no event will an investment be made
for the Fund in the securities of one issuer if such investment would cause
more than 10% of the book value of the Alliance Growth Equity Fund to be
invested in the securities of such issuer, and no investment will be made for
the Fund if such investment would cause more than 40% of the book value of
the Fund to be invested in the securities of four or fewer issuers. This
strategy of investment concentration may increase an investor's risk of loss
in the event of a decline in the value of one of these securities. As of
December 31, 1996, 28.6% (of market value) of the Alliance Growth Equity Fund
was held in the stocks of four issuers. See Separate Account No. 4 (Pooled)
Statement of Investments and Net Assets in the SAI.
Debt Instruments Issued by Schedule B Banks--The Alliance Balanced Fund may
invest in debt instruments issued by Schedule B Banks, which are foreign
branches of United States banks. Schedule B Banks are not required to
maintain the same financial reserves which are required of United States
banks, but Schedule B Bank certificates of deposit are fully guaranteed by
the U.S. parent of the issuing bank. Debt instruments issued by Schedule B
Banks may include certificates of deposit and time deposits of London
branches of United States banks ("Eurodollars"). Eurodollar investments are
subject to the types of risks associated with foreign securities. London
branches of the United States banks have extensive government regulation
which may limit both the amount and the type of loans and interest rates. In
addition, the banking industry's profitability is closely linked to
prevailing money market conditions for financing lending operations. Both
general economic conditions and credit risks play an important part in the
operations of the banking industry. United States banks are required to
maintain reserves, are limited in how much they can loan to a single borrower
and are subject to other regulations to promote financial soundness. Not all
of these laws and regulations apply to foreign branches of United States
banks.
17
<PAGE>
Hedging Transactions--The Alliance Balanced Fund may engage in hedging
transactions which are designed to protect against anticipated adverse price
movements in securities owned or intended to be purchased by the Fund. When
interest rates go up, the market value of outstanding debt securities
declines and vice versa. In recent years the volatility of the market for
debt securities has increased significantly, and market prices of longer-term
obligations have been subject to wide fluctuations, particularly as
contrasted with those of short-term instruments. The Fund will take certain
risks into consideration when determining which, if any, options or financial
futures contracts it will use. If the price movements of hedged portfolio
securities are in fact favorable to the Fund, the hedging transactions will
tend to reduce and may eliminate the economic benefit to the Fund which
otherwise would result. Also, the price movements of options and futures used
for hedging purposes may not correlate as anticipated with price movements of
the securities being hedged. This can make a hedge transaction less effective
than anticipated and could result in a loss. The options and futures markets
can sometimes become illiquid and the exchanges on which such instruments are
traded may impose trading halts or delays on the exercise of options and
liquidation of futures positions in certain circumstances. This could in some
cases operate to the Fund's detriment.
Money Market Investments--The Alliance Growth Equity, Aggressive Equity and
Balanced Funds may make temporary investments in government obligations,
short-term commercial paper and other money market instruments. They may buy
these directly or acquire units in our Separate Account No. 2A. Separate
Account No. 2A provides an efficient means for certain of our other separate
accounts to invest cash positions on a pooled basis at no additional costs.
Separate Account No. 2A seeks to obtain a high level of current income,
preserve its assets and maintain liquidity. It invests only in short-term
securities which mature in 60 days or less from the date of purchase or which
are subject to repurchase agreements requiring repurchases in 60 days or
less. Units in Separate Account No. 2A are not registered under the 1933 Act.
The kinds of direct investments the Funds make in money market instruments
will be payable only in United States dollars and will consist principally of
securities issued or guaranteed by the United States Government or one of its
agencies or instrumentalities, negotiable certificates of deposit, bankers'
acceptances or bank time deposits, repurchase agreements (covering securities
issued or guaranteed by the United States Government or one of its agencies
or instrumentalities, certificates of deposit or bankers' acceptances),
commercial paper that is rated Prime-1 by Moody's Investors Service
("Moody's") or A-1 or A-1 Plus by Standard & Poor's Corporation ("S&P"),
unrated commercial paper, master demand notes or variable amount floating
rate notes of any issuer that has an outstanding issue of unsecured debt that
is currently rated Aa or better by Moody's or AA or better by S&P, and any
debt securities issued or guaranteed by an issuer, which is currently rated
Aa or better by Moody's or AA or better by S&P, with less than one year to
maturity. Such investments may include Eurodollars, certificates of deposit
and commercial paper issued by Schedule B Banks.
Convertible Securities--The Alliance Growth Equity, Aggressive Equity and
Balanced Funds may invest in convertible preferred stocks or convertible debt
instruments. Convertible securities contain both debt and equity features.
Because of their debt element, they may provide some protection when stock
prices decline. Nevertheless, convertible securities may lose significant
value in periods of extreme market volatility.
THE GENERAL ACCOUNT OPTIONS
Contributions to the General Account Options 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
18
<PAGE>
York and to insurance laws and regulations of all jurisdictions in which we
are authorized to do business. Because of applicable exemptive and
exclusionary provisions, interests in the general account have not been
registered under the 1933 Act, nor is the general account an investment
company under the Investment Company Act of 1940. 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 prospectus for your information and which relate
to the general account and the General Account Options. 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.
GUARANTEED RATE ACCOUNTS
THE GUARANTEES. Contributions to the Guaranteed Rate Accounts (GRAs) 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 asset-based fees. GRAs with maturities of
approximately three and approximately five years are available under the
Program. AMOUNTS ALLOCATED TO A GRA MAY GENERALLY NOT BE REMOVED PRIOR TO
MATURITY.
New guaranteed rates are offered each Wednesday and are available for a
seven-day period. Call the AIM System to obtain the current GRA rates.
Interest accrues from the day after your contribution or transfer is credited
through the maturity date of the GRA, which is either approximately three or
approximately five years from the end of the seven-day offering period. We
guarantee the amount of your contributions and the interest credited, subject
to any penalties applicable upon premature withdrawal. See Premature
Withdrawals and Transfers from a GRA in the SAI for a description of such
penalties and when they apply. For a discussion of maturing GRAs, see
Maturing GRAs in the SAI.
PREMATURE WITHDRAWALS AND TRANSFERS
o You may not transfer from one GRA to another or from a GRA to another
Investment Option except at maturity.
o You may transfer other amounts at any time to a GRA at the current
guaranteed rate.
o Withdrawals may be made from a GRA before maturity if: you are disabled;
you attain age 70 1/2; you die; or you are not self-employed and your
employment is terminated.
o You may not remove GRA funds before maturity to take a loan, hardship or
other in-service withdrawal, as a result of a trustee-to-trustee transfer,
or to receive benefits from a terminated plan.
o Certain other withdrawals prior to maturity are permitted, but may be
subject to penalty. See Procedures for Withdrawals, Distributions and
Transfers from a GRA in the SAI.
MONEY MARKET GUARANTEE ACCOUNT
THE GUARANTEES. All amounts held in the Money Market Guarantee Account are
credited with the same rate of interest. The rate changes monthly and is
expressed as an effective annual rate, reflecting daily compounding and the
deduction of asset-based fees and charges. The rate will approximate current
market rates for money market mutual funds minus these fees. Call the AIM
System to obtain the current monthly rate. On January 1 each year we set an
annual minimum rate for this Account. The minimum guaranteed interest rate
for 1997 is 2.5% (before fees).
19
<PAGE>
CONTRIBUTIONS. Contributions may be made at any time and will earn the
current rate from the day after the contribution is credited through the end
of the month or, if earlier, the day of withdrawal or transfer. Balances in
the Account at the end of the month automatically begin receiving interest at
the new rate until transferred or withdrawn. We guarantee the amount of your
contributions and the interest credited.
DISTRIBUTIONS AND TRANSFERS. Distributions, withdrawals and transfers may be
made at any time assuming your employer's plan permits.
PART IV: FUND PERFORMANCE
The following tables provide a historical view of investment performance. The
information presented includes performance results for each Fund, along with
data representing unmanaged market indices.
UNMANAGED MARKET INDICES
Benchmark indices, while providing a broader perspective on relative
performance, are only a tool for comparison. At any time, the composition of
a Fund will differ from the benchmarks presented. Also, performance data for
the unmanaged market indices do not reflect any deductions for investment
advisory, brokerage or other expenses of the type typically associated with
an actively managed fund. This effectively overstates the rate of return of
the market indices relative to that which would be available to a typical
investor, and limits the usefulness of these indices in assessing the
performance of the Funds. Since the Funds do not distribute dividends or
interest, the market indices have been adjusted to reflect reinvestment of
dividends and interest to provide comparability.
STANDARD AND POOR'S 500 INDEX (S&P 500)--an unmanaged weighted index of the
securities of 500 industrial, transportation, utility and financial companies
widely regarded by investors as representative of the stock market.
STANDARD & POOR'S MIDCAP 400 (TOTAL RETURN) INDEX (S&P MIDCAP TR)--an
unmanaged market-weighted index with each stock affecting the index in
proportion to its market value. It consists of 400 domestic stocks chosen for
market size (median market capitalization falls in the $200 million to $5
billion range), liquidity, and industry group representation.
CONSUMER PRICE INDEX (URBAN CONSUMERS--NOT SEASONALLY ADJUSTED)(CPI)--an
index of inflation.
LEHMAN AGGREGATE INDEX--an unmanaged bond index which includes fixed rate
debt issues rated investment grade or higher by Moody's Investors Service,
Standard and Poor's Corporation, or Fitch Investor's Service, in that order.
All issues have at least one year to maturity and an outstanding par value of
at least $100 million for U.S. Government issues and $50 million for all
others.
LEHMAN GOVERNMENT/CORPORATE BOND INDEX (LEHMAN)--an unmanaged index widely
regarded by investors as representative of the bond market.
LEHMAN TREASURY BOND INDEX (LEHMAN TREASURY)--an unmanaged bond index which
includes all public obligations of the U.S. Treasury (excluding foreign
targeted issues).
20
<PAGE>
MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX (MSCI WORLD)--an
arithmetical average weighted by market value of the performance of 1,520
companies listed on the stock exchanges of the United States, Europe, Canada,
Australia, New Zealand and the Far East.
HOW PERFORMANCE DATA ARE PRESENTED
The following tables show Fund performance on several different bases: annual
percent changes in Fund Unit Values, average annual rates of return and the
total value as of December 31, 1996 of a $10,000 investment made on January
1, 1987. The Fund performance shown may not represent your actual experience;
nor does it reflect the effect of the record maintenance and report or
enrollment fees. The average annual rates of return are time-weighted, assume
an investment at the beginning of each period, and include the reinvestment
of investment income.
The Alliance Global, Conservative Investors and Growth Investors Funds became
available under the Program on July 1, 1993. The performance figures prior to
that date for these Funds reflect (1) hypothetical performance based on the
actual performance of the Alliance Global, Conservative Investors and Growth
Investors Portfolios, respectively, from the date each commenced operations
and (2) the deduction of the Program Expense Charge, the financial accounting
fee and the daily accrual of direct expenses attributable to the Alliance
Growth Equity Fund. After July 1, 1993, they reflect actual performance and,
for 1993, annualized actual expenses. See Part VII: Deductions and Charges.
No performance is provided for the MFS Research, Warburg Pincus Small Company
Value, T. Rowe Price Equity Income and Merrill Lynch World Strategy Funds.
See the EQ Advisors Trust Prospectus, which accompanies this prospectus for
additional performance information.
21
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------
PERCENT CHANGES IN FUND UNIT VALUES*
- ------------------------------------------------
ANNUAL PERIOD ENDING
LAST BUSINESS DAY OF 1987 1988 1989
- ------------------------- ------ ------- -------
<S> <C> <C> <C>
FUND
- ------------------------- ------ ------- -------
Alliance Growth Equity 4.0% 15.5% 43.0%
- ------------------------- ------ ------- -------
Alliance Aggressive
Equity -4.0 0.7 45.2
- ------------------------- ------ ------- -------
Alliance Balanced -6.9 13.4 24.9
- ------------------------- ------ ------- -------
Alliance Global -- 9.3 25.4
- ------------------------- ------ ------- -------
Alliance Conservative
Investors -- -- 1.7
- ------------------------- ------ ------- -------
Alliance Growth Investors -- -- 2.6
- ------------------------- ------ ------- -------
- ------------------------- ------ ------- -------
COMPARATIVE INDICES 1987 1988 1989
- ------------------------- ------ ------- -------
S&P 500 5.3% 16.6% 31.7%
- ------------------------- ------ ------- -------
S&P Midcap TR -2.0 20.9 35.6
- ------------------------- ------ ------- -------
S&P 500/Lehman Aggregate
(50%/50%) 4.0 12.2 23.1
- ------------------------- ------ ------- -------
MSCI World 16.2 23.3 16.6
- ------------------------- ------ ------- -------
S&P 500/Lehman Treasury
(30%/70%) 3.0 9.9 19.6
- ------------------------- ------ ------- -------
S&P 500/Lehman (70%/30%) 4.0 13.9 26.5
- ------------------------- ------ ------- -------
CPI 4.4 4.4 4.6
- ------------------------- ------ ------- -------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
PERCENT CHANGES IN FUND UNIT VALUES*
- ---------------------------------------------------------------------------------
ANNUAL PERIOD ENDING
LAST BUSINESS DAY OF 1990 1991 1992 1993 1994 1995 1996
- ------------------------- -------- ------- ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
FUND
- ------------------------- -------- ------- ------ ------- ------- ------- -------
Alliance Growth Equity -12.3% 50.4% 0.1% 18.0% -2.8% 30.3% 16.4%
- ------------------------- -------- ------- ------ ------- ------- ------- -------
Alliance Aggressive
Equity 7.5 85.1 -4.2 13.1 -5.1 29.6 20.9
- ------------------------- -------- ------- ------ ------- ------- ------- -------
Alliance Balanced -1.9 39.7 -3.9 10.8 -9.2 18.9 10.0
- ------------------------- -------- ------- ------ ------- ------- ------- -------
Alliance Global -7.4 29.1 -1.9 30.8 3.6 16.8 12.9
- ------------------------- -------- ------- ------ ------- ------- ------- -------
Alliance Conservative
Investors 5.0 18.4 4.3 9.4 -5.9 18.3 3.7
- ------------------------- -------- ------- ------ ------- ------- ------- -------
Alliance Growth Investors 9.4 47.3 3.5 13.9 -4.8 24.2 11.0
- ------------------------- -------- ------- ------ ------- ------- ------- -------
- ------------------------- -------- ------- ------ ------- ------- ------- -------
COMPARATIVE INDICES 1990 1991 1992 1993 1994 1995 1996
- ------------------------- -------- ------- ------ ------- ------- ------- -------
S&P 500 -3.1% 30.5% 7.6% 10.0% 1.3% 37.5% 23.0%
- ------------------------- -------- ------- ------ ------- ------- ------- -------
S&P Midcap TR -5.1 50.1 11.9 13.9 -3.6 30.9 19.2
- ------------------------- -------- ------- ------ ------- ------- ------- -------
S&P 500/Lehman Aggregate
(50%/50%) 2.9 23.2 7.5 9.9 -0.8 28.0 13.3
- ------------------------- -------- ------- ------ ------- ------- ------- -------
MSCI World -17.0 18.3 -5.2 22.5 5.1 20.7 13.5
- ------------------------- -------- ------- ------ ------- ------- ------- -------
S&P 500/Lehman Treasury
(30%/70%) 5.1 19.9 7.3 10.5 -2.0 24.1 8.8
- ------------------------- -------- ------- ------ ------- ------- ------- -------
S&P 500/Lehman (70%/30%) 0.3 26.2 7.6 10.3 -0.1 32.1 16.9
- ------------------------- -------- ------- ------ ------- ------- ------- -------
CPI 6.2 3.0 2.9 2.7 2.7 2.9 3.3
- ------------------------- -------- ------- ------ ------- ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
AVERAGE ANNUAL RATES OF RETURN--DECEMBER 31, 1996*
- ------------------------------------------------------------------------------------
FUND 10 YEARS 5 YEARS 3 YEARS 2 YEARS 1 YEAR
- ---------------------------------- ---------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Alliance Growth Equity 14.7% 11.7% 13.8% 23.1% 16.4%
- ---------------------------------- ---------- --------- --------- --------- --------
Alliance Aggressive Equity 16.2 10.0 14.1 25.2 20.9
- ---------------------------------- ---------- --------- --------- --------- --------
Alliance Balanced 8.6 4.8 5.9 14.4 10.0
- ---------------------------------- ---------- --------- --------- --------- --------
Alliance Global -- 11.9 11.0 14.9 12.9
- ---------------------------------- ---------- --------- --------- --------- --------
Alliance Conservative Investors -- 5.6 4.9 10.8 3.7
- ---------------------------------- ---------- --------- --------- --------- --------
Alliance Growth Investors -- 9.1 9.5 17.4 11.0
- ---------------------------------- ---------- --------- --------- --------- --------
- ---------------------------------- ---------- --------- --------- --------- --------
COMPARATIVE INDICES 10 YEARS 5 YEARS 3 YEARS 2 YEARS 1 YEAR
- ---------------------------------- ---------- --------- --------- --------- --------
S&P 500 15.3% 15.2% 19.7% 30.0% 23.0%
- ---------------------------------- ---------- --------- --------- --------- --------
S&P Midcap TR 15.9 13.9 14.6 24.9 19.2
- ---------------------------------- ---------- --------- --------- --------- --------
S&P 500/Lehman Aggregate (50%/50%) 12.3 11.4 13.3 20.8 13.3
- ---------------------------------- ---------- --------- --------- --------- --------
MSCI World 10.6 10.8 12.9 17.0 13.5
- ---------------------------------- ---------- --------- --------- --------- --------
S&P 500/Lehman Treasury (30%/70%) 10.7 9.6 10.1 16.5 8.8
- ---------------------------------- ---------- --------- --------- --------- --------
S&P 500/Lehman (70%/30%) 13.6 13.0 15.8 24.6 16.9
- ---------------------------------- ---------- --------- --------- --------- --------
CPI 3.7 2.8 2.8 2.9 3.3
- ---------------------------------- ---------- --------- --------- --------- --------
</TABLE>
* Hypothetical performance is shown in italics.
PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE PERFORMANCE. NO PROVISIONS
HAVE BEEN MADE FOR THE EFFECT OF TAXES ON INCOME AND GAINS OR UPON
DISTRIBUTION.
22
<PAGE>
Although historical percentage change data is valuable in evaluating fund
performance, it is often easier to understand the information in more graphic
examples. One approach to this is the use of "mountain charts." Mountain
charts, such as the ones below illustrate the growth of a hypothetical
investment over time for each of the Funds. Each chart illustrates the growth
through December 31, 1996 of an investment of $10,000 made on January 1,
1987. The mountain charts for the Alliance Global, Alliance Conservative
Investors and Alliance Growth Investors Funds illustrate the Funds' annual
rates of return and the total value as of December 31, 1996 of a $10,000
investment made on January 1, 1988, January 1, 1989 and January 1, 1989,
respectively.(a) No charts have been provided for the MFS Research, Warburg
Pincus Small Company Value, T. Rowe Price Equity Income and Merrill Lynch
World Strategy Funds because these Funds were not in existence during these
periods.
GROWTH OF $10,000 INITIAL INVESTMENT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Growth Equity
12/31/86 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91
$10,000 $10,400 $12,012 $17,177 $15,064 $22,657
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
$22,679 $26,762 $26,012 $33,894 $39,453
Aggressive Equity Fund
12/31/86 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91
$10,000 $9,600 $9,667 $14,037 $15,090 $27,931
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
$26,758 $30,263 $28,719 $37,220 $45,000
Balanced Fund
12/31/86 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91
$10,000 $9,310 $10,558 $13,186 $12,936 $18,071
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
$17,367 $19,242 $17,472 $20,774 $22,851
Global Fund
12/31/86 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91
-- $10,000 $10,930 $13,706 $12,692 $16,385
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
$16,074 $21,025 $21,782 $25,441 $28,723
23
<PAGE>
Conservative Investors Fund
12/31/86 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91
-- -- $10,000 $10,170 $10,679 $12,643
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
$13,187 $14,427 $13,575 $16,060 $16,654
Growth Investors Fund
12/31/86 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91
-- -- $10,000 $10,260 $11,224 $16,534
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
$17,112 $19,491 $18,555 $23,046 $25,581
</TABLE>
(a) The Alliance Growth Equity Fund commenced operations under the NAR
Program on January 1, 1968 at a Unit Value of $10.00. The Alliance
Aggressive Equity Fund commenced operations on May 1, 1969, on which date
the hypothetical Program Unit Value would have been $3.38. The Alliance
Balanced Fund commenced operations on June 25, 1979, on which date the
hypothetical Program Unit Value would have been $3.68. The Alliance
Global, Conservative Investors and Growth Investors Funds became
available under the Program on July 1, 1993, each at a Unit Value of
$10.00. The underlying Global Portfolio commenced operations on August
27, 1987. The underlying Conservative Investors and Growth Investors
Portfolios commenced operations on October 2, 1989.
24
<PAGE>
INVESTMENT OF CONTRIBUTIONS IN THE FUNDS
PURCHASE OF FUND UNITS
Amounts allocated to a Fund are used to purchase Units. Your interest in each
Fund is represented by the value of your Units in that Fund. The number of
Units you purchase in a Fund is calculated by dividing the amount allocated
by the Unit Value calculated as of the close of business on the day your
purchase is made. The number of Units credited will not vary because of any
subsequent fluctuation in the Unit Value; however, the value of the Unit
fluctuates with the investment experience of the Fund. Such experience
reflects the investment income and realized and unrealized capital gains and
losses of that Fund, and the deductions and charges we make to the Fund.
BUSINESS DAY
A business day is any day both we and the New York Stock Exchange are open.
Contributions, transfers, and allocation changes are effective on the
business day they are received. Distribution requests are also effective on
the business day they are received unless, as in the Master Plans, there are
plan provisions to the contrary. However, we may have to delay the processing
of any transaction which is not accompanied by a properly completed form or
which is not mailed to the correct address. An Account Executive will
generally be available to speak with you each business day from 9 a.m. to 5
p.m. eastern time. We may, however, close due to emergency conditions.
HOW WE DETERMINE THE UNIT VALUE
We determine the Unit Value at the end of each business day. The Unit Value
for each Fund is determined by first calculating a gross unit value
reflecting only investment performance and then adjusting it for Program
expenses to obtain the Fund Unit Value. We calculate the gross unit value by
multiplying the gross unit value for the preceding business day by the net
investment factor for that subsequent business day and, for the Alliance
Growth Equity, Aggressive Equity and Balanced Funds, then deducting audit and
custodial fees. We calculate the net investment factor as follows:
o First, we take the value of the Fund's assets at the close of business on
the preceding business day.
o Next, we add the investment income and capital gains, realized and
unrealized, that are credited to the assets of the Fund during the
business day for which we are calculating the net investment factor.
o Then we subtract the capital losses, realized and unrealized, charged to
the Fund during that business day.
o Finally, we divide this amount by the value of the Fund's assets at the
close of the preceding business day.
The Fund Unit Value is calculated on every business day by multiplying the
Fund Unit Value for the last business day of the previous month by the net
change factor for that business day. The net change factor for each business
day is equal to (a) minus (b) where
(a) is the gross unit value for that business day divided by the gross unit
value for the last business day of the previous month; and
(b) is the charge to the Fund for that month for the daily accrual of fees
and expenses times the number of days since the end of the preceding
month.
For information on the valuation of assets of the Funds, see How We
Value the Assets of the Funds in the SAI.
The value of the investments of the Alliance Global, Conservative Investors
and Growth Investors Funds in the corresponding Hudson River Trust Portfolios
is calculated by multiplying the number of shares held by Separate Account
No. 51 in each Portfolio by the net asset value per share of that Portfolio
determined as of the close of business on the same day as the respective Unit
Values of the Alliance Global, Conservative Investors and Growth Investors
Funds are determined.
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The value of the investments of the MFS Research, Warburg Pincus Small
Company Value, T. Rowe Price Equity Income and Merrill Lynch World Strategy
Funds in the corresponding EQ Advisors Trust Portfolios is calculated by
multiplying the number of shares held by Separate Account No. 66 in each
Portfolio by the net asset value per share of that Portfolio determined as of
the close of business on the same day as the respective Unit Values of the
MFS Research, Warburg Pincus Small Company Value, T. Rowe Price Equity Income
and Merrill Lynch World Strategy Funds are determined.
PART V: EQUITABLE LIFE AND THE INVESTMENT MANAGERS
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 (the "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.
THE SEPARATE ACCOUNTS
Separate accounts are used to fund benefits under group annuity contracts and
other agreements for tax-deferred retirement programs we administer. The
separate accounts which hold the Alliance Growth Equity, Aggressive Equity
and Balanced Funds were established pursuant to the Insurance Law of the
State of New York in 1968, 1969 and 1979, respectively. The separate account
which holds the Alliance Global, Conservative Investors and Growth Investors
Funds was established in 1993. The assets of the separate accounts are our
property. However, you have a claim under the group annuity contract equal to
the value of your accumulation in each Fund. Income, gains and losses,
whether or not realized, from assets allocated to the Funds are, in
accordance with the group annuity contract, credited to or charged against
the Fund without regard to our other income, gains or losses. The portion of
each Fund's assets we hold on your behalf may not be used to satisfy
obligations that may arise out of any other business we conduct. We may
transfer amounts owed to us, such as fees and expenses, to our general
account at any time.
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Because of exclusionary provisions, none of the Separate Accounts are subject
to regulation under the 1940 Act. However, The Hudson River Trust and EQ
Advisors Trust, whose Class IA shares are purchased by Separate Account Nos.
51 and 66, respectively, are registered as open-end management investment
companies under the 1940 Act.
INVESTMENT MANAGEMENT OF THE FUNDS
We use the personnel and facilities of Alliance Capital Management L.P.
("Alliance") for portfolio management, securities selection and transaction
services in managing the assets of the Funds. Alliance is also the investment
adviser of The Hudson River Trust. The Alliance Global, Conservative
Investors and Growth Investors Funds are divisions of our Separate Account
No. 51 and invest in corresponding Portfolios of The Hudson River Trust.
Alliance is a publicly-traded limited partnership which is indirectly
majority-owned by Equitable Life. Equitable Life and Alliance are registered
investment advisers under the Investment Advisers Act of 1940. As of December
31, 1996, Alliance had total assets under management of over $182.7 billion.
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, 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.
The EQ Advisors Trust is managed by EQ Financial Consultants, Inc. (The
Manager). The Manager has overall responsibility for the general management
and administration of the EQ Advisors Trust. The Manager is an investment
advisor registered under the Advisers Act. The Manager currently furnishes
specialized investment advice to other clients, including individuals,
pension and profit sharing plans, trusts, charitable organizations,
corporations, and other business entities. The Manager is a Delaware
corporation and an indirect, wholly-owned subsidiary of Equitable.
T. Rowe Price Associates, Inc., Massachusetts Financial Services Company,
Warburg Pincus Counsellors, Inc. and Merrill Lynch Asset Management, L.P.
serve as the investment advisers (each an "EQAT Adviser" and together the
"EQAT Advisers") to one or more of the EQ Advisors Trust portfolios. Each EQT
Adviser is a well known investment fund manager in the U.S. and/or Europe.
Additional information regarding each EQT Adviser appears in the EQ Advisors
Trust prospectus, which accompanies this prospectus.
The securities held in the Alliance Growth Equity, Aggressive Equity and
Balanced Funds must be authorized or approved by the Investment Committee of
our Board of Directors. Subject to the Investment Committee's broad
supervisory authority, our investment officers and managers have complete
discretion over the assets of these Funds and have been given discretion as
to sales and, within specified limits, purchases of stocks, other equity
securities and certain debt securities. When an investment opportunity arises
that is consistent with the objectives of more than one account, investment
opportunities are allocated among accounts in an impartial manner based on
certain factors such as investment objective and current investment and cash
positions.
We, together with the Holding Company, own 79.9% of the outstanding common
stock of Donaldson, Lufkin & Jenrette, Inc. (DLJ). A DLJ subsidiary,
Donaldson, Lufkin & Jenrette Securities Corporation, is one of the nation's
largest investment banking and securities firms. Another DLJ subsidiary,
Autranet, Inc., is a securities broker that
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markets independently originated research to institutions. Through the
Pershing Division of Donaldson, Lufkin & Jenrette Securities Corporation, DLJ
supplies correspondent services, including order execution, securities
clearance and other centralized financial services, to numerous independent
regional securities firms and banks.
To the extent permitted by law and consistent with the Fund transaction
practices discussed in this prospectus, and subject to the consent of Fund
contractholders, the Funds may engage in securities and other transactions
with the above entities or may invest in shares of the investment companies
with which those entities have affiliations. In 1995, there were no such
transactions through DLJ subsidiaries.
VOTING RIGHTS
No voting rights apply to any of the Separate Accounts or to the General
Account Options. As legal owner of the shares of The Hudson River Trust held
in Separate Account No. 51 which invests in units of the Alliance Global,
Conservative Investors and Growth Investors Funds and of the shares of the EQ
Advisors Trust held in Separate Account No. 66 which invests in units of the
MFS Research, Warburg Pincus Small Company Value, T. Rowe Price Equity Income
and Merrill Lynch World Strategy Funds, we do, however, have the right to
vote on certain matters. The Hudson River Trust and the EQ Advisors Trust are
not required to hold annual meetings of shareholders and may elect not to do
so. If a meeting of shareholders is held, they may vote on such matters as
election of directors and any other matters requiring a vote by shareholders
under the 1940 Act. Equitable Life will vote the shares of The Hudson River
Trust allocated to the Alliance Global, Conservative Investors and Growth
Investors Funds and the shares of the EQ Advisors Trust allocated to the MFS
Research, Warburg Pincus Small Company Value, T. Rowe Price Equity Income and
Merrill Lynch World Strategy Funds in accordance with instructions received
from employers, participants or trustees, as the case may be, in the
respective Funds. Each participant for whom we maintain records and, in other
cases, the employer or trustee, will be allowed to instruct us on how to vote
shares of The Hudson River Trust in proportion to their interest in the
Alliance Global, Conservative Investors and Growth Investors Funds and of the
EQ Advisors Trust in proportion to their interest in the MFS Research,
Warburg Pincus Small Company Value, T. Rowe Price Equity Income and Merrill
Lynch World Strategy Funds as of the record date for the shareholder meeting.
If we do not receive instructions in time from all shareholders, we will vote
the shares for which no instructions have been received in the same
proportion as we vote shares for which we have received instructions. If you
invest in The Hudson River Trust and/or the EQ Advisors Trust, you will
receive periodic reports relating to the Trust and proxy material, together
with a voting instruction form, in connection with shareholder meetings.
Currently, we control The Hudson River Trust. Trust shares are held by other
separate accounts of ours and by separate accounts of insurance companies
affiliated and unaffiliated with us. Shares held by these separate accounts
will generally be voted according to the instructions of the owners of
insurance policies and contracts funded through those separate accounts, thus
diluting the effect of your voting instructions.
PART VI: PROVISIONS OF THE CONTRACT AND SERVICES WE PROVIDE
ADOPTION OF THE PROGRAM BY EMPLOYERS
To adopt a Members Retirement Program, you as the employer or trustee must
complete the appropriate Participation Agreement. If you would like to
discuss enrollment in the Program, call our Retirement Program Specialists at
1-800-523-1125. They can help you complete the Participation Agreement for
review by your tax advisor.
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For our prototype self-directed plan, you as the employer must use the
prototype plan adoption agreement. You must also adopt the Pooled Trust and
arrange separately for plan level recordkeeping and brokerage services. We
will provide recordkeeping services only for assets held in the Pooled Trust.
You can use any plan recordkeeper of your choice or you can arrange through
us to hire Trust Consultants, Inc. at a special rate. In addition, you can
arrange through us brokerage services from our affiliate, Pershing Discount
Brokerage Services, at special rates or use any other broker of your choice.
EMPLOYER RESPONSIBILITIES
If you are an employer and you adopt our Members Retirement Plan, you as the
employer and plan administrator will have certain responsibilities relating
to the administration and qualification of your plan. See Your
Responsibilities as Employer in the SAI for a list of responsibilities which
you will have if you adopt the Members Retirement Plan. If you, as an
employer, have an individually designed plan, you already have these
responsibilities, which will not be increased in any way by your adoption of
the Pooled Trust for investment only. If you utilize our prototype
self-directed plan, you will have responsibilities as the plan administrator
and will also have to appoint a plan trustee; these responsibilities will be
greater than those under the Members Retirement Plan. (You should consult
your legal adviser for an understanding of your legal responsibilities under
the self-directed plan.) If you use an individually designed plan, it is your
responsibility to determine that the terms of your plan are consistent with
the provisions of the Pooled Trust and our practices described in this
prospectus and the SAI. We try in this prospectus to make it clear which
actions you are to take as employer and which you are to take as participant.
We will give you guidance and assistance in the performance of your
responsibilities. The ultimate responsibility, however, rests with you.
CONTRIBUTIONS
EMPLOYER RESPONSIBILITIES
Employers should send contribution checks or money orders payable to
Equitable Life to the address shown under Corresponding With the Program. All
contributions must be allocated by the participant and must be accompanied by
a properly completed Contribution Remittance form. Contributions are credited
on the day of receipt. Failure to use the proper form, or to complete the
form properly, however, may result in a delay in crediting contributions for
the entire business. Employers should not permit employees to send post-tax
contributions directly to the Program. See Your Responsibilities as Employer
in the SAI.
ALLOCATION OF CONTRIBUTIONS BY PARTICIPANTS
o You may allocate your contribution among as many Investment Options as you
wish.
o You may change your allocation instructions as often as you wish by
calling the AIM System. Your new instructions become effective on the
business day we receive them; provided that is before 4 p.m. eastern time,
and the remittance form is properly completed. Current participants should
refer to their AIM System brochures.
o You may allocate employer contributions in different percentages than your
employee contributions. The allocation percentages you elect for employer
contributions will automatically apply to 401(k) qualified non-elective
contributions, qualified matching contributions and matching
contributions. The allocation percentages you elect for employee
contributions will automatically apply to both your post-tax employee
contributions and your 401(k) salary deferral contributions.
o If we have not received valid instructions, we will allocate your
contributions to the Money Market Guarantee Account.
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Under the Members Retirement Plan, participants make all investment
allocations. Under an individually designed plan or our self-directed
prototype plan, either the participant or the trustee makes investment
allocations, depending on the terms of the plan.
TRANSFERS AMONG INVESTMENT OPTIONS
GENERAL RULES
o Generally, amounts may be transferred to or from the Investment Options at
any time. However, no transfers from the Guaranteed Rate Accounts are
permitted prior to maturity.
o There is no charge for transfers and no tax liability.
o To make a transfer, give us instructions through the AIM System.
o All transfers are made as of the close of business on the day we receive
your instructions, provided we receive your request by 4:00 p.m. eastern
time. Transfers by phone must be made and confirmed by 4:00 p.m. eastern
time. Transfer requests completed after that time or on a non-business day
will be processed as of the close of business on the following business
day.
To transfer by telephone, you must have a Personal Security Code (PSC)
number, which you obtain by completing an AIMS Authorization form. You must
have a touch-tone telephone to make transfers on 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. 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.
PAYMENTS OR WITHDRAWALS FROM THE FUNDS
Payments or withdrawals out of the Funds ordinarily will be made promptly
upon request in accordance with Plan provisions. However, we can defer
payments, applications and withdrawals from the Funds for any period during
which the New York Stock Exchange is closed for trading, sales of securities
are restricted or determination of the fair market value of assets of the
Funds is not reasonably practicable because of an emergency.
DISTRIBUTIONS AND BENEFIT PAYMENT OPTIONS
PARTICIPANT BENEFITS: RETIREMENT, DISABILITY AND TERMINATION OF EMPLOYMENT
Under the Members Retirement Plan or our self-directed prototype plan, you
are eligible for benefits upon retirement, death or disability, or upon
termination of employment with a vested benefit. ("Vested" refers to the
nonforfeitable portion of your benefits under the plan.) If you are a
participant in an individually designed plan, your eligibility for retirement
benefits depends on the terms of that plan. If you own more than 5% of the
business, you must begin to receive your benefits no later than April 1 of
the year after you reach age 70 1/2. For all other participants, distribution
must begin by April 1st of the later of the year after attaining age 70 1/2
or retirement.
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The Program is flexible as to how and when you can receive your benefits, but
you are also subject to extremely complicated legal requirements. Certain
plan distributions may result in penalty or excise taxes. A general
explanation of the federal income tax treatment of distributions and benefit
payment options is provided in Federal Income Tax Considerations in both this
prospectus and the SAI. If you retire, become disabled or terminate your
employment, you should discuss the available options with your financial
advisor. Our Account Executives can be of assistance.
PARTICIPANT WITHDRAWALS PRIOR TO RETIREMENT
o You may withdraw all or part of your Account Balance under the Members
Retirement Plan attributable to post-tax employee contributions at any
time, provided that you withdraw at least $300 at a time (or, if less,
your entire post-tax Account Balance). See Part VIII: Federal Income Tax
Considerations.
o If you are married, your spouse must generally consent in writing before
you can make any type of withdrawal, except for the purchase of a
Qualified Joint and Survivor Annuity.
o Self-employed persons may generally not receive a distribution prior to
age 59 1/2.
o Employees may generally not receive a distribution prior to separation
from service.
o Hardship withdrawals before age 59 1/2 may be permitted under 401(k) and
certain other profit sharing plans.
Under an individually designed plan and our self-directed plan, the
availability of pre-retirement withdrawals depends on the terms of the plan.
We suggest that you ask your employer what types of withdrawals are available
under your plan. See Procedures for Withdrawals, Distributions and Transfers
in the SAI for a more detailed discussion of these general rules.
Generally you may not make withdrawals from the Guaranteed Rate Accounts
prior to maturity. See The Guaranteed Rate Accounts in Part III.
PARTICIPANT DEATH BENEFITS
o If you die before the entire benefit due you has been paid, the remainder
of your benefits will be paid to your beneficiary.
o The law requires your entire benefit to be distributed no more than five
years after your death. There are two exceptions--(1) if your benefit is
paid to your spouse, your spouse may elect to receive benefits over
his/her life or a period certain which does not exceed his or her life
expectancy beginning any time up to the date you would have attained age
70 1/2 or, if later, one year after your death, and (2) a beneficiary who
is not your spouse may elect payments over his/her life or a fixed period
which does not exceed the beneficiary's life expectancy, provided payments
begin within one year of your death.
o If at your death you were already receiving annuity benefits, your
beneficiary will receive the survivor benefits, if any, under the form of
the annuity selected. If an annuity benefit was not selected, your
beneficiary can continue to receive benefits based on the payment option
you selected or can select a different payment option so long as payments
are made at least as rapidly as with the payment option you originally
selected.
o To designate a beneficiary or to change an earlier designation, have your
employer send us your completed beneficiary designation form. Your spouse
must consent in writing to a designation of any non-spouse beneficiary, as
explained in Procedures for Withdrawals, Distributions and
Transfers--Spousal Consent Requirements in the SAI.
If you are a participant in the Members Retirement Plan and you die without
designating a beneficiary, your vested benefit will automatically be paid to
your spouse or, if you are not married, to the first surviving class of (a)
your
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children, (b) your parents and (c) your brothers and sisters. If none of them
survive you, your vested benefit will be paid to your estate. If you are a
participant in our prototype self-directed plan and you die without
designating a beneficiary, your vested benefit will automatically be paid to
your spouse or, if you are not married, to the first surviving class of (a)
your children, (b) your grandchildren, (c) your parents, (d) your brothers
and sisters and (e) your nephews and nieces. If none of them survive you,
your vested benefit will be paid to your estate.
Under the Members Retirement Plan, on the day we receive proof of your death,
we automatically transfer your Account Balance in the Funds to the Money
Market Guarantee Account unless your beneficiary instructs otherwise. All
amounts are held until your beneficiary requests a distribution or transfer.
Our Account Executives can explain these and other requirements affecting
death benefits.
BENEFIT PAYMENT OPTIONS
Once you are eligible to receive benefits you may, if your plan permits,
select one or more of the following forms of distribution:
o Qualified Joint and Survivor Annuity
o Installment Payments
o Lump Sum Payment
o Life Annuity
o Life Annuity--Period Certain
o Joint and Survivor Annuity
o Joint and Survivor Annuity--Period Certain
o Cash Refund Annuity
See Types of Benefits in the SAI for detailed information regarding each of
the above options, and Procedures for Withdrawals, Distributions and
Transfers in the SAI.
If you are married and the value of your account balance or vested benefits
is greater than $3,500, federal law generally requires you to receive a
Qualified Joint and Survivor Annuity payable to you for life and then to your
surviving spouse for life, unless you and your spouse have properly waived
that form of payment in advance. Certain self-directed prototypes and
individually designed plans are not subject to this requirement.
Under the Members Retirement Plan and the self-directed prototype plan, you
may designate a non-spouse beneficiary any time after the earlier of the
first day of the plan year in which you attain age 35 or the date on which
you separate from service with your employer. If you designate a beneficiary
other than your spouse prior to your reaching age 35, your spouse must
consent to the designation and, upon your reaching age 35, must again give
his or her consent or the designation will lapse. In order for you to make a
withdrawal, elect a form of benefit other than a Qualified Joint and Survivor
Annuity or designate a non-spouse beneficiary, your spouse must consent to
your election in writing within the 90 day period before your annuity
starting date. To consent, your spouse must sign on the appropriate line on
your election of benefits or beneficiary designation form. Your spouse's
signature must be witnessed by a notary public or plan representative.
If you change your mind, you may revoke your election and elect a Qualified
Joint and Survivor Annuity or designate your spouse as beneficiary, simply by
filing the appropriate form. Your spouse's consent is not required for this
revocation.
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It is also possible for your spouse to sign a blanket consent form. By
signing this form, your spouse gives you the right to name any beneficiary
or, if applicable, form of distribution you want. Once you file such a form,
you may change your election whenever you want, even without spousal consent.
Spousal consent to a withdrawal or benefit in a form other than a Qualified
Joint and Survivor Annuity is not required under certain self-directed
prototype profit sharing plans that do not offer life annuity benefits.
The minimum amount that can be used to purchase any type of annuity is
$3,500. Usually, an annuity administrative charge of $350 will be deducted
from the amount used to purchase the annuity. If we give any group pension
client with a qualified plan a better annuity purchase rate than those
currently guaranteed under the Program, we will also make those rates
available to Program participants. The annuity administrative charge may be
greater than $350 in that case.
LOANS TO PARTICIPANTS
The Members Retirement Plan permits you to borrow a portion (not to exceed
$50,000) of your vested Account Balance in all your plans, if your employer
has elected this feature. Your employer can tell you whether loans are
available under your plan. If you are a sole proprietor, a partner who owns
more than 10% of the business, or a shareholder-employee of an S Corporation
who owns more than 5% of the business (including family members of these
prohibited individuals), you presently may not borrow from your vested
Account Balance without first obtaining a prohibited transaction exemption
from the Department of Labor. Consult with your attorney or tax advisor
regarding the advisability and procedures for obtaining such an exemption.
Loans are also available under our self-directed prototype plan and under an
individually designed plan if the terms of your plan allow them.
You, the participant, must pay interest on your loan; the interest paid may
not be deductible. All interest that you pay will be added to your Account
Balance and will be taxable upon distribution. If you fail to repay the loan
when due, the amount of the unpaid balance may be taxable and subject to
additional penalty taxes. Loans are subject to restrictions under federal tax
laws, and all plans of the employer are aggregated for purposes of these
restrictions. You should apply for a loan through your employer. Loan kits
containing all necessary forms, along with an explanation of how to set
interest rates, are available from our Account Executives. YOU MAY NOT TAKE A
LOAN FROM THE GUARANTEED RATE ACCOUNTS PRIOR TO MATURITY. IF YOU ARE MARRIED,
YOUR SPOUSE MUST CONSENT IN WRITING BEFORE YOU CAN TAKE A LOAN.
PART VII: DEDUCTIONS AND CHARGES
No deductions are made from contributions or withdrawals for sales expenses.
Fees and charges apply to amounts held for each plan. Asset-based fees are
charged against the assets of each Fund. The Unit Values of the Funds are
reduced to reflect the deduction of those fees. Rates for Guaranteed Rate
Accounts and for the Money Market Guarantee Account reflect the deduction of
applicable asset-based fees. Unless otherwise noted, fees which are set in
fixed dollar amounts are deducted by reducing the number of Units in the
appropriate Funds and the number of dollars in each General Account Option.
The amount allocable to the three-year or five-year Guaranteed Rate Account
will be taken from your most recent GRA in that Account.
MEMBERS RETIREMENT PLAN (PENSION AND PROFIT SHARING),
PROTOTYPE SELF-DIRECTED PLAN AND INVESTMENT ONLY FEES
RECORD MAINTENANCE AND REPORT FEE. At the end of each calendar quarter, we
deduct a record maintenance and report fee of $3.75 from your Account
Balance. We reserve the right to charge additional fees if you request
special mailings, reports, and services.
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ENROLLMENT FEE. There is a non-refundable one-time enrollment fee of $25 for
each participant. If the enrollment fee is not paid by your employer, it may
be deducted from contributions or from your Account Balance. We may waive
this fee under certain circumstances. If we do not maintain individual
participant records under the Pooled Trust, the employer is instead charged
$25 for each plan or trust.
PROTOTYPE SELF-DIRECTED PLAN FEES. An employer who participates in our
prototype self-directed plan will incur additional fees not payable to us,
such as brokerage and administration fees.
PROGRAM EXPENSE CHARGE. A daily charge at an annual rate of 1.00% is made
against your account balance. All investment returns and interest rates
reflect the deduction of this charge.
This fee is applied toward the cost of maintenance of the Investment Options,
promotion of the Program, commissions, administrative costs, such as
enrollment and answering participant inquiries, and overhead expenses such as
salaries, rent, postage, telephone, travel, legal, actuarial and accounting
costs, office equipment and stationery. During 1996, we received $1,563,814
under the Program Expense Charge.
INVESTMENT MANAGEMENT AND ACCOUNTING FEES. These charges apply only to assets
in the Funds. These charges are reflected in the computation of the Unit
Values applicable for each Fund.
We receive fees for investment management services for the Alliance Growth
Equity, Aggressive Equity and Balanced Funds. The investment management and
accounting fee covers the investment management and financial accounting
services we provide for these Funds, as well as a portion of our related
administrative costs. This fee is charged daily at an effective annual rate
of .50% of the net assets of the Alliance Growth Equity and Balanced Funds
and an effective annual rate of .65% for the Alliance Aggressive Equity Fund.
We receive fees for financial accounting services for the Alliance Global,
Conservative Investors and Growth Investors Funds. This fee is charged daily
at an effective annual rate of .20% of the net assets of these Funds.
HUDSON RIVER TRUST ANNUAL EXPENSES. The Alliance Global, Conservative
Investors and Growth Investors Funds are indirectly subject to investment
advisory and other expenses charged against assets of the corresponding
Portfolios of The Hudson River Trust. These expenses are described in The
Hudson River Trust prospectus accompanying this prospectus.
EQ ADVISORS TRUST ANNUAL EXPENSES. The MFS Research, Warburg Pincus Small
Company Value, T. Rowe Price Equity Income and Merrill Lynch World Strategy
Funds are indirectly subject to investment advisory and other expenses
charged against assets of the corresponding Portfolios of the EQ Advisors
Trust. These expenses are described in the EQ Advisors Trust prospectus
accompanying this prospectus.
OTHER EXPENSES. Certain costs and expenses are charged directly to the Funds.
These may include transfer taxes, Securities and Exchange Commission filing
fees and certain related expenses including printing of SEC filings,
prospectuses and reports, proxy mailings, other mailing costs, legal expenses
and (for the Alliance Global, Conservative Investors and Growth Investors
Funds only) custodians' fees and outside auditing expenses.
ANNUITY ADMINISTRATIVE CHARGE. If a participant elects an annuity option, a
$350 charge will usually be deducted from the amount used to purchase the
annuity to reimburse us for administrative expenses associated with
processing the application for the annuity and with issuing each month's
annuity payment. See Distributions and Benefit Payment Options in Part VI for
details.
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PREMIUM TAXES. In certain jurisdictions, amounts used to purchase an annuity
are subject to charges for premium and other applicable taxes (rates
currently range up to 5%). Taxes depend, among other things, on your place of
residence, applicable laws and the retirement benefit you select. We will
deduct such charges based on your place of residence at the time the annuity
payments begin.
FEES PAID TO ASSOCIATIONS. We may pay associations a fee for enabling the
Program to be made available to their memberships. The fee may be based on
the number of employers whom we solicit, the number who participate in the
Program, and/or the value of Program assets. We make these payments without
any additional deduction or charge under the Program.
GENERAL. We will give you written notice of any change in the fees and
charges. We may also establish a separate fee schedule for requested
non-routine administrative services. During 1996 we received total fees and
charges under the Program of $2,548,586.
PART VIII: FEDERAL INCOME TAX CONSIDERATIONS
Current federal income tax rules relating to adoption of the Program and
generally to distributions to participants under qualified retirement plans
are outlined briefly below. The rules relating to contributions are outlined
briefly in the SAI under Provisions of the Members Retirement Plan. For
purposes of this outline we have assumed that you are not a participant in
any other qualified retirement plan. We have not attempted to discuss other
current federal income tax rules that govern participation, vesting, funding
or prohibited transactions, although some information on these subjects
appears here and in the SAI; nor do we discuss the reporting and disclosure
or fiduciary requirements of the Employee Retirement Income Security Act. In
addition, we do not discuss the effect, if any, of state tax laws that may
apply. FOR INFORMATION ON THESE MATTERS, WE SUGGEST THAT YOU CONSULT YOUR TAX
ADVISOR.
The Internal Revenue Service does not have to approve your adoption of the
Pooled Trust. If you adopt the Members Retirement Plan, you will not need IRS
approval unless you adopt certain provisions. We will tell you whether it is
desirable for you to submit your plan to the Internal Revenue Service for
approval. If you make such a submission, you will have to pay an IRS user's
fee.
DISTRIBUTIONS: TAX CONSEQUENCES
In this section, the word "you" refers to the plan participant.
Amounts distributed to a participant from a qualified plan are generally
subject to federal income tax as ordinary income when benefits are
distributed to you or your beneficiary. Generally speaking, only your
post-tax contributions, if any, are not taxed when distributed.
LUMP SUM DISTRIBUTIONS. If your benefits are distributed to you in a lump sum
after you have participated in the plan for at least five taxable years, you
may be able to use five-year averaging. Under this method, the tax on the
lump sum distribution is calculated separately from taxes on any other income
you may have during the year. The tax is calculated at ordinary income tax
rates in the year of the distribution, but as if it were your only income in
each of five years. The tax payable is the sum of the five years'
calculations. To qualify for five-year averaging, the distribution must
consist of your entire balance in the plan and must be made in one taxable
year of the recipient after you have attained age 59 1/2. Five-year averaging
is available only for one lump sum distribution.
35
<PAGE>
If you were born before 1936, you may elect to have special rules apply to
one lump sum distribution. You may elect either ten-year averaging using 1986
rates or five-year averaging using then current rates. In addition, you may
elect separately to have the portion of your distribution attributable to
pre-1974 contributions taxed at a flat 20% rate.
Effective January 1, 2000, five year averaging on lump sum distributions may
no longer be used.
ELIGIBLE ROLLOVER DISTRIBUTIONS. Many types of distributions from qualified
plans are "eligible rollover distributions" that can be transferred directly
to another qualified plan or individual retirement arrangement ("IRA"), or
rolled over to another plan or IRA within 60 days of the receipt of the
distribution. If a distribution is an "eligible rollover distribution," 20%
mandatory federal income tax withholding will apply unless the distribution
is directly transferred to a qualified plan or IRA. See Eligible Rollover
Distributions and Federal Income Tax Withholding in the SAI for a more
detailed discussion.
ANNUITY OR INSTALLMENT PAYMENTS. Each payment you receive is treated as
ordinary income except where you have a "cost basis" in the benefit. Your
cost basis is equal to the amount of your post-tax employee contributions,
plus any employer contributions you were required to include in gross income
in prior years. A portion of each annuity or installment payment you receive
will be excluded from gross income. If you (and your survivor) continue to
receive payments after your cost basis has been paid out, all amounts will be
taxable.
IN-SERVICE WITHDRAWALS; HARDSHIP WITHDRAWALS. Some plans allow in-service
withdrawals of after-tax contributions. The portion of each in-service
withdrawal attributable to cost basis is received income tax-free. The
portion that is attributable to earnings will be included in your gross
income. Amounts contributed before January 1, 1987 to employer plans which on
May 5, 1986 permitted such withdrawals are taxable withdrawals only to the
extent that they exceed the amount of your cost basis. Other amounts are
treated as partly a return of cost basis with the remaining portion treated
as earnings. Amounts included in gross income under this rule may also be
subject to the additional 10% penalty tax on premature distributions
described below. In addition, 20% mandatory federal income tax withholding
may also apply.
PREMATURE DISTRIBUTIONS. You may be liable for an additional 10% penalty tax
on all taxable amounts distributed before age 59 1/2 unless the distribution
falls within a specified exception or is rolled over into an IRA or other
qualified plan.
The exceptions to the penalty tax include (a) distributions made on account
of your death or disability, (b) distributions beginning after separation
from service in the form of a life annuity or installments over your life
expectancy (or the joint lives or life expectancies of you and your
beneficiary), (c) distributions due to separation from active service after
age 55 and (d) distributions used to pay deductible medical expenses.
EXCESS DISTRIBUTIONS. There is a 15% excise tax on aggregated distributions
in excess of a threshold amount from qualified plans, IRAs and Section 403(b)
tax deferred annuities (even if those plans were maintained by unrelated
employers).
For distributions to individual participants, this tax is temporarily
suspended for the years 1997, 1998 and 1999.
WITHHOLDING. Under the Members Plans, 20% mandatory income tax withholding
will apply to all "eligible rollover distributions" that are not directly
rolled over to a qualified plan or IRA. If a distribution is not an eligible
rollover
36
<PAGE>
distribution, the recipient may elect out of withholding. See Eligible
Rollover Distributions and Federal Income Tax Withholding in the SAI. Under
an individually designed plan or our prototype self-directed plan that uses
the Pooled Trust for investment only, we will pay the full amount of the
distribution to the plan's trustee. The trustee is responsible for
withholding federal income tax upon distributions to you or your beneficiary.
OTHER TAX CONSEQUENCES. Federal estate and gift and state and local estate,
inheritance, and other tax consequences of participation in the Program
depend on the residence and the circumstances of each participant or
beneficiary. For complete information on tax considerations, you should
consult a qualified tax advisor.
PART IX: MISCELLANEOUS
CHANGE OR DISCONTINUANCE OF THE PROGRAM. The group annuity contract has been
amended from time to time, and may be amended in the future. No future change
can affect annuity benefits in the course of payment. Provided certain
conditions are met, we may terminate the offer of any of the Investment
Options and offer new ones with different terms.
We may terminate the contract at any time. If the contract is terminated, we
will not accept any further contributions. We will continue to hold amounts
allocated to the Guaranteed Rate Accounts until maturity. Amounts already
invested in the Investment Options may remain in the Program and you may also
elect payment of benefits through us.
DISQUALIFICATION OF PLAN. If your plan is found not to qualify under the
Internal Revenue Code, we may return the plan's assets to the employer, as
the plan administrator, or we may disallow future investments in the separate
accounts.
REPORTS. We send reports annually to employers showing the aggregate Account
Balances of all participants and information necessary to complete annual IRS
filings.
TRUSTEE. The sole responsibility of The United States Trust Company of New
York is to serve as a party to the group annuity contract. It has no
responsibility for the administration of the Program or for any distributions
or duties under the group annuity contract.
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. This regulation does
not, however, involve any supervision of the investment policies of the Funds
or of the selection of any investments except to determine compliance with
the law 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.
LEGAL PROCEEDINGS. We are engaged in litigation of various kinds which in our
judgment is not of material importance in relation to our total assets. None
of the litigation now in progress is expected to affect any assets of the
Funds.
ADDITIONAL INFORMATION. A registration statement relating to the offering
described in this prospectus has been filed with the Securities and Exchange
Commission under the Securities Act of 1933. Certain portions of the
Registration
37
<PAGE>
Statement have been omitted from this prospectus and the SAI pursuant to the
rules and regulations of the Commission. The omitted information may be
obtained by requesting a copy of the registration statement from the
Commission's principal office in Washington, D.C., and paying the
Commission's prescribed fees or by accessing the Securities and Exchange
Commission's Electronic Data Gathering, Analysis, and Retrieval (EDGAR)
System.
EXPERTS. The financial statements as of December 31, 1996 and for each of the
two years in the period then ended included in the SAI for Separate Account
Nos. 3, 4, 10, and 51 and the condensed financial information for each of the
four years in the period ended December 31, 1996 included in this prospectus
and the financial statements as of December 31, 1996 and 1995 and for each of
the three years in the period ended December 31, 1996 included in the SAI for
Equitable Life have been so included in reliance upon the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm
as experts in auditing and accounting.
ACCEPTANCE. The employer or plan sponsor, as the case may be, is solely
responsible for determining whether the Program is a suitable funding vehicle
and should, therefore, carefully read the prospectus and installation
materials before entering into a Participation Agreement.
38
<PAGE>
TABLE OF CONTENTS
OF STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
The Contract..................................... SAI-2
Your Responsibilities as Employer................ SAI-2
Procedures for Withdrawals, Distributions
and Transfers................................... SAI-3
Types of Benefits................................ SAI-6
Provisions of the Members Retirement Plan ...... SAI-8
Investment Restrictions Applicable to the
Alliance Growth Equity, Aggressive Equity and
Balanced Funds.................................. SAI-11
How We Value the Assets of the Funds............. SAI-12
Summary of Unit Values for the Funds............. SAI-13
Fund Transactions................................ SAI-14
Investment Management and Financial
Accounting Fee.................................. SAI-15
Underwriter...................................... SAI-15
Our Management................................... SAI-16
Financial Statements............................. SAI-18
</TABLE>
CLIP AND MAIL TO US TO RECEIVE A
STATEMENT OF ADDITIONAL INFORMATION
- -----------------------------------------------------------------------------
To: The Equitable Life Assurance Society
of the United States
Box 2468 G.P.O.
New York, NY 10116
Please send me a copy of the Statement of Additional Information for the
Members Retirement Program Prospectus dated May 1, 1997.
Name:
-------------------------------------------------------------
Address:
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-----------------------------------------------------------------------------
39
<PAGE>
INVESTMENT OPTION CHARACTERISTICS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
ALLIANCE GROWTH ALLIANCE AGGRESSIVE
EQUITY FUND EQUITY FUND
- ------------------------------------------------------------------
<S> <C> <C>
DESIGNED FOR Long term growth of Long term growth of
(OBJECTIVE) capital capital
- ------------------------------------------------------------------
INVESTS PRIMARILY IN Common stocks and Common stocks and
other equity-type other equity-type
securities securities issued
generally issued by by medium and
large and smaller sized
intermediate-sized companies with
companies strong growth
potential
- ------------------------------------------------------------------
RISK TO PRINCIPAL Average for a Greatest risk of all
growth fund Alliance Funds
- ------------------------------------------------------------------
PRIMARY GROWTH Capital Capital
POTENTIAL appreciation and appreciation
THROUGH reinvested
dividends
- ------------------------------------------------------------------
INCOME GUARANTEE No No
- ------------------------------------------------------------------
VOLATILITY OF RETURN Somewhat more Highly volatile
volatile than the
S&P 500
- ------------------------------------------------------------------
TRANSFERS TO OTHER Permitted daily Permitted daily
OPTIONS
- ------------------------------------------------------------------
WITHDRAWAL No No
PENALTIES
- ------------------------------------------------------------------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
ALLIANCE BALANCED ALLIANCE GLOBAL ALLIANCE CONSERVATIVE ALLIANCE GROWTH
FUND FUND INVESTORS FUND INVESTORS FUND
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DESIGNED FOR Competitive return Long term growth High total return High total return
(OBJECTIVE) through a of capital without undue risk to consistent with
combination of principal reasonable risk
growth of capital
and current income
- ---------------------------------------------------------------------------------------------------------------
INVESTS PRIMARILY IN Common stocks and The Global The Conservative The Growth
other equity-type Portfolio of the Investors Portfolio of Investors
securities, Hudson River the Hudson River Portfolio of the
publicly traded Trust, which in Trust, which in turn, Hudson River
debt securities and turn, primarily primarily invests in a Trust, which in
money market invests in equity diversified mix of turn, primarily
instruments--mix securities of publicly-traded invests in a
determined by non-United States securities. Asset mix diversified mix of
portfolio manager as well as United generally consists of publicly-traded
States companies 30% equity and 70% securities. Asset
fixed income mix generally
securities but will consists of 30%
vary depending on fixed income and
market conditions. 70% equity
securities but
will vary
depending on
market conditions.
- ---------------------------------------------------------------------------------------------------------------
RISK TO PRINCIPAL Somewhat lower than Just below average Lowest risk of all Below average for
the Growth Equity for a growth fund equity options a growth fund
Fund
- ---------------------------------------------------------------------------------------------------------------
PRIMARY GROWTH Capital Capital Capital appreciation, Capital
POTENTIAL appreciation, appreciation reinvested dividends appreciation,
THROUGH reinvested and interest reinvested
dividends and dividends and
interest interest
- ---------------------------------------------------------------------------------------------------------------
INCOME GUARANTEE No No No No
VOLATILITY OF RETURN Generally lower Somewhat more Very low volatility Somewhat less
than pure equity volatile than the volatile than the
funds, but degree S&P 500 S&P 500
may vary depending
on market
conditions
- ---------------------------------------------------------------------------------------------------------------
TRANSFERS TO OTHER Permitted daily Permitted daily Permitted daily Permitted daily
OPTIONS
- ---------------------------------------------------------------------------------------------------------------
WITHDRAWAL No No No No
PENALTIES
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
The Funds each have different investment objectives and policies that can
affect the returns of each Fund and the market and financial risks to which
each is subject. While we do not intend to change the investment objectives
of the pooled funds, we nevertheless have the right to do so, subject to the
approval of the New York State Insurance Department. The Funds involve a
greater potential for growth but involve risks that are not present with the
Guaranteed Options. There is no assurance that any of the investment
objectives of the Funds will be achieved or that the risk to principal or
volatility of return will be as indicated.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
WARBURY PINCUS T. ROWE PRICE MERRILL LYNCH
MFS RESEARCH SMALL COMPANY EQUITY INCOME WORLD STRATEGY
FUND VALUE FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DESIGNED FOR Long term growth of Long term capital Substantial High total
(OBJECTIVE) capital and future appreciation dividend income and investment return
income capital
appreciation
- ------------------------------------------------------------------------------------------------------------
INVESTS PRIMARILY IN Common stocks or Portfolio of equity Dividend-paying Portfolio of
securities securities of small common stocks of equity and fixed
convertible into capitalization established income securities,
common stock of companies that are companies including
companies that considered convertible
possess better than relatively securities of U.S.
average prospects undervalued and foreign
for long-term issuers
growth
- ------------------------------------------------------------------------------------------------------------
RISK TO PRINCIPAL Average for a fund Greater than Lower risk than a Not available per
with moderate growth the S&P 500 fund focusing on Fund Manager
growth stocks, but
greater risk than a
bond fund.
- ------------------------------------------------------------------------------------------------------------
PRIMARY GROWTH Capital Long-term capital Dividend income and Not available per
POTENTIAL appreciation and appreciation with capital Fund Manager
THROUGH income current income appreciation
- ------------------------------------------------------------------------------------------------------------
INCOME GUARANTEE No No No No
- ------------------------------------------------------------------------------------------------------------
VOLATILITY OF RETURN Somewhat more More volatile Somewhat more Not available per
volatile than the than the volatile that the Fund Manager
S&P 500 S&P 500 S&P 500
- ------------------------------------------------------------------------------------------------------------
TRANSFERS TO OTHER Permitted daily Permitted daily Permitted daily Permitted daily
OPTIONS
- ------------------------------------------------------------------------------------------------------------
WITHDRAWAL No No No No
PENALTIES
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
GUARANTEED MONEY MARKET
RATE ACCOUNTS GUARANTEE ACCOUNT
- ---------------------------------------------------------------------
<S> <C> <C>
DESIGNED FOR Principal and interest Principal and
(OBJECTIVE) guaranteed --interest interest guaranteed
rates reflect --short term
maturities rates
- ---------------------------------------------------------------------
INVESTS PRIMARILY IN Contributions credited Contributions
with fixed rate of credited with
interest until the guaranteed current
maturity date rate of interest
- ---------------------------------------------------------------------
RISK TO PRINCIPAL Equitable Life Equitable Life
guarantees principal guarantees principal
and interest and interest
- ---------------------------------------------------------------------
PRIMARY GROWTH Interest income Interest income
POTENTIAL
THROUGH
- ---------------------------------------------------------------------
INCOME GUARANTEE Yes--subject to Yes
withdrawal penalties
- ---------------------------------------------------------------------
VOLATILITY OF RETURN Equitable Life Equitable Life
guarantees interest guarantees monthly
rate until the interest rate
maturity date
- ---------------------------------------------------------------------
TRANSFERS TO OTHER Permitted only at Permitted daily
OPTIONS maturity
- ---------------------------------------------------------------------
WITHDRAWAL Prior to maturity, No
PENALTIES withdrawals may not be
permitted or may be
subject to a penalty
- ---------------------------------------------------------------------
</TABLE>
<PAGE>
- ------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
- ------------------------------------------------------------------------------
MAY 1, 1997
MEMBERS RETIREMENT PROGRAM OF
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
Separate Account Units of interest under a group annuity contract with THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, 1290 Avenue of The
Americas, New York, New York 10104, which funds the Members Retirement
Program. Toll-free telephone number 1-800-526-2701.
This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the prospectus dated May 1, 1997 for the Members
Retirement Program of The Equitable Life Assurance Society of the United
States.
A copy of the prospectus to which this Statement of Additional Information
relates is available at no charge by writing to Equitable Life at Box 2468
G.P.O., New York, New York 10116 or by calling our toll-free telephone
number.
The following information is contained primarily in the prospectus:
Investment Objectives and Policies
Investment Advisory Services
Certain of the cross references in this Statement of Additional Information
are contained in the prospectus dated May 1, 1997 to which this Statement of
Additional Information relates.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
The Contract................................................. SAI-2
Your Responsibilities as Employer............................ SAI-2
Procedures for Withdrawals, Distributions and
Transfers................................................... SAI-3
Pre-Retirement Withdrawals................................. SAI-3
Benefit Distributions...................................... SAI-3
Spousal Consent Requirements............................... SAI-4
Eligible Rollover Distributions and Federal Income
Tax Withholding........................................... SAI-4
Premature Withdrawals and Transfers from a
GRA....................................................... SAI-5
Maturing GRAs.............................................. SAI-6
Types of Benefits............................................ SAI-6
Provisions of the Members Retirement Plan.................... SAI-8
Plan Eligibility Requirements.............................. SAI-8
Contributions to Qualified Plans........................... SAI-8
Contributions to the Members
Retirement Plan........................................... SAI-8
The Members Retirement Plan and Section
404(c) of ERISA........................................... SAI-10
Vesting.................................................... SAI-10
Investment Restrictions Applicable to the Alliance Growth
Equity,
Aggressive Equity and Balanced Funds........................ SAI-11
How We Value the Assets of the Funds......................... SAI-12
Summary of Unit Values for the Funds......................... SAI-13
Fund Transactions............................................ SAI-14
Investment Management and Financial Accounting
Fee......................................................... SAI-15
Underwriter.................................................. SAI-15
Our Management............................................... SAI-16
Financial Statements......................................... SAI-18
</TABLE>
- ------------
Copyright 1997 by The Equitable Life Assurance Society of The United States.
All rights reserved.
<PAGE>
ADDITIONAL INFORMATION ABOUT THE PROGRAM
THE CONTRACT
The Program is funded through a group annuity contract with The Equitable
Life Assurance Society of the United States (Equitable Life). The contract
governs the Investment Options that are offered under the Program. Equitable
Life has the right to terminate the contract. See Part IX:
Miscellaneous--Change or Discontinuance of the Program in the prospectus. The
Trustee holds the contract for the benefit of employers and participants in
the Program.
YOUR RESPONSIBILITIES AS EMPLOYER
If you adopt the Members Retirement Plan, you as the employer and plan
administrator will have certain responsibilities, including:
o sending us your contributions at the proper time and in the proper
form;
o maintaining all personnel records necessary for administering your
plan;
o determining who is eligible to receive benefits;
o forwarding to us all the forms your employees are required to submit;
o distributing summary plan descriptions and participant annual reports
to your employees and former employees;
o distributing our prospectuses and confirmation notices to your
employees and, in some cases, former employees, if under your plan they
can direct the investment of their account balances;
o filing an annual information return for your plan with the Internal
Revenue Service, if required;
o providing us the information with which to run special
non-discrimination tests, if you have a 401(k) plan or your plan
accepts post-tax employee or employer matching contributions;
o determining the amount of all contributions for each participant in the
plan;
o forwarding salary deferral and post-tax employee contributions to us;
o selecting interest rates and monitoring default procedures, if you
elect the loan provisions in the plan; and
o providing us with written instructions for allocating forfeiture
amounts for the plan year the forfeiture occurs.
If you, as an employer, have an individually designed plan, your
responsibilities will not be increased in any way by your adoption of the
Pooled Trust. If you adopt our self-directed prototype plan, you will be
completely responsible for administering the plan and complying with all of
the reporting and disclosure requirements applicable to qualified plans, with
the assistance of the recordkeeper of your choice.
We will give you guidance and assistance in the performance of your
responsibilities. The ultimate responsibility, however, rests with you. If
you have questions about any of your obligations, you can contact our Account
Executives at 1-800-526-2701 or write to the Members Retirement Program at
Box 2468 G.P.O., New York, New York 10116.
SAI-2
<PAGE>
PROCEDURES FOR WITHDRAWALS, DISTRIBUTIONS AND TRANSFERS
PRE-RETIREMENT WITHDRAWALS. Under the Members Retirement Plan, self-employed
persons may generally not receive a distribution prior to age 59 1/2, and
employees may generally not receive a distribution prior to separation from
service. However, if your employer maintains the Members Retirement Plan as a
profit sharing plan, you may request distribution of benefits after you reach
age 59 1/2 even if you are still working. In addition, if your employer has
elected to make hardship withdrawals available under your plan, you may
request distribution before age 59 1/2 in the case of financial hardship (as
defined in your plan). In a 401(k) plan, the plan's definition of hardship
applies to employer contributions but not to your 401(k)
contributions--including employee pre-tax contributions, employer qualified
non-elective contributions and qualified matching contributions. To withdraw
your own 401(k) contributions, plus interest earned on these amounts prior to
1989, you must demonstrate financial hardship within the meaning of
applicable Income Tax Regulations. Each withdrawal must be at least $1,000
(or, if less, your entire Account Balance or the amount of your hardship
withdrawal under a profit sharing or 401(k) plan). If your employer
terminates the plan, all amounts (subject to GRA restrictions) may be
distributed to participants at that time.
YOU MAY WITHDRAW ALL OR PART OF YOUR ACCOUNT BALANCE UNDER THE MEMBERS
RETIREMENT PLAN ATTRIBUTABLE TO POST-TAX EMPLOYEE CONTRIBUTIONS AT ANY TIME,
SUBJECT TO ANY WITHDRAWAL RESTRICTIONS APPLICABLE TO THE INVESTMENT OPTIONS,
provided that you withdraw at least $300 at a time (or, if less, your Account
Balance attributable to post-tax employee contributions). See Federal Income
Tax Considerations in the prospectus.
All benefit payments (including withdrawals due to plan terminations) will be
paid in accordance with the rules described below under Benefit
Distributions. All other withdrawals will be effected as of the close of
business on the day we receive the properly completed form.
If you are married, your spouse must consent in writing before you can make
any type of withdrawal, except for the purchase of a Qualified Joint and
Survivor Annuity. See Spousal Consent Requirements below.
Under the self-directed prototype plan you may receive a distribution upon
attaining normal retirement age as specified in the plan, or upon separation
from service. If your employer maintains the self-directed prototype plan as
a profit sharing plan, an earlier distribution of funds that have accumulated
after two years is available if you incur a financial hardship, as defined in
the plan. In addition, if you are married, your spouse may have to consent in
writing before you can make any type of withdrawal, except for the purchase
of a Qualified Joint and Survivor Annuity. See Spousal Consent Requirements
below.
Under an individually designed plan the availability of pre-retirement
withdrawals depends on the terms of the plan. We suggest that you ask your
employer what types of withdrawals are available under your plan.
PLEASE NOTE THAT GENERALLY YOU MAY NOT MAKE WITHDRAWALS FROM THE GUARANTEED
RATE ACCOUNTS PRIOR TO MATURITY EVEN IF THE EMPLOYER PLAN PERMITS WITHDRAWALS
PRIOR TO THAT TIME. (SEE PREMATURE WITHDRAWALS AND TRANSFERS FROM A GRA).
BENEFIT DISTRIBUTIONS. In order for you to begin receiving benefits under the
Members Retirement Plan, your employer must send us your properly completed
Election of Benefits form and, if applicable, Beneficiary Designation form.
If we receive your properly completed forms on or before the 15th of the
month, your benefits will commence as of the close of business on the first
business day of the next month; if your forms arrive after the 15th, your
benefits will commence as of the close of business on the first business day
of the second following month.
Under an individually designed plan and our self-directed prototype plan,
your employer must send us a Request for Disbursement Form. We will send
single sum payments to your plan's trustee as of the close of business on the
day we receive a properly completed form. If you wish to receive annuity
payments, your plan's trustee may purchase an annuity contract from us.
Annuity payments will be paid directly to you and will commence as of the
close of business
SAI-3
<PAGE>
on the first business day of the next month if we receive your properly
completed forms on or before the 15th of the month. If we receive your
properly completed forms after the 15th, annuity payments will commence as of
the close of business on the first business day of the second following
month.
Please note that we use the value of your vested benefits at the close of
business on the day payment is due to determine the amount of benefits you
receive. We will not, therefore, begin processing your check until the
following business day. You should expect your check to be mailed within five
days after processing begins. Annuity checks can take longer. If you are
withdrawing more than $50,000 and you would like expedited delivery at your
expense, you may elect to do so on your Election of Benefits Form.
Distributions under a qualified retirement plan such as yours are subject to
extremely complicated legal requirements. When you are ready to retire, we
suggest that you discuss the available payment options with your employer or
financial advisor. Our Account Executives can provide you or your employer
with information.
SPOUSAL CONSENT REQUIREMENTS. Under the Members Retirement Plan and the
self-directed prototype plan, you may designate a non-spouse beneficiary any
time after the earlier of the first day of the plan year in which you attain
age 35 or the date on which you separate from service with your employer. If
you designate a beneficiary other than your spouse prior to your reaching age
35, your spouse must consent to the designation and, upon reaching age 35,
must give his or her consent or the designation will lapse. In order for you
to make a withdrawal, elect a form of benefit other than a Qualified Joint
and Survivor Annuity or designate a non-spouse beneficiary, your spouse must
consent to your election in writing within the 90 day period before your
annuity starting date. To consent, your spouse must sign the appropriate line
on your election of benefits or beneficiary designation form. Your spouse's
signature must be witnessed by a notary public or plan representative.
If you change your mind, you may revoke your election and elect a Qualified
Joint and Survivor Annuity or designate your spouse as beneficiary, simply by
filing the appropriate form. Your spouse's consent is not required for this
revocation.
It is also possible for your spouse to sign a blanket consent form. By
signing this form, your spouse consents not just to a specific beneficiary or
form of distribution, but gives you the right to name any beneficiary or form
of distribution you want. Once you file such a form, you may change your
election whenever you want, even without spousal consent. No spousal consent
to a withdrawal or benefit in a form other than a Qualified Joint and
Survivor Annuity is required under certain self-directed and
individually-designed profit sharing plans that do not offer life annuity
benefits.
ELIGIBLE ROLLOVER DISTRIBUTIONS AND FEDERAL INCOME TAX WITHHOLDING. All
"eligible rollover distributions" are subject to mandatory federal income tax
withholding of 20% unless the Participant elects to have the distribution
directly rolled over to a qualified plan or individual retirement arrangement
(IRA). An "eligible rollover distribution" is generally any distribution that
is not one of a series of substantially equal periodic payments made (not
less frequently than annually) (1) for the life (or life expectancy) of the
plan 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 10 years or more. In addition, the following are not subject to
mandatory 20% withholding:
o certain corrective distributions under Internal Revenue Code (Code)
Section 401(k) plans;
o certain defaulted loans that are treated as distributions; and
o a distribution to a beneficiary other than to a surviving spouse or a
current or former spouse under a qualified domestic relations order.
If a distribution is made to a 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.
SAI-4
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If a distribution is not an "eligible rollover distribution" income tax will
be withheld from all taxable payments unless the recipient elects not to have
income tax withheld.
PREMATURE WITHDRAWALS AND TRANSFERS FROM A GRA. You may transfer amounts from
other Investment Options to a GRA at any time. Transfers may not be made from
one GRA to another or from a GRA to one of the other Investment Options until
the maturity date of the GRA. Likewise, you may not remove amounts from a GRA
prior to maturity in order to obtain a plan loan or make a hardship or
in-service withdrawal. If your plan's assets are transferred to another
funding vehicle from the Program or if your plan is terminated, we will
continue to hold your money in GRAs until maturity. All such GRAs will be
held in the Pooled Trust under the investment-only arrangement. See Transfers
Among Investment Options in Part VI of the Prospectus.
Withdrawals are not permitted prior to maturity unless they are permitted
under your plan and are Exempt or Qualified, as explained below. Exempt
Withdrawals may be made without penalty at any time. Qualified Withdrawals
are subject to a penalty. No Qualified Withdrawals are permitted from a
five-year GRA during the first two years after the end of its offering
period; this rule does not apply if the amount of the applicable penalty is
less than the interest you have accrued. If you have more than one GRA and
you are taking a partial withdrawal or installments, amounts held in your
most recently purchased three-year or five-year GRA will be used first to
make withdrawal or installment payments.
Exempt Withdrawal. Amounts may be withdrawn without penalty from a GRA prior
to its maturity if:
o you are a professional age 59 1/2 or older and you elect an installment
payout of at least three years or an annuity benefit;
o you are not a professional and you attain age 59 1/2;
o you are not a professional and you terminate employment (including
retirement);
o you are disabled;
o you attain age 70 1/2; or
o you die.
If you are a participant under a plan which was adopted by an employer which
is not a member of a professional association which makes the Program
available as a benefit of membership, the above rules will be applied
substituting the term "highly compensated" for "professional" and "non-highly
compensated" for "not a professional." For this purpose, "highly compensated"
shall have the meaning set forth under Provisions of the Members
Plans--Contributions to the Members Retirement Plan below.
Qualified Withdrawal. You may withdraw amounts with a penalty from a GRA
prior to its maturity if you are a professional and you take a payment upon
retirement after age 59 1/2 under a distribution option of less than three
years duration. The interest paid to you upon withdrawal will be reduced by
an amount calculated as follows:
(i) the amount by which the three-year GRA rate being offered on the
date of withdrawal exceeds the GRA rate from which the withdrawal is
made, times
(ii) the years and/or fraction of a year until maturity, times
(iii) the amount withdrawn from the GRA.
We will make this calculation based on GRA rates without regard to deductions
for the applicable Program expense charge. If the three-year GRA is not being
offered at the time of withdrawal, the adjustment will be based on then
current rates on U.S. Treasury notes or for a comparable option under the
Program.
Your original contributions will never be reduced by this adjustment. No
adjustment is made if the current three-year GRA rate is equal to or less
than the rate for the GRA from which the Qualified Withdrawal is being made.
A separate
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adjustment is calculated for each GRA. If the interest accumulated in one GRA
is insufficient to recover the amount calculated under the formula, the
excess may be deducted as necessary from interest accumulated in other same
duration GRAs in the same Guaranteed Rate Account.
EXAMPLE: You contribute $1,000 to a three-year GRA on January 1 with a rate
of 4%. Two years later you make a Qualified Withdrawal. Your GRA balance is
$1,082. The current GRA rate is 6%; (i) 6%-4%=2%, (ii) 2% x 1 year = 2%,
(iii) 2% x $1,082 = $21.64. The withdrawal proceeds would be $1,082-$21.64 =
$1,060.36.
MATURING GRAS
o Your confirmation notice lists the maturity date for each GRA you hold.
o You may arrange in advance for the reinvestment of your maturing GRAs by
using the Account Investment Management (AIM) System. (Instructions must
be received at least four days before the GRA matures.)
o The instructions you give us remain in effect until you change them
(again, at least four days before you want the change to go into
effect).
o You may have different instructions for your GRAs attributable to
employer contributions than for your GRAs attributable to employee
contributions.
o If you have not provided GRA maturity instructions, your maturing GRAs
will be allocated to the Money Market Guarantee Account.
TYPES OF BENEFITS
Under the Members Retirement Plan, and under most self-directed prototype
plans, except as provided below, you may select one or more of the following
forms of distribution once you are eligible to receive benefits. Please see
Benefit Distributions under Procedures for Withdrawals, Distributions and
Transfers. Not all of these distribution forms may be available to you, if
your employer has adopted an individually designed plan or a self-directed
prototype profit sharing plan that does not offer annuity benefits. We
suggest you ask your employer what types of benefits are available under your
plan.
QUALIFIED JOINT AND SURVIVOR ANNUITY. An annuity providing equal monthly
payments for your life and, after your death, for your surviving spouse's
life. No payments will be made after you and your spouse die, even if you
have received only one payment. THE LAW GENERALLY REQUIRES THAT IF THE VALUE
OF YOUR VESTED BENEFITS EXCEEDS $3,500, YOU MUST RECEIVE A QUALIFIED JOINT
AND SURVIVOR ANNUITY UNLESS YOUR SPOUSE CONSENTS IN WRITING TO A CONTRARY
ELECTION. Please see Spousal Consent Requirements under Procedures for
Withdrawals, Distributions and Transfers for an explanation of the procedures
for electing not to receive a Qualified Joint and Survivor Annuity.
LUMP SUM PAYMENT. A single payment of all or part of your vested benefits. If
you take a lump sum payment of only part of your balance, it must be at least
$1,000. If you have more than one GRA, amounts held in your most recent GRA
will first be used to make payment. IF YOUR VESTED BENEFIT IS $3,500 OR LESS,
YOU WILL RECEIVE A LUMP SUM PAYMENT OF THE ENTIRE AMOUNT.
PERIODIC INSTALLMENTS. Monthly, quarterly, semi-annual or annual payments
over a period of at least three years, where the initial payment on a monthly
basis is at least $300. You can choose either a time-certain payout, which
provides variable payments over a specified period of time, or a
dollar-certain payout, which provides level payments over a variable period
of time. During the installment period, your remaining Account Balance will
be invested in whatever Options you designate; each payment will be drawn pro
rata from all the Options you have selected. If you
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have more than one GRA, amounts held in your most recently purchased
three-year or five-year GRA will first be used to make installment payments.
If you die before receiving all the installments, we will make the remaining
payments to your beneficiary. We do not offer installments for benefits under
individually designed plans or under our self-directed prototype plan.
LIFE ANNUITY. An annuity providing monthly payments for your life. No
payments will be made after your death, even if you have received only one
payment.
LIFE ANNUITY--PERIOD CERTAIN. An annuity providing monthly payments for your
life or, if longer, a specified period of time. If you die before the end of
that specified period, payments will continue to your beneficiary until the
end of the period. Subject to legal limitations, you may specify a minimum
payment period of 5, 10, 15 or 20 years; the longer the specified period, the
smaller the monthly payments will be.
JOINT AND SURVIVOR ANNUITY. An annuity providing monthly payments for your
life and that of your beneficiary. You may specify the percentage of the
annuity payment to be made to your beneficiary. Subject to legal limitations,
that percentage may be 100%, 75%, 50%, or any percentage you specify.
JOINT AND SURVIVOR ANNUITY--PERIOD CERTAIN. An annuity providing monthly
payments for your life and that of your beneficiary or, if longer, a
specified period of time. If you and your beneficiary both die before the end
of the specified period, payments will continue to your contingent
beneficiary until the end of the period. Subject to legal limitations, you
may specify a minimum payment period of 5, 10, 15 or 20 years and the
percentage of the annuity payment to be made to your beneficiary (as noted
above under Joint and Survivor Annuity); the longer the specified period, the
smaller the monthly payments will be.
CASH REFUND ANNUITY. An annuity providing equal monthly payments for your
life with a guarantee that the sum of those payments will be at least equal
to the portion of your vested benefits used to purchase the annuity. If upon
your death the sum of the monthly payments to you is less than that amount,
your beneficiary will receive a lump sum payment of the remaining guaranteed
amount.
The cost of the fixed annuity is determined from tables in the group annuity
contract which show the amounts necessary to purchase each $1 of monthly
payment (after deduction of any applicable taxes and the annuity
administrative charge described below). Payments depend on the annuity
selected, your age, and the age of your beneficiary if you select a joint and
survivor annuity. We may change the tables in the contract no more than once
every five years.
The minimum amount that can be used to purchase any type of annuity is
$3,500. Usually, an annuity administrative charge of $350 will be deducted
from the amount used to purchase the annuity. If we give any group pension
client with a qualified profit sharing plan a better annuity purchase rate
than those currently available for the Program, we will also make those rates
available to Program participants. The annuity administrative charge may be
greater than $350 in that case.
Under a Qualified Joint and Survivor Annuity or a Cash Refund Annuity, the
amount of the monthly payments is fixed at retirement and remains level
throughout the distribution period. Under the Life Annuity, Life
Annuity--Period Certain, Joint and Survivor Annuity and Joint and Survivor
Annuity--Period Certain, you may select either fixed or variable payments.
The variable payments reflect the investment performance of the Growth Equity
Fund. If you are interested in a variable annuity, when you are ready to
select your benefit please ask our Account Executives for our variable
annuity prospectus supplement.
The chart below shows the relative financial value of the different annuity
options, based on our current rates for fixed annuities. This chart is
provided as a sample. The numbers provided in the Rate per $1.00 of Annuity
column, which are used to calculate the monthly annuity provided, are subject
to change. The example assumes the annuitant's age
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is 65 1/2 years, the joint annuitant's age is the same and the amount used to
purchase the annuity is $100,000. The annuity administrative charge of $350
is deducted from the purchase price of $100,000, leaving a total of $99,650
to be applied to purchase the annuity. Certain legal requirements may limit
the forms of annuity available to you.
<TABLE>
<CAPTION>
AMOUNT TO BE
APPLIED ON RATE PER MONTHLY
ANNUITY FORM $1.00 OF ANNUITY
ANNUITY FORM ELECTED ANNUITY PROVIDED
- -------------------------------------------- -------------- ---------- ----------
<S> <C> <C> <C>
Life......................................... $99,650 $143.06 $696.56
Cash Refund.................................. 99,650 150.82 660.72
5 Year Certain Life.......................... 99,650 144.62 689.05
10 Year Certain Life......................... 99,650 148.55 670.82
15 Year Certain Life......................... 99,650 153.87 647.62
100% Joint & Survivor Life................... 99,650 168.01 593.12
75% Joint & Survivor Life.................... 99,650 161.16 618.33*
50% Joint & Survivor Life.................... 99,650 155.13 642.36*
100% Joint & Survivor--5 Year Certain
Life**...................................... 99,650 168.04 593.01
100% Joint & Survivor--10 Year Certain
Life**...................................... 99,650 168.27 592.20
100% Joint & Survivor--15 Year Certain
Life**...................................... 99,650 168.91 589.96
100% Joint & Survivor--20 Year Certain
Life**...................................... 99,650 170.10 585.83
</TABLE>
* Represents the amount payable to the primary annuitant. A surviving
joint annuitant would receive the applicable percentage of the amount
paid to the primary annuitant.
** You may also elect a Joint and Survivor Annuity--Period Certain with a
monthly benefit payable to the surviving joint annuitant in any
percentage you specify.
PROVISIONS OF THE MEMBERS RETIREMENT PLAN
PLAN ELIGIBILITY REQUIREMENTS. Under the Members Retirement Plan, the
employer specifies the eligibility requirements for its plan in the
Participation Agreement. The employer may exclude any employee who has not
attained a specified age (not to exceed 21) and completed a specified number
of years (not to exceed two) in each of which he completed 1,000 hours of
service. No more than one year of eligibility service may be required for a
401(k) arrangement.
The Members Retirement Plan provides that a sole proprietor, partner or
shareholder may, upon commencement of employment or upon first becoming
eligible to participate in any qualified plan of the employer, make a
one-time irrevocable election not to participate in the plan or to make a
reduced contribution. This election applies to all plans of the employer, now
and in the future, and should be discussed with your tax advisor.
CONTRIBUTIONS TO QUALIFIED PLANS. Current federal income tax rules relating
to contributions under qualified retirement plans are outlined briefly below.
For purposes of this outline we have assumed that you are not a participant
in any other qualified retirement plan.
The employer's contributions to the plan are deductible in the year for which
they are made. As a general rule, employer contributions must be made for any
year by the due date (including extensions) for filing the employer's federal
income tax return for that year. However, under Department of Labor ("DOL")
rules, participants' salary deferrals under a 401(k) plan must generally be
contributed by the employer as soon as practicable after the payroll period
for which the deferral is made, but no later than the 15th business day of
the month following the month in which participant contributions are withheld
or received by the employer.
If the employer contributes more to the plan than is deductible under the
rules described below, the employer may be liable for a 10% penalty tax on
that nondeductible amount and may risk disqualifying the plan.
CONTRIBUTIONS TO THE MEMBERS RETIREMENT PLAN. The employer makes annual
contributions to its plan based on the plan's provisions.
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An employer that adopts the Members Retirement Plan as a profit sharing plan
makes contributions in discretionary amounts to be determined annually. The
aggregate employer contribution to the plan, including participants' salary
deferrals under a 401(k) arrangement, is limited to 15% of all participants'
compensation for the plan year. For plan purposes, compensation for
self-employed persons does not include deductible plan contributions made on
behalf of the self-employed person.
A 401(k) arrangement is available as part of the profit sharing plan. Under a
401(k) arrangement, employees are permitted to make contributions to the plan
on a pre-tax basis. The maximum amount that may be contributed by
highly-compensated employees is limited depending upon the amount that is
contributed by non-highly compensated employees and the amount the employer
designates as a nonforfeitable 401(k) contribution. In 1997, a "highly
compensated" employee for this purpose is (a) an owner of more than 5% of the
business, or (b) anyone with earnings of more than $80,000 from the business
in 1996. For (b), the employer may elect to include only employees in the
highest paid 20%. In any event, the maximum amount each employee may defer is
limited to $9,500 for 1997 reduced by that employee's salary reduction
contributions to simplified employee pensions (SEPs) and employee
contributions to tax deferred (Section 403(b)) annuities, and contributions
deductible by the employee under a trust described under Section 501(c)(18)
of the Code. The maximum amount a participant may defer in a SIMPLE 401(k)
plan for 1997 is $6,000.
If the employer adopts the Members Retirement Plan as a defined contribution
pension plan, its contribution is equal to the percentage of each
participant's compensation that is specified in the Participation Agreement.
Under either type of plan, compensation in excess of $160,000 in 1997 must be
disregarded in making contributions. Contributions may be integrated with
Social Security which means that contributions with respect to each
participant's compensation in excess of the integration level may exceed
contributions made with respect to compensation below the integration level,
within limits imposed by the Code. Your Account Executive can help you
determine the legally permissible contribution.
Except in the case of certain non-top heavy plans, contributions on behalf of
non-key employees must be at least 3% of compensation (or, under the profit
sharing plan, the percentage contributed on behalf of key employees, if less
than 3%). In 1997, a "key employee" means (a) an owner of one of the ten
largest (but more than 1/2%) interests in the business with earnings of more
than $30,000, or (b) an officer of the business with earnings of more than
$62,500 or (c) an owner of more than 5% of the business, or (d) an owner of
more than 1% of the business with earnings of more than $150,000. For
purposes of (b), no more than 50 employees (or, if less, the greater of three
or 10% of the employees) shall be treated as officers.
Certain plans may also permit participants to make post-tax contributions. We
will maintain a separate account to reflect each participant's post-tax
contributions and the earnings (or losses) thereon. Post-tax contributions
are now subject to complex rules under which the maximum amount that may be
contributed by highly compensated employees is limited, depending on the
amount contributed by non-highly compensated employees. IF THE EMPLOYER
PERMITS HIGHLY-COMPENSATED EMPLOYEES TO MAKE POST-TAX CONTRIBUTIONS, THE
EMPLOYER SHOULD MAKE SURE THAT ALL NON-DISCRIMINATION TESTS ARE PASSED. If an
employer employs only "highly compensated" employees (as defined above),
post-tax contributions may not be made to the plan. In addition, the employer
may make matching contributions to certain plans, i.e., contributions which
are based upon the amount of post-tax or pre-tax 401(k) contributions made by
plan participants. Special non-discrimination rules also apply to matching
contributions and may limit the amount of matching contributions that may be
made on behalf of highly compensated employees.
Contributions on behalf of each participant are limited to the lesser of
$30,000 and 25% of his earnings (excluding, in the case of self-employed
persons, all deductible plan contributions). The participant's post-tax
contributions are taken into account for purposes of applying this
limitation.
Each participant's Account Balance equals the sum of the amounts accumulated
in each Investment Option. We will maintain separate records of each
participant's interest in each of the Investment Options attributable to
employer
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contributions, 401(k) non-elective contributions, 401(k) elective
contributions, post-tax employee contributions and employer matching
contributions. Any amounts rolled over from the plan of a previous employer
will also be accounted for separately. Our records will also reflect each
participant's degree of vesting (see below) in his Account Balance
attributable to employer contributions and employer matching contributions.
The participant will receive an individual confirmation of each transaction
(including the deduction of record maintenance and report fees). The
participant will also receive an annual statement showing his Account Balance
in each Investment Option attributable to each type of contribution. Based on
information supplied by you, we will run the required special
non-discrimination tests (Actual Deferral Percentage and Actual Contribution
Percentage) applicable to 401(k) plans and plans that accept post-tax
employee contributions or employer matching contributions.
Non-discrimination tests do not apply to SIMPLE 401(k) plans, as long as the
employer makes a matching contribution equal to 100% of the amount deferred
by each participant, up to 3% of compensation or a 2% non-elective
contribution to all eligible employees and follows the notification and
filing requirements outlined in the SIMPLE 401(k) model amendment to the
Master Plan.
Elective deferrals to a 401(k) plan are subject to applicable FICA (Social
Security) and FUTA (unemployment) taxes.
THE MEMBERS RETIREMENT PLAN AND SECTION 404(C) OF ERISA. The Members
Retirement Plan is a participant directed individual account plan designed to
comply with the requirements of Section 404(c) of ERISA. Section 404(c) of
ERISA, and the related Department of Labor (DOL) regulation, provide that if
a participant or beneficiary exercises control over the assets in his or her
plan account, plan fiduciaries will not be liable for any loss that is the
direct and necessary result of the participant's or beneficiary's exercise of
control. This means that if the employer plan complies with Section 404(c),
participants can make and are responsible for the results of their own
investment decisions.
Section 404(c) plans must, among other things, make a broad range of
investment choices available to participants and beneficiaries and must
provide them with enough information to make informed investment decisions.
The Members Retirement Plan provides the broad range of investment choices
and information that are needed in order to meet the requirements of Section
404(c). Our suggested summary plan descriptions, annual reports,
prospectuses, and confirmation notices provide the required investment
information; it is the employer's responsibility, however, to see that this
information is distributed in a timely manner to participants and
beneficiaries. You should read this information carefully before making your
investment decisions.
VESTING. Vesting refers to the nonforfeitable portion of a participant's
Account Balance attributable to employer contributions under the Members
Retirement Plan. The participant's Account Balance attributable to 401(k)
contributions, post-tax employee contributions and rollover contributions is
nonforfeitable at all times.
A participant will become fully vested in all benefits if still employed at
death, disability, attainment of normal retirement age or upon termination of
the plan. If the participant terminates employment before that time, any
benefits that have not yet become vested under the plan's vesting schedule
will be forfeited. The normal retirement age is 65 under the Members
Retirement Plan.
Except as described below in the case of certain non-top heavy plans,
benefits must vest in accordance with any of the schedules below or one at
least as favorable to participants:
<TABLE>
<CAPTION>
SCHEDULE A SCHEDULE B SCHEDULE C
YEARS OF VESTED VESTED VESTED
SERVICE PERCENTAGE PERCENTAGE PERCENTAGE
- ---------- ------------ ------------ ------------
<S> <C> <C> <C>
1 0% 0% 0%
2 100 20 0
3 100 40 100
4 100 60 100
5 100 80 100
6 100 100 100
</TABLE>
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If the plan requires more than one year of service for participation, it
must use Schedule A or one at least as favorable to participants.
Provided the employer plan is not "top-heavy," within the meaning of Section
416 of the Code, and provided that the plan does not require more than one
year of service for participation, an employer may, in accordance with
provisions of the Members Retirement Plan, instead elect one of the following
vesting schedules or one at least as favorable to participants:
<TABLE>
<CAPTION>
SCHEDULE F SCHEDULE G
YEARS OF VESTED VESTED
SERVICE PERCENTAGE PERCENTAGE
- ------------- ------------ ------------
<S> <C> <C>
less than 3 0% 0%
3 20 0
4 40 0
5 60 100
6 80 100
7 100 100
</TABLE>
All contributions to a SIMPLE 401(k) plan are 100% vested and not subject to
the vesting schedule above. This does not include employer and matching
contributions made to a plan before amending to a SIMPLE 401(k) plan.
INVESTMENT RESTRICTIONS APPLICABLE TO THE ALLIANCE GROWTH EQUITY, AGGRESSIVE
EQUITY AND BALANCED FUNDS
For an explanation of the investment restrictions applicable to the Alliance
Global, Conservative Investors and Growth Investors Funds, see Investment
Restrictions in The Hudson River Trust prospectus which appears behind the
Members Retirement Program prospectus.
For an explanation of the investment restrictions applicable to the MFS
Research, Warburg Pincus Small Company Value, T. Rowe Price Equity Income and
Merrill Lynch World Strategy Funds, see Investment Restrictions in the EQ
Advisors Trust Statement of Additional Information.
None of the Alliance Growth Equity, Aggressive Equity and Balanced Funds
will:
o trade in foreign exchange (except transactions incidental to the
settlement of purchases or sales of securities for a Fund);
o make an investment in order to exercise control or management over a
company;
o underwrite the securities of other companies, including purchasing
securities that are restricted under the 1933 Act or rules or
regulations thereunder (restricted securities cannot be sold publicly
until they are registered under the 1933 Act), except as stated below;
o make short sales, except when the Fund has, by reason of ownership of
other securities, the right to obtain securities of equivalent kind and
amount that will be held so long as they are in a short position;
o trade in commodities or commodity contracts (except the Alliance
Balanced Fund is not prohibited from entering into hedging transactions
through the use of stock index or interest rate future contracts, as
described in the prospectus);
o purchase real estate or mortgages, except as stated below. The Funds
may buy shares of real estate investment trusts listed on stock
exchanges or reported on the National Association of Securities
Dealers, Inc. automated quotation system ("NASDAQ");
o have more than 5% of its assets invested in the securities of any one
registered investment company. A Fund may not own more than 3% of an
investment company's outstanding voting securities. Finally, total
holdings of investment company securities may not exceed 10% of the
value of the Fund's assets;
SAI-11
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o purchase any security on margin or borrow money except for short-term
credits necessary for clearance of securities transactions;
o make loans, except loans through the purchase of debt obligations or
through entry into repurchase agreements; or
o invest more than 10% of its total assets in restricted securities, real
estate investments, or portfolio securities not readily marketable.
The Alliance Growth Equity and Balanced Funds will not make an investment in
an industry if that investment would make the Fund's holding in that industry
exceed 25% of its assets. The United States government, and its agencies and
instrumentalities, are not considered members of any industry.
The Alliance Growth Equity and Aggressive Equity Funds will not purchase or
write puts and calls (options).
HOW WE VALUE THE ASSETS OF THE FUNDS
The assets of the Funds are valued as follows:
o STOCKS listed on national securities exchanges or traded on the NASDAQ
national market system are valued at the last sale price. If on a
particular day there is no sale, they are valued at the latest
available bid price reported on a composite tape. Other unlisted
securities reported on the NASDAQ system are valued at inside (highest)
quoted bid prices.
o FOREIGN SECURITIES not traded directly, or in American Depository
Receipt (ADR) form, in the United States, are valued at the last sale
price in the local currency or an exchange in the country of origin.
Foreign currency is converted into dollars at current exchange rates.
o UNITED STATES TREASURY SECURITIES and other obligations issued or
guaranteed by the United States Government, its agencies or
instrumentalities are valued at representative quoted prices.
o LONG-TERM PUBLICLY TRADED CORPORATE BONDS (i.e., maturing in more than
a year) are valued at prices obtained from a bond pricing service of a
major dealer in bonds when such prices are available; however, in
circumstances where it is deemed appropriate to do so, an
over-the-counter or exchange quotation may be used.
o CONVERTIBLE PREFERRED STOCKS listed on national securities exchanges
are valued at their last sale price or, if there is no sale, at the
latest available bid price.
o CONVERTIBLE BONDS and UNLISTED CONVERTIBLE PREFERRED STOCKS are valued
at bid prices obtained from one or more major dealers in such
securities; where there is a discrepancy between dealers, values may be
adjusted based on recent premium spreads to the underlying common
stock.
o SHORT-TERM DEBT SECURITIES that mature in more than 60 days are valued
at representative quoted prices. Short-term securities that mature in
60 days or less are valued at amortized cost, which approximates market
value. The Funds may also acquire short-term debt securities through
units in our Separate Account No. 2A. These unit values are calculated
in the same way as Fund Units. The assets of Separate Account No. 2A
are valued as described above.
o OPTION CONTRACTS listed on organized exchanges are valued at last sale
prices or closing asked prices, in the case of calls, and at quoted bid
prices, in the case of puts. The market value of a put or call will
usually reflect, among other factors, the market price of the
underlying security. When a Fund writes a call option, an amount equal
to the premium received by the Fund is included in the Fund's financial
statements as an asset
SAI-12
<PAGE>
and an equivalent liability. The amount of the liability is
subsequently marked-to-market to reflect the current market value of
the option written. The current market value of a traded option is the
last sale price or, in the absence of a sale, the last offering price.
When an option expires on its stipulated expiration date or a Fund
enters into a closing purchase or sales transaction, the Fund realizes
a gain or loss without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is
extinguished. When an option is exercised, the Fund realizes a gain or
loss from the sale of the underlying security, and the proceeds of the
sale are increased by the premium originally received, or reduced by
the price paid for the option.
Our investment officers determine in good faith the fair market value of
securities and other assets that do not have a readily available market price
in accordance with accepted accounting practices and applicable laws and
regulations.
SUMMARY OF UNIT VALUES FOR THE FUNDS
Set forth below are Unit Values for the Funds, computed to the nearest cent
on the last business day of the periods specified. The value of a Alliance
Growth Equity Fund Unit was established at $10.00 on January 1, 1968, for the
National Association of Realtors Members Retirement Program (NAR Program),
which was merged into the Members Retirement Program on December 27, 1984.
The Alliance Aggressive Equity Fund and Balanced Fund Unit Values under the
Program were established at $10.00 on May 1, 1985, the date on which the
Funds were first made available under the Program. The Alliance Global,
Conservative Investors and Growth Investors Unit Values under the Program
were established at $10.00 on July 1, 1993, the date on which these Funds
were first made available under the Program. The MFS Research, Warburg Pincus
Small Company Value, T. Rowe Price Equity Income and Merrill Lynch World
Strategy Fund Unit Values under the Program will be established at $10.00 on
August 1, 1997, the date on which these Funds become available under the
Program.
The Alliance Global, Conservative Investors and Growth Investors Fund Unit
Values before July 1, 1993 reflect hypothetical performance based on (1) the
actual performance of the Alliance Global Portfolio since August 27, 1987 and
the Alliance Conservative Investors and Growth Investors Portfolios since
October 2, 1989, respectively, the dates each commenced operations, and (2)
the deduction of the Program Expense Charge, the financial accounting fee and
the daily accrual of direct expenses attributable to the Alliance Growth
Equity Fund. Since July 1, 1993, they reflect actual performance. See
Deductions and Charges in the prospectus for a description of the charges
which will apply.
UNIT VALUES OF THE FUNDS
<TABLE>
<CAPTION>
CONSERVATIVE GROWTH
LAST BUSINESS GROWTH AGGRESSIVE BALANCED GLOBAL INVESTORS INVESTORS
DAY OF EQUITY FUND EQUITY FUND FUND FUND(1) FUND(1) FUND(1)
- --------------- ------------- ------------- ---------- -------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
1987............ $ 64.52 $10.77 $11.84 $ 5.25 -- --
1988............ 74.54 10.85 13.42 5.74 -- --
1989............ 106.57 15.75 16.76 7.20 $ 7.23 $ 5.52
1990............ 93.41 16.93 16.45 6.67 7.59 6.04
1991............ 140.45 31.33 22.97 8.61 8.99 8.90
1992............ 140.51 30.01 22.07 8.45 9.38 9.21
1993............ 165.88 33.95 24.45 11.05 10.22 10.49
1994............ 161.15 32.21 22.19 11.45 9.62 9.98
1995............ 209.90 41.74 26.39 13.38 11.39 12.40
1996............ 244.25 50.46 29.02 15.11 11.81 13.76
March 1997 ..... 236.39 48.97 28.49 14.57 11.66 13.46
</TABLE>
(1) Unit Values reflect hypothetical performance through July 1, 1993 and
actual performance thereafter.
SAI-13
<PAGE>
FUND TRANSACTIONS
The Alliance Growth Equity, Aggressive Equity and Balanced Funds are charged
for securities brokers' commission, transfer taxes and other fees relating to
securities transactions. Transactions in equity securities for each of these
Funds are executed primarily through brokers that receive a commission paid
by the Fund. The brokers are selected by Alliance Capital Management L.P.
("Alliance") and Equitable Life. For 1996, 1995 and 1994, the Alliance Growth
Equity Fund paid $5,682,578, $6,044,623 and $4,738,796, respectively, in
brokerage commissions; the Alliance Aggressive Equity Fund paid $1,268,209,
$1,547,073 and $908,990, respectively, in brokerage commissions; and the
Alliance Balanced Fund paid $931,317, $1,016,342 and $801,704, respectively,
in brokerage commissions. Similar fees are paid by the corresponding Hudson
River Trust Portfolios in which the Alliance Global, Conservative Investors
and Growth Investors Funds invest. Similar fees are paid by the corresponding
EQ Advisors Trust Portfolios in which the MFS Research, Warburg Pincus Small
Company Value, T. Rowe Price Equity Income and Merrill Lynch World Strategy
Funds invest, but not for this period since these Funds were not in
existence.
Alliance and Equitable Life seek to obtain the best price and execution of
all orders placed for the portfolios of the Funds, considering all the
circumstances. If transactions are executed in the over-the-counter market,
they will deal with the principal market makers, unless more favorable prices
or better execution is otherwise obtainable. There are occasions on which
portfolio transactions for the Funds may be executed as part of concurrent
authorizations to purchase or sell the same security for certain other
accounts or clients advised by Alliance and Equitable Life. These concurrent
authorizations potentially can be either advantageous or disadvantageous to
the Funds. When these concurrent authorizations occur, the objective is to
allocate the executions among the Funds and the other accounts in a fair
manner.
We also consider the amount and quality of securities research services
provided by a broker. Typical research services include general economic
information and analyses and specific information on and analyses of
companies, industries and markets. Factors in evaluating research services
include the diversity of sources used by the broker and the broker's
experience, analytical ability, and professional stature. The receipt of
research services from brokers tends to reduce our expenses in managing the
Funds. This is taken into account when setting the expense charges.
Brokers who provide research services may charge somewhat higher commissions
than those who do not. However, we will select only brokers whose commissions
we believe are reasonable in all the circumstances. Of the brokerage
commissions paid by the Alliance Growth Equity, Aggressive Equity and
Balanced Funds during 1996, $5,463,647, $1,242,539 and $821,445,
respectively, were paid to brokers providing research services on
transactions of $3,287,148,404, $553,297,591 and $452,035,380, respectively.
We periodically evaluate the services provided by brokers and prepare
internal proposals for allocating among those various brokers business for
all the accounts we manage or advise. That evaluation involves consideration
of the overall capacity of the broker to execute transactions, its financial
condition, its past performance and the value of research services provided
by the broker in servicing the various accounts advised or managed by us. We
have no binding agreements with any firm as to the amount of brokerage
business which the firm may expect to receive for research services or
otherwise. There may, however, be understandings with certain firms that we
will continue to receive services from such firms only if such firms are
allocated a certain amount of brokerage business. We may try to allocate such
amounts of business to such firms to the extent possible in accordance with
the policies described above.
Research information obtained by us may be used in servicing all accounts
under our management, including our general account. Similarly, not all
research provided by a broker or dealer with which the Funds transact
business will necessarily be used in connection with those Funds.
Transactions for the Funds in the over-the-counter market are normally
executed as principal transactions with a dealer that is a principal
market-maker in the security, unless a better price or better execution can
be obtained from
SAI-14
<PAGE>
another source. Under these circumstances, the Funds pay no commission.
Similarly, portfolio transactions in money market and debt securities will
normally be executed through dealers or underwriters under circumstances
where the Fund pays no commission.
When making securities transactions for Funds that do not involve paying a
brokerage commission (such as the purchase of short-term debt securities), we
seek to obtain prompt execution in an effective manner at the best price.
Subject to this general objective, we may give orders to dealers or
underwriters who provide investment research. None of the Funds will pay a
higher price, however, and the fact that we may benefit from such research is
not considered in setting the expense charges.
In addition to using brokers and dealers to execute portfolio securities
transactions for accounts we manage, we may enter into other types of
business transactions with brokers or dealers. These other transactions will
be unrelated to allocation of the Funds' portfolio transactions.
INVESTMENT MANAGEMENT AND FINANCIAL ACCOUNTING FEE
The table below shows the amount we received under the investment management
and financial accounting fee under the Program during each of the last three
years. See Part VII: Deductions and Charges in the prospectus. No investment
management or financial accounting fees were received for the MFS Research,
Warburg Pincus Small Company Value, T. Rowe Price Equity Income and Merrill
Lynch World Strategy Funds for 1996 because they were not in existence.
<TABLE>
<CAPTION>
FUND 1996 1995 1994
- ------------------------------ ---------- ---------- ----------
<S> <C> <C> <C>
Alliance Growth Equity......... $256,818 $199,240 $171,628
Alliance Aggressive Equity .... 119,359 73,380 56,470
Alliance Balanced.............. 64,630 54,768 50,964
Alliance Global................ 14,005 8,833 5,753
Alliance Conservative
Investors..................... 21,570 4,253 3,816
Alliance Growth Investors ..... 7,186 4,880 3,901
</TABLE>
UNDERWRITER
EQ Financial Consultants, Inc. ("EQ Financial"), a wholly-owned subsidiary of
Equitable Life, may be deemed to be the principal underwriter of separate
account units under the group annuity contract. EQ Financial is registered
with the SEC as a broker-dealer under the 1934 Act and is a member of the
National Association of Securities Dealers, Inc. EQ Financial's principal
business address is 1755 Broadway, New York, NY 10019. The offering of the
units under the contract is continuous. No underwriting commissions have been
paid during any of the last three fiscal years with respect to units of
interest under the contract. See Part VII: Deductions and Charges in the
prospectus.
SAI-15
<PAGE>
OUR MANAGEMENT
Equitable Life is managed by a Board of Directors which is elected by its
shareholders. Its directors and certain of its executive officers and their
principal occupations are as follows:
<TABLE>
<CAPTION>
DIRECTORS
NAME PRINCIPAL OCCUPATION
- ----------------------------- ------------------------------------------------------------------------------------
<S> <C>
Claude Bebear Chairman of the Executive Board, AXA-UAP
Christopher Brocksom Retired Chief Executive Officer, AXA-UAP Equity & Law Life Assurance Society PLC
Francoise Colloc'h Senior Executive Vice President Human Resources and Communications, AXA-UAP
Henri de Castries Senior Executive Vice President, Financial Services and Life Insurance Activities,
AXA-UAP
Joseph L. Dionne Chairman and Chief Executive Officer, The McGraw-Hill Companies
William T. Esrey Chairman and Chief Executive Officer, Sprint Corporation
Jean-Rene Fourtou Chairman and Chief Executive Officer, Rhone Paulenc, S.A.
Norman C. Francis President, Xavier University of Louisiana
Donald J. Greene Counselor-at-Law, Partner, Le Boeuf, Lamb, Greene & MacRae
John T. Hartley Retired Chairman and Chief Executive Officer, Harris Corporation
John H. F. Haskell, Jr. Director and Managing Director, Dillon, Read & Co., Inc.
Mary R. (Nina) Henderson President, CPC Specialty Markets Group of CPC International, Inc.
W. Edwin Jarmain President, Jarmain Group Inc.
G. Donald Johnston, Jr. Retired Chairman and Chief Executive Officer, JWT Group, Inc.
Winthrop Knowlton Chairman, Knowlton Brothers, Inc.
Arthur L. Liman Counselor-at-Law, Partner, Paul, Weiss, Rifkind, Wharton & Garrison
George T. Lowy Counselor-at-Law, Partner, Cravath, Swaine & Moore
Didier Pineau-Valencienne Chairman and Chief Executive Officer, Schneider, S.A.
George J. Sella, Jr. Retired Chairman of the Board and Chief Executive Officer, American Cyanamid
Company
Dave H. Williams Chairman and Chief Executive Officer, Alliance Capital Management, L.P.
</TABLE>
SAI-16
<PAGE>
Unless otherwise indicated, the following persons have been involved in the
management of Equitable Life in various executive positions during the last
five years.
<TABLE>
<CAPTION>
OFFICER-DIRECTORS
NAME PRINCIPAL OCCUPATION
- ----------------------- ------------------------------------------------------------------------------
<S> <C>
William T. McCaffrey Senior Executive Vice President and Chief Operating Officer
Joseph J. Melone Director, President and Chief Executive Officer, The Equitable Companies
Incorporated, Chairman, Chief Executive Officer and President, Equitable Life
OTHER OFFICERS
NAME PRINCIPAL OCCUPATION*
- ----------------------- -----------------------------------------------------------------------------
Stanley B. Tulin Senior Executive Vice President and Chief Financial Officer; prior thereto,
Chairman, Insurance Consulting and Actuarial Practice, Coopers & Lybrand
Robert E. Garber Executive Vice President and General Counsel
Peter D. Noris Executive Vice President and Chief Investment Officer. Prior to May 1995,
Vice President/Manager, Insurance Company Investment Strategies Group,
Salomon Brothers, Inc. Prior to November 1992, as Principal, Fixed Income
Insurance Group, Morgan Stanley & Company
Jose Suquet Executive Vice President and Chief Agency Officer
Gordon G. Dinsmore Senior Vice President and Chief Valuation Actuary
Alvin H. Fenichel Senior Vice President and Controller
Kevin R. Byrne Vice President and Treasurer
Paul J. Flora Senior Vice President and Auditor
Pauline Sherman Vice President, Secretary and Associate General Counsel
</TABLE>
[FN]
- ------------
* Current positions listed are with Equitable Life unless otherwise
specified.
SAI-17
<PAGE>
FINANCIAL STATEMENTS
The financial statements of Equitable Life included in this Statement of
Additional Information should be considered only as bearing upon the ability
of Equitable Life to meet its obligations under the group annuity contract.
They should not be considered as bearing upon the investment experience of
the Funds. The financial statements of Separate Account Nos. 3 (Pooled), 4
(Pooled), 10 (Pooled) and 51 (Pooled) reflect applicable fees, charges and
other expenses under the Program as in effect during the periods covered, as
well as the charges against the accounts made in accordance with the terms of
all other contracts participating in the respective separate accounts, if
applicable.
<TABLE>
<CAPTION>
<S> <C>
Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled) and 51 (Pooled):
Report of Independent Accountants--Price Waterhouse LLP............................................ SAI-19
Separate Account No. 3 (Pooled)(The Alliance Aggressive Equity Fund):
Statement of Assets and Liabilities, December 31, 1996............................................. SAI-20
Statements of Operations and Changes in Net Assets for the Years Ended
December 31, 1996 and 1995........................................................................ SAI-21
Portfolio of Investments, December 31, 1996........................................................ SAI-22
Separate Account No. 4 (Pooled)(The Alliance Growth Equity Fund):
Statement of Assets and Liabilities, December 31, 1996............................................. SAI-26
Statements of Operations and Changes in Net Assets for the Years Ended
December 31, 1996 and 1995........................................................................ SAI-27
Portfolio of Investments, December 31, 1996........................................................ SAI-28
Separate Account No. 10 (Pooled)(The Alliance Balanced Fund):
Statement of Assets and Liabilities, December 31, 1996............................................. SAI-33
Statements of Operations and Changes in Net Assets for the Years Ended
December 31, 1996 and 1995........................................................................ SAI-34
Portfolio of Investments, December 31, 1996........................................................ SAI-35
Separate Account No. 51 (Pooled)(The Alliance Global, Conservative Investors and Growth Investors
Funds):
Statements of Assets and Liabilities, December 31, 1996............................................ SAI-51
Statements of Operations and Changes in Net Assets for the year ended December 31, 1996 and
1995.............................................................................................. SAI-52
Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled) and 51 (Pooled):
Notes to Financial Statements...................................................................... SAI-53
The Equitable Life Assurance Society of the United States:
Report of Independent Accountants--Price Waterhouse LLP............................................ SAI-56
Consolidated Balance Sheets, December 31, 1996 and 1995............................................ SAI-57
Consolidated Statements of Earnings Years Ended
December 31, 1996, 1995 and 1994.................................................................. SAI-58
Consolidated Statement of Shareholder's Equity Years Ended
December 31, 1996, 1995 and 1994.................................................................. SAI-59
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1996, 1995 and 1994.................................................................. SAI-60
Notes to Consolidated Financial Statements......................................................... SAI-61
</TABLE>
SAI-18
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and the Participants in the Members Retirement Program
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and changes in net assets present fairly, in all material
respects, the financial position of Separate Account Nos. 3, 4, 10 and the
Global Fund, Conservative Investors Fund and Growth Investors Fund
(constituting Separate Account No. 51, hereafter referred to as "Separate
Account No. 51") of The Equitable Life Assurance Society of the United States
("Equitable Life") at December 31, 1996 and each of their results of
operations and changes in net assets for each of the two years in the period
then ended for Separate Account Nos. 3, 4, 10 and 51, 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 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 securities at December 31, 1996 by correspondence with the
custodian and brokers, the application of alternative auditing procedures
where confirmations from brokers were not received and confirmation of shares
owned in The Hudson River Trust with the transfer agent, provide a reasonable
basis for the opinion expressed above.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The selected per unit information
(appearing under "Condensed Fund Financial Information" in the prospectus) is
presented for the purpose of satisfying regulatory reporting requirements and
is not a required part of the basic financial statements. Such selected per
unit information has been subjected to auditing procedures applied during the
audit of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the basic financial statements taken
as a whole.
Price Waterhouse LLP
New York, New York
February 10, 1997
SAI-19
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED) (THE ALLIANCE AGGRESSIVE EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statement of Assets and Liabilities
December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------
ASSETS:
Investments (Notes 2 and 3):
Common stocks--at market value (cost: $373,457,990) ........................................ $429,928,523
Participation in Separate Account No. 2A--at amortized cost, which approximates market
value, equivalent to 92,858 units at $255.57 ............................................... 23,732,041
Cash......................................................................................... 29,501
Receivables:
Securities sold ............................................................................ 274,498
Dividends................................................................................... 31,519
- -------------------------------------------------------------------------------------------- --------------
Total assets............................................................................. 453,996,082
- -------------------------------------------------------------------------------------------- --------------
LIABILITIES:
Payables:
Securities purchased ....................................................................... 2,701,994
Due to Equitable Life's General Account .................................................... 7,596,637
Investment management fees payable ......................................................... 3,829
Accrued expenses ............................................................................ 166,762
- -------------------------------------------------------------------------------------------- --------------
Total liabilities ....................................................................... 10,469,222
- -------------------------------------------------------------------------------------------- --------------
NET ASSETS .................................................................................. $443,526,860
============================================================================================ ==============
</TABLE>
See Notes to Financial Statements.
SAI-20
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Operations and Changes in Net Assets
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1996 1995
- --------------------------------------------------------------------------------------------- ---------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (Note 2):
Dividends (net of foreign taxes withheld--1996: $-0-and 1995: $21,522) ...... $ 888,868 $ 1,552,241
Interest ..................................................................... 1,847,954 729,465
- ------------------------------------------------------------------------------ --------------- ---------------
Total ........................................................................ 2,736,822 2,281,706
EXPENSES (NOTE 4) ............................................................ (5,268,842) (4,967,053)
- ------------------------------------------------------------------------------ --------------- ---------------
NET INVESTMENT LOSS .......................................................... (2,532,020) (2,685,347)
- ------------------------------------------------------------------------------ --------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain from security and foreign currency transactions ................ 83,136,492 75,694,748
- ------------------------------------------------------------------------------ --------------- ---------------
Unrealized appreciation (depreciation) of investments:
Beginning of year ........................................................... 62,843,978 42,542,366
End of year ................................................................. 56,470,533 62,843,978
- ------------------------------------------------------------------------------ --------------- ---------------
Change in unrealized appreciation/depreciation ............................... (6,373,445) 20,301,612
- ------------------------------------------------------------------------------ --------------- ---------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS .............................. 76,763,047 95,996,360
- ------------------------------------------------------------------------------ --------------- ---------------
Increase in net assets attributable to operations ............................ 74,231,027 93,311,013
- ------------------------------------------------------------------------------ --------------- ---------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ................................................................ 226,778,696 205,540,949
Withdrawals .................................................................. (199,186,117) (266,542,005)
- ------------------------------------------------------------------------------ --------------- ---------------
Increase (decrease) in net assets attributable to contributions and
withdrawals ................................................................. 27,592,579 (61,001,056)
- ------------------------------------------------------------------------------ --------------- ---------------
INCREASE IN NET ASSETS ....................................................... 101,823,606 32,309,957
NET ASSETS--BEGINNING OF YEAR ................................................ 341,703,254 309,393,297
- ------------------------------------------------------------------------------ --------------- ---------------
NET ASSETS--END OF YEAR ...................................................... $ 443,526,860 $ 341,703,254
============================================================================== =============== ===============
</TABLE>
See Notes to Financial Statements.
SAI-21
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ----------------------------------------------------- ----------- --------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
CHEMICALS-SPECIALTY (4.5%)
Crompton & Knowles Corp. ............................. 399,100 $ 7,682,675
Cytec Industries, Inc.* .............................. 243,900 9,908,438
IDEXX Laboratories, Inc.* ............................ 64,700 2,329,200
--------------
19,920,313
--------------
METALS & MINING (2.0%)
Cyprus Amax Minerals Co. ............................. 106,700 2,494,112
Kaiser Aluminium Corp.* .............................. 94,100 1,093,913
Titanium Metals Corp.* ............................... 163,600 5,378,350
--------------
8,966,375
--------------
STEEL (2.3%)
AK Steel Holding Corp. ............................... 155,000 6,141,875
Worthington Industries, Inc. ......................... 230,400 4,176,000
--------------
10,317,875
--------------
TOTAL BASIC MATERIALS (8.8%) ......................... 39,204,563
--------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (6.9%)
Philip Environmental, Inc.* .......................... 190,700 2,765,150
Republic Industries, Inc.* ........................... 314,700 9,814,706
USA Waste Services, Inc.* ............................ 414,000 13,196,250
Wheelabrator Technologies, Inc. ...................... 309,000 5,021,250
--------------
30,797,356
--------------
PRINTING, PUBLISHING & BROADCASTING (4.1%)
Comcast Corp. (Class A) .............................. 602,700 10,735,594
Evergreen Media Corp. (Class A)* ..................... 297,400 7,435,000
--------------
18,170,594
--------------
TRUCKING, SHIPPING (1.6%)
Xtra Corp. ........................................... 159,800 6,931,325
--------------
TOTAL BUSINESS SERVICES (12.6%) ...................... 55,899,275
--------------
CONSUMER CYCLICALS
AIRLINES (4.0%)
America West Airlines, Inc. (Class B)* ............... 241,400 3,832,225
Continental Airlines Inc. (Class B)* ................. 198,800 5,616,100
Delta Air Lines, Inc. ................................ 66,500 4,713,187
Northwest Airlines Corp. (Class A)* .................. 94,500 3,697,313
--------------
17,858,825
--------------
APPAREL, TEXTILE (8.7%)
Mohawk Industries, Inc.* ............................. 145,100 3,192,200
Nine West Group, Inc.* ............................... 364,100 16,885,138
Polymer Group, Inc.* ................................. 299,000 4,148,625
Shaw Industries, Inc. ................................ 302,900 3,559,075
Tommy Hilfiger Corp.* ................................ 131,800 6,326,400
Unifi, Inc. .......................................... 145,700 4,680,612
--------------
38,792,050
--------------
SAI-22
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- --------------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ----------------------------------------------------- ----------- --------------
AUTO-RELATED (0.9%)
NAL Financial Group, Inc.* ........................... 400,000 $ 3,850,000
--------------
FOOD SERVICES, LODGING (6.5%)
Choice Hotels International, Inc.* ................... 202,700 3,572,588
Doubletree Corp.* .................................... 69,300 3,118,500
Extended Stay America, Inc.* ......................... 184,100 3,705,012
Host Marriott Corp.* ................................. 893,900 14,302,400
La Quinta Motor Inns, Inc. ........................... 76,200 1,457,325
Studio Plus Hotels, Inc.* ............................ 53,200 837,900
Suburban Lodges of America, Inc.* .................... 123,400 1,974,400
--------------
28,968,125
--------------
HOUSEHOLD FURNITURE, APPLIANCES (2.1%)
Industrie Natuzzi (ADR) .............................. 254,000 5,842,000
Sunbeam Corp. ........................................ 138,300 3,561,225
--------------
9,403,225
--------------
LEISURE-RELATED (5.7%)
Electronic Arts, Inc.* ............................... 88,000 2,634,500
Harman International Industries, Inc. ................ 175,700 9,773,313
Hasbro, Inc. ......................................... 226,900 8,820,737
ITT Corp.* ........................................... 95,200 4,129,300
--------------
25,357,850
--------------
RETAIL-GENERAL (3.4%)
AutoZone, Inc.* ...................................... 168,500 4,633,750
Circuit City Stores, Inc. ............................ 254,500 7,666,813
Pep Boys Manny Moe & Jack ............................ 80,800 2,484,600
--------------
14,785,163
--------------
TOTAL CONSUMER CYCLICALS (31.3%) ..................... 139,015,238
--------------
CONSUMER NONCYCLICALS
DRUGS (3.9%)
Biogen, Inc.* ........................................ 192,600 7,463,250
Centocor, Inc.* ...................................... 216,400 7,736,300
MedImmune, Inc.* ..................................... 120,900 2,055,300
--------------
17,254,850
--------------
HOSPITAL SUPPLIES & SERVICES (8.0%)
Health Management Association, Inc. (Class A)* ...... 173,900 3,912,750
Healthsouth Corp.* ................................... 364,925 14,095,228
Manor Care, Inc. ..................................... 202,700 5,472,900
Saint Jude Medical, Inc.* ............................ 284,850 12,141,731
--------------
35,622,609
--------------
SOAPS & TOILETRIES (1.7%)
Dial Corp. ........................................... 293,200 4,324,700
Estee Lauder Cos. (Class A) .......................... 57,100 2,904,963
--------------
7,229,663
--------------
TOTAL CONSUMER NONCYCLICALS (13.6%) .................. 60,107,122
--------------
SAI-23
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- --------------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ----------------------------------------------------- ----------- --------------
CREDIT-SENSITIVE
FINANCIAL SERVICES (1.1%)
Aames Financial Corp. ................................ 130,300 $ 4,674,512
--------------
INSURANCE (3.2%)
CNA Financial Corp.* ................................. 132,500 14,177,500
--------------
UTILITY-TELEPHONE (2.7%)
Telephone & Data Systems, Inc. ....................... 336,300 12,190,875
--------------
TOTAL CREDIT-SENSITIVE (7.0%) ........................ 31,042,887
--------------
ENERGY
OIL-DOMESTIC (4.9%)
Oryx Energy Co.* ..................................... 245,900 6,086,025
Ultramar Diamond Shamrock Corp. ...................... 489,880 15,492,455
--------------
21,578,480
--------------
OIL-SUPPLIES & CONSTRUCTION (4.6%)
Diamond Offshore Drilling, Inc.* ..................... 188,104 10,721,927
Rowan Cos, Inc.* ..................................... 442,300 10,007,038
--------------
20,728,965
--------------
TOTAL ENERGY (9.5%) .................................. 42,307,445
--------------
TECHNOLOGY
ELECTRONICS (3.1%)
American Power Conversion Corp.* ..................... 22,000 599,500
DT Industries, Inc. .................................. 68,100 2,383,500
Pairgain Technologies, Inc.* ......................... 22,600 687,887
Parametric Technology Corp.* ......................... 157,600 8,096,700
Xylan Corp.* ......................................... 65,900 1,861,675
--------------
13,629,262
--------------
OFFICE EQUIPMENT (2.0%)
Read-Rite Corp.* ..................................... 108,300 2,734,575
Storage Technology Corp.* ............................ 73,400 3,495,675
Symantec Corp.* ...................................... 175,500 2,544,750
--------------
8,775,000
--------------
OFFICE EQUIPMENT SERVICES (4.2%)
Baan Company N.V.* ................................... 110,000 3,822,500
Fore Systems, Inc.* .................................. 128,500 4,224,437
Informix Corp.* ...................................... 165,000 3,361,875
Premisys Communications, Inc.* ....................... 104,100 3,513,375
Sterling Commerce, Inc.* ............................. 105,907 3,733,222
--------------
18,655,409
--------------
SAI-24
<PAGE>
SEPARATE ACCOUNT NO. 3 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- --------------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ----------------------------------------------------- ----------- --------------
TELECOMMUNICATIONS (4.8%)
American Satellite Network-Rights* ................... 9,550 $ 0
Andrew Corp.* ........................................ 81,900 4,345,819
Glenayre Technologies, Inc.* ......................... 157,600 3,398,250
Millicom International Cellular S.A.* ................ 153,460 4,929,903
Tellabs, Inc.* ....................................... 79,400 2,987,425
U.S. Cellular Corp.* ................................. 125,700 3,503,887
Vanguard Cellular Systems, Inc. (Class A)* .......... 135,050 2,127,038
--------------
21,292,322
--------------
TOTAL TECHNOLOGY (14.1%) ............................. 62,351,993
--------------
TOTAL COMMON STOCKS (96.9%)
(Cost $373,457,990) ................................. 429,928,523
--------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates
market value, equivalent to 92,858 units
at $255.57 each (5.4%) .............................. 23,732,041
--------------
TOTAL INVESTMENTS (102.3%)
(Cost/Amortized Cost $397,190,031) .................. 453,660,564
LIABILITIES IN EXCESS OF CASH AND RECEIVABLES (-2.3%)
(10,133,704)
--------------
NET ASSETS (100.0%) .................................. $443,526,860
==============
</TABLE>
* Non-income producing.
See Notes to Financial Statements.
SAI-25
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED) (THE ALLIANCE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statement of Assets and Liabilities
December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
- ------------------------------------------------------------------------------------------------------
ASSETS:
Investments (Notes 2 and 3):
Common stocks--at market value (cost: $1,991,952,527) ................................ $2,440,835,888
Preferred stocks--at market value (cost: $1,742,250) ................................. 1,809,000
Long-term debt securities--at value (amortized cost: $2,863,053) ..................... 2,493,750
Participation in Separate Account No. 2A--at amortized cost, which approximates
market value, equivalent to 85,593 units at $255.57 ............................... 21,875,326
Cash................................................................................... 2,419,444
Receivables:
Securities sold ...................................................................... 18,681,125
Dividends............................................................................. 474,057
- --------------------------------------------------------------------------------------- --------------
Total assets.......................................................................... 2,488,588,590
- --------------------------------------------------------------------------------------- --------------
LIABILITIES:
Payables:
Securities purchased ................................................................. 13,390,630
Due to Equitable Life's General Account .............................................. 15,548,100
Investment management fees payable ................................................... 7,688
Accrued expenses ...................................................................... 475,122
Amount retained by Equitable Life in Separate Account No. 4 (Note 1) ................. 641,292
- --------------------------------------------------------------------------------------- --------------
Total liabilities..................................................................... 30,062,832
- --------------------------------------------------------------------------------------- --------------
NET ASSETS (NOTE 1):
Net assets attributable to participants' accumulations ................................ 2,432,753,839
Reserves and other contract liabilities attributable to annuity benefits ............. 25,771,919
- --------------------------------------------------------------------------------------- --------------
NET ASSETS ............................................................................ $2,458,525,758
======================================================================================= ==============
</TABLE>
See Notes to Financial Statements.
SAI-26
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Operations and Changes in Net Assets
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1996 1995
- ---------------------------------------------------------------------------- -------------- ---------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Dividends (net of foreign taxes withheld--1996: $62,998 and 1995: $239,657) $ 13,755,557 $ 19,610,344
Interest and amortization of premium ........................................ 292,364 (852,218)
- ---------------------------------------------------------------------------- -------------- ---------------
Total ....................................................................... 14,047,921 18,758,126
EXPENSES (NOTE 4) ........................................................... (18,524,630) (16,007,109)
- ---------------------------------------------------------------------------- -------------- ---------------
NET INVESTMENT INCOME (LOSS) ................................................ (4,476,709) 2,751,017
- ---------------------------------------------------------------------------- -------------- ---------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 2):
Realized gain from security and foreign currency transactions .............. 218,176,662 260,870,246
- ---------------------------------------------------------------------------- -------------- ---------------
Unrealized appreciation of investments
and foreign currency transactions:
Beginning of year .......................................................... 290,870,386 41,831,973
End of year ................................................................ 448,580,808 290,870,386
- ---------------------------------------------------------------------------- -------------- ---------------
Change in unrealized appreciation/depreciation .............................. 157,710,422 249,038,413
- ---------------------------------------------------------------------------- -------------- ---------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ............................. 375,887,084 509,908,659
- ---------------------------------------------------------------------------- -------------- ---------------
Increase in net assets attributable to operations ........................... 371,410,375 512,659,676
- ---------------------------------------------------------------------------- -------------- ---------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ............................................................... 552,427,638 422,289,107
Withdrawals ................................................................. (590,972,941) (474,530,080)
- ---------------------------------------------------------------------------- -------------- ---------------
Decrease in net assets attributable to contributions and withdrawals ....... (38,545,303) (52,240,973)
- ---------------------------------------------------------------------------- -------------- ---------------
Decrease in accumulated amount retained by Equitable Life in Separate
Account No. 4 (Note 1) ..................................................... 536,145 113,489
- ---------------------------------------------------------------------------- -------------- ---------------
INCREASE IN NET ASSETS ...................................................... 333,401,217 460,532,192
NET ASSETS--BEGINNING OF YEAR ............................................... 2,125,124,541 1,664,592,349
- ---------------------------------------------------------------------------- -------------- ---------------
NET ASSETS--END OF YEAR ..................................................... $2,458,525,758 $2,125,124,541
============================================================================ ============== ===============
</TABLE>
See Notes to Financial Statements.
SAI-27
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------- ------------ ---------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ---------------------------------------------------------- ------------ ---------------
<S> <C> <C>
COMMON STOCKS:
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (1.7%)
Republic Industries, Inc.* ................................ 1,355,000 $ 42,259,063
---------------
PRINTING, PUBLISHING & BROADCASTING (0.1%)
Australis Media Ltd. Conv. Note* .......................... 25,000,000 2,483,906
---------------
PROFESSIONAL SERVICES (0.7%)
Ceridian Corp.* ........................................... 170,000 6,885,000
Service Corp. International ............................... 360,000 10,080,000
---------------
16,965,000
---------------
TOTAL BUSINESS SERVICES (2.5%) ............................ 61,707,969
---------------
CONSUMER CYCLICALS
AIRLINES (6.9%)
America West Airlines, Inc. (Class B)* .................... 1,250,000 19,843,750
Continental Airlines, Inc. (Class B)* ..................... 1,300,000 36,725,000
Delta Air Lines, Inc. ..................................... 375,000 26,578,125
KLM Royal Dutch Airlines .................................. 230,000 6,411,250
Northwest Airlines Corp. (Class A)* ....................... 1,400,000 54,775,000
UAL Corp.* ................................................ 400,000 25,000,000
---------------
169,333,125
---------------
FOOD SERVICES, LODGING (1.2%)
Host Marriott Corp.* ...................................... 1,000,000 16,000,000
La Quinta Motor Inns, Inc. ................................ 700,000 13,387,500
---------------
29,387,500
---------------
HOUSEHOLD FURNITURE, APPLIANCES (1.2%)
Industrie Natuzzi (ADR) ................................... 1,000,000 23,000,000
Sunbeam Corp. ............................................. 255,800 6,586,850
---------------
29,586,850
---------------
LEISURE-RELATED (0.3%)
Carnival Corp. ............................................ 225,000 7,425,000
---------------
RETAIL--GENERAL (1.6%)
AutoZone, Inc.* ........................................... 500,000 13,750,000
CompUSA, Inc.* ............................................ 1,200,000 24,750,000
---------------
38,500,000
---------------
TOTAL CONSUMER CYCLICALS (11.2%) .......................... 274,232,475
---------------
SAI-28
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- ---------------------------------------------------------- ------------ ---------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ---------------------------------------------------------- ------------ ---------------
CONSUMER NONCYCLICALS
DRUGS (1.5%)
Centocor, Inc.* ........................................... 750,000 $ 26,812,500
Geltex Pharmaceuticals, Inc.* ............................. 210,000 5,092,500
MedImmune, Inc.* .......................................... 300,000 5,100,000
---------------
37,005,000
---------------
HOSPITAL SUPPLIES & SERVICES (1.9%)
Columbia/HCA Healthcare Corp. ............................. 540,000 22,005,000
Oxford Health Plans, Inc.* ................................ 200,000 11,712,500
Saint Jude Medical, Inc.* ................................. 310,000 13,213,750
---------------
46,931,250
---------------
SOAPS & TOILETRIES (1.0%)
Colgate Palmolive Co. ..................................... 275,000 25,368,750
---------------
TOBACCO (6.7%)
Loews Corp. ............................................... 1,750,000 164,937,500
---------------
TOTAL CONSUMER NONCYCLICALS (11.1%) ....................... 274,242,500
---------------
CREDIT-SENSITIVE
BANKS (1.0%)
First Union Corp. ......................................... 320,000 23,680,000
---------------
FINANCIAL SERVICES (8.0%)
A.G. Edwards, Inc. ........................................ 300,000 10,087,500
Dean Witter Discover & Co. ................................ 420,000 27,825,000
Legg Mason, Inc. .......................................... 935,000 35,997,500
MBNA Corp. ................................................ 900,000 37,350,000
Merrill Lynch & Co., Inc. ................................. 1,000,000 81,500,000
Resource Bancshares Mortgage Group, Inc. .................. 248,800 3,545,400
---------------
196,305,400
---------------
INSURANCE (11.4%)
CNA Financial Corp.* ...................................... 1,700,000 181,900,000
IPC Holdings Ltd. ......................................... 207,400 4,640,575
Life Re Corp. ............................................. 721,000 27,848,625
NAC Re Corp. .............................................. 564,600 19,125,825
PMI Group, Inc. ........................................... 12,600 697,725
Travelers Group, Inc. ..................................... 1,020,000 46,282,500
---------------
280,495,250
---------------
SAI-29
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- ---------------------------------------------------------- ------------ ---------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ---------------------------------------------------------- ------------ ---------------
UTILITY--TELEPHONE (7.8%)
Frontier Corp. ............................................ 365,000 $ 8,258,125
Telephone & Data Systems, Inc. ............................ 4,550,000 164,937,500
WorldCom, Inc.* ........................................... 755,000 19,677,188
---------------
192,872,813
---------------
TOTAL CREDIT-SENSITIVE (28.2%) ............................ 693,353,463
---------------
ENERGY
COAL & GAS PIPELINES (0.2%)
Nabors Industries, Inc.* .................................. 250,000 4,812,500
---------------
OIL--DOMESTIC (0.5%)
Ultramar Diamond Shamrock Corp. ........................... 408,000 12,903,000
---------------
OIL--INTERNATIONAL (0.0%)
Tatneft (ADR)* ............................................ 19,000 912,000
---------------
OIL--SUPPLIES & CONSTRUCTION (8.8%)
Coflexip* ................................................. 75,000 1,968,750
Diamond Offshore Drilling, Inc.* .......................... 350,000 19,950,000
ENSCO International, Inc.* ................................ 550,000 26,675,000
Marine Drilling Co., Inc.* ................................ 56,500 1,112,344
Noble Drilling Corp.* ..................................... 1,100,000 21,862,500
Parker Drilling Co.* ...................................... 4,900,000 47,162,500
Rowan Cos., Inc.* ......................................... 4,000,000 90,500,000
Transocean Offshore, Inc. ................................. 110,000 6,888,750
---------------
216,119,844
---------------
TOTAL ENERGY (9.5%) ....................................... 234,747,344
---------------
TECHNOLOGY
ELECTRONICS (13.7%)
Applied Materials, Inc.* .................................. 250,000 8,984,375
Cisco Systems, Inc.* ...................................... 3,000,000 190,875,000
IDT Corp.* ................................................ 155,000 1,705,000
LSI Logic Corp.* .......................................... 210,000 5,617,500
Seagate Technology, Inc.* ................................. 2,150,000 84,925,000
Teradyne, Inc.* ........................................... 603,000 14,698,125
3Com Corp.* ............................................... 400,000 29,350,000
---------------
336,155,000
---------------
OFFICE EQUIPMENT (1.7%)
Compaq Computer Corp.* .................................... 400,000 29,700,000
Sterling Software, Inc.* .................................. 376,700 11,913,138
---------------
41,613,138
---------------
SAI-30
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- ---------------------------------------------------------- ------------ ---------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ---------------------------------------------------------- ------------ ---------------
OFFICE EQUIPMENT SERVICES (4.5%)
Checkfree Corp.* .......................................... 416,700 $ 7,135,988
Electronic Data Systems Corp. ............................. 900,000 38,925,000
Informix Corp.* ........................................... 1,150,000 23,431,250
Oracle Corp.* ............................................. 400,000 16,700,000
Sterling Commerce, Inc.* .................................. 700,000 24,675,000
---------------
110,867,238
---------------
TELECOMMUNICATIONS (16.8%)
American Online, Inc.* .................................... 150,000 4,987,500
American Satellite Network--Rights* ....................... 70,000 0
Cellular Communications Puerto Rico, Inc.* ................ 482,200 9,523,450
Colt Telecom Group PLC (ADR)* ............................. 175,000 3,368,750
Deutsche Telekom AG (ADR)* ................................ 1,300,000 26,487,500
DSC Communications Corp.* ................................. 720,000 12,870,000
MFS Communications Co., Inc.* ............................. 820,000 44,690,000
Millicom International Cellular S.A.* ..................... 1,775,000 57,021,874
Netscape Communications Corp.* ............................ 400,000 22,750,000
Nokia Corp. (ADR) ......................................... 600,000 34,575,000
Palmer Wireless, Inc.* .................................... 102,000 1,071,000
Rogers Cantel Mobile Communications, Inc. (Class B)(ADR)* 1,364,100 26,429,437
Scientific Atlanta, Inc. .................................. 2,650,400 39,756,000
U.S. Cellular Corp.* ...................................... 3,200,000 89,200,000
Vanguard Cellular Systems, Inc. (Class A)* ................ 2,615,000 41,186,250
---------------
413,916,761
---------------
TOTAL TECHNOLOGY (36.7%) .................................. 902,552,137
---------------
TOTAL COMMON STOCKS (99.2%)
(Cost $1,991,952,527)..................................... 2,440,835,888
---------------
PREFERRED STOCKS:
CONSUMER CYCLICALS
AIRLINES (0.1%)
Continental Airlines Financial
Trust 8.5% Conv., 2020 ................................... 27,000 1,809,000
---------------
TOTAL CONSUMER CYCLICALS (0.1%) ........................... 1,809,000
---------------
TOTAL PREFERRED STOCKS (0.1%)
(Cost $1,742,250) ........................................ 1,809,000
---------------
</TABLE>
SAI-31
<PAGE>
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------ ------------ --------------
PRINCIPAL VALUE
AMOUNT (NOTE 3)
- ------------------------------------------------------------------------ ------------ --------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
TECHNOLOGY
TELECOMMUNICATIONS (0.1%)
U.S. Cellular Corp.,
Zero Coupon Conv., 2015 ................................................ $7,500,000 $ 2,493,750
--------------
TOTAL TECHNOLOGY (0.1%) ................................................. 2,493,750
--------------
TOTAL LONG-TERM DEBT SECURITIES (0.1%)
(Amortized Cost $2,863,053) ............................................ 2,493,750
--------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates
market value, equivalent to 85,593 units
at $255.57 (0.9%) each ................................................. 21,875,326
--------------
TOTAL INVESTMENTS (100.3%)
(Cost/Amortized Cost $2,018,433,156) ................................... 2,467,013,964
LIABILITIES IN EXCESS OF CASH AND RECEIVABLES (-0.3%) ................... (7,846,914)
AMOUNT RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT NO. 4 (0.0%)(NOTE 1) .................................. (641,292)
--------------
NET ASSETS (100.0%) ..................................................... $2,458,525,758
==============
Reserves attributable to participants' accumulations .................... $2,432,753,839
Reserves and other contract liabilities attributable to annuity benefits 25,771,919
--------------
NET ASSETS .............................................................. $2,458,525,758
==============
</TABLE>
* Non-income producing.
See Notes to Financial Statements.
SAI-32
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED) (THE ALLIANCE BALANCED FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statement of Assets and Liabilities
December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------
ASSETS:
Investments (Notes 2 and 3):
Common stocks -at value (cost: $129,934,036) ................................... $150,745,399
Preferred stocks -at value (cost: $1,439,770)................................... 2,015,395
Long-term debt securities -at value (amortized cost: $139,089,406) ............ 141,817,397
Participation in Separate Account No. 2A--at amortized cost, which approximates
market value, equivalent to 88,051 units at $255.57............................ 22,503,485
Cash............................................................................. 55,995
Receivables:
Interest ....................................................................... 1,847,704
Securities sold ................................................................ 487,633
Dividends....................................................................... 205,847
- -------------------------------------------------------------------------------- --------------
Total assets................................................................... 319,678,855
- -------------------------------------------------------------------------------- --------------
LIABILITIES:
Payables:
Securities purchased ........................................................... 1,316,198
Due to Equitable Life's General Account ........................................ 4,989,608
Investment management fees payable ............................................. 3,279
Accrued expenses ................................................................ 219,440
- -------------------------------------------------------------------------------- --------------
Total liabilities.............................................................. 6,528,525
- -------------------------------------------------------------------------------- --------------
NET ASSETS ...................................................................... $313,150,330
================================================================================ ==============
</TABLE>
See Notes to Financial Statements.
SAI-33
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Operations and Changes in Net Assets
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1996 1995
- ------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Interest ................................................................. $ 9,820,381 $11,113,819
Dividends (net of foreign taxes withheld --
1996: $115,641 and 1995: $6,516) ........................................ 2,417,609 3,014,441
- ------------------------------------------------------------------------- --------------- ---------------
Total .................................................................... 12,237,990 14,128,260
EXPENSES (NOTE 4) ........................................................ (4,691,514) (5,349,200)
- ------------------------------------------------------------------------- --------------- ---------------
NET INVESTMENT INCOME .................................................... 7,546,476 8,779,060
- ------------------------------------------------------------------------- --------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain from security and foreign currency transactions ........... 35,223,719 16,986,767
- ------------------------------------------------------------------------- --------------- ---------------
Unrealized appreciation (depreciation) of investments and foreign
currency transactions:
Beginning of year ....................................................... 34,125,491 (8,178,659)
End of year ............................................................. 24,115,275 34,125,491
- ------------------------------------------------------------------------- --------------- ---------------
Change in unrealized appreciation/depreciation ........................... (10,010,216) 42,304,150
- ------------------------------------------------------------------------- --------------- ---------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS .......................... 25,213,503 59,290,917
- ------------------------------------------------------------------------- --------------- ---------------
Increase in net assets attributable to operations ........................ 32,759,979 68,069,977
- ------------------------------------------------------------------------- --------------- ---------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ............................................................ 68,031,967 65,614,609
Withdrawals .............................................................. (161,825,766) (153,764,130)
- ------------------------------------------------------------------------- --------------- ---------------
Decrease in net assets attributable to contributions and withdrawals .... (93,793,799) (88,149,521)
- ------------------------------------------------------------------------- --------------- ---------------
DECREASE IN NET ASSETS ................................................... (61,033,820) (20,079,544)
NET ASSETS--BEGINNING OF YEAR ............................................ 374,184,150 394,263,694
- ------------------------------------------------------------------------- --------------- ---------------
NET ASSETS--END OF YEAR .................................................. $313,150,330 $374,184,150
========================================================================= =============== ===============
</TABLE>
See Notes to Financial Statements.
SAI-34
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments
December 31, 1996
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------------- ----------- --------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
CHEMICALS (0.8%)
Akzo Nobel N.V. .................................. 2,740 $ 374,072
Bayer AG ......................................... 10,600 430,186
Freeport-McMoran, Inc. ........................... 21,600 693,900
Holliday Chemical Holdings PLC ................... 46,500 97,981
Monsanto Co. ..................................... 16,000 622,000
Olin Corp. ....................................... 3,650 137,331
Toagosei Co. Ltd. ................................ 9,000 31,863
UBE Industries Ltd. .............................. 15,000 42,483
--------------
2,429,816
--------------
CHEMICALS-SPECIALTY (0.2%)
Crompton & Knowles Corp. ......................... 8,600 165,550
Cytec Industries, Inc.* .......................... 8,900 361,563
NGK Insulators ................................... 7,000 66,488
--------------
593,601
--------------
METALS & MINING (0.4%)
Century Aluminum Co. ............................. 7,100 122,475
Gibraltar Steel Corp.* ........................... 5,500 144,375
Kaiser Aluminum Corp.* ........................... 7,000 81,375
Mitsubishi Materials Corp. ....................... 12,000 48,493
Nippon Light Metal Co. ........................... 16,000 65,763
Pechiney SA (A Shares) ........................... 2,759 115,603
Reynolds Metals Co. .............................. 9,300 524,288
Steel Dynamics, Inc.* ............................ 6,800 130,050
Western Mining Corp. Ltd. ........................ 23,022 145,111
--------------
1,377,533
--------------
PAPER (0.1%)
UPM-Kymmene Oy ................................... 6,510 136,653
Fletcher Forestry Shares ......................... 18,000 30,158
--------------
166,811
--------------
STEEL (0.3%)
NKK Corp.* ....................................... 50,000 112,685
Nippon Steel Corp. ............................... 43,000 126,984
Nisshin Steel Co. Ltd. ........................... 77,000 206,778
Pohang Iron & Steel Co. Ltd. (ADR) ............... 4,000 81,000
Tokyo Steel Manufacturing Co. Ltd. ............... 19,000 270,702
Usinor Sacilor ................................... 10,000 145,514
--------------
943,663
--------------
TOTAL BASIC MATERIALS (1.8%) ..................... 5,511,424
--------------
SAI-35
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- -----------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------------- ----------- --------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.8%)
Culligan Water Technologies, Inc.* ............... 3,000 $ 121,500
Philip Environmental, Inc.* ...................... 8,700 126,150
Republic Industries, Inc.* ....................... 7,100 221,431
Superior Services, Inc.* ......................... 1,300 26,488
United States Filter Corp.* ...................... 4,000 127,000
United Waste Systems, Inc.* ...................... 4,000 137,500
USA Waste Services, Inc.* ........................ 42,000 1,338,750
WMX Technologies, Inc. ........................... 15,000 489,375
--------------
2,588,194
--------------
PRINTING, PUBLISHING & BROADCASTING (1.5%)
British Sky Broadcasting Group PLC ............... 22,400 200,309
Cablevision Systems Corp. (Class A)* ............. 22,000 673,750
Dainippon Printing Co. Ltd. ...................... 11,000 192,816
Evergreen Media Corp. (Class A)* ................. 8,200 205,000
EZ Communications, Inc. (Class A)* ............... 2,200 80,575
Liberty Media Group (Class A)* ................... 3,900 111,394
New York Times Co. ............................... 21,800 828,400
Pearson PLC ...................................... 13,300 170,767
Reed International ............................... 15,720 296,633
Reuters Holdings ................................. 24,900 320,561
Schibsted ASA .................................... 3,160 58,314
Sinclair Broadcast Group, Inc.* .................. 3,000 78,000
Singapore Press Holdings ......................... 11,000 216,966
Television Broadcasts Ltd. ....................... 31,000 123,847
Time Warner, Inc. ................................ 10,050 376,875
Universal Outdoor Holdings, Inc.* ................ 2,800 65,800
Viacom, Inc. (Class B)* .......................... 20,722 722,680
--------------
4,722,687
--------------
PROFESSIONAL SERVICES (0.5%)
Adecco SA ........................................ 375 94,135
Ceridian Corp.* .................................. 18,400 745,200
Equity Corporation International* ................ 3,300 66,000
Ha-Lo Industries, Inc.* .......................... 8,375 230,313
Interim Services, Inc.* .......................... 2,000 71,000
ISS International Service System A/S (Class B)* . 5,150 135,594
Telespectrum Worldwide, Inc.* .................... 8,600 136,525
--------------
1,478,767
--------------
TRUCKING, SHIPPING (0.2%)
Bergesen Dy AS (A Shares) ........................ 9,450 231,529
Kamigumi Co. Ltd. ................................ 11,000 72,187
Mayne Nickless Ltd. .............................. 12,000 82,029
Nippon Express Co. Ltd. .......................... 15,000 102,841
Toyo Kanetsu ..................................... 13,000 45,126
Unitor ASA* ...................................... 1,950 25,113
--------------
558,825
--------------
TOTAL BUSINESS SERVICES (3.0%) ................... 9,348,473
--------------
SAI-36
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- -----------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------------- ----------- --------------
CAPITAL GOODS
AEROSPACE (0.5%)
Boeing Co. ....................................... 5,100 $ 542,513
British Aerospace ................................ 10,500 230,241
General Electric Co. PLC ......................... 34,200 223,806
Swire Pacific Ltd. (Class A) ..................... 11,000 104,887
United Technologies Corp. ........................ 7,800 514,800
--------------
1,616,247
--------------
BUILDING & CONSTRUCTION (0.5%)
American Standard Companies, Inc.* ............... 13,400 512,550
Bouygues ......................................... 2,239 232,164
Daito Trust Construction Co. ..................... 12,978 144,561
GTM Entrepose .................................... 2,231 103,197
Maeda Road Construction Co. ...................... 5,000 57,852
Matsushita Electric Works Ltd. ................... 14,000 120,525
National House Industrial Co. .................... 10,000 132,976
Shimizu Corp. .................................... 13,000 97,099
Wimpey (George) PLC .............................. 90,900 196,987
--------------
1,597,911
--------------
BUILDING MATERIALS & FOREST PRODUCTS (0.5%)
BPB Industries PLC ............................... 14,600 95,917
Buckeye Cellulose Corp.* ......................... 2,700 71,887
Hepworth PLC ..................................... 15,300 66,443
Hughes Supply, Inc. .............................. 2,800 120,750
Louisiana Pacific Corp. .......................... 8,900 188,013
Martin Marietta Materials, Inc. .................. 30,000 697,500
Rugby Group PLC .................................. 75,300 122,547
Stora Kopparbergs (Series B) ..................... 14,300 195,023
--------------
1,558,080
--------------
ELECTRICAL EQUIPMENT (0.7%)
Alcatel Alsthom .................................. 530 42,576
General Electric Co. ............................. 20,900 2,066,488
Sumitomo Electric Industries ..................... 11,000 153,873
--------------
2,262,937
--------------
MACHINERY (0.5%)
Amano Corp. ...................................... 14,000 149,901
Daifuku Co., Inc. ................................ 11,000 138,675
Furukawa Co. Ltd. ................................ 20,000 67,352
Ishikawajima Harima Heavy Industries ............. 17,000 75,598
KSB AG-Vorzug .................................... 1,000 155,966
Legris Industries ................................ 4,390 184,873
Mitsubishi Heavy Industries Ltd. ................. 19,000 150,937
Siebe PLC ........................................ 13,000 240,965
TI Group PLC ..................................... 27,100 270,194
--------------
1,434,461
--------------
TOTAL CAPITAL GOODS (2.7%) ....................... 8,469,636
--------------
SAI-37
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- -----------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------------- ----------- --------------
CONSUMER CYCLICALS
AIRLINES (0.4%)
Lufthansa AG ..................................... 15,000 $ 202,560
Mesa Airline, Inc.* .............................. 8,300 56,025
Northwest Airlines Corp. (Class A)* .............. 20,400 798,150
Qantas Airways Ltd. .............................. 17,000 28,376
Singapore Airlines Ltd. .......................... 3,000 27,228
--------------
1,112,339
--------------
APPAREL, TEXTILE (0.9%)
Designer Holdings Ltd.* .......................... 5,800 93,525
Kuraray Co. Ltd. ................................. 20,000 184,785
Mohawk Industries, Inc.* ......................... 5,600 123,200
Nine West Group, Inc.* ........................... 4,700 217,963
Polymer Group, Inc.* ............................. 5,600 77,700
Reebok International Ltd. ........................ 45,500 1,911,000
Stage Stores, Inc.* .............................. 4,900 89,424
Tommy Hilfiger Corp.* ............................ 3,200 153,600
Warnaco Group, Inc. (Class A) .................... 3,900 115,537
--------------
2,966,734
--------------
AUTO-RELATED (0.2%)
Asahi Glass Co. Ltd. ............................. 26,000 244,711
Magneti Marelli Spa* ............................. 45,500 56,542
Miller Industries, Inc.* ......................... 4,050 81,000
Sumitomo Rubber Industries, Inc. ................. 10,000 74,519
Team Rental Group, Inc.* ......................... 9,500 153,188
--------------
609,960
--------------
AUTOS & TRUCKS (0.3%)
Bajaj Auto Ltd. (GDR) ............................ 6,500 171,438
Honda Motor Corp. ................................ 5,000 142,906
Toyota Motor Corp. ............................... 22,000 632,588
Volkswagen AG* ................................... 260 107,714
--------------
1,054,646
--------------
FOOD SERVICES, LODGING (0.9%)
Brinker International, Inc.* ..................... 47,500 760,000
Compass Group PLC* ............................... 16,900 178,775
Doubletree Corp.* ................................ 4,380 197,100
Host Marriott Corp.* ............................. 27,900 446,400
Innkeepers USA Trust ............................. 7,500 104,063
Interstate Hotels Co.* ........................... 5,100 144,075
La Quinta Motor Inns, Inc. ....................... 45,400 868,275
Suburban Lodges of America, Inc.* ................ 5,500 88,000
--------------
2,786,688
--------------
HOUSEHOLD FURNITURE, APPLIANCES (1.0%)
Electrolux B ..................................... 1,770 102,786
First Brands Corp. ............................... 21,200 601,550
Industrie Natuzzi (ADR) .......................... 3,400 78,200
Matsushita Electric Industrial Co. ............... 20,000 326,397
Sunbeam Corp. .................................... 78,700 2,026,525
--------------
3,135,458
--------------
SAI-38
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- -----------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------------- ----------- --------------
LEISURE-RELATED (1.2%)
Carnival Corp. ................................... 2,500 $ 82,500
Cyrk, Inc.* ...................................... 56,500 734,500
Disney (Walt) Co. ................................ 23,733 1,652,410
Harman International Industries, Inc. ............ 3,100 172,438
Ladbroke Group PLC ............................... 66,800 264,345
Learning Company, Inc.* .......................... 2,800 40,250
Rank Group PLC ................................... 39,800 296,930
Resorts World BHD ................................ 36,000 163,928
Salomon SA ....................................... 1,700 145,803
Shimano, Inc. .................................... 7,000 119,074
--------------
3,672,178
--------------
PHOTO & OPTICAL (0.0%)
Fuji Photo Film Co. .............................. 3,000 98,955
--------------
RETAIL-GENERAL (2.1%)
AutoZone, Inc.* .................................. 75,600 2,079,000
British Airport Author PLC ....................... 31,600 263,362
CompUSA, Inc.* ................................... 65,800 1,357,125
Consolidated Stores Corp.* ....................... 3,250 104,406
Dayton Hudson Corp. .............................. 24,500 961,625
Fingerhut Cos., Inc. ............................. 37,000 453,250
Kingfisher PLC ................................... 9,300 100,610
Kokuyo Co. ....................................... 5,000 123,478
Petco Animal Supplies, Inc.* ..................... 5,450 113,088
Sainsbury (J) PLC ................................ 40,600 269,861
Sears PLC ........................................ 127,000 206,686
Vendex International N.V. ........................ 5,700 243,676
Woolworths Ltd. .................................. 108,492 261,292
--------------
6,537,459
--------------
TOTAL CONSUMER CYCLICALS (7.0%) .................. 21,974,417
--------------
CONSUMER NONCYCLICALS
BEVERAGES (0.7%)
Bass Breweries ................................... 16,000 225,033
Cadbury Schweppes PLC ............................ 26,600 224,425
Coca-Cola Amatil Ltd. ............................ 12,503 133,666
Coca-Cola Co. .................................... 22,200 1,168,275
Grand Metropolitan ............................... 30,100 236,680
Kirin Brewery Co. ................................ 10,000 98,437
Lion Nathan Ltd. ................................. 33,000 79,087
--------------
2,165,603
--------------
CONTAINERS (0.6%)
Crown Cork & Seal Co., Inc. ...................... 26,000 1,413,750
Hub Group, Inc. (Class A)* ....................... 4,200 112,350
Schmalbach Lubeca AG* ............................ 970 238,277
--------------
1,764,377
--------------
SAI-39
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- -----------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------------- ----------- --------------
DRUGS (3.7%)
Amgen, Inc.* ..................................... 18,000 $ 978,750
Apothekers Cooperatie Opg-CV ..................... 2,250 64,688
Astra AB (A Shares) .............................. 5,400 266,864
Biogen, Inc.* .................................... 31,526 1,221,633
Centocor, Inc.* .................................. 41,500 1,483,625
Eisai Co. Ltd. ................................... 7,000 137,812
Geltex Pharmaceuticals, Inc.* .................... 6,100 147,925
Glaxo-Wellcome PLC ............................... 16,000 259,843
Medicis Pharmaceutical Corp. (Class A)* ......... 2,300 101,200
MedImmune, Inc.* ................................. 5,000 85,000
Merck & Co., Inc. ................................ 23,300 1,846,525
Novartis AG* ..................................... 656 751,325
Orion-Yhtymae Oy (B Shares) ...................... 6,710 258,347
Pfizer, Inc. ..................................... 21,400 1,773,525
Revco D.S., Inc.* ................................ 10,300 381,100
Sankyo Co. ....................................... 2,000 56,645
Smithkline Beecham PLC ........................... 17,800 246,842
Santen Pharmaceutical Co. ........................ 4,000 82,894
Taisho Pharmaceutical Co. ........................ 6,000 141,439
Takeda Chemical Industries ....................... 5,000 104,913
Yamanouchi Pharmaceutical ........................ 12,000 246,611
United Natural Foods, Inc.* ...................... 5,700 96,900
Warner-Lambert Co. ............................... 10,100 757,500
--------------
11,491,906
--------------
FOODS (1.0%)
Campbell Soup Co. ................................ 13,350 1,071,338
CSM N.V.* ........................................ 1,000 55,535
House Foods Industry ............................. 5,000 80,736
Nabisco Holdings Corp. (Class A) ................. 26,920 1,046,515
Nestle AG ........................................ 335 359,653
Orkla A/S 'A', ................................... 1,890 132,090
Suedzucker AG .................................... 460 224,500
Viscofan Envoltura ............................... 1,200 17,575
Yakult Honsha Co. ................................ 9,000 93,256
Yamakazi Baking Co. .............................. 5,000 79,871
--------------
3,161,069
--------------
HOSPITAL SUPPLIES & SERVICES (1.8%)
Columbia/HCA Healthcare Corp. .................... 41,500 1,691,125
Compdent Corp.* .................................. 2,700 95,175
Coventry Corp.* .................................. 8,100 75,052
Enterprise Systems, Inc.* ........................ 5,700 133,950
Medtronic, Inc. .................................. 13,200 897,600
National Surgery Centers, Inc.* .................. 3,100 117,800
Oxford Health Plans, Inc.* ....................... 15,400 901,863
Pacificare Health Systems, Inc. (Class B)* ...... 5,500 468,875
Rotech Medical Corp.* ............................ 5,100 107,100
Steris Corp.* .................................... 23,224 1,010,244
--------------
5,498,784
--------------
SAI-40
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- -----------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------------- ----------- --------------
RETAIL-FOOD (0.3%)
Delhaize Freres .................................. 1,870 $ 111,192
Ito Yokado Co. Ltd. .............................. 3,000 130,559
Kesko* ........................................... 2,900 40,940
Seven-Eleven Japan Ltd. .......................... 9,000 526,898
Tesco PLC ........................................ 7,600 46,154
--------------
855,743
--------------
SOAPS & TOILETRIES (0.9%)
Colgate Palmolive Co. ............................ 13,600 1,254,600
Gillette Corp. ................................... 16,500 1,282,875
KAO Corp. ........................................ 16,000 186,512
Shiseido Co. ..................................... 12,000 138,848
--------------
2,862,835
--------------
TOBACCO (0.9%)
BAT Industries ................................... 18,900 156,869
Hanjaya Mandala Sampoerna ........................ 46,000 245,385
Japan Tobacco, Inc. .............................. 22 149,124
Philip Morris Cos., Inc. ......................... 22,410 2,523,926
Tabacalera SA .................................... 3,420 147,368
--------------
3,222,672
--------------
TOTAL CONSUMER NONCYCLICALS (9.9%) ............... 31,022,989
--------------
CREDIT-SENSITIVE
BANKS (1.7%)
AMMB Holdings BHD ................................ 14,000 117,521
Banco Santander SA ............................... 1,980 126,833
Bangkok Bank Public Co. .......................... 4,000 38,681
Bank of Tokyo-Mitsubishi Bank .................... 14,000 259,908
Barclays Bank .................................... 25,500 437,059
Chase Manhattan Corp. ............................ 2,000 178,500
Chiba Bank ....................................... 12,000 81,858
Den Danske Bank .................................. 3,600 290,467
First Union Corp. ................................ 27,800 2,057,200
Kredietbank ...................................... 420 137,785
Malayan Banking Berhad ........................... 10,000 110,869
Mitsui Trust & Banking Co. ....................... 38,000 296,952
National Westminster Bank* ....................... 18,500 217,251
Overseas Chinese Bank ............................ 14,600 181,548
Overseas Union Bank Ltd. ......................... 19,000 146,645
Philippine Commercial International Bank ........ 1,000 13,118
Sparbanken Sverige AB (Shares A) ................. 4,300 73,777
Sparekassen Bikuben A/S* ......................... 1,700 79,700
State Bank of India (GDR)* ....................... 7,000 101,500
Thai Farmers Bank Public Co. ..................... 22,000 137,253
Thai Farmers Bank Public Co. -- Warrants* ....... 750 205
Tokai Bank ....................................... 17,000 177,619
--------------
5,262,249
--------------
SAI-41
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- -----------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------------- ----------- --------------
FINANCIAL SERVICES (2.8%)
Aames Financial Corp. ............................ 2,900 $ 104,038
American Express Co. ............................. 30,700 1,734,550
Beneficial Corp. ................................. 5,750 364,406
Daiwa Securities Co. Ltd. ........................ 6,000 53,363
Dean Witter Discover & Co. ....................... 27,900 1,848,375
Hambrecht & Quist Group* ......................... 4,900 105,963
Incentive AB (B Shares)* ......................... 770 55,894
Industrial Credit & Investment Corp. (GDR)* ..... 8,000 78,000
ING Groep N.V. ................................... 11,300 406,595
Japan Securities Finance Co. ..................... 16,000 186,512
MBNA Corp. ....................................... 43,900 1,821,850
Merrill Lynch & Co., Inc. ........................ 15,300 1,246,950
Nikko Securities Co. ............................. 15,000 111,907
Nomura Securities Co. ............................ 15,000 225,369
Oxford Resources Corp. (Class A)* ................ 5,300 163,638
RAC Financial Group, Inc.* ....................... 3,600 76,050
Union Acceptance Corp. (Class A)* ................ 7,300 129,575
--------------
8,713,035
--------------
INSURANCE (2.5%)
AMEV N.V. ........................................ 11,430 400,032
Assurances Generales de France ................... 8,470 273,436
Baloise Holdings ................................. 120 241,165
Istituto Naz Delle Assicurazioni ................. 145,800 189,931
ITT Hartford Group, Inc. ......................... 700 47,250
Life Re Corp. .................................... 32,500 1,255,313
MGIC Investment Corp. ............................ 9,500 722,000
Mitsui Marine & Fire Insurance Co. ............... 21,000 112,970
PennCorp Financial Group, Inc. ................... 25,800 928,800
PMI Group, Inc. .................................. 2,600 143,975
TIG Holdings, Inc. ............................... 25,500 863,813
Travelers Group, Inc. ............................ 54,899 2,491,042
Sumitomo Marine & Fire Insurance Co. ............. 17,000 105,690
United Assurance Group PLC ....................... 20,200 166,275
--------------
7,941,692
--------------
REAL ESTATE (0.3%)
Hysan Development Co. Ltd. ....................... 14,000 55,750
Hysan Development Co. Ltd. -- Warrants* ......... 850 769
JP Realty, Inc. .................................. 3,500 90,563
Macerich Co. ..................................... 3,400 88,825
New World Development Co. ........................ 9,000 60,799
Sefimeg .......................................... 1,500 108,702
Societe des Immeubles de France SA ............... 1,561 92,062
Simco S.A. ....................................... 1,145 99,968
Sumitomo Realty & Development Co. ................ 19,000 119,765
Unibail S.A. ..................................... 1,550 154,149
Union Immobiliere de France ...................... 1,230 100,396
Wharf Holdings ................................... 15,000 74,859
--------------
1,046,607
--------------
SAI-42
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- -----------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------------- ----------- --------------
UTILITY-ELECTRIC (0.7%)
Cinergy Corp. .................................... 10,500 $ 350,438
FPL Group, Inc. .................................. 16,700 768,200
Korea Electric Power (ADR) ....................... 5,000 102,500
Malakoff BHD* .................................... 16,000 78,559
Manila Electric Co. .............................. 13,000 106,274
National Grid Group PLC .......................... 78,500 262,905
Tokyo Electric Power Co., Inc. ................... 7,000 153,527
Veba AG .......................................... 7,000 402,586
--------------
2,224,989
--------------
UTILITY-GAS (0.2%)
Anglian Water PLC ................................ 21,700 219,328
Hong Kong & China Gas Co. ........................ 27,400 52,961
Hong Kong & China Gas Co.-- Warrants* ............ 2,700 1,501
Osaka Gas Co. .................................... 33,000 90,329
Tokyo Gas Co. .................................... 70,000 189,794
--------------
553,913
--------------
UTILITY-TELEPHONE (0.4%)
British Telecommunications ....................... 31,100 210,179
Frontier Corp. ................................... 8,500 192,313
LCI International, Inc.* ......................... 9,000 193,500
Telecom Corp. of New Zealand ..................... 28,000 142,917
Telecom Italia Spa ............................... 99,900 259,485
WorldCom, Inc.* .................................. 8,000 208,500
--------------
1,206,894
--------------
TOTAL CREDIT-SENSITIVE (8.6%) .................... 26,949,379
--------------
ENERGY
COAL & GAS PIPELINES (0.2%)
Nabors Industries, Inc.* ......................... 33,000 635,250
--------------
OIL-DOMESTIC (1.2%)
Apache Corp. ..................................... 22,500 795,938
Costilla Energy, Inc.* ........................... 11,900 162,138
Louis Dreyfus Natural Gas Corp.* ................. 62,900 1,077,163
Louisiana Land & Exploration Co. ................. 7,300 391,463
KCS Energy, Inc. ................................. 3,300 117,975
Tom Brown, Inc.* ................................. 27,500 574,063
Ultramar Diamond Shamrock Corp. .................. 2,764 87,412
Union Pacific Resources Group, Inc. .............. 13,974 408,740
--------------
3,614,892
--------------
OIL-INTERNATIONAL (1.2%)
British Petroleum Co. PLC ........................ 31,600 379,208
Elf Aquitaine .................................... 3,770 343,176
ENI Spa .......................................... 45,500 233,518
Exxon Corp. ...................................... 19,800 1,940,400
Mitsubishi Oil Co. ............................... 18,000 107,711
Repsol SA ........................................ 4,250 163,147
Shell Transport & Trading Co.* ................... 9,800 169,814
Tatneft (ADR)* ................................... 800 38,400
Total Compagnie Francaise ........................ 5,173 420,739
--------------
3,796,113
--------------
SAI-43
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- -----------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------------- ----------- --------------
OIL-SUPPLIES & CONSTRUCTION (1.6%)
BJ Services Co.* ................................. 17,700 $ 902,700
Baker Hughes, Inc. ............................... 35,600 1,228,200
Halliburton Co. .................................. 5,000 301,250
Noble Drilling Corp.* ............................ 18,000 357,750
Parker Drilling Co.* ............................. 10,700 102,988
Rowan Cos., Inc.* ................................ 8,600 194,575
Saipem Spa* ...................................... 24,100 110,897
Schlumberger, Ltd. ............................... 7,900 789,013
Transocean Offshore, Inc. ........................ 18,300 1,146,037
--------------
5,133,410
--------------
RAILROADS (1.1%)
Burlington Northern Santa Fe ..................... 12,000 1,036,500
Canadian Pacific Ltd. ............................ 32,000 848,000
East Japan Railway Co. ........................... 41 184,449
Genesee & Wyoming, Inc. (Class A)* ............... 4,200 145,950
Guangshen Railway Co. Ltd. (ADR)* ................ 4,000 82,500
Union Pacific Corp. .............................. 16,500 992,063
--------------
3,289,462
--------------
TOTAL ENERGY (5.3%) .............................. 16,469,127
--------------
TECHNOLOGY
ELECTRONICS (4.4%)
Advanced Semiconductor Engineering (GDR)* ....... 6,060 57,570
Altera Corp.* .................................... 24,100 1,751,769
BMC Industries, Inc. ............................. 6,300 198,450
Cisco Systems, Inc.* ............................. 43,300 2,754,963
Exabyte Corp.* ................................... 6,500 86,938
Hirose Electric Co. Ltd. ......................... 5,000 289,699
HMT Technology Corp.* ............................ 4,800 72,075
Hoya Corp. ....................................... 9,000 353,596
IDT Corp.* ....................................... 6,200 68,200
Insight Enterprises, Inc.* ....................... 2,600 72,800
Intel Corp. ...................................... 15,600 2,042,625
Intergraph Corp.* ................................ 15,000 153,750
Kandenko Co. Ltd. ................................ 9,000 85,485
Kent Electronics Corp.* .......................... 4,300 110,725
Kyocera Corp. .................................... 2,000 124,687
National Semiconductor Corp.* .................... 3,000 73,125
Network General Corp.* ........................... 3,700 111,925
Rohm Co. Ltd. .................................... 9,000 590,623
Seagate Technology, Inc.* ........................ 20,600 813,700
SGS-Thomson Microelectronics N.V.* ............... 650 45,977
Systemsoft Corp.* ................................ 5,500 81,813
TDK Corp. ........................................ 7,000 456,351
Teradyne, Inc.* .................................. 5,000 121,875
Texas Instruments, Inc. .......................... 2,750 175,313
Uniphase Corp.* .................................. 1,700 89,250
Ushio, Inc.* ..................................... 13,000 141,439
Westell Technologies, Inc.* ...................... 3,300 75,488
Yamatake-Honeywell Co. ........................... 7,000 113,030
3Com Corp.* ...................................... 35,850 2,630,494
3D Labs, Inc. Ltd.* .............................. 2,600 59,800
--------------
13,803,535
--------------
SAI-44
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- -----------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------------- ----------- --------------
OFFICE EQUIPMENT (0.6%)
Applix, Inc.* .................................... 4,200 $ 91,875
Canon, Inc. ...................................... 14,000 309,472
Compaq Computer Corp.* ........................... 13,670 1,014,998
Read-Rite Corp.* ................................. 5,700 143,925
Sterling Software, Inc.* ......................... 10,200 322,575
Storage Technology Corp.* ........................ 3,000 142,875
--------------
2,025,720
--------------
OFFICE EQUIPMENT SERVICES (2.4%)
Comverse Technology, Inc.* ....................... 7,800 294,938
Electronic Data Systems Corp. .................... 12,900 557,925
First Data Corp. ................................. 24,400 890,600
Informix Corp.* .................................. 98,500 2,006,938
Microsoft Corp.* ................................. 12,200 1,008,025
Oracle Corp.* .................................... 54,200 2,262,850
Premisys Communications, Inc.* ................... 2,000 67,500
Sterling Commerce, Inc.* ......................... 13,265 467,590
Structural Dynamics Research Corp. (Class A)* ... 4,000 80,000
--------------
7,636,366
--------------
TELECOMMUNICATIONS (1.3%)
Act Networks, Inc.* .............................. 2,600 94,900
Asia Satellite Telecommunications Holdings Ltd.* 4,000 9,282
Cable Design Technologies* ....................... 3,000 93,375
Comnet Cellular, Inc.* ........................... 3,300 91,987
DDI Corp. ........................................ 113 747,414
Deutsche Telekom AG* ............................. 3,810 79,478
ICG Communications, Inc.* ........................ 5,000 88,125
Korea Mobile Telecommunications Corp. (ADR) ..... 20,497 263,898
MFS Communications Co., Inc.* .................... 8,186 446,137
Millicom International Cellular SA* .............. 2,000 64,250
Netscape Communications Corp.* ................... 14,800 841,750
PT Indosat ....................................... 73,000 216,341
PT Telekomunikasi Indonesia ...................... 60,000 103,513
Scientific Atlanta, Inc. ......................... 25,800 387,000
Telecel-Comunicacoes Pessoai SA* ................. 500 31,935
Vodafone Group ................................... 40,600 171,445
Winstar Communications, Inc.* .................... 4,900 102,900
Xircom* .......................................... 4,600 100,050
--------------
3,933,780
--------------
TOTAL TECHNOLOGY (8.7%) .......................... 27,399,401
--------------
DIVERSIFIED
MISCELLANEOUS (1.1%)
Allied Signal, Inc. .............................. 28,700 1,922,900
BTR PLC .......................................... 65,650 319,401
Cie Generale des Eaux ............................ 1,233 152,803
Citic Pacific Ltd. ............................... 23,000 133,519
First Pacific Co. ................................ 75,289 97,828
Hanson PLC ....................................... 91,200 127,331
Tomkins PLC ...................................... 42,100 193,646
U.S. Industries, Inc.* ........................... 19,000 653,125
--------------
TOTAL DIVERSIFIED (1.1%) ......................... 3,600,553
--------------
TOTAL COMMON STOCKS (48.1%)
(Cost $129,934,036).............................. 150,745,399
--------------
SAI-45
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- -----------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ------------------------------------------------- ----------- --------------
PREFERRED STOCKS:
BASIC MATERIALS
CHEMICALS (0.1%)
Henkel KGAA* ..................................... 5,850 $ 292,348
--------------
TOTAL BASIC MATERIALS (0.1%) ..................... 292,348
--------------
CONSUMER CYCLICALS
APPAREL, TEXTILE (0.0%)
Designer Finance Trust
6.0% Conv. ...................................... 2,000 92,500
--------------
RETAIL-GENERAL (0.1%)
Hornbach Holding AG .............................. 2,440 174,422
--------------
TOTAL CONSUMER CYCLICALS (0.1%) .................. 266,922
--------------
CONSUMER NONCYCLICALS ............................
CONTAINERS (0.0%)
Crown Cork & Seal Co., Inc.
4.5% Conv. ...................................... 2,200 114,400
--------------
TOTAL CONSUMER NONCYCLICALS (0.0%) ............... 114,400
--------------
CREDIT-SENSITIVE
BANKS (0.1%)
First Chicago NBD Corp.
5.75% Conv., Series B ........................... 4,300 388,075
--------------
FINANCIAL SERVICES (0.0%)
Money Store
6.5% Conv. ...................................... 3,800 104,025
--------------
INSURANCE (0.1%)
PennCorp. Financial Group, Inc.
7.0% Conv. ...................................... 2,500 148,750
--------------
TOTAL CREDIT-SENSITIVE (0.2%) .................... 640,850
--------------
TECHNOLOGY
TELECOMMUNICATIONS (0.3%)
MFS Communications Co., Inc.
8.0% Conv. ...................................... 5,900 538,375
Nokia Oy Cum ..................................... 2,800 162,500
--------------
TOTAL TECHNOLOGY (0.3%) .......................... 700,875
--------------
TOTAL PREFERRED STOCKS (0.7%)
(Cost $1,439,770) ............................... 2,015,395
--------------
LONG-TERM DEBT SECURITIES:
PRINCIPAL
BUSINESS SERVICES AMOUNT
-----------
Environmental Control (0.1%)
United Waste Systems, Inc.
4.5% Conv., 2001 ................................ $240,000 290,400
--------------
</TABLE>
SAI-46
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 3)
- -------------------------------------------------- ------------ -------------
<S> <C> <C>
PRINTING, PUBLISHING & BROADCASTING
(1.6%)
Time Warner Entertainment Co.
8.375%, 2023 .................................... $4,825,000 $4,891,923
-------------
PROFESSIONAL SERVICES (0.2%)
Career Horizons, Inc.
7.0% Conv., 2002 ................................ 70,000 137,288
Danka Business Systems PLC
6.75% Conv., 2002 ............................... 155,000 209,250
First Financial Management Corp.
5.0% Conv., 1999 ................................ 220,000 369,875
-------------
716,413
-------------
TOTAL BUSINESS SERVICES (1.9%) ................... 5,898,736
-------------
CAPITAL GOODS
MACHINERY (0.1%)
DII Group, Inc.
6.0% Conv., 2002 ................................ 200,000 190,000
-------------
TOTAL CAPITAL GOODS (0.1%) ....................... 190,000
-------------
CONSUMER CYCLICALS
APPAREL, TEXTILE (0.1%)
Nine West Group, Inc.
5.5% Conv., 2003 ................................ 305,000 303,474
-------------
FOOD SERVICES, LODGING (0.1%)
HFS, Inc.
4.5% Conv., 1999 ................................ 105,000 347,549
-------------
RETAIL-GENERAL (0.1%)
Saks Holdings, Inc.
5.5% Conv., 2006 ................................ 150,000 138,000
-------------
TOTAL CONSUMER CYCLICALS (0.3%) .................. 789,023
-------------
CONSUMER NONCYCLICALS
DRUGS (0.1%)
MedImmune, Inc.
7.0% Conv. Sub., 2003 ........................... 175,000 188,563
Quintiles Transnational Corp.
4.25% Conv., 2000 ............................... 115,000 120,750
-------------
309,313
-------------
HOSPITAL SUPPLIES & SERVICES (0.2%)
American Medical Response, Inc.
5.25% Conv., 2001 ............................... 160,000 172,400
Healthsouth Corp.
5.0% Conv., 2001 ................................ 90,000 186,187
Phycor, Inc.
4.5% Conv., 2003 ................................ 235,000 228,831
Tenet Healthcare Corp.
6.0% Conv., 2005 ................................ 160,000 168,000
-------------
755,418
-------------
TOTAL CONSUMER NONCYCLICALS (0.3%) .............. 1,064,731
-------------
</TABLE>
SAI-47
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 3)
- -------------------------------------------------- --------------- --------------
<S> <C> <C>
CREDIT-SENSITIVE
BANKS (1.6%)
Sumitomo Bank International
0.75% Conv., 2001 ............................... Yen 26,000,000 $ 237,415
St. George Bank Ltd.
7.15%, 2005 ..................................... $ 4,850,000 4,842,337
--------------
5,079,752
--------------
FINANCIAL SERVICES (3.0%)
Aames Financial Corp.
5.5% Conv., 2006 ................................ 130,000 175,663
Bankamerica Capital II
8.0%, 2026 ...................................... 5,000,000 5,095,250
Leasing Solutions, Inc.
6.875% Conv., 2003 .............................. 260,000 260,000
Morgan Stanley Group, Inc.
6.5%, 2001 ...................................... 4,000,000 3,985,360
--------------
9,516,273
--------------
INSURANCE (2.8%)
Conseco Finance Trust II
8.7%, 2026 ...................................... 3,500,000 3,518,095
John Hancock Mutual Life Insurance Co.
7.375%, 2024 .................................... 5,000,000 4,819,350
Penn Treaty American Corp.
6.25% Conv., 2003 ............................... 105,000 113,925
--------------
8,451,370
--------------
MORTGAGE-RELATED (10.3%)
Federal Home Loan Mortgage Corp.
7.0%, 2011....................................... 9,403,034 9,400,101
Federal National Mortgage Association:
6.5%, 2011 ...................................... 9,492,908 9,320,850
7.0%, 2026 ...................................... 6,632,744 6,489,729
Government National Mortgage Association
7.5%, 2026 ...................................... 7,069,998 7,074,417
--------------
32,285,097
--------------
FOREIGN GOVERNMENT (0.7%)
Province of Quebec
7.125%, 2024 .................................... 2,175,000 2,088,740
--------------
UTILITY-GAS (1.3%)
RAS Laffan Liquid Natural Gas
8.294%, 2014 .................................... 4,000,000 4,064,860
--------------
U.S. GOVERNMENT (21.6%)
U.S. Treasury Notes:
6.375%, 1999 .................................... 20,850,000 21,032,438
5.75%, 2000 ..................................... 16,925,000 16,702,859
7.75%, 2000 ..................................... 12,250,000 12,820,397
6.25%, 2001 ..................................... 5,860,000 5,863,663
5.75%, 2003 ..................................... 6,215,000 6,028,550
6.50%, 2005 ..................................... 5,225,000 5,260,922
67,708,829
--------------
TOTAL CREDIT-SENSITIVE (41.3%) ................... 129,194,921
--------------
SAI-48
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- ---------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 3)
- -------------------------------------------------- --------------- --------------
ENERGY
COAL & GAS PIPELINES (0.0%)
Swift Energy Co.
6.25% Conv., 2006 ............................... $ 120,000 $ 131,700
--------------
OIL-SUPPLIES & CONSTRUCTION (0.1%)
Seacor Holdings
5.375% Conv. Sub. Notes, 2006 ................... 110,000 127,600
--------------
TOTAL ENERGY (0.1%) .............................. 259,300
--------------
TECHNOLOGY
ELECTRONICS (1.0%)
Altera Corp.
5.75% Conv. Sub. Note, 2002...................... 275,000 425,563
Applied Magnetics Corp.:
7.0% Conv., 2006 ................................ 320,000 566,400
7.0% Conv. Euro, 2006 ........................... 60,000 106,200
C-Cube Microsystems, Inc.
5.875% Conv., 2005 .............................. 170,000 220,150
Checkpoint Systems, Inc.
5.25% Conv., 2005 ............................... 75,000 109,594
LSI Logic Corp.
5.5% Conv., 2001 ................................ 135,000 296,325
Plasma & Materials Technologies, Inc.
7.125% Conv., 2001 .............................. 225,000 220,500
Sanmina Corporation
5.5% Conv., 2002 ................................ 240,000 501,900
SCI Systems, Inc.
5.0% Conv., 2006 ................................ 265,000 302,763
S3 Incorporated
5.75% Conv. Sub. Note, 2003 ..................... 125,000 136,875
3Com Corp.
10.25% Conv., 2001 .............................. 180,000 397,350
--------------
3,283,620
--------------
TELECOMMUNICATIONS (0.2%)
BBN Corp.
6.0% Conv., 2012 ................................ 320,000 310,400
Comverse Technology, Inc.
5.75% Conv. Sub., 2006 .......................... 375,000 388,592
Bay Networks, Inc.
5.25%, 2003 ..................................... 90,000 81,225
--------------
780,217
--------------
TOTAL TECHNOLOGY (1.2%) .......................... 4,063,837
--------------
SAI-49
<PAGE>
SEPARATE ACCOUNT NO. 10 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments (Continued)
December 31, 1996
- ---------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 3)
- -------------------------------------------------- --------------- --------------
DIVERSIFIED
MISCELLANEOUS (0.1%)
Thermo Electron Corp.
5.0% Euro Conv., 2001 ........................... $ 180,000 $ 356,849
--------------
TOTAL DIVERSIFIED (0.1%) ......................... 356,849
--------------
TOTAL LONG-TERM DEBT SECURITIES (45.3%)
(Amortized Cost $139,089,406) ................... 141,817,397
--------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates
market value, equivalent to 88,051 units
at $255.57 each (7.2%) .......................... 22,503,485
--------------
TOTAL INVESTMENTS (101.3%)
(Cost/Amortized Cost $292,966,697) .............. 317,081,676
LIABILITIES IN EXCESS OF CASH AND RECEIVABLES
(-1.3%) ......................................... (3,931,346)
--------------
NET ASSETS (100.0%) .............................. $313,150,330
==============
</TABLE>
* Non-income producing.
See Notes to Financial Statements.
SAI-50
<PAGE>
SEPARATE ACCOUNT NO. 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Assets and Liabilities
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
CONSERVATIVE GROWTH
GLOBAL INVESTORS INVESTORS
FUND FUND FUND
- -------------------------------------------------------------------------- ------------- -------------- -------------
<S> <C> <C> <C>
ASSETS:
Investments in shares of The Hudson River Trust, at value (Cost: Global
Portfolio--$39,685,059; Conservative Investors Portfolio--$13,027,790;
Growth Investors Portfolio--$45,491,559)(Note 1) ......................... $43,874,835 $12,889,263 $46,622,174
Receivable for The Hudson River Trust shares sold ......................... 564,416 526,260 469,893
------------- -------------- -------------
Total assets ........................................................... 44,439,251 13,415,523 47,092,067
- -------------------------------------------------------------------------- ------------- -------------- -------------
LIABILITIES:
Due to Equitable Life's General Account ................................... 546,468 523,788 454,883
Accrued expenses .......................................................... 26,025 8,321 19,421
- -------------------------------------------------------------------------- ------------- -------------- -------------
Total liabilities ...................................................... 572,493 532,109 474,304
- -------------------------------------------------------------------------- ------------- -------------- -------------
NET ASSETS ................................................................ $43,866,758 $12,883,414 $46,617,763
========================================================================== ============= ============== =============
</TABLE>
See Notes to Financial Statements.
SAI-51
<PAGE>
SEPARATE ACCOUNT NO. 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Operations and Changes in Net Assets
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
CONSERVATIVE GROWTH
GLOBAL FUND INVESTORS FUND INVESTORS FUND
- --------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2): --Dividends from The
Hudson River Trust ............................. $ 697,045 $ 400,157 $ 662,083 $ 224,858 $ 988,398 $ 602,858
EXPENSES (NOTE 4) ............................... (375,304) (224,839) (188,556) (56,285) (300,959) (136,295)
- ------------------------------------------------- ------------ ------------ ------------- ------------ ------------- -------------
NET INVESTMENT INCOME ........................... 321,741 175,318 473,527 168,573 687,439 466,563
- ------------------------------------------------- ------------ ------------ ------------- ------------ ------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Realized gain (loss) from share transactions ... 571,515 55,631 115,805 (21,293) 361,719 (5,408)
Realized gain distribution from
The Hudson River Trust ......................... 1,889,554 788,817 348,297 32,181 4,768,387 362,984
- ------------------------------------------------- ------------ ------------ ------------- ------------ ------------- -------------
NET REALIZED GAIN ............................... 2,461,069 844,448 464,102 10,888 5,130,106 357,576
- ------------------------------------------------- ------------ ------------ ------------- ------------ ------------- -------------
Unrealized appreciation (depreciation) of
investments:
Beginning of year .............................. 2,311,157 (467,857) 304,939 (216,587) 2,480,800 (263,697)
End of year .................................... 4,189,776 2,311,157 (138,527) 304,939 1,130,615 2,480,800
- ------------------------------------------------- ------------ ------------ ------------- ------------ ------------- -------------
Change in unrealized appreciation/depreciation . 1,878,619 2,779,014 (443,466) 521,526 (1,350,185) 2,744,497
- ------------------------------------------------- ------------ ------------ ------------- ------------ ------------- -------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 4,339,688 3,623,462 20,636 532,414 3,779,921 3,102,073
- ------------------------------------------------- ------------ ------------ ------------- ------------ ------------- -------------
Increase in net assets attributable to
operations...................................... 4,661,429 3,798,780 494,163 700,987 4,467,360 3,568,636
- ------------------------------------------------- ------------ ------------ ------------- ------------ ------------- -------------
FROM C0NTRIBUTIONS AND WITHDRAWALS:
Contributions ................................... 22,444,295 19,143,847 14,885,027 2,281,637 22,344,425 20,374,439
Withdrawals ..................................... (11,827,050) (6,358,047) (7,693,055) (508,945) (7,615,781) (2,640,877)
- ------------------------------------------------- ------------ ------------ ------------- ------------ ------------- -------------
Increase in net assets attributable to
contributions and withdrawals .................. 10,617,245 12,785,800 7,191,972 1,772,692 14,728,644 17,733,562
- ------------------------------------------------- ------------ ------------ ------------- ------------ ------------- -------------
INCREASE IN NET ASSETS........................... 15,278,674 16,584,580 7,686,135 2,473,679 19,196,004 21,302,198
NET ASSETS--BEGINNING OF YEAR ................... 28,588,084 12,003,504 5,197,279 2,723,600 27,421,759 6,119,561
- ------------------------------------------------- ------------ ------------ ------------- ------------ ------------- -------------
NET ASSETS--END OF YEAR ......................... $43,866,758 $28,588,084 $12,883,414 $5,197,279 $46,617,763 $27,421,759
================================================= ============ ============ ============= ============ ============= =============
</TABLE>
See Notes to Financial Statements.
SAI-52
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 10 (POOLED) AND 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements
1. Separate Account Nos. 3 (Pooled) (the Alliance Aggressive Equity Fund),
4 (Pooled) (the Alliance Growth Equity Fund), 10 (Pooled) (the Alliance
Balanced Fund), and 51 (Pooled) (the Alliance Global, Conservative Investors
and Growth Investors Funds) (the Funds) of The Equitable Life Assurance
Society of the United States (Equitable Life), a wholly-owned subsidiary of
The Equitable Companies Incorporated, were established in conformity with the
New York State Insurance Law. Pursuant to such law, to the extent provided in
the applicable contracts, the net assets in the Funds are not chargeable with
liabilities arising out of any other business of Equitable Life. The excess
of assets over reserves and other contract liabilities amounting to $641,292
as shown in the Statement of Assets and Liabilities in Separate Account No. 4
may be transferred to Equitable Life's general account.
Separate Account No. 51 was established as of the opening of business on
July 1, 1993, to fund the Association Members Retirement Plan and Trusts.
Interests of retirement and investment plans for Equitable Life employees,
managers, and agents in Separate Account Nos. 3 (Pooled), 4 (Pooled) and 10
(Pooled) aggregated $99,049,571 (22.3%), $288,921,270 (11.8%) and $25,996,744
(8.3%), respectively, at December 31, 1996 and $68,328,503 (20.0%),
$246,531,777 (11.6%) and $22,742,258 (6.1%), respectively, at December 31,
1995, of the net assets in these Funds.
Equitable Life is the investment manager for the Funds. Alliance Capital
Management L.P. (Alliance) serves as the investment adviser to Equitable Life
with respect to the management of Separate Account Nos. 3, 4 and 10 (the
Equitable Funds). Alliance is a publicly-traded limited partnership which is
indirectly majority-owned by Equitable Life.
Separate Account No. 51 has ten investment funds which invest in shares of
corresponding portfolios of The Hudson River Trust (Trust). The Association
Members Retirement Plan and Trusts invest in the following funds of the
account: Global, Conservative Investors and Growth Investors. The Trust is an
open-end, diversified management investment company that invests the assets
of separate accounts of insurance companies. Alliance is the investment
adviser to the Trust.
Equitable Life and Alliance seek to obtain the best price and execution of
all orders placed for the portfolios of the Equitable Funds considering all
circumstances. In addition to using brokers and dealers to execute portfolio
security transactions for accounts under their management, Equitable Life and
Alliance may also enter into other types of business and securities
transactions with brokers and dealers, which will be unrelated to allocation
of the Equitable Funds' portfolio transactions.
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.
2. Security transactions are recorded on the trade date. Amortized cost of
debt securities consists of cost adjusted, where applicable, for amortization
of premium or accretion of discount. Dividend income is recorded on the
ex-dividend date; interest income (including amortization of premium and
discount on securities using the effective yield method) is accrued daily.
Realized gains and losses on the sale of investments are computed on the
basis of the identified cost of the related investments sold. For Separate
Account No. 51, realized gains and losses on investments include gains and
SAI-53
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 10 (POOLED) AND 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements (Continued)
losses on redemptions of the Trust's shares (determined on the identified
cost basis) and capital gain distribution from the Trust. Dividends and
realized gain distributions from The Hudson River Trust are recorded on
ex-date.
Transactions denominated in foreign currencies are recorded at the rate
prevailing at the date of such transactions. Asset and liability accounts
that are denominated in a foreign currency are adjusted to reflect the
current exchange rate at the end of period. Transaction gains or losses
resulting from changes in the exchange rate during the reporting period or
upon settlement of the foreign currency transactions are reflected under
"Realized and Unrealized Gain (Loss) on Investments" in the Statements of
Operations and Changes in Net Assets.
Equitable Life's internal short-term investment account, Separate Account
No. 2A, was established to provide a more flexible and efficient vehicle to
combine and invest temporary cash positions of certain eligible accounts
(Participating Funds) under Equitable Life's management. Separate Account No.
2A invests in debt securities maturing in sixty days or less from the date of
acquisition. At December 31, 1996, the amortized cost of investments held in
Separate Account No. 2A consists of the following:
<TABLE>
<CAPTION>
AMORTIZED COST %
- ----------------------------------------------------- -------------- --------
<S> <C> <C>
Commercial Paper, 5.3%-6.9% due 1/2/97 through
2/18/97.............................................. $292,301,486 87.9%
Time Deposits, 6.5% due 1/2/97 ....................... 40,000,000 12.0
- ----------------------------------------------------- -------------- --------
Total Investments..................................... 332,301,486 99.9
Cash and Receivables Less Liabilities................. 175,640 0.1
- ----------------------------------------------------- -------------- --------
Net Assets of Separate Account No. 2A................. $332,477,126 100.0%
===================================================== ============== ========
Units Outstanding..................................... 1,300,905
Unit Value............................................ $255.57
- ----------------------------------------------------- -------------- --------
</TABLE>
Participating Funds purchase or redeem units depending on each
participating account's excess cash availability or cash needs to meet its
liabilities. Separate Account No. 2A is not subject to investment management
fees. Short-term debt securities may also be purchased directly by the
Equitable Funds.
For 1996 and 1995, investment security transactions, excluding short-term
debt securities, were as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 3 SEPARATE ACCOUNT NO. 4 SEPARATE ACCOUNT NO. 10
----------------------------- ----------------------------- -----------------------------
COST OF NET PROCEEDS COST OF NET PROCEEDS COST OF NET PROCEEDS
PURCHASES OF SALES PURCHASES OF SALES PURCHASES OF SALES
- ---------------------------- --------------- -------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stocks and long-term
corporate debt securities:
1996....................... $450,676,363 $434,241,789 $2,439,864,229 $2,487,456,851 $337,043,222 $416,837,259
1995 ...................... 460,486,634 525,937,180 2,037,876,834 2,082,648,235 374,948,659 389,169,100
U.S. Government obligations:
1996....................... -- -- -- -- $226,791,922 $234,990,432
- ---------------------------- --------------- -------------- --------------- ------------- -------------- -------------
1995 ...................... -- -- -- -- 219,815,471 172,433,013
</TABLE>
No activity is shown for Separate Account No. 51 since it trades
exclusively in shares of corresponding portfolios of The Hudson River Trust.
SAI-54
<PAGE>
SEPARATE ACCOUNT NOS. 3 (POOLED), 4 (POOLED), 10 (POOLED) AND 51 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements (Concluded)
3. Investment securities for the Equitable Funds are valued as follows:
Stocks listed on national securities exchanges and certain
over-the-counter issues traded on the National Association of Securities
Dealers, Inc. Automated Quotation (NASDAQ) national market system are valued
at the last sale price, or, if no sale, at the latest available bid price.
Foreign securities not traded directly, or in American Depository Receipt
(ADR) form in the United States are valued at the last sale price in the
local currency on an exchange in the country of origin. Foreign currency is
converted into its U.S. dollar equivalent at current exchange rates.
United States Treasury securities and other obligations issued or
guaranteed by the United States Government, its agencies or instrumentalities
are valued at representative quoted prices.
Long-term publicly traded corporate bonds are valued at prices obtained
from a bond pricing service of a major dealer in bonds when such prices are
available; however, in circumstances where Equitable Life and Alliance deem
it appropriate to do so, an over-the-counter or exchange quotation may be
used.
Convertible preferred stocks listed on national securities exchanges are
valued at their last sale price or, if there is no sale, at the latest
available bid price.
Convertible bonds and unlisted convertible preferred stocks are valued at
bid prices obtained from one or more major dealers in such securities; where
there is a discrepancy between dealers, values may be adjusted based on
recent premium spreads to the underlying common stock.
Other assets that do not have a readily available market price, are valued
at fair value as determined in good faith by Equitable Life's investment
officers.
The value of the investments of the Alliance Global, Conservative
Investors and Growth Investors Funds in the corresponding Hudson River Trust
Portfolios is calculated by multiplying the number of shares held by Separate
Account No. 51 in each Portfolio by the net asset value per share of that
Portfolio determined as of the close of business on the same day as the
respective unit values of the Alliance Global, Conservative Investors and
Growth Investors Funds are determined.
Separate Account No. 2A is valued daily at amortized cost, which
approximates market value. Short-term debt securities purchased directly by
the Equitable Funds which mature in 60 days or less are valued at amortized
cost. Short-term debt securities which mature in more than 60 days are valued
at representative quoted prices.
4. Charges and fees relating to the Funds are deducted in accordance with
the terms of the various contracts which participate in the Funds. With
respect to the Members Retirement Plan and Trust, these expenses consist of
investment management and accounting fees, program expense charge, direct
expenses and record maintenance and report fees. These charges and fees are
paid to Equitable Life and are recorded as expenses in the accompanying
Statements of Operations and Changes in Net Assets.
5. No Federal income tax based on net income or realized and unrealized
capital gains was applicable to contracts participating in the Funds by
reason of applicable provisions of the Internal Revenue Code and no Federal
income tax payable by Equitable Life will affect such contracts. Accordingly,
no provision for Federal income tax is required.
SAI-55
<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
SAI-56
<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.
SAI-57
<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.
SAI-58
<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.
SAI-59
<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.
SAI-60
<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.
SAI-61
<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
SAI-62
<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
SAI-63
<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.
SAI-64
<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.
SAI-65
<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
SAI-66
<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>
SAI-67
<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.
SAI-68
<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
SAI-69
<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.
SAI-70
<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>
SAI-71
<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.
SAI-72
<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>
SAI-73
<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
SAI-74
<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.
SAI-75
<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>
SAI-76
<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.
SAI-77
<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.
SAI-78
<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
SAI-79
<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.
SAI-80
<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>
SAI-81
<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.
SAI-82
<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>
SAI-83
<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.
SAI-84
<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.
SAI-85
<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>
SAI-86
<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
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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.
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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.
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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
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(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.
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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
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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
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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
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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
SAI-95
<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
SAI-96
<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>
SAI-97
<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.
SAI-98
<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
================ =================
SAI-99
<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.
SAI-100
<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>
SAI-101
<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
SAI-102
<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>
SAI-103
<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>
SAI-104
<PAGE>
Supplement dated May 1, 1997 to Prospectus dated May 1, 1997
- -------------------------------------------------------------------------------
MEMBERS RETIREMENT PROGRAMS
funded under contracts with
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
1290 Avenue of the Americas, New York, New York 10104
Toll-Free Telephone 800-223-5790
------------------------------
VARIABLE ANNUITY BENEFITS
------------------------------
This Prospectus Supplement should be read and retained for
future reference by Participants in the Members Retirement
Programs who are
considering variable annuity
payment benefits after
retirement.
This Prospectus Supplement is not authorized for
distribution unless accompanied or preceded by
the Prospectus dated May 1, 1997 for the
appropriate Members Retirement Program.
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
<PAGE>
RETIREMENT BENEFITS
When you become eligible to receive benefits under a Members
Retirement Program, you may select one or more of the following forms of
distribution, which are available in variable or fixed form. The law requires
that if the value of your Account Balance is more than $3,500, you must receive
a Qualified Joint and Survivor Annuity unless your Spouse consents to a
different election.
Life Annuity - an annuity providing monthly payments for your life. No
payments will be made after your death, even if you have received only one
payment.
Life Annuity - Period Certain - an annuity providing monthly payments
for your life or, if longer, a specified period of time. If you die before the
end of that specified period, payments will continue to your beneficiary until
the end of the period. Subject to legal limitations, you may specify a minimum
payment period of 5, 10, 15 or 20 years; the longer the specified period, the
smaller the monthly payments will be.
Joint and Survivor Annuity - Period Certain - an annuity providing
monthly payments for your life and that of your beneficiary or, if longer, a
specified period of time. If you and your beneficiary both die before the end
of the specified period, payments will continue to your contingent beneficiary
until the end of the period. Subject to legal limitations, you may specify a
minimum payment period of 5, 10, 15 or 20 years; the longer the specified
period, the smaller the monthly payments will be.
How Annuity Payments are Made
When your distribution of benefits under an annuity begins, your Units
in the Funds are redeemed. Part or all of the proceeds, plus part or all of
your Account Balance in the General Account Options, may be used to purchase an
annuity. The minimum amount that can be used to purchase any type of annuity is
$3,500. Usually, a $350 charge will be deducted from the amount used to
purchase the annuity to reimburse us for administrative expenses associated
with processing the application and with issuing each month's annuity payment.
Applicable premium taxes will also be deducted.
Annuity payments may be fixed or variable.
FIXED ANNUITY PAYMENTS. Fixed annuity payments are determined from our
annuity rate tables in effect at the time the first annuity payment is
made. The minimum amount of the fixed payments is determined from
tables in our contract with the Trustees, which show the amount of
proceeds necessary to purchase each $1 of monthly annuity payments
(after deduction of any applicable taxes and the annuity
administrative charge). These tables are
- 2 -
<PAGE>
designed to determine the amounts required to pay for the annuity
selected, taking into account our administrative and investment
expenses and mortality and expense risks. The size of your payment
will depend upon the form of annuity chosen, your age and the age of
your beneficiary if you select a joint and survivor annuity. If our
current group annuity rates for payment of proceeds would produce a
larger payment, those rates will apply instead of the minimums in the
contract tables. If we give any group pension client with a qualified
plan a better annuity rate than those currently available for the
Program, we will also make those rates available to Program
participants. The annuity administrative charge may be greater than
$350 in that case. Under our contract with the Trustees, we may change
the tables but not more frequently than once every five years. Fixed
annuity payments will not fluctuate during the payment period.
VARIABLE ANNUITY PAYMENTS. Variable annuity payments are funded
through our Separate Account No. 4 (Pooled) (the "Fund"), through the
purchase of Annuity Units. The number of Annuity Units purchased is
equal to the amount of the first annuity payment divided by the
Annuity Unit Value for the due date of the first annuity payment. The
amount of the first annuity payment is determined in the same manner
for a variable annuity as it is for a fixed annuity. The number of
Annuity Units stays the same throughout the payment period for the
variable annuity but the Annuity Unit Value changes to reflect the
investment income and the realized and unrealized capital gains and
losses of the Fund, after adjustment for an assumed base rate of
return of 5-3/4%, described below.
The amounts of variable annuity payments are determined as follows:
Payments normally start as of the first day of the second calendar month
following our receipt of the proper forms. The first two monthly payments are
the same.
Payments after the first two will vary according to the investment
performance of the Fund. Each monthly payment will be calculated by multiplying
the number of Annuity Units credited to you by the Annuity Unit Value for the
first business day of the calendar month before the due date of the payment.
The Annuity Unit Value was set at $1.1553 as of July 1, 1969, the
first day that Separate Account No. 4 (Pooled) was operational. For any month
after that date, it is the Annuity Unit Value for the preceding month
multiplied by the change factor for the current month. The change factor gives
effect to the assumed annual base rate of return of 5-3/4% and to the actual
investment experience of the Fund.
Because of the adjustment for the assumed base rate of return, the
Annuity Unit Value rises and falls depending on whether the actual rate of
investment return is higher or lower than 5-3/4%.
- 3 -
<PAGE>
Illustration of Changes in Annuity Payments. To show how we determine
variable annuity payments from month to month, assume that the amount you
applied to purchase an annuity is enough to fund an annuity with a monthly
payment of $363 and that the Annuity Unit Value for the due date of the first
annuity payment is $1.05. The number of annuity units credited under your
certificate would be 345.71 (363 / 1.05 = 345.71). If the third monthly payment
is due on March 1, and the Annuity Unit Value for February was $1.10, the
annuity payment for March would be the number of units (345.71) times the
Annuity Unit Value ($1.10), or $380.28. If the Annuity Unit Value was $1.00 on
March 1, the annuity payment for April would be 345.71 times $1.00 or $345.71.
Summary of Annuity Unit Values for the Fund
This table shows the Annuity Unit Values with an assumed based rate of
return of 5-3/4%.
<TABLE>
<CAPTION>
First Business Day of Annuity Unit Value
--------------------- ------------------
<S> <C>
October 1987 $4.3934
October 1988 $3.5444
October 1989 $4.8357
October 1990 $3.8569
October 1991 $5.4677
October 1992 $5.1818
October 1993 $6.3886
October 1994 $6.1563
October 1995 $7.4970
October 1996 $8.0828
</TABLE>
THE FUND
The Fund (Separate Account No. 4 (Pooled)) was established pursuant to
the Insurance Law of the State of New York in 1969. It is an investment account
used to fund benefits under group annuity contracts and other agreements for
tax-deferred retirement programs administered by us.
- 4 -
<PAGE>
For a full description of the Fund, its investment policies, the
risks of an investment in the Fund and information relating to the valuation of
Fund assets, see the description of the Fund in our May 1, 1997 prospectus and
the Statement of Additional Information.
INVESTMENT MANAGER
The Manager
We, Equitable Life, act as Investment Manager to the Fund. As such, we
have complete discretion over Fund assets and we invest and reinvest these
assets in accordance with the investment policies described in our May 1, 1997
prospectus and Statement of Additional Information.
We are a New York stock life insurance company with our Home Office at
1290 Avenue of the Americas, New York, New York 10104. Founded in 1859, we are
one of the largest insurance companies in the United States. Equitable Life,
our sole stockholder Equitable Companies, Inc., and their subsidiaries managed
assets of approximately $239.8 billion as of December 31, 1996, including third
party assets of $184.8 billion.
Investment Management
In providing investment management to the Funds, we currently use the
personnel and facilities of our majority owned subsidiary, Alliance Capital
Management L.P. ("Alliance"), for portfolio selection and transaction services.
For a description of Alliance, see our May 1, 1997 Members Retirement Program
prospectus.
Fund Transactions
The Fund is charged for securities brokers commissions, transfer taxes
and other fees relating to securities transactions. Transactions in equity
securities for the Fund are executed primarily through brokers which are
selected by Alliance/Equitable Life and receive commissions paid by the Fund.
For 1996 and 1995, the Fund paid $5,682,578 and $6,044,623, respectively, in
brokerage commissions. For a full description of our policies relating to the
selection of brokers, see the description of the Fund in our May 1, 1997
Statement of Additional Information.
- 5 -
<PAGE>
FINANCIAL STATEMENTS
The financial statements of the Fund reflect applicable fees,
charges and other expenses under the Members Programs as in effect during the
periods covered, as well as the charges against the account made in accordance
with the terms of all other contracts participating in the account.
Separate Account No. 4 (Pooled): Page
Report of Independent Accountants - Price Waterhouse LLP 7
Statement of Assets and Liabilities, 8
December 31, 1996
Statement of Operations and Changes in Net Assets
for the Years Ended December 31, 1996 and 1995 9
Portfolio of Investments
December 31, 1996 10
Notes to Financial Statements 15
- 6 -
<PAGE>
- ------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States and the
Participants in the Members Retirement Program
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and changes in net assets present fairly, in all material
respects, the financial position of Separate Account No. 4 of The Equitable
Life Assurance Society of the United States ("Equitable Life") at December
31, 1996 and its results of operations and changes in net assets for each of
the two years in the period then ended, 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 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 securities at December 31, 1996 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The selected per unit information
(appearing under "Condensed Fund Financial Information" in the prospectus) is
presented for the purpose of satisfying regulatory reporting requirements and
is not a required part of the basic financial statements. Such selected per
unit information has been subjected to auditing procedures applied during the
audit of the basic financial statements and, in our opinion, is fairly stated
in all material respects in relation to the basic financial statements taken
as a whole.
Price Waterhouse LLP
New York, New York
February 10, 1997
- 7 -
<PAGE>
- -----------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED) (THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statement of Assets and Liabilities
December 31, 1996
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
- -------------------------------------------------------------------------------------------------------
ASSETS:
Investments (Notes 2 and 3):
Common stocks--at market value (cost: $1,991,952,527) ................................ $2,440,835,888
Preferred stocks--at market value (cost: $1,742,250) ................................. 1,809,000
Long-term debt securities--at value (amortized cost: $2,863,053) ..................... 2,493,750
Participation in Separate Account No. 2A--at amortized cost, which approximates
market value, equivalent to 85,593 units at $255.57 ................................. 21,875,326
Cash................................................................................... 2,419,444
Receivables:
Securities sold ...................................................................... 18,681,125
Dividends............................................................................. 474,057
- -------------------------------------------------------------------------------------- --------------
Total assets.......................................................................... 2,488,588,590
- -------------------------------------------------------------------------------------- --------------
LIABILITIES:
Payables:
Securities purchased ................................................................. 13,390,630
Due to Equitable Life's General Account .............................................. 15,548,100
Investment management fees payable ................................................... 7,688
Accrued expenses ...................................................................... 475,122
Amount retained by Equitable Life in Separate Account No. 4 (Note 1) ................. 641,292
- -------------------------------------------------------------------------------------- --------------
Total liabilities..................................................................... 30,062,832
- -------------------------------------------------------------------------------------- --------------
NET ASSETS (NOTE 1):
Net assets attributable to participants' accumulations ................................ 2,432,753,839
Reserves and other contract liabilities attributable to annuity benefits ............. 25,771,919
- -------------------------------------------------------------------------------------- --------------
NET ASSETS ............................................................................ $2,458,525,758
====================================================================================== ==============
</TABLE>
See Notes to Financial Statements.
- 8 -
<PAGE>
- -----------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Operations and Changes in Net Assets
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1996 1995
- ---------------------------------------------------------------------------- -------------- ---------------
<S> <C> <C>
FROM OPERATIONS:
INVESTMENT INCOME (NOTE 2):
Dividends (net of foreign taxes withheld--1996: $62,998 and 1995: $239,657) $ 13,755,557 $ 19,610,344
Interest and amortization of premium ........................................ 292,364 (852,218)
- ---------------------------------------------------------------------------- -------------- ---------------
Total ....................................................................... 14,047,921 18,758,126
EXPENSES (NOTE 4) ........................................................... (18,524,630) (16,007,109)
- ---------------------------------------------------------------------------- -------------- ---------------
NET INVESTMENT INCOME (LOSS) ................................................ (4,476,709) 2,751,017
- ---------------------------------------------------------------------------- -------------- ---------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 2):
Realized gain from security and foreign currency transactions .............. 218,176,662 260,870,246
- ---------------------------------------------------------------------------- -------------- ---------------
Unrealized appreciation of investments
and foreign currency transactions:
Beginning of year .......................................................... 290,870,386 41,831,973
End of year ................................................................ 448,580,808 290,870,386
- ---------------------------------------------------------------------------- -------------- ---------------
Change in unrealized appreciation/depreciation .............................. 157,710,422 249,038,413
- ---------------------------------------------------------------------------- -------------- ---------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ............................. 375,887,084 509,908,659
- ---------------------------------------------------------------------------- -------------- ---------------
Increase in net assets attributable to operations ........................... 371,410,375 512,659,676
- ---------------------------------------------------------------------------- -------------- ---------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ............................................................... 552,427,638 422,289,107
Withdrawals ................................................................. (590,972,941) (474,530,080)
- ---------------------------------------------------------------------------- -------------- ---------------
Decrease in net assets attributable to contributions and withdrawals ....... (38,545,303) (52,240,973)
- ---------------------------------------------------------------------------- -------------- ---------------
Decrease in accumulated amount retained by Equitable Life in Separate
Account No. 4 (Note 1) ..................................................... 536,145 113,489
- ---------------------------------------------------------------------------- -------------- ---------------
INCREASE IN NET ASSETS ...................................................... 333,401,217 460,532,192
NET ASSETS--BEGINNING OF YEAR ............................................... 2,125,124,541 1,664,592,349
- ---------------------------------------------------------------------------- -------------- ---------------
NET ASSETS--END OF YEAR ..................................................... $2,458,525,758 $2,125,124,541
============================================================================ ============== ===============
</TABLE>
See Notes to Financial Statements.
- 9 -
<PAGE>
- -----------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------- ------------ ---------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ---------------------------------------------------------- ------------ ---------------
<S> <C> <C>
COMMON STOCKS:
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (1.7%)
Republic Industries, Inc.* ................................ 1,355,000 $ 42,259,063
---------------
PRINTING, PUBLISHING & BROADCASTING (0.1%)
Australis Media Ltd. Conv. Note* .......................... 25,000,000 2,483,906
---------------
PROFESSIONAL SERVICES (0.7%)
Ceridian Corp.* ........................................... 170,000 6,885,000
Service Corp. International ............................... 360,000 10,080,000
---------------
16,965,000
---------------
TOTAL BUSINESS SERVICES (2.5%) ............................ 61,707,969
---------------
CONSUMER CYCLICALS
AIRLINES (6.9%)
America West Airlines, Inc. (Class B)* .................... 1,250,000 19,843,750
Continental Airlines, Inc. (Class B)* ..................... 1,300,000 36,725,000
Delta Air Lines, Inc. ..................................... 375,000 26,578,125
KLM Royal Dutch Airlines .................................. 230,000 6,411,250
Northwest Airlines Corp. (Class A)* ....................... 1,400,000 54,775,000
UAL Corp.* ................................................ 400,000 25,000,000
---------------
169,333,125
---------------
FOOD SERVICES, LODGING (1.2%)
Host Marriott Corp.* ...................................... 1,000,000 16,000,000
La Quinta Motor Inns, Inc. ................................ 700,000 13,387,500
---------------
29,387,500
---------------
HOUSEHOLD FURNITURE, APPLIANCES (1.2%)
Industrie Natuzzi (ADR) ................................... 1,000,000 23,000,000
Sunbeam Corp. ............................................. 255,800 6,586,850
---------------
29,586,850
---------------
LEISURE-RELATED (0.3%)
Carnival Corp. ............................................ 225,000 7,425,000
---------------
RETAIL--GENERAL (1.6%)
AutoZone, Inc.* ........................................... 500,000 13,750,000
CompUSA, Inc.* ............................................ 1,200,000 24,750,000
---------------
38,500,000
---------------
TOTAL CONSUMER CYCLICALS (11.2%) .......................... 274,232,475
---------------
- 10 -
<PAGE>
- -----------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1996 (Continued)
- ---------------------------------------------------------- ------------ ---------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ---------------------------------------------------------- ------------ ---------------
CONSUMER NONCYCLICALS
DRUGS (1.5%)
Centocor, Inc.* ........................................... 750,000 $ 26,812,500
Geltex Pharmaceuticals, Inc.* ............................. 210,000 5,092,500
MedImmune, Inc.* .......................................... 300,000 5,100,000
---------------
37,005,000
---------------
HOSPITAL SUPPLIES & SERVICES (1.9%)
Columbia/HCA Healthcare Corp. ............................. 540,000 22,005,000
Oxford Health Plans, Inc.* ................................ 200,000 11,712,500
Saint Jude Medical, Inc.* ................................. 310,000 13,213,750
---------------
46,931,250
---------------
SOAPS & TOILETRIES (1.0%)
Colgate Palmolive Co. ..................................... 275,000 25,368,750
---------------
TOBACCO (6.7%)
Loews Corp. ............................................... 1,750,000 164,937,500
---------------
TOTAL CONSUMER NONCYCLICALS (11.1%) ....................... 274,242,500
---------------
CREDIT-SENSITIVE
BANKS (1.0%)
First Union Corp. ......................................... 320,000 23,680,000
---------------
FINANCIAL SERVICES (8.0%)
A.G. Edwards, Inc. ........................................ 300,000 10,087,500
Dean Witter Discover & Co. ................................ 420,000 27,825,000
Legg Mason, Inc. .......................................... 935,000 35,997,500
MBNA Corp. ................................................ 900,000 37,350,000
Merrill Lynch & Co., Inc. ................................. 1,000,000 81,500,000
Resource Bancshares Mortgage Group, Inc. .................. 248,800 3,545,400
---------------
196,305,400
---------------
INSURANCE (11.4%)
CNA Financial Corp.* ...................................... 1,700,000 181,900,000
IPC Holdings Ltd. ......................................... 207,400 4,640,575
Life Re Corp. ............................................. 721,000 27,848,625
NAC Re Corp. .............................................. 564,600 19,125,825
PMI Group, Inc. ........................................... 12,600 697,725
Travelers Group, Inc. ..................................... 1,020,000 46,282,500
---------------
280,495,250
---------------
- 11 -
<PAGE>
- -----------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1996 (Continued)
- ---------------------------------------------------------- ------------ ---------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ---------------------------------------------------------- ------------ ---------------
UTILITY--TELEPHONE (7.8%)
Frontier Corp. ............................................ 365,000 $ 8,258,125
Telephone & Data Systems, Inc. ............................ 4,550,000 164,937,500
WorldCom, Inc.* ........................................... 755,000 19,677,188
---------------
192,872,813
---------------
TOTAL CREDIT-SENSITIVE (28.2%) ............................ 693,353,463
---------------
ENERGY
COAL & GAS PIPELINES (0.2%)
Nabors Industries, Inc.* .................................. 250,000 4,812,500
---------------
OIL--DOMESTIC (0.5%)
Ultramar Diamond Shamrock Corp. ........................... 408,000 12,903,000
---------------
OIL--INTERNATIONAL (0.0%)
Tatneft (ADR)* ............................................ 19,000 912,000
---------------
OIL--SUPPLIES & CONSTRUCTION (8.8%)
Coflexip* ................................................. 75,000 1,968,750
Diamond Offshore Drilling, Inc.* .......................... 350,000 19,950,000
ENSCO International, Inc.* ................................ 550,000 26,675,000
Marine Drilling Co., Inc.* ................................ 56,500 1,112,344
Noble Drilling Corp.* ..................................... 1,100,000 21,862,500
Parker Drilling Co.* ...................................... 4,900,000 47,162,500
Rowan Cos., Inc.* ......................................... 4,000,000 90,500,000
Transocean Offshore, Inc. ................................. 110,000 6,888,750
---------------
216,119,844
---------------
TOTAL ENERGY (9.5%) ....................................... 234,747,344
---------------
TECHNOLOGY
ELECTRONICS (13.7%)
Applied Materials, Inc.* .................................. 250,000 8,984,375
Cisco Systems, Inc.* ...................................... 3,000,000 190,875,000
IDT Corp.* ................................................ 155,000 1,705,000
LSI Logic Corp.* .......................................... 210,000 5,617,500
Seagate Technology, Inc.* ................................. 2,150,000 84,925,000
Teradyne, Inc.* ........................................... 603,000 14,698,125
3Com Corp.* ............................................... 400,000 29,350,000
---------------
336,155,000
---------------
OFFICE EQUIPMENT (1.7%)
Compaq Computer Corp.* .................................... 400,000 29,700,000
Sterling Software, Inc.* .................................. 376,700 11,913,138
---------------
41,613,138
---------------
- 12 -
<PAGE>
- -----------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1996 (Continued)
- ---------------------------------------------------------- ------------ ---------------
NUMBER OF VALUE
SHARES (NOTE 3)
- ---------------------------------------------------------- ------------ ---------------
OFFICE EQUIPMENT SERVICES (4.5%)
Checkfree Corp.* .......................................... 416,700 $ 7,135,988
Electronic Data Systems Corp. ............................. 900,000 38,925,000
Informix Corp.* ........................................... 1,150,000 23,431,250
Oracle Corp.* ............................................. 400,000 16,700,000
Sterling Commerce, Inc.* .................................. 700,000 24,675,000
---------------
110,867,238
---------------
TELECOMMUNICATIONS (16.8%)
American Online, Inc.* .................................... 150,000 4,987,500
American Satellite Network--Rights* ....................... 70,000 0
Cellular Communications Puerto Rico, Inc.* ................ 482,200 9,523,450
Colt Telecom Group PLC (ADR)* ............................. 175,000 3,368,750
Deutsche Telekom AG (ADR)* ................................ 1,300,000 26,487,500
DSC Communications Corp.* ................................. 720,000 12,870,000
MFS Communications Co., Inc.* ............................. 820,000 44,690,000
Millicom International Cellular S.A.* ..................... 1,775,000 57,021,874
Netscape Communications Corp.* ............................ 400,000 22,750,000
Nokia Corp. (ADR) ......................................... 600,000 34,575,000
Palmer Wireless, Inc.* .................................... 102,000 1,071,000
Rogers Cantel Mobile Communications, Inc. (Class B)(ADR)* 1,364,100 26,429,437
Scientific Atlanta, Inc. .................................. 2,650,400 39,756,000
U.S. Cellular Corp.* ...................................... 3,200,000 89,200,000
Vanguard Cellular Systems, Inc. (Class A)* ................ 2,615,000 41,186,250
---------------
413,916,761
---------------
TOTAL TECHNOLOGY (36.7%) .................................. 902,552,137
---------------
TOTAL COMMON STOCKS (99.2%)
(Cost $1,991,952,527)..................................... 2,440,835,888
---------------
PREFERRED STOCKS:
CONSUMER CYCLICALS
AIRLINES (0.1%)
Continental Airlines Financial
Trust 8.5% Conv., 2020 ................................... 27,000 1,809,000
---------------
TOTAL CONSUMER CYCLICALS (0.1%) ........................... 1,809,000
---------------
TOTAL PREFERRED STOCKS (0.1%)
(Cost $1,742,250) ........................................ 1,809,000
---------------
</TABLE>
- 13 -
<PAGE>
- -----------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1996 (Concluded)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------ ------------ --------------
PRINCIPAL VALUE
AMOUNT (NOTE 3)
- ------------------------------------------------------------------------ ------------ --------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
TECHNOLOGY
TELECOMMUNICATIONS (0.1%)
U.S. Cellular Corp.,
Zero Coupon Conv., 2015 ................................................ $7,500,000 $ 2,493,750
--------------
TOTAL TECHNOLOGY (0.1%) ................................................. 2,493,750
--------------
TOTAL LONG-TERM DEBT SECURITIES (0.1%)
(Amortized Cost $2,863,053) ............................................ 2,493,750
--------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates
market value, equivalent to 85,593 units
at $255.57 (0.9%) each ................................................. 21,875,326
--------------
TOTAL INVESTMENTS (100.3%)
(Cost/Amortized Cost $2,018,433,156) ................................... 2,467,013,964
LIABILITIES IN EXCESS OF CASH AND RECEIVABLES (-0.3%) ................... (7,846,914)
AMOUNT RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT NO. 4 (0.0%)(NOTE 1) .................................. (641,292)
--------------
NET ASSETS (100.0%) ..................................................... $2,458,525,758
==============
Reserves attributable to participants' accumulations .................... $2,432,753,839
Reserves and other contract liabilities attributable to annuity benefits 25,771,919
--------------
NET ASSETS .............................................................. $2,458,525,758
==============
</TABLE>
* Non-income producing.
See Notes to Financial Statements.
- 14 -
<PAGE>
- -----------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements
1. Separate Account No. 4 (Pooled) (the Growth Equity Fund) (the Fund) of
The Equitable Life Assurance Society of the United States (Equitable Life), a
wholly-owned subsidiary of The Equitable Companies Incorporated, was
established in conformity with the New York State Insurance Law. Pursuant to
such law, to the extent provided in the applicable contracts, the net assets
in the Fund are not chargeable with liabilities arising out of any other
business of Equitable Life. The excess of assets over reserves and other
contract liabilities amounting to $641,292 as shown in the Statements of
Assets and Liabilities in Separate Account No. 4 may be transferred to
Equitable Life's General Account.
Interests of retirement and investment plans for Equitable Life employees,
managers, and agents in Separate Account No. 4 aggregated $288,921,270
(11.8%), at December 31, 1996 and $246,531,777 (11.6%), at December 31, 1995,
of the net assets in the Fund.
Equitable Life is the investment manager for the Fund. Alliance Capital
Management L.P. (Alliance) serves as the investment adviser to Equitable Life
with respect to the management of the Fund. Alliance is a publicly-traded
limited partnership which is indirectly majority-owned by Equitable Life.
Equitable Life and Alliance seek to obtain the best price and execution of
all orders placed for the Fund considering all circumstances. In addition to
using brokers and dealers to execute portfolio security transactions for
accounts under their management, Equitable Life and Alliance may also enter
into other types of business and securities transactions with brokers and
dealers, which will be unrelated to allocation of the Fund's portfolio
transactions.
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.
2. Security transactions are recorded on the trade date. Amortized cost of
debt securities consists of cost adjusted, where applicable, for amortization
of premium or accretion of discount. Dividend income is recorded on the
ex-dividend date; interest income (including amortization of premium and
discount on securities using the effective yield method) is accrued daily.
Realized gains and losses on the sale of investments are computed on the
basis of the identified cost of the related investments sold.
Transactions denominated in foreign currencies are recorded at the rate
prevailing at the date of such transactions. Asset and liability accounts
that are denominated in a foreign currency are adjusted to reflect the
current exchange rate at the end of the period. Transaction gains or losses
resulting from changes in the exchange rate during the reporting period or
upon settlement of the foreign currency transactions are reflected under
"Realized and Unrealized Gain (Loss) on Investments" in the Statements of
Operations and Changes in Net Assets.
- 15 -
<PAGE>
- -----------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements (Continued)
Equitable Life's internal short-term investment account, Separate Account
No. 2A, was established to provide a more flexible and efficient vehicle to
combine and invest temporary cash positions of certain eligible accounts
(Participating Funds) under Equitable Life's management. Separate Account No.
2A invests in debt securities maturing in sixty days or less from the date of
acquisition. At December 31, 1996, the amortized cost of investments held in
Separate Account No. 2A consists of the following:
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMORTIZED COST %
- -------------------------------------------------------- -------------- --------
<S> <C> <C>
Commercial Paper, 5.3%-6.9% due 01/02/97 through
02/18/97................................................ $292,301,486 87.9%
Time Deposits, 6.5% due 01/02/97......................... 40,000,000 12.0
- -------------------------------------------------------- -------------- --------
Total Investments........................................ 332,301,486 99.9
Cash and Receivables Less Liabilities.................... 175,640 0.1
- -------------------------------------------------------- -------------- --------
Net Assets of Separate Account No. 2A.................... $332,477,126 100.0%
======================================================== ============== ========
Units Outstanding........................................ 1,300,905
Unit Value............................................... $255.57
- -------------------------------------------------------- -------------- --------
</TABLE>
Participating Funds purchase or redeem units depending on each
participating account's excess cash availability or cash needs to meet its
liabilities. Separate Account No. 2A is not subject to investment management
fees. Separate Account No. 2A is valued daily at amortized cost, which
approximates market value.
For 1996 and 1995, investment security transactions, excluding short-term
debt securities, were as follows:
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEPARATE ACCOUNT NO. 4
------------------------------
COST OF NET PROCEEDS
PURCHASES OF SALES
- ----------------------------------------------- -------------- --------------
<S> <C> <C>
Stocks and long-term corporate debt securities:
1996.......................................... $2,439,864,229 $2,487,456,851
1995.......................................... 2,037,876,834 2,082,648,235
U.S. Government obligations:
1996.......................................... -- --
1995.......................................... -- --
</TABLE>
----------------------------------------------------------------------------
3. Investment securities are valued as follows:
Stocks listed on national securities exchanges and certain
over-the-counter issues traded on the National Association of Securities
Dealers, Inc. Automated Quotation (NASDAQ) national market system are valued
at the last sale price, or, if no sale, at the latest available bid price.
Foreign securities not traded directly, or in American Depository Receipt
(ADR) form in the United States, are valued at the last sale price in the
local currency on an exchange in the country of origin. Foreign currency is
converted into its U.S. dollar equivalent at current exchange rates.
United States Treasury securities and other obligations issued or
guaranteed by the United States Government, its agencies or instrumentalities
are valued at representative quoted prices.
- 16 -
<PAGE>
- -----------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Notes to Financial Statements (Concluded)
Long-term publicly traded corporate bonds are valued at prices obtained
from a bond pricing service of a major dealer in bonds when such prices are
available; however, in circumstances where Equitable Life and Alliance deem
it appropriate to do so, an over-the-counter or exchange quotation may be
used.
Convertible preferred stocks listed on national securities exchanges are
valued at their last sale price or, if there is no sale, at the latest
available bid price.
Convertible bonds and unlisted convertible preferred stocks are valued at
bid prices obtained from one or more major dealers in such securities; where
there is a discrepancy between dealers, values may be adjusted based on
recent premium spreads to the underlying common stock.
Other assets that do not have a readily available market price are valued
at fair value as determined in good faith by Equitable Life's investment
officers.
Separate Account No. 2A is valued daily at amortized cost, which
approximates market value. Short-term debt securities purchased directly by
the Funds which mature in 60 days or less are valued at amortized cost.
Short-term debt securities which mature in more than 60 days are valued at
representative quoted prices.
4. Charges and fees are deducted in accordance with the terms of the
various contracts which participate in the Fund. With respect to the American
Dental Association Members Retirement Program, these expenses consist of
investment management and accounting fees, program expense charge, direct
expenses and record maintenance and report fee. These charges and fees are
paid to Equitable Life by the Fund and are recorded as expenses in the
accompanying Statements of Operations and Changes in Net Assets.
5. No Federal income tax based on net income or realized and unrealized
capital gains was applicable to contracts participating in the Fund for the
two years ended December 31, 1996, by reason of applicable provisions of the
Internal Revenue Code and no Federal income tax payable by Equitable Life for
such years will affect such contracts. Accordingly, no Federal income tax
provision is required.
- 17 -
<PAGE>
PART C
OTHER INFORMATION
-----------------
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B.
The following are included in the Statement of Additional Information:
1. Separate Account Nos. 3 (Pooled), 4 (Pooled), 10 (Pooled) and 51
Pooled (The Aggressive Equity, Growth Equity, Balanced and
Global, Conversative Investors and Growth Investors Accounts):
- Report of Independent Accountants - Price Waterhouse LLP
2. Separate Account No. 3 (Pooled):
- Statements of Assets and Liabilities, December 31, 1996
- Statements of Operations and Changes in Net Assets for the
Years Ended December 31, 1996 and 1995
- Portfolio of Investments, December 31, 1996
3. Separate Account No. 4 (Pooled):
- Statement of Assets and Liabilities, December 31, 1996
- Statements of Operations and Changes in Net Assets for the
Years Ended December 31, 1996 and 1995
- Portfolio of Investments, December 31, 1996
4. Separate Account No. 10 (Pooled):
- Statements of Assets and Liabilities, December 31, 1996
- Statements of Operations and Changes in Net Assets for the
Years Ended December 31, 1996 and 1995
- Portfolio of Investments, December 31, 1996
5 Separate Account No. 51 (Pooled)
- Statements of Assets and Liabilities,December 31, 1996
- Statements of Operations and Changes in Net Assets for the Year
Ended December 31, 1996 and 1995.
6. Separate Account Nos. 3(Pooled), 4 (Pooled), 10 (Pooled) and 51
(Pooled):
- Notes to Financial Statements
7. The Equitable Life Assurance Society of the United States:
- Report of Independent Accountants - Price Waterhouse
- Consolidated Balance Sheets, December 31, 1996 and 1995
- Consolidated Statements of Earnings for the Years Ended
December 31, 1996, 1995 and 1994
- Consolidated Statements of Equity for the Years Ended December
31, 1996 and 1995 and 1994
- Consolidated Statements of Cash Flows for the Years Ended
December 31, 1996, 1995 and 1994
- Notes to Consolidated Financial Statements
C-1
<PAGE>
(b) Exhibits.
The following Exhibits are filed herewith:
1. Resolutions of the Board of Directors of The Equitable Life
Assurance Society of the United States ("Equitable") authorizing
the establishment of the Registrant, incorporated by reference to
Post-Effective Amendment No. 1 on Form N-3 to Registration
Statement 33-46995, filed July 22, 1992.
2. Not applicable.
3. (a) Form of Sales Agreement between Equitable Variable Life
Insurance Company and The Equitable Life Assurance
Society ofthe United States for itself and on behalf of
its Separate Account No. 51, incorporated by reference to
Post-Effective Amendment No. 2 to Registration No.
33-46995 on Form N-3 of Registrant, filed March 2, 1993.
(b) Distribution Agreement dated as of January 1, 1995 by and
between The Hudson River Trust and Equico Securities, Inc.,
incorporated by reference to Registration Statement No.
33-91586 on Form N-4 of Registrant, filed April 26, 1995.
(c) Sales Agreement dated as of January 1, 1995 by and among
Equico Securities, Inc., Equitable Separate Account A,
Separate Account No. 301 and Separate Account No. 51,
incorporated by reference to Registration Statement No.
33-91586 on Form N-4 of Registrant, filed April 26, 1995.
4. (a) Exhibit 6(e) (Copy of Group Annuity Contract AC 6059,
effective August 30, 1984, among the United States Trust
Company of New York and The Equitable Life Assurance
Society of the United States), incorporated by reference to
Registration No. 33-21417 on Form N-3 of Registrant, filed
April 26, 1988.
(b) Exhibit 6(f) (Form of Rider No. 1 to Group Annuity
Contract AC 6059 between the United States Trust Company
of New York and The Equitable Life Assurance Society of
the United States), incorporated by reference to
Registration No. 33-34554 on Form N-3 of Registrant,
filed April 26, 1990.
(c) Exhibit 6(g) (Form of Rider No. 2 to Group Annuity
Contract AC 6059 between the United States Trust Company
of New York and The Equitable Life Assurance Society of
the United States), incorporated by reference to
Registration No. 33-34554 on Form N-3 of Registrant,
filed April 26, 1990.
(d) Form of Rider No. 3 to Group Annuity Contract AC 6059
between the United States Trust Company of New York and
The Equitable Life Assurance Society of the United
States, incorporated by reference to Registration No.
33-46995 on Form N-3 of Registrant, filed April 8, 1992.
C-2
<PAGE>
(e) Form of Rider No. 4 to Group Annuity Contract AC 6059
between the United States Trust Company of New York and
The Equitable Life Assurance Society of the United
States, incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-46995 on Form N-3
of Registrant, filed March 2, 1993.
(f) Form of Rider No. 5 to Group Annuity Contract No. AC
6059 between The Chase Manhattan Bank, N.A. and The
Equitable Life Assurance Society of the United States.
5. (a) Exhibit 7(k) (Form of Participation Agreement for the
standardized Profit-Sharing Plan under the Association
Members Program), incorporated by reference to
Post-Effective Amendment No. 1 on Form N-3 to
Registration Statement on Form S-1 of Registrant, filed
April l6, 1986.
(b) Exhibit 7(l) (Form of Participation Agreement for the
non-standardized Profit-Sharing Plan under the Association
Members Program), incorporated by reference to
Post-Effective Amendment No. 1 on Form N-3 to Registration
Statement on Form S-1 of Registrant, filed April l6, 1986.
(c) Exhibit 7(m) (Form of Participation Agreement for the
standardized Defined Contribution Pension Plan under the
Association Members Program), incorporated by reference to
Post-Effective Amendment No. 1 on Form N-3 to Registration
Statement on Form S-1 of Registrant, filed April l6, 1986.
(d) Exhibit 7(n) (Form of Participation Agreement for the
non-standardized Defined Contribution Pension Plan under
the Association Members Program), incorporated by reference
to Post-Effective Amendment No. 1 on Form N-3 to
Registration Statement on Form S-1 of Registrant, filed
April l6, 1986.
(e) Exhibit 7(r) (Copy of Attachment to Profit Sharing
Participation Agreement under the Association Members
Retirement Plan of the Equitable Life Assurance Society of
the United States), incorporated by reference to
Registration No. 33-21417 on Form N-3 of Registrant, filed
April 26, 1988.
(f) Exhibit 7(0)(2) (Form of Participant Enrollment Form under
the Association Members Program), incorporated by reference
to Post-Effective Amendment No. 2 in Form N-3 to
Registration Statement on Form S-1 of Registrant, filed
April 2l, l987.
(g) Exhibit 7(t) (Form of Standardized Participation
Agreement under the Association Members Defined Benefit
Pension Plan), incorporated by reference to Registration
No. 33-21417 on Form N-3 of Registrant, filed April 26,
1988.
(h) Exhibit 7(ee) (Form of Standardized Participation Agreement
for the Defined Contribution Pension Plan under
C-3
<PAGE>
the Association Members Program, as filed with the Internal
Revenue Service on April 18, 1989), incorporated by
reference to Post-Effective Amendment No. 2 to Registration
No. 33-21417 on Form N-3 of Registrant, filed April 26,
1989.
(i) Exhibit 7(ff) (Form of Non-Standardized Participation
Agreement for the Defined Contribution Pension Plan under
the Association Members Program, as filed with the Internal
Revenue Service on April 18, 1989), incorporated by
reference to Post-Effective Amendment No. 2 to Registration
No. 33-21417 on Form N-3 of Registrant, filed April 26,
1989.
(j) Exhibit 7(gg) (Form of Standardized Participation Agreement
for the Profit-Sharing Plan under the Association Members
Program, as filed with the Internal Revenue Service on
April 18, 1989), incorporated by reference to
Post-Effective Amendment No. 2 to Registration No. 33-21417
on Form N-3 of Registrant, filed April 26, 1989.
(k) Exhibit 7(hh) (Form of Non-Standardized Participation
Agreement for the Profit-Sharing Plan under the Association
Members Program, as filed with the Internal Revenue Service
on April 18, 1989), incorporated by reference to
Post-Effective Amendment No. 2 to Registration No. 33-21417
on Form N-3 of Registrant, filed April 26, 1989.
(l) Exhibit 7(ii) (Form of Simplified Participation Agreement
for the Defined Contribution Pension Plan under the
Association Members Program, as filed with the Internal
Revenue Service on April 18, 1989), incorporated by
reference to Post-Effective Amendment No. 2 to Registration
No. 33-21417 on Form N-3 of Registrant, filed April 26,
1989.
(m) Exhibit 7(jj) (Form of Simplified Participation Agreement
for the Profit-Sharing Plan under the Association Members
Program, as filed with the Internal Revenue Service on
April 18, 1989), incorporated by reference to
Post-Effective Amendment No. 2 to Registration No. 33-21417
on Form N-3 of Registrant, filed April 26, 1989.
(n) Exhibit 7(kk) (Form of Standardized (and non-integrated)
Participation Agreement for the Defined Benefit Pension
Plan under the Association Members Program, as filed with
the Internal Revenue Service on April 18, 1989),
incorporated by reference to Post-Effective Amendment No. 2
to Registration No. 33-21417 on Form N-3 of Registrant,
filed April 26, 1989.
(o) Exhibit 7(ll) (Form of Standardized (and integrated)
Participation Agreement for the Defined Benefit Pension
Plan under the Association Members Program, as filed with
the Internal Revenue Service on April 18, 1989),
C-4
<PAGE>
incorporated by reference to Post-Effective Amendment No. 2
to Registration No. 33-21417 on Form N-3 of Registrant,
filed April 26, 1989.
(p) Exhibit 7(mm) (Form of Non-Standardized (and
non-integrated) Participation Agreement for the Defined
Benefit Pension Plan under the Association Members Program,
as filed with the Internal Revenue Service on April 18,
1989), incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1989.
(q) Exhibit 7(nn) (Form of Non-Standardized (and integrated)
Participation Agreement for the Defined Benefit Pension
Plan under the Association Members Program, as filed with
the Internal Revenue Service on April 18, 1989),
incorporated by reference to Post-Effective Amendment No. 2
to Registration No. 33-21417 on Form N-3 of Registrant,
filed April 26, 1989.
(r) Form of First Amendment to the Members Retirement Plan of
The Equitable Life Assurance Society of the United States
Participation Agreement, as filed with the Internal Revenue
Service on December 23, 1991, incorporated by reference to
Registration No. 33-46995 on Form N-3 of Registrant, filed
April 8, 1992.
6. (a) Copy of the Restated Charter of The Equitable Life
Assurance Society of the United States, adopted August 6,
1992, incorporated by reference to Post-Effective
Amendment No. 2 to Registrant No. 33-46995 on Form N-3 of
Registrant, filed March 2, 1993.
(b) By-Laws of The Equitable Life Assurance Society of the
United States, as amended through July 22, 1992,
incorporated by reference to Post-Effective Amendment No.
2 to Registration No. 33-46995 on Form N-3 of Registrant,
filed March 2, 1993.
(c) Copy of the Certificate of Amendment of the Restated
Charter of The Equitable Life Assurance Society of the
United States, adopted November 18, 1993, incorporated by
reference to Post-Effective Amendment No. 1 to
Registration Statement No. 33-91586 on Form N-4 of
Registrant, filed on April 25, 1996.
(d) By-Laws of The Equitable Life Assurance Society of the
United States, as amended November 21, 1996.
(e) 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) Exhibit 11(e)(2) (Form of Association Members Retirement
Plan, as filed with the Internal Revenue Service on April
C-5
<PAGE>
18, 1989), incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-21417 on Form N-3
of Registrant, filed April 26, 1989.
(b) Exhibit 11(j)(2) (Form of Association Members Retirement
Trust, as filed with the Internal Revenue Service on April
18, 1989), incorporated by reference to Post-Effective
Amendment No. 2 to Registration No. 33-21417 on Form N-3 of
Registrant, filed April 26, 1989.
(c) Exhibit 11(k) (Copy of the Association Members Pooled Trust
for Retirement Plans, as submitted to the Internal Revenue
Service on March 3, 1987), incorporated by reference to
Post-Effective Amendment No. 2 to Registration on Form S-1
of Registrant, filed April 2l, l987.
(d) Exhibit 11(o) (Form of Association Members Defined
Benefit Pension Plan, as filed with the Internal Revenue
Service on April 18, 1989), incorporated by reference to
Post-Effective Amendment No. 2 to Registration No.
33-21417 on Form N-3 of Registrant, filed April 26, 1989.
(e) Form of First Amendment to the Pooled Trust for Association
Members Retirement Plans of The Equitable Life Assurance
Society of the United States, as filed with the Internal
Revenue Service on December 23, 1991, incorporated by
reference to Registration No. 33-46995 on Form N-3 of
Registrant, filed April 8, 1992.
(f) Form of First Amendment to the Association Members
Retirement Plan of The Equitable Life Assurance Society of
the United States, as filed with the Internal Revenue
Service on December 23, 1991, incorporated by reference to
Registration No. 33-46995 on Form N-3 of Registrant, filed
April 8, 1992.
(g) Form of First Amendment to the Association Members
Retirement Trust of The Equitable Life Assurance Society of
the United States, as filed with the Internal Revenue
Service on December 23, 1991, incorporated by reference to
Registration No. 33-46995 on Form N-3 of Registrant, filed
April 8, 1992.
(h) Form of Participation Agreement among EQ Advisors Trust,
The Equitable Life Assurance Society of the United
States, Equitable Distributors, Inc. and EQ Financial
Consultants, Inc., incorporated by reference to
Registration Statement of EQ Advisors Trust on Form
N-1A (File Nos. 333-17217 and 811-07953)
9. (a) Opinion and Consent of Melvin S. Altman, Esq., Vice
President and Associate General Counsel of The Equitable
Life Assurance Society of the United States, incorporated
by reference to Registration No. 33-46995 on Form N-3 of
Registrant, filed April 8, 1992.
C-6
<PAGE>
(b) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life
Assurance Society of the United States, incorporated by
reference to Post-Effective Amendment No. 3 to
Registration No. 33-46995 on Form N-3 of Registrant,
filed April 21, 1993.
(c) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life
Assurance Society of the United States incorporated by
reference to Registration No. 33-61978 on Form N-3 of
Registrant, filed May 3, 1993.
(d) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life
Assurance Society of the United States, incorporated by
reference to Registration No. 33-61978 on Form N-3 of
Registrant, filed November 16, 1993.
(e) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Senior Counsel of The Equitable Life
Assurance Society of the United States, incorporated by
reference to Registration No. 33-91586 on Form N-4 of
Registrant, filed April 26, 1995.
(f) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Associate General Counsel of The
Equitable Life Assurance Society of the United States.
10. (a) Consent of Melvin S. Altman (included within Exhibit
12(a)), incorporated by reference to Registration No.
33-46995 on Form N-3 of Registrant, filed April 8, 1992.
(b) Consent of Anthony A. Dreyspool (included within Exhibit
12(b)), incorporated by reference to Post-Effective
Amendment No. 3 to Registration No. 33-46995 on Form N-3
of Registrant, filed April 21, 1993.
(c) Consent of Anthony A. Dreyspool (included within Exhibit
12(c)) incorporated by reference to Registration No.
33-61978 on Form N-3 of Registrant, filed May 3, 1993.
(d) Consent of Anthony A. Dreyspool (included within Exhibit
12(c)) incorporated by reference to Registration No.
33-61978 on Form N-3 of Registrant, filed November 16,
1993.
(e) Consent of Anthony A. Dreyspool (included within Exhibit
9(e)), incorporated by reference to Registration No.
33-91586 on Form N-4 of Registrant, filed April 26, 1995.
(f) Consent of Anthony A. Dreyspool (included within Exhibit
9(f) above).
(g) Consent of Price Waterhouse LLP.
(h) Powers of Attorney.
C-7
<PAGE>
11. Not applicable.
12. Not applicable.
13. Not applicable.
27. Financial Data Schedule.
C-8
<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
Bucksinghamshire 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
Norman C. Francis Director
Xavier University of Louisiana
7325 Palmetto Street
New Orleans, LA 70125
C-9
<PAGE>
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
- ---------------- ---------
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
George T. Lowy Director
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
C-10
<PAGE>
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS EQUITABLE
- ---------------- ---------
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-11
<PAGE>
POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH
BUSINESS ADDRESS 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-12
<PAGE>
Item 26. Persons Controlled by or Under Common Control with the Insurance
Company or Registrant
Separate Account Nos. 3, 4, 10 and 51, of The Equitable Life Assurance
Society of the United States (the "Separate Accounts") are separate accounts 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-13
<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-14
<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%)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
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<PAGE>
The Equitable Companies Incorporated (cont.)
Donaldson Lufkin & Jenrette, Inc.
The Equitable Life Assurance Society of the United States (cont.)
Equitable Holding Corporation (cont.)
Six-Pac G.P., Inc. (1990) (Georgia)
Equitable Distributors, Inc. (1988) (Delaware) (a)
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-16
<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-17
<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.
C-18
<PAGE>
Alliance Capital Management (Turkey), Ltd.
Cursitor Alliance Management Limited (UK)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
C-19
<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-20
<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-21
<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-22
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Axa Insurance Inc. Canada 100% owned by Axa Canada and
Axa Assurance Inc.
Anglo Canada General Canada 100% owned by Axa Canada
Insurance 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-23
<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 Co Korea 50% owned by Axa
Ltd
Axa Oyak Hayat Sigota Turkey 60% owned by Axa
Oyak Sigorta Turkey 11% owned by Axa
C-24
<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 France 100% owned by C.F.P.
Credit (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 &
Loans Law Plc
C-25
<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-26
<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-27
<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-28
<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-29
<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-30
<PAGE>
Item 27. Number of Contractowners.
As of March 31, 1997, the number of participants in the Association
Members Program offered by the Registrant was 10,102.
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, Equico Securities, Inc. ("Equico")
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 or she, is or was a director or officer of Equico.
(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 for
Equitable's Separate Account No. 301, Separate Account A, and for
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-31
<PAGE>
Item 30. Location of Accounts and Records
The records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 to 31a-3 promulgated
thereunder, are maintained by The Equitable Life Assurance Society of
the United States at 135 West 50th Street
New York, New York 10020.
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.
C-32
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, the Registrant has caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City and State of New York, on the 29th day
of April, 1997.
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-33
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, the Registrant has caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City and State of New York, on the 29th 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 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 29, 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 29, 1997
C-34
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. PAGE NO.
- ----------- --------
4(f) Form of Rider No. 5 to Group Annuity Contract 6059
between The Chase Manhattan Bank, N.A. and The
Equitable Life Assurance Society of the United States.
6(d) By-Laws of The Equitable Life Assurance Society of the
United States, as amended November 21, 1996.
6(e) Restated Charter of The Equitable Life Assurance
Society of the United States, as amended January 1,
1997.
9(f) Opinion and Consent of Anthony A. Dreyspool, Vice
President and Associate General Counsel of The
Equitable Life Assurance Society of the United States.
10(g) Consent of Price Waterhouse LLP.
10(h) Powers of Attorney.
27 Fiancial Data Schedule.
C-35
<PAGE>
Attached to and made part of Group Annuity Contract No. AC 6059 ("Contract")
between
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES ("Equitable")
and
THE CHASE MANHATTAN BANK, N.A. (formerly United States Trust Company of New
York) ("Contract Holder"), as Trustee under the Members Retirement Trust of
The Equitable Life Assurance Society of the United States and the Pooled Trust
for Association Members Retirement Plans of The Equitable Life Assurance
Society of the United States
Rider No. 5
IT IS HEREBY AGREED that said Contract is amended, effective July 1, 1997, as
set forth below and any and all contrary provisions of the Contract shall be
considered to have been replaced to conform with the provisions of this Rider:
1. The following definitions are added after the definition "Master Trust":
MFS Research Fund - the Funding Account maintained for the Plan as part
of the MFS Research Investment Division of Separate Account No. 66.
Merrill Lynch World Strategy Fund- the Funding Account maintained for the
Plan as part of the Merrill Lynch World Strategy Investment Division of
Separate Account No. 66.
Page 1
<PAGE>
2. The following definition is added after the definition "Separate Account
Unit Value":
T. Rowe Price Equity Income Fund - the Funding Account maintained for the
Plan as part of the T. Rowe Price Equity Income Investment Division of
Separate Account No. 66.
3. The following definition is added after the definition "Variable Annuity
Unit Value":
Warburg Pincus Small Company Value - the Funding Account maintained for
the Plan as part of the Warburg Pincus Small Company Value Investment
Division of Separate Account No. 66.
4. The definition of "Funding Account" is amended to read as follows:
Funding Account - an account maintained under Article II to which
contributions to the Trusts are allocated and which is adjusted to
reflect interest, income, gains, losses, penalties, expenses, charges and
fees. As of August 1, 1997, the following Funding Accounts are
maintained: the Three-Year Weekly GRA, the Five-Year Weekly GRA, the
Money Market Guarantee, the Aggressive Equity Fund, the Growth Equity
Fund, the Balanced Fund, the Global Fund, the Conservative Investors
Fund, the Growth Investors Fund, the MFS Research Fund, the Merrill Lynch
World Strategy Fund, the T. Rowe Price Equity Income Fund, and the
Warburg Pincus Small Company Value Fund,.
5. The definition of "Investment Division" is amended to read as follows:
Investment Division - any one of the individual investment divisions of
Separate Account No. 51 and Separate Account No.66, each having its own
investment objectives, policies and restrictions.
6. The definition of "Separate Account" is amended to read as follows:
Separate Account - the following Separate Accounts, which have been
established by Equitable pursuant to the Insurance Law of the State of
New York, are or will be used to fund benefits under the Trusts:
Pooled Separate Account No. 4 - the Growth Equity Fund
Pooled Separate Account No. 3 - the Aggressive Equity Fund
Pooled Separate Account No. 10 - the Balanced Fund
Page 2
<PAGE>
Pooled Separate Account No. 51 - the Hudson River Trust Funds
Pooled Separate Account No. 66 - the EQ Advisors Trust Funds
The assets of a Separate Account are Equitable's property; however, the
portion of such assets equal to the reserves and other contract
liabilities with respect to the Separate Account shall not be chargeable
with liabilities arising out of any other business Equitable may conduct.
Equitable reserves the right to transfer to any other Separate Account or
to its general account the amounts held for variable annuities in its
Pooled Separate Account No. 4 that are in excess of the reserves required
for such annuities and other contract liabilities.
7. The following definition is added after the definition "Separate Account
No. 51":
Separate Account No. 66 - a pooled Equitable Separate Account that has
four Investment Divisions, which are: the MFS Research Division, the Merrill
Lynch World Strategy Division, the Warburg Pincus Small Company Value Division
and the T. Rowe Price Equity Income Division.
8. The definition of "Separate Account Unit Value" is amended to read as
follows:
Separate Account Unit Value - the value of a Unit in a Separate Account
or Investment Division. The Separate Account Unit Value with respect to a
Separate Account or Investment Division is established as of the first
day that Separate Account or Investment Division is offered as a Funding
Account and is thereafter determined as of the close of business on each
Business Day and is equal to the Separate Account Unit Value on the last
Business Day of the preceding month multiplied by the net change factor
for the current Business Day. The net change factor for any Business Day
is equal to (i) the gross unit value for the Separate Account or
Investment Division for that Business Day divided by such gross unit
value for the last Business Day of the preceding month, minus (ii) the
charge to the Separate Account or Investment Division for the daily
accrual of fees and expenses, multiplied by the number of days since the
end of the preceding month. The gross unit value for a Separate Account
or Investment Division for any Business Day shall be such gross unit
value for the preceding Business Day multiplied by the net investment
factor, where the net investment factor is (i) the value of the Separate
Account or Investment Division on such preceding Business Day, plus the
investment income and capital gains, realized and unrealized, for the
Business Day for which the net investment factor is being calculated,
minus the capital losses, realized and unrealized, for that Business Day,
divided by (ii) the value of the Separate Account or Investment Division
on the preceding Business Day.
Page 3
<PAGE>
The Separate Account Unit Value for the Growth Equity Fund as of December
27, 1984 was $42.065868. The Separate Account Unit Values for the
Aggressive Equity Fund and the Balanced Fund were $10.00 as of May 1,
1985, the first day those Separate Accounts were offered as Funding
Accounts. The Separate Account Unit Values for each of the Global Fund,
the Conservative Investors Fund and the Growth Investors Fund shall be
$10.00 on July 1, 1993, the first day these Investment Divisions were
offered as Funding Accounts. The Separate Account Unit Values for each of
the MFS Research Fund, the Merrill Lynch World Strategy Fund, the T. Rowe
Price Equity Income Fund and the Warburg Pincus Small Company Value Fund
shall be $10.00 on August 1, 1997, the first day these Investment
Divisions will be offered as Funding Accounts.
For purposes of this definition, the value of a Separate Account or
Investment Division shall be the aggregate fair market value of all its
assets, or, to the extent that the fair market value of certain assets
cannot be easily ascertained, their fair value as determined by Equitable
in accordance with accepted accounting practices and applicable law and
regulations.
10. Section 2.7 is amended to read as follows:
2.7 Three Separate Accounts -- the Growth Equity Fund, the Aggressive
Equity Fund and the Balanced Fund and three Investment Divisions of
Separate Account No. 51 -- the Global Fund, the Conservative Investors
Fund and the Growth Investors Fund -- are available as Funding Accounts.
Other Investment Divisions of Separate Account No. 51 may be made
available in the future.
As of August 1, 1997, four Investment Divisions of Separate Account No.
66 -- the MFS Research Fund, the Merrill Lynch World Strategy Fund, the
T. Rowe Price Equity Income Fund and the Warburg Pincus Small Company
Value Fund will be available as Funding Accounts. Other Investment
Divisions of Separate Account No. 66 may be made available in the future.
Amounts allocated to a Separate Account or Investment Division shall be
invested in accordance with the stated objectives of that Separate
Account or Investment Division. Equitable shall make no guarantee of
principal or income for amounts allocated to a Separate Account or
Investment Division. Whenever an amount is allocated to or withdrawn from
a Separate Account or Investment Division, the Separate Account or
Investment Division shall be credited or charged with the number of Units
determined by dividing such amount by the Separate Account Unit Value as
of the date of the contribution, transfer or withdrawal. The number of
Units in the Separate Account or Investment Division on any Business Day
shall be equal to the number of such Units on the preceding Business Day,
plus the
Page 4
<PAGE>
number of Units credited to the Separate Account or Investment Division
and minus the number of Units withdrawn from the Separate Account or
Investment Division on that Business Day. The aggregate amount held in a
Separate Account or Investment Division on any Business Day shall be
equal to the number of Units in that Separate Account or Investment
Division on that Business Day multiplied by the Separate Account Unit
Value on that Business Day.
11. A new Section 2.7B is added to read as follows:
2.7B Contributions and transfers to the MFS Research Fund, the Merrill
Lynch World Strategy Fund, the T. Rowe Price Equity Income Fund and the
Warburg Pincus Small Company Value Fund and shall be invested in Units of
the corresponding Investment Division of Separate Account No. 66, which
will in turn invest in shares of the corresponding portfolio of The EQ
Advisors Trust. The EQ Advisors Trust is registered under the Investment
Company Act of 1940 as a series type, open-end diversified management
investment company which invests the variable product assets of insurance
company separate accounts. Each portfolio of the EQ Advisors Trust is a
separate investment portfolio with its own investment objectives,
policies and restrictions. As of July 1, 1997, there are twelve
investment portfolios in the EQ Advisors Trust: the T. Rowe Price
International Stock Portfolio, the T. Rowe Price Equity Income Portfolio,
the EQ/Putnam Growth & Income Value Portfolio, the EQ/Putnam
International Equity Portfolio, the EQ/Putnam Investors Growth Portfolio,
the EQ/Putnam Balanced Portfolio, the MFS Research Portfolio, the MFS
Emerging Growth Companies Portfolio, the Morgan Stanley Emerging Markets
Equity Portfolio, the Warburg Pincus Small Company Value Portfolio, the
Merrill Lynch World Strategy Portfolio and the Merrill Lynch Basic Value
Equity Portfolio.
12. Section 2.8 is amended to read as follows:
2.8 Equitable is the investment manager (as defined in Section 3(38) of
the Employee Retirement Income Security Act) for its Separate Account
Nos. 3, 4 and 10. Equitable hereby acknowledges that it is a fiduciary
with respect to any assets of the Trusts that are allocated to any such
Separate Account. Equitable shall not be the investment manager of the
shares of The Hudson River Trust allocated to Separate Account No. 51, it
being understood that the only assets of Separate Account No. 51 shall be
shares of said Trust. Equitable shall not be the investment manager of
the shares of the EQ Advisors Trust allocated to Separate Account No. 66,
it being understood that the only assets of Separate Account No. 66 shall
be shares of said Trust.
Page 5
<PAGE>
NEW YORK, NEW YORK,
FOR THE CONTRACT HOLDER: FOR THE EQUITABLE:
- ----------------------- -----------------
By By
-------------------------- --------------------------------------
Chairman of the Board
Title By
----------------------- --------------------------------------
President and Chief Executive Officer
Dated By
----------------------- --------------------------------------
Vice President and Secretary
At By
-------------------------- --------------------------------------
Head Office Assistant Registrar
Date of Issue
---------------------------
0154a
Page 6
<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>
April 29, 1997
The Equitable Life Assurance
Society of the United States
1290 Avenue of the Americas
New York, New York 10104
Dear Sirs:
This opinion is furnished in connection with the N-4 Registration
Statement (the "Registration Statement") of The Equitable Life Assurance
Society of the United States ("Equitable") under the Securities Act of 1933, as
amended (the "Act"), relating to separate account units of interest ("Units")
under a group annuity contract issued by Equitable to The United States Trust
Company as Trustee of the Association Members Retirement Trust and of the
Association Members Pooled Trust for Retirement Plans (the "Association Members
Contract"), as proposed to be formally amended (the separate accounts included
in the Association Members Contract being referred to herein collectively as
the "Separate Accounts"). The Association Members Contract is designed to
provide benefits under retirement plans and trusts adopted by members of
certain associations for themselves and their employees. Such plans and trusts
will be qualified under Section 401 of the Internal Revenue Code of 1986, as
amended. The securities being registered are to be offered in the manner
described in the Registration Statement covering up to $20,000,000 of the plan
contributions to be received under the Association Members Contract.
I have examined all such corporate records of Equitable and such other
documents and such laws as I consider appropriate as a basis for the opinion
hereinafter expressed. On the basis of such examination, it is my opinion that:
1. Equitable is a corporation duly organized and validly existing
under the laws of the State of New York.
2. The Separate Accounts were duly created pursuant to the provisions
of the New York Insurance Law.
<PAGE>
The Equitable Life Assurance
Society of the United States
April 29, 1997
Page 2
3. The assets of the Separate Accounts are owned by Equitable;
Equitable is not a trustee with respect thereto. Under New York law,
the income, gains and losses, whether or not realized, from assets
allocated to the Separate Accounts must be credited to or charged
against such Accounts, without regard to the other income, gains or
losses of Equitable.
4. The Association Members Contract provides that the portion of the
assets of the Separate Accounts equal to the reserves and other
contract liabilities with respect to the Separate Accounts shall not
be chargeable with liabilities arising out of any other business
Equitable may conduct.
5. The Association Members Contract (including proposed formal
amendments thereto) and the Units issued thereunder have been duly
authorized; and the Association Members Contract (including the Units
duly issued thereunder) when formally amended and delivered will
constitute a validly issued and binding obligation of Equitable in
accordance with its terms.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Yours very truly,
/s/ Anthony A. Dreyspool
------------------------
AAD:mgf
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information to the
Registration Statement on Form N-4 (the "Registration Statement") of our
report dated February 10, 1997 relating to the financial statements of Separate
Account Nos. 3, 4, 10 and 51 of The Equitable Life Assurance Society of the
United States 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 use in the Prospectus Supplement constituting part of
this Registration Statement of our report dated February 10, 1997 relating
to the financial statements of Separate Account No. 4 of The Equitable Life
Assurance Society of the United States for the year ended December 31, 1996,
which report appears in such Prospectus Supplement. We also consent to the
references to us under the headings "Condensed Fund Financial Information"
and "Experts" in the Prospectus.
Price Waterhouse LLP
New York, New York
April 29, 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 20th day of February, 1997
/s/ Jean-Rene Foutou
<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> 0000727920
<NAME> SEP ACCT. NO. 3 (MRP)
<SERIES>
<NUMBER> 01
<NAME> THE AGGRESSIVE EQUITY FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
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<CIK> 0000727920
<NAME> SEP ACCT. NO. 4 (MRP)
<SERIES>
<NUMBER> 02
<NAME> THE GROWTH EQUITY FUND
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<CIK> 0000727920
<NAME> SEP ACCT. NO. 10 (MRP)
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<NUMBER> 03
<NAME> THE BALANCED FUND
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<CIK> 0000727920
<NAME> SEP ACCT NO. 51 (MRP)
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<NUMBER> 04
<NAME> GLOBAL FUND
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<CIK> 0000727920
<NAME> SEP ACCT. NO 51 (MRP)
<SERIES>
<NUMBER> 05
<NAME> CONSERVATIVE INVESTORS FUND
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<CIK> 0000727920
<NAME> SEP ACCT. NO. 51 (MRP)
<SERIES>
<NUMBER> 06
<NAME> GROWTH INVESTORS FUND
<S> <C>
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