<PAGE>
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM N-3
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 Insurance Company)
1290 Avenue of the Americas, New York, New York 10104
(Address of Insurance Company's Principal Executive Offices)
Telephone Number, including Area Code: (212) 554-1234
--------------------------
ROBIN WAGNER
VICE PRESIDENT AND 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>
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Title of Securities Being Amount Being Registered Proposed Maximum Proposed Maximum Amount of Registration
Registered Offered Price per Unit* Aggregate Offering Fee(2)
Price*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Units of Interest
Under Group Annuity
Contract $10,000,000 .000264 $10,000,000 $2,640
(1) (1)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Estimated solely for purpose of determining the registration fee.
(1) The Contract does not provide for a predetermined amount of number of units.
(2) Of the $32,903,165 of units of interest under group annuity contracts
registered under Registration Statement No. 333-50949 for which a filing fee
of $9,706 was previously paid, and the $25,000,000 units of interest under
Registration Statement No. 333-77115 for which a filing fee of $6,950 was
previously paid, $57,903,165 (for an aggregate filing fee of $16,656) are
being carried forward.
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>
American Dental Association
Members Retirement Program
[MEMBERS RETIREMENT PROGRAM LOGO]
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MAY 1, 2000
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GROWTH EQUITY FUND [ALLIANCE CAPITAL LOGO]
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AGGRESSIVE EQUITY FUND [MFS INVESTMENT MANAGEMENT LOGO]
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ADA FOREIGN FUND [TEMPLETON LOGO]
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EQUITY INDEX FUND [STATE STREET GLOBAL ADVISORS LOGO]
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EQUITY INCOME FUND [PUTNAM INVESTMENTS LOGO]
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ADA BLUE CHIP GROWTH FUND [INVESCO LOGO]
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LIFECYCLE FUND-CONSERVATIVE [STATE STREET GLOBAL ADVISORS LOGO]
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LIFECYCLE FUND-MODERATE [STATE STREET GLOBAL ADVISORS LOGO]
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REAL ESTATE FUND [LEND LEASE LOGO]
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GUARANTEED RATE ACCOUNTS [METLIFE LOGO]
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MONEY MARKET GUARANTEE ACCOUNT [EQUITABLE LOGO]
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THIS BOOKLET CONTAINS A PROSPECTUS RELATING TO THE AMERICAN DENTAL ASSOCIATION
MEMBERS RETIREMENT PROGRAM CONTRACT WHICH IS ISSUED BY THE EQUITABLE LIFE
ASSURANCE SOCIETY OF THE UNITED STATES.
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<PAGE>
American Dental Association
Members Retirement Program
PROSPECTUS DATED MAY 1, 2000
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Please read this prospectus and keep it for future reference. It contains
important information you should know before participating in the Program or
allocating amounts under the contract.
ABOUT THE ADA PROGRAM
The Program provides members of the American Dental Association and their
eligible employees several plans for the accumulation of retirement savings on a
tax-deferred basis. Through trusts ("trusts") maintained under these plans, you
can allocate contributions among the investment options offered under the
Program. There are currently twelve investment options under the Program
including: 3-year and 5-year Guaranteed Rate Accounts, and, through the American
Dental Association Members Retirement Program contract, nine investment funds
and the Money Market Guarantee Account.
WHAT IS THE AMERICAN DENTAL ASSOCIATION MEMBERS RETIREMENT PROGRAM CONTRACT?
The American Dental Association Members Retirement Program contract is a
deferred group annuity contract issued by THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES. Contributions to the trusts maintained under the plans
will be allocated among our investment funds and our Money Market Guarantee
Account, in accordance with participant instructions.
- ---------------------------------------------------
INVESTMENT FUNDS
- ---------------------------------------------------
o Growth Equity o Equity Income Fund
Fund o Lifecycle Fund -
o Aggressive Equity Moderate
Fund o Lifecycle Fund -
o ADA Foreign Fund Conservative
o Equity Index Fund o ADA Blue Chip Growth
o Real Estate Fund Fund
- ---------------------------------------------------
The Growth Equity Fund is managed by Equitable Life.
The Real Estate Fund invests primarily in units of Equitable Life's Prime
Property Fund.
The Aggressive Equity Fund, ADA Foreign Fund, Equity Index Fund, Equity Income
Fund and ADA Blue Chip Growth Fund respectively invest in shares of the
following mutual funds: MFS Emerging Growth Fund, Templeton Foreign Fund - Class
A, State Street Global Advisors (SSgA) S&P 500 Index Fund, Putnam Equity Income
Fund and INVESCO Blue Chip Growth Fund ("Underlying Mutual Funds"). You should
also read the prospectuses for the Underlying Mutual Funds and keep them for
future reference.
The Lifecycle Funds - Conservative and Moderate ("Lifecycle Funds") each invest
in units of a corresponding group trust ("Lifecycle Fund Group Trusts")
maintained by State Street Bank and Trust Company ("State Street").
The Equity Index Fund and the Lifecycle Funds are described, in detail, in a
separate prospectus for those investment funds. You may obtain a copy of that
prospectus, or of any Underlying Mutual Fund prospectus, by writing or calling
us toll-free. See "How To Reach Us" on the back cover.
We have filed registration statements relating to this offering with the
Securities and Exchange Commission. A Statement of Additional Information
("SAI"), dated May 1, 2000, which is part of the registration statements, is
available free of charge upon request by writing to us or calling us toll-free.
The SAI has been incorporated by reference into this prospectus. The table of
contents for the SAI and a request form to obtain the SAI appear at the end of
this prospectus. You may also obtain a copy of this prospectus and the SAI
through the SEC web site at www.sec.gov.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE SECURITIES ARE NOT
INSURED BY THE FDIC OR ANY OTHER AGENCY. THEY ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF ANY BANK AND ARE NOT BANK GUARANTEED. THEY ARE SUBJECT TO
INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
<PAGE>
Contents of this prospectus
- ------
1
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ADA PROGRAM
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Index of key words and phrases 3
The Program at a glance - key features 4
The Contract at a glance - key features 5
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1 FEE TABLE 6
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Program expense charge and investment fund
operating expenses 6
Examples 9
Condensed Financial Information 10
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2 PROGRAM INVESTMENT OPTIONS 11
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Investment options - the Equity Funds 11
Additional information about the Equity Funds 15
The Real Estate Fund 15
Special risks related to the Real Estate Fund 18
Investment options - the Guaranteed Options 19
- -----------------------------------------------------
3 HOW WE VALUE YOUR ACCOUNT BALANCE IN
THE INVESTMENT FUNDS 22
- -----------------------------------------------------
- --------------------------------------------------------------------------------
When we use the words "we," "us" and "our," we mean Equitable Life. Please see
the index of key words and phrases used in this prospectus. The index will refer
you to the page where particular terms are defined or explained.
When we address the reader of this prospectus with words such as "you" and the
plans available in the Program unless otherwise explained. For example, "The
Program" section of the prospectus is primarily directed at the employer.
No person is authorized by The Equitable Life Assurance Society of the United
States to give any information or make any representations other than those
contained in this prospectus and the SAI, or in other printed or written "your,"
we generally mean the individual participant in one or more of the materials
issued by Equitable Life. You should not rely on any other information or
representation.
<PAGE>
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2
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4 TRANSFERS AND ACCESS TO YOUR ACCOUNT 23
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Transfers among investment options 23
Our Account Investment Management System & our
Internet website 23
Participant loans 23
Choosing benefit payment options 24
Spousal consent 24
Benefits payable after the death of the participant 25
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5 THE PROGRAM 26
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Eligible employers 26
Summary of plan choices 26
Getting started 27
How to make Program contributions 27
Allocating Program contributions 27
Distributions from the investment options 28
Rules applicable to participant distributions 28
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6 PERFORMANCE INFORMATION 30
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Annual percentage change in fund unit values 31
Average annual percentage change in fund unit value 31
How we calculate performance data 32
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7 CHARGES AND EXPENSES 33
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Charges based on amounts invested in the Program 33
Plan and transaction expenses 34
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8 TAX INFORMATION 36
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Income taxation of distributions to qualified plan
participants 36
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9 MORE INFORMATION 38
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About Program changes or terminations 38
IRS disqualification 38
About the separate accounts 38
About legal proceedings 38
About our independent accountants 39
Reports we provide and available information 39
Acceptance 39
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APPENDIX I: CONDENSED FINANCIAL
INFORMATION A-1
- --------------------------------------------------------------------
TABLE OF CONTENTS OF STATEMENT OF
ADDITIONAL INFORMATION S-1
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Investment Option Characteristics fold-out
About Equitable Life fold-out
How to Reach Us back cover
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<PAGE>
ADA Program
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3
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INDEX OF KEY WORDS AND PHRASES
This index should help you locate more information on the terms used in this
prospectus.
<TABLE>
<CAPTION>
Page
<S> <C>
AIM System 23
beneficiary 25
benefit payment options 24
business day 23
contract 26
contributions 27
eligible rollover distributions 36
Equitable Life fold-out
Equity Funds 11
GRAs 19
guaranteed options 19
individually designed plan 26
IRA 36
Internet website 23
investment funds cover
investment options 11
Lifecycle Funds 14
Lifecycle Fund Group Trusts 14
Master Plan 26
Master Trust 26
Money Market Guarantee Account 20
Pooled Trust 26
Prime Property Fund 15
Program 26
Self Directed Prototype Plan 26
separate accounts 38
SSgA State Street 14
Trustees 26
Underlying Mutual Funds cover
Underlying State Street Funds 14
unit value 22
unit 22
3-year GRA 19
5-year GRA 19
</TABLE>
<PAGE>
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4
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THE PROGRAM AT A GLANCE - KEY FEATURES
EMPLOYER CHOICE OF RETIREMENT PLANS
Our Master Plan is a defined contribution master plan that can be adopted as a
profit-sharing plan (401(k), SIMPLE 401(k) and safe harbor 401(k) features are
available) and a defined contribution pension plan, or both. The Program's
investment options are the only investment choices under the Master Plan.
Our Self-Directed Prototype Plan gives added flexibility in choosing your
investments.
If you maintain your own individually-designed plan, which invests through our
Investment Only arrangement, you may use the investment options in the Program
through our Pooled Trust.
PLAN FEATURES
MASTER PLAN:
o Program investment options used as the only investment choices.
o Plan-level and participant-level recordkeeping, benefit payments, tax
withholding and reporting provided.
o Use of our Master Trust.
o No minimum amount must be invested.
o 5500 reporting.
o Automatic updates for law changes.
SELF-DIRECTED PROTOTYPE PLAN:
o You may combine Program investment options with individual stock and bond
investments.
o Our Pooled Trust is adopted for investment use only, and a minimum of
$25,000 must be maintained in the Trust.
o Recordkeeping services provided only for plan assets in Pooled Trust.
o Third party recordkeeping services can be arranged through us.
o Brokerage services can be arranged through us.
INVESTMENT ONLY:
o Our Pooled Trust is adopted for investment use only.
o Recordkeeping services provided for plan assets in Pooled Trust.
TAX ADVANTAGES:
o On earnings
No tax on investment earnings until withdrawn.
o On transfers
No tax on internal transfers.
ADDITIONAL FEATURES FOR AMOUNTS HELD IN THE TRUST:
o Toll-free number available for transfers and account information.
o Participant loans (if elected by your employer; some restrictions apply).
o Regular statements of account.
o Retirement Program Specialist and Account Executive support.
o Daily valuation of accounts.
PLAN CHARGES AND EXPENSES:
o Plan and transaction charges vary by type of plan adopted, or by specific
transaction.
<PAGE>
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5
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THE CONTRACT AT A GLANCE - KEY FEATURES
PROFESSIONAL INVESTMENT MANAGEMENT:
These professional investment managers who advise or sponsor the eight different
Equity Funds and the Real Estate Fund:
o Alliance Capital Management L.P.
o State Street Global Advisors
o Massachusetts Financial Services Company
o Templeton Global Advisors Ltd.
o Putnam Investments, Inc.
o Lend Lease Real Estate Investments, Inc.
o INVESCO Funds Group, Inc.
o Equitable Life
GUARANTEED OPTIONS:
The three guaranteed options include two Guaranteed Rate Accounts ("GRAs") and a
Money Market Guarantee Account (the GRA's are offered by another insurance
carrier).
TAX NOTE:
Because you are buying a contract to fund a retirement plan that already
provides tax deferral under Federal income tax rules, you should do so for the
contract's features and benefits other than tax deferral. The tax deferral of
the contract does not provide necessary or additional benefits.
CONTRACT CHARGES AND EXPENSES:
o Program expense charge assessed against combined value of Program assets in
the Trust.
o Investment management and administration fees and other expenses charged on
an investment fund-by-fund basis, as applicable.
o Indirectly, charges of underlying investment vehicles for investment
management, 12b-1 fees and other expenses.
BENEFIT PAYMENT OPTIONS:
o Lump sum.
o Installments on a time certain or dollar certain basis.
o Variety of annuity (fixed or variable) benefit payout options as available
under your employer's plan.
o Fixed or variable annuity options available.
<PAGE>
1 Fee table
- -----
6
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The fee tables and discussion below will help you understand the various
charges and expenses you will bear under the contract. The tables reflect
charges: (1) you will directly incur, including Program Expense charge,
administration fee, investment management fee and other expenses, and (2) fees
and expenses of the Underlying Mutual Funds, and the Lifecycle Group Trusts and
their underlying collective funds ("Underlying State Street Funds") you will
indirectly incur. Certain other Program charges also apply as described under
"Plan and Transaction Expenses." If you annuitize your account, charges for
premium taxes and other fees may apply.
WHEN YOU PURCHASE OR REDEEM UNITS OF ANY OF THE INVESTMENT FUNDS YOU WILL PAY
NO SALES LOAD, NO DEFERRED SALES CHARGE, NO SURRENDER FEES AND NO TRANSFER OR
EXCHANGE FEES.
PROGRAM EXPENSE CHARGE AND INVESTMENT FUND OPERATING EXPENSES
The Program expense charge and investment fund operating expenses are paid out
of each investment fund's assets. The Growth Equity and Real Estate Funds each
pay us an investment management fee that varies based on their respective
assets. No investment management fees are paid to us by the Aggressive Equity
Fund, ADA Foreign Fund, Equity Index Fund, Equity Income Fund, ADA Blue Chip
Growth Fund or Lifecycle Funds. The Program expense charge is based partly on
the level of assets in the Trust and partly on the number of plans. An
administration fee is based on investment fund assets. Each investment fund
also incurs other expenses for services such as printing, mailing, legal, and
similar items. All of these operating expenses are reflected in each investment
fund's unit value. See "How We Value Your Account."
The tables that follow summarize the charges, at annual percentage rates, that
apply to the investment funds. They do not include other charges which are
specific to the various plans, such as enrollment fees or record maintenance
and report fees. See "Charges and Expenses," for more details. THE EXPENSES
SHOWN FOR THE INVESTMENT FUNDS ARE BASED ON AVERAGE PROGRAM ASSETS IN EACH OF
THE INVESTMENT FUNDS DURING THE YEAR ENDED DECEMBER 31, 1999, AND REFLECT
APPLICABLE FEES.
GROWTH EQUITY AND REAL ESTATE FUNDS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
INVESTMENT FUND OPERATING EXPENSES
--------------------------------------------------
INVESTMENT
PROGRAM EXPENSE ADMINISTRATION MANAGEMENT OTHER
FUND CHARGE FEE FEE EXPENSES TOTAL
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Growth Equity 0.62% 0.15% 0.22% (1) 0.05% 1.04%
Real Estate 0.62% 0.25% 1.10% (2) 0.06% 2.03%
</TABLE>
(1) The fee is computed using the following investment management fee
schedule: 0.29% of the first $100 million of program assets allocated to
the investment fund and 0.20% of program assets allocated to the
investment fund in excess of $100 million.
(2) The fee is computed using the following investment management fee
schedule: 1.10% of the first $50 million of program assets allocated to
the investment fund; 1.00% of the next $25 million of program assets
allocated to the investment fund; and 0.95% of program assets allocated
to the investment fund in excess of $75 million.
AGGRESSIVE EQUITY, ADA FOREIGN, EQUITY INDEX, EQUITY INCOME AND ADA BLUE CHIP
GROWTH FUNDS
The Aggressive Equity, ADA Foreign, Equity Index, Equity Income and ADA Blue
Chip Growth Funds each invest in shares of an Underlying Mutual Fund. The
following table shows, at annual percentage rates, the charges and fees which
are deducted from each of these investment funds and the Underlying Mutual
Fund. No transaction charges are incurred by the investment funds
<PAGE>
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7
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when shares of the Underlying Mutual Fund are purchased or redeemed, but
operating expenses of the Underlying Mutual Funds are indirectly incurred. For
a detailed description of charges and expenses incurred by the Underlying
Mutual Funds, please see their prospectuses. THE EXPENSES SHOWN FOR THE
UNDERLYING MUTUAL FUNDS ARE EXPRESSED AS A PERCENTAGE OF THEIR RESPECTIVE
AVERAGE DAILY NET ASSETS.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PROGRAM INVESTMENT
EXPENSE ADMINISTRATION MANAGEMENT
CHARGE FEE FEE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Aggressive Equity Fund 0.62% 0.15%(2) None
MFS Emerging Growth Fund (1) None None 0.68%
----- ----- ------
TOTAL 0.62% 0.15%(2) 0.68%
- --------------------------------------------------------------------------------
ADA Foreign Fund 0.62% 0.15%(4) None
Templeton Foreign Fund Class A (3) None None 0.61%
----- ----- ------
TOTAL 0.62% 0.15%(4) 0.61%
- --------------------------------------------------------------------------------
Equity Index Fund 0.62% 0.15% None
SSgA S&P 500 Index Fund (after
waivers) (5) None None 0.00%(6)
----- ----- ------
TOTAL 0.62% 0.15% 0.00%(6)
- --------------------------------------------------------------------------------
Equity Income Fund 0.62% 0.15%(8) None
Putnam Equity Income Fund (7) None None 0.54%
----- ----- ------
TOTAL 0.62% 0.15%(8) 0.54%
- --------------------------------------------------------------------------------
ADA Blue Chip Growth Fund 0.62% 0.15%(11) None
INVESCO Blue Chip Growth Fund (10) None None 0.55%
----- ----- ------
TOTAL 0.62% 0.15%(11) 0.55%
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
OTHER
EXPENSES 12B-1 FEE TOTAL
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aggressive Equity Fund 0.07% None 0.84%(2)
MFS Emerging Growth Fund (1) 0.20% 0.25% 1.13%
---- ----- ----
TOTAL 0.27% 0.25% 1.97%(2)
- -------------------------------------------------------------------------------------
ADA Foreign Fund 0.12% None 0.89%(4)
Templeton Foreign Fund Class A (3) 0.27% 0.25% 1.13%
---- ----- ----
TOTAL 0.39% 0.25% 2.02%(4)
- -------------------------------------------------------------------------------------
Equity Index Fund 0.12% None 0.89%
SSgA S&P 500 Index Fund (after
waivers) (5) 0.09% 0.09% 0.18%(6)
---- ----- ----
TOTAL 0.21% 0.09% 1.07%(6)
- -------------------------------------------------------------------------------------
Equity Income Fund 0.37% None 1.14%(8)
Putnam Equity Income Fund (7) 0.15% 0.25% 0.94%
---- ----- ----
TOTAL 0.52%(9) 0.25% 2.08%(8)
- -------------------------------------------------------------------------------------
ADA Blue Chip Growth Fund 0.05% None 0.82%(11)
INVESCO Blue Chip Growth Fund (10) 0.26% 0.25% 1.06%
---- ----- ----
TOTAL 0.31%(12) 0.25% 1.88%(11)
- -------------------------------------------------------------------------------------
</TABLE>
(1) Source: MFS Emerging Growth Fund prospectus dated April 1, 2000.
(2) An administration fee of up to 0.25% of the average daily net assets of
the Program invested in the MFS Emerging Growth Fund is paid to Equitable
Life by MFS Fund Distributors, Inc. ("MFS Distributors"). Equitable Life
has waived the 0.15% administration fee applicable to the Aggressive
Equity Fund and will use the payment from MFS Distributors, to defray
administrative expenses associated with the Program's operations and to
fund Program enhancements. The agreement and waiver are expected to be in
effect for an indefinite period, but these arrangements are subject to
termination by either party upon notice.
(3) Source: Templeton Foreign Fund prospectus dated January 1, 2000.
(4) The Templeton Foreign Fund - Class A Rule 12b-1 plan is described in the
Templeton Foreign Fund's prospectus. Templeton Foreign Fund pays
Equitable Life an amount equal to the 0.25% Rule 12b-1 fee for services
Equitable Life performs for Templeton Foreign Fund. Equitable Life has
waived the 0.15% administration fee applicable to the ADA Foreign Fund
and will use the payment from Templeton Foreign Fund to defray
administrative expenses associated with the Program's operations and to
fund Program enhancements. The agreement and waiver are expected to be in
effect for an indefinite period, but these arrangements are subject to
termination by either party upon notice.
(5) Source: SSgA S&P 500 Index Fund Prospectus dated December 17, 1999.
(6) State Street has contractually agreed to waive .07% of its .10%
management fee for the S&P 500 Index Fund until December 31, 2010. In
addition, until December 31, 2002, State Street has voluntarily agreed to
reimburse the fund for all expenses in excess of .18% of average daily
net assets on an annual basis. The annual management fee after the waiver
and reimbursement is 0.00%. The total annual expenses shown above have
been restated to reflect the waiver and reimbursement. The annual fund
operating expenses without any contractual management fee waiver and
reimbursement would have been 0.28%. The total Fund expense would have
been 1.17%.
(7) Source: Putnam Equity Income Fund prospectus dated March 30, 2000.
(8) The Putnam Equity Income Fund - Class A Rule 12b-1 plan is described in
the Putnam Equity Index Fund's prospectus. Putnam Equity Income Fund pays
Equitable Life an amount equal to the 0.25% Rule 12b-1 fee for services
Equitable Life performs for Putnam Equity Index Fund. Equitable Life has
waived the 0.15% administration fee applicable to the ADA Equity Income
Fund and will use the payment from Putnam Equity Income Fund to defray
administrative expenses associated with the Program's operations and to
fund Program enhancements. The agreement and waiver are expected to be in
effect for an indefinite period, but these arrangements are subject to
termination by either party upon notice.
<PAGE>
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8
- --------------------------------------------------------------------------------
(9) Includes organizational expenses of $38,988 that were initially paid by
Equitable Life and are being reimbursed over a five year period ending
July, 2004.
(10) Source: Invesco Blue Chip Growth Fund prospectus dated August 31, 1999.
(11) The Invesco Blue Chip Growth Fund - Class A Rule 12b-1 plan is described
in the Invesco Blue Chip Growth Fund's prospectus. Invesco Blue Chip
Growth Fund pays Equitable Life an amount equal to the 0.25% Rule 12b-1
fee for services Equitable Life performs for Invesco Blue Chip Growth
Fund. Equitable Life has waived the 0.15% administration fee applicable
to the ADA Blue Chip Growth Fund and will use the payment from Invesco
Blue Chip Growth Fund to defray administrative expenses associated with
the Program's operations and to fund Program enhancements. The agreement
and waiver are expected to be in effect for an indefinite period, but
these arrangements are subject to termination by either party upon
notice.
(12) Includes organizational expenses of $68,940 that were initially paid by
Equitable Life and are being reimbursed over a five year period ending
October, 2004.
LIFECYCLE FUNDS
No transaction charges are incurred by the Lifecycle Funds when units of a
corresponding Lifecycle Fund Group Trust are purchased or redeemed, but annual
operating expenses are incurred by each Lifecycle Fund Group Trust. A deduction
is made from the assets of each Lifecycle Fund Group Trust to compensate State
Street for managing the assets of the Lifecycle Fund Group Trusts.
The fees and charges which are deducted from the assets of the Lifecycle Funds,
the Lifecycle Fund Group Trusts and the Underlying State Street Funds are shown
in the table below. For a detailed description of the fee and charge
arrangements involving the Lifecycle Funds, Lifecycle Fund Group Trusts and
Underlying State Street Funds, please see the separate prospectus for the
Equity Index Fund and the Lifecycle Funds. THE EXPENSES SHOWN FOR EACH OF THE
LIFECYCLE FUND GROUP TRUSTS AND UNDERLYING STATE STREET FUNDS ARE EXPRESSED AS
A PERCENTAGE OF THEIR RESPECTIVE AVERAGE NET ASSETS FOR 1999.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
PROGRAM INVESTMENT
EXPENSE ADMINISTRATION MANAGEMENT OTHER
CHARGE FEE FEE EXPENSES TOTAL
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Lifecycle Fund - Conservative 0.62% 0.15% None 0.43%(1) 1.20%
Lifecycle Fund
Group Trust - Conservative None 0.09%(2) 0.17% 0.12%(1&3) 0.38%
Underlying State Street Funds(5) None None None 0.02%(4) 0.02%
- ---------------------------------------------------------------------------------------------------------------------
TOTAL 0.62% 0.24% 0.17% 0.57%(4) 1.60%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
PROGRAM INVESTMENT
EXPENSE ADMINISTRATION MANAGEMENT OTHER
CHARGE FEE FEE EXPENSES TOTAL
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Lifecycle Fund - Moderate 0.62% 0.15% None 0.16%(1) 0.93%
Lifecycle Fund
Group Trust - Moderate None 0.01%(2) 0.17% 0.01%(1&3) 0.19%
Underlying State Street Funds(5) None None None 0.02%(4) 0.02%
- --------------------------------------------------------------------------------------------------------------------
TOTAL 0.62% 0.16% 0.17% 0.19%(4) 1.14%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) These include a charge at the annual rate of .03% of the value of the
respective assets in the Lifecycle Funds - Conservative and Moderate to
compensate Equitable Life for additional legal, accounting and other
potential expenses resulting from the inclusion of the Lifecycle Fund
Group Trusts and Underlying State Street Funds maintained by State Street
among the investment options described in this prospectus and the SAI.
Other expenses also include $150,087 of costs incurred by Equitable Life
and State Street in the organization of the Lifecycle Funds. These costs
are being reimbursed from the Lifecycle Funds, over a five year period,
pro rata based on the assets of each of those investment funds, ending
June 30, 2000. On December 8, 1995, the Program's balance in the Balanced
Fund (approximately $70 million) was transferred to the Lifecycle Fund -
Moderate. The much larger balance in that Fund results in a much lower
ratio of other expenses to total assets compared to the corresponding
ratio for the Lifecycle Fund - Conservative.
<PAGE>
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(2) Based on the Lifecycle Fund Group Trusts - Conservative and Moderate
current fixed fee of $12,000 per year, per fund, and average net assets
for 1999.
(3) Based on the Lifecycle Fund Group Trusts - Conservative and Moderate
average net assets for 1999.
(4) Other expenses of the Underlying State Street Funds are based on expenses
incurred by each Fund during 1999.
These totals are based upon a weighted average of the other expenses for
each Underlying State Street Fund. In calculating the weighted average,
expenses for each Underlying State Street Fund were multiplied by their
respective target percentages within their respective Group Trust. See
"Lifecycle Funds - Conservative" and "Lifecycle Funds - Moderate" for a
description of the targeted percentage weightings of the Lifecycle Fund
Group Trusts - Conservative and Moderate.
(5) For greater detail on the Underlying State Street Funds' expenses, refer
to our separate prospectus for the Lifecycle Funds.
EXAMPLES
You would pay the expenses shown below on a $1,000 initial investment over the
time period indicated for each investment fund listed below, assuming a 5%
annual rate of return. The examples include all annual fund operating expenses
plus an estimate of average plan and transaction charges over the time periods
indicated, assuming the account is not annuitized. The estimate is computed by
aggregating all record maintenance and report fees and enrollment fees, divided
by the average assets for the same period. See "Plan and Transaction Expenses."
As the minimum amount that can be converted to an annuity is $5,000, the amount
accumulated from the $1,000 contribution could not be paid in the form of an
annuity at the end of any of the periods shown in the examples. There are no
surrender charges, so the amounts would be the same, whether you withdraw all
or a portion of your Account Balance.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
INVESTMENT FUND(1) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Growth Equity $ 10.86 $ 33.87 $ 58.70 $ 129.71
Aggressive Equity 20.28 62.63 107.49 231.62
Real Estate 20.88 64.46 110.56 237.85
ADA Foreign 20.78 64.15 110.05 236.82
Equity Index 11.17 34.81 60.31 133.16
Equity Income 21.39 65.98 - -
ADA Blue Chip Growth 19.37 59.88 - -
Lifecycle - Conservative 16.49 51.11 88.07 191.71
Lifecycle - Moderate 11.86 36.94 63.95 140.94
- -------------------------------------------------------------------------------
</TABLE>
(1) The expenses shown reflect the arrangements discussed in notes to the fee
tables above.
The purpose of these tables and examples is to assist you in understanding the
various costs and expenses that will be incurred, either directly or
indirectly, when amounts are invested in the Funds. FUTURE EXPENSES MAY BE
GREATER OR LESS THAN THOSE SHOWN. IN ADDITION, THE 5% RATE OF RETURN IN THE
EXAMPLE IS NOT AN ESTIMATE OR GUARANTEE OF FUTURE PERFORMANCE.
We may deduct a $350 annuitization fee if you elect a variable annuity payout
option. Assuming an annuity payout option could be issued, the expenses shown
in the above example would, in each case, be increased by $4.34 based on the
average amount applied to annuity payout options in 1999.
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CONDENSED FINANCIAL INFORMATION
Please see APPENDIX I at the end of this prospectus for condensed financial
information concerning the Growth Equity Fund and Real Estate Fund, and unit
value and number of units outstanding information for the Aggressive Equity
Fund, ADA Foreign Fund, Equity Index Fund, Equity Income Fund and ADA Blue Chip
Growth Fund and Lifecycle Funds.
FINANCIAL STATEMENTS OF INVESTMENT FUNDS
Each of the investment funds is, or is part of, one of our separate accounts as
described in "About the Separate Accounts" under "More Information." The
financial statements for the Growth Equity Fund (Separate Account No. 4
(Pooled)), Aggressive Equity Fund (Separate Account No. 200), ADA Foreign Fund
(Separate Account No. 191) and Real Estate Fund (Separate Account No. 30), and
our Prime Property Fund (Separate Account No. 8) in which the Real Estate Fund
invests, Equity Income Fund (Separate Account No. 206) and ADA Blue Chip Growth
Fund (Separate Account No. 206) may be found in the SAI for this prospectus.
Financial statements for the Equity Index Fund (Separate Account No. 195),
Lifecyle Fund - Conservative (Separate Account No. 197) and Lifecycle Fund -
Moderate (Separate Account No. 198), are found in our separate SAI for those
investment funds.
<PAGE>
2 Program Investment Options
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You may choose from TWELVE INVESTMENT OPTIONS under the Program. These are the
Real Estate Fund and the other eight investment funds we call the "Equity
Funds." You can also choose from three guaranteed options: a 3-year Guaranteed
Rate Account and a 5-year Guaranteed Rate Account ("GRAs"), and our Money
Market Guarantee Account. The Equity Funds and the Money Market Guarantee
Account are available under the contract issued by us. The GRAs are available
under annuity contracts issued by other major insurance companies. The
guaranteed options are referred to in this prospectus solely for the purpose of
providing a more complete understanding of how the investment funds operate
with other investment options available under the Program.
THE EQUITY FUNDS
Each Equity Fund has a different investment objective. The Equity Funds try to
meet their investment objectives by investing either in a portfolio of
securities or by holding mutual fund shares or units in a group trust. We
cannot assure you that any of the Equity Funds will meet their investment
objectives.
THE GROWTH EQUITY FUND
OBJECTIVE
The Growth Equity Fund seeks to achieve long-term growth of capital by
investing in the securities of companies that we believe will share in the
growth of our nation's economy - and those of other leading industrialized
countries - over a long period.
INVESTMENT MANAGER
We manage the Growth Equity Fund. We currently use the personnel and facilities
of Alliance Capital Management L.P. ("Alliance") for portfolio management,
securities selection and transaction services. We are the indirect
majority-owners of Alliance. We and Alliance are each registered investment
advisers under the Investment Advisers Act of 1940.
Alliance acts as investment adviser to various separate accounts and general
accounts of Equitable Life and other affilliated insurance companies. Alliance
also provides investment management and advisory 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. As of December 31, 1999, Alliance had
total assets under management of $368 billion. Alliance's main office is
located at 1345 Avenue of the Americas, New York, New York 10105.
INVESTMENT STRATEGIES
The Fund maintains its own portfolio of securities. The Growth Equity Fund
invests primarily in common stocks. The Fund generally invests in securities of
intermediate and large sized companies, but may invest in stocks of companies
of any size. At times the Fund may invest its equity holdings in a relatively
small number of issuers, provided that no investment when made causes more than
10% of the Growth Equity Fund's assets to be invested in the securities of one
issuer.
The Growth Equity Fund also may invest smaller amounts in other equity-type
securities, such as convertible preferred stocks or convertible debt
instruments. The Fund also may invest in non-equity investments, including
non-participating and non-convertible preferred stocks, bonds and debentures.
The Fund's non-equity investments could be substantial if we believe that the
Fund will not meet its investment objectives by buying common stock and other
equity-type securities. The Fund also
<PAGE>
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may invest up to 10% of its total assets in restricted securities (securities
not freely traded) and up to 15% of its total assets in foreign securities
(securities of established foreign companies without substantial business in
the United States.)
As a defensive strategy, the 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, which
invests in such securities. The Fund would not be pursuing its investment
objective when using this temporary defensive strategy.
RISKS OF INVESTMENT STRATEGIES
Investing in common stocks and other securities involves the risk that the
value of the stocks or securities purchased will fluctuate. These fluctuations
could occur for a single company, an industry, a sector of the economy, or the
stock market as a whole. These fluctuations could cause the value of the Growth
Equity Fund's investments - and, therefore, the value of the Fund's units - to
fluctuate, and you could lose money.
Market and financial risks are inherent in any securities investment. By market
risks, we mean factors which do not necessarily relate to a particular issuer,
but affect the way markets, and securities within those markets, perform.
Market risks can be described 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. Important factors associated with the Growth Equity
Fund are discussed below.
In addition to large sized companies, the Growth Equity Fund may invest in
securities of medium and small sized companies. The securities of small and
medium sized, less mature, lesser known companies involves greater risks than
those normally associated with larger, more mature, well-known companies.
Therefore, consistent earnings may not be as likely in small companies as in
large companies.
The Growth Equity Fund runs a risk of increased and more rapid fluctuations in
the value of its investments in securities of small or medium sized companies.
This is due to the greater business risks of small size and limited product
lines, markets, distribution channels, and financial and managerial resources.
Historically, the price of small (less than $2 billion) and medium (between $2
and $10 billion) capitalization stocks and stocks of recently organized
companies have fluctuated more than the larger capitalization stocks and the
overall stock market. One reason is that small- and medium-sized companies have
less certain prospects for growth, a lower degree of liquidity in the markets
for their stocks, and greater sensitivity to changing economic conditions.
Finally, concentrating the Growth Equity Fund's equity holdings in the stocks
of a few companies also increases the risk of loss because a decline in the
value of one of these stocks would have a greater impact on the Fund. As of
December 31, 1999, the Fund held 29.8% of its net assets in the stocks of four
issuers. See Separate Account No. 4 (Pooled) Statement of Investments and Net
Assets in the SAI.
Investing in non-equity securities, such as bonds and debentures, involves the
risk that the value of these securities held by the Growth Equity Fund - and,
therefore, the value of the Fund's units - will fluctuate with changes in
interest rates (interest rate risk) and the perceived ability of the issuer to
make interest or principal payments on time (credit risk). Moreover,
convertible securities, such as convertible preferred stocks or convertible
debt instruments, contain both debt and equity features, and may lose
significant value in periods of extreme market volatility.
<PAGE>
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Investing in securities of foreign companies involves additional risks,
including risk of loss from changes in the political or economic climate of the
countries in which these companies do business. Foreign currency fluctuations,
exchange controls or financial instability could cause the value of the Growth
Equity Fund's foreign investments to fluctuate. Additionally, foreign
accounting, auditing and disclosure standards may differ from domestic
standards, and there may be less regulation in foreign countries of stock
exchanges, brokers, banks, and listed companies than in the United States. As a
result, the Fund's foreign investments may be less liquid and their prices may
be subject to greater fluctuations than comparable investments in securities of
U.S. issuers.
Investing in restricted securities involves additional risks because these
securities generally (1) are less liquid than non-restricted securities and (2)
lack readily available market quotations. Accordingly, the Growth Equity Fund
may be unable to quickly sell its restricted security holdings at fair market
value.
THE AGGRESSIVE EQUITY, ADA FOREIGN, EQUITY INDEX, EQUITY INCOME AND ADA BLUE
CHIP GROWTH FUNDS
The Aggressive Equity, ADA Foreign, Equity Index, Equity Income and ADA Blue
Chip Growth Funds each invest in shares of an Underlying Mutual Fund. The
investment results you will experience in any one of those investment funds
will depend on the investment performance of the Underlying Mutual Funds. The
table below shows the names of the Underlying Mutual Funds, their investment
objectives, and their advisers.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
UNDERLYING MUTUAL FUND
------------------------------------------------------------------------
INVESTMENT FUND NAME OBJECTIVE ADVISER
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aggressive Equity MFS Emerging Long-term Massachusetts
Fund Growth Fund growth of capital Financial
Services
Company
- -------------------------------------------------------------------------------------------------
ADA Foreign Templeton Long-term Templeton
Fund Foreign Fund growth of capital Global Advisors
Limited
- -------------------------------------------------------------------------------------------------
Equity Index SSgA S&P 500 Replicate the State Street
Fund Index Fund total return of the Global Advisers
S&P 500 Index (SSgA)
- -------------------------------------------------------------------------------------------------
Equity Income Putnam Growth and Putnam
Fund Equity Income income Investments, Inc.
Fund
- -------------------------------------------------------------------------------------------------
ADA Blue Chip Growth Invesco Blue Chip Long-term INVESCO Funds Group, Inc.
Fund Growth Fund capital growth
- -------------------------------------------------------------------------------------------------
</TABLE>
Each of the Underlying Mutual Funds has been selected by the ADA Trustees. We
have no investment management responsibilities for the Aggressive Equity, ADA
Foreign, Equity Index, Equity Income or ADA Blue Chip Growth Funds. As to those
Funds, we act in accordance with the investment policies established by the ADA
Trustees.
<PAGE>
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PLEASE REFER TO THE PROSPECTUSES AND SAIS OF THE UNDERLYING MUTUAL FUNDS FOR A
MORE DETAILED DISCUSSION OF INVESTMENT OBJECTIVES AND STRATEGIES, ADVISERS,
RISK FACTORS AND OTHER INFORMATION CONCERNING THE UNDERLYING MUTUAL FUNDS.
LIFECYCLE FUNDS -- CONSERVATIVE AND MODERATE
OBJECTIVES
The Lifecycle Fund - Conservative seeks to provide current income and a low to
moderate growth of capital by investing exclusively in units of the Lifecycle
Group Trust - Conservative.
The Lifecycle Fund - Moderate seeks to provide growth of capital and a
reasonable level of current income by investing exclusively in units of the
Lifecycle Group Trust - Moderate.
THE LIFECYCLE FUND GROUP TRUSTS
The Lifecycle Fund Group Trusts are maintained by State Street. Each of the
Group Trusts is organized as a collective investment fund under Massachusetts
law. Because of exclusionary provisions, the Lifecycle Fund Group Trusts are
not subject to regulation under the Investment Company Act of 1940. The
Lifecycle Fund Group Trusts were selected by the ADA Trustees.
State Street serves as the trustee and investment manager to the Lifecycle Fund
Group Trusts. Each of the Group Trusts attempts to achieve its investment
objective by investing in a mix of underlying collective investment funds (the
Underlying State Street Funds) maintained by State Street and offered
exclusively to tax exempt retirement plans. Unlike the Lifecycle Fund Group
Trusts, however, which are available only under the ADA Program, the Underlying
State Street Funds may receive contributions from other tax exempt retirement
plans.
The Lifecycle Fund Group Trusts each seek to achieve their objectives by
investing 100% of their respective assets in a mix of Underlying State Street
Funds in accordance with certain target percentage weightings selected by the
ADA Trustees. The Underlying State Street Funds of the Lifecycle Fund Group
Trust - Conservative and Moderate are:
o S&P 500 Flagship Fund
o Russell 2000 Fund
o Daily EAFE Non-Lending Fund
o Daily Government/Corporate Bond Fund
o Short Term Investment Fund
PLEASE REFER TO OUR SEPARATE PROSPECTUS AND SAI FOR THE EQUITY INDEX FUND AND
THE LIFECYCLE FUNDS FOR MORE DETAILED INFORMATION, INCLUDING STRATEGIES, RISK
FACTORS AND IMPORTANT INFORMATION CONCERNING THE UNDERLYING STATE STREET FUNDS.
<PAGE>
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ADDITIONAL INFORMATION ABOUT THE EQUITY FUNDS
CHANGE OF INVESTMENT OBJECTIVES
We may change the investment objectives of the Aggressive Equity, ADA Foreign,
Equity Index, Equity Income, ADA Blue Chip Growth and the Lifecycle Funds in
consultation with the ADA Trustees and if the New York State Insurance
Department approves the change. We may also change the mutual fund or
collective investment fund in which any one of these Equity Funds invests in
consultation with the Trustees. We can change the investment objectives of the
Growth Equity Fund, if the New York State Insurance Department approves the
change.
VOTING RIGHTS
If the MFS Emerging Growth Fund, Templeton Foreign Fund, SSgA S&P 500 Index
Fund, INVESCO Blue Chip Growth Fund or the Putnam Equity Income Fund holds a
meeting of shareholders, we will vote shares held in the corresponding Equity
Fund in accordance with instructions received from employers, participants or
trustees, as the case may be. Shares will be voted in proportion to the voter's
interest in the Equity Fund holding the shares as of the record date for the
shareholders meeting. We abstain from voting shares if we receive no
instructions. Employers, participants or trustees will receive: (1) periodic
reports relating to the Underlying Mutual Funds and (2) proxy materials,
together with a voting instruction form, in connection with shareholder
meetings.
THE REAL ESTATE FUND
OBJECTIVE
The Real Estate Fund seeks a stable rate of return over an extended period of
time through rental income and appreciation of real property values. It pursues
this goal by investing primarily in units of our Prime Property Fund (Separate
Account No. 8), which has the same objective. Because of the nature of real
estate investments, to provide a measure of liquidity, the Real Estate Fund
also invests in liquid assets such as our Separate Account No. 2A, which only
invests in short-term securities. We cannot assure you that the Real Estate
Fund or Prime Property Fund will meet their investment objective.
INVESTMENT MANAGER
We manage both the Real Estate Fund and Prime Property Fund. We have retained
Lend Lease Real Estate Investments, Inc. ("Lend Lease") to advise us as to all
our real property acquisitions, management and sales. Lend Lease also
coordinates related accounting and bookkeeping functions with us. Lend Lease
has offices world-wide and throughout the United States. As of December 31,
1999, Lend Lease had approximately $32.0 billion in assets under management.
Lend Lease originates, analyzes, evaluates and recommends commercial real
estate investments for its clients, then manages and services those investments
on an ongoing basis.
INVESTMENT STRATEGIES
Prime Property Fund's principal investment strategy is to acquire and own
well-located, quality, income-producing real estate investments in strong
rental markets throughout the United States. Location, potential income stream,
cost, potential for increasing rental income and capital appreciation, resale
marketability, and architectural and other physical attributes are important
factors considered in the selection of properties. We also evaluate the risks,
including environmental risks, involved with the property, as well as the
probability and potential impact of changes in the local economy. See "Prime
Property Fund Investments" in the SAI for additional information about the
current distribution of investments by property type and location.
<PAGE>
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Prime Property Fund does not have a specified holding period for its
properties. The Fund will buy and sell properties at any time. In general,
however, we seek to hold properties for long-term investment.
Prime Property Fund may also invest in: (1) construction and mortgage loans
receivable; (2) notes receivable; (3) developmental properties and (4) forward
commitments (an agreement to purchase property upon completion of construction
or leasing.) Although there are no limits on the amount the Fund can invest in
any one property, we do not intend to invest more than 10% of the Fund's assets
in any one property or in developmental properties.
Prime Property Fund participates in joint ventures, particularly with regard to
large properties. We seek to form joint ventures with persons and companies
who, because of our experience with them or investigation into their financial
condition and business history, we regard as experienced and financially
responsible. Prime Property Fund may issue construction and mortgage loans on a
fixed or variable rate basis in connection with joint ventures in which it
participates. If Prime Property Fund issues fixed rate loans, it may seek to
stabilize the market value of such loans by engaging in interest rate hedging
transactions, to the extent permitted under applicable regulatory requirements.
Prime Property Fund may also engage in transactions and invest in properties
other than or in addition to those described above, including commercial
mortgaged backed securities (CMBS) and shares in real estate investment trusts
(REITs).
Prime Property Fund may use various forms of mortgage financing in connection
with its real estate activities.
Prime Property Fund may also borrow money in order to:
o acquire new properties;
o improve existing investments;
o provide working capital for repairs and improvements; and
o meet other cash flow requirements.
Prime Property Fund may use mortgage financing to acquire properties, may
mortgage properties after acquisition, may acquire properties subject to
mortgages and may enter into joint ventures or other arrangements that require
mortgage financing. Prime Property Fund's borrowings may have recourse to
wholly-owned properties or may be secured by the general credit of the Fund and
thus have recourse to the entire Fund. During the period from 1989 through 1999
Prime Property Fund's total borrowings secured by wholly-owned properties
ranged from 10.4% to 26.9% of the Fund's total portfolio value. For more
information regarding borrowings secured by wholly-owned properties see "Prime
Property Fund Investments" in the SAI.
Prime Property Fund does not borrow in order to meet investors' withdrawal
requests.
<PAGE>
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LIQUID ASSETS
The Real Estate Fund seeks to hold enough liquid assets to provide for expected
withdrawals, and seeks to hold a minimum of 5% of its assets in liquid assets.
The Real Estate Fund and the Prime Property Fund each may invest in:
o units of our Separate Account No. 2A;
o government obligations;
o short-term commercial paper; and
o other money market instruments of the types described above.
These holdings could tend to reduce the investment performance of the Real
Estate Fund as compared to the Prime Property Fund or a fund fully invested in
real estate.
INVESTMENT RISKS RELATED TO PRIME PROPERTY FUND
Prime Property Fund is subject to the risks generally associated with the
ownership of real property, some of which we describe below. These risks could
cause the value of Prime Property Fund's real estate and other investments -
and, therefore, the value of its units - to fluctuate.
The risks associated with investing in real property include:
o the uncertainty of cash flow;
o the need to meet fixed and other obligations;
o shifts in property values in real estate markets in general and in
local markets in particular;
o adverse changes in economic and social conditions, including
demographic trends;
o changes in operating expenses, including real estate taxes;
o changes in tax, zoning, building, environmental and other laws;
o losses due to nonpayment of rent;
o uninsured losses; and
o other risks beyond our control.
We believe that the large number of properties held in Prime Property Fund and
their geographic and use diversification provide a measure of protection
against these risks.
Investments in developmental properties are subject to additional risks, which
include cost overruns, construction delays, difficulties in finding suitable
tenants and delays in fully renting the property. Joint ventures may be
vulnerable to losses as a result of a joint venturer's financial difficulties.
In addition, the joint venturer may at times have objectives that are contrary
to those of Prime Property Fund. Construction loans may be vulnerable to losses
due to a developer's financial difficulties. In general, construction loans
will not be personal obligations of the borrower, and Prime Property Fund will
look solely to the underlying property in case of default. Other liens such as
mechanics' liens may have priority over Prime Propery Fund's security interest
in the property.
<PAGE>
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SPECIAL RISKS RELATED TO THE REAL
ESTATE FUND
LIQUIDITY
There is no assurance that the Real Estate Fund will have sufficient liquidity
to make distributions and transfers when requested under the Program or when
required by law. From 1991 to June 1994 the Real Estate Fund used substantially
all of its available cash flow and liquid assets to pay participant withdrawal
requests, and withdrawal requests were being delayed in accordance with our
procedures. We currently are delaying withdrawals from the Prime Property Fund.
Nevertheless, the Real Estate Fund has sufficient liquidity and is paying
participant withdrawals on a current basis.
Further, we may restrict or delay the Real Estate Fund's withdrawals from Prime
Property Fund, if we reasonably believe it necessary to protect the interests of
other participants in Prime Property Fund. We have restricted withdrawals from
Prime Property Fund from time to time.
The procedures we use for any delayed distributions or transfers from the Real
Estate Fund are described under "Procedures for Withdrawals, Distributions and
Transfers - Special Rules for Distributions and Transfers from the Real Estate
Fund" in the SAI.
- --------------------------------------------------------------------------------
You may redeem Real Estate Fund units once each quarter. Payments to you may be
delayed.
- --------------------------------------------------------------------------------
You should also understand that you may only redeem your Real Estate Fund units
after the end of a calendar quarter. We process redemption requests after we
know the value of Prime Property Fund for the last day of that quarter and have
determined the value of Real Estate Fund units. This determination normally
occurs five to ten days into the succeeding month. If you are taking a
distribution or transfer from the Real Estate Fund, the amount distributed will
not reflect any change in the net value of Prime Property Fund assets
attributable to the period between the last day of the quarter and the day your
redemption occurs. Please see "Special Rules for Distributions and Transfers
from the Real Estate Fund" under "Procedures for withdrawals, Distributions and
Transfers" in the SAI.
Because an investment in the Real Estate Fund involves substantial risk and
could deny you immediate access to your investment, you may wish to limit your
investment in the Real Estate Fund, particularly as you near retirement.
INSURANCE RISKS
We believe that our all-risk (property) insurance will provide adequate
compensation for accidental loss of property value, including losses in
California resulting from earthquakes. Our insurance against earthquake loss in
California is limited to: (1) $375 million per occurrence and (2) $375 million
aggregate annually for all our California properties, including Prime Property
Fund properties. We believe that the amount of earthquake insurance we carry is
reasonable in light of the types of coverage available at acceptable prices and
based on probable maximum loss analysis. Prime Property Fund's properties are
also covered under a commercial general liability and umbrella policy that we
believe is adequate for the portfolio in view of the types of coverage currently
available at acceptable prices.
CONFLICTS OF INTEREST
Lend Lease makes property acquisitions for us, our clients, and for itself and
its clients. Before acquisition, properties are allocated among Prime Property
Fund, our other separate accounts (both pooled and single-client accounts), our
general account, Lend Lease's own account, and Lend Lease's advisory accounts.
Two or more of those accounts may share some of those properties. Prime Property
Fund does not share any properties with any of our other accounts. We also may
have interests in properties held in our general account or in other accounts we
manage that may be affected by the acquisition, operations or sale of Prime
Property Fund properties. One or more of these situations could give rise to
conflicts of interest among Prime Property Fund and these other accounts,
including our accounts.
<PAGE>
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Lend Lease seeks to allocate properties among the accounts based on the
accounts' investment policies, size, liquidity and diversification requirements,
current availability of funds, current portfolio holdings and annually
established investment goals. Lend Lease's recommendations as to the allocation
of properties are reviewed and approved by the Allocation Committee of the Lend
Lease Board of Directors. With limited exceptions, the Allocation Committee has
final authority over the allocation of investment properties for all of our
accounts.
Certain related parties of Lend Lease manage some of the properties held in
Prime Property Fund pursuant to an exemption issued by the U.S. Department of
Labor. Lend Lease charges market level fees, including a profit, for the
services provided. During 1999, related parties of Lend Lease were paid $9.7
million for property management services.
Further, the value of the Real Estate Fund's investments depends heavily on the
estimated market values of properties held by Prime Property Fund. See "How We
Value Your Account." We base those estimates on our periodic reappraisals of the
properties. Our fees will tend to increase as those appraised values increase.
There is no assurance that any of the properties will ultimately be sold for
their appraised values.
Finally, Lend Lease also may postpone withdrawals from Prime Property Fund under
certain circumstances within our discretion. These circumstances include a
reasonable determination by us not to sell properties. Lend Lease's fees depend
on the aggregate value of net assets held in Prime Property Fund.
THE GUARANTEED OPTIONS
You can choose from among three different guaranteed options:
o two GRAs guaranteed by major insurance companies, or
o our Money Market Guarantee Account held in one of our separate accounts and
guaranteed by us.
Your investment in a guaranteed option is not regulated by the Securities and
Exchange Commission, and the following discussion about the guaranteed options
has not been reviewed by the staff of the SEC. The discussion, however, is
subject to certain generally applicable provisions of the federal securities
laws relating to the accuracy and completeness of the statements made.
GUARANTEED RATE ACCOUNTS
You can choose from a GRA that matures in three years (3-year GRA) or a GRA that
matures in five years (5-year GRA). Your contributions to the GRAs earn the
guaranteed interest rate then in effect when your contribution is credited to
your plan account. The interest rate is expressed as an effective annual rate,
reflecting daily compounding and the deduction of applicable asset-based fees.
See "Charges and Expenses."
You can make new contributions or transfer amounts from other investment options
to a GRA at the current guaranteed rate at any time. New guaranteed rates are
offered each Wednesday and are available for a seven-day period. You may call
the AIM System or access the website on the Internet to obtain the current GRA
rates. You earn interest from the day after your contribution or transfer is
credited through the maturity date of the GRA. See "Maturing GRAs" in the SAI
for more information. The amount of your contribution and interest that is
guaranteed is subject to any penalties applicable upon premature withdrawal. See
"Premature Withdrawals and Transfers from a GRA" in the SAI.
RESTRICTIONS ON WITHDRAWALS AND TRANSFERS
As a general matter, prior to a GRA's maturity you may not:
o remove amounts from a GRA;
o make transfers from one GRA to another investment option; or
o use GRA amounts to obtain a plan loan, for hardship or in-service
withdrawals, to receive benefits from a terminated plan or to transfer
amounts to a new plan.
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Withdrawals from a GRA may be made before maturity if you are disabled, you
attain age 70 1/2, or you die. Certain other withdrawals from a GRA prior to
maturity are permitted, but may be subject to a penalty. See "Premature
Withdrawals and Transfers" from a GRA in the SAI.
THE GRA GUARANTEES
Metropolitan Life Insurance Company ("MetLife") guarantees all contributions
allocated to GRA's during a one year period beginning July 28, 1999. These
contributions are invested until maturity through two group annuity contracts
that MetLife issued to the ADA Trustees. MetLife is a wholly-owned New York
subsidiary of MetLife, Inc., a publicly traded company. MetLife's home office is
at One Madison Avenue, New York, NY 10010. Founded in 1868, MetLife had assets
of approximately $34.1 billion in its general account as of December 31, 1999.
MetLife and its subsidiaries had assets under management as of December 31, 1999
of approximately $420 billion.
The ADA Trustees may arrange for other carriers to provide GRAs at any time. All
references in this prospectus and the SAI to the Guaranteed Rate Accounts" or to
a "GRA" or "GRAs" shall be deemed to refer to the GRAs provided by MetLife or
any other carrier which previously provided or may in the future provide Program
GRAs, as appropriate. All GRAs invested in prior to July 28, 1999, remain
invested through maturity with the insurance company that provided that GRA.
Withdrawals, transfers, reallocations on maturity and benefit distributions from
GRAs provided by other carriers are subject to Equitable Life's receipt of the
proceeds of such GRA from the other carriers.
MONEY MARKET GUARANTEE ACCOUNT
All contributions to the Money Market Guarantee Account earn the same rate of
interest. The rate changes monthly and is expressed as an effective annual rate,
reflecting daily compounding and the deduction of applicable asset-based fees.
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 transfer or withdrawal. Your balance in the Money Market
Guarantee Account at the end of the month automatically begins receiving
interest at the new rate until transferred or withdrawn. You may call the AIM
System or access the website on the Internet to obtain the current monthly rate.
DISTRIBUTIONS, WITHDRAWALS, AND TRANSFERS
You may effect distributions, withdrawals and transfers, without penalty, at any
time permitted under your plan. We do not impose penalties on distributions,
withdrawals or transfers.
THE MONEY MARKET GUARANTEE ACCOUNT GUARANTEE
We guarantee the amount of your contributions to the Money Market Guarantee
Account and the interest credited. We hold assets in our Separate Account No. 43
sufficient to pay all principal and accrued interest under the Money Market
Guarantee Account option, less applicable fees, as required by law. Assets we
hold in Separate Account No. 43 attributable to ADA participants are available
to Program participants who have allocated amounts to the Money Market Guarantee
Account. We may not use these amounts to satisfy obligations that may arise out
of any other business we conduct. If the assets in Separate Account No. 43 are
insufficient to provide for payment of all principal and accrued interest under
the Money Market Guarantee Account, we will transfer additional assets into
Separate Account No. 43 from Equitable Life's general account, to make up for
any shortfall. We may remove assets from Separate Account No. 43 that are in
excess of those attributable to the combined account values of all ADA
participants.
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CALCULATION OF OUR RATES
The interest rate we credit to the Money Market Guarantee Account approximates:
(1) the average over each calendar year of "domestic prime" money market funds
(funds with the highest quality investments); plus
(2) an amount which approximates the average expenses deducted from such
funds; less
(3) 0.15% (Administration Fee) and the applicable Program Expense Charge. See
"Charges and Expenses."
On January 1 each year we set an annual minimum interest rate for the Money
Market Guarantee Account. The minimum guaranteed interest rate for 2000 is 2.5%
(before applicable asset-based fees).
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3 How we value your account balance in the Investment Funds
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FOR AMOUNTS IN THE EQUITY FUNDS
When you invest in an Equity Fund, your contribution or transfer purchases
"units" of that Fund. The unit value on any day reflects the value of the Fund's
investments for the day and the charges and expenses we deduct from the Fund. We
calculate the number of units you purchase by dividing the amount you invest by
the unit value of the Fund as of the close of business on the day we receive
your contribution or transfer instruction.
On any given day, your account value in any Equity Fund equals the number of the
Fund's units credited to your account, multiplied by that day's value for one
Fund unit. In order to take deductions from any Equity Fund, we cancel units
having a value equal to the amount we need to deduct. Otherwise, the number of
your Fund units of any Equity Fund does not change unless you make additional
contributions, make a withdrawal, effect a transfer, or request some other
transaction that involves moving assets into or out of that Fund option.
For a description of how Equity Fund unit values are computed, see "How We
Compute Unit Values for the Funds" in the SAI.
FOR AMOUNTS IN THE REAL ESTATE FUND
The day on which the Real Estate Fund unit value is determined depends each
month on the day on which the value of Prime Property Fund is known. Prime
Property Fund is valued only once each month, as of the last business day of the
month. However, that value is normally not known until several days later
because financial data must be calculated and reported from properties located
throughout the country. When this process is completed, units of the Real Estate
Fund are valued. During the period between the end of the month and the day on
which the Real Estate fund units are valued, which normally ranges from five to
ten days, the value of Prime Property Fund real estate assets from the end of
the preceding month may change, income will accrue and expenses will be
incurred.
The Real Estate Fund accepts contributions and transfers only one day each
month. When you invest in the Real Estate Fund, your contribution or transfer is
first placed in the Money Market Guarantee Account. On the next day that the
Real Estate Fund accepts contributions, your contribution or transfer, plus
accrued interest, is used to purchase units in the Real Estate Fund. We
calculate the number of units you purchase by dividing the amount you invest by
the unit value of the Real Estate Fund. Note that the net value of Prime
Property Fund's investments as of the end of the preceding month may increase or
decrease before your purchase of Real Estate Fund units takes place. As a
result, the procedure described above will tend to favor Real Estate Fund units
being purchased to the extent that there have been net increases in the value of
the underlying net assets between the end of the month and the date of the
valuation. It will have the opposite effect to the extent of any decreases in
the net assets during this period.
You may change your mind about investing in the Real Estate Fund, but only if
you advise us in writing before a transfer is made to the Real Estate Fund. You
should tell us that the money being held in the Money Market Guarantee Account
is no longer designated for investment in the Real Estate Fund. You also should
enclose a transfer form telling us where that money is to be allocated. We must
receive your instructions by the close of business on the day the transfer is to
occur. Because the transfer date varies from month to month, we cannot ensure
that your instructions will be effective unless we receive them by the first day
of the month.
For a description of how Real Estate Fund unit values are computed, see "How We
Determine Unit Values for the Funds" in the SAI.
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4 Transfers and access to your account
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TRANSFERS AMONG INVESTMENT OPTIONS
You may transfer some or all of your amounts among the investment options if you
participate in the Master Plan. Participants in other plans may make transfers
as allowed by the plan.
No transfers from the GRAs to other investment options are permitted prior to
maturity. Transfers to the GRAs, and to or from the Money Market Guarantee
Account and the Growth Equity Fund, are permitted at any time. Transfers from
the Aggressive Equity Fund, ADA Foreign Fund, Equity Index Fund, Equity Income
Fund, ADA Blue Chip Growth Fund and Lifecycle Funds are permitted at any time
except if there is any delay in redemptions from the Underlying Mutual Fund or,
with respect to the Lifecycle Funds, the Lifecycle Fund Group Trusts in which
they invest.
Transfers to and from the Real Estate Fund are subject to special rules, which
are described in detail under "Procedures for Withdrawals, Distributions and
Transfers - Special Rules for Distributions and Transfers from the Real Estate
Fund" in the SAI and referred to under "The Program."
OUR ACCOUNT INVESTMENT MANAGEMENT SYSTEM (AIM) AND OUR INTERNET WEBSITE
Participants may use our automated AIM System, or our Internet website to
transfer between investment options, obtain account information, change the
allocation of future contributions and maturing GRAs and hear investment
performance information (transfer between investment options and the ability to
change the allocations of future contributions and maturing GRA's will be
available through our Internet website during the second half of 2000). To use
the AIM System, you must have a touch-tone telephone, or our Internet website
can be accessed at www.equitable.com/ada. We assign a personal security code
("PSC") number to you after we receive your completed enrollment form.
We have established procedures to reasonably confirm the genuineness of
instructions communicated to us by telephone when using the AIM System and by
Internet, the website. The procedures require personal identification
information, including your PSC number, prior to acting on telephone
instructions or accessing information on the Internet, and providing written
confirmation of the transfers. Thus, we will not be liable for following
telephone instructions, or Internet instructions, we reasonably believe to be
genuine.
A transfer request will be effective on the business day we receive the request.
We will confirm all transfers in writing.
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A business day is any day on which both the New York Stock Exchange and we are
open, and generally ends at 4:00 p.m. Eastern Time. We may, however, close due
to emergency conditions.
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PARTICIPANT LOANS
Participant loans are available if the employer plan permits them. Participants
must apply for a plan loan through the employer. Loan packages containing all
necessary forms, along with an explanation of how interest rates are set, are
available from our Account Executives.
Loans are subject to restrictions under Federal tax laws and ERISA. If you are a
sole proprietor, 10% or more partner, or a shareholder-employee of an S
Corporation who owns more than 5% of the shares (or a family member of any of
the above as defined under Federal income tax laws), you presently may not
borrow from your vested account balance without first obtaining a prohibited
transaction exemption from the Department of Labor. Participants should consult
with their attorneys or tax advisors regarding the advisability and procedures
for obtaining such an exemption. A loan may not be taken from the Real Estate
Fund, or from the Guaranteed Rate Accounts prior to maturity. If a participant
is married, written spousal consent will be required for a loan.
Generally, the loan amount will be transferred from the investment options into
a loan account. The participant must pay the interest as required by Federal
income tax rules. If you fail to repay the loan when due, the amount of the
unpaid balance may be taxable and subject to additional penalty taxes. Interest
paid on a retirement plan loan is not deductible.
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CHOOSING BENEFIT PAYMENT OPTIONS
Benefit payments are subject to plan provisions.
The Program offers a variety of benefit payment options for participants in the
Master Plan. Your plan may allow you a choice of one or more of the following
forms of distribution:
o Qualified Joint and Survivor Annuity
o Lump Sum Payment
o Installment Payments
o Life Annuity
o Life Annuity - Period Certain
o Joint and Survivor Annuity
o Joint and Survivor Annuity - Period Certain
o Cash Refund Annuity
All of these options can be either fixed or variable except for the Cash Refund
Annuity and the Qualified Joint and Survivor Annuity which are fixed options
only.
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The amount of each payment in a fixed option remains the same. Variable option
payments change to reflect the investment performance of the Growth Equity
Fund.
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See "Types of Benefits" in the SAI for detailed information regarding each of
the benefit payout options, and "Procedures for Withdrawals, Distributions and
Transfers" in the SAI.
Fixed annuities are available from insurance companies selected by the Trustees.
Upon request, we will provide fixed annuity rate quotes available from one or
more such companies. Participants may instruct us to withdraw all or part of
their account balance and forward it to the annuity provider selected. Once we
have distributed that amount to the company selected, we will have no further
responsibility to the extent of the distribution.
We provide the variable annuity options. Payments under variable annuity options
reflect investment performance of the Growth Equity Fund.
The minimum amount that can be used to purchase any type of annuity is $5,000.
In most cases a variable annuity administrative charge of $350 will be deducted
from the amount used to purchase an annuity from Equitable Life. Annuities
purchased from other providers may also be subject to fees and charges.
If you are a participant in a self-directed or individually-designed plan, ask
your employer for information on benefit payment options under your Plan.
SPOUSAL CONSENT
If a participant is married and has an account balance greater than $5,000,
Federal law generally requires payment of a Qualified Joint and Survivor Annuity
payable to the participant for life and then to the surviving spouse for life,
unless you and your spouse have properly waived that form of payment in advance.
Please see "Spousal Consent Requirements" under "Types of Benefits" in the SAI.
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BENEFITS PAYABLE AFTER THE DEATH OF A PARTICIPANT
If a participant dies before the entire benefit has been paid, the remaining
benefits will be paid to the participant's beneficiary. If a participant dies
before he or she is required to begin receiving benefits, the law generally
requires the entire benefit to be distributed no more than five years after
death. There are exceptions: (1) a beneficiary who is not the participant's
spouse may elect payments over his or her life or a fixed period which does not
exceed the beneficiary's life expectancy, provided payments begin within one
year of death, (2) if the benefit is payable to the spouse, the spouse may elect
to receive benefits over his or her life or a fixed period which does not exceed
his/her life expectancy beginning any time up to the date the participant would
have attained age 701/2 or, if later, one year after the participant's death, or
(3) the spouse may be able to roll over all or part of the death benefit to a
traditional individual retirement arrangement. If, at death, a participant was
already receiving benefits, the beneficiary can continue to receive benefits
based on the payment option selected by the participant, subject to the Federal
income tax minimum distribution rules. To designate a beneficiary or to change
an earlier designation, a participant must have the employer send us a
beneficiary designation form. In some cases, the spouse must consent in writing
to a designation of any non-spouse beneficiary, as explained in "Spousal Consent
Requirements" under "Types of Benefits" in the SAI.
Under the Master Plan, on the day we receive proof of death, we automatically
transfer the participant's account balance in the Equity Funds to the Money
Market Guarantee Account unless the beneficiary gives us other written
instructions. The balance in the Real Estate Fund will be treated as a Priority
1 distribution and will be scheduled for transfer to the Money Market Guarantee
Account following the last day of the next quarter. See "Special Risks Related
to the Real Estate Fund." The balance in the Guaranteed Rate Accounts will
remain in the Guaranteed Rate Accounts.
<PAGE>
5 The Program
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This section explains the ADA Program in further detail. It is intended for
employers who wish to enroll in the Program, but contains information of
interest to participants as well. You should, of course, understand the
provisions of your plan and the Adoption Agreement that define the scope of the
Program in more specific terms. References to "you" and "your" in this section
are to you in your capacity as an employer. The Program is described in the
prospectus solely to provide a more complete understanding of how the investment
funds operate within the Program.
The American Dental Association Members Retirement Program consists of several
types of retirement plans and two retirement plan Trusts, the Master Trust and
the Pooled Trust. Each of the Trusts invests exclusively in the group annuity
contract described in this prospectus and in the group annuity contract funding
the GRA's. The Program is sponsored by the ADA, and the Trustees under the
Master and Pooled Trusts are the members of the Council on Insurance of the ADA
(the "Trustees"). The Program had 26,316 participants and $1.6 billion in assets
at December 31, 1999.
ELIGIBLE EMPLOYERS
You can adopt the Program if you or at least one of your partners or other
shareholders is a member of: (1) the ADA, (2) a constituent or component society
of the ADA, or (3) an ADA-affiliated organization. Participation by an
affiliated organization must first be approved by the ADA's Council on
Insurance.
Our Retirement Program Specialists are available to answer your questions about
joining the Program. Please contact us by using the telephone number or
addresses listed under "How To Reach Us - Information on Joining the Program" on
the back cover of the prospectus.
SUMMARY OF PLAN CHOICES
You have a choice of three retirement plan arrangements under the Program. You
can:
o Choose the MASTER PLAN - which automatically gives you a full range of
services from Equitable Life. These include your choice of the Program
investment options, plan-level and participant-level recordkeeping,
benefit payments and tax withholding and reporting. Under the Master Plan
employers adopt our Master Trust and your only investment choices are from
the Investment Options.
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The Master Plan is a defined contribution master plan that can be adopted as a
profit sharing plan (including optional 401(k), SIMPLE 401(k) and safe harbor
401(k) features), a defined contribution pension plan, or both.
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o Choose the SELF-DIRECTED PROTOTYPE PLAN - which gives you added flexibility
in choosing investments. This is a defined contribution prototype plan
which can be used to combine the Program investment options with your own
individual investments such as stocks and bonds. With this plan you must
adopt our Pooled Trust and maintain a minimum balance of $25,000 at all
times.
You must arrange separately for plan level accounting and brokerage
services. We provide recordkeeping services only for plan assets held in
the Pooled Trust. You can use any plan recordkeeper or you can arrange
through us to hire Trust Consultants, Inc. at a special rate. You can also
arrange through us brokerage services from our affiliate, DLJ Direct, at
special rates or use the services of any other broker.
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The Pooled Trust is an investment vehicle used with individually designed
qualified retirement plans. It can be used for both defined contribution and
defined benefit plans. We provide recordkeeping services for plan assets held in
the Pooled Trust.
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o Maintain your own INDIVIDUALLY DESIGNED PLAN - and use the Pooled Trust for
investment options in the Program and your own individual investments. The
Pooled Trust is for investment only and can be used for both defined
benefit and defined contribution plans.
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Choosing the right plan depends on your own set of circumstances. We recommend
that you review all plan, trust, participation and related agreements with your
legal and tax counsel.
GETTING STARTED
If you choose the Master Plan, you must complete an Adoption Agreement. If you
have your own individually designed plan and wish to use the Pooled Trust as an
investment vehicle, the trustee of your plan must complete an Adoption
Agreement.
If you choose the Self-Directed Prototype Plan, you must complete the Prototype
Plan adoption agreement as well as an Adoption Agreement in order to use the
Pooled Trust.
As an employer, you are responsible for the administration of the plan you
choose. If you have a Self-Directed Prototype Plan, you are also responsible for
appointing a plan trustee. Please see "Your Responsibilities as Employer" in the
SAI.
HOW TO MAKE PROGRAM CONTRIBUTIONS
Contributions must be in the form of a check drawn on a bank in the U.S.
clearing through the Federal Reserve System, in U.S. dollars, and made payable
to The ADA Retirement Trust. All contribution checks should be sent to Equitable
Life at the address shown "For Contribution Checks Only" in the "Information
Once You Join the Program" section under "How to Reach Us" on the back cover of
this prospectus. Third party checks are not acceptable, except for rollover
contributions, tax-free exchanges or trustee checks that involve no refund. All
checks are subject to collection. We reserve the right to reject a payment if it
is received in an unacceptable form.
All contributions must be accompanied by a Contribution Remittance form which
designates the amount to be allocated to each participant by contribution type
and fiscal year to which the contribution will be applied. Contributions are
normally credited on the business day that we receive them, provided the
remittance form is properly completed. Contributions are only accepted from the
employer. Employees may not send contributions directly to the Program.
The Real Estate Fund will accept contributions and effect transfers only one day
a month. See "The Real Estate Fund."
There is no minimum amount which must be contributed for investment if you adopt
the Master Plan, or if you have your own individually designed plan that uses
the Pooled Trust. If you adopt our self-directed prototype plan, you must, as
indicated above, keep at least $25,000 in the Pooled Trust at all times.
ALLOCATING PROGRAM CONTRIBUTIONS
Under the Master Plan, participants make all of the investment decisions.
Investment decisions in the Self-Directed Prototype Plan and individually
designed plans are made either by the participant or by the plan trustees,
depending on the terms of the plan.
Participants may allocate contributions among any number of Program investment
options. Allocation instructions can be changed at any time. IF WE DO NOT
RECEIVE ADEQUATE INSTRUCTIONS, WE WILL ALLOCATE YOUR CONTRIBUTIONS TO THE MONEY
MARKET GUARANTEE ACCOUNT UNTIL WE ARE PROPERLY INSTRUCTED OTHERWISE.
WHEN TRANSACTION REQUESTS ARE EFFECTIVE. Contributions, as well as transfer
requests and allocation changes (not including GRA maturity allocation changes
discussed in the SAI), are effective on the business day they are received.
In-service distribution requests are also effective on the business day they are
received. Benefit payments are subject to plan provisions. Transaction requests
received after the end of a business day will be credited the next business day.
Processing of any transaction may be delayed if a properly completed form is not
received.
Trustee-to-trustee transfers of plan assets are effective the business day after
we receive all items we require, including
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check and mailing instructions, and the new or amended plan opinion/IRS
determination letter or adequate proof of this letter.
DISTRIBUTIONS FROM THE INVESTMENT OPTIONS
Keep in mind two sets of rules when considering distributions or withdrawals
from the Program. The first are rules and procedures that apply to the
investment options, exclusive of the provisions of your plan. We discuss those
in this section. The second are rules specific to your plan. We discuss those
"Rules Applicable to Participant Distributions" below. Certain plan
distributions may be subject to Federal income tax, and penalty taxes. See "Tax
Information."
AMOUNTS IN THE EQUITY FUNDS AND MONEY MARKET GUARANTEE ACCOUNT. These are
generally available for distribution at any time, subject to the provisions of
your plan. However, there may be a delay for withdrawals from the Aggressive
Equity Fund, ADA Foreign Fund, Equity Index, Equity Income, ADA Blue Chip Growth
Fund or the Lifecyle Funds if there is any delay in redemptions from the related
Underlying Mutual Fund, or with respect to the Lifecycle Funds, from the
Lifecycle Fund Group Trusts in which they invest.
AMOUNTS IN THE GUARANTEED RATE ACCOUNTS. Withdrawals generally may not be taken
from GRAs prior to maturity. See "Guaranteed Rate Accounts."
Payments or withdrawals and application of proceeds to an annuity ordinarily
will be made promptly upon request in accordance with plan provisions. However,
we can defer payments, applications and withdrawals 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 is not reasonably
practicable because of an emergency.
DISTRIBUTION AND TRANSFERS FROM THE REAL ESTATE FUND. Under the Master Plan,
distributions from the Real Estate Fund are made only after the amount to be
withdrawn has been transferred to another investment option and a confirmation
of the transfer has been sent to the recipient. Participants in an
individually-designed plan or the Prototype Self-Directed Plan may receive a
distribution directly from the Real Estate Fund without first having it
transferred to another investment option. See "Procedures for Withdrawals,
Distributions and Transfers - Special Rules for Distributions and Transfers From
the Real Estate Fund" and "Tax Information" in the SAI.
All distributions and transfers from the Real Estate Fund are subject to a
minimum wait of one calendar quarter. Payments are scheduled to be made shortly
after the end of the calendar quarter following the quarter in which we receive
properly completed forms requesting the distribution or transfer, but they may
be delayed. Withdrawals from the Real Estate Fund must be made in amounts of at
least $1,000 or, if less, your balance in the Real Estate Fund.
The Real Estate Fund may not have enough liquid assets to pay all withdrawals
when requested. If liquid assets are insufficient to pay all requested
withdrawals, withdrawal requests are prioritized according to the nature of the
distribution. For an explanation of how our "Priority 1" and "Priority 2"
distribution procedures operate, please see "Special Rules for Distributions and
Transfers from the Real Estate Fund" under "Procedures for Withdrawals,
Distributions and Transfers" in the SAI. Also see "Special Risks Related to the
Real Estate Fund" in the prospectus.
IF YOUR PLAN IS AN EMPLOYER OR TRUSTEE-DIRECTED PLAN, YOU AS THE EMPLOYER ARE
RESPONSIBLE FOR ENSURING THAT THERE IS SUFFICIENT CASH AVAILABLE TO PAY
BENEFITS.
RULES APPLICABLE TO PARTICIPANT DISTRIBUTIONS
In addition to our own procedures, distribution and benefit payment options
under a tax qualified retirement plan are subject to complicated legal
requirements. A general explanation of the Federal income tax treatment of
distributions and benefit payment options is provided in "Tax Information" in
this prospectus and the SAI. You should discuss your options with a qualified
financial advisor. Our Account Executives also can be of assistance.
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In general, under the Master Plan or our Self-Directed Prototype Plan,
participants are eligible for benefits upon retirement, death or disability, or
upon termination of employment with a vested benefit. Participants in an
individually designed plan are eligible for retirement benefits depending on the
terms of their plan. See "Benefit Payment Options" under "Transfers and Access
to Your Money," and "Tax Information" for more details. For participants who own
more than 5% of the business, benefits must begin no later than April 1 of the
year after the participant reaches age 70 1/2. For all other participants,
distribution must begin by April 1 of the later of the year after attaining age
70 1/2 or retirement from the employer sponsoring the plan.
Under the Master Plan, self-employed persons may generally not receive a
distribution prior to age 59 1/2, and employees generally may not receive a
distribution prior to a separation from service.
<PAGE>
6 Performance information
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The investment performance of the Equity Funds and the Real Estate Fund reflects
changes in unit values experienced over time. The unit value calculations for
the Funds include all earnings, including dividends and realized and unrealized
capital gains. Unlike the typical mutual fund, the Funds reinvest, rather than
distribute, their earnings.
The following tables show the annual percentage change in Fund unit values, and
the average annual percentage change in Fund unit values, for various periods
within the ten years ended December 31, 1999. You may compare the performance
results for each Fund with the data presented for certain unmanaged market
indices, or "benchmarks."
Performance data for the benchmarks do not reflect any deductions for investment
advisory, brokerage or other expenses of the type typically associated with an
actively managed investment fund. This overstates their rates of return and
limits the usefulness of the benchmarks in assessing the performance of the
Funds. The benchmark results have been adjusted to reflect reinvestment of
dividends and interest for greater comparability. The benchmarks are:
o Standard and Poor's 500 Index ("S&P 500") - a weighted index of the securities
of 500 companies widely regarded by investors as representative of the stock
market.
o Russell 2000 Index ("Russell 2000") - a broadly diversified small
capitalization index of the approximately 2,000 smallest stocks within the
Russell 3000 Index. The Russell 3000 Index consists of the largest 3,000
publicly traded stocks of U.S. domiciled corporations and includes large,
medium and small capitalization stocks.
o Morgan Stanley Capital International Europe, Australasia, and Far East Index
("MSCI EAFE") - a broadly diversified index representing approximately 1,000
stocks across 20 major developed markets in Europe, Australia, New Zealand and
the Far East. The MSCI EAFE index captures about 60% of the available market
capitalization in each country and is designed to offer global investors
access to some of the world's largest and most liquid equity securities
outside the U.S. and Canada.
o Lehman Government/Corporate Bond Index ("Lehman") - an index widely regarded
as representative of the bond market.
o Salomon Brothers 3-Month T-Bill Index ("Salomon 3 Mo. T-Bill") - an index of
direct obligations of the U.S. Treasury which are issued in maturities between
31 and 90 days.
o Consumer Price Index (Urban Consumers - not seasonally adjusted) ("CPI") - an
index of inflation that can be used as a non-securities benchmark.
The annual percentage change in unit values represents the percentage increase
or decrease in unit values from the beginning of one year to the end of that
year. 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.
Historical results are presented for the Funds for the periods during which the
Funds were available under the Program. Hypothetical results were calculated for
prior periods, as described in "How We Calculate Performance Data." In the case
of the Aggressive Equity Fund, hypothetical results are shown for years before
1996, because the Program did not begin to invest in the MFS Emerging Growth
Fund until December 1, 1995. For the Equity Index Fund, no results are presented
for periods prior to 1993, as the SSgA S&P 500 Index Fund began operations
during 1992. 1995 performance data for the Lifecycle Funds is shown for the
period when the Funds commenced operations on May 1, 1995 through December 31,
1995.
No performance is provided for the Equity Income Fund and the ADA Blue Chip
Growth Fund because these Funds were not offered under the Program until July 7,
1999 and October 25, 1999, respectively.
THE PERFORMANCE SHOWN DOES NOT REFLECT ANY RECORD MAINTENANCE AND REPORT OR
ENROLLMENT FEES. NO PROVISIONS HAVE BEEN MADE FOR THE EFFECT OF TAXES ON INCOME
AND GAINS OR UPON DISTRIBUTIONS. PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE
PERFORMANCE.
<PAGE>
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ANNUAL PERCENTAGE CHANGE IN FUND UNIT VALUES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
LIFECYCLE LIFECYCLE
GROWTH AGGRESSIVE ADA EQUITY FUND - FUND -
EQUITY EQUITY* FOREIGN* INDEX* CONSERVATIVE MODERATE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 34.4% 49.1% 38.2% 19.8% 5.1% 12.0%
1998 (3.2) 23.6 (5.6) 27.2 10.2 15.1
1997 26.2 19.8 5.9 31.7 9.9 16.1
1996 17.0 13.8 16.8 21.3 4.3 10.6
1995 31.1 40.2 10.0 35.1 5.9 10.1
1994 (2.3) 4.0 (0.6) 0.7 - -
1993 18.7 23.4 33.4 6.4 - -
1992 0.6 10.8 (0.6) - - -
1991 51.1 86.4 17.3 - - -
1990 (11.9) (3.3) (3.8) - - -
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
SALOMON
REAL S&P RUSSELL MSCI 3-MO.
ESTATE 500 2000 EAFE LEHMAN T-BILL CPI
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1999 9.9% 21.1% 21.3% 27.0% (2.2)% 4.7% 2.7%
1998 16.1 28.6 (2.5) 20.0 9.5 5.1 1.6
1997 9.3 33.4 22.4 1.8 9.8 5.2 1.9
1996 0.2 23.0 16.5 6.1 2.9 5.3 3.3
1995 4.4 37.5 28.4 11.2 19.2 5.7 2.9
1994 3.6 1.3 (1.8) 7.8 (3.5) 4.2 2.7
1993 (3.2) 10.0 18.9 32.6 11.0 3.1 2.7
1992 (5.2) 7.6 18.4 (12.2) 7.6 3.6 2.9
1991 (8.7) 30.5 46.1 12.5 16.1 5.8 3.0
1990 2.0 (3.1) (19.5) (23.2) 8.3 7.9 6.2
- -----------------------------------------------------------------------------------
</TABLE>
AVERAGE ANNUAL PERCENTAGE CHANGE IN
FUND UNIT VALUES - YEARS ENDING
DECEMBER 31, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
LIFECYCLE LIFECYCLE
GROWTH AGGRESSIVE ADA EQUITY FUND -- FUND -- REAL
EQUITY EQUITY* FOREIGN* INDEX CONSERVATIVE MODERATE ESTATE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Year 34.4% 49.1% 38.2% 19.8% 5.1% 12.0% 9.9%
3 Years 18.0 30.2 11.4 26.2 8.4 14.4 11.7
5 Years 20.3 28.6 12.2 26.9 N/A N/A 7.8
10 Years 14.6 24.6 10.2 N/A N/A N/A 2.6
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
SALOMON
S&P RUSSELL MSCI 3(MO.
500 2000 EAFE LEHMAN T(BILL CPI
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Year 21.1% 21.3% 27.0% (2.2)% 4.7% 2.7%
3 Years 27.6 13.1 15.8 5.6 5.0 2.0
5 Years 28.6 16.7 12.8 7.6 5.2 2.4
10 Years 18.2 13.4 7.0 7.7 5.1 2.9
- -------------------------------------------------------------------------------------------
</TABLE>
* Hypothetical results, in bold, are based on underlying mutual fund
performance before the inception of the respective Funds.
<PAGE>
- ------
32
- --------------------------------------------------------------------------------
HOW WE CALCULATE PERFORMANCE DATA
The Growth Equity Fund performance reflects actual investment experience and the
deduction of asset-based charges actually incurred by Separate Account No. 4
(Pooled) under the Program.
The Aggressive Equity Fund has invested in the Class A shares of MFS Emerging
Growth Fund since September 13, 1993, when those shares were first offered for
sale. Prior to that date, and from December 1, 1995, the Aggressive Equity Fund
invested in Class B shares of MFS Emerging Growth Fund. The Class B and Class A
shares are identical, except that the Class B shares have higher class(related
expenses than the Class A shares.
Until December 1, 1995, when it became Separate Account No. 200, the Aggressive
Equity Fund had been part of our Separate Account No. 3 (Pooled) that has its
own managed portfolio of securities. As the Class A and Class B shares of MFS
Emerging Growth Fund represent interests in the same pool of investments, we
have shown hypothetical results for the Aggressive Equity Fund for all periods
before December 1, 1995, based on the actual performance of the Class B shares.
The results shown are adjusted for the Program expense charges and expenses
incurred by the Aggressive Equity Fund when it was part of Separate Account No.
3 (Pooled). Because the expenses of the Class B shares are higher than the Class
A shares, the performance shown for periods before September 13, 1993 would have
been higher if Class A shares were available.
The ADA Foreign Fund began operations as Separate Account No. 191 on March 2,
1992. Until May 1, 1996, it invested approximately 95% of its assets in Class A
(formerly Class I) shares of Templeton Foreign Fund and the balance in an
Equitable Life short-term investment account, Separate Account No. 2A. Since May
1, 1996, the ADA Foreign Fund has been 100% invested in Class A shares of
Templeton Foreign Fund. The results shown in the tables for periods prior to
March 2, 1992, are hypothetical results and are based on the investment of 100%
of the ADA Foreign Fund's assets in Templeton Foreign Fund, consistent with the
current investment policy of the Fund. On January 1, 1993, Templeton Foreign
Fund - Class A implemented a Rule 12b-1 plan, which affects subsequent
performance. For the hypothetical calculations we have applied the Program
expense charge during those periods plus .15% in estimated other expenses to the
historical experience of the Templeton Foreign Fund.
The Equity Index Fund began operations as Separate Account No. 195 on February
1, 1994. For prior periods hypothetical results are shown. The results reflect
the actual performance of SSgA S&P 500 Index Fund beginning with 1993, the first
full year after that mutual fund began operations. For these hypothetical
calculations we have applied the Program expense charge during those periods
plus .15% in estimated other expenses to the historical investment experience of
the SSgA S&P 500 Index Fund.
The Lifecycle Fund - Conservative and the Lifecycle Fund - Moderate performance
shown reflects actual investment performance of Separate Account No. 197 and
Separate Account No. 198 for the period beginning May 1, 1995, when the Funds
commenced operations.
The Real Estate Fund performance shown reflects actual investment experience and
the deduction of asset(based charges actually incurred by Separate Account No.
30 (Pooled) under the Program during the periods indicated.
The Equity Income Fund and the ADA Blue Chip Growth Fund began operations each
as a subaccount under Separate Account No. 206 on July 7, 1999 and October 25,
1999 respectively, when the Funds commenced operations. No performance is
provided for Equity Income Fund and the ADA Blue Chip Growth Fund because these
Funds were not offered under the Program until July 7, 1999 and October 25,
1999, respectively.
<PAGE>
7 Charges and expenses
- ------
33
- --------------------------------------------------------------------------------
You will incur two general types of charges under the Program:
(1) Charges based on the value of your assets in the Trust - these apply
to all amounts invested in the Trust (including installment payout
option payments), and do not vary by plan. These are, in general,
reflected as reductions in the unit values of the investment funds or
as reductions from the rates credited to the guaranteed options.
(2) Plan and transaction charges - these vary by plan or are charged for
specific transactions, and are typically stated in a dollar amount.
Unless otherwise noted, these are deducted in fixed dollar amounts by
reducing the number of units in the appropriate investment funds and
the dollars in the guaranteed options.
For the Real Estate Fund, we base the number of units deducted on the
last unit value determined prior to the date of deduction. We deduct
amounts for the 3-year or 5-year GRA from your most recent GRA.
We make no deduction from your contributions or withdrawals for sales
expenses.
CHARGES BASED ON AMOUNTS INVESTED IN THE PROGRAM
PROGRAM EXPENSE CHARGE
We assess the Program expense charge against the combined value of Program
assets in the Trust. The purpose of this charge is to cover the expenses that we
and the ADA incur in connection with the Program.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
ANNUAL PROGRAM EXPENSE CHARGE*
--------------------------------------------
VALUE OF PROGRAM
ASSETS EQUITABLE LIFE ADA TOTAL
- ---------------------------------------------------------------------
<S> <C> <C> <C>
First $400 million .615% .025% .640%
Over $400 million .615 .020 .635
- ---------------------------------------------------------------------
</TABLE>
* The Program expense charge is determined by negotiation between us and the
Trustees. The charge is primarily based on a formula that gives effect to
total Program assets allocated to the Trust and the number of plans
enrolled in the Program. Currently, the portion paid to the ADA has been
reduced to 0.015% for all asset levels, but the ADA's portion could be
increased in the future. For the 12 months beginning May 1, 2000, the total
Program expense charge is 0.635%.
For investment options other than GRAs, the Program expense charge is calculated
based on Program assets in the Trust on January 31 in each year, and is charged
at a monthly rate of 1/12 of the relevant annual charge.
For GRAs, the Program expense charge is calculated based on Program assets in
the Trust on January 31 of each year, and is charged at a constant daily rate of
1/365 of the relevant annual charge until maturity. Subsequent changes in the
Program expense charge will not be reflected in the charge against closed GRAs.
In addition to the Program expense charge, we charge an annual investment
accounting fee of 0.02% on all amounts of Program assets invested in GRAs. This
fee is reflected in the interest rates credited to the GRAs and is calculated
and charged in the same manner as the Program expense charge.
We apply our portion of the Program expense charge toward the cost of
maintenance of the investment funds, promotion of the Program, investment funds
and Money Market Guarantee Account, 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. The ADA's part of this fee covers
developmental and administrative expenses incurred in connection with the
Program. The ADA Trustees can direct us to raise or lower the ADA's part of this
fee to reflect their expenses in connection with the Program. During 1999 we
received $8,919,753 and the ADA received $210,784 under the Program expense
charge.
<PAGE>
- ------
34
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT AND ADMINISTRATION FEES
The computation of unit values for each investment fund also reflects applicable
fees charged for investment management and administration. These charges are
based on the amount of Program assets in the investment funds at the end of the
second month prior to the day on which the calculation is made and are
calculated as set forth in "Program expense charge and investment fund operating
expenses" under "Fee Table," above.
As part of our administrative functions, we maintain records for all portfolio
transactions and cash flow control, calculate unit values, monitor compliance
with the New York Insurance Law and supervise custody matters for all the Equity
Funds.
The Real Estate Fund pays us a fee for managing that Fund and the underlying
Prime Property Fund. We impose no additional fees for our management of Prime
Property Fund. The services we provide to the Real Estate Fund include
monitoring the Real Estate Fund's holdings and liquidity. The services we
provide to Prime Property Fund include selecting real properties for purchase
and sale, managing some properties, selecting managers for other properties,
appraising the properties, accounting for receipts and disbursements for the
properties, and servicing any loans issued by Prime Property Fund. The
administration fee is to reimburse us for the additional expenses involved in
administering that Fund.
OTHER EXPENSES BORNE BY THE INVESTMENT FUNDS
Certain other expenses are charged directly to the investment funds. These
include SEC filing fees and certain related expenses such as printing of SEC
filings, prospectuses and reports, mailing costs, custodians' fees, financial
accounting costs, outside auditing and legal expenses, and other costs related
to the Program.
The Aggressive Equity, ADA Foreign, Equity Index, Equity Income and ADA Blue
Chip Growth Funds purchase and redeem shares in the MFS Emerging Growth Fund,
Templeton Foreign Fund - Class A, SSgA S&P 500 Index Fund, Putnam Equity Income
Fund, and INVESCO Blue Chip Growth Fund respectively, at net asset value. The
net asset value reflects charges for management, audit, legal, shareholder
services, transfer agent and custodian fees. For a description of charges and
expenses assessed by the MFS Emerging Growth Fund, Templeton Foreign Fund, SSgA
S&P 500 Index Fund, Putnam Equity Income Fund and INVESCO Blue Chip Growth Fund
which are indirectly borne by the Funds, please refer to the prospectuses for
each of these Underlying Mutual Funds.
The Lifecycle Funds - Conservative and Moderate purchase and redeem units in the
Lifecycle Fund Group Trusts - Conservative and Moderate, respectively, at net
asset value. The net asset value reflects charges for investment management,
audit, legal, custodian and other fees. By agreement with the ADA Trustees, we
impose a charge at the annual rate of .03% of the value of the respective assets
of the Lifecycle Funds - Conservative and Moderate. This charge compensates us
for additional legal, accounting and other potential expenses resulting from the
inclusion of the Lifecycle Fund Group Trusts and Underlying State Street Funds
among the investment options described in this prospectus. For a description of
charges and expenses assessed by the Lifecycle Fund Group Trusts, which are
indirectly borne by the Lifecycle Funds, please refer to our separate prospectus
for the Lifecycle Funds.
PLAN AND TRANSACTION EXPENSES
ADA RETIREMENT PLAN, PROTOTYPE SELF-DIRECTED PLAN AND INDIVIDUALLY-DESIGNED PLAN
FEES
RECORD MAINTENANCE AND REPORT FEE. At the end of each calendar quarter, we
deduct a record maintenance and report fee from each participant's Account
Balance. This fee is:
<TABLE>
<CAPTION>
- -------------------------------------------------------------
<S> <C>
ADA Members Retirement Plan participants $3 per quarter
Self-Directed Prototype Plan participants $3 per quarter
Investment Only $1 per quarter
- -------------------------------------------------------------
</TABLE>
<PAGE>
- ------
35
- --------------------------------------------------------------------------------
ENROLLMENT FEE. We charge an employer a non-refundable enrollment fee of $25 for
each participant enrolled under its plan. If we do not maintain individual
participant records under an individually-designed plan, we instead charge the
employer $25 for each plan or trust. If the employer fails to pay these charges,
we may deduct the amount from subsequent contributions or from participants'
account balances.
PROTOTYPE SELF-DIRECTED PLAN FEES. Employers who participate in our Prototype
Self-Directed Plan incur additional fees not payable to us, such as brokerage
and administration fees.
INDIVIDUAL ANNUITY CHARGES
ANNUITY ADMINISTRATIVE CHARGE. If a participant elects a variable annuity
payment option, we deduct a $350 charge from the amount used to purchase the
annuity. This charge reimburses us for administrative expenses associated with
processing the application for the annuity and issuing each month's annuity
payment. The minimum amount that can be converted to an annuity, so that the
charge would apply, is $5,000. Annuities purchased from other providers may also
be subject to fees and charges.
CHARGES FOR STATE PREMIUM AND OTHER APPLICABLE TAXES
We deduct a charge designed to approximate certain applicable taxes that may be
imposed on us, for example, for our state premium tax. Currently, we deduct the
charge from the amount applied to provide an annuity payout option. The current
tax charge that might be imposed on us varies by state and ranges from 0% to 5%
(1% in Puerto Rico and 5% in the U.S. Virgin Islands).
We reserve the right to deduct any applicable charges such as premium taxes from
each contribution or from distributions or upon termination of your contract. If
we have deducted any applicable tax charges from contributions, we will not
deduct a charge for the same taxes later. If, however, an additional tax is
later imposed on us when you make a partial or full withdrawal, or your contract
is terminated, or you begin receiving annuity payments, we reserve the right to
deduct a charge at that time.
GENERAL INFORMATION ON FEES AND CHARGES
We may change our investment management fees if we give the ADA Trustees 90 days
notice and comply with the conditions of our group annuity contract. We may
change the other fees and charges described above at any time with the ADA's
consent. During 1999 we received total fees and charges under the Program of
$12,601,267.
<PAGE>
Tax information
- ------
36
- --------------------------------------------------------------------------------
In this section, we briefly outline current Federal income tax rules relating to
adoption of the Program, contributions to the Program and distributions to
participants under qualified retirement plans. Certain other information about
qualified retirement plans appears here and in the SAI. We do not discuss the
effect, if any, of state tax laws that may apply.
The United States Congress has in the past considered and may in the future
consider proposals for legislation that, if enacted, could change the tax
treatment of qualified retirement plans. In addition, the Treasury Department
may amend existing regulations, issue new regulations, or adopt new
interpretations of existing laws. State tax laws or, if you are not a United
States resident, foreign tax laws, may affect the tax consequences to you or the
beneficiary. These laws may change from time to time without notice and, as a
result, the tax consequences may also change. There is no way of predicting
whether, when or in what form any such change would be adopted.
Any such change could have retroactive effects regardless of the date of
enactment. We suggest you consult your legal or tax advisor.
Because you are buying a contract to fund a retirement plan that already
provides tax deferral under Federal income tax rules, you should do so for the
contract's features and benefits other than tax deferral. The tax deferral of
the contract does not provide additional benefits.
INCOME TAXATION OF DISTRIBUTIONS TO QUALIFIED PLAN PARTICIPANTS
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.
ELIGIBLE ROLLOVER DISTRIBUTIONS. Many types of distributions from qualified
plans are "eligible rollover distributions" that can be transferred directly to
another qualified plan or traditional 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 ordinary income for
tax purposes, 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 had to include in gross income in prior years. You
may exclude from gross income a portion of each annuity or installment payment
you receive. If you (and your survivor) continue to receive payments after you
have received your cost basis in the contract, all amounts will be taxable.
IN-SERVICE WITHDRAWALS. Some plans allow in-service withdrawals of after-tax
contributions. The portion of each withdrawal attributable to cost basis is not
taxable. The portion of each withdrawal attributable to earnings is taxable.
Withdrawals are taxable only after they exceed your cost basis if they are
attributable to your pre-January 1, 1987 contributions under plans that
permitted those withdrawals as of May 5, 1986. Amounts that you include 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),
<PAGE>
- ------
37
- --------------------------------------------------------------------------------
(c) distributions due to separation from active service after age 55 and (d)
distributions you use to pay deductible medical expenses.
WITHHOLDING. In almost all cases, 20% mandatory income tax withholding will
apply to all "eligible rollover distributions" that are not directly transferred
to a qualified plan or IRA. If a distribution is not an eligible rollover
distribution, the recipient may elect out of withholding. The rate of
withholding depends on the type of distribution. See "Eligible Rollover
Distributions and Federal Income Tax Withholding" in the SAI. Under the ADA
Master Retirement Plan, we will withhold the tax and send you the remaining
amount. Under an individually designed plan or our prototype self-directed plan
we will pay the full amount of the distribution to the plan's trustee. The
trustee is then responsible for withholding Federal income tax upon
distributions to you or your beneficiary.
OTHER TAX CONSEQUENCES
Federal estate and gift taxes, state and local estate and inheritance taxes, 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 Federal, state, local and other tax considerations, you should
consult a qualified tax advisor.
<PAGE>
9 More information
- ------
38
- --------------------------------------------------------------------------------
ABOUT PROGRAM CHANGES OR TERMINATIONS
AMENDMENTS. The group annuity contract has been amended in the past and we and
the Trustees may agree to amendments in the future. No future change can affect
annuity benefits in the course of payment. If certain conditions are met, we
may: (1) terminate the offer of any of the investment options and (2) offer new
investment options with different terms.
TERMINATION. We or the ADA Trustees may terminate the group annuity contract. If
the contract is terminated, we will not accept any further contributions or
perform any recordkeeping functions after the date of termination. We then would
make arrangements with the ADA Trustees with respect to the assets held in the
investment options that we provide, subject to the following:
o transfers and withdrawals from the Real Estate Fund would continue to be
subject to the restrictions described in this prospectus and in the SAI;
o the ADA Trustees could transfer assets from the Money Market Guarantee
Account in installments over a period of time not to exceed two years;
however, during that time participants would be permitted to make
transfers to funding vehicles provided by another financial institution
(other than a money market fund or similar investment); and
o amounts allocated to the GRAs would be held until maturity.
If the ADA Trustees make arrangements with us, you may be able to continue to
invest amounts in the investment options that we provide and elect payment of
benefits through us.
IRS DISQUALIFICATION
If your plan is found not to qualify under the Internal Revenue Code, we may:
(1) return the plan's assets to the employer (in our capacity as the plan
administrator) or (2) prevent plan participants from investing in the separate
accounts.
ABOUT THE SEPARATE ACCOUNTS
Each investment fund is one of our separate accounts. We established the
separate accounts under special provisions of the New York Insurance Law. These
provisions prevent creditors from any other business we conduct from reaching
the assets we hold in our investment funds for owners of our variable annuity
contracts, including our group annuity contracts with the ADA Trustees. The
results of each separate account's operations are accounted for without regard
to Equitable Life's, or any other separate account's, operating results. We are
the legal owner of all of the assets in the separate accounts and may withdraw
any amounts we have in the separate accounts that exceed our reserves and other
liabilities under variable annuity contracts.
The separate accounts that we call the Growth Equity, Aggressive Equity, ADA
Foreign, Equity Index, Lifecycle and Real Estate Funds commenced operations in
1968, 1995, 1992, 1994, 1995, and 1986 respectively. The Aggressive Equity Fund,
which was part of our Separate Account No. 3 (Pooled), was transferred on
December 1, 1995 to Separate Account No. 200. The separate account No. 206 has
two subaccounts that we call the Equity Income Fund and the ADA Blue Chip Growth
Fund, both established in 1999. Because of exclusionary provisions, none of the
investment funds is subject to regulation under the Investment Company Act of
1940.
The Aggressive Equity, ADA Foreign, Equity Index , Equity Income and ADA Blue
Chip Growth Fund and Lifecycle Funds are used exclusively in the ADA Program.
The Growth Equity and Real Estate Funds each are "pooled" funds that are used to
fund benefits under the ADA Program and other group annuity contracts,
agreements, and tax-deferred retirement programs we administer.
ABOUT LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings is likely to have a material adverse effect
upon the separate accounts, our ability to meet our obligations under the
Program, or the distribution of group annuity contract interests under the
Program.
<PAGE>
- ------
39
- --------------------------------------------------------------------------------
ABOUT OUR INDEPENDENT ACCOUNTANTS
The following financial statements included in the SAI, and condensed financial
information included in the prospectus have been so included in reliance on the
report of PricewaterhouseCoopers LLP given on the authority of said firm as
experts in auditing and accounting:
o The financial statements for Separate Account Nos. 4, 191, 200, 206, 30 and
8 as of December 31, 1999 and for each of the periods then ended.
o The financial statements for Equitable Life as of December 31, 1999 and 1998
and for each of the three years in the period ended December 31, 1999.
o The condensed financial information for Separate Account Nos. 4, 191 and 30
for each of the seven years in the period ended December 31, 1999.
o The condensed financial information for Separate Account No. 195 for each of
the six years in the period ended December 31, 1999.
o The condensed financial information for Separate Account Nos. 197, 198 and
200 for each of the five years in the period ended December 31, 1999.
o The condensed financial information for Separate Account No. 206 for the
year ended December 31, 1999.
REPORTS WE PROVIDE AND AVAILABLE INFORMATION
We send reports annually to employers showing the aggregate Account Balances of
all participants and information necessary to complete annual IRS filings.
As permitted by the SEC's rules, we omitted certain portions of the registration
statement filed with the SEC from this prospectus and the SAI. You may obtain
the omitted information by: (1) requesting a copy of the registration statement
from the SEC's principal office in Washington, D.C., and paying prescribed fees,
or (2) by accessing the EDGAR Database at the SEC's web site at
http://www.sec.gov.
ACCEPTANCE
The employer or plan sponsor, as the case may be: (1) is solely responsible for
determining whether the Program is a suitable funding vehicle and (2) should
carefully read the prospectus and other materials before entering into a
Participation Agreement.
<PAGE>
Appendix I: Condensed financial information
- -------
A-1
- --------------------------------------------------------------------------------
These selected per unit data and ratios for the years ended December 31, 1993
through December 31, 1999 have been audited by PricewaterhouseCoopers LLP,
independent accountants, as stated in their reports included in the SAI. For
years prior to 1993, the condensed financial information was audited by other
independent accountants. The financial statements of each of the Funds as well
as the consolidated financial statements of Equitable Life are contained in the
SAI. The report for the Real Estate Fund includes an explanatory paragraph
relating to the appraised valuation of real estate investments. Information is
provided for the period that each Fund has been available under the Program,
but not longer than ten years.
GROWTH EQUITY FUND: SEPARATE ACCOUNT NO. 4 (POOLED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
INCOME AND EXPENSES CAPITAL CHANGES
----------------------------------------- ----------------------------------------
NET
REALIZED
AND
UNREALIZED NET NET ASSET NET ASSET
GAINS INCREASE VALUE AT VALUE AT
NET INVESTMENT (LOSSES) ON (DECREASE) BEGINNING END OF
YEAR ENDED EXPENSES INCOME INVESTMENTS IN UNIT OF PERIOD PERIOD
DEC. 31, INCOME (NOTE A) (LOSS) (NOTE B) VALUE (NOTE C) (NOTE D)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1999 $ 2.08 $ (4.04) $ (1.96) $ 119.97 $ 118.01 $ 343.18 $ 461.19
1998 1.84 (3.64) (1.80) (9.63) (11.43) 354.61 343.18
1997 1.77 (3.38) (1.61) 75.28 73.67 280.94 354.61
1996 1.56 (2.87) (1.31) 42.22 40.91 240.03 280.94
1995 2.10 (2.28) (.18) 57.14 56.96 183.07 240.03
1994 2.03 (2.03) .00 (4.23) (4.23) 187.30 183.07
1993* 1.97 (1.92) .05 29.46 29.51 157.79 187.30
1992 1.69 (1.75) (.06) .92 .86 156.93 157.79
1991 1.50 (1.52) (.02) 53.07 53.05 103.88 156.93
1990 2.13 (1.16) .97 (14.99) (14.02) 117.90 103.88
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
OPERATING STATISTICS
-----------------------------
RATIO OF NET NUMBER OF
RATIO OF INVESTMENT UNITS
OPERATING INCOME OUTSTANDING
EXPENSES TO (LOSS) TO AT END OF PORTFOLIO
AVERAGE NET AVERAGE NET PERIOD TURNOVER
YEAR ENDED DEC. 31, ASSETS ASSETS (IN 000'S) RATE
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999 1.05% (.51)% 1,060 72%
1998 1.05 (.52) 1,296 71
1997 1.07 (.51) 1,386 62
1996 1.10 (.50) 1,435 105
1995 1.07 (.08) 1,456 108
1994 1.11 .00 1,441 91
1993* 1.14 .03 1,431 82
1992 1.17 (.04) 1,418 68
1991 1.16 (.02) 1,350 66
1990 1.10 .92 1,295 93
- ------------------------------------------------------------------------------
</TABLE>
* Prior to July 22, 1993, Equitable Life Capital Management Corporation
("Equitable Life 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 Life Capital and became
the investment adviser to the Fund.
NOTES: See next page.
<PAGE>
- -------
A-2
- --------------------------------------------------------------------------------
A. Enrollment, annual administration and actuarial and quarterly record
maintenance and report fees are not included above and did not affect any
unit values. Defined benefit plan annual administration and actuarial and
quarterly record maintenance and report fees reduced the number of Fund
units credited to participants; enrollment fees were generally deducted from
contributions to the Program.
B. See Note 2 to Financial Statements of Separate Account No. 4 (Pooled), which
may be found in the SAI.
C. The Program became available beginning on January 1, 1968. The value for a
Growth Equity Fund unit was established at $10.00 on that date.
D. Income, expenses, gains and losses shown above pertain only to ADA
participants' accumulations attributable to the Program. Other plans also
participate in the Growth Equity Fund and may have operating results and
other supplementary data different from those shown above.
AGGRESSIVE EQUITY FUND, ADA FOREIGN FUND, EQUITY INDEX FUND, EQUITY INCOME
FUND, ADA BLUE CHIP GROWTH FUND, LIFECYCLE FUND - CONSERATIVE AND LIFECYCLE
FUND - MODERATE:
SEPARATE ACCOUNT NOS. 200, 191, 195, 206, 197 AND 198
Unit values and number of units outstanding for these Funds, since inception,
are shown below.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31,
----------------------------------------------
1992 1993 1994 1995
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggressive Equity Fund
Unit Value - - - $ 42.62
Number of units outstanding (000's) - - - 1,802
ADA Foreign Fund
Unit Value $ 9.81 $ 13.08 $ 13.01 $ 14.31
Number of units outstanding (000's) 1,692 4,220 5,537 4,769
Equity Index Fund
Unit Value - - $ 9.71 $ 13.12
Number of units outstanding (000's) - - 515 1,483
Equity Income Fund
Unit Value - - - -
Number of units outstanding (000's) - - - -
ADA Blue Chip Growth Fund
Unit Value - - - -
Number of units outstanding (000's) - - - -
Lifecycle Fund - Conservative
Unit Value - - - $ 10.59
Number of units outstanding (000's) - - - 281
Lifecycle Fund - Moderate
Unit Value - - - $ 11.01
Number of units outstanding (000's) - - - 6,924
- ---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDING DECEMBER 31, INCEPTION DATE
------------------------------------------------ ---------------
1996 1997 1998 1999
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Aggressive Equity Fund 12/1/95
Unit Value $ 48.48 $ 58.07 $ 71.77 $ 106.99
Number of units outstanding (000's) 2,237 2,295 2,348 2,295
ADA Foreign Fund 3/2/92
Unit Value $ 16.71 $ 17.69 $ 16.70 $ 23.08
Number of units outstanding (000's) 5,050 5,170 4,336 3,895
Equity Index Fund 2/1/94
Unit Value $ 15.91 $ 20.95 $ 26.65 $ 31.94
Number of units outstanding (000's) 2,100 3,713 4,890 6,399
Equity Income Fund 7/7/99
Unit Value - - - $ 8.92
Number of units outstanding (000's) - - - 475
ADA Blue Chip Growth Fund 10/25/99
Unit Value - - - $ 12.50
Number of units outstanding (000's) - - - 834
Lifecycle Fund - Conservative 5/1/95
Unit Value $ 11.04 $ 12.13 $ 13.37 $ 14.06
Number of units outstanding (000's) 409 596 1,009 906
Lifecycle Fund - Moderate 5/1/95
Unit Value $ 12.18 $ 14.14 $ 16.28 $ 18.23
Number of units outstanding (000's) 7,241 7,657 7,691 7,262
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -------
A-3
- --------------------------------------------------------------------------------
REAL ESTATE FUND: SEPARATE ACCOUNT NO. 30 (POOLED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
INCOME AND EXPENSES CAPITAL CHANGES
------------------------------------ --------------------------------------
NET
REALIZED
AND
UNREALIZED NET UNIT UNIT
NET GAINS INCREASE VALUE AT VALUE AT
INVESTMENT (LOSSES) ON (DECREASE) BEGINNING END OF
YEAR ENDED EXPENSES INCOME INVESTMENTS IN UNIT OF PERIOD PERIOD
DEC. 31, INCOME (NOTE A) (LOSS) (NOTE B) VALUE (NOTE C) (NOTE F)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1999 $ 0.05 $ (.20) $ (.15) $ 1.63 $ 1.48 $ 14.54 $ 16.02
1998 0.07 (.30) (.23) 2.10 1.87 12.67 14.54
1997 0.11 (.27) (.16) 1.36 1.20 11.47 12.67
1996 0.09 (.25) (.16) .95 .79 10.68 11.47
1995 0.06 (.25) (.19) .02 .21 10.89 10.68
1994 0.04 (.24) (.20) .65 .45 10.44 10.89
1993 0.01 (.24) (.23) .22 (.01) 10.45 10.44
1992 0.01 (.25) (.24) (.38) (.62) 11.07 10.45
1991 0.01 (.26) (.25) (.84) (1.09) 12.16 11.07
1990 0.02 (.27) (.25) .05 (0.20) 12.36 12.16
- -----------------------------------------------------------------------------------------------------
</TABLE>
REAL ESTATE FUND: SEPARATE ACCOUNT NO. 30 (POOLED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
OPERATING
STATISTICS
-------------------------------
RATIO OF NET NUMBER OF
RATIO OF INVESTMENT UNITS
OPERATING INCOME OR OUTSTANDING PORTFOLIO
EXPENSES TO (LOSS) TO AT END OF TURNOVER
YEAR ENDED AVERAGE NET AVERAGE NET PERIOD RATE
DEC. 31, ASSETS ASSETS (IN 000'S) (NOTE E)
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999 1.47% (1.10)% 436 N/A
1998 2.20 (1.66) 358 N/A
1997 2.29 (1.38) 318 N/A
1996 2.30 (1.48) 349 N/A
1995 2.26 (1.67) 371 N/A
1994 2.26 (1.87) 311 N/A
1993 2.26 (2.20) 408 N/A
1992 2.30 (2.25) 511 N/A
1991 2.21 (2.10) 515 N/A
1990 2.14 (1.96) 530 N/A
- ---------------------------------------------------------------------------
</TABLE>
A. Enrollment and quarterly record maintenance and report fees are not
included above and did not affect Real Estate Fund unit values. Quarterly
record maintenance and report fees reduced the number of Real Estate Fund
units credited to participants; enrollment fees were generally deducted
from contributions to the Program.
B. The change in the value of Prime Property Fund (Separate Account No. 8)
units owned by the Real Estate Fund and any realized gains (losses) from
the redemption of such units are included in net realized and unrealized
gain on investments. See Note 2 to Financial Statements of Separate Account
No. 30 (Pooled), which may be found in the SAI.
C. The value for a Real Estate Fund unit was established at $10.00 on August
29, 1986, the date on which the Fund commenced operations.
D. Annualized basis.
E. The Real Estate Fund invests solely in units of Equitable Life's Separate
Account Nos. 8 and 2A; thus, there is no applicable portfolio turnover rate
for the Real Estate Fund.
F. The Real Estate Fund Unit Values shown above are based on the year-end
values for Separate Account Nos. 8 and 2A. However, the unit values used
under the Program for determining Fund balances, processing transactions
and calculating performance (including Fund balances, transactions and
performance effected or reported on December 31) are based on the last Real
Estate Fund unit value determined in each relevant period and, therefore,
such unit values reflect the values of Separate Account Nos. 8 and 2A as of
dates prior to the last day of such periods.
Income, expenses, gains and losses shown above pertain only to ADA
participants' accumulations attributable to the Program. Other plans also
participate in Separate Account No. 30 (Pooled) and may have operating results
and other supplementary data different from those shown above.
<PAGE>
Statement of additional information
- -------
S-1
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Funding of the Program SAI-2
Your Responsibilities as Employer SAI-2
Procedures for Withdrawals, Distributions and
Transfers SAI-3
Types of Benefits SAI-8
Provisions of the Master Plan SAI-10
Prime Property Fund Investments SAI-14
Investment Restrictions Applicable to the Growth
Equity Fund SAI-17
How We Determine the Unit Value for the Funds SAI-17
How We Value the Assets of the Investment Funds SAI-18
Growth Equity Fund Transactions SAI-21
Prime Property Fund Transactions SAI-22
Investment Management Fee SAI-22
Underwriter SAI-22
Our Management SAI-23
Financial Statements SAI-26
CLIP AND MAIL TO US TO RECEIVE A STATEMENT OF ADDITIONAL INFORMATION
To: The Equitable Life Assurance Society
of the United States
Box 2486 G.P.O.
New York, NY 10116
Please send me a copy of the Statement of Additional Information for the
American Dental Association Members Retirement Program Prospectus dated May 1,
2000.
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Copyright 2000 by The Equitable Life Assurance Society of the United States. All
rights reserved.
<PAGE>
About Equitable Life
- --------------------------------------------------------------------------------
The Equitable Life Assurance Society of the United States ("Equitable Life") is
the issuer of the group annuity contract that funds the Program. Equitable Life
also makes forms of plans and trusts available, and offers recordkeeping and
participant services to facilitate the operation of the Program.
Equitable Life is a New York stock life insurance corporation and has been doing
business since 1859. We are a wholly-owned subsidiary of AXA Financial, Inc.
(previously The Equitable Life Companies, Incorporated). The majority
shareholder of AXA Financial, Inc. is AXA, a French holding company for an
international group of insurance and related financial services companies. As a
majority shareholder, and under its other arrangements with Equitable Life and
Equitable Life's parent, AXA exercises significant influence over the operations
and capital structure of Equitable Life and its parent. No company other than
Equitable Life's related companies, however, have any legal responsibility to
pay amounts that Equitable Life owes under the contract.
Equitable Life manages over $462.7 billion in assets as of December 31, 1999.
For more than 100 years Equitable Life has been among the largest insurance
companies in the United States. We are licensed to sell life insurance and
annuities in all fifty states, the District of Columbia, Puerto Rico, and the
U.S. Virgin Islands. Our home office is located at 1290 Avenue of the Americas,
New York, NY 10104.
<PAGE>
- --------------------------------------------------------------------------------
HOW TO REACH US
You can reach us as indicated below to obtain:
o Copies of any plans, trusts, adoption agreements, or enrollment or other
forms used in the Program.
o Unit values and other values under your plan,
o Any other information or materials that we provide in connection with the
Program.
INFORMATION ON JOINING THE PROGRAM
- --------------------------------------------------------------------------------
BY PHONE:
- --------------------------------------------------------------------------------
1-800-523-1125 (Retirement Program Specialists available weekdays 9am to 5pm
Eastern Time)
- --------------------------------------------------------------------------------
BY REGULAR MAIL:
- --------------------------------------------------------------------------------
The ADA Members Retirement Program
c/o Equitable Life, Box 2011
Secaucus, NJ 07096
- --------------------------------------------------------------------------------
BY REGISTERED, CERTIFIED, OR OVERNIGHT DELIVERY:
- --------------------------------------------------------------------------------
The ADA Members Retirement Program
c/o Equitable Life
200 Plaza Drive, Second Floor
Secaucus, NJ 07094
- --------------------------------------------------------------------------------
BY INTERNET:
- --------------------------------------------------------------------------------
The ADA Members Retirement Program website www.equitable.com/ada, provides
information about the Program, as well as several interactive tools and
resources that can help answer some of your retirement planning questions. The
website also provides an e-mail feature that can be accessed by clicking on
either "Contact us" or "Send E-Mail to the Equitable."
INFORMATION ONCE YOU JOIN THE PROGRAM
- --------------------------------------------------------------------------------
BY PHONE:
- --------------------------------------------------------------------------------
1-800-223-5790
(Account Executives available weekdays 9am to 5pm
Eastern Time)
- --------------------------------------------------------------------------------
TOLL-FREE AIM SYSTEM FOR AMOUNTS IN THE TRUST:
- --------------------------------------------------------------------------------
By calling 1-800-223-5790 you may, with your assigned personal security code,
use our Account Investment Management ("AIM") System to:
o Transfer between investment options and obtain account information.
o Change the allocation of future contributions and maturing guaranteed options
o Hear investment performance information, including investment fund unit values
and current guaranteed option interest rates.
The AIM System operates 24 hours a day. You may speak with our Account
Executives during regular business hours.
- --------------------------------------------------------------------------------
BY INTERNET FOR AMOUNTS IN THE TRUST:
- --------------------------------------------------------------------------------
By logging on to www.equitable.com/ada, Client Services you may, with your
social security number and your personal security code, use the Internet to
access certain retirement account information such as:
o Investment performance, investment fund unit values, and current guaranteed
option interest rates.
o Transfer between investment options and obtain account information (available
by the second half of 2000)
o Change the allocation of future contributions and maturing Guaranteed Rate
Accounts (available by the second half of 2000)
- --------------------------------------------------------------------------------
BY REGULAR MAIL:
- --------------------------------------------------------------------------------
(correspondence): The ADA Members
Retirement Program
Box 2486 G.P.O.
New York, NY 10116
- --------------------------------------------------------------------------------
FOR CONTRIBUTION CHECKS ONLY:
- --------------------------------------------------------------------------------
The Association Members
Retirement Program
P.O. Box 1599
Newark, NJ 07101-9764
- --------------------------------------------------------------------------------
FOR REGISTERED, CERTIFIED, OR OVERNIGHT DELIVERY:
- --------------------------------------------------------------------------------
The ADA Members Retirement Program
c/o Equitable Life
200 Plaza Drive, 2B-55
Secaucus, NJ 07094.
- --------------------------------------------------------------------------------
BY E-MAIL:
- --------------------------------------------------------------------------------
We welcome your comments and questions regarding the ADA Members Retirement
Program. If you have a comment or suggestion about the ADA website we would
appreciate hearing from you. Go to equitable.com/ada, Client Services and click
on "Contact Us" or click on "email the ADA Members Retirement Program."
No person is authorized by The Equitable Life Assurance Society of the United
States to give any information or make any representations other than those
contained in this prospectus and the SAI, of in the other printed or written
material issued by Equitable Life. You should not rely on any other information
or representation.
<PAGE>
Investment option characteristics
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH EQUITY EQUITY ADA FOREIGN
FUND FUND FUND
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Long-term growth of Long-term growth of Long-term growth of
DESIGNED FOR (OBJECTIVE) capital capital capital
- -----------------------------------------------------------------------------------------------------
INVESTS PRIMARILY IN Common stocks and Invests 100% of its Invests 100% of its
other equity-type assets in the MFS assets in the
securities generally Emerging Growth Templeton Foreign
issued by large and Fund which invests Fund-Class A which
intermediate-sized in common stocks invests primarily in
companies of emerging stocks of companies
growth companies. outside the U.S.,
including in emerging
markets.
- -----------------------------------------------------------------------------------------------------
RISK TO PRINCIPAL Average for a growth Somewhat higher Somewhat higher
fund than a growth fund than a growth fund
- -----------------------------------------------------------------------------------------------------
PRIMARY GROWTH Capital appreciation and Capital appreciation Capital appreciation
POTENTIAL THROUGH reinvested dividends and reinvested and reinvested
dividends dividends
- -----------------------------------------------------------------------------------------------------
INCOME GUARANTEE No No No
- -----------------------------------------------------------------------------------------------------
VOLATILITY OF RETURN Somewhat more volatile Highly volatile Generally depends on
than the S&P 500 stock, country and
currency selections, as
well as market factors
- -----------------------------------------------------------------------------------------------------
TRANSFERS TO OTHER Permitted daily Permitted daily Permitted daily
OPTIONS
- -----------------------------------------------------------------------------------------------------
WITHDRAWAL No No No
PENALTIES
- -----------------------------------------------------------------------------------------------------
[ALLIANCE CAPITAL LOGO] [MFS LOGO] [TEMPLETON LOGO]
</TABLE>
<TABLE>
<CAPTION>
EQUITY INDEX EQUITY INCOME ADA BLUE CHIP LIFECYCLE FUND -
FUND FUND GROWTH FUND CONSERVATIVE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Replicate the total Growth and Long-term growth of Current income
DESIGNED FOR (OBJECTIVE) return of the S&P 500 income capital and low to
Index moderate growth
of capital
- ----------------------------------------------------------------------------------------------------------------------------
INVESTS PRIMARILY IN Invests 100% of its Invests 100% of its Invests 100% of its Invests 100% of its
assets in the SSgA assets in the assets in the INVESCO assets in a mix of
S&P 500 Index Fund Putnam Equity Blue Chip Growth underlying collective
which invests in all Income Fund Fund which invests investment funds
500 stocks in the S&P which invests mostly in common maintained by State
500 Index in mostly in income stocks of large Street
proportion to their producing companies with
weighting in the Index equities, and may market capitalizations
invest in debt over $10 billion, as
securities for well as preferred stock
additional income
- ----------------------------------------------------------------------------------------------------------------------------
RISK TO PRINCIPAL Somewhat lower than Somewhat lower than Somewhat lower than Somewhat lower than
the Growth Equity Equity Funds average for a growth the Lifecycle
Fund fund Fund-Moderate
- ----------------------------------------------------------------------------------------------------------------------------
PRIMARY GROWTH Capital appreciation Reinvested dividends, Capital appreciation Capital appreciation
POTENTIAL THROUGH and reinvested capital growth and reinvested and reinvested
dividends dividends dividends and interest
- ----------------------------------------------------------------------------------------------------------------------------
INCOME GUARANTEE No No No No
- ----------------------------------------------------------------------------------------------------------------------------
VOLATILITY OF RETURN Generally equal to the Somewhat lower Somewhat more Generally lower
S&P 500 Index than the Equity Funds volatile than the than pure equity
S&P 500 funds, but degree may
vary depending on
market conditions
- ----------------------------------------------------------------------------------------------------------------------------
TRANSFERS TO OTHER Permitted daily Permitted daily Permitted daily Permitted daily
OPTIONS
- ----------------------------------------------------------------------------------------------------------------------------
WITHDRAWAL No No No No
PENALTIES
- ----------------------------------------------------------------------------------------------------------------------------
[SSGA LOGO] [PUTNAM LOGO] [INVESCO LOGO] [SSGA LOGO]
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED MONEY MARKET
LIFECYCLE FUND - RATE GUARANTEE
MODERATE REAL ESTATE FUND ACCOUNTS ACCOUNT
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Growth of capital Stable rate of Principal Principal and
DESIGNED FOR (OBJECTIVE) and reasonable return through and interest interest
level of current rental income and guaranteed- guaranteed-
income appreciation interest short term rates
rates reflect
maturities
- -----------------------------------------------------------------------------------------------------------------------------
INVESTS PRIMARILY IN Invests 100% of High-grade, Contributions credited Contributions credited
its assets in a income-producing with fixed rate of with current
mix of underlying real property interest until the guaranteed rate
collective investment maturity date of interest
funds maintained by
State Street
- -----------------------------------------------------------------------------------------------------------------------------
RISK TO PRINCIPAL Somewhat lower Lower than the Carrier providing Equitable Life
than a growth Equity Funds GRAs guarantees guarantees
fund principal and interest principal and
interest; also
backed by assets
in insulated
separate account
- -----------------------------------------------------------------------------------------------------------------------------
PRIMARY GROWTH Capital appreciation, Rental income, Interest income Interest income
POTENTIAL THROUGH reinvested dividends capital appreciation
and interest
- -----------------------------------------------------------------------------------------------------------------------------
INCOME GUARANTEE No No Yes-subject to Yes
withdrawal penalties
- -----------------------------------------------------------------------------------------------------------------------------
VOLATILITY OF RETURN Generally lower than Stable and less Carrier providing Equitable Life
pure equity funds, but volatile than the GRAs guarantees guarantees
degree may vary Equity Funds interest rate until the monthly interest
depending on market maturity date rate; also backed
conditions by assets in
insulated separate
account
- -----------------------------------------------------------------------------------------------------------------------------
TRANSFERS TO OTHER Permitted daily Permitted quarterly if Permitted only at Permitted daily
OPTIONS cash available maturity
- -----------------------------------------------------------------------------------------------------------------------------
WITHDRAWAL No No Prior to maturity, No
PENALTIES withdrawals may not
be permitted or may
be subject to a
penalty
- -----------------------------------------------------------------------------------------------------------------------------
[SSGA LOGO] [LEND LEASE LOGO] [METLIFE LOGO] [EQUITABLE LIFE LOGO]
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
MAY 1, 2000
AMERICAN DENTAL ASSOCIATION
MEMBERS RETIREMENT PROGRAM
- --------------------------------------------------------------------------------
This Statement of Additional Information ("SAI") is not a prospectus. You
should read this SAI in conjunction with Equitable Life's prospectus dated May
1, 2000 for the American Dental Association Members Retirement Program. THIS
SAI RELATES TO ALL INVESTMENT FUNDS EXCEPT THE EQUITY INDEX FUND AND LIFECYCLE
FUNDS, WHICH ARE DISCUSSED IN OUR SEPARATE SAI FOR THOSE INVESTMENT OPTIONS.
A copy of the prospectus to which this SAI relates is available at no charge by
writing to Equitable Life at Box 2486 G.P.O., New York, New York 10116 or by
calling our toll-free telephone number 1-800-223-5790. Definitions of special
terms used in this SAI are found in the prospectus.
Certain of the cross references in this SAI are contained in the prospectus
dated May 1, 2000 to which this SAI relates.
CONTENTS OF THIS SAI
<TABLE>
<CAPTION>
PAGE IN SAI
------------
<S> <C>
The Program
Funding of the Program ............................ SAI-2
Your Responsibilities as Employer ................. SAI-2
Procedures for Withdrawals, Distributions and
Transfers .................................... SAI-3
Pre-Retirement Withdrawals ...................... SAI-3
Benefit Distributions ........................... 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
Special Rules for Distributions and Transfers
from the Real Estate Fund .................. SAI-6
Real Estate Fund Withdrawals from Prime
Property Fund .............................. SAI-7
Types of Benefits ................................. SAI-8
Provisions of the Master Plan ..................... SAI-10
Plan Eligibility Requirements ................... SAI-10
Contributions to Qualified Plans ................ SAI-10
Contributions to the Master Plan ................ SAI-10
Allocation of Contributions ..................... SAI-12
The Master Plan and Section 404(c) of
ERISA ...................................... SAI-13
Vesting ......................................... SAI-13
Prime Property Fund Investments ..................... SAI-14
Holdings of Prime Property Fund ..................... SAI-15
Investment Restrictions Applicable to the Growth
Equity Fund .................................. SAI-17
How We Determine Unit Values for the Funds .......... SAI-17
The Equity Funds .................................. SAI-17
The Real Estate Fund .............................. SAI-18
How We Value the Assets of the Investment
Funds ........................................ SAI-18
The Growth Equity Fund ............................ SAI-18
Other Equity Funds ................................ SAI-19
Assets Held in Prime Property Fund ................ SAI-20
Growth Equity Fund Transactions ..................... SAI-21
Prime Property Fund Transactions .................... SAI-22
Investment Management Fee ........................... SAI-22
Underwriter ......................................... SAI-22
Our Management ...................................... SAI-23
Financial Statements ................................ SAI-26
</TABLE>
- ----------
Copyright 2000 by The Equitable Life Assurance Society of The United States.
1290 Avenue of the Americas New York, New York 10104. All rights reserved.
<PAGE>
- --------------------------------------------------------------------------------
THE PROGRAM
The Program consists of the Master Plan, Self-Directed Prototype Plan and
Investment Only plans made available to members of the American Dental
Association and their eligible employees. The following information regarding
the Program is provided solely to provide a more complete understanding of how
the investment funds available under Equitable Life's group annuity contract
operate within the Program. In addition to issuing the group annuity contract
under which the investment funds are available, we also provide administrative
support, recordkeeping and marketing services in connection with the Program.
We provide these services pursuant to an administrative services agreement
between the ADA Trustees and Equitable Life. This administrative services
agreement would normally terminate when the group annuity contract with
Equitable Life ("the contract") terminates.
FUNDING OF THE PROGRAM
The Program is primarily funded through a group annuity contract (contract)
issued to the ADA Trustees by Equitable Life. The ADA Trustees have also
entered into two group annuity contracts with Metropolitan Life Insurance
Company relating to Guaranteed Rate Accounts opened during the one year period
beginning July 28, 1999. All other investment options are covered by the
contract with Equitable Life. The ADA Trustees hold all contracts for the
benefit of employers and participants in the Program.
The ADA Trustees and Equitable Life also have an administrative services
agreement for administrative support, recordkeeping and marketing services
provided by Equitable Life. This agreement would normally terminate when the
group annuity contract with Equitable Life terminates.
YOUR RESPONSIBILITIES AS EMPLOYER
If you adopt the Master 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
format (including contribution type and fiscal year);
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;
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
as soon as possible. In any event, no later than the 15th business day
of the month following the month in which the employer withholds or
receives participant contributions;
SAI-2
<PAGE>
- --------------------------------------------------------------------------------
o selecting interest rates and monitoring default procedures if you
elect the loan provision in your plan; and
o providing us with written instructions for allocating amounts in the
plan's forfeiture account.
If you, as an employer, have an individually designed plan, your
responsibilities will not be increased in any way by adopting the Pooled Trust
for investment only. 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 can provide guidance and assistance in the performance of your
responsibilities. If you have questions about any of your obligations, you can
contact our Account Executives at 1-800-223-5790 or write to us at Box 2486
G.P.O., New York, New York 10116.
PROCEDURES FOR WITHDRAWALS, DISTRIBUTIONS AND TRANSFERS
PRE-RETIREMENT WITHDRAWALS. Under the Master Plan, self-employed persons
generally may not receive a distribution prior to age 59 1/2, and employees
generally may not receive a distribution prior to separation from service.
However, if the Master Plan is maintained as a profit sharing plan, you may
request distribution of benefits after you reach age 59 1/2 even if you are
still working. If the Master Plan is maintained as a 401(k) plan and you are
under age 59 1/2, you may withdraw your own 401(k) contributions only if you
can 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 401(k) plan).
If your employer terminates the plan, all amounts (subject to GRA restrictions)
may be distributed to participants at that time (except salary deferral amounts
if there is a successor plan.)
You may withdraw all or part of your account balance under the Master 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 "Tax Information" in the
prospectus.
We pay all benefit payments (including withdrawals due to plan terminations) in
accordance with the rules described below in the "Benefit Distributions"
discussion. We effect all other participant withdrawals as of the close of the
business day we receive the properly completed form.
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 Requirement" 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.
Transfers and withdrawals from the Aggressive Equity Fund, the ADA Foreign
Fund, the ADA Blue Chip Growth Fund, the Equity Index Fund and the Equity
Income Fund may be delayed if there is any delay in redemption of shares of the
respective mutual funds in which the Funds invest. We generally do not expect
any delays.
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Transfers and withdrawals from the Lifecycle Funds--Conservative and Moderate
may be delayed if there is any delay in redemption of units of the Lifecycle
Fund Group Trusts. We generally do not expect any such delays.
Special rules apply to withdrawals from the Real Estate Fund. See "Special
Rules for Distributions and Transfers from the Real Estate Fund" below.
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" BELOW.
TRANSFERS FROM THE ADA FOREIGN FUND, ADA BLUE CHIP GROWTH FUND, EQUITY INDEX
FUND, AGGRESSIVE EQUITY FUND, EQUITY INCOME FUND AND LIFECYCLE
FUNDS--CONSERVATIVE AND MODERATE ARE PERMITTED DAILY EXCEPT UNDER INFREQUENT
CIRCUMSTANCES WHEN THE WITHDRAWALS MAY BE SUBJECT TO A DELAY. SEE "BENEFIT
DISTRIBUTIONS" BELOW. IN ADDITION, THE REAL ESTATE FUND IS SUBJECT TO SPECIAL
WITHDRAWAL RULES WHICH ARE DESCRIBED UNDER "SPECIAL RULES FOR DISTRIBUTIONS AND
TRANSFERS FROM THE REAL ESTATE FUND" BELOW.
BENEFIT DISTRIBUTIONS. In order for you to begin receiving benefits under the
Master Plan, your employer must send us your properly completed Election of
Benefits form and, if applicable, Beneficiary Designation form. Benefit
payments will be made according to the provisions of your plan.
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 a variable annuity contract from us. Fixed
annuities are available from insurance companies selected by the Trustees. See
"Types of Benefits." We will pay annuity payments directly to you and payments
will commence according to the provisions of your plan.
Please note that we use the value of your vested benefits at the close of the
business 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 buy a fixed annuity,
your check will come from the insurance company you selected. If you are
withdrawing more than $50,000 and you would like expedited delivery at your
expense, you may request it on your Election of Benefits form.
If a participant in the Master Plan dies without designating a beneficiary, the
vested benefit will automatically be paid to the spouse or, if the participant
is not married, to the first surviving class of his or her (a) children, (b)
parents and (c) brothers and sisters. If none of them survive, the
participant's vested benefit will be paid to the participant's estate. If a
participant in our prototype self-directed plan dies without designating a
beneficiary, the vested benefit will automatically be paid to the spouse or, if
the participant is not married, to the first surviving class of his or her (a)
children, (b) grandchildren, (c) parents, (d) brothers and sisters and (e)
nephews and nieces. If none of them survive, the participant's vested benefit
will be paid to the participant's estate.
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 traditional 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 plan 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:
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o hardship withdrawals of salary deferred contributions from 401(k)
plans;
o certain corrective distributions under Code Section 401(k) plans;
o 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 we make a distribution 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.
If a distribution is not an "eligible rollover distribution", we will withhold
income tax 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, your money remains in
the GRAs until maturity. All such GRAs will be held in the Pooled Trust under
the investment-only arrangement. See "Guaranteed Rate Accounts" in the
prospectus.
The Program does not permit withdrawals before maturity unless your plan
permits them and they are exempt or qualified, as explained below. You may take
exempt withdrawals without penalty at any time. Qualified withdrawals are
subject to a penalty. There are no qualified withdrawals 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 that is available under the withdrawal rules for
exempt and qualified withdrawals will be used first. Please note that
withdrawals, transfers, reallocations on maturity and benefit distributions
from GRAs provided by a carrier other than Equitable Life are subject to
Equitable Life's receipt of the proceeds of such GRA from such carrier.
Exempt Withdrawal. Amounts may be withdrawn without penalty from a GRA prior to
its maturity if:
o you are a dentist 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 dentist and you attain age 59 1/2 or terminate
employment (including retirement);
o you are disabled;
o you attain age 70 1/2; or
o you die.
Qualified Withdrawal. You may withdraw amounts with a penalty from a GRA prior
to its maturity if you are a dentist and are taking payments 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:
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(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.
We will never reduce your original contributions by this adjustment. We make no
adjustment if the current three-year GRA rate is equal to or less than the rate
for the GRA from which we make the qualified withdrawal. We calculate a
separate adjustment for each GRA. If the interest accumulated in one GRA is
insufficient to recover the amount calculated under the formula, we may deduct
the excess as necessary from interest accumulated in other GRAs of the same
duration.
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. Your confirmation notice lists the maturity date for each GRA
you hold.
You may arrange in advance for the reinvestment of your maturing GRAs by using
the AIM System or accessing the website on the Internet. (GRA maturity
allocation change requests received on a business day before 4:00 P.M. Eastern
Time are effective four days after we receive them. GRA maturity allocation
change requests received after 4:00 P.M. Eastern Time or on a non-business day
are effective four days after the next business day after we receive them.)
o The instructions you give us remain in effect until you change them
(again, your GRA maturity allocation change request will be processed
as described above).
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 never provided GRA maturity instructions, your maturing
GRAs will be allocated to the Money Market Guarantee Account.
SPECIAL RULES FOR DISTRIBUTIONS AND TRANSFERS FROM THE REAL ESTATE FUND. At
times of insufficient liquidity, we may delay withdrawals from the Real Estate
Fund and Prime Property Fund in accordance with the procedures described below.
As of the date of this SAI, the Real Estate Fund is fulfilling withdrawal
requests on a current basis. You may call us to receive current information
regarding the status of Real Estate Fund withdrawals. See "Special Risks
Related to the Real Estate Fund" in the prospectus for more information.
THERE IS A MINIMUM WAIT OF ONE CALENDAR QUARTER FOR WITHDRAWALS FROM THE REAL
ESTATE FUND. All distributions and transfers from the Real Estate Fund are
scheduled to be made shortly after the end of the calendar quarter following
the quarter in which we receive properly completed withdrawal request forms.
The amount distributed is based on the Real Estate Fund's unit value on the
date distribution is made. Withdrawals from the Real Estate Fund must be made
in amounts of at least $1,000 or, if less, your balance in the Real Estate
Fund.
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IN ADDITION TO THE WAIT OF AT LEAST ONE CALENDAR QUARTER WHICH IS REQUIRED BY
OUR PROCEDURES, IT IS ALSO POSSIBLE THAT THE REAL ESTATE FUND MAY NOT HAVE
ENOUGH CASH TO MAKE ALL WITHDRAWALS AND TRANSFERS WHEN REQUESTED. If at the end
of a calendar quarter the Real Estate Fund does not have enough cash to pay all
scheduled withdrawals, the withdrawals will be divided into two priority
categories:
o Priority 1 consists of all amounts requested because of death or
disability or after age 70 1/2.
o Priority 2 consists of all other requests.
The Real Estate Fund will satisfy all scheduled Priority 1 distribution
requests before it satisfies any Priority 2 request, even if the Priority 1
requests were received after the Priority 2 requests. If the Real Estate Fund
does not have enough cash to make all Priority 1 distributions, distributions
will be paid in the order that requests are received. After making all Priority
1 distributions, the Real Estate Fund will make Priority 2 distributions and
transfers. If the Real Estate Fund is unable to satisfy all scheduled Priority
2 distributions and transfer requests, the requests will be paid in the order
that requests are received.
To make Priority 1 distributions, the Real Estate Fund will use substantially
all its liquid assets, keeping only a reserve that we believe is adequate for
anticipated expenses. If possible, the Real Estate Fund will also liquidate as
much of its interest in Prime Property Fund as required. With regard to
Priority 2, we will make distributions and transfers to the extent that funds
are available from cash flow and from liquidation of Prime Property Fund units.
However, we will not make Priority 2 distributions and transfers if the Real
Estate Fund cannot liquidate enough of its interest in Prime Property Fund and
we believe that it would be desirable to maintain liquidity to meet anticipated
Priority 1 distributions.
Requests that remain unpaid will be scheduled for the next quarterly
distribution date. At that time these requests will be satisfied to the extent
possible, in accordance with their respective priorities and order of receipt.
Please note that if you make a Priority 2 request that is not paid when
scheduled, Priority 1 distributions requested in later quarters may be paid
before your Priority 2 request.
REAL ESTATE FUND WITHDRAWALS FROM PRIME PROPERTY FUND. If the Real Estate Fund
does not have enough liquid assets to pay all requested withdrawals, it will
seek to withdraw some or all of its interest from Prime Property Fund. We may
postpone withdrawals from Prime Property Fund, however, for such time as we
reasonably consider necessary to obtain the amount to be withdrawn or to
protect the interests of other participants in Prime Property Fund. In making
this determination, we consider primarily (i) the availability of cash to
manage Prime Property Fund's property holdings, to meet emergencies and to meet
commitments for property acquisitions and loans, (ii) the time necessary to
dispose of properties and (iii) any adverse impact of proposed property sales
on other participants in Prime Property Fund.
If withdrawal from Prime Property Fund is restricted, any payment from Prime
Property Fund is applied pro rata to the withdrawal requests of all
participants in Prime Property Fund that are eligible for payment on the
withdrawal date, regardless of when those requests were made. Prime Property
Fund withdrawal requests not satisfied by a pro rata distribution are deferred
until the next withdrawal date (generally the last business day of the
following quarter), at which time the amount available for distribution will
again be applied pro rata to all pending requests. For purposes of this policy,
the Real Estate Fund is considered a single participant in Prime Property Fund,
on a par with each other participant in Prime Property Fund. From the first
quarter of 1995 through the third quarter of 1995, Prime Property Fund
satisfied all participant withdrawal requests. As of the fourth quarter of
1995, Prime Property Fund was unable to satisfy all participant withdrawal
requests. Consequently, withdrawals from Prime Property Fund are being
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delayed in accordance with the procedures discussed above. However, since June
1994 the Real Estate Fund has had sufficient liquidity, and we have not
restricted withdrawals. If the Real Estate Fund experiences periods of
insufficient liquidity withdrawals may be delayed as described above under
"Special Rules for Distributions and Transfers from the Real Estate Fund."
There have been other periods when there was insufficient available cash in
Prime Property Fund to meet all withdrawal requests. During these other periods
Real Estate Fund withdrawals were not delayed or restricted in any manner
because the Real Estate Fund was sufficiently liquid.
A withdrawal from Prime Property Fund by one or more of its larger investors
could significantly reduce its cash position and increase the likelihood that
the Real Estate Fund would not have cash sufficient to meet all withdrawal
requests. At December 31, 1999 there were 152 plans in Prime Property Fund,
none of which held more than 5.2% of Prime Property Fund.
TYPES OF BENEFITS
Under the Master Plan, and under most self-directed prototype plans, you may
select one or more of the following forms of distribution once you are eligible
to receive benefits. If your employer has adopted an individually designed plan
or a self-directed prototype profit sharing plan that does not offer annuity
benefits, not all of these distribution forms may be available to you. 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 prior to the last death. THE LAW REQUIRES THAT IF THE
VALUE OF YOUR VESTED BENEFITS EXCEEDS $5,000, YOU MUST RECEIVE A QUALIFIED
JOINT AND SURVIVOR ANNUITY UNLESS YOUR SPOUSE CONSENTS IN WRITING TO A CONTRARY
ELECTION. Please see "Spousal Consent Requirements" below.
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 $5,000 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
investment options you designate, other than the Real Estate Fund; each payment
will be drawn pro rata from all the investment options you have selected. You
may not leave or place any assets in the Real Estate Fund. If you 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, subject to IRS minimum distribution rules and beneficiary
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 prior
to your death.
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.
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JOINT AND SURVIVOR ANNUITY. An annuity providing monthly payments for your life
and that of your beneficiary. You may specify the percentage of the original
annuity payment to be made to your beneficiary. Subject to legal limitations,
that percentage may be 100%, 75%, 50%, or any other 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 your 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.
FIXED AND VARIABLE ANNUITY CHOICES
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. All
forms of variable annuity benefits under the Program will be provided by us.
The payments under variable annuity options 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.
Fixed annuities will be issued by insurance companies selected by the ADA
Trustees from time to time. We do not currently offer fixed annuities under the
Program. Upon your request, the companies selected by the Trustees will provide
annuity benefit information. We have no further responsibility for the amount
used to purchase a fixed annuity once it has been sent to the insurance company
you select. The cost of a fixed annuity is determined by each issuing insurance
company. Your Account Executive has more details regarding the insurance
companies currently providing annuity benefits under the Program.
SPOUSAL CONSENT REQUIREMENTS
Under the Master Plan and the self-directed prototype plan, you may designate a
non-spouse beneficiary any time after the earlier of: (1) the first day of the
plan year in which you attain age 35, or (2) 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 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 consents not just to a specific beneficiary or, with
respect to the waiver of the Qualified Joint and Survivor Annuity, the form of
distribution, but 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. 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 prototype
profit sharing plans that do not offer life annuity benefits.
PROVISIONS OF THE MASTER PLAN
PLAN ELIGIBILITY REQUIREMENTS. Under the Master Plan, the employer specifies
the eligibility requirements for its plan in the Adoption 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 employer may also exclude salaried dentists (those with no ownership
interest in the practice), employees of related employers, leased employees and
certain other types of employees at the employer's election, provided such
exclusion does not cause the plan to discriminate in favor of "highly
compensated" employees (defined below). The Master Plan provides that a 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. We outline below the current Federal income
tax rules relating to contributions under qualified retirement plans. This
outline assumes that you are not a participant in any other qualified
retirement plan.
The employer deducts contributions to the plan in the year it makes them. As a
general rule, an employer must make contributions for any year by the due date
(including extensions) for filing its Federal income tax return for that year.
However, Department of Labor ("DOL") rules generally require that the employer
contribute participants' salary deferral (or post-tax employee contribution)
amounts under a 401(k) plan as soon as possible after the payroll period
applicable to a deferral. In any event, the employer must make these
contributions no later than the 15th business day of the month following the
month in which the employer withholds or receives participant contributions.
If the employer contributes more to the plan than it may deduct under the rules
we describe below, the employer (a) may be liable for a 10% penalty tax on that
nondeductible amount and (b) may risk disqualifying the plan.
CONTRIBUTIONS TO THE MASTER PLAN. The employer makes annual contributions to
its plan based on the plan's provisions.
An employer that adopts the Master Plan as a profit sharing plan makes
discretionary contributions as it determines annually. The aggregate employer
contribution to the plan, including all participants' salary deferrals under a
401(k) arrangement, may not exceed 15% of all participants' taxable
compensation for the plan year. For plan purposes, compensation for
self-employed persons does not include deductible plan contributions on behalf
of the self-employed person.
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A 401(k) arrangement is available as part of the profit sharing plan. Employees
may make pre-tax contributions to a plan under a 401(k) arrangement. The
maximum amount that highly compensated employees may contribute depends on (a)
the amount that non-highly compensated employees contribute and (b) the amount
the employer designates as a nonforfeitable 401(k) contribution. Different
rules apply to a SIMPLE 401(k) or safe harbor 401(k).
For 2000, a "highly compensated" employee, for this purpose, is (a) an owner of
more than 5% of the practice, or (b) anyone with earnings of more than $80,000
from the practice in 1999. 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 $10,500 for 2000, reduced by that employee's
salary reduction contributions to simplified employee pension plans established
before 1997 (SARSEPs), SIMPLE plans, employee contributions to tax deferred
Section 403(b) arrangements, and contributions deductible by the employee under
a trust described under Section 501(c)(18) of the Internal Revenue Code. The
maximum amount a participant may defer in a SIMPLE 401(k) plan for 2000 is
$6,000.
Employers may adopt a safe harbor 401(k) arrangement. Under this arrangement,
an employer agrees to offer a matching contribution equal to (a) 100% of salary
deferral contributions or equal to up to 3% of compensation and (b) 50% of
salary deferral contributions that exceed 3% but are less than 5% of
compensation or a 2% non-elective contribution to all eligible employees. These
contributions must be non-forfeitable. If the employer makes these
contributions and meets the notice requirements for safe harbor 401(k) plans,
the plan is not subject to non-discrimination testing on salary deferral and
matching or non-elective contributions described above.
If the employer adopts the Master Plan as a defined contribution pension plan,
its contribution is equal to the percentage of each participant's compensation
that the Adoption Agreement specifies.
Under any type of plan, an employer must disregard compensation in excess of
$170,000 in 2000 in making contributions. An employer may integrate
contributions with Social Security. This means that contributions, for each
participant's compensation, that exceed the integration level may be greater
than contributions for compensation below the integration level. The Federal
tax law imposes limits on this excess. Your Account Executive can help you
determine the legally permissible contribution.
Contributions for non-key employees must be at least 3% of compensation (or,
under the profit sharing plan, the percentage the employer contributes for key
employees, if less than 3%). In 2000, "key employee" means (a) an owner of one
of the ten largest (but more than 1/2%) interests in the practice with earnings
of more than $30,000, or (b) an officer of the practice with earnings of more
than $67,500 or (c) an owner of more than 5% of the practice, or (d) an owner
of more than 1% of the practice 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) on those contributions. Post-tax
contributions are subject to complex rules under which the maximum amount that
a highly compensated employee may contribute depends on the amount that
non-highly employees contribute. BEFORE PERMITTING ANY HIGHLY-COMPENSATED
EMPLOYEE TO MAKE POST-TAX CONTRIBUTIONS, THE EMPLOYER SHOULD VERIFY THAT IT HAS
PASSED ALL NON-DISCRIMINATION TESTS. If an employer employs only "highly
compensated" employees (as defined above), the plan will not accept post-tax
contributions. In addition, the employer may make matching contributions to
certain plans, i.e., contributions based on the amount of post-tax or pre-tax
401(k) contributions that plan participants make. Special non-discrimination
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rules apply to matching contributions. These rules may limit the amount of
matching contributions that an employer may make for highly compensated
employees. These non-discrimination rules for matching contributions generally
do not apply to SIMPLE and safe harbor 401(k) plans.
Contributions (including forfeiture amounts) for each participant may not
exceed the lesser of (a) $30,000 or (b) 25% of the participant's earnings
(excluding, in the case of self-employed persons, all deductible plan
contributions). The participant's post-tax contributions count toward 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
contributions, 401(k) non-elective contributions, 401(k) elective
contributions, post-tax employee contributions SIMPLE employer, safe harbor
non-elective, safe harbor matching and employer matching contributions. We will
also account separately for any amounts rolled over from a previous employer's
plan. Our records will also reflect each participant's percentage 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 the participant's
account balance in each investment option attributable to each type of
contribution. Based on information that you supply, we will run the required
special non-discrimination tests (Actual Deferral Percentage and Actual
Contribution Percentage) applicable to (a) 401(k) plans (other than SIMPLE
401(k) and safe harbor 401(k)) and (b) plans that accept post-tax employee
contributions or employer matching contributions.
Non-discrimination tests do not apply to SIMPLE 401(k) plans, if the employer
makes (a) a matching contribution equal to 100% of the amount each participant
deferred, up to 3% of compensation, or (b) a 2% non-elective contribution to
all eligible employees. The employer must also follow the notification and
filing requirements outlined in the SIMPLE 401(k) model amendment to the Master
Plan to avoid non-discrimination tests.
Under a SIMPLE 401(k) the employer must offer all eligible employees the
opportunity to defer part of their salary into the plan and make either a
matching or non-elective contribution. The matching contribution must be 100%
of the salary deferral amount up to 3% of compensation. The non-elective
contribution is 2% of compensation, the employer must make it for all eligible
employees, even those not deferring. The matching or non-elective contribution
must be non-forfeitable. The employer must notify employees which contribution
the employer will make 60 days before the beginning of the year.
Elective deferrals to a 401(k) plan are subject to applicable FICA (social
security) and FUTA (unemployment) taxes.
ALLOCATION OF CONTRIBUTIONS. You, as employer or participant, may allocate
contributions among any number of the investment options. You may change
allocation instructions at any time, and as often as needed, by calling the AIM
System or accessing the website on the Internet. New instructions become
effective on the business day we receive them. Employer contributions may be
allocated in different percentages than employee contributions. The allocation
percentages elected for employer contributions automatically apply to any
401(k) qualified non-elective contributions, qualified matching contributions,
employer matching contributions, SIMPLE employer, safe harbor non-elective and
safe harbor matching contributions. Your allocation percentages for employee
contributions automatically apply to any post-tax employee contributions and
401(k) salary deferral contributions. IF WE HAVE NOT RECEIVED VALID
INSTRUCTIONS, WE WILL ALLOCATE CONTRIBUTIONS TO THE MONEY MARKET GUARANTEE
ACCOUNT. You may, of course, transfer to another investment option at any time.
SAI-12
<PAGE>
- --------------------------------------------------------------------------------
THE MASTER PLAN AND SECTION 404(C) OF ERISA. The Master 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, (a) make a broad range of
investment choices available to participants and beneficiaries and (b) provide
them with adequate information to make informed investment decisions. The
Investment Options and documentation available under the ADA Program provide
the broad range of investment choices and information needed in order to meet
the requirements of Section 404(c). However, while our suggested summary plan
descriptions, annual reports, prospectuses, and confirmation notices provide
the required investment information, the employer is responsible for
distributing this information in a timely manner to participants and
beneficiaries. You should read this information carefully before making your
investment decisions.
VESTING. Vesting refers to the participant's rights with respect to that
portion of a participant's Account Balance attributable to employer
contributions under the Master Plan. If a participant is "vested," the amount
or benefit in which the participant is vested belongs to the participant, and
may not be forfeited. The participant's Account Balance attributable to (a)
401(k) contributions (including salary deferral, qualified non-elective and
qualified matching contributions), (b) post-tax employee contributions and (c)
rollover contributions always belong to the participant, and is nonforfeitable
at all times.
A participant becomes 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 vested under the plan's vesting schedule are forfeited. The
normal retirement age is 65 under the Master Plan unless the employer elects a
lower age on its adoption agreement.
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>
If the plan requires more than one year of service for participation in the
plan, the plan must use Schedule A or one at least as favorable to
participants.
All contributions to a SIMPLE 401(k) plan are 100% vested and not subject to
the vesting schedule above. This rule, however, does not apply to employer and
matching contributions made to a plan before the plan is amended to become a
SIMPLE 401(k) plan. Non-elective and matching contributions required under a
safe harbor 401(k) arrangement are 100% vested and not subject to the vesting
schedule above.
SAI-13
<PAGE>
- --------------------------------------------------------------------------------
PRIME PROPERTY FUND INVESTMENTS
Since typically 85% to 100% of the Real Estate Fund's assets are invested in
Prime Property Fund, we provide the following information about the investments
of Prime Property Fund. See "The Real Estate Fund-Investment Strategies" in the
prospectus for a description of Prime Property Fund's real estate investment
strategies and borrowing policies.
At December 31, 1999, Prime Property Fund held 95 investments in wholly-owned
properties and equities in partnerships with an aggregate market value of $3.1
billion.
Prime Property Fund seeks to diversify its property portfolio by type and
location. Prime Property Fund's major holdings (in wholly-owned properties and
equities in partnerships) as of December 31, 1999 included:
o 13 retail properties, primarily super-regional shopping centers, with
an aggregate market value of $1.0 billion.
o 26 office properties, with an aggregate market value of $1.4 billion.
o 45 industrial properties (primarily warehouses) and research and
development facilities, with an aggregate market value of $398.7
million.
o 4 hotels, with an aggregate market value of $103.8 million.
o 7 other properties, which include any other income-producing
properties not specifically mentioned above, with an aggregate market
value of $133.2 million.
In addition to wholly-owned properties and equities in partnerships, Prime
Property Fund has 4 investments in mortgage loans receivable with an aggregate
market value of $260.3 million, or 7.8% of Prime Property Fund's investments.
Mortgages and common stock may be accepted as partial consideration for
properties sold.
BORROWINGS. Borrowings on seven wholly-owned properties held in Prime Property
Fund as of December 31, 1999 are summarized below.
- --------------------------------------------------------------------------------
Summary of Borrowings*--December 31, 1999
Number of mortgages payable ......................... 5
Number of encumbered properties ..................... 7
Outstanding secured borrowings (millions) ........... $ 399.4
Outstanding unsecured borrowings (millions) ......... $ 516.3
Borrowings as a percent of total assets ............. 26.9%
- ----------
*Prime Property Fund also held interests in real estate partnerships having
total assets of $1.2 billion and total liabilities of $518 million.
- --------------------------------------------------------------------------------
SAI-14
<PAGE>
- --------------------------------------------------------------------------------
HOLDINGS OF PRIME PROPERTY FUND
Below we provide charts that describe the investments in wholly-owned
properties, partnership equities and mortgage-loan receivables and REIT stock
of Prime Property Fund as of December 31, 1999 and for the other periods
indicated.
- -------------------------------------------------------------------------------
DISTRIBUTION OF INVESTMENT VALUE BY TYPE AND LOCATION* (BY PERCENTAGE) --
DECEMBER 31, 1999
- -------------------------------------------------------------------------------
SOUTH EAST MID-WEST WEST TOTAL
- -------------------------------------------------------------------------------
Industrial/R&D 3.2% 2.4% 1.0% 5.4% 12.0%
Office -- 25.5 5.7 14.5 45.7
Retail 2.6 11.7 9.8 11.0 35.1
Hotel 1.0 2.1 -- -- 3.1
Other 0.9 1.8 1.4 -- 4.1
- -------------------------------------------------------------------------------
Total 7.7% 43.5% 17.9% 30.9% 100.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
DISTRIBUTION OF INVESTMENTS BY TYPE AND LOCATION* (BY NUMBER OF INVESTMENTS) --
DECEMBER 31, 1999
- -------------------------------------------------------------------------------
SOUTH EAST MID-WEST WEST TOTAL
- -------------------------------------------------------------------------------
Industrial/R&D 12 9 5 19 45
Office -- 15 6 7 28
Retail 2 5 5 3 15
Hotel 2 2 -- -- 4
Other 1 4 2 -- 7
- -------------------------------------------------------------------------------
Total 17 35 18 29 99
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
DISTRIBUTION OF INVESTMENT VALUE BY LOCATION* (BY PERCENTAGE) -- DECEMBER 31,
- -------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
--------- ---------- --------- ---------- ---------- ----------
South 7.7% 11.2% 14.6% 17.7% 18.5% 19.7%
East 43.5 44.0 41.2 35.4 35.0 31.0
Mid-West 17.9 15.9 15.3 22.9 24.0 27.3
West 30.9 28.9 27.1 24.0 22.5 22.0
Not Applicable -- -- 1.8 -- -- --
- -------------------------------------------------------------------------------
- ------------------
* Each region comprises the states indicated:
South: Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma,
Tennessee, Texas
East: Connecticut, Delaware, District of Columbia, Kentucky, Maine, Maryland,
Massachusetts, New Hampshire, New Jersey, New York, North Carolina,
Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, West Virginia
Mid-West: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri,
Nebraska, North Dakota, Ohio, South Dakota, Wisconsin
West: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New
Mexico, Oregon, Utah, Washington, Wyoming
SAI-15
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
DISTRIBUTION OF INVESTMENT VALUE BY PROPERTY TYPE (BY PERCENTAGE) -- DECEMBER 31,
- -----------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Industrial/R&D 12.0% 13.7% 14.0% 11.6% 11.0% 10.6%
Office 45.7 45.0 37.1 30.6 30.1 24.9
Retail 35.1 35.5 40.8 53.0 54.4 60.8
Hotel 3.1 3.2 5.1 3.7 3.5 3.2
Other 4.1 2.6 3.0 1.1 1.0 0.5
- -----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
DISTRIBUTION OF INVESTMENT VALUE BY TYPE OF OWNERSHIP (BY PERCENTAGE) -- DECEMBER 31,
- --------------------------------------------------------------------------------------
WHOLLY-OWNED EQUITY IN MORTGAGE
REAL ESTATE* PARTNERSHIPS LOANS RECEIVABLE TOTAL
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial/R&D 11.5% 0.5% -- 12.0%
Office 35.3 7.5 2.9% 45.7
Retail 27.9 2.3 4.9 35.1
Hotel 3.1 -- -- 3.1
Other 2.3 1.8 -- 4.1
- --------------------------------------------------------------------------------------
Total 80.1% 12.1% 7.8% 100.0%
- --------------------------------------------------------------------------------------
</TABLE>
* Title to wholly-owned properties allocated to Prime Property Fund is
generally held in Equitable Life's name.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
DISTRIBUTION OF INVESTMENTS BY VALUE RANGE* -- DECEMBER 31, 1999
- ----------------------------------------------------------------------
INVESTMENT PERCENTAGE OF
VALUE PERCENTAGE OF NUMBER OF TOTAL NUMBER
(MILLIONS) INVESTMENT VALUE INVESTMENTS OF INVESTMENTS
- ----------------------------------------------------------------------
<S> <C> <C> <C>
Under $2.5 0.4% 7 7.1%
$ 2.5-$5 2.0 17 17.2
$ 5-$10 4.5 19 19.2
$ 10-$20 6.1 15 15.1
$ 20-$50 20.4 20 20.2
$ 50-$100 33.8 15 15.1
Over $100 32.8 6 6.1
- ----------------------------------------------------------------------
Total 100.0% 99 100.0%
- ----------------------------------------------------------------------
</TABLE>
* Includes all investments stated at the Fund's ownership share.
SAI-16
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT RESTRICTIONS APPLICABLE TO THE GROWTH EQUITY FUND
The Growth Equity Fund will not:
o trade in foreign exchange (except transactions incidental to the
settlement of purchases or sales of securities);
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; purchase or write puts
and calls (options);
o purchase real estate or mortgages, except as stated below. The Fund
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. The 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;
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.
o 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.
HOW WE DETERMINE UNIT VALUES FOR THE FUNDS
THE EQUITY FUNDS. We determine the unit value for each Equity Fund at the end
of each business day. The unit value for each Fund is calculated by first
determining a gross unit value, which reflects only investment performance, and
then adjusting it for Fund expenses to obtain the Fund unit value. We determine
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 (for
the Growth Equity Fund we also subtract any 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.
SAI-17
<PAGE>
- --------------------------------------------------------------------------------
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
other expenses times the number of days since the end of the preceding month.
THE REAL ESTATE FUND. We determine the unit value for the Real Estate Fund once
each month, generally as of the close of business on the first business day
after the day the unit value for Prime Property Fund is known. We first
determine the gross unit value, which is equal to (a) plus (b) plus (c) divided
by (d), where:
(a) is the aggregate value of all units of Prime Property Fund held by the Real
Estate Fund determined as of the last business day of the preceding month;
(b) is the aggregate value of all units of Separate Account No. 2A and cash or
cash equivalents held by the Real Estate Fund, determined as of the close of
business on the day the Real Estate Fund unit value is known;
(c) is the net value of all other assets and liabilities of the Real Estate
Fund, determined as of the close of business on the day the Real Estate Fund
unit value is known; and
(d) is the total number of Real Estate Fund Units outstanding.
To obtain the Real Estate Fund unit value, we then adjust this gross unit value
for Fund fees and other expenses at rates equal to 1/12 of the annual rates.
For information on how we value the assets of Prime Property Fund held by the
Real Estate Fund, see the next section of the SAI. We discuss valuation of the
units of Separate Account No. 2A and cash equivalents held by the Real Estate
Fund in the next section under The Growth Equity Fund--Short-Term Debt
Securities.
HOW WE VALUE THE ASSETS OF THE INVESTMENT FUNDS
THE GROWTH EQUITY FUND. The assets of the Growth Equity Fund 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, the stocks 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.
SAI-18
<PAGE>
- --------------------------------------------------------------------------------
o FOREIGN SECURITIES not traded directly, or in 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
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
one 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 debt securities that
mature in 60 days or less are valued at amortized cost, which
approximates market value. The Growth Equity Fund, as well as the Real
Estate Fund, 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.
Our investment officers determine in good faith the fair 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.
OTHER EQUITY FUNDS. The Aggressive Equity Fund, ADA Foreign Fund, Equity Index
Fund, Equity Income Fund, ADA Blue Chip Growth Fund and the Lifecycle
Funds--Conservative and Moderate, invest all of their assets in the MFS
Emerging Growth Fund, Templeton Foreign Fund, SSgA S&P 500 Index Fund, Putnam
Equity Income Fund, INVESCO Blue Chip Growth Fund and Lifecycle Fund Group
Trusts--Conservative and Moderate, respectively. The Group Trusts, in turn,
invests all of their assets in the Underlying State Street Funds.
The asset value of the MFS Emerging Growth Fund, the Templeton Foreign
Fund--Class A, the SSgA S&P 500 Index Fund, the Putnam Equity Income Fund and
the INVESCO Blue Chip Growth Fund is computed on a daily basis by each of these
funds. See the prospectus for each of these Underlying Mutual Funds for
information on valuation methodology. See our separate prospectus for the
Lifecycle Funds for information on valuation methodology with respect to the
investments of those Funds.
SAI-19
<PAGE>
- --------------------------------------------------------------------------------
ASSETS HELD IN PRIME PROPERTY FUND. The values of real estate investments are
estimated in accordance with the policies and procedures of the Appraisal
Institute. Ultimate realization of the market values is dependent to a great
extent on economic and other conditions that are beyond management's control
(such as general economic conditions, conditions affecting tenants and other
events occurring in the markets in which individual properties are located).
Further, values may or may not represent the prices at which the real estate
investments would sell since market prices of real estate investments can only
be determined by negotiation between a willing buyer and seller. Market value
considers the financial aspects of a property, market transactions and the
relative yield for an asset as measured against alternative investments. During
the first three quarters of 1998, appraisal of the real properties held by
Prime Property Fund were prepared by our valuation staff or by third-party
appraisers. All staff appraisals were concurred with and reviewed by one of
three designated third party appraisal firms, which also physically inspected
one-third of the properties on a rotating basis. During 1999 and the fourth
quarter of 1998, all appraisals were prepared by independent external
appraisers. The external appraisals are reviewed by the external appraisal
management firm. All appraisal reports and appraisal reviews comply with the
currently published Uniform Standards of Professional Appraisal Practice, as
promulgated by the Appraisal Institute. Appraised values do not necessarily
represent the prices at which the real estate investments would sell since
sales prices are determined by negotiation between willing buyers and sellers.
The values of real estate properties and partnership equities are determined
giving consideration to income, cost, and market data approaches of estimating
property value. The income approach projects an income stream for a property
(typically 10 years) and discounts this income plus a reversion (presumed sale)
into a present value. Yield rates and growth assumptions utilized in this
approach are derived from market transactions as well as other financial and
demographic data. The cost approach estimates the replacement cost of the
building less depreciation plus the land value. Generally, this approach
provides a check on the income approach. The market data approach compares
recent transactions to the appraised property. Adjustments are made for
dissimilarities which typically provide a range of value. Generally, the income
approach carries the most weight in the value reconciliation.
Investment values are determined quarterly from limited restricted appraisals,
in accordance with the Uniform Standards of Professional Appraisal Practice,
which include less documentation but nevertheless meet minimum requirements of
the Appraisal Standards Board and the Appraisal Institute and are considered
appraisals. In these appraisals, a full discounted cash flow analysis, which is
the basis of an income approach, is the primary focus. Interim monthly
valuations are determined giving consideration to material investment
transactions. Full appraisal reports on selected properties are prepared on a
rotating basis.
We value partnership equities using Prime Property Fund's equity in the net
assets of the partnerships, in accordance with the valuation procedures
described above.
During the past five years, on average, net proceeds from sales of properties
in which Equitable Life retained no equity interest equaled approximately 99.7%
of their most recent quarterly valuation.
The fair value of mortgage loans receivable held in Prime Property Fund has
been determined by one or more of the following criteria as appropriate: (i) on
the basis of estimated market interest rates for loans of comparable quality
and maturity, (ii) by recognizing the value of equity participations and
options to enter into equity participations contained in certain loan
instruments and (iii) giving consideration to the value of the underlying
security.
SAI-20
<PAGE>
- --------------------------------------------------------------------------------
See Notes to the Financial Statements of Separate Account No. 8 (Prime Property
Fund) in this SAI for more information about the valuation of investments in
Prime Property Fund.
GROWTH EQUITY FUND TRANSACTIONS
The Growth Equity Fund is charged for securities brokers' commissions, transfer
taxes and other fees relating to securities transactions. Transactions in
equity securities for a Fund 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 1999, 1998 and
1997, the Growth Equity Fund paid $5,877,438, $4,288,187, and $3,698,148,
respectively, in brokerage commissions.
We and Alliance 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, we and Alliance deal
with the principal market makers, unless more favorable prices or better
execution is otherwise obtainable. On occasion, we and Alliance may execute
portfolio transactions for the Funds as part of concurrent authorizations to
purchase or sell the same security for certain other accounts or clients that
we or Alliance advise. These concurrent authorizations potentially can be
either advantageous or disadvantageous to the Funds. When the concurrent
authorizations occur, our 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. The factors we use to evaluate research services
include the diversity of sources used by the broker, and the broker's
experience, analytical ability, and professional stature. Our receipt of
research services from brokers tends to reduce our expenses in managing the
Funds. We take this expense reduction into account when setting the expense
charges.
Brokers who provide research services may charge somewhat higher commissions
than those who do not. However, we only select brokers whose commissions we
believe are reasonable in all the circumstances. Of the brokerage commissions
paid by the Growth Equity Fund during 1999, $2,308,108 was paid to brokers
providing research services on transactions of $2,810,065,842.
We periodically evaluate the services provided by brokers and prepare internal
proposals for allocating among those various brokers business for all the
accounts that 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.
We may use the research information we obtain in servicing all accounts under
our management, including our general account. Similarly, not all research
provided by a broker or dealer with which the Fund transacts business
necessarily will be used in connection with the Fund.
When making securities transactions for the Fund 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
SAI-21
<PAGE>
- --------------------------------------------------------------------------------
at the best price. Subject to this general objective, we may give orders to
dealers or underwriters who provide investment research, but the Fund will not
pay a higher price. 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.
PRIME PROPERTY FUND TRANSACTIONS
Prime Property Fund is charged separately for fees paid to independent property
managers, outside legal expenses, operating expenses, real estate taxes and
insurance premiums. Compass Management & Leasing ("Compass") a former
affiliate, of Lend Lease, had been retained to provide management and leasing
services for certain properties of Prime Property Fund. On September 30, 1998,
Lend Lease sold Compass to LaSalle Partners Incorporated now Jones Lang LaSalle
("LaSalle"). LaSalle will continue to manage certain properties for Prime
Property Fund. During 1999, LaSalle earned an aggregate of $9.7 million in
property management and leasing fees from Prime Property Fund.
INVESTMENT MANAGEMENT FEE
The table below shows the amount we received in investment management fees
under the Program during each of the last three years. See "Charges and
Expenses" in the prospectus.
1999 1998 1997
----------- ------------- -----------
Growth Equity Fund .......... $971,974 $1,030,425 $981,577
Real Estate Fund ............ $ 66,968 $ 48,146 $ 42,978
UNDERWRITER
AXA Advisors, Inc. (formerly EQ Financial Consultants, Inc.), an affiliate of
Equitable Life, may be deemed to be the principal underwriter of separate
account units under the group annuity contract. AXA Advisors is registered with
the SEC as a broker-dealer under the Securities Exchange Act of 1934 and is a
member of the National Association of Securities Dealers, Inc. AXA Advisor's
principal business address is 1290 Avenue of the Americas, New York, NY 10104.
The offering of the units under the contract is continuous. We have paid no
underwriting commissions during any of the last three fiscal years with respect
to units of interest under the contract. See "Charges and Expenses" in the
prospectus.
SAI-22
<PAGE>
- --------------------------------------------------------------------------------
OUR MANAGEMENT
We are managed by a Board of Directors which is elected by our shareholder(s).
Our directors and certain of our executive officers and their principal
occupations are as follows. Unless otherwise indicated, the following persons
have been involved in the management of Equitable and/or its affiliates in
various executive positions during the last five years.
<TABLE>
<CAPTION>
DIRECTORS
NAME PRINCIPAL OCCUPATION
- --------------------------- -------------------------------------------------------------------------
<S> <C>
Francoise Colloc'h Member of the AXA Management Board and Group Executive
President, Human Resources, Communication and Synergies of AXA.
Henri de Castries Chairman of the Board, AXA Financial; Vice Chairman, AXA's
Management Board.
Joseph L. Dionne Retired Chairman and Chief Executive Officer, The McGraw-Hill
Companies.
Denis Duverne Executive Vice President, International AXA; member, AXA Executive
Board.
Jean-Rene Fourtou Vice Chairman of the Management Board, Aventis; prior thereto,
Chairman and Chief Executive Officer, Rhone-Poulenc, S.A.
Norman C. Francis President, Xavier University of Louisiana.
Donald J. Greene Of Counsel, LeBoeuf, Lamb, Greene & MacRae, L.L.P.; prior thereto,
Partner of the firm.
John T. Hartley Director and retired Chairman and Chief Executive Officer, Harris
Corporation.
John H. F. Haskell, Jr. Senior Advisor, Warburg, Dillon Read LLC; prior thereto, Managing
Director and member of the Board of Directors.
Mary (Nina) Henderson Corporate Vice President, Core Business Development of Bestfoods
(formerly CPC International, Inc.); prior thereto, Vice President and
President, Bestfoods Grocery.
W. Edwin Jarmain President, Jarmain Group Inc.
George T. Lowy Partner, Cravath, Swaine & Moore.
Didier Pineau-Valencienne Vice Chairman, Credit Suisse First Boston; Honorary Chairman,
Schneider Electric; prior thereto, Chairman and Chief Executive Officer.
George J. Sella, Jr. Retired Chairman and Chief Executive Officer, American Cyanamid
Company.
Peter J. Tobin Dean, Peter J. Tobin College of Business Administration, St. John's
University; prior thereto, Chief Financial Officer, Chase Manhattan
Corp.
Dave H. Williams Chairman, Alliance Capital Management; prior thereto, Chief Executive
Officer.
Michael Hegarty President and Chief Operating Officer of Equitable Life; Senior Vice
Chairman and Chief Operating Officer, AXA Financial, Inc.; prior
thereto, Vice Chairman, Chase Manhattan Corporation.
Edward D. Miller Chairman of the Board and Chief Executive Officer, Equitable Life;
former Senior Vice Chairman of Chase Manhattan Corporation; prior
thereto, President and Senior Vice Chairman of Chemical Bank.
</TABLE>
SAI-23
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DIRECTORS
NAME PRINCIPAL OCCUPATION
- --------------------- ------------------------------------------------------------------------
<S> <C>
Stanley B. Tulin Vice Chairman of the Board and Chief Financial Officer of Equitable
Life; prior thereto, Senior Executive Vice President of AXA Financial,
Inc. and Chairman of the Insurance Consulting and Actuarial Practice of
Coopers & Lybrand, L.L.P.
Leon B. Billis Executive Vice President and Chief Information Officer.
Derry E. Bishop Executive Vice President and Chief Agency Officer, Equitable Life and
AXA Client Solutions; Director and Executive Vice President, AXA
Advisors, LLC.
Harvey Blitz Senior Vice President of Equitable and of AXA Financial, Inc.;
Executive Vice President, AXA Advisors, LLC.
Kevin R. Byrne Senior Vice President and Treasurer, Equitable Life, AXA Financial,
Inc., AXA Client Solutions, LLC, Equitable Distributors and Equitable
of Colorado.
John A. Caroselli Executive Vice President; prior thereto, Senior Vice President, Chase
Manhattan Corp.
Judy A. Faucett Senior Vice President and Actuary; prior thereto, Partner and Senior
Actuarial Consultant of Coopers & Lybrand L.L.P.
Alvin H. Fenichel Senior Vice President and Controller, Equitable Life and AXA
Financial, Inc.
Paul J. Flora Senior Vice President and Auditor; Vice President and Auditor, AXA
Financial, Inc.
Robert E. Garber Executive Vice President and Chief Legal Officer; General Counsel,
AXA Financial, Inc.
Donald R. Kaplan Senior Vice President, Chief Compliance Officer and Associate General
Counsel.
Michael S. Martin Executive Vice President and Chief Marketing Officer; Chairman and
Chief Executive Officer; AXA Advisors LLC; President, Equitable of
Colorado.
Richard J. Matteis Executive Vice President; prior thereto, Executive Vice President Chase
Manhattan Corp.
Peter D. Norris Executive Vice President and Chief Investment Officer, Equitable Life
and AXA Financial, Inc.; Chairman, President and Trustee of EQ
ADVISORS TRUST; Executive Vice President of AXA Client Solutions
and Equitable of Colorado; Chief Investment Officer of Equitable of
Colorado.
Brian S. O'Neil Executive Vice President of Equitable Life, AXA Financial, Inc. and
AXA Client Solutions.
Anthony C. Pasquale Senior Vice President of Equitable Life and AXA Client Solutions;
Chairman and Chief Operating Officer, Casualty.
Pauline Sherman Senior Vice President, Secretary and Associate General Counsel of
Equitable Life, AXA Financial, Inc. and AXA Client Solutions; Senior
Vice President and Secretary, Equitable of Colorado.
Richard V. Silver Senior Vice President and General Counsel, Equitable Life; Senior Vice
President and Associate General Counsel, AXA Financial, Inc. and
AXA Client Solutions; Vice President and General Counsel, Equitable
of Colorado.
</TABLE>
SAI-24
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DIRECTORS
NAME PRINCIPAL OCCUPATION
- ------------------- -------------------------------------------------------------------
<S> <C>
Jose S. Suquet Senior Executive Vice President and Chief Distribution Officer,
Equitable Life and AXA Client Solutions; Chairman, EDI.
Gregory G. Wilcox Executive Vice President, Equitable Life and AXA Financial, Inc.
R. Lee Wilson Executive Vice President, Equitable Life and AXA Client Solutions.
</TABLE>
SAI-25
<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. 4 (Pooled), 30
(Pooled), 191, 200 and 206 reflect applicable fees, charges and other expenses
under the Program in effect during the periods covered and they also reflect
the charges against the accounts made in accordance with the terms of all other
contracts participating in the respective separate accounts. The financial
statements of Separate Account No. 8 (Prime Property Fund) reflect charges
against the account made in accordance with the terms of all other contracts
participating in the account, there are no Program fees charged against
Separate Account No. 8.
<TABLE>
<S> <C>
SEPARATE ACCOUNT NO. 4 (POOLED):
Report of Independent Accountants ..................................................... SAI-27
Separate Account No. 4 (Pooled) (The Growth Equity Fund):
Statement of Assets and Liabilities, December 31, 1999 ................................ SAI-28
Statements of Operations Year Ended December 31, 1999 ................................. SAI-29
Statements of Changes in Net Assets Years Ended December 31, 1999 and 1998 ............ SAI-30
Portfolio of Investments, December 31, 1999 ........................................... SAI-31
Notes to Financial Statements ......................................................... SAI-36
SEPARATE ACCOUNT NOS. 191, 200 AND 206:
Report of Independent Accountants ..................................................... SAI-39
Separate Account No. 191 (The ADA Foreign Fund):
Statement of Assets and Liabilities, December 31, 1999 ................................ SAI-40
Statements of Operations Year Ended December 31, 1999 ................................. SAI-41
Statements of Changes in Net Assets Years Ended December 31, 1999 and 1998 ............ SAI-42
Separate Account No. 200 (The Aggressive Equity Fund):
Statement of Assets and Liabilities, December 31, 1999 ................................ SAI-43
Statements of Operations Year Ended December 31, 1999 ................................. SAI-44
Statements of Changes in Net Assets Years Ended December 31, 1999 and 1998 ............ SAI-45
Separate Account No. 206
Statement of Assets and Liabilities, December 31, 1999 ................................ SAI-46
Statements of Operations Year Ended December 31, 1999 ................................. SAI-47
Statements of Changes in Net Assets Years Ended December 31, 1999 and 1998 ............ SAI-48
Separate Account Nos. 191, 200 and 206:
Notes to Financial Statements ......................................................... SAI-49
SEPARATE ACCOUNT NO. 30 (POOLED) (THE REAL ESTATE FUND):
Report of Independent Accountants ..................................................... SAI-50
Statements of Assets and Liabilities, December 31, 1999 and 1998 ...................... SAI-51
Statements of Operations and Changes in Net Assets for the Years Ended December 31,
1999 and 1998 ....................................................................... SAI-52
Statements of Cash Flows for the Years Ended December 31, 1999 and 1998 ............... SAI-53
Notes to Financial Statements ......................................................... SAI-54
SEPARATE ACCOUNT NO. 8 (PRIME PROPERTY FUND):
Report of Independent Accountants ..................................................... SAI-56
Statement of Independent Appraisers ................................................... SAI-57
Statements of Assets and Liabilities, December 31, 1999 and 1998 ...................... SAI-58
Statements of Operations and Changes in Net Assets for the Years Ended December 31,
1999 and 1998 ....................................................................... SAI-59
Statements of Cash Flows for the Years Ended December 31, 1999 and 1998 ............... SAI-60
Notes to Financial Statements ......................................................... SAI-61
Schedule X: Supplementary Income Statement Information, December 31, 1999 and 1998 .... SAI-70
Schedule XII: Mortgage Loans Receivable on Real Estate, December 31, 1999 and 1998 .... SAI-71
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES:
Report of Independent Accountants ..................................................... SAI-74
Consolidated Balance Sheets, December 31, 1999 and 1998 ............................... SAI-75
Consolidated Statements of Earnings for the Years Ended December 31, 1999, 1998 and
1997 ................................................................................ SAI-76
Consolidated Statements of Shareholder's Equity and Comprehensive Income for the Years
Ended December 31, 1999, 1998 and 1997 .............................................. SAI-77
Consolidated Statements of Cash Flows for the Years Ended December 31, 1999, 1998 and
1997................................................................................. SAI-78
Notes to Consolidated Financial Statements ............................................ SAI-79
</TABLE>
SAI-26
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and the Contractowners of Separate Account No. 4
of The Equitable Life Assurance Society of the United States
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 and the selected per unit data (included under Condensed
Financial Information in the prospectus of American Dental Association Members
Retirement Program) present fairly, in all material respects, the financial
position of Separate Account No. 4 (Pooled) (The Growth Equity Fund) of The
Equitable Life Assurance Society of the United States ("Equitable Life") at
December 31, 1999, the result of its operations for the year then ended,
changes in its net assets for the two years then ended, and the selected per
unit data for the periods presented, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and the selected per unit data (hereafter referred to as "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 auditing standards generally accepted in the United States of America,
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, 1999 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
New York, New York
February 1, 2000
SAI-27
<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, 1999
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------
ASSETS:
Investments (Notes 2 and 3):
Common stocks -- at market value (cost: $1,333,345,581) ................................. $1,777,794,011
Long-term debt securities -- at market value (amortized cost: $7,810,985) ............... 11,874,375
Participation in Separate Account No. 2A -- at amortized cost, which approximates market
value, equivalent to
120,801 units at $300.60 ............................................................... 36,312,393
Receivable for investment securities sold ................................................ 6,662,243
Dividends and interest receivable ........................................................ 1,361,064
- ------------------------------------------------------------------------------------------------------------
Total assets ........................................................................... 1,834,004,086
- ------------------------------------------------------------------------------------------------------------
LIABILITIES:
Due to Equitable Life's General Account .................................................. 39,371,465
Payable for investment securities purchased .............................................. 1,639,781
Custodian fee payable .................................................................... 367,334
Investment management fees payable ....................................................... 3,770
Accrued expense .......................................................................... 482,251
- ------------------------------------------------------------------------------------------------------------
Total liabilities ...................................................................... 41,864,601
- ------------------------------------------------------------------------------------------------------------
NET ASSETS ............................................................................... $1,792,139,485
============================================================================================================
Amount retained by Equitable Life in Separate Account No. 4 .............................. $ 2,714,541
Net assets attributable to contract owners ............................................... 1,735,846,337
Net assets attributable to annuity benefits .............................................. 53,578,607
- ------------------------------------------------------------------------------------------------------------
NET ASSETS ............................................................................... $1,792,139,485
============================================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-28
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITD STATES
Statement of Operations
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------
INVESTMENT INCOME (NOTE 2):
Dividends ............................................................. $ 9,728,926
Interest .............................................................. 421,216
- ----------------------------------------------------------------------------------------
Total investment income ............................................... 10,150,142
- ----------------------------------------------------------------------------------------
EXPENSES (NOTE 4):
Asset and investment management fees .................................. (7,361,227)
Administrative fees ................................................... (6,442,906)
Operating expenses .................................................... (569,529)
- ----------------------------------------------------------------------------------------
Total expenses ........................................................ (14,373,662)
- ----------------------------------------------------------------------------------------
Net investment loss ................................................... (4,223,520)
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain from security and foreign currency transactions ......... 294,811,943
Change in unrealized appreciation/depreciation of investments ......... 264,368,034
- ----------------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Investments ....................... 559,179,977
- ----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO OPERATIONS ................. $ 554,956,457
========================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-29
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1999 1998
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment loss .......................................................... $ (4,223,520) $ (5,333,397)
Net realized gain on investments and foreign currency transactions ........... 294,811,943 424,897,105
Change in unrealized appreciation/depreciation of investments ................ 264,368,034 (505,981,445)
- -------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets attributable to operations ............. 554,956,457 (86,417,737)
- -------------------------------------------------------------------------------------------------------------------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ................................................................ 369,385,670 451,738,195
Withdrawals .................................................................. (1,245,308,651) (897,373,357)
- -------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets attributable to contributions and withdrawals ..... (875,922,981) (445,635,162)
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets attributable to Equitable Life's transactions ..... 58,823 23,520
- -------------------------------------------------------------------------------------------------------------------------
DECREASE IN NET ASSETS ....................................................... (320,907,701) (532,029,379)
NET ASSETS -- BEGINNING OF YEAR .............................................. 2,113,047,186 2,645,076,565
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS -- END OF YEAR .................................................... $ 1,792,139,485 $2,113,047,186
=========================================================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-30
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
CHEMICALS-SPECIALTY (0.4%)
Lyondell Chemical Company ...................... 600,000 $ 7,650,000
------------
TOTAL BASIC MATERIALS (0.4%) ................... 7,650,000
------------
CONSUMER CYCLICALS
AIRLINES (11.5%)
Alaska Air Group, Inc.* ........................ 540,000 18,967,500
America West Holdings Corp. (Class B)* ......... 90,000 1,867,500
Continental Airlines, Inc. (Class B)* .......... 2,935,000 130,240,624
Northwest Airlines Corp. (Class A)* ............ 2,475,000 55,068,750
------------
206,144,374
------------
APPAREL, TEXTILE (1.9%)
Mohawk Industries, Inc.* ....................... 577,600 15,234,200
Unifi, Inc.* ................................... 1,575,000 19,392,188
------------
34,626,388
------------
AUTO RELATED (1.7%)
Budget Group, Inc.* ............................ 1,225,000 11,101,563
Dollar Thrifty Automotive Group, Inc.* ......... 780,000 18,671,250
Monaco Coach Corp.* ............................ 10,200 260,738
------------
30,033,551
------------
FOOD SERVICES, LODGING (1.1%)
Extended Stay America, Inc.* ................... 2,665,000 20,320,625
------------
HOUSEHOLD FURNITURE, APPLIANCES (0.8%)
Industrie Natuzzi Spa (ADR) .................... 1,053,900 13,964,175
------------
LEISURE RELATED (10.1%)
Carnival Corp. ................................. 1,124,200 53,750,813
Cendant Corporation* ........................... 660,000 17,531,250
Metro-Goldwyn-Mayer, Inc.* ..................... 200,000 4,712,500
Park Place Entertainment Corp.* ................ 600,000 7,500,000
Royal Caribbean Cruises Ltd.* .................. 1,950,000 96,159,374
------------
179,653,937
------------
</TABLE>
SAI-31
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1999 (Continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
RETAIL -- GENERAL (1.2%)
Bed Bath & Beyond, Inc.* .............................. 240,000 $ 8,340,000
TJX Cos., Inc. ........................................ 320,000 6,540,000
Venator Group, Inc.* .................................. 975,000 6,825,000
------------
21,705,000
------------
TOTAL CONSUMER CYCLICALS (28.3%) ...................... 506,448,050
------------
CONSUMER NONCYCLICALS
BEVERAGES (0.2%)
Pepsi Bottling Group, Inc. ............................ 200,000 3,312,500
------------
HOSPITAL SUPPLIES & SERVICES (5.0%)
Health Management Associates, Inc. (Class A)* ......... 3,119,200 41,719,300
HEALTHSOUTH Corp.* .................................... 3,250,000 17,468,750
McKesson HBOC, Inc. ................................... 300,000 6,768,750
Quintiles Transnational Corp.* ........................ 585,000 10,932,188
Tenet Healthcare Corp.* ............................... 535,000 12,572,500
------------
89,461,488
------------
MEDIA & CABLE (1.1%)
Rogers Communications, Inc. (Class B)* ................ 620,000 15,345,000
UnitedGlobalcom, Inc. (Class A)* ...................... 50,000 3,531,250
------------
18,876,250
------------
RETAIL -- FOOD (0.1%)
Kroger Co.* ........................................... 150,000 2,831,250
------------
TOTAL CONSUMER NONCYCLICALS (6.4%) .................... 114,481,488
------------
CREDIT-SENSITIVE
BANKS (0.3%)
Bank of Tokyo-Mitsubishi Ltd. ......................... 345,000 4,808,438
------------
FINANCIAL SERVICES (8.9%)
Associates First Capital Corp. (Class A) .............. 650,000 17,834,375
CIT Group, Inc. (Class A) ............................. 399,170 8,432,466
Edwards (A.G.), Inc. .................................. 805,000 25,810,313
Legg Mason, Inc. ...................................... 2,965,000 107,481,250
------------
159,558,404
------------
</TABLE>
SAI-32
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1999 (Continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- --------------------------------------------------------------------------------------
<S> <C> <C>
INSURANCE (9.1%)
Ace Ltd. .............................................. 2,000,000 $ 33,375,000
CNA Financial Corp.* .................................. 3,323,500 129,408,780
------------
162,783,780
------------
REAL ESTATE (0.3%)
Prime Retail, Inc. .................................... 1,000,000 5,625,000
------------
UTILITY -- TELEPHONE (8.4%)
Centurytel, Inc. ...................................... 110,100 5,215,988
Tele Celular Sul Participacoes (ADR) .................. 50,000 1,587,500
Tele Centro Oeste Celular Participacoes (ADR) ......... 100,000 650,000
Tele Nordeste Celular Participacoes (ADR) ............. 30,000 1,515,000
Tele Sudeste Celular Participacoes (ADR) .............. 349,300 13,557,206
Telemig Celular Participacoes (ADR) ................... 100,000 4,618,750
Telephone & Data Systems, Inc. ........................ 790,000 99,540,000
Telesp Celular Participacoes (ADR) .................... 200,000 8,475,000
Viatel, Inc.* ......................................... 297,200 15,937,350
------------
151,096,794
------------
TOTAL CREDIT-SENSITIVE (27.0%) ........................ 483,872,416
------------
ENERGY
OIL -- DOMESTIC (2.5%)
Kerr-McGee Corp. ...................................... 585,000 36,270,000
Murphy Oil Corp. ...................................... 145,000 8,319,375
------------
44,589,375
------------
OIL -- INTERNATIONAL (0.1%)
IRI International Corporation* ........................ 305,000 1,220,000
------------
OIL -- SUPPLIES & CONSTRUCTION (0.7%)
Stolt Comex Seaway S.A.* .............................. 165,000 1,825,313
Stolt Comex Seaway S.A. (ADR) (Class A)* .............. 1,058,000 11,638,000
------------
13,463,313
------------
TOTAL ENERGY (3.3%) ................................... 59,272,688
------------
</TABLE>
SAI-33
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1999 (Continued)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY
ELECTRONICS (0.8%)
ARDENT Software, Inc.* ............................................ 150,000 $ 5,850,000
DBT Online, Inc.* ................................................. 359,900 8,772,563
--------------
14,622,563
--------------
OFFICE EQUIPMENT SERVICES (0.6%)
Informix Corporation* ............................................. 887,600 10,096,450
--------------
TELECOMMUNICATIONS (30.4%)
Adelphia Business Solutions* ...................................... 90,000 4,320,000
Amdocs Ltd.* ...................................................... 515,000 17,767,500
American Satellite Network -- Warrants (Expire 06/30/00)* ......... 70,000 0
Global TeleSystems Group, Inc.* ................................... 3,980,000 137,807,499
Mannesmann AG ..................................................... 40,000 9,641,482
Millicom International Cellular S.A.* ............................. 2,165,500 135,073,062
NTL Incorporated* ................................................. 820,000 102,295,000
PSINet, Inc.* ..................................................... 237,500 14,665,625
RCN Corporation* .................................................. 710,100 34,439,850
United States Cellular Corp.* ..................................... 885,000 89,329,688
--------------
545,339,706
--------------
TOTAL TECHNOLOGY (31.8%) .......................................... 570,058,719
--------------
DIVERSIFIED
MISCELLANEOUS (2.0%)
U.S. Industries, Inc. ............................................. 919,600 12,874,400
Viad Corp. ........................................................ 830,000 23,136,250
--------------
TOTAL DIVERSIFIED (2.0%) .......................................... 36,010,650
--------------
TOTAL COMMON STOCKS (99.2%)
(Cost $1,333,345,581)............................................. 1,777,794,011
--------------
</TABLE>
SAI-34
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1999 (Concluded)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
TECHNOLOGY
TELECOMMUNICATIONS (0.7%)
NTL Incorporated
7.0% Conv., 2008 ................................................... $4,500,000 $ 11,874,375
--------------
TOTAL TECHNOLOGY (0.7%) ............................................. 11,874,375
--------------
TOTAL LONG-TERM DEBT SECURITIES (0.7%)
(Amortized Cost $7,810,985)......................................... 11,874,375
--------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates
market value, equivalent to 120,801
units at $300.60 each (2.0%)........................................ 36,312,393
--------------
TOTAL INVESTMENTS (101.9%)
(Cost/Amortized Cost $1,377,468,959)................................ 1,825,980,779
OTHER ASSETS LESS LIABILITIES (-1.9%) ............................... (33,841,294)
--------------
NET ASSETS (100.0%) ................................................. $1,792,139,485
==============
Amount retained by Equitable Life in Separate Account No. 4 ......... $ 2,714,541
Net assets attributable to contract owners .......................... 1,735,846,337
Net assets attributable to annuity benefits ......................... 53,578,607
--------------
NET ASSETS .......................................................... $1,792,139,485
==============
</TABLE>
* Non-income producing.
See Notes to Financial Statements.
SAI-35
<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 AXA Financial, Inc., 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 $2,714,541 as shown in the Statement of Assets and Liabilities
in Separate Account No. 4 may be transferred to Equitable Life's General
Account. These financial statements reflect the total net assets and results
of operations for Separate Account No. 4. The American Dental Association
Members Retirement Program is one of the many contract owners participating
in this Fund.
Interests of retirement and investment plans for Equitable Life employees,
managers, and agents in Separate Account No. 4 aggregated $365,557,809
(20.4%), at December 31, 1999 and $323,953,589 (15.3%), at December 31,
1998, 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
accounting principles generally accepted in the United States of America
(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 Statement of
Operations.
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
SAI-36
<PAGE>
- --------------------------------------------------------------------------------
maturing in sixty days or less from the date of acquisition. At December
31, 1999, the amortized cost of investments held in Separate Account No. 2A
consist of the following:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
AMORTIZED COST %
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Bankers' Acceptances, 5.70% due 01/21/00 through 02/24/00 ................ $ 5,140,555 2.3%
Certificates of Deposit, 5.50% - 5.99% due 01/28/00 through 01/31/00 ..... 9,998,680 4.5
Commercial Paper, 4.45% - 6.45% due 01/03/00 through 02/15/00 ............ 176,636,726 79.2
U.S. Government Agency, 1.5% due 01/03/00 ................................ 30,997,417 13.9
- --------------------------------------------------------------------------------------------------------
Total Investments ........................................................ 222,773,378 99.9
Other Assets Less Liabilities ............................................ 212,513 0.1
- --------------------------------------------------------------------------------------------------------
Net Assets of Separate Account No. 2A .................................... $ 222,985,891 100.0%
========================================================================================================
Units Outstanding ........................................................ 741,808
Unit Value ............................................................... $ 300.60
- --------------------------------------------------------------------------------------------------------
</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 1999 and 1998, investment security transactions, excluding short-term
debt securities, were as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
COST OF NET PROCEEDS
PURCHASES OF SALES
- -------------------------------------------------------------------------------------
<S> <C> <C>
Stocks and long-term corporate debt securities:
1999 ........................................ $1,340,597,736 $2,209,410,520
1998 ........................................ 1,692,067,102 2,151,023,546
U.S. Government obligations:
1999 ........................................ -- --
1998 ........................................ -- --
- -------------------------------------------------------------------------------------
</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.
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.
SAI-37
<PAGE>
- --------------------------------------------------------------------------------
Convertible bonds and unlisted convertible preferred stock 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 fees. These charges and fees are paid to
Equitable Life by the Fund and are recorded as expenses in the accompanying
Statement of Operations.
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, 1999, 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.
SAI-38
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and the Contractowners of Separate Account Nos. 191, 200 and 206
of The Equitable Life Assurance Society of the United States
In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and changes in net assets and the selected per
unit data (included under Condensed Financial Information in the prospectus of
American Dental Association Members Retirement Program) present fairly, in all
material respects, the financial position of Separate Account Nos. 191 (The ADA
Foreign Fund), 200 (The Aggressive Equity Fund), 206 (comprised of The Equity
Income Fund and The ADA Blue Chip Growth Fund) of The Equitable Life Assurance
Society of the United States ("Equitable Life") at December 31, 1999, the
results of each of their operations for the year then ended, changes in each of
their net assets for the two years then ended, and the selected per unit data
for the periods presented, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and the
selected per unit data (hereafter referred to as "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 auditing
standards generally accepted in the United States of America, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of shares owned in the underlying mutual funds with the transfer agents at
December 31, 1999, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
February 1, 2000
SAI-39
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 191
(THE ADA FOREIGN FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------
ASSETS:
Investments in 8,040,091 shares of The Templeton Foreign Fund -- at value (cost:
$79,092,485)
(Note 2) ................................................................................ $89,998,322
- ---------------------------------------------------------------------------------------------------------
LIABILITIES:
Accrued expenses ......................................................................... 88,462
- ---------------------------------------------------------------------------------------------------------
NET ASSETS ............................................................................... $89,909,860
=========================================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-40
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 191
(THE ADA FOREIGN FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statement of Operations
Year Ended December 31, 1999
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------
INVESTMENT INCOME (NOTE 2):
Dividends from The Templeton Foreign Fund ............................. $ 2,686,674
- ----------------------------------------------------------------------------------------
EXPENSES (NOTE 3):
Asset and investment management fees .................................. (494,829)
Operating expenses .................................................... (90,192)
- ----------------------------------------------------------------------------------------
Total expenses ........................................................ (585,021)
- ----------------------------------------------------------------------------------------
Net investment income ................................................. 2,101,653
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized loss from share transactions ................................. (1,194,707)
Realized gain distribution from The Templeton Foreign Fund ............ 605,157
Change in unrealized appreciation/depreciation of investments ......... 23,891,247
- ----------------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Investments ....................... 23,301,697
- ----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO OPERATIONS ................. $ 25,403,350
========================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-41
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 191
(THE ADA FOREIGN FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1999 1998
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income ........................................................ $ 2,101,653 $ 2,267,587
Net realized gain (loss) on investments ...................................... (589,550) 5,361,978
Change in unrealized appreciation/depreciation of investments ................ 23,891,247 (12,318,532)
- --------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets attributable to operations ............. 25,403,350 (4,688,967)
- --------------------------------------------------------------------------------------------------------------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ................................................................ 49,792,113 26,640,883
Withdrawals .................................................................. (57,694,793) (40,991,665)
- --------------------------------------------------------------------------------------------------------------------
Net decrease in net assets attributable to contributions and withdrawals ..... (7,902,680) (14,350,782)
- --------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS ............................................ 17,500,670 (19,039,749)
NET ASSETS -- BEGINNING OF YEAR .............................................. 72,409,190 91,448,939
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS -- END OF YEAR .................................................... $ 89,909,860 $ 72,409,190
====================================================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-42
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 200
(THE AGGRESSIVE EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Statement of
Assets and Liabilities
December 31, 1999
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------------
ASSETS:
Investments in 3,693,768 shares of The MFS Emerging Growth Fund -- at value (cost:
$138,526,981)
(Note 2) ................................................................................ $245,737,902
- ----------------------------------------------------------------------------------------------------------
LIABILITIES:
Accrued expenses ......................................................................... 188,390
- ----------------------------------------------------------------------------------------------------------
NET ASSETS ............................................................................... $245,549,512
==========================================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-43
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 200
(THE AGGRESSIVE EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statement of Operations
Year Ended December 31, 1999
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------
INVESTMENT INCOME (NOTE 2):
Dividends from The MFS Emerging Growth Fund ........................... $ --
- ---------------------------------------------------------------------------------------
EXPENSES (NOTE 3):
Asset and investment management fees .................................. (1,154,872)
Operating expenses .................................................... (130,084)
- ---------------------------------------------------------------------------------------
Total expenses ........................................................ (1,284,956)
- ---------------------------------------------------------------------------------------
Net investment loss ................................................... (1,284,956)
- ---------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain from share transactions ................................. 14,829,091
Realized gain distribution fron The MFS Emerging Growth Fund .......... 1,153,736
Change in unrealized appreciation/depreciation of investments ......... 66,440,741
- ---------------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Investments ....................... 82,423,568
- ---------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO OPERATIONS ................. $ 81,138,612
=======================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-44
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 200
(THE AGGRESSIVE EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1999 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment loss .................................................................. $ (1,284,956) $ (1,051,546)
Net realized gain on investments ..................................................... 15,982,827 13,400,947
Change in unrealized appreciation/depreciation of investments ........................ 66,440,741 17,993,189
- ----------------------------------------------------------------------------------------------------------------------------
Net increase in net assets attributable to operations ................................ 81,138,612 30,342,590
- ----------------------------------------------------------------------------------------------------------------------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ........................................................................ 70,775,951 74,479,930
Withdrawals .......................................................................... (74,900,787) (69,570,667)
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets attributable to contributions and withdrawals .. (4,124,836) 4,909,263
- ----------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS ............................................................... 77,013,776 35,251,853
NET ASSETS -- BEGINNING OF YEAR ...................................................... 168,535,736 133,283,883
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS -- END OF YEAR ............................................................ $ 245,549,512 $ 168,535,736
============================================================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-45
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 206
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Assets and Liabilities
December 31, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
THE THE ADA BLUE
EQUITY INCOME CHIP GROWTH
FUND FUND
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investments in 304,234 shares of Putnam Equity Income Fund -- at value
(cost: $4,721,334) (Note 2) ............................................... $4,248,026
Investments in 1,283,394 shares of INVESCO Blue Chip Growth Fund -- at value
(cost: $10,178,980) (Note 2)............................................... $10,435,349
- --------------------------------------------------------------------------------------------------------------
LIABILITIES:
Accrued expenses ........................................................... 8,307 8,461
- --------------------------------------------------------------------------------------------------------------
NET ASSETS ................................................................. $4,239,719 $10,426,888
==============================================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-46
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 206
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Operations
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
THE THE ADA BLUE
EQUITY INCOME CHIP GROWTH
FUND* FUND**
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME (NOTE 2):
Dividends from Putnam Equity Income Fund and INVESCO Blue Chip Growth Fund,
respectively ............................................................................ $ 34,569 $522,102
- ----------------------------------------------------------------------------------------------------------------------------
EXPENSES (NOTE 3):
Asset and investment management fees ..................................................... (10,664) (4,276)
Operating expenses ....................................................................... (14,890) (4,241)
- ----------------------------------------------------------------------------------------------------------------------------
Total expenses ........................................................................... (25,554) (8,517)
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income .................................................................... 9,015 513,585
- ----------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain (loss) from share transactions ............................................. (222,999) 12,154
Realized gain distribution from Putman Equity Income Fund and INVESCO Blue Chip Growth
Fund, respectively ...................................................................... 418,419 216,442
Unrealized appreciation/depreciation of investments ...................................... (473,308) 256,369
- ----------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized (Loss) on Investments ........................................ (277,888) 484,965
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO OPERATIONS ......................... $ (268,873) $998,550
============================================================================================================================
</TABLE>
* Commenced operations on July 7, 1999.
** Commenced operations on October 25, 1999.
See Notes to Financial Statements.
SAI-47
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 206
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
THE THE ADA BLUE
EQUITY INCOME CHIP GROWTH
FUND FUND
- ---------------------------------------------------------------------------------------------------------------------
JULY 7, 1999* OCTOBER 25, 1999*
TO TO
DECEMBER 31, 1999 DECEMBER 31, 1999
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income ........................................................ $ 9,015 $ 513,585
Net realized gain on investments ............................................. 195,420 228,596
Unrealized appreciation/depreciation of investments .......................... (473,308) 256,369
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets attributable to operations ............. (268,873) 998,550
- ---------------------------------------------------------------------------------------------------------------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ................................................................ 7,653,702 10,381,629
Withdrawals .................................................................. (3,145,110) (953,291)
- ---------------------------------------------------------------------------------------------------------------------
Net increase in net assets attributable to contributions and withdrawals ..... 4,508,592 9,428,338
- ---------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS ....................................................... 4,239,719 10,426,888
NET ASSETS -- BEGINNING OF PERIOD ............................................ -- --
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS -- END OF PERIOD .................................................. $ 4,239,719 $10,426,888
=====================================================================================================================
</TABLE>
* Commencement of operations.
See Notes to Financial Statements.
SAI-48
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NOS. 191, 200 AND 206
of The Equitable Life Assurance Society of the United States
Notes to Financial Statements
1. Separate Account Nos. 191 (the ADA Foreign Fund), 200 (the Aggressive Equity
Fund) and 206 (the Equity Income Fund and the ADA Blue Chip Growth Fund) (the
Funds) of The Equitable Life Assurance Society of the United States
(Equitable Life), a wholly-owned subsidiary of AXA Financial, Inc., 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.
Equitable Life is the investment manager for the Funds.
The accompanying financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America
(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.
Separate Account No. 191 invests 100% of its assets in shares of the
Templeton Foreign Fund, a series of Templeton Funds, Inc., which is
registered under the Investment Company Act of 1940 as an open-end management
investment company. The investment manager of the Templeton Foreign Fund is
Templeton Global Advisors Ltd., an indirect wholly-owned subsidiary of
Franklin Resources, Inc.
Separate Account No. 200 invests 100% of its assets in Class A shares of the
MFS Emerging Growth Fund, a series of MFS Series Trust II, which was
organized as a Massachusetts business trust and is registered under the 1940
Act as an open-end management investment company. The investment adviser of
the MFS Emerging Growth Fund is Massachusetts Financial Services.
Separate Account No. 206 has two investment funds. The Equity Income Fund
invests 100% of its assets in Class A shares of the Putnam Equity Income
Fund, which is registered under the Investment Company Act of 1940 as an
open-end management investment company. The fund is managed by Putnam
Management, Inc., a wholly-owned subsidiary of Putnam Investments, Inc. The
ADA Blue Chip Growth Fund invests 100% of its assets in shares of the INVESCO
Blue Chip Growth Fund, which is registered under the Investment Company Act
of 1940 as an open-end management investment company. The fund is managed by
INVESCO Funds Group, Inc.
2. Realized gains and losses on investments include gains and losses on
redemptions of the underlying fund's shares (determined on the identified
cost basis) and capital gain distributions from the underlying funds.
Dividends and realized gain distributions from underlying funds are recorded
on ex-date.
Investments in the Templeton Foreign Fund, MFS Emerging Growth Fund, Putnam
Equity Income Fund and INVESCO Blue Chip Growth Fund are valued at the
underlying mutual fund's net asset value per share.
3. Charges and fees relating to the Funds are deducted in accordance with the
terms of the contracts issued by Equitable Life to the Trusts. With respect
to the American Dental Association Members Retirement Program, these expenses
consist of program expense charges, direct expenses and record maintenance
and report fees. These charges and fees are paid to Equitable Life by the
Funds and are recorded as expenses in the accompanying Statement of
Operations.
4. No federal income tax 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 federal income tax provision is required.
SAI-49
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 30 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Report of Independent Accountants
The Equitable Life Assurance Society of the United States:
In our opinion, the accompanying balance sheets and the related statements of
operations and changes in net assets and cash flow present fairly, in all
material respects, the financial position of Separate Account No. 30 of The
Equitable Life Assurance Society of the United States (the Account) at December
31, 1999 and 1998 and the results of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States. These financial statements are the responsibility of the
Company'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 auditing standards generally accepted in the
United States, 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.
PricewaterhouseCoopers LLP
Atlanta, Georgia
February 11, 2000
SAI-50
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 30 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Assets and Liabilities
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
DECEMBER 31,
1999 1998
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investments (Notes B):
Participation in Prime Property Fund at value, equivalent to 1,080 units at $9,575.90
for 1999 (cost: $5,753,222) and 1,021 units at $8,444.24 for 1998 (cost: $5,253,222).... $10,337,261 $8,618,436
Participation in Separate Account No. 2A, at amortized cost which approximates market
value, equivalent to 2,872 units at $300.60 for 1999 and 3,862 units at $285.54
for 1998 ............................................................................... 863,273 1,102,846
Cash ..................................................................................... 2,691 31,104
- ---------------------------------------------------------------------------------------------------------------------------
Total Assets ........................................................................... 11,203,225 9,752,386
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Accrued expenses ......................................................................... 21,142 16,233
- ---------------------------------------------------------------------------------------------------------------------------
Total Liabilities ...................................................................... 21,142 16,233
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS ............................................................................... $11,182,083 $9,736,153
===========================================================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-51
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 30 (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,
1999 1998
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES (NOTE B):
Interest income ...................................................... $ 46,426 $ 48,476
Expenses ............................................................. (207,493) (170,394)
- ----------------------------------------------------------------------------------------------------------
Net Investment Loss .................................................. (161,067) (121,918)
- ----------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain on Investments (Note B):
Realized gain from redemption of Prime Property Fund units ........... -- 192,123
Change in Unrealized Gain on Investments ............................. 1,218,825 1,183,733
- ----------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Investments ...................... 1,218,825 1,375,856
- ----------------------------------------------------------------------------------------------------------
Increase in net assets attributable to investment activities ......... 1,057,758 1,253,938
- ----------------------------------------------------------------------------------------------------------
FROM CLIENT TRANSACTIONS:
Allocations .......................................................... 1,818,420 1,317,853
Withdrawals .......................................................... (1,430,248) (1,257,208)
- ----------------------------------------------------------------------------------------------------------
Increase in net assets attributable to client transactions ........... 388,172 60,645
- ----------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS ............................................... 1,445,930 1,314,583
NET ASSETS -- JANUARY 1 .............................................. 9,736,153 8,421,570
- ----------------------------------------------------------------------------------------------------------
NET ASSETS -- DECEMBER 31 ............................................ $ 11,182,083 $ 9,736,153
==========================================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-52
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 30 (POOLED)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Cash Flows
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1999 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Investment Loss ...................................................................... $ (161,067) $ (121,918)
- ----------------------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net investment loss to net cash flow used in operating
activities:
Increase (decrease) in accrued expenses ................................................. 4,909 (7,436)
- ----------------------------------------------------------------------------------------------------------------------------
Total adjustments ....................................................................... 4,909 (7,436)
- ----------------------------------------------------------------------------------------------------------------------------
Net cash flow used in operating activities .............................................. (156,158) (129,354)
- ----------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Purchase of Units -- Prime Property Fund ................................................ (500,000) (500,000)
Redemption of Units -- Prime Property Fund .............................................. -- 500,000
- ----------------------------------------------------------------------------------------------------------------------------
Net cash flow used in investing activities .............................................. (500,000) --
- ----------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Allocations ............................................................................. 1,818,420 1,317,853
Withdrawals ............................................................................. (1,430,248) (1,257,208)
- ----------------------------------------------------------------------------------------------------------------------------
Net cash flow provided by financing activities .......................................... 388,172 60,645
- ----------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS ............................... (267,986) (68,709)
CASH AND SHORT-TERM INVESTMENTS -- JANUARY 1 ............................................. 1,133,950 1,202,659
- ----------------------------------------------------------------------------------------------------------------------------
CASH AND SHORT-TERM INVESTMENTS -- DECEMBER 31 ........................................... $ 865,964 $ 1,133,950
============================================================================================================================
</TABLE>
See Notes to Financial Statements.
SAI-53
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 30 (POOLED)
of The Equitable Life Assurance Society of the United States
Notes to Financial Statements
A. General
Separate Account No. 30 (the Account) was established as a separate account
of The Equitable Life Assurance Society of the United States (Equitable),
in conformity with the New York State Insurance Law. Pursuant to such law,
the net assets in the Account are not chargeable with liabilities arising
out of any other business of Equitable. Equitable engaged Lend Lease Real
Estate Investments, Inc. ("Lend Lease" or "Management") to act as
investment manager for the Account.
B. Summary of Significant Accounting Policies
1. Investment Transactions
The Account participates primarily in Equitable's Prime Property Fund by
purchasing or redeeming units on the date Prime Property Fund units are
valued. Prime Property Fund invests in real estate as discussed in the
accompanying financial statements of Prime Property Fund.
The change in value of Prime Property Fund units owned by the Account is
recorded as unrealized appreciation (depreciation). Prime Property Fund's
unit value changes as a result of both investment income and increases
and decreases in investment value. In determining realized gains or
losses from the redemption of Prime Property Fund units, the cost of
units sold is recorded on a first-in, first-out basis.
The Account participates in Equitable's Separate Account No. 2A by
purchasing or redeeming units, depending on the Account's excess cash
availability or need for cash to meet Account liabilities or withdrawals.
The investments of Separate Account No. 2A consist of debt securities
which mature or can be liquidated in sixty days or less from the date of
acquisition. Short-term debt securities may also be purchased directly by
the Account. Interest income is recorded when earned and expenses are
recognized when incurred.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income,
expenses, and unrealized gains (losses) during the reporting period.
Actual results could differ from those estimates.
These financial statements should be read in conjunction with the
financial statements of Prime Property Fund.
2. Valuation of Investments
The Account's participation in Prime Property Fund is valued as of the
last business day of the month based upon the number of units held and
the unit value of Prime Property Fund. Investments held by Prime Property
Fund are valued as disclosed in Note B2 of the financial statements of
Prime Property Fund.
Separate Account No. 2A is primarily valued at amortized cost which
approximates market value.
C. Expenses
Expense charges are made in accordance with the terms of the contracts
participating in the Account.
SAI-54
<PAGE>
- --------------------------------------------------------------------------------
D. Federal Income Tax
No federal income tax based on net investment income or realized and
unrealized gains was applicable to contracts participating in the Account
by reason of applicable sections of the Internal Revenue Code, and no
federal income tax payable by Equitable will affect the contracts.
E. Withdrawals
The ability of a client to withdraw funds from the Account is subject to
the availability of cash arising from net investment income, allocations
and the redemption of units in Prime Property Fund. To the extent that
withdrawal requests exceed such available cash, Management has uniform
procedures to provide for cash payments. As of December 31, 1999, the
Account is fulfilling withdrawal requests on a current basis.
SAI-55
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
The Equitable Life Assurance Society of the United States:
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and changes in net assets and of cash flows
present fairly, in all material respects, the financial position of Prime
Property Fund of The Equitable Life Assurance Society of the United States (the
Account) at December 31, 1999 and 1998, and the results of its operation and
its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States. These financial statements
are the responsibility of the Account'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 auditing standards
generally accepted in the United States, 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.
PricewaterhouseCoopers LLP
Atlanta, Georgia
February 11, 2000
SAI-56
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INDEPENDENT APPRAISERS
All Prime Property Fund market value estimates are made by independent third
party appraisers, which are staff members of the undersigned.
The appraisers have had the full cooperation of Lend Lease with complete and
unrestricted access to all underlying documents including, but not limited to,
leases, operating agreements, budgets and partnership joint venture agreements.
We have independently researched the market for all relevant data and performed
appropriate analysis.
All valuations reports have been prepared in compliance with the Uniform
Standards of Professional Appraisal Practice ("USPAP") of the Appraisal
Foundation.
PricewaterhouseCoopers LLP
Arthur Andersen LLP
December 31, 1999
SAI-57
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
DECEMBER 31,
-------------------------------------
1999 1998
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Real estate investments at value (Notes B and C):
Properties $2,651,640,000 $2,650,035,000
Partnership equities and related mortgage loans receivable 503,397,062 458,805,914
Mortgage loans receivable 157,400,000 178,800,000
- -----------------------------------------------------------------------------------------------------
Total real estate investments at value 3,312,437,062 3,287,640,914
Cash and short-term investments (Notes B and C) 27,089,283 20,000,143
Accrued investment income 50,121,886 52,194,434
Prepaid real estate expenses and taxes 3,584,345 3,291,073
Other assets 13,166,463 11,648,878
- -----------------------------------------------------------------------------------------------------
TOTAL ASSETS 3,406,399,039 3,374,775,442
- -----------------------------------------------------------------------------------------------------
LIABILITIES:
Mortgage loans payable (Note D) 399,369,373 410,001,245
Notes payable and borrowings under line of credit (Note D) 516,344,576 487,204,169
Accrued real estate expenses and taxes 39,935,825 42,279,908
Accrued asset management fees and other liabilities 21,861,897 27,734,613
Accrued capital expenditures 15,439,134 18,974,050
Accrued interest 11,055,869 10,422,446
- -----------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,004,006,674 996,616,431
- -----------------------------------------------------------------------------------------------------
NET ASSETS $2,402,392,365 $2,378,159,011
- -----------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
SAI-58
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------
1999 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Investment Income (Notes B and C):
Rental income from real estate properties $ 347,614,905 $ 382,219,611
Equity in income from partnerships and interest from related mortgage
loans receivable 43,405,299 29,167,339
Interest from mortgage loans receivable 12,969,272 13,401,412
Interest from short-term investments 1,760,249 7,706,114
Other 246,344 4,588,412
- ---------------------------------------------------------------------------------------------------------------
Total 405,996,069 437,082,888
- ---------------------------------------------------------------------------------------------------------------
Expenses (Note B):
Real estate operating expenses 91,983,408 113,781,811
Real estate taxes 41,049,268 41,958,513
Interest on mortgage loans payable, notes payable and line of credit
(Note D) 59,549,656 51,329,091
Asset management fees (Note H) 23,280,155 25,733,739
- ---------------------------------------------------------------------------------------------------------------
Total 215,862,487 232,803,154
- ---------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 190,133,582 204,279,734
- ---------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) (Note B):
Realized gain (loss) from sale or disposition of investments:
Net proceeds from sales or dispositions 194,732,360 541,139,725
Less: Cost of investments sold or disposed 358,002,683 650,348,706
Less: Realization of unrealized gain (loss) on investments sold or
disposed (160,423,350) (110,421,648)
- ---------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from sale or disposition of investments (2,846,973) 1,212,667
Change in unrealized gain on investments 84,277,546 224,539,850
Change in unrealized gain on mortgages and notes payable 10,356,034 --
- ---------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN 91,786,607 225,752,517
- ---------------------------------------------------------------------------------------------------------------
Increase in net assets attributable to investment activities 281,920,189 430,032,251
- ---------------------------------------------------------------------------------------------------------------
FROM CLIENT TRANSACTIONS:
Allocations 73,251,536 92,886,413
Withdrawals (Note F) (330,938,371) (743,307,309)
- ---------------------------------------------------------------------------------------------------------------
Decrease in net assets attributable to client transactions (257,686,835) (650,420,896)
- ---------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS 24,233,354 (220,388,645)
NET ASSETS -- BEGINNING 2,378,159,011 2,598,547,656
- ---------------------------------------------------------------------------------------------------------------
NET ASSETS -- ENDING $2,402,392,365 $2,378,159,011
- ---------------------------------------------------------------------------------------------------------------
Unit Value $ 9,575.90 $ 8,444.24
Units Outstanding 250,879 281,631
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
SAI-59
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------
1999 1998
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net investment income $ 190,133,582 $ 204,279,734
- -----------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net investment income to net cash flow provided
by operating activities:
Equity in income from partnerships in excess of distributions of net
investment income received (10,205,936) (4,959,448)
Amortization of deferred financing costs 1,888,854 1,128,995
Changes in assets -- (increase) decrease:
Accrued investment income 7,731,726 (14,809,048)
Prepaid real estate expenses and taxes (293,272) 3,898,510
Other assets 923,480 1,309,622
Changes in liabilities -- increase (decrease):
Accrued real estate expenses, taxes and interest (1,710,660) 2,392,967
Accrued asset management fees and other liabilities (5,872,716) 2,146,699
- -----------------------------------------------------------------------------------------------------------------
Total adjustments (7,538,524) (8,891,703)
- -----------------------------------------------------------------------------------------------------------------
Net Cash Flow Provided by Operating Activities 182,595,058 195,388,031
- -----------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Additions to real estate properties (57,845,640) (88,674,964)
Acquisitions of real estate properties (68,532,226) (241,578,141)
Proceeds from real estate properties sold 165,391,514 406,747,504
Acquisition of REIT stock -- (7,002,273)
Proceeds from REIT stock sold -- 56,879,481
Proceeds from mortgage loans receivable sold 21,207,597 --
Repayments of mortgage loans receivable 298,032 12,573,235
Acquisitions of partnership equities (26,000,000) (26,000,000)
Proceeds from partnership equities sold 31,240,846 65,347,929
Contributions to partnership equities and advances on related loans
receivable (4,785,565) (1,556,957)
- -----------------------------------------------------------------------------------------------------------------
Net Cash Flow Provided by Investing Activities 60,974,558 176,735,814
- -----------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Proceeds from mortgage loans payable 115,173,000 300,865,198
Principal payments on mortgage loans payable (125,361,798) (236,539,927)
Proceeds from notes payable 225,000,000 385,000,000
Principal payments on line of credit (190,000,000) (195,000,000)
Payments for deferred financing costs (1,163,779) (1,732,424)
Allocations 70,810,472 92,853,141
Withdrawals (330,938,371) (743,307,309)
- -----------------------------------------------------------------------------------------------------------------
Net Cash Flow Used in Financing Activities (236,480,476) (397,861,321)
- -----------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Short-term Investments 7,089,140 (25,737,476)
Cash and Short-term Investments -- Beginning 20,000,143 45,737,619
- -----------------------------------------------------------------------------------------------------------------
Cash and Short-term Investments -- Ending $ 27,089,283 $ 20,000,143
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
SAI-60
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
A: GENERAL
Prime Property Fund (the Account) was established as a separate account of The
Equitable Life Assurance Society of the United States (Equitable) in conformity
with the New York State Insurance Law for the purpose of acquiring real estate
and real estate related investments. Pursuant to such law, the net assets in
the Account are not chargeable with liabilities arising out of any other
business of Equitable. Equitable engaged Lend Lease Real Estate Investments,
Inc. ("Lend Lease" or "Management") to act as investment manager for the
Account.
At December 31, 1999, approximately 25%, 25% and 19% of the Account's real
estate investment value is located in the Pacific, Northeast and Midwest
regions of the United States, respectively, as defined by the National Council
of Real Estate Investment Fiduciaries. At December 31, 1999, approximately 46%
and 35% of the Account's real estate investment value consists of office
buildings and retail properties, respectively.
B: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. INVESTMENT TRANSACTIONS
Real estate property acquisitions are recorded as of the date of closing.
Mortgage and construction loans receivable and capital contributions to
partnership equities are recorded as of the date funds are advanced. Purchase
money mortgages acquired as consideration received for real estate sold are
recorded as of the closing date of the sales transaction.
Expenditures which extend economic life or represent additional capital
investments benefiting future periods (including tenant improvements and
leasing commissions) are capitalized. For properties under development or major
expansion, carrying costs related to the development or expansion are
capitalized prior to substantial completion of tenant improvements for a
maximum period of one year from cessation of major construction activity.
Historical cost depreciation is not recognized on real estate properties.
Rental income is recognized when due in accordance with the terms of the
respective leases rather than being averaged over the lives of the leases.
Expenses are recognized when incurred. Income from partnership operations
represents the Account's share of partnership income excluding historical cost
depreciation.
The Account determines realized gain (loss) by comparing net proceeds from the
sale or disposition of investments to the cost of the investments sold. The
unrealized gain (loss) previously recorded for these investments is then
reversed and reported as realization of unrealized gain (loss) on investments
sold or disposed in the Statements of Operations and Changes in Net Assets.
Mortgage loans and notes payable are stated at estimated market value. Benefits
or detriments resulting from a differential in current mortgage interest rates
and contractual mortgage interest rates and other factors are taken into
consideration in determining the market value of the borrowings.
Costs incurred in connection with obtaining borrowings are deferred and
amortized to interest on loans payable over the term of the related debt using
the straight-line method.
SAI-61
<PAGE>
- --------------------------------------------------------------------------------
2. VALUATION OF INVESTMENTS
The values of real estate investments are estimated in accordance with the
policies and procedures of the Appraisal Institute. Ultimate realization of the
market values is dependent to a great extent on economic and other conditions
that are beyond Management's control (such as general economic conditions,
conditions affecting tenants and other events occurring in the markets in which
individual properties are located). Further, values do not necessarily
represent the prices at which the real estate investments would sell since
market prices of real estate investments can only be determined by negotiation
between a willing buyer and seller. Market value considers the financial
aspects of a property, market transactions and the relative yield for an asset
as measured against alternative investments. Although the market values
represent subjective estimates, management believes that these market values
are reasonable approximations of market prices.
Real Estate Properties and Partnership Equities
The values of real estate properties and partnership equities have been
prepared giving consideration to Income, Cost, and Market Data Approaches of
estimating property value. The Income Approach projects an income stream for a
property (typically ten years) and discounts this income plus a reversion
(presumed sale) into a present value. Yield rates and growth assumptions
utilized in this approach are derived from market transactions as well as other
financial and demographic data. The Cost Approach estimates the replacement
cost of the building less depreciation plus the land value. Generally, this
approach provides a check on the Income Approach. The Market Data Approach
compares recent transactions to the appraised property. Adjustments are made
for dissimilarities which typically provide a range of value. Generally, the
Income Approach carries the most weight in the value reconciliation.
Investment values are determined quarterly from limited restricted appraisals,
in accordance with the Uniform Standards of Professional Appraisal Practice,
which include less documentation but nevertheless meet the minimum requirements
of the Appraisal Standards Board and the Appraisal Institute and are considered
appraisals. In these appraisals, a full discounted cash flow analysis, which is
the basis of an Income Approach, is the primary focus. Interim monthly
valuations are determined by giving consideration to material investment
transactions. Full appraisal reports are prepared on a rotating basis for all
properties.
During 1999 and the fourth quarter of 1998, all appraisals for the Account were
prepared by independent external appraisers. The external appraisals are
reviewed by the external Appraisal Management Firm. During the first three
quarters of 1998, appraisals were prepared by Management's valuation staff or
third-party appraisers. All staff appraisals were concurred with and reviewed
by one of three designated third-party appraisal firms, which also physically
inspected one-third of the properties each year on a rotating basis. All
appraisal reports and appraisal reviews comply with the currently published
Uniform Standards of Professional Appraisal Practice, as promulgated by the
Appraisal Institute.
Since appraisals take into consideration the estimated effect of physical
depreciation, a more meaningful financial statement presentation is achieved by
excluding historical cost depreciation from net investment income. This
presentation does not affect the net assets or unit value of the Account.
Partnership equities are stated at the Account's equity in the value of the net
assets of the partnerships.
Mortgage Loans Receivable
The market value of mortgage loans receivable held in the Account has been
determined by one or more of the following criteria, as appropriate: (i) on the
basis of estimated market interest rates for loans of comparable quality
SAI-62
<PAGE>
- --------------------------------------------------------------------------------
and maturity, (ii) by recognizing the value of equity participations and
options to enter into equity participations contained in certain loan
instruments, and (iii) giving consideration to the value of the underlying
security.
Short-Term Investments
Short-term investments are primarily valued at amortized cost, which
approximates market value.
3. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires Management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses and unrealized gains (losses)
during the reporting period. Actual results could differ from those estimates.
4. RECLASSIFICATIONS
Certain reclassifications have been made to the 1998 balances to confirm to the
1999 presentation.
SAI-63
<PAGE>
- --------------------------------------------------------------------------------
C: INVESTMENTS
1. REAL ESTATE INVESTMENTS
The Account's real estate investments are composed of the following:
<TABLE>
<CAPTION>
DECEMBER 31, 1999 DECEMBER 31, 1998
----------------------------- -----------------------------
(MILLIONS) COST VALUE COST VALUE
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PROPERTIES:
Office $ 1,213.8 $ 1,168.3 $ 1,294.7 $ 1,177.0
- --------------------------------------------------------------------------------------------
Retail 940.1 923.7 1,029.5 908.0
- --------------------------------------------------------------------------------------------
Industrial/R&D 343.5 382.2 419.8 433.8
- --------------------------------------------------------------------------------------------
Hotel 110.4 103.8 105.6 105.0
- --------------------------------------------------------------------------------------------
Residential/Other 73.8 73.6 28.3 26.2
- --------------------------------------------------------------------------------------------
Subtotal 2,681.6 2,651.6 2,877.9 2,650.0
- --------------------------------------------------------------------------------------------
PARTNERSHIP EQUITIES AND RELATED MORTGAGE LOANS RECEIVABLE:
Office 176.4 346.6 169.6 303.3
- --------------------------------------------------------------------------------------------
Retail (4.3) 80.7 4.3 79.5
- --------------------------------------------------------------------------------------------
Industrial/R&D 18.9 16.5 19.3 16.0
- --------------------------------------------------------------------------------------------
Residential/Other 62.7 59.6 62.4 60.0
- --------------------------------------------------------------------------------------------
Subtotal 253.7 503.4 255.6 458.8
- --------------------------------------------------------------------------------------------
MORTGAGE LOANS RECEIVABLE:
Retail 123.3 157.4 144.6 178.8
- --------------------------------------------------------------------------------------------
Subtotal 123.3 157.4 144.6 178.8
- --------------------------------------------------------------------------------------------
Total $ 3,058.6 $ 3,312.4 $ 3,278.1 $ 3,287.6
- --------------------------------------------------------------------------------------------
</TABLE>
In December 1999, the Account signed a contract to sell two wholly-owned office
properties in Richmond Heights, MO. The transaction closed in January, 2000.
SAI-64
<PAGE>
- --------------------------------------------------------------------------------
2. REAL ESTATE PARTNERSHIP EQUITIES
The combined financial positions and results of operations of the Account's
partnership equities at December 31, 1999 and 1998 are summarized as follows:
<TABLE>
<CAPTION>
1999 1998
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Number of interests 11 13
- --------------------------------------------------------------------------------------------------
Ownership positions 35.0 - 75.0% 33.3 - 75.0%
- --------------------------------------------------------------------------------------------------
Account's equity value (millions) $383 $337
- --------------------------------------------------------------------------------------------------
Notes receivable related to partnership equities (millions) $17 $20
- --------------------------------------------------------------------------------------------------
Partnership assets (millions)* $1,231 $1,218
- --------------------------------------------------------------------------------------------------
Partnership liabilities (millions)* $518 $573
- --------------------------------------------------------------------------------------------------
Partnership income before depreciation (millions)* $53 $31
- --------------------------------------------------------------------------------------------------
</TABLE>
* Stated at 100%.
3. MORTGAGE LOANS RECEIVABLE
At December 31, 1999, mortgage loans receivable at a market value of $260.3
million, of which $102.9 million related to partnership equities and $157.4
million of other mortgage loans receivable, had interest rates ranging from
6.6% to 12.0%. Contractual principal amounts due from borrowers during the five
years following December 31, 1999 and thereafter are as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, (MILLIONS)
- ---------------------------------------
<S> <C>
2000 $ 1
- ---------------------------------------
2001 1
- ---------------------------------------
2002 103
- ---------------------------------------
2003 120
- ---------------------------------------
2004 --
- ---------------------------------------
Thereafter --
- ---------------------------------------
Total $225
- ---------------------------------------
</TABLE>
4. SHORT-TERM INVESTMENTS
The Account's short-term investments are composed of participation in
Equitable's Separate Account No. 2A. The assets of Separate Account No. 2A
consist of debt securities maturing in sixty days or less from the date of
acquisition. Such debt securities may include bankers' acceptances,
certificates of deposit, commercial paper, and repurchase agreements.
Short-term debt securities may also be purchased directly by the Account.
SAI-65
<PAGE>
- --------------------------------------------------------------------------------
D: BORROWINGS
1. MORTGAGE LOANS PAYABLE
Mortgage loans payable are recorded at market value and consist of the
following at December 31, 1999:
<TABLE>
<CAPTION>
(MILLIONS)
- --------------------------------------------------------------------------------------------------------
<S> <C>
LIBOR plus .80% loan collateralized by two real estate properties with a market value of
$467.0 million. Maturing June 2000. $ 225.0
- --------------------------------------------------------------------------------------------------------
LIBOR plus 1.75% loan collateralized by two real estate properties with a market value of
$172.1 million. Maturing March 2001. 100.0
- --------------------------------------------------------------------------------------------------------
6.16% loan collateralized by a real estate property with a market value of $151.4
million. Maturing October 2005. 61.1
- --------------------------------------------------------------------------------------------------------
10.07% loan collateralized by a real estate property with a market value of $20.4
million. Maturing June 2001. 9.8
- --------------------------------------------------------------------------------------------------------
9.375% loan collateralized by a real estate property with a market value of $4.1 million.
Maturing February 2000. 3.5
- --------------------------------------------------------------------------------------------------------
Total $ 399.4
========================================================================================================
</TABLE>
The $100 million mortgage loan payable contains a covenant which requires the
maintenance of a debt service coverage ratio. The Account was in compliance
with such covenant at December 31, 1999.
A total of $2.6 million in financing costs have been incurred with respect to
the mortgage loans payable. As of December 31, 1999, $1.1 million remains
unamortized.
Scheduled annual payments of principal on mortgage loans payable are as
follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, (MILLIONS)
- ----------------------------------------
<S> <C>
2000 $ 228.6
- ----------------------------------------
2001 109.8
- ----------------------------------------
2002 .8
- ----------------------------------------
2003 .9
- ----------------------------------------
2004 .9
- ----------------------------------------
Thereafter 63.3
- ----------------------------------------
Total $ 404.3
========================================
</TABLE>
2. NOTES PAYABLE
In August 1997, the Account issued $300 million of unsecured notes payable
composed of the following: $125 million 6.80% notes due August 15, 2002 and
$175 million 7.00% notes due August 15, 2004. The market value of these notes
as of December 31, 1999 is $291.3 million. Interest on the notes is payable on
February 15 and August 15 of each year, commencing February 1998. The notes are
redeemable at the option of the Account, in whole or in part, at any time at a
redemption price equal to the sum of the principal amount of the notes or
portion thereof being redeemed plus accrued and unpaid interest thereon plus a
prepayment penalty.
SAI-66
<PAGE>
- --------------------------------------------------------------------------------
The terms of the notes include covenants which, among other things, require
maintenance of certain financial ratios and restrict encumbrance of assets and
creation of indebtedness. The Account was in compliance with such covenants at
December 31, 1999 and 1998.
Financing costs of $3.1 million have been incurred with respect to the notes
payable. As of December 31, 1999, $1.9 million remains unamortized.
3. LINE OF CREDIT
In June of 1997, the Account entered into a $250 million revolving credit
agreement with a number of banks. The agreement expires in June 2000. Under the
terms of the agreement, interest rates are determined at the time of the
borrowing and are based on LIBOR plus .50% to .75%, or other alternative rates.
In addition, the Account pays a quarterly commitment fee ranging from .125% to
.175% per annum on the average daily unused amount. During the year the Account
borrowed $225 million and repaid $190 million on an unsecured basis under the
agreement. At December 31, 1999, there was $225 million in borrowings
outstanding under the agreement.
The terms of the credit agreement include various covenants which provide,
among other things, for the maintenance of consolidated net assets of not less
than $1.5 billion and other restrictions on investments and outstanding
indebtedness. The Account was in compliance with such covenants at December 31,
1999 and 1998.
Financing costs of $0.7 million have been incurred with respect to the line of
credit. As of December 31, 1999,
$0.1 million remains unamortized.
4. EXTINGUISHMENT OF DEBT
During 1999, the Account disposed of a portion of a real estate property by
conveying it to the lender in full satisfaction of a mortgage loan payable of
$12.5 million. Upon conveyance of the property, the Account recorded a realized
loss of $13.1 million from the conveyance of the property and a realized gain
of $12.5 million from extinguishment of the debt.
During 1998, a partnership in which the Account held a 50% interest conveyed a
property to the lender in full satisfaction of a mortgage loan payable. Upon
conveyance, the Account reclassified a previously recognized unrealized loss of
$27.5 million, the cost of the Account's interest in the partnership, to a
realized loss. In addition, the Account received a cash distribution of
approximately $6.5 million and a release on an outstanding liability for $7.6
million for which the Account recorded realized gains.
SAI-67
<PAGE>
- --------------------------------------------------------------------------------
E: LEASES
Minimum future rentals to be received on real estate properties, excluding
partnership equities, under noncancelable operating leases in effect as of
December 31, 1999 are as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31, (MILLIONS)
- ----------------------------------------
<S> <C>
2000 $ 219.5
- ----------------------------------------
2001 196.5
- ----------------------------------------
2002 169.5
- ----------------------------------------
2003 141.3
- ----------------------------------------
2004 111.3
- ----------------------------------------
Thereafter 275.9
- ----------------------------------------
Total $ 1,114.0
========================================
</TABLE>
Contingent rentals included in investment income were approximately $5.0
million and $5.5 million in 1999 and 1998, respectively.
F: WITHDRAWALS
The ability of a client to withdraw funds from the Account is subject to the
availability of cash arising from net investment income, allocations, and the
sale of investments in the normal course of business. To the extent that
withdrawal requests exceed such available cash, Management has uniform
procedures to provide for cash payments, which may be deferred for such period
as Management considers necessary to protect the interests of other clients in
the Account or to obtain the funds to be withdrawn. At December 31, 1999 and
1998, withdrawal requests exceeded available cash.
G: RELATED PARTY TRANSACTIONS
At December 31, 1999 and 1998, interests of retirement plans for employees,
managers, and agents of Equitable in the Account aggregated $106.3 million
(4.4%) and $94.6 million (4.0%), respectively, of the net assets of the
Account.
Compass Management & Leasing, Inc. (Compass), a former affiliate of Lend Lease,
had been retained to provide management and leasing services for certain
properties of the Account. On September 30, 1998, Lend Lease sold Compass to
LaSalle Partners, Inc., now Jones Lang LaSalle (LaSalle). LaSalle will continue
to manage certain properties for the Account.
Due to the structure of the sale of Compass to LaSalle, Lend Lease will
continue to comply with an exemption from the Department of Labor which allows
it to charge market rate property management and leasing fees for properties
LaSalle manages for the Account. All such fees must be approved by an
independent fiduciary. During 1999 and 1998, Compass, and LaSalle earned an
aggregate of $9.7 million and $10.5 million, respectively, in property
management and leasing fees from the Account, and in addition were reimbursed
an aggregate of $11.6 million and $13.9 million, respectively, for payroll
expenses for on-site personnel.
SAI-68
<PAGE>
- --------------------------------------------------------------------------------
H: FEES
Management charges clients in the Account a monthly asset management fee based
on the client's prior month-end net asset value at the annual rates shown
below:
<TABLE>
<CAPTION>
ANNUAL
AMOUNT OF FUNDS RATE
- ------------------------------------------------
<S> <C>
First $10 million 1.15%
- ------------------------------------------------
Next $15 million 1.00%
- ------------------------------------------------
Excess over $25 million 0.80%
- ------------------------------------------------
</TABLE>
Additional fees may also be charged to clients for certain optional services
provided by Management.
At December 31, 1999 and 1998, the clients' liability to Management for asset
management fees totaled $4.4 million and $4.6 million, respectively. Account
investments in Separate Account No. 2A are not subject to an additional asset
management fee.
I: SUPPLEMENT DISCLOSURES OF CASH FLOW INFORMATION
In the Statements of Cash Flows, the Account considers short-term investments
to be cash equivalents.
Cash payments of interest were $57.0 million and $51.9 million during 1999 and
1998, respectively.
Non-cash investing and financing activities are summarized as follows:
<TABLE>
<CAPTION>
1999 1998
(MILLIONS) (MILLIONS)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Conveyance of real estate property to lenders, at cost $13 --
- --------------------------------------------------------------------------------------------------------
Transfer of partnership equity to real estate property at cost $25 --
- --------------------------------------------------------------------------------------------------------
Assumption of mortgage loan payable upon conversion of partnership equity $16 --
- --------------------------------------------------------------------------------------------------------
Conveyance of partnership equity to lenders, at cost -- $12
- --------------------------------------------------------------------------------------------------------
Write off of partnership notes receivable, at cost -- $ 2
- --------------------------------------------------------------------------------------------------------
Write off of mortgage receivable, at cost -- $ 8
- --------------------------------------------------------------------------------------------------------
Capitalized interest on internally funded construction projects -- $ 2
========================================================================================================
</TABLE>
J: FEDERAL INCOME TAX
No federal income tax based on net investment income or realized and unrealized
gains was applicable to contracts participating in the Account by reason of
applicable sections of the Internal Revenue Code, and no federal income tax
payable by Equitable will affect the contracts.
K: INVESTMENT COMMITMENTS
As of December 31, 1999, the Account proposes to invest an additional $9.6
million in existing real estate investments and $50.0 million in new
properties.
SAI-69
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 8 (PRIME PROPERTY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Supplementary Financial Information
Schedule X -- Supplementary Income Statement Information
(In thousands)
<TABLE>
<CAPTION>
COLUMN B
YEAR ENDED DECEMBER 31,
- --------------------------------------------------------------
COLUMN A
ITEM 1999 1998
- --------------------------------------------------------------
<S> <C> <C>
1. Maintenance and repairs ......... $13,738 $15,712
- --------------------------------------------------------------
2. Real estate taxes ............... $40,623 $41,545
- --------------------------------------------------------------
</TABLE>
Maintenance and Repairs is included in Real Estate Operating Expenses.
Other captions not included since such costs and expenses are not applicable or
did not exceed 1% of total revenues.
SAI-70
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 8 (PRIME PROPERTY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Supplementary Financial Information
Schedule XII -- Mortgage Loans Receivable on Real Estate
As of December 31, 1999
(In thousands)
<TABLE>
<CAPTION>
CURRENT
EFFECTIVE FINAL
INTEREST MATURITY
DESCRIPTION RATE DATE
- --------------------------------------------------------
<S> <C> <C>
Mortgage Loans Receivable:
Participating mortgage secured 8.2% 07/01/03
by a shopping center in New
Castle County, DE
Secured by office, hotel, retail, 6.63% 04/01/02
garage and marina facility in
Boston, MA
Secured by office, hotel, retail, 12% 03/31/02
garage and marina facility in
Boston, MA
Secured by shopping center in 10% 12/21/02
Frederick, MD
- --------------------------------------------------------
Total ..........................
- --------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CARRYING
AMOUNT OF
FACE MORTGAGE
AMOUNT OF AT MARKET
DESCRIPTION PERIODIC PAYMENT TERMS MORTGAGE VALUE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mortgage Loans Receivable:
Participating mortgage secured Monthly payment of interest plus Participation in $122,426 $157,400
by a shopping center in New property cash flow. Loan due at maturity date.
Castle County, DE
Secured by office, hotel, retail, Quarterly interest only. Loan due at Maturity date. 63,000 63,000
garage and marina facility in
Boston, MA
Secured by office, hotel, retail, Monthly interest only to the extent of available cash 35,381 35,381
garage and marina facility in flow. Principal and all accrued unpaid interest due at
Boston, MA maturity date.
Secured by shopping center in Quarterly interest only. Loan due at maturity date. 4,500 4,500
Frederick, MD
- -----------------------------------------------------------------------------------------------------------------
Total .......................... $225,307 $260,281
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
The following is a reconciliation of the carrying amounts of the above loans at
market value for the years ended December 31, 1999 and 1998:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1999 1998
- -----------------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C>
Balance -- January 1 .................................................... $ 280,728 $ 289,993
Additions during the year:
Advances/New Loans ...................................................... 9,173 2,636
Deductions during the year: .............................................
Collection of principal and transfers to real estate properties ......... (30,638) (12,573)
Increase/(decrease) in unrealized gain/(loss) during the year ........... 808 8,172
Increase/(decrease) in realized gain/(loss) during the year ............. 210 (7,500)
- -----------------------------------------------------------------------------------------------------
Balance -- December 31 ................................................. $ 260,281 $ 280,728
- -----------------------------------------------------------------------------------------------------
</TABLE>
SAI-71
<PAGE>
- --------------------------------------------------------------------------------
NET INVESTMENT VALUE BY TYPE -- DECEMBER 31, 1999
<TABLE>
<CAPTION>
INVESTMENT PERCENT OF TOTAL MORTGAGE LOANS NET INVESTMENT PERCENT OF
VALUE INVESTMENT PAYABLE VALUE TOTAL NET
(MILLIONS) VALUE (MILLIONS) (MILLIONS) INVESTMENT VALUE
------------ ------------------ ---------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
Office .................... $ 1,514.9 45.7% $ 62.1 $ 1,452.8 49.9%
Retail .................... 1,161.8 35.1 324.0 837.8 28.8
Industrial/R&D ............ 398.7 12.0 13.3 385.4 13.2
Hotel ..................... 103.8 3.1 -- 103.8 3.6
Residential/Other ......... 133.2 4.1 -- 133.2 4.5
- ------------------------------------------------------------------------------------------------------------------------
Total ..................... $ 3,312.4 100.0% $ 399.4 $ 2,913.0 100.0%
========================================================================================================================
</TABLE>
NUMBER OF INVESTMENTS BY TYPE AND LOCATION -- DECEMBER 31, 1999
<TABLE>
<CAPTION>
RESIDENTIAL/
OFFICE RETAIL INDUSTRIAL/R&D HOTEL OTHER TOTAL
-------- -------- ---------------- ------- ------------- -------
<S> <C> <C> <C> <C> <C> <C>
Pacific .................... 5 2 15 -- -- 22
Mountain ................... 2 1 4 -- -- 7
Southwest .................. -- -- 9 -- -- 9
Southeast .................. -- 2 3 2 1 8
West North Central ......... 5 2 2 -- -- 9
East North Central ......... 1 3 3 -- 2 9
Mideast .................... 7 2 6 1 1 17
Northeast .................. 8 3 3 1 3 18
- ---------------------------------------------------------------------------------------------------------
Total ...................... 28 15 45 4 7 99
=========================================================================================================
</TABLE>
INVESTMENT VALUE BY TYPE AND LOCATION -- DECEMBER 31, 1999
<TABLE>
<CAPTION>
RESIDENTIAL/
OFFICE RETAIL INDUSTRIAL/R&D HOTEL OTHER TOTAL
-------- ---------- ---------------- --------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Pacific .................... 9.8% 10.6% 4.5% -- -- 24.9%
Mountain ................... 4.7 0.4 0.9 -- -- 6.0
Southwest .................. -- -- 2.8 -- -- 2.8
Southeast .................. -- 2.6 0.4 1.0% 0.9% 4.9
West North Central ......... 1.1 6.0 0.5 -- -- 7.6
East North Central ......... 4.6 3.8 0.5 -- 1.4 10.3
Mideast .................... 10.2 4.9 2.1 0.7 0.8 18.7
Northeast .................. 15.3 6.8 0.3 1.4 1.0 24.8
- -----------------------------------------------------------------------------------------------------------------
Total ...................... 45.7% 35.1% 12.0% 3.1% 4.1% 100.0%
=================================================================================================================
</TABLE>
SAI-72
<PAGE>
- --------------------------------------------------------------------------------
DISTRIBUTION OF PROPERTIES BY PROPERTY MANAGER* -- DECEMBER 31, 1999
<TABLE>
<CAPTION>
LEND LEASE JONES LANG LASALLE OTHER THIRD-PARTY AGENTS TOTAL
------------------------- ------------------------- ------------------------- --------------------------
INVESTMENT INVESTMENT INVESTMENT INVESTMENT
NO. OF VALUE NO. OF VALUE NO. OF VALUE NO. OF VALUE
PROPERTIES (MILLIONS) PROPERTIES (MILLIONS) PROPERTIES (MILLIONS) PROPERTIES (MILLIONS)
------------ ------------ ------------ ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Office ............... -- $ -- 14 $ 831.1 12 $ 585.4 26 $ 1,416.5
Retail ............... -- -- 11 882.7 2 117.2 13 999.9
Industrial/R&D ....... -- -- 28 240.0 17 158.7 45 398.7
Hotel ................ -- -- -- -- 4 103.8 4 103.8
Residential/Other .... 2 6.2 -- -- 5 127.0 7 133.2
- ------------------------------------------------------------------------------------------------------------------------------
Total ................ 2 $ 6.2 53 $ 1,953.8 40 $ 1,092.1 95 $ 3,052.1
==============================================================================================================================
</TABLE>
* Includes wholly-owned and partnership equity properties.
SAI-73
<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 comprehensive
income 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, 1999 and 1998, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States of America. 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 auditing standards
generally accepted in the United States of America, 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.
PricewaterhouseCoopers LLP
New York, New York
February 1, 2000
F-1
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------- --------------
(IN MILLIONS)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Available for sale, at estimated fair value............................. $ 18,599.7 $ 18,993.7
Held to maturity, at amortized cost..................................... 133.2 125.0
Mortgage loans on real estate............................................. 3,270.0 2,809.9
Equity real estate........................................................ 1,160.2 1,676.9
Policy loans.............................................................. 2,257.3 2,086.7
Other equity investments.................................................. 671.2 713.3
Investment in and loans to affiliates..................................... 1,201.8 928.5
Other invested assets..................................................... 911.6 808.2
------------- -------------
Total investments..................................................... 28,205.0 28,142.2
Cash and cash equivalents................................................... 628.0 1,245.5
Deferred policy acquisition costs........................................... 4,033.0 3,563.8
Other assets................................................................ 3,868.3 3,054.6
Closed Block assets......................................................... 8,607.3 8,632.4
Separate Accounts assets.................................................... 54,453.9 43,302.3
------------- -------------
TOTAL ASSETS................................................................ $ 99,795.5 $ 87,940.8
============= =============
LIABILITIES
Policyholders' account balances............................................. $ 21,351.4 $ 20,857.5
Future policy benefits and other policyholders' liabilities................. 4,777.6 4,726.4
Short-term and long-term debt............................................... 1,407.9 1,181.7
Other liabilities........................................................... 3,133.6 3,474.3
Closed Block liabilities.................................................... 9,025.0 9,077.0
Separate Accounts liabilities............................................... 54,332.5 43,211.3
------------- -------------
Total liabilities..................................................... 94,028.0 82,528.2
------------- -------------
Commitments and contingencies (Notes 11, 13, 14, 15 and 16)
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.............................................. 3,557.2 3,110.2
Retained earnings........................................................... 2,600.7 1,944.1
Accumulated other comprehensive (loss) income............................... (392.9) 355.8
------------- -------------
Total shareholder's equity............................................ 5,767.5 5,412.6
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY.................................. $ 99,795.5 $ 87,940.8
============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
F-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------- -------------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Universal life and investment-type product policy fee
income...................................................... $ 1,257.5 $ 1,056.2 $ 950.6
Premiums...................................................... 558.2 588.1 601.5
Net investment income......................................... 2,240.9 2,228.1 2,282.8
Investment (losses) gains, net................................ (96.9) 100.2 (45.2)
Commissions, fees and other income............................ 2,177.9 1,503.0 1,227.2
Contribution from the Closed Block............................ 86.4 87.1 102.5
------------ ------------- -------------
Total revenues.......................................... 6,224.0 5,562.7 5,119.4
------------ ------------- -------------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders' account balances.......... 1,078.2 1,153.0 1,266.2
Policyholders' benefits....................................... 1,038.6 1,024.7 978.6
Other operating costs and expenses............................ 2,797.3 2,201.2 2,203.9
------------ ------------- -------------
Total benefits and other deductions..................... 4,914.1 4,378.9 4,448.7
------------ ------------- -------------
Earnings from continuing operations before Federal
income taxes and minority interest.......................... 1,309.9 1,183.8 670.7
Federal income taxes.......................................... 332.0 353.1 91.5
Minority interest in net income of consolidated subsidiaries.. 199.4 125.2 54.8
------------ ------------- -------------
Earnings from continuing operations........................... 778.5 705.5 524.4
Discontinued operations, net of Federal income taxes.......... 28.1 2.7 (87.2)
------------ ------------- -------------
Net Earnings.................................................. $ 806.6 $ 708.2 $ 437.2
============ ============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------- -------------
(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............. 3,110.2 3,105.8 3,105.8
Additional capital in excess of par value..................... 447.0 4.4 -
------------ ------------- -------------
Capital in excess of par value, end of year................... 3,557.2 3,110.2 3,105.8
------------ ------------- -------------
Retained earnings, beginning of year.......................... 1,944.1 1,235.9 798.7
Net earnings.................................................. 806.6 708.2 437.2
Dividend paid to the Holding Company.......................... (150.0) - -
------------ ------------- -------------
Retained earnings, end of year................................ 2,600.7 1,944.1 1,235.9
------------ ------------- -------------
Accumulated other comprehensive income,
beginning of year........................................... 355.8 516.3 177.0
Other comprehensive (loss) income............................. (748.7) (160.5) 339.3
------------ ------------- -------------
Accumulated other comprehensive (loss) income, end of year.... (392.9) 355.8 516.3
------------ ------------- -------------
TOTAL SHAREHOLDER'S EQUITY, END OF YEAR....................... $ 5,767.5 $ 5,412.6 $ 4,860.5
============ ============= ============
COMPREHENSIVE INCOME
Net earnings.................................................. $ 806.6 $ 708.2 $ 437.2
------------ ------------- -------------
Change in unrealized (losses) gains, net of reclassification
adjustment.................................................. (776.9) (149.5) 343.7
Minimum pension liability adjustment.......................... 28.2 (11.0) (4.4)
------------ ------------- -------------
Other comprehensive (loss) income............................. (748.7) (160.5) 339.3
------------ ------------- -------------
COMPREHENSIVE INCOME.......................................... $ 57.9 $ 547.7 $ 776.5
============ ============= ============
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------- -------------
(IN MILLIONS)
<S> <C> <C> <C>
Net earnings.................................................. $ 806.6 $ 708.2 $ 437.2
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Interest credited to policyholders' account balances........ 1,078.2 1,153.0 1,266.2
Universal life and investment-type product
policy fee income......................................... (1,257.5) (1,056.2) (950.6)
Investment losses (gains)................................... 96.9 (100.2) 45.2
Change in Federal income tax payable........................ 157.4 123.1 (74.4)
Change in property and equipment............................ (256.3) (81.8) (9.6)
Change in deferred acquisition costs........................ (260.7) (314.0) (220.7)
Other, net.................................................. (168.8) 70.9 399.7
------------ ------------- -------------
Net cash provided by operating activities..................... 195.8 503.0 893.0
------------ ------------- -------------
Cash flows from investing activities:
Maturities and repayments................................... 2,019.0 2,289.0 2,702.9
Sales....................................................... 7,572.9 16,972.1 10,385.9
Purchases................................................... (10,737.3) (18,578.5) (13,205.4)
(Increase) decrease in short-term investments............... (178.3) 102.4 (555.0)
Decrease in loans to discontinued operations................ - 660.0 420.1
Sale of subsidiaries........................................ - - 261.0
Other, net.................................................. (134.8) (341.8) (612.6)
------------ ------------- -------------
Net cash (used) provided by investing activities.............. (1,458.5) 1,103.2 (603.1)
------------ ------------- -------------
Cash flows from financing activities: Policyholders'
account balances:
Deposits.................................................. 2,366.2 1,508.1 1,281.7
Withdrawals............................................... (1,765.8) (1,724.6) (1,886.8)
Net increase (decrease) in short-term financings............ 378.2 (243.5) 419.9
Repayments of long-term debt................................ (41.3) (24.5) (196.4)
Payment of obligation to fund accumulated deficit of
discontinued operations................................... - (87.2) (83.9)
Dividend paid to the Holding Company........................ (150.0) - -
Other, net.................................................. (142.1) (89.5) (62.7)
------------ ------------- -------------
Net cash provided (used) by financing activities.............. 645.2 (661.2) (528.2)
------------ ------------- -------------
Change in cash and cash equivalents........................... (617.5) 945.0 (238.3)
Cash and cash equivalents, beginning of year.................. 1,245.5 300.5 538.8
------------ ------------- -------------
Cash and Cash Equivalents, End of Year........................ $ 628.0 $ 1,245.5 $ 300.5
============ ============= =============
Supplemental cash flow information
Interest Paid............................................... $ 92.2 $ 130.7 $ 217.1
============ ============= =============
Income Taxes Paid........................................... $ 116.5 $ 254.3 $ 170.0
============ ============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) ORGANIZATION
The Equitable Life Assurance Society of the United States ("Equitable
Life") is an indirect, wholly owned subsidiary of AXA Financial, Inc. (the
"Holding Company," and collectively with its consolidated subsidiaries,
"AXA Financial"). Equitable Life's insurance business is conducted
principally by Equitable Life and its wholly owned life insurance
subsidiaries, Equitable of Colorado ("EOC"), and, prior to December 31,
1996, Equitable Variable Life Insurance Company ("EVLICO"). Effective
January 1, 1997, EVLICO was merged into Equitable Life. Equitable Life's
investment management business, which comprises the Investment Services
segment, is conducted principally by Alliance Capital Management L.P.
("Alliance"), and Donaldson, Lufkin & Jenrette, Inc. ("DLJ"), an investment
banking and brokerage affiliate. 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 58.0% at
December 31, 1999 (53.0% if all securities convertible into, and options
on, common stock were to be converted or exercised).
On September 20, 1999, as part of AXA Financial's "branding" strategic
initiative, EQ Financial Consultants, Inc., a broker-dealer subsidiary of
Equitable Life, was merged into a new company, AXA Advisors, LLC ("AXA
Advisors"). Also, on September 21, 1999, AXA Advisors was transferred by
Equitable Life to AXA Distribution Holding Corporation ("AXA
Distribution"), a wholly owned indirect subsidiary of the Holding Company,
for $15.3 million. The excess of the sales price over AXA Advisors' book
value has been recorded in Equitable Life's books as a capital
contribution. Equitable Life will continue to develop and market the
"Equitable" brand of life and annuity products, while AXA Distribution and
its subsidiaries begin to assume responsibility for providing financial
advisory services, product distribution and customer relationship
management.
The Insurance 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. It also 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 includes Alliance and the results of DLJ
which are accounted for on an equity basis. In 1999, Alliance reorganized
into Alliance Capital Management Holding L.P. ("Alliance Holding") and
Alliance (the "Reorganization"). Alliance Holding's principal asset is its
interest in Alliance and it functions as a holding entity through which
holders of its publicly traded units own an indirect interest in the
operating partnership. The Company exchanged substantially all of its
Alliance Holding units for units in Alliance ("Alliance Units"). As a
result of the reorganization, the Company was the beneficial owner of
approximately 2% of Alliance Holding and 56% of Alliance. Alliance provides
diversified investment fund management services to a variety of
institutional clients, including pension funds, endowments, and foreign
financial institutions, as well as to individual investors, principally
through a broad line of mutual funds. This segment includes institutional
Separate Accounts which provide various investment options for large group
pension clients, primarily deferred benefit contribution plans, through
pooled or single group accounts. At December 31, 1999, Equitable Life has a
31.7% ownership interest in DLJ. DLJ's businesses include securities
underwriting, sales and trading, merchant banking, financial advisory
services, investment research, venture capital, correspondent brokerage
services, online interactive brokerage services and asset management. DLJ
serves institutional, corporate, governmental and individual clients both
domestically and internationally. Through June 10, 1997, this segment also
includes Equitable Real Estate Investment Management Inc. ("EREIM") which
was sold. EREIM provided real estate investment management services,
property management services, mortgage servicing and loan asset management,
and agricultural investment management.
F-6
<PAGE>
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") which
require 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.
The accompanying consolidated financial statements include the accounts of
Equitable Life and certain of its subsidiaries engaged in insurance related
business (collectively, the "Insurance Group"); other subsidiaries,
principally Alliance and through June 10, 1997, EREIM (see Note 5); 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, liabilities and results of operations are presented in the
consolidated financial statements as single line items (see Note 7). Unless
specifically stated, all other footnote disclosures contained herein
exclude the Closed Block related amounts.
All significant intercompany transactions and balances except those with
the Closed Block, DLJ and discontinued operations (see Note 8) have been
eliminated in consolidation. The years "1999," "1998" and "1997" refer to
the years ended December 31, 1999, 1998 and 1997, respectively. Certain
reclassifications have been made in the amounts presented for prior periods
to conform these periods with the 1999 presentation.
Closed Block
------------
On July 22, 1992, Equitable Life established the Closed Block for the
benefit of certain individual participating policies which were in force on
that date. The assets allocated to the Closed Block, together with
anticipated revenues from policies included in the Closed Block, were
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
Closed Block policyholders and will not revert to the benefit of the
Holding Company. No reallocation, transfer, borrowing or lending of assets
can be made between the Closed Block and other portions of Equitable Life's
General Account, any of its Separate Accounts or 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
-----------------------
Discontinued operations at December 31, 1999, principally consists of the
Group Non-Participating Wind-Up Annuities ("Wind-Up Annuities"), for which
a premium deficiency reserve has been established. Management reviews the
adequacy of the allowance each quarter and believes the allowance for
future losses at December 31, 1999 is adequate to provide for all future
losses; however, the quarterly allowance review 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 allowance for future losses, 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 allowance
are likely to result (see Note 8).
F-7
<PAGE>
Accounting Changes
------------------
In March 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use," which
requires capitalization of external and certain internal costs incurred to
obtain or develop internal-use computer software during the application
development stage. The Company applied the provisions of SOP 98-1
prospectively effective January 1, 1998. The adoption of SOP 98-1 did not
have a material impact on the Company's consolidated financial statements.
Capitalized internal-use software is amortized on a straight-line basis
over the estimated useful life of the software.
New Accounting Pronouncements
-----------------------------
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities," which establishes
accounting and reporting standards for derivative instruments, including
certain derivatives embedded in other contracts, and for hedging
activities. It requires all derivatives to be recognized on the balance
sheet at fair value. The accounting for changes in the fair value of a
derivative depends on its intended use. Derivatives not used in hedging
activities must be adjusted to fair value through earnings. Changes in the
fair value of derivatives used in hedging activities will, depending on the
nature of the hedge, either be offset in earnings against the change in
fair value of the hedged item attributable to the risk being hedged or
recognized in other comprehensive income until the hedged item affects
earnings. For all hedging activities, the ineffective portion of a
derivative's change in fair value will be immediately recognized in
earnings. In June 1999, the FASB issued SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective
Date of FASB Statement No. 133," which defers the effective date of SFAS
No. 133 to all fiscal quarters of all fiscal years beginning after June 15,
2000. The Company expects to adopt SFAS No. 133 effective January 1, 2001.
Adjustments resulting from initial adoption of the new requirements will be
reported in a manner similar to the cumulative effect of a change in
accounting principle and will be reflected in net income or accumulated
other comprehensive income based upon existing hedging relationships, if
any. Management currently is assessing the impact of adoption. However,
Alliance's adoption of the new requirements is not expected to have a
significant impact on the Company's consolidated balance sheet or statement
of earnings. Also, since most of DLJ's derivatives are carried at fair
values, the Company's consolidated earnings and financial position are not
expected to be significantly affected by DLJ's adoption of the new
requirements.
Valuation of Investments
------------------------
Fixed maturities identified as available for sale are reported at estimated
fair value. Fixed maturities, which the Company has both the ability and
the intent to hold to maturity, are stated principally at amortized cost.
The amortized cost of fixed maturities is adjusted for impairments in value
deemed to be other than temporary.
Valuation allowances are netted against the asset categories to which they
apply.
Mortgage loans on real estate are stated at unpaid principal balances, net
of unamortized discounts and valuation allowances. 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.
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 held for sale are computed using the lower of depreciated cost or
current estimated fair value, net of disposition costs. Depreciation is
discontinued on real estate held for sale.
F-8
<PAGE>
Policy loans are stated at unpaid principal balances.
Partnerships and joint venture interests in which the Company does not have
control or 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.
Equity securities, comprised of common stock classified as both trading and
available for sale securities, are carried at estimated fair value and are
included in other equity investments.
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.
Net Investment Income, Investment Gains, Net and Unrealized Investment
----------------------------------------------------------------------
Gains (Losses)
--------------
Net investment income and realized investment gains (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 (losses) are determined by specific
identification and are presented as a component of revenue. Changes in
valuation allowances are included in investment gains (losses).
Unrealized gains (losses) on publicly-traded common equity securities
classified as trading securities are reflected in net investment income.
Unrealized investment gains (losses) on fixed maturities and equity
securities available for sale held by the Company are accounted for as a
separate component of accumulated comprehensive income, net of related
deferred Federal income taxes, amounts attributable to discontinued
operations, participating group annuity contracts and deferred policy
acquisition costs ("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.
F-9
<PAGE>
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. 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 25
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
accumulated other comprehensive income in consolidated shareholder's equity
as of the balance sheet date.
As part of its asset/liability management process, in second quarter 1999,
management initiated a review of the matching of invested assets to
Insurance product lines given their different liability characteristics and
liquidity requirements. As a result of this review, management reallocated
the current and prospective interests of the various product lines in the
invested assets. These asset reallocations and the related changes in
investment yields by product line, in turn, triggered a review of and
revisions to the estimated future gross profits used to determine the
amortization of DAC for universal life and investment-type products. The
revisions to estimated future gross profits resulted in an after-tax
writedown of DAC of $85.6 million (net of a Federal income tax benefit of
$46.1 million).
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, 1999, the expected investment yield, excluding policy loans, generally
ranged from 7.75% grading to 7.5% over a 20 year period. 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. The effect on the amortization of
DAC of revisions to estimated gross margins is reflected in earnings in the
period such estimated gross margins are revised. The effect on the DAC
asset that would result from realization of unrealized gains (losses) is
recognized with an offset to accumulated comprehensive income in
consolidated shareholder's equity as of the balance sheet date.
For non-participating traditional life 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.
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
represents 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, includes a margin
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
F-10
<PAGE>
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 8.35% for
annuity liabilities.
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. While
management believes its disability income ("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 DI and major
medical policies were $948.4 million and $951.7 million at December 31,
1999 and 1998, respectively. Incurred benefits (benefits paid plus changes
in claim reserves) and benefits paid for individual DI and major medical
are summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Incurred benefits related to current year.......... $ 150.7 $ 140.1 $ 132.3
Incurred benefits related to prior years........... 64.7 84.2 60.0
------------- ------------ ------------
Total Incurred Benefits............................ $ 215.4 $ 224.3 $ 192.3
============= ============ ============
Benefits paid related to current year.............. $ 28.9 $ 17.0 $ 28.8
Benefits paid related to prior years............... 189.8 155.4 146.2
------------- ------------ ------------
Total Benefits Paid................................ $ 218.7 $ 172.4 $ 175.0
============= ============ ============
</TABLE>
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.
At December 31, 1999, participating policies, including those in the Closed
Block, represent approximately 23.0% ($47.0 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 consolidated subsidiaries. Current Federal income taxes are
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 are 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 Separate Accounts liabilities.
F-11
<PAGE>
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 1999, 1998 and 1997, investment results of such
Separate Accounts were $6,045.5 million, $4,591.0 million and $3,411.1
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.
Employee Stock Option Plan
--------------------------
The Company accounts for stock option plans sponsored by the Holding
Company, DLJ and Alliance in accordance with the provisions of Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees," and related interpretations. In accordance with the opinion,
compensation expense is recorded on the date of grant only if the current
market price of the underlying stock exceeds the option strike price at the
grant date. See Note 22 for the pro forma disclosures for the Holding
Company, DLJ and Alliance required by SFAS No. 123, "Accounting for
Stock-Based Compensation".
F-12
<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, 1999
-----------------
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 14,866.8 $ 139.5 $ 787.0 $ 14,219.3
Mortgage-backed.................... 2,554.5 2.3 87.8 2,469.0
U.S. Treasury, government and
agency securities................ 1,194.1 18.9 23.4 1,189.6
States and political subdivisions.. 110.0 1.4 4.9 106.5
Foreign governments................ 361.8 16.2 14.8 363.2
Redeemable preferred stock......... 286.4 1.7 36.0 252.1
------------- ------------- ------------ -------------
Total Available for Sale............... $ 19,373.6 $ 180.0 $ 953.9 $ 18,599.7
============= ============= ============ =============
Held to Maturity: Corporate......... $ 133.2 $ - $ - $ 133.2
============= ============= ============ =============
Equity Securities:
Common stock available for sale...... 25.5 1.5 17.8 9.2
Common stock trading securities...... 7.2 9.1 2.2 14.1
------------- ------------- ------------ -------------
Total Equity Securities................ $ 32.7 $ 10.6 $ 20.0 $ 23.3
============= ============= ============ =============
December 31, 1998
-----------------
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 14,520.8 $ 793.6 $ 379.6 $ 14,934.8
Mortgage-backed.................... 1,807.9 23.3 .9 1,830.3
U.S. Treasury, government and
agency securities................ 1,464.1 107.6 .7 1,571.0
States and political subdivisions.. 55.0 9.9 - 64.9
Foreign governments................ 363.3 20.9 30.0 354.2
Redeemable preferred stock......... 242.7 7.0 11.2 238.5
------------- ------------- ------------ -------------
Total Available for Sale............... $ 18,453.8 $ 962.3 $ 422.4 $ 18,993.7
============= ============= ============ =============
Held to Maturity: Corporate......... $ 125.0 $ - $ - $ 125.0
============= ============= ============ =============
Equity Securities:
Common stock available for sale...... $ 58.3 $ 114.9 $ 22.5 $ 150.7
============= ============= ============ =============
</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 determines an
estimated fair value using a discounted cash flow approach, including
provisions for credit risk, generally based on the assumption such
securities will be held to maturity. Estimated fair values for equity
securities, substantially all of which do not have a readily ascertainable
market value, have 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, 1999 and 1998, securities without a readily ascertainable
market value having an amortized cost of $3,322.2 million and $3,539.9
million, respectively, had estimated fair values of $3,177.7 million and
$3,748.5 million, respectively.
F-13
<PAGE>
The contractual maturity of bonds at December 31, 1999 is shown below:
<TABLE>
<CAPTION>
AVAILABLE FOR SALE
-------------------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Due in one year or less................................................ $ 479.1 $ 477.8
Due in years two through five.......................................... 2,991.8 2,921.2
Due in years six through ten........................................... 7,197.9 6,813.0
Due after ten years.................................................... 5,864.0 5,666.5
Mortgage-backed securities............................................. 2,554.4 2,469.1
------------ ------------
Total.................................................................. $ 19,087.2 $ 18,347.6
============ ============
</TABLE>
Corporate bonds held to maturity with an amortized cost and estimated fair
value of $133.2 million are due in one year or less.
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
concentrations in any single issuer or 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, 1999, approximately 14.9% of the $18,344.3
million aggregate amortized cost of bonds held by the Company was
considered to be other than investment grade.
In addition, the Insurance Group is an equity investor in limited
partnership interests which primarily invest in securities considered to be
other than investment grade. The carrying values at December 31, 1999 and
1998 were $647.9 million and $562.6 million, respectively.
Investment valuation allowances and changes thereto are shown below:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Balances, beginning of year........................ $ 230.6 $ 384.5 $ 137.1
Additions charged to income........................ 68.2 86.2 334.6
Deductions for writedowns and
asset dispositions............................... (150.2) (240.1) (87.2)
------------- ------------ ------------
Balances, End of Year.............................. $ 148.6 $ 230.6 $ 384.5
============= ============ ============
Balances, end of year comprise:
Mortgage loans on real estate.................... $ 27.5 $ 34.3 $ 55.8
Equity real estate............................... 121.1 196.3 328.7
------------- ------------ ------------
Total.............................................. $ 148.6 $ 230.6 $ 384.5
============= ============ ============
</TABLE>
F-14
<PAGE>
At December 31, 1999, the carrying value of fixed maturities which are
non-income producing for the twelve months preceding the consolidated
balance sheet date was $152.1 million.
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 $106.0 million and $115.1
million at December 31, 1999 and 1998, 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 $9.5
million, $10.3 million and $17.2 million in 1999, 1998 and 1997,
respectively. Gross interest income on these loans included in net
investment income aggregated $8.2 million, $8.3 million and $12.7 million
in 1999, 1998 and 1997, respectively.
Impaired mortgage loans along with the related provision for losses were as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------
1999 1998
-------------- --------------
(IN MILLIONS)
<S> <C> <C>
Impaired mortgage loans with provision for losses.................. $ 142.4 $ 125.4
Impaired mortgage loans without provision for losses............... 2.2 8.6
-------------- --------------
Recorded investment in impaired mortgage loans..................... 144.6 134.0
Provision for losses............................................... (23.0) (29.0)
-------------- --------------
Net Impaired Mortgage Loans........................................ $ 121.6 $ 105.0
============== ==============
</TABLE>
Impaired mortgage loans without 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 1999, 1998 and 1997, respectively, the Company's average recorded
investment in impaired mortgage loans was $141.7 million, $161.3 million
and $246.9 million. Interest income recognized on these impaired mortgage
loans totaled $12.0 million, $12.3 million and $15.2 million ($0.0 million,
$.9 million and $2.3 million recognized on a cash basis) for 1999, 1998 and
1997, respectively.
The Insurance Group's investment in equity real estate is through direct
ownership and through investments in real estate joint ventures. At
December 31, 1999 and 1998, the carrying value of equity real estate held
for sale amounted to $382.2 million and $836.2 million, respectively. For
1999, 1998 and 1997, respectively, real estate of $20.5 million, $7.1
million and $152.0 million was acquired in satisfaction of debt. At
December 31, 1999 and 1998, the Company owned $443.9 million and $552.3
million, respectively, of real estate acquired in satisfaction of debt.
Depreciation of real estate held for production of income 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 $251.6 million and $374.8 million at December 31, 1999 and 1998,
respectively. Depreciation expense on real estate totaled $21.8 million,
$30.5 million and $74.9 million for 1999, 1998 and 1997, respectively.
F-15
<PAGE>
4) JOINT VENTURES AND PARTNERSHIPS
Summarized combined financial information for real estate joint ventures
(25 individual ventures at both December 31, 1999 and 1998) and for 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, follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------
1999 1998
------------- -------------
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEETS
Investments in real estate, at depreciated cost........................ $ 861.1 $ 913.7
Investments in securities, generally at estimated fair value........... 678.4 636.9
Cash and cash equivalents.............................................. 68.4 85.9
Other assets........................................................... 239.3 279.8
------------- -------------
Total Assets........................................................... $ 1,847.2 $ 1,916.3
============= =============
Borrowed funds - third party........................................... $ 354.2 $ 367.1
Borrowed funds - AXA Financial......................................... 28.9 30.1
Other liabilities...................................................... 313.9 197.2
------------- -------------
Total liabilities...................................................... 697.0 594.4
------------- -------------
Partners' capital...................................................... 1,150.2 1,321.9
------------- -------------
Total Liabilities and Partners' Capital................................ $ 1,847.2 $ 1,916.3
============= =============
Equity in partners' capital included above............................. $ 316.5 $ 365.6
Equity in limited partnership interests not included above and other... 524.1 390.1
------------- -------------
Carrying Value......................................................... $ 840.6 $ 755.7
============= =============
</TABLE>
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Revenues of real estate joint ventures............. $ 180.5 $ 246.1 $ 310.5
Revenues of other limited partnership interests.... 455.1 128.9 506.3
Interest expense - third party..................... (39.8) (33.3) (91.8)
Interest expense - AXA Financial................... (2.5) (2.6) (7.2)
Other expenses..................................... (139.0) (197.0) (263.6)
------------- ------------ ------------
Net Earnings....................................... $ 454.3 $ 142.1 $ 454.2
============= ============ ============
Equity in net earnings included above.............. $ 10.5 $ 44.4 $ 76.7
Equity in net earnings of limited partnership
interests not included above..................... 76.0 37.9 69.5
Other.............................................. - - (.9)
------------- ------------ ------------
Total Equity in Net Earnings....................... $ 86.5 $ 82.3 $ 145.3
============= ============ ============
</TABLE>
F-16
<PAGE>
5) NET INVESTMENT INCOME AND INVESTMENT GAINS (LOSSES)
The sources of net investment income follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................... $ 1,499.8 $ 1,489.0 $ 1,459.4
Mortgage loans on real estate...................... 253.4 235.4 260.8
Equity real estate................................. 250.2 356.1 390.4
Other equity investments........................... 165.1 83.8 156.9
Policy loans....................................... 143.8 144.9 177.0
Other investment income............................ 161.3 185.7 181.7
------------- ------------ ------------
Gross investment income.......................... 2,473.6 2,494.9 2,626.2
Investment expenses.............................. (232.7) (266.8) (343.4)
------------- ------------ ------------
Net Investment Income.............................. $ 2,240.9 $ 2,228.1 $ 2,282.8
============= ============ ============
</TABLE>
Investment (losses) gains, net, including changes in the valuation
allowances, follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................... $ (290.9) $ (24.3) $ 88.1
Mortgage loans on real estate...................... (3.3) (10.9) (11.2)
Equity real estate................................. (2.4) 74.5 (391.3)
Other equity investments........................... 88.1 29.9 14.1
Sale of subsidiaries............................... - (2.6) 252.1
Issuance and sales of Alliance Units............... 5.5 19.8 -
Issuance and sales of DLJ common stock............. 106.0 18.2 3.0
Other.............................................. .1 (4.4) -
------------- ------------ ------------
Investment (Losses) Gains, Net..................... $ (96.9) $ 100.2 $ (45.2)
============= ============ ============
</TABLE>
Writedowns of fixed maturities amounted to $223.2 million, $101.6 million
and $11.7 million for 1999, 1998 and 1997, respectively, and writedowns of
equity real estate amounted to $136.4 million for 1997. In fourth quarter
1997, the Company reclassified $1,095.4 million depreciated cost of equity
real estate from real estate held for the production of income to real
estate held for sale. Additions to valuation allowances of $227.6 million
were recorded upon these transfers. Additionally, in fourth quarter 1997,
$132.3 million of writedowns on real estate held for production of income
were recorded.
For 1999, 1998 and 1997, respectively, proceeds received on sales of fixed
maturities classified as available for sale amounted to $7,138.6 million,
$15,961.0 million and $9,789.7 million. Gross gains of $74.7 million,
$149.3 million and $166.0 million and gross losses of $214.3 million, $95.1
million and $108.8 million, respectively, were realized on these sales. The
change in unrealized investment (losses) gains related to fixed maturities
classified as available for sale for 1999, 1998 and 1997 amounted to
$(1,313.8) million, $(331.7) million and $513.4 million, respectively.
On January 1, 1999, investments in publicly-traded common equity securities
in the General Account portfolio within other equity investments amounting
to $102.3 million were transferred from available for sale securities to
trading securities. As a result of this transfer, unrealized investment
gains of $83.3 million ($43.2 million net of related DAC and Federal income
taxes) were recognized as realized investment gains in the consolidated
statements of earnings. Net unrealized holding gains of $7.0 million were
included in net investment income in the consolidated statements of
earnings for 1999. These trading securities had a carrying value of $14.1
million and costs of $7.2 million at December 31, 1999.
F-17
<PAGE>
During 1999, DLJ completed its offering of a new class of its Common Stock
to track the financial performance of DLJdirect, its online brokerage
business. As a result of this offering, the Company recorded a non-cash
pre-tax realized gain of $95.8 million.
For 1999, 1998 and 1997, investment results passed through to certain
participating group annuity contracts as interest credited to
policyholders' account balances amounted to $131.5 million, $136.9 million
and $137.5 million, respectively.
In 1997, Equitable Life sold EREIM (other than its interest in Column
Financial, Inc.) ("ERE") to Lend Lease Corporation Limited ("Lend Lease"),
for $400.0 million and recognized an investment gain of $162.4 million, net
of Federal income tax of $87.4 million. Equitable Life entered into
long-term advisory agreements whereby ERE continues to provide
substantially the same services to Equitable Life's General Account and
Separate Accounts, for substantially the same fees, as provided prior to
the sale. Through June 10, 1997, the businesses sold reported combined
revenues of $91.6 million and combined net earnings of $10.7 million.
On June 30, 1997, Alliance reduced the recorded value of goodwill and
contracts associated with Alliance's 1996 acquisition of Cursitor Holdings
L.P. and Cursitor Holdings Limited (collectively, "Cursitor") by $120.9
million since Cursitor's business fundamentals no longer supported the
carrying value of its investment. The Company's earnings from continuing
operations for 1997 included a charge of $59.5 million, net of a Federal
income tax benefit of $10.0 million and minority interest of $51.4 million.
The remaining balance of intangible assets is being amortized over its
estimated useful life of 20 years.
Net unrealized investment gains (losses), included in the consolidated
balance sheets as a component of accumulated comprehensive income and the
changes for the corresponding years, follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Balance, beginning of year......................... $ 384.1 $ 533.6 $ 189.9
Changes in unrealized investment (losses) gains.... (1,486.6) (242.4) 543.3
Changes in unrealized investment losses
(gains) attributable to:
Participating group annuity contracts.......... 24.7 (5.7) 53.2
DAC............................................ 208.6 13.2 (89.0)
Deferred Federal income taxes.................. 476.4 85.4 (163.8)
------------- ------------ ------------
Balance, End of Year............................... $ (392.8) $ 384.1 $ 533.6
============= ============ ============
Balance, end of year comprises:
Unrealized investment (losses) gains on:
Fixed maturities............................... $ (773.9) $ 539.9 $ 871.2
Other equity investments....................... (16.3) 92.4 33.7
Other, principally Closed Block................ 46.8 111.1 80.9
------------- ------------ ------------
Total........................................ (743.4) 743.4 985.8
Amounts of unrealized investment gains
attributable to:
Participating group annuity contracts........ - (24.7) (19.0)
DAC.......................................... 80.8 (127.8) (141.0)
Deferred Federal income taxes................ 269.8 (206.8) (292.2)
------------- ------------ ------------
Total.............................................. $ (392.8) $ 384.1 $ 533.6
============= ============ ============
</TABLE>
Changes in unrealized gains (losses) reflect changes in fair value of only
those fixed maturities and equity securities classified as available for
sale and do not reflect any changes in fair value of policyholders' account
balances and future policy benefits.
F-18
<PAGE>
6) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Accumulated other comprehensive income (loss) represents cumulative gains
and losses on items that are not reflected in earnings. The balances for
the past three years follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Unrealized (losses) gains on investments........... $ (392.8) $ 384.1 $ 533.6
Minimum pension liability.......................... (.1) (28.3) (17.3)
------------- ------------ ------------
Total Accumulated Other
Comprehensive (Loss) Income...................... $ (392.9) $ 355.8 $ 516.3
============= ============ ============
</TABLE>
The components of other comprehensive income (loss) for the past three
years follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Net unrealized (losses) gains on investment
securities:
Net unrealized (losses) gains arising during
the period..................................... $ (1,682.3) $ (186.1) $ 564.0
Adjustment to reclassify losses (gains)
included in net earnings during the period..... 195.7 (56.3) (20.7)
------------- ------------ ------------
Net unrealized (losses) gains on investment
securities..................................... (1,486.6) (242.4) 543.3
Adjustments for policyholder liabilities,
DAC and deferred Federal income taxes.......... 709.7 92.9 (199.6)
------------- ------------ ------------
Change in unrealized losses (gains), net of
adjustments.................................... (776.9) (149.5) 343.7
Change in minimum pension liability................ 28.2 (11.0) (4.4)
------------- ------------ ------------
Total Other Comprehensive (Loss) Income............ $ (748.7) $ (160.5) $ 339.3
============= ============ ============
</TABLE>
F-19
<PAGE>
7) CLOSED BLOCK
Summarized financial information for the Closed Block follows:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C
BALANCE SHEETS
Fixed Maturities:
Available for sale, at estimated fair value (amortized cost,
$4,144.8 and $4,149.0)........................................... $ 4,014.0 $ 4,373.2
Mortgage loans on real estate........................................ 1,704.2 1,633.4
Policy loans......................................................... 1,593.9 1,641.2
Cash and other invested assets....................................... 194.4 86.5
DAC.................................................................. 895.5 676.5
Other assets......................................................... 205.3 221.6
------------ ------------
Total Assets......................................................... $ 8,607.3 $ 8,632.4
============ ============
Future policy benefits and policyholders' account balances........... $ 9,011.7 $ 9,013.1
Other liabilities.................................................... 13.3 63.9
------------ ------------
Total Liabilities.................................................... $ 9,025.0 $ 9,077.0
============ ============
</TABLE>
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Premiums and other revenue......................... $ 619.1 $ 661.7 $ 687.1
Investment income (net of investment
expenses of $15.8, $15.5 and $27.0).............. 574.2 569.7 574.9
Investment (losses) gains, net..................... (11.3) .5 (42.4)
------------- ------------ ------------
Total revenues............................... 1,182.0 1,231.9 1,219.6
------------- ------------ ------------
Policyholders' benefits and dividends.............. 1,024.7 1,082.0 1,066.7
Other operating costs and expenses................. 70.9 62.8 50.4
------------- ------------ ------------
Total benefits and other deductions.......... 1,095.6 1,144.8 1,117.1
------------- ------------ ------------
Contribution from the Closed Block................. $ 86.4 $ 87.1 $ 102.5
============= ============ ============
</TABLE>
Impaired mortgage loans along with the related provision for losses
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------
1999 1998
------------- -------------
(IN MILLIONS)
<S> <C> <C>
Impaired mortgage loans with provision for losses...................... $ 26.8 $ 55.5
Impaired mortgage loans without provision for losses................... 4.5 7.6
------------- -------------
Recorded investment in impaired mortgages.............................. 31.3 63.1
Provision for losses................................................... (4.1) (10.1)
------------- -------------
Net Impaired Mortgage Loans............................................ $ 27.2 $ 53.0
============= =============
</TABLE>
During 1999, 1998 and 1997, the Closed Block's average recorded investment
in impaired mortgage loans was $37.0 million, $85.5 million and $110.2
million, respectively. Interest income recognized on these impaired
mortgage loans totaled $3.3 million, $4.7 million and $9.4 million ($.3
million, $1.5 million and $4.1 million recognized on a cash basis) for
1999, 1998 and 1997, respectively.
F-20
<PAGE>
Valuation allowances amounted to $4.6 million and $11.1 million on mortgage
loans on real estate and $24.7 million and $15.4 million on equity real
estate at December 31, 1999 and 1998, respectively. Writedowns of fixed
maturities amounted to $3.5 million for 1997. Writedowns of equity real
estate amounted to $28.8 million for 1997.
In fourth quarter 1997, $72.9 million depreciated cost of equity real
estate held for production of income was reclassified to equity real estate
held for sale. Additions to valuation allowances of $15.4 million were
recorded upon these transfers. Also in fourth quarter 1997, $28.8 million
of writedowns on real estate held for production of income were recorded.
Many expenses related to Closed Block operations are charged to operations
outside of the Closed Block; accordingly, the contribution from the Closed
Block does not represent the actual profitability of the Closed Block
operations. Operating costs and expenses outside of the Closed Block are,
therefore, disproportionate to the business outside of the Closed Block.
F-21
<PAGE>
8) DISCONTINUED OPERATIONS
Summarized financial information for discontinued operations follows:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEETS
Mortgage loans on real estate........................................ $ 454.6 $ 553.9
Equity real estate................................................... 426.6 611.0
Other equity investments............................................. 55.8 115.1
Other invested assets................................................ 87.1 24.9
------------ ------------
Total investments.................................................. 1,024.1 1,304.9
Cash and cash equivalents............................................ 164.5 34.7
Other assets......................................................... 213.0 219.0
------------ ------------
Total Assets......................................................... $ 1,401.6 $ 1,558.6
============ ============
Policyholders' liabilities........................................... $ 993.3 $ 1,021.7
Allowance for future losses.......................................... 242.2 305.1
Other liabilities.................................................... 166.1 231.8
------------ ------------
Total Liabilities.................................................... $ 1,401.6 $ 1,558.6
============ ============
</TABLE>
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Investment income (net of investment
expenses of $49.3, $63.3 and $97.3).............. $ 98.7 $ 160.4 $ 188.6
Investment (losses) gains, net..................... (13.4) 35.7 (173.7)
Policy fees, premiums and other income............. .2 (4.3) .2
------------- ------------ ------------
Total revenues..................................... 85.5 191.8 15.1
Benefits and other deductions...................... 104.8 141.5 169.5
(Losses charged) earnings credited to allowance
for future losses................................ (19.3) 50.3 (154.4)
------------- ------------ ------------
Pre-tax loss from operations....................... - - -
Pre-tax earnings from releasing (loss from
strengthening) the allowance for future
losses........................................... 43.3 4.2 (134.1)
Federal income tax (expense) benefit............... (15.2) (1.5) 46.9
------------- ------------ ------------
Earnings (Loss) from Discontinued Operations....... $ 28.1 $ 2.7 $ (87.2)
============= ============ ============
</TABLE>
The Company's quarterly process for evaluating the allowance for future
losses applies the current period's results of the discontinued operations
against the allowance, re-estimates future losses and adjusts the
allowance, if appropriate. Additionally, as part of the Company's annual
planning process which takes place in the fourth quarter of each year,
investment and benefit cash flow projections are prepared. These updated
assumptions and estimates resulted in a release of allowance in 1999 and
1998 and strengthening of allowance in 1997.
In fourth quarter 1997, $329.9 million depreciated cost of equity real
estate was reclassified from equity real estate held for production of
income to real estate held for sale. Additions to valuation allowances of
$79.8 million were recognized upon these transfers. Also in fourth quarter
1997, $92.5 million of writedowns on real estate held for production of
income were recognized.
F-22
<PAGE>
Benefits and other deductions includes $26.6 million and $53.3 million of
interest expense related to amounts borrowed from continuing operations in
1998 and 1997, respectively.
Valuation allowances of $1.9 million and $3.0 million on mortgage loans on
real estate and $54.8 million and $34.8 million on equity real estate were
held at December 31, 1999 and 1998, respectively. Writedowns of equity real
estate were $95.7 million in 1997.
During 1999, 1998 and 1997, discontinued operations' average recorded
investment in impaired mortgage loans was $13.8 million, $73.3 million and
$89.2 million, respectively. Interest income recognized on these impaired
mortgage loans totaled $1.7 million, $4.7 million and $6.6 million ($.0
million, $3.4 million and $5.3 million recognized on a cash basis) for
1999, 1998 and 1997, respectively.
At December 31, 1999 and 1998, discontinued operations had real estate
acquired in satisfaction of debt with carrying values of $24.1 million and
$50.0 million, respectively.
9) SHORT-TERM AND LONG-TERM DEBT
Short-term and long-term debt consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Short-term debt...................................................... $ 557.0 $ 179.3
------------ ------------
Long-term debt:
Equitable Life:
Surplus notes, 6.95% due 2005...................................... 399.5 399.4
Surplus notes, 7.70% due 2015...................................... 199.7 199.7
Other.............................................................. .4 .3
------------ ------------
Total Equitable Life........................................... 599.6 599.4
------------ ------------
Wholly Owned and Joint Venture Real Estate:
Mortgage notes, 5.43% - 9.5%, due through 2017..................... 251.3 392.2
------------ ------------
Alliance:
Other.............................................................. - 10.8
------------ ------------
Total long-term debt................................................. 850.9 1,002.4
------------ ------------
Total Short-term and Long-term Debt.................................. $ 1,407.9 $ 1,181.7
============ ============
</TABLE>
Short-term Debt
---------------
Equitable Life has a $700.0 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 and expires in September 2000. The
interest rates are based on external indices dependent on the type of
borrowing and at December 31, 1999 range from 5.76% to 8.5%. There were no
borrowings outstanding under this bank credit facility at December 31,
1999.
Equitable Life has a commercial paper program with an issue limit of $1.0
billion. This program is available for general corporate purposes used to
support Equitable Life's liquidity needs and is supported by Equitable
Life's existing $700.0 million bank credit facility. At December 31, 1999,
there were $166.9 million outstanding under this program.
Alliance has a $425.0 million five-year revolving credit facility with a
group of commercial banks. Under the 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 London Interbank Offered Rate ("LIBOR") or the
Federal Funds Rate. A facility fee is payable on the total facility. During
July 1999, Alliance increased the size of its commercial paper program by
$200.0 million from $425.0 million for a total available limit of $625.0
million. Borrowings from the revolving credit facility and the original
commercial paper program may not exceed $425.0 million in the aggregate.
The revolving credit facility provides backup liquidity for commercial
paper issued under
F-23
<PAGE>
Alliance's commercial paper program and can be used as a direct source of
borrowing. The revolving credit facility contains covenants that require
Alliance to, among other things, meet certain financial ratios. At December
31, 1999, Alliance had commercial paper outstanding totaling $384.7 million
at an effective interest rate of 5.9%; there were no borrowings outstanding
under Alliance's revolving credit facility.
In December 1999, Alliance established a $100.0 million extendible
commercial notes ("ECN") program to supplement its commercial paper
program. ECN's are short-term debt instruments that do not require any
back-up liquidity support.
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. At
December 31, 1999, the Company is in compliance with all debt covenants.
The Company has pledged real estate, mortgage loans, cash and securities
amounting to $323.6 million and $640.2 million at December 31, 1999 and
1998, respectively, as collateral for certain short-term and long-term
debt.
At December 31, 1999, aggregate maturities of the long-term debt based on
required principal payments at maturity was $3.0 million for 2000 and
$848.7 million for 2005 and thereafter.
10) FEDERAL INCOME TAXES
A summary of the Federal income tax expense in the consolidated statements
of earnings follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Federal income tax expense (benefit):
Current.......................................... $ 174.0 $ 283.3 $ 186.5
Deferred......................................... 158.0 69.8 (95.0)
------------- ------------ ------------
Total.............................................. $ 332.0 $ 353.1 $ 91.5
============= ============ ============
</TABLE>
F-24
<PAGE>
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 their tax effects
follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Expected Federal income tax expense................ $ 458.4 $ 414.3 $ 234.7
Non-taxable minority interest...................... (47.8) (33.2) (38.0)
Non-taxable subsidiary gains....................... (37.1) (6.4) -
Adjustment of tax audit reserves................... 27.8 16.0 (81.7)
Equity in unconsolidated subsidiaries.............. (64.0) (39.3) (45.1)
Other.............................................. (5.3) 1.7 21.6
------------- ------------ ------------
Federal Income Tax Expense......................... $ 332.0 $ 353.1 $ 91.5
============= ============ ============
</TABLE>
The components of the net deferred Federal income taxes are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1999 December 31, 1998
----------------------------- -----------------------------
ASSETS LIABILITIES Assets Liabilities
----------- ------------ ------------ -----------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Compensation and related benefits...... $ - $ 37.7 $ 235.3 $ -
Other.................................. - 20.6 27.8 -
DAC, reserves and reinsurance.......... - 329.7 - 231.4
Investments............................ 115.1 - - 364.4
----------- ------------ ------------ -----------
Total.................................. $ 115.1 $ 388.0 $ 263.1 $ 595.8
=========== ============ ============ ===========
</TABLE>
At December 31, 1999, in conjunction with the non-qualified employee
benefit plans, $236.8 million in deferred tax asset was transferred to the
Holding Company. See Note 12 for discussion of the benefit plans
transferred.
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 their
tax effects follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
DAC, reserves and reinsurance...................... $ 83.2 $ (7.7) $ 46.2
Investments........................................ 3.2 46.8 (113.8)
Compensation and related benefits.................. 21.0 28.6 3.7
Other.............................................. 50.6 2.1 (31.1)
------------- ------------ ------------
Deferred Federal Income Tax
Expense (Benefit)................................ $ 158.0 $ 69.8 $ (95.0)
============= ============ ============
</TABLE>
The Internal Revenue Service (the "IRS") is in the process of examining the
Holding Company's consolidated Federal income tax returns for the years
1992 through 1996. Management believes these audits will have no material
adverse effect on the Company's results of operations.
F-25
<PAGE>
11) 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. Ceded reinsurance does not relieve the originating insurer of
liability. The effect of reinsurance (excluding group life and health) is
summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Direct premiums.................................... $ 420.6 $ 438.8 $ 448.6
Reinsurance assumed................................ 206.7 203.6 198.3
Reinsurance ceded.................................. (69.1) (54.3) (45.4)
------------- ------------ ------------
Premiums........................................... $ 558.2 $ 588.1 $ 601.5
============= ============ ============
Universal Life and Investment-type Product
Policy Fee Income Ceded.......................... $ 69.7 $ 75.7 $ 61.0
============= ============ ============
Policyholders' Benefits Ceded...................... $ 99.6 $ 85.9 $ 70.6
============= ============ ============
Interest Credited to Policyholders' Account
Balances Ceded................................... $ 38.5 $ 39.5 $ 36.4
============= ============ ============
</TABLE>
Since 1997, the Company reinsures on a yearly renewal term basis 90% of the
mortality risk on new issues of certain term, universal and variable life
products. The Company's retention limit on joint survivorship policies is
$15.0 million. All in force business above $5.0 million is reinsured. The
Insurance Group also reinsures the entire risk on certain substandard
underwriting risks and in certain other cases.
The Insurance Group cedes 100% of its group life and health business to a
third party insurer. Premiums ceded totaled $.1 million, $1.3 million and
$1.6 million for 1999, 1998 and 1997, respectively. Ceded death and
disability benefits totaled $44.7 million, $15.6 million and $4.3 million
for 1999, 1998 and 1997, respectively. Insurance liabilities ceded totaled
$510.5 million and $560.3 million at December 31, 1999 and 1998,
respectively.
F-26
<PAGE>
12) 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 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 ("ERISA").
Effective December 31, 1999, the Holding Company legally assumed primary
liability from Equitable Life for all current and future obligations of its
Excess Retirement Plan, Supplemental Executive Retirement Plan and certain
other employee benefit plans that provide participants with medical, life
insurance, and deferred compensation benefits; Equitable Life remains
secondarily liable. The amount of the liability associated with employee
benefits transferred was $676.5 million, including $183.0 million of
non-qualified pension benefit obligations and $394.1 million of
postretirement benefits obligations at December 31, 1999. This transfer was
recorded as a non-cash capital contribution to Equitable Life.
Components of net periodic pension (credit) cost for the qualified and
non-qualified plans follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 36.7 $ 33.2 $ 32.5
Interest cost on projected benefit obligations..... 131.6 129.2 128.2
Actual return on assets............................ (189.8) (175.6) (307.6)
Net amortization and deferrals..................... 7.5 6.1 166.6
------------- ------------ ------------
Net Periodic Pension Cost (Credit)................. $ (14.0) $ (7.1) $ 19.7
============= ============ ============
</TABLE>
The projected benefit obligations under the qualified and non-qualified
pension plans were comprised of:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Benefit obligations, beginning of year................................. $ 1,933.4 $ 1,801.3
Service cost........................................................... 36.7 33.2
Interest cost.......................................................... 131.6 129.2
Actuarial (gains) losses............................................... (53.3) 108.4
Benefits paid.......................................................... (123.1) (138.7)
------------ ------------
Subtotal before transfer............................................... 1,925.3 1,933.4
Transfer of Non-qualified Pension Benefit Obligation
to the Holding Company............................................... (262.5) -
------------ ------------
Benefit Obligation, End of Year........................................ $ 1,662.8 $ 1,933.4
============ ============
</TABLE>
F-27
<PAGE>
The funded status of the qualified and non-qualified pension plans was as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Plan assets at fair value, beginning of year........................... $ 2,083.1 $ 1,867.4
Actual return on plan assets........................................... 369.0 338.9
Contributions.......................................................... .1 -
Benefits paid and fees................................................. (108.5) (123.2)
------------ ------------
Plan assets at fair value, end of year................................. 2,343.7 2,083.1
Projected benefit obligations.......................................... 1,925.3 1,933.4
------------ ------------
Excess of plan assets over projected benefit obligations............... 418.4 149.7
Unrecognized prior service cost........................................ (5.2) (7.5)
Unrecognized net (gain) loss from past experience different
from that assumed.................................................... (197.3) 38.7
Unrecognized net asset at transition................................... (.1) 1.5
------------ ------------
Subtotal before transfer............................................... 215.8 182.4
Transfer of Accrued Non-qualified Pension Benefit Obligation
to the Holding Company............................................... 183.0 -
------------ ------------
Prepaid Pension Cost, Net.............................................. $ 398.8 $ 182.4
============ ============
</TABLE>
The prepaid pension cost for pension plans with assets in excess of
projected benefit obligations was $412.2 million and $363.9 million and the
accrued liability for pension plans with projected benefit obligations in
excess of plan assets was $13.5 million and $181.5 million at December 31,
1999 and 1998, respectively.
The pension plan assets include corporate and government debt securities,
equity securities, equity real estate and shares of group trusts managed by
Alliance. The discount rate and rate of increase in future compensation
levels used in determining the actuarial present value of projected benefit
obligations were 8.0% and 6.38%, respectively, at December 31, 1999 and
7.0% and 3.83%, respectively, at December 31, 1998. As of January 1, 1999
and 1998, the expected long-term rate of return on assets for the
retirement plan was 10.0% and 10.25%, respectively.
The Company recorded, as a reduction of shareholder's equity, an additional
minimum pension liability of $.1 million, $28.3 million and $17.3 million,
net of Federal income taxes, at December 31, 1999, 1998 and 1997,
respectively, primarily representing the excess of the accumulated benefit
obligation of the non-qualified pension plan over the accrued liability.
The aggregate accumulated benefit obligation and fair value of plan assets
for pension plans with accumulated benefit obligations in excess of plan
assets were $325.7 million and $36.3 million, respectively, at December 31,
1999 and $309.7 million and $34.5 million, respectively, at December 31,
1998.
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 $30.2 million,
$31.8 million and $33.2 million for 1999, 1998 and 1997, respectively.
The Company provides certain medical and life insurance benefits
(collectively, "postretirement benefits") for qualifying employees,
managers and agents retiring from the Company (i) on or after attaining age
55 who have at least 10 years of service or (ii) on or after attaining age
65 or (iii) whose jobs have been abolished and who have attained age 50
with 20 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 1999, 1998 and 1997, the Company made estimated postretirement
benefits payments of $29.5 million, $28.4 million and $18.7 million,
respectively.
F-28
<PAGE>
The following table sets forth the postretirement benefits plan's status,
reconciled to amounts recognized in the Company's consolidated financial
statements:
<TABLE>
<CAPTION>
1999 1998 1997
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 4.7 $ 4.6 $ 4.5
Interest cost on accumulated postretirement
benefits obligation.............................. 34.4 33.6 34.7
Unrecognized prior service costs................... (7.0) - -
Net amortization and deferrals..................... 8.4 .5 1.9
----------------- ---------------- -----------------
Net Periodic Postretirement Benefits Costs......... $ 40.5 $ 38.7 $ 41.1
================= ================ =================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Accumulated postretirement benefits obligation, beginning
of year.............................................................. $ 490.4 $ 490.8
Service cost........................................................... 4.7 4.6
Interest cost.......................................................... 34.4 33.6
Contributions and benefits paid........................................ (29.5) (28.4)
Actuarial gains........................................................ (29.0) (10.2)
------------ ------------
Accumulated postretirement benefits obligation, end of year............ 471.0 490.4
Unrecognized prior service cost........................................ 26.9 31.8
Unrecognized net loss from past experience different
from that assumed and from changes in assumptions.................... (86.0) (121.2)
------------ ------------
Subtotal before transfer............................................... 411.9 401.0
Transfer to the Holding Company........................................ (394.1) -
------------ ------------
Accrued Postretirement Benefits Cost................................... $ 17.8 $ 401.0
============ ============
</TABLE>
Since January 1, 1994, costs to the Company for providing these 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 7.5% in 1999, gradually declining to
4.75% in the year 2010, and in 1998 was 8.0%, gradually declining to 2.5%
in the year 2009. The discount rate used in determining the accumulated
postretirement benefits obligation was 8.0% and 7.0% at December 31, 1999
and 1998, respectively.
If the health care cost trend rate assumptions were increased by 1%, the
accumulated postretirement benefits obligation as of December 31, 1999
would be increased 3.55%. The effect of this change on the sum of the
service cost and interest cost would be an increase of 3.91%. If the health
care cost trend rate assumptions were decreased by 1% the accumulated
postretirement benefits obligation as of December 31, 1999 would be
decreased by 4.38%. The effect of this change on the sum of the service
cost and interest cost would be a decrease of 4.96%.
F-29
<PAGE>
13) 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, 1999 and 1998,
respectively, was $797.3 million and $880.9 million. The average unexpired
terms at December 31, 1999 ranged from two months to 5.0 years. At December
31, 1999, the cost of terminating swaps in a loss position was $1.8
million. Equitable Life maintains an interest rate cap program designed to
hedge crediting rates on interest-sensitive individual annuities contracts.
The outstanding notional amounts at December 31, 1999 of contracts
purchased and sold were $7,575.0 million and $875.0 million, respectively.
The net premium paid by Equitable Life on these contracts was $51.6 million
and is being amortized ratably over the contract periods ranging from 1 to
4 years. Income and expense resulting from this program are reflected as an
adjustment to interest credited to policyholders' account balances.
DLJ enters into certain contractual agreements referred to as derivatives
or off-balance-sheet financial instruments primarily for trading purposes
and to provide products for its clients. DLJ performs the following
activities: writing over-the-counter ("OTC") options to accommodate
customer needs; trading in forward contracts in U.S. government and agency
issued or guaranteed securities; trading in futures contracts on equity
based indices, interest rate instruments, and currencies; and issuing
structured products based on emerging market financial instruments and
indices. DLJ also enters into swap agreements, primarily equity, interest
rate and foreign currency swaps. DLJ is not significantly involved in
commodity derivative instruments.
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 the timing
and 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 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, 1999 and 1998.
F-30
<PAGE>
Fair values 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.
Fair values of policy loans are estimated by discounting the face value of
the loans from the time of the next interest rate review to the present, at
a rate equal to the excess of the current estimated market rates over the
current interest rate charged on the loan.
The estimated fair values for the Company's association plan contracts,
supplementary contracts not involving life contingencies ("SCNILC") and
annuities certain, which are included in policyholders' account balances,
and guaranteed interest contracts are estimated using projected cash flows
discounted at rates reflecting expected current offering rates.
The estimated fair values for variable deferred annuities and single
premium deferred annuities ("SPDA"), which are included in policyholders'
account balances, are estimated by discounting the account value back from
the time of the next crediting rate review to the present, at a rate equal
to the excess of current estimated market rates offered on new policies
over the current crediting rates.
Fair values for long-term debt are 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 carrying value of short-term borrowings approximates their
estimated fair value.
The following table discloses carrying value and estimated fair value for
financial instruments not otherwise disclosed in Notes 3, 7 and 8:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------------
1999 1998
--------------------------------- ---------------------------------
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.......... $ 3,270.0 $ 3,239.3 $ 2,809.9 $ 2,961.8
Other limited partnership interests.... 647.9 647.9 562.6 562.6
Policy loans........................... 2,257.3 2,359.5 2,086.7 2,370.7
Policyholders' account balances -
investment contracts................. 12,740.4 12,800.5 12,892.0 13,396.0
Long-term debt......................... 850.9 834.9 1,002.4 1,025.2
Closed Block Financial Instruments:
-----------------------------------
Mortgage loans on real estate.......... $ 1,704.2 $ 1,650.3 $ 1,633.4 $ 1,703.5
Other equity investments............... 36.3 36.3 56.4 56.4
Policy loans........................... 1,593.9 1,712.0 1,641.2 1,929.7
SCNILC liability....................... 22.8 22.5 25.0 25.0
Discontinued Operations Financial
---------------------------------
Instruments:
------------
Mortgage loans on real estate.......... $ 454.6 $ 467.0 $ 553.9 $ 599.9
Fixed maturities....................... 85.5 85.5 24.9 24.9
Other equity investments............... 55.8 55.8 115.1 115.1
Guaranteed interest contracts.......... 33.2 27.5 37.0 34.0
Long-term debt......................... 101.9 101.9 147.1 139.8
</TABLE>
F-31
<PAGE>
14) 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 $59.4 million to affiliated real estate joint
ventures; and to provide equity financing to certain limited partnerships
of $373.8 million at December 31, 1999, under existing loan or loan
commitment agreements.
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.
The Insurance Group had $24.9 million of letters of credit outstanding at
December 31, 1999.
15) LITIGATION
The Company
-----------
Life Insurance and Annuity Sales Cases
A number of lawsuits are pending as individual claims and purported class
actions against Equitable Life, its subsidiary insurance company and a
former insurance subsidiary. These actions involve, among other things,
sales of life and annuity products for varying periods from 1980 to the
present, and allege, among other things, sales practice misrepresentation
primarily involving: the number of premium payments required; the propriety
of a product as an investment vehicle; the propriety of a product as a
replacement of an existing policy; and failure to disclose a product as
life insurance. Some actions are in state courts and others are in U.S.
District Courts in different jurisdictions, and are in varying stages of
discovery and motions for class certification.
In general, the plaintiffs request an unspecified amount of damages,
punitive damages, enjoinment from the described practices, prohibition
against cancellation of policies for non-payment of premium or other
remedies, as well as attorneys' fees and expenses. Similar actions have
been filed against other life and health insurers and have resulted in the
award of substantial judgments, including material amounts of punitive
damages, or in substantial settlements. 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
these cases should not have a material adverse effect on the financial
position of the Company. 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.
Discrimination Case
Equitable Life is a defendant in an action, certified as a class action in
September 1997, in the United States District Court for the Northern
District of Alabama, Southern Division, involving alleged discrimination on
the basis of race against African-American applicants and potential
applicants in hiring individuals as sales agents. Plaintiffs seek a
declaratory judgment and affirmative and negative injunctive relief,
including the payment of back-pay, pension and other compensation. Although
the outcome of litigation cannot be predicted with certainty, the Company's
management believes that the ultimate resolution of this matter should not
have a material adverse effect on the financial position of the Company.
The Company's management cannot make an estimate of loss, if any, or
predict whether or not such matter will have a material adverse effect on
the Company's results of operations in any particular period.
Agent Health Benefits Case
Equitable Life is a defendant in an action, certified as a class action in
March 1999, in the United States District Court for the Northern District
of California, alleging, among other things, that Equitable Life violated
ERISA by eliminating certain alternatives pursuant to which agents of
Equitable Life could qualify for health care coverage. The class consists
of "[a]ll current, former and retired Equitable agents, who while
F-32
<PAGE>
associated with Equitable satisfied [certain alternatives] to qualify for
health coverage or contributions thereto under applicable plans."
Plaintiffs allege various causes of action under ERISA, including claims
for enforcement of alleged promises contained in plan documents and for
enforcement of agent bulletins, breach of unilateral contract, breach of
fiduciary duty and promissory estoppel. The parties are currently engaged
in discovery. Although the outcome of any litigation cannot be predicted
with certainty, the Company's management believes that the ultimate
resolution of this matter should not have a material adverse effect on the
financial position of the Company. The Company's management cannot make an
estimate of loss, if any, or predict whether or not such matter will have a
material adverse effect on the Company's results of operations in any
particular period.
Prime Property Fund Case
In January 2000, the California Supreme Court denied the Company's petition
for review of an October 1999 decision by the California Superior Court of
Appeal. Such decision reversed the dismissal by the Supreme Court of Orange
County, California of an action which was commenced in 1995 by a real
estate developer in connection with a limited partnership formed in 1991
with the Company on behalf of Prime Property Fund ("PPF"). The Company
serves as investment manager for PPF, an open-end, commingled real estate
separate account of the Company for pension clients. Plaintiff alleges
breach of fiduciary duty and other claims principally in connection with
PPF's 1995 purchase and subsequent foreclosure of the loan which financed
the partnership's property. Plaintiff seeks compensatory and punitive
damages. The case has been remanded to the Superior Court for further
proceedings. Although the outcome of litigation cannot be predicted with
certainty, the Company's management believes that the ultimate resolution
of this matter should not have a material adverse effect on the financial
position of the Company. The Company's management cannot make an estimate
of loss, if any, or predict whether or not this matter will have a material
adverse effect on the Company's results of operations in any particular
period.
Alliance Capital
----------------
In July 1995, a class action complaint was filed against Alliance North
American Government Income Trust, Inc. (the "Fund"), Alliance Holding 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 original complaint was dismissed in 1996; on
appeal, the dismissal was affirmed. In October 1996, plaintiffs filed a
motion for leave to file an amended complaint, alleging the Fund failed to
hedge against currency risk despite representations that it would do so,
the Fund did not properly disclose that it planned to invest in
mortgage-backed derivative securities and two Fund advertisements
misrepresented the risks of investing in the Fund. In October 1998, the
U.S. Court of Appeals for the Second Circuit issued an order granting
plaintiffs' motion to file an amended complaint alleging that the Fund
misrepresented its ability to hedge against currency risk and denying
plaintiffs' motion to file an amended complaint containing the other
allegations. In December 1999, the United States District Court for the
Southern District of New York granted the defendants' motion for summary
judgment on all claims against all defendants. Later in December 1999, the
plaintiffs filed motions for reconsideration of the Court's ruling. These
motions are currently pending with the Court.
In connection with the Reorganization; Alliance assumed any liabilities
which Alliance Holding may have with respect to this action. Alliance and
Alliance Holding believe that the allegations in the amended complaint are
without merit and intend to vigorously defend against these claims. While
the ultimate outcome of this matter cannot be determined at this time,
management of Alliance Holding and Alliance do not expect that it will have
a material adverse effect on Alliance Holding's or Alliance's results of
operations or financial condition.
DLJSC
-----
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC") is a
defendant along with certain other parties in a class action complaint
involving the underwriting of units, consisting of notes and warrants to
purchase common shares, of Rickel Home Centers, Inc. ("Rickel"), which
filed a voluntary petition for reorganization pursuant to Chapter 11 of the
Bankruptcy Code. The complaint seeks unspecified compensatory and punitive
damages from DLJSC, as an underwriter and as an owner of 7.3% of the common
stock, for alleged violation of Federal securities laws and common law
fraud for alleged misstatements and omissions contained in the prospectus
and registration statement used in the offering of the units. In April
1999, the complaint against DLJSC and the other defendants was dismissed.
The plaintiffs have appealed. DLJSC intends to defend itself vigorously
against all the allegations contained in the complaint.
DLJSC is a defendant in a purported class action filed in a Texas State
Court on behalf of the holders of $550 million principal amount of
subordinated redeemable discount debentures of National Gypsum Corporation
("NGC"). The debentures were canceled in connection with a Chapter 11 plan
of reorganization for NGC consummated in July 1993. The litigation seeks
compensatory and punitive damages for DLJSC's activities as financial
advisor to NGC in the course of NGC's Chapter 11 proceedings. In March
1999, the Court granted motions for summary judgment filed by DLJSC and the
other defendants. The plaintiffs have appealed. DLJSC intends to defend
itself vigorously against all the allegations contained in the complaint.
In November 1998, three purported class actions were filed in the U.S.
District Court for the Southern District of New York against more than 25
underwriters of initial public offering securities, including DLJSC. The
complaints allege that defendants conspired to fix the "fee" paid for
underwriting initial public offering securities by setting the
underwriters' discount or "spread" at 7%, in violation of the Federal
antitrust laws. The complaints seek treble damages in an unspecified amount
and injunctive relief as well as attorneys' fees and costs. In March 1999,
the plaintiffs filed a consolidated amended complaint. A motion by all
defendants
F-33
<PAGE>
to dismiss the complaints on several grounds is pending. Separately, the
U.S. Department of Justice has issued a Civil Investigative Demand to
several investment banking firms, including DLJSC, seeking documents and
information relating to "alleged" price-fixing with respect to underwriting
spreads in initial public offerings. The Justice Department has not made
any charges against DLJSC or the other investment banking firms. DLJSC is
cooperating with the Justice Department in providing the requested
information and believes that no violation of law by DLJSC has occurred.
Although there can be no assurance, DLJ's management does not believe that
the ultimate resolution of the litigations described above to which DLJSC
is a party will have a material adverse effect on DLJ's consolidated
financial condition. Based upon the information currently available to it,
DLJ's management cannot predict whether or not such litigations will have a
material adverse effect on DLJ's results of operations in any particular
period.
Other Matters
In addition to the matters described above, the Holding Company 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.
16) LEASES
The Company has entered into operating leases for office space and certain
other assets, principally information technology equipment and office
furniture and equipment. Future minimum payments under noncancelable leases
for 2000 and the four successive years are $111.2 million, $93.3 million,
$78.3 million, $71.9 million, $66.5 million and $523.7 million thereafter.
Minimum future sublease rental income on these noncancelable leases for
2000 and the four successive years is $5.2 million, $4.1 million, $2.8
million, $2.8 million, $2.8 million and $23.8 million thereafter.
At December 31, 1999, the minimum future rental income on noncancelable
operating leases for wholly owned investments in real estate for 2000 and
the four successive years is $120.7 million, $113.5 million, $96.0 million,
$79.7 million, $74.1 million and $354.6 million thereafter.
17) OTHER OPERATING COSTS AND EXPENSES
Other operating costs and expenses consisted of the following:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Compensation costs................................. $ 1,010.6 $ 772.0 $ 721.5
Commissions........................................ 549.5 478.1 409.6
Short-term debt interest expense................... 16.7 26.1 31.7
Long-term debt interest expense.................... 76.3 84.6 121.2
Amortization of policy acquisition costs........... 314.5 292.7 287.3
Capitalization of policy acquisition costs......... (709.9) (609.1) (508.0)
Writedown of policy acquisition costs.............. 131.7 - -
Rent expense, net of sublease income............... 113.9 100.0 101.8
Cursitor intangible assets writedown............... - - 120.9
Other.............................................. 1,294.0 1,056.8 917.9
------------- ------------ ------------
Total.............................................. $ 2,797.3 $ 2,201.2 $ 2,203.9
================= ================ =================
</TABLE>
F-34
<PAGE>
During 1997, the Company restructured certain operations in connection with
cost reduction programs and recorded a pre-tax provision of $42.4 million.
The amount paid during 1999 associated with cost reduction programs totaled
$15.6 million. At December 31, 1999, the remaining liabilities associated
with cost reduction programs was $8.8 million. The 1997 cost reduction
program included costs related to employee termination and exit costs.
18) INSURANCE GROUP STATUTORY FINANCIAL INFORMATION
Equitable Life is restricted as to the amounts it may pay as shareholder
dividends. Under the New York Insurance Law, the Superintendent has broad
discretion to determine whether the financial condition of a stock life
insurance company would support the payment of dividends to its
shareholders. For 1999, 1998 and 1997, statutory net income (loss) totaled
$547.0 million, $384.4 million and ($351.7) million, respectively.
Statutory surplus, capital stock and Asset Valuation Reserve ("AVR")
totaled $5,570.6 million and $4,728.0 million at December 31, 1999 and
1998, respectively. In September 1999, $150.0 million in dividends were
paid to the Holding Company by Equitable Life, the first such payment since
Equitable Life's demutualization in 1992.
At December 31, 1999, the Insurance Group, in accordance with various
government and state regulations, had $26.8 million of securities deposited
with such government or state agencies.
The differences between statutory surplus and capital stock determined in
accordance with Statutory Accounting Principles ("SAP") and total
shareholder's equity under GAAP are primarily: (a) the inclusion in SAP of
an AVR intended to stabilize surplus from fluctuations in the value of the
investment portfolio; (b) future policy benefits and policyholders' account
balances under SAP differ from GAAP due to differences between actuarial
assumptions and reserving methodologies; (c) certain policy acquisition
costs are expensed under SAP but deferred under GAAP and amortized over
future periods to achieve a matching of revenues and expenses; (d) external
and certain internal costs incurred to obtain or develop internal use
computer software during the application development stage is capitalized
under GAAP but expensed under SAP; (e) Federal income taxes are generally
accrued under SAP based upon revenues and expenses in the Federal income
tax return while under GAAP deferred taxes provide for timing differences
between recognition of revenues and expenses for financial reporting and
income tax purposes; (f) the valuation of assets under SAP and GAAP differ
due to different investment valuation and depreciation methodologies, as
well as the deferral of interest-related realized capital gains and losses
on fixed income investments; and (g) differences in the accrual
methodologies for post-employment and retirement benefit plans.
F-35
<PAGE>
19) BUSINESS SEGMENT INFORMATION
The Company's operations consist of Insurance and Investment Services. The
Company's management evaluates the performance of each of these segments
independently and allocates resources based on current and future
requirements of each segment. Management evaluates the performance of each
segment based upon operating results adjusted to exclude the effect of
unusual or non-recurring events and transactions and certain revenue and
expense categories not related to the base operations of the particular
business net of minority interest. Information for all periods is presented
on a comparable basis.
Intersegment investment advisory and other fees of approximately $75.6
million, $61.8 million and $84.1 million for 1999, 1998 and 1997,
respectively, are included in total revenues of the Investment Services
segment. These fees, excluding amounts related to discontinued operations
of $.5 million, $.5 million and $4.2 million for 1999, 1998 and 1997,
respectively, are eliminated in consolidation.
The following tables reconcile each segment's revenues and operating
earnings to total revenues and earnings from continuing operations before
Federal income taxes and cumulative effect of accounting change as reported
on the consolidated statements of earnings and the segments' assets to
total assets on the consolidated balance sheets, respectively.
<TABLE>
<CAPTION>
INVESTMENT
INSURANCE SERVICES ELIMINATION TOTAL
------------- ------------ ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
1999
----
Segment revenues..................... $ 4,283.0 $ 2,052.7 $ (23.8) $ 6,311.9
Investment (losses) gains............ (199.4) 111.5 - (87.9)
------------- ------------ ------------ ------------
Total Revenues....................... $ 4,083.6 $ 2,164.2 $ (23.8) $ 6,224.0
============= ============ ============ ============
Pre-tax operating earnings........... $ 895.7 $ 427.0 $ - $ 1,322.7
Investment (losses) gains , net of
DAC and other charges.............. (208.4) 110.5 - (97.9)
Non-recurring DAC adjustments........ (131.7) - - (131.7)
Pre-tax minority interest............ - 216.8 - 216.8
------------- ------------ ------------ ------------
Earnings from Continuing
Operations......................... $ 555.6 $ 754.3 $ - $ 1,309.9
============= ============ ============ ============
Total Assets......................... $ 86,842.7 $ 12,961.7 $ (8.9) $ 99,795.5
============= ============ ============ ============
1998
----
Segment revenues..................... $ 4,029.8 $ 1,438.4 $ (5.7) $ 5,462.5
Investment gains..................... 64.8 35.4 - 100.2
------------- ------------ ------------ ------------
Total Revenues....................... $ 4,094.6 $ 1,473.8 $ (5.7) $ 5,562.7
============= ============ ============ ============
Pre-tax operating earnings........... $ 688.6 $ 284.3 $ - $ 972.9
Investment gains, net of
DAC and other charges.............. 41.7 27.7 - 69.4
Pre-tax minority interest............ - 141.5 - 141.5
------------- ------------ ------------ ------------
Earnings from Continuing
Operations......................... 730.3 453.5 - 1,183.8
============= ============ ============ ============
Total Assets......................... $ 75,626.0 $ 12,379.2 $ (64.4) $ 87,940.8
============= ============ ============ ============
</TABLE>
F-36
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT
INSURANCE SERVICES ELIMINATION TOTAL
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1997
----
Segment revenues..................... $ 3,990.8 $ 1,200.0 $ (7.7) $ 5,183.1
Investment (losses) gains............ (318.8) 255.1 - (63.7)
------------- ------------ ------------ ------------
Total Revenues....................... $ 3,672.0 $ 1,455.1 $ (7.7) $ 5,119.4
============= ============ ============ ============
Pre-tax operating earnings........... $ 507.0 $ 258.3 $ - $ 765.3
Investment (losses) gains, net of
DAC and other charges.............. (292.5) 252.7 - (39.8)
Non-recurring costs and expenses..... (41.7) (121.6) - (163.3)
Pre-tax minority interest............ - 108.5 - 108.5
------------- ------------ ------------ ------------
Earnings from Continuing
Operations......................... $ 172.8 $ 497.9 $ - $ 670.7
============= ============ ============ ============
Total Assets......................... $ 67,762.4 $ 13,691.4 $ (96.1) $ 81,357.7
============= ============ ============ ============
</TABLE>
20) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The quarterly results of operations for 1999 and 1998 are summarized below:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
------------- ------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
1999
----
Total Revenues................ $ 1,484.3 $ 1,620.3 $ 1,512.1 $ 1,607.3
============= ============= ============ ============
Earnings from Continuing
Operations.................. $ 187.3 $ 222.6 $ 186.5 $ 182.1
============= ============= ============ ============
Net Earnings.................. $ 182.0 $ 221.3 $ 183.1 $ 220.2
============= ============= ============ ============
1998
----
Total Revenues................ $ 1,470.2 $ 1,422.9 $ 1,297.6 $ 1,372.0
============= ============= ============ ============
Earnings from Continuing
Operations.................. $ 212.8 $ 197.0 $ 136.8 $ 158.9
============= ============= ============ ============
Net Earnings.................. $ 213.3 $ 198.3 $ 137.5 $ 159.1
============= ============= ============ ============
</TABLE>
F-37
<PAGE>
21) INVESTMENT IN DLJ
At December 31, 1999, the Company's ownership of DLJ interest was
approximately 31.71%. The Company's ownership interest in DLJ will continue
to be reduced upon the exercise of options granted to certain DLJ employees
and the vesting of forfeitable restricted stock units acquired by DLJ
employees. DLJ restricted stock units represent 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.
Summarized balance sheets information for DLJ, reconciled to the Company's
carrying value of DLJ, are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Assets:
Trading account securities, at market value............................ $ 27,982.4 $ 13,195.1
Securities purchased under resale agreements........................... 29,538.1 20,063.3
Broker-dealer related receivables...................................... 44,998.1 34,264.5
Other assets........................................................... 6,493.5 4,759.3
------------ ------------
Total Assets........................................................... $ 109,012.1 $ 72,282.2
============ ============
Liabilities:
Securities sold under repurchase agreements............................ $ 56,474.4 $ 35,775.6
Broker-dealer related payables......................................... 37,207.4 26,161.5
Short-term and long-term debt.......................................... 6,518.6 3,997.6
Other liabilities...................................................... 4,704.5 3,219.8
------------ ------------
Total liabilities...................................................... 104,904.9 69,154.5
DLJ's company-obligated mandatorily redeemed preferred
securities of subsidiary trust holding solely debentures of DLJ...... 200.0 200.0
Total shareholders' equity............................................. 3,907.2 2,927.7
------------ ------------
Total Liabilities, Cumulative Exchangeable Preferred Stock and
Shareholders' Equity................................................. $ 109,012.1 $ 72,282.2
============ ============
DLJ's equity as reported............................................... $ 3,907.2 $ 2,927.7
Unamortized cost in excess of net assets acquired in 1985
and other adjustments................................................ 22.9 23.7
The Holding Company's equity ownership in DLJ.......................... (1,341.4) (1,002.4)
Minority interest in DLJ............................................... (1,479.3) (1,118.2)
------------ ------------
The Company's Carrying Value of DLJ.................................... $ 1,109.4 $ 830.8
============ ============
</TABLE>
F-38
<PAGE>
Summarized statements of earnings information for DLJ reconciled to the
Company's equity in earnings of DLJ is as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ -------------
(IN MILLIONS)
<S> <C> <C> <C>
Commission, fees and other income..................... $ 4,145.1 $ 3,150.5 $ 2,430.7
Net investment income................................. 2,175.3 2,189.1 1,652.1
Principal Transactions, net........................... 825.9 67.4 557.7
------------ ------------ -------------
Total revenues........................................ 7,146.3 5,407.0 4,640.5
Total expenses including income taxes................. 6,545.6 5,036.2 4,232.2
------------ ------------ -------------
Net earnings.......................................... 600.7 370.8 408.3
Dividends on preferred stock.......................... 21.2 21.3 12.2
------------ ------------ -------------
Earnings Applicable to Common Shares.................. $ 579.5 $ 349.5 $ 396.1
============ ============ =============
DLJ's earnings applicable to common shares as
reported............................................ $ 579.5 $ 349.5 $ 396.1
Amortization of cost in excess of net assets
acquired in 1985.................................... (.9) (.8) (1.3)
The Holding Company's equity in DLJ's earnings........ (222.7) (136.8) (156.8)
Minority interest in DLJ.............................. (172.9) (99.5) (109.1)
------------ ------------ -------------
The Company's Equity in DLJ's Earnings................ $ 183.0 $ 112.4 $ 128.9
============ ============ =============
</TABLE>
22) ACCOUNTING FOR STOCK-BASED COMPENSATION
The Holding Company sponsors a stock incentive plan for employees of
Equitable Life. DLJ and Alliance each sponsor their own stock option plans
for certain employees. The Company has elected to continue to account for
stock-based compensation using the intrinsic value method prescribed in APB
No. 25. Had compensation expense for the Holding Company, DLJ and Alliance
Stock Option Incentive Plan options been determined based on SFAS No. 123's
fair value based method, the Company's pro forma net earnings for 1999,
1998 and 1997 would have been $757.1 million, $678.4 million and $426.3
million, respectively.
The fair values of options granted after December 31, 1994, used as a basis
for the pro forma disclosures above, were estimated as of the grant dates
using the Black-Scholes option pricing model. The option pricing
assumptions for 1999, 1998 and 1997 follow:
<TABLE>
<CAPTION>
HOLDING COMPANY DLJ ALLIANCE
------------------------------ ------------------------------- ----------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
--------- ---------- --------- ---------- --------- ---------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dividend yield...... 0.31% 0.32% 0.48% 0.56% 0.69% 0.86% 8.70% 6.50% 8.00%
Expected volatility. 28% 28% 20% 36% 40% 33% 29% 29% 26%
Risk-free interest
rate.............. 5.46% 5.48% 5.99% 5.06% 5.53% 5.96% 5.70% 4.40% 5.70%
Expected life
in years.......... 5 5 5 5 5 5 7 7.2 7.2
Weighted average
fair value per
option at
grant-date........ $10.78 $11.32 $6.13 $17.19 $16.27 $10.81 $3.88 $3.86 $2.18
</TABLE>
F-39
<PAGE>
A summary of the Holding Company, DLJ and Alliance's option plans follows:
<TABLE>
<CAPTION>
HOLDING COMPANY DLJ ALLIANCE
----------------------------- ----------------------------- -----------------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Price of Price of Price of
Shares Options Shares Options Units Options
(In Millions) Outstanding (In Millions) Outstanding (In Millions) Outstanding
--------------- ------------- --------------- ------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance as of
January 1, 1997........ 13.4 $10.40 22.2 $14.03 10.0 $ 9.54
Granted................ 6.4 $20.93 6.4 $30.54 2.2 $18.28
Exercised.............. (3.2) $10.13 (.2) $16.01 (1.2) $ 8.06
Forfeited.............. (.8) $11.72 (.2) $13.79 (.4) $10.64
--------------- ------------- ---------------
Balance as of
December 31, 1997...... 15.8 $14.53 28.2 $17.78 10.6 $11.41
Granted................ 8.6 $33.13 1.5 $38.59 2.8 $26.28
Exercised.............. (2.2) $10.59 (1.4) $14.91 (.9) $ 8.91
Forfeited.............. (.8) $23.51 (.1) $17.31 (.2) $13.14
--------------- ------------- ---------------
Balance as of
December 31, 1998...... 21.4 $22.00 28.2 $19.04 12.3 $14.92
Granted................ 4.3 $31.70 4.8 $45.23 2.0 $30.18
Exercised.............. (2.4) $13.26 (2.2) $34.61 (1.5) $ 9.51
Forfeited.............. (.6) $24.29 (.1) $15.85 (.3) $17.79
--------------- ------------- ---------------
Balance as of
December 31, 1999...... 22.7 $24.60 30.7 $23.30 12.5 $17.95
=============== ============= ===============
</TABLE>
F-40
<PAGE>
Information about options outstanding and exercisable at December 31, 1999
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
- -------------------- ------------------ ---------------- --------------- ------------------ ----------------
Holding
Company
- --------------------
<S> <C> <C> <C> <C> <C> <C>
$ 9.06 -$13.88 5.6 4.2 $10.50 10.9 $18.98
$14.25 -$22.63 5.2 7.7 $20.95 - -
$25.32 -$34.59 8.2 8.7 $29.08 - -
$40.97 -$41.28 3.7 8.6 $41.28 - -
----------------- ------------------
$ 9.06 -$41.28 22.7 7.3 $24.60 10.9 $18.98
================= ================ =============== ================== ================
DLJ
- --------------------
$13.50 -$25.99 20.2 8.4 $14.61 20.6 $16.62
$26.00 -$38.99 4.9 7.8 $33.99 - -
$39.00 -$52.875 4.8 9.0 $43.28 - -
$53.00 -$76.875 .8 9.7 $57.09 - -
----------------- ------------------
$13.50 -$76.875 30.7 8.4 $23.30 20.6 $16.62
================= ================ =============== ================== ================
Alliance
- --------------------
$ 3.66 -$ 9.81 2.6 3.8 $ 8.31 2.2 $ 8.12
$ 9.88 -$12.56 3.3 5.6 $11.16 2.6 $10.92
$13.75 -$18.47 1.8 7.9 $18.34 .7 $18.34
$18.78 -$26.31 2.8 8.9 $26.16 .6 $26.06
$27.31 -$30.94 2.0 9.9 $30.24 - -
----------------- ------------------
$ 3.66 -$30.94 12.5 7.0 $17.95 6.1 $12.12
================= ================ =============== ================== ================
</TABLE>
F-41
<PAGE>
Supplement dated May 1, 2000 to Prospectus dated May 1, 2000
------------------------------------------------------------------------
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, 2000 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 $5,000, you must receive
a Qualified Joint and Survivor Annuity unless your Spouse consents to a
different election.
Life Annuity - 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
$5,000. 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 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
2
<PAGE>
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 4-3/4% 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%.
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 divided by 1.05 = 345.71). If the
3
<PAGE>
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%.
First Business Day of Annuity Unit Value
--------------------- ------------------
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
October 1997 $11.0300
October 1998 $7.5963
October 1999 $9.8568
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.
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, 2000 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, 2000
prospectus and Statement of Additional Information.
4
<PAGE>
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 AXA Financial, Inc., and their subsidiaries managed assets of
approximately $462.7 billion as of December 31, 1999, including third party
assets of $340.6 billion.
Investment Management
In providing investment management to the Fund, 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, 2000 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 1999, 1998 and 1997, the Fund paid $5,877,438, $4,288,187 and $3,698,148,
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, 2000 Statement of Additional Information.
5
<PAGE>
FINANCIAL STATEMENTS
The financial statements of the Fund reflect applicable fees,
charges and other expenses under the Members Retirement 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 - PricewaterhouseCoopers LLP 7
Statement of Assets and Liabilities,
December 31, 1999 8
Statement of Operations and Changes in Net Assets
for the Years Ended December 31, 1999 and 1998 9
Portfolio of Investments
December 31, 1999 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 Contractowners of Separate Account No. 4
of The Equitable Life Assurance Society of the United States
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 (Pooled) (The Growth Equity Fund) of The
Equitable Life Assurance Society of the United States ("Equitable Life") at
December 31, 1999, the results of its operations for the year then ended and
changes in its net assets for each of the two years then ended, in conformity
with accounting principles generally accepted in the United States of America.
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 auditing standards generally accepted in the
United States of America, 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, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
February 1, 2000
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, 1999
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------
ASSETS:
Investments (Notes 2 and 3):
Common stocks -- at market value (cost: $1,333,345,581) ................................. $1,777,794,011
Long-term debt securities -- at market value (amortized cost: $7,810,985) ............... 11,874,375
Participation in Separate Account No. 2A -- at amortized cost, which approximates market
value, equivalent to
120,801 units at $300.60 ............................................................... 36,312,393
Receivable for investment securities sold ................................................ 6,662,243
Dividends and interest receivable ........................................................ 1,361,064
- ------------------------------------------------------------------------------------------------------------
Total assets ........................................................................... 1,834,004,086
- ------------------------------------------------------------------------------------------------------------
LIABILITIES:
Due to Equitable Life's General Account .................................................. 39,371,465
Payable for investment securities purchased .............................................. 1,639,781
Custodian fee payable .................................................................... 367,334
Investment management fees payable ....................................................... 3,770
Accrued expense .......................................................................... 482,251
- ------------------------------------------------------------------------------------------------------------
Total liabilities ...................................................................... 41,864,601
- ------------------------------------------------------------------------------------------------------------
NET ASSETS ............................................................................... $1,792,139,485
============================================================================================================
Amount retained by Equitable Life in Separate Account No. 4 .............................. $ 2,714,541
Net assets attributable to contract owners ............................................... 1,735,846,337
Net assets attributable to annuity benefits .............................................. 53,578,607
- ------------------------------------------------------------------------------------------------------------
NET ASSETS ............................................................................... $1,792,139,485
============================================================================================================
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITD STATES
Statement of Operations
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------
INVESTMENT INCOME (NOTE 2):
Dividends ............................................................. $ 9,728,926
Interest .............................................................. 421,216
- ----------------------------------------------------------------------------------------
Total investment income ............................................... 10,150,142
- ----------------------------------------------------------------------------------------
EXPENSES (NOTE 4):
Asset and investment management fees .................................. (7,361,227)
Administrative fees ................................................... (6,442,906)
Operating expenses .................................................... (569,529)
- ----------------------------------------------------------------------------------------
Total expenses ........................................................ (14,373,662)
- ----------------------------------------------------------------------------------------
Net investment loss ................................................... (4,223,520)
- ----------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Realized gain from security and foreign currency transactions ......... 294,811,943
Change in unrealized appreciation/depreciation of investments ......... 264,368,034
- ----------------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Investments ....................... 559,179,977
- ----------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO OPERATIONS ................. $ 554,956,457
========================================================================================
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1999 1998
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment loss .......................................................... $ (4,223,520) $ (5,333,397)
Net realized gain on investments and foreign currency transactions ........... 294,811,943 424,897,105
Change in unrealized appreciation/depreciation of investments ................ 264,368,034 (505,981,445)
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets attributable to operations ............. 554,956,457 (86,417,737)
- -----------------------------------------------------------------------------------------------------------------------
FROM CONTRIBUTIONS AND WITHDRAWALS:
Contributions ................................................................ 369,385,670 451,738,195
Withdrawals .................................................................. (1,245,308,651) (897,373,357)
- -----------------------------------------------------------------------------------------------------------------------
Net decrease in net assets attributable to contributions and withdrawals ..... (875,922,981) (445,635,162)
- -----------------------------------------------------------------------------------------------------------------------
Net increase in net assets attributable to Equitable Life's transactions ..... 58,823 23,520
- -----------------------------------------------------------------------------------------------------------------------
DECREASE IN NET ASSETS ....................................................... (320,907,701) (532,029,379)
NET ASSETS -- BEGINNING OF YEAR .............................................. 2,113,047,186 2,645,076,565
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS -- END OF YEAR .................................................... $ 1,792,139,485 $2,113,047,186
=======================================================================================================================
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- ------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
CHEMICALS-SPECIALTY (0.4%)
Lyondell Chemical Company ...................... 600,000 $ 7,650,000
------------
TOTAL BASIC MATERIALS (0.4%) ................... 7,650,000
------------
CONSUMER CYCLICALS
AIRLINES (11.5%)
Alaska Air Group, Inc.* ........................ 540,000 18,967,500
America West Holdings Corp. (Class B)* ......... 90,000 1,867,500
Continental Airlines, Inc. (Class B)* .......... 2,935,000 130,240,624
Northwest Airlines Corp. (Class A)* ............ 2,475,000 55,068,750
------------
206,144,374
------------
APPAREL, TEXTILE (1.9%)
Mohawk Industries, Inc.* ....................... 577,600 15,234,200
Unifi, Inc.* ................................... 1,575,000 19,392,188
------------
34,626,388
------------
AUTO RELATED (1.7%)
Budget Group, Inc.* ............................ 1,225,000 11,101,563
Dollar Thrifty Automotive Group, Inc.* ......... 780,000 18,671,250
Monaco Coach Corp.* ............................ 10,200 260,738
------------
30,033,551
------------
FOOD SERVICES, LODGING (1.1%)
Extended Stay America, Inc.* ................... 2,665,000 20,320,625
------------
HOUSEHOLD FURNITURE, APPLIANCES (0.8%)
Industrie Natuzzi Spa (ADR) .................... 1,053,900 13,964,175
------------
LEISURE RELATED (10.1%)
Carnival Corp. ................................. 1,124,200 53,750,813
Cendant Corporation* ........................... 660,000 17,531,250
Metro-Goldwyn-Mayer, Inc.* ..................... 200,000 4,712,500
Park Place Entertainment Corp.* ................ 600,000 7,500,000
Royal Caribbean Cruises Ltd.* .................. 1,950,000 96,159,374
------------
179,653,937
------------
</TABLE>
11
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1999 (Continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- -------------------------------------------------------------------------------------
<S> <C> <C>
RETAIL -- GENERAL (1.2%)
Bed Bath & Beyond, Inc.* .............................. 240,000 $ 8,340,000
TJX Cos., Inc. ........................................ 320,000 6,540,000
Venator Group, Inc.* .................................. 975,000 6,825,000
------------
21,705,000
------------
TOTAL CONSUMER CYCLICALS (28.3%) ...................... 506,448,050
------------
CONSUMER NONCYCLICALS
BEVERAGES (0.2%)
Pepsi Bottling Group, Inc. ............................ 200,000 3,312,500
------------
HOSPITAL SUPPLIES & SERVICES (5.0%)
Health Management Associates, Inc. (Class A)* ......... 3,119,200 41,719,300
HEALTHSOUTH Corp.* .................................... 3,250,000 17,468,750
McKesson HBOC, Inc. ................................... 300,000 6,768,750
Quintiles Transnational Corp.* ........................ 585,000 10,932,188
Tenet Healthcare Corp.* ............................... 535,000 12,572,500
------------
89,461,488
------------
MEDIA & CABLE (1.1%)
Rogers Communications, Inc. (Class B)* ................ 620,000 15,345,000
UnitedGlobalcom, Inc. (Class A)* ...................... 50,000 3,531,250
------------
18,876,250
------------
RETAIL -- FOOD (0.1%)
Kroger Co.* ........................................... 150,000 2,831,250
------------
TOTAL CONSUMER NONCYCLICALS (6.4%) .................... 114,481,488
------------
CREDIT-SENSITIVE
BANKS (0.3%)
Bank of Tokyo-Mitsubishi Ltd. ......................... 345,000 4,808,438
------------
FINANCIAL SERVICES (8.9%)
Associates First Capital Corp. (Class A) .............. 650,000 17,834,375
CIT Group, Inc. (Class A) ............................. 399,170 8,432,466
Edwards (A.G.), Inc. .................................. 805,000 25,810,313
Legg Mason, Inc. ...................................... 2,965,000 107,481,250
------------
159,558,404
------------
</TABLE>
12
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1999 (Continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- -------------------------------------------------------------------------------------
<S> <C> <C>
INSURANCE (9.1%)
Ace Ltd. .............................................. 2,000,000 $ 33,375,000
CNA Financial Corp.* .................................. 3,323,500 129,408,780
------------
162,783,780
------------
REAL ESTATE (0.3%)
Prime Retail, Inc. .................................... 1,000,000 5,625,000
------------
UTILITY -- TELEPHONE (8.4%)
Centurytel, Inc. ...................................... 110,100 5,215,988
Tele Celular Sul Participacoes (ADR) .................. 50,000 1,587,500
Tele Centro Oeste Celular Participacoes (ADR) ......... 100,000 650,000
Tele Nordeste Celular Participacoes (ADR) ............. 30,000 1,515,000
Tele Sudeste Celular Participacoes (ADR) .............. 349,300 13,557,206
Telemig Celular Participacoes (ADR) ................... 100,000 4,618,750
Telephone & Data Systems, Inc. ........................ 790,000 99,540,000
Telesp Celular Participacoes (ADR) .................... 200,000 8,475,000
Viatel, Inc.* ......................................... 297,200 15,937,350
------------
151,096,794
------------
TOTAL CREDIT-SENSITIVE (27.0%) ........................ 483,872,416
------------
ENERGY
OIL -- DOMESTIC (2.5%)
Kerr-McGee Corp. ...................................... 585,000 36,270,000
Murphy Oil Corp. ...................................... 145,000 8,319,375
------------
44,589,375
------------
OIL -- INTERNATIONAL (0.1%)
IRI International Corporation* ........................ 305,000 1,220,000
------------
OIL -- SUPPLIES & CONSTRUCTION (0.7%)
Stolt Comex Seaway S.A.* .............................. 165,000 1,825,313
Stolt Comex Seaway S.A. (ADR) (Class A)* .............. 1,058,000 11,638,000
------------
13,463,313
------------
TOTAL ENERGY (3.3%) ................................... 59,272,688
------------
</TABLE>
13
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1999 (Continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY
ELECTRONICS (0.8%)
ARDENT Software, Inc.* ............................................ 150,000 $ 5,850,000
DBT Online, Inc.* ................................................. 359,900 8,772,563
--------------
14,622,563
--------------
OFFICE EQUIPMENT SERVICES (0.6%)
Informix Corporation* ............................................. 887,600 10,096,450
--------------
TELECOMMUNICATIONS (30.4%)
Adelphia Business Solutions* ...................................... 90,000 4,320,000
Amdocs Ltd.* ...................................................... 515,000 17,767,500
American Satellite Network -- Warrants (Expire 06/30/00)* ......... 70,000 0
Global TeleSystems Group, Inc.* ................................... 3,980,000 137,807,499
Mannesmann AG ..................................................... 40,000 9,641,482
Millicom International Cellular S.A.* ............................. 2,165,500 135,073,062
NTL Incorporated* ................................................. 820,000 102,295,000
PSINet, Inc.* ..................................................... 237,500 14,665,625
RCN Corporation* .................................................. 710,100 34,439,850
United States Cellular Corp.* ..................................... 885,000 89,329,688
--------------
545,339,706
--------------
TOTAL TECHNOLOGY (31.8%) .......................................... 570,058,719
--------------
DIVERSIFIED
MISCELLANEOUS (2.0%)
U.S. Industries, Inc. ............................................. 919,600 12,874,400
Viad Corp. ........................................................ 830,000 23,136,250
--------------
TOTAL DIVERSIFIED (2.0%) .......................................... 36,010,650
--------------
TOTAL COMMON STOCKS (99.2%)
(Cost $1,333,345,581)............................................. 1,777,794,011
--------------
</TABLE>
14
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT NO. 4 (POOLED)
(THE GROWTH EQUITY FUND)
OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
Portfolio of Investments -- December 31, 1999 (Concluded)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
TECHNOLOGY
TELECOMMUNICATIONS (0.7%)
NTL Incorporated
7.0% Conv., 2008 ................................................... $4,500,000 $ 11,874,375
--------------
TOTAL TECHNOLOGY (0.7%) ............................................. 11,874,375
--------------
TOTAL LONG-TERM DEBT SECURITIES (0.7%)
(Amortized Cost $7,810,985)......................................... 11,874,375
--------------
PARTICIPATION IN SEPARATE ACCOUNT NO. 2A,
at amortized cost, which approximates
market value, equivalent to 120,801
units at $300.60 each (2.0%)........................................ 36,312,393
--------------
TOTAL INVESTMENTS (101.9%)
(Cost/Amortized Cost $1,377,468,959)................................ 1,825,980,779
OTHER ASSETS LESS LIABILITIES (-1.9%) ............................... (33,841,294)
--------------
NET ASSETS (100.0%) ................................................. $1,792,139,485
==============
Amount retained by Equitable Life in Separate Account No. 4 ......... $ 2,714,541
Net assets attributable to contract owners .......................... 1,735,846,337
Net assets attributable to annuity benefits ......................... 53,578,607
--------------
NET ASSETS .......................................................... $1,792,139,485
==============
</TABLE>
* Non-income producing.
See Notes to Financial Statements.
15
<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 AXA Financial, Inc., 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 $2,714,541 as shown in the Statement of Assets
and Liabilities in Separate Account No. 4 may be transferred to Equitable
Life's General Account. These financial statements reflect the total net
assets and results of operations for Separate Account No. 4. The Members
Retirement Programs constitute, among many others, contract owners
participating in this Fund.
Interests of retirement and investment plans for Equitable Life employees,
managers, and agents in Separate Account No. 4 aggregated $365,557,809
(20.4%), at December 31, 1999 and $323,953,589 (15.3%), at December 31,
1998, 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
accounting principles generally accepted in the United States of America
(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 Statement of
Operations.
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
16
<PAGE>
- --------------------------------------------------------------------------------
maturing in sixty days or less from the date of acquisition. At December
31, 1999, the amortized cost of investments held in Separate Account No. 2A
consist of the following:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
AMORTIZED COST %
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Bankers' Acceptances, 5.70% due 01/21/00 through 02/24/00 ................ $ 5,140,555 2.3%
Certificates of Deposit, 5.50% - 5.99% due 01/28/00 through 01/31/00 ..... 9,998,680 4.5
Commercial Paper, 4.45% - 6.45% due 01/03/00 through 02/15/00 ............ 176,636,726 79.2
U.S. Government Agency, 1.5% due 01/03/00 ................................ 30,997,417 13.9
- ------------------------------------------------------------------------------------------------------
Total Investments ........................................................ 222,773,378 99.9
Other Assets Less Liabilities ............................................ 212,513 0.1
- ------------------------------------------------------------------------------------------------------
Net Assets of Separate Account No. 2A .................................... $ 222,985,891 100.0%
======================================================================================================
Units Outstanding ........................................................ 741,808
Unit Value ............................................................... $ 300.60
- ------------------------------------------------------------------------------------------------------
</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 1999 and 1998, investment security transactions, excluding short-term
debt securities, were as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
COST OF NET PROCEEDS
PURCHASES OF SALES
- -----------------------------------------------------------------------------------
Stocks and long-term corporate debt securities:
<S> <C> <C>
1999 ........................................ $1,340,597,736 $2,209,410,520
1998 ........................................ 1,692,067,102 2,151,023,546
U.S. Government obligations:
1999 ........................................ -- --
1998 ........................................ -- --
- -----------------------------------------------------------------------------------
</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.
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.
17
<PAGE>
- --------------------------------------------------------------------------------
Convertible bonds and unlisted convertible preferred stock 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 Members
Retirement Programs, 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 by the Fund and are recorded as expenses in the accompanying
Statement of Operations.
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, 1999, 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.
18
<PAGE>
PART C
OTHER INFORMATION
Item 28. Financial Statements and Exhibits
(a) Financial Statements included in Part B.
The following are included in the Statement of Additional
Information relating to the American Dental Association
Program:
1. Separate Account Nos., 4 (Pooled), 191 and 200
(The Growth Equity, ADA Foreign and Aggressive
Equity Accounts):
-Report of Independent Accountants - PricewaterhouseCoopers, LLP
2. Separate Account No. 4 (Pooled):
- Statement of Assets and Liabilities, December 31, 1999
- Statements of Operations and Changes in Net
Assets for the Years Ended December 31, 1999 and 1998
- Portfolio of Investments, December 31, 1999
- Notes to Financial Statements
3. Separate Account No. 191:
- Statement of Assets and Liabilities, December 31, 1999
- Statements of Operations and Changes in Net
Assets for the Years Ended December 31, 1999 and 1998
4. Separate Account No. 200:
- Statement of Assets and Liabilities
- Statement of Operations and Changes in Net Assets for the
Years Ended December 31, 1999 and 1998
5. Separate Account Nos. 191 and 200:
- Notes to Audited Financial Statements
6. Separate Account No. 30 (Pooled):
- Report of Independent Accountants - PricewaterhouseCoopers, LLP
- Statement of Assets and Liabilities, December 31, 1999
- Statements of Operations and Changes in Net Assets for the Years
Ended December 31, 1999 and 1998
- Statements of Cash Flows for the Years Ended December 31, 1999 and
1997
- Statement of Investments and Net Assets, December 31, 1999
- Notes to Financial Statements
C-1
<PAGE>
7. Separate Account No. 8 (Prime Property Fund):
- Report of Independent Accountants - PricewaterhouseCoopers, LLP
- Statement of Assets and Liabilities, December 31, 1999
- Statements of Operations and Changes in Net Assets for the Years
Ended December 31, 1999 and 1998
- Statements of Cash Flows for the Years Ended December 31, 1999 and
1997
- Notes to Financial Statements
8. Schedule X:
- Supplementary Income Statement Information, December 31, 1999 and
1998
9. Schedule XII:
- Mortgage Loans Receivable on Real Estate, December 31, 1999 and
1998
10. The Equitable Life Assurance Society of the United States:
- Report of Independent Accountants - PricewaterhouseCoopers, LLP
- Consolidated Balance Sheets, December 31, 1999 and 1998
- Consolidated Statements of Earnings for the Years Ended December
31, 1999, 1998 and 1997
- Consolidated Statements of Equity for the Years Ended December 31,
1999, 1998 and 1997
- Consolidated Statements of Cash Flows for the Years Ended December
31, 1999, 1998 and 1997.
(b) Exhibits.
The following Exhibits are filed herewith:
1.(a) Resolutions of the Board of Directors of The Equitable Life Assurance
Society of the United States ("Equitable") authorizing the
establishment of Equitable's Separate Account Nos. 4, 30, and 191,
incorporated by reference to Post-Effective Amendment No. 1 on Form N-3
to Registration Statement 33-46995, filed July 22, 1992.
(b) Resolutions of the Board of Directors of the Equitable authorizing the
establishment of Equitable's Separate Account 200, dated September 5,
1995, incorporated by reference to Exhibit 1(b) to Registration
Statement No. 333-50967, filed February 5, 1999.
(c) Action, dated April 6, 1999 regarding the Establishment of Separate
Account 206, incorporated herein by reference to Exhibit 1(c) to
Registration Statement No. 333-77117 on Form N-4, filed October 25,
1999.
2. Not Applicable.
3. Not Applicable.
4. (a) Investment Management Agreement by and among (i) the Trustees
of the American Dental Association Members Retirement Trust and
of the American Dental Association Members Pooled Trust for
Retirement Plans, (ii) the Committee of Separate Account No. 191
of The Equitable Life Assurance Society of the United States,
and (iii) The Equitable Life Assurance Society of the United
States in its capacity as insurer and owner of the assets of
Separate Account No. 191 and as an Investment Manager of
Separate Account No. 191 to the extent described therein,
incorporated by reference to Registration No. 33-46995 on Form
N-3 of Registrant, filed April 8, 1992.
(b) Participation Agreement among EQ Advisors Trust, The Equitable Life
Assurance Society of the United States, Equitable Distributor, Inc.,
and EQ Financial Consultants, Inc. (now AXA Advisors, LLC) dated as of
the 14th day of April, 1997, incorporated herein by reference to the
Registration Statement of EQ Advisors Trust (File No. 333-17217) on
Form N-1A, filed August 28, 1997.
5.(a) Not Applicable
C-2
<PAGE>
6. (a) Exhibit 6(a)(2) (Group Annuity Contract AC 2100, as amended and
restated effective February 1, 1991 on contract Form No. APC
1,000-91, among the Trustees of the American Dental Association
Members Retirement Trust, the American Dental Association
Members Pooled Trust for Retirement Plans and The Equitable Life
Assurance Society of the United States), incorporated by
reference to Post-Effective Amendment No. 1 to Registration
Statement 33-40162 on Form N-3 of Registrant, filed December 20,
1991.
(b) Rider No.1 to Group Annuity Contract AC 2100 among the Trustees
of the American Dental Association Members Retirement Trust, the
American Dental Association Members Pooled Trust for Retirement
Plans 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) Form of Rider No. 2 to Group Annuity Contract AC 2100 among the
Trustees of the American Dental Association Members Retirement
Trust, the American Dental Association Members Pooled Trust for
Retirement Plans 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.
(d) Rider No. 3 to Group Annuity Contract AC 2100 among the Trustees
of the American Dental Association Members Retirement Trust, the
American Dental Association Members Pooled Trust for Retirement
Plans and The Equitable Life Assurance Society of the United
States, incorporated by reference to Registration No. 33-75614
on Form N-3 of Registrant, filed April 29, 1994.
(e) Form of Rider No. 4 to Group Annuity Contract AC 2100 among the
Trustees of the American Dental Association Members Retirement
Trust, the American Dental Association Members Pooled Trust for
Retirement Plans and The Equitable Life Assurance Society of the
United States, incorporated by reference to Registration No. 33-
75614 on Form N-3 of Registrant, filed April 29, 1994.
(f) Form of Rider No. 5 to Group Annuity Contract 2100 among the
Trustees of the American Dental Association Members Retirement
Trust, the American Dental Association Members Pooled Trust for
Retirement Plans and The Equitable Life Assurance Society of the
United States, incorporated by reference to Post-Effective
C-3
<PAGE>
Amendment No.1 to Registration Statement No. 33-75616 on Form
N-4 of Registrant, filed February 27, 1995.
(g) Form of Rider No. 6 to Group Annuity Contract 2100 among the
Trustees of the American Dental Association Members Retirement
Trust, the American Dental Association Members Pooled Trust for
Retirement Plans and The Equitable Life Assurance Society of
the United States, incorporated by reference to Registration
Statement No. 33-63113 on Form N-4 of Registrant, filed
September 29, 1995.
(h) Form of Rider No. 7 to Group Annuity Contract 2100 among the
Trustees of the American Dental Association Members Retirement
Trust, the American Dental Association Members Pooled Trust for
Retirement Plans and The Equitable Life Assurance Society of
the United States, incorporated by reference to Pre-Effective
Amendment No.1 to Registration Statement No. 33-63113 on Form
N-4 of Registrant, filed November 21, 1995.
(i) Form of Rider No. 8 to Group Annuity Contract 2100 among the
Trustees of the American Dental Association Members Retirement
Trust, the American Dental Association Members Pooled Trust for
Retirement Plans and The Equitable Life Assurance Society of
the United States, incorporated by reference to Post-Effective
Amendment No.1 to Registration Statement No. 33-91648 on Form
N-3 of Registrant, filed April 30, 1996.
(j) Form of Rider No. 9 to Group Annuity Contract 2100 among the
Trustees of the American Dental Association Members. Retirement
Trust, the American Dental Association Members Pooled Trust for
Retirement Plans and The Equitable Life Assurance Society of the
United States, incorporated by reference to Post-Effective
Amendment No. 2 to Registration Statement No. 33-91648 on Form
N-3 of Registrant, filed April 24, 1997.
7. (a) Exhibit 7(a) (Form of Participation Agreement for the
standardized Profit-Sharing Plan under the ADA 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, l986.
(b) Exhibit 7(b) (Form of Participation Agreement for the
nonstandardized Profit-Sharing Plan under the ADA 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(e) (Copy of Attachment to Profit Sharing Participation
Agreement under the American Dental Association Members
Retirement Plan), incorporated by reference to Registration No.
33-21417 on Form N-3 of Registrant, filed April 26, 1988.
(d) Exhibit 7(e)(2) (Form of Participant Enrollment Form under the
ADA Program), incorporated by reference to Post-Effective
Amendment No. 2 on Form N-3 to Registration Statement on Form
S-1 of Registrant, filed April 2l, l987.
(e) Exhibit 7(u) (Form of Simplified Participation Agreement for
the Defined Contribution Pension Plan under the ADA Program, as
filed with the Internal Revenue Service), 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-4
<PAGE>
(f) Exhibit 7(v) (Form of Simplified Participation Agreement for
the Profit-Sharing Plan under the ADA Program, as filed with
the Internal Revenue Service), incorporated by reference to
Post-Effective Amendment No. 2 to Registration No. 33-21417 on
Form N-3 of Registrant, filed April 26, 1989.
(g) Exhibit 7(w) (Form of Non-Standardized Participation Agreement
for the Profit-Sharing Plan under the ADA Program, as filed
with the Internal Revenue Service), incorporated by reference
to Post-Effective Amendment No. 2 to Registration No. 33-21417
on Form N-3 of Registrant, filed April 26, 1989.
(h) Exhibit 7(x) (Form of Standardized Participation Agreement for
the Profit-Sharing Plan under the ADA Program, as filed with
the Internal Revenue Service), 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(y) (Form of Non-Standardized Participation Agreement
for the Defined Contribution Pension Plan under the ADA
Program, as filed with the Internal Revenue Service),
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(z) (Form of Standardized Participation Agreement for
the Defined Contribution Pension Plan under the ADA Program, as
filed with the Internal Revenue Service), incorporated by
reference to Post-Effective Amendment No. 2 to Registration No.
33-21417 on Form N-3 of Registrant, filed April 26, 1989.
8. (a) Restated Charter of The Equitable Life Assurance Society of the
United States, as amended January 1, 1997, incorporated by
reference to Post-Effective Amendment No. 2 to Registration
Statement No. 33-91648 on Form N-3 of Registrant, filed April
24, 1997.
(b) By-Laws of The Equitable Life Assurance Society of the United
States, as amended November 21, 1996, incorporated by reference
to Post-Effective Amendment No. 2 to Registration Statement No.
33-91648 on Form N-3 of Registrant, filed April 24, 1997.
9. Not Applicable.
C-5
<PAGE>
10. Not Applicable.
11. (a) Exhibit 11(a)(2) (Form of American Dental Association Members
Retirement Plan, as filed with the Internal Revenue Service),
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(g)(2) (Form of American Dental Association Members
Retirement Trust, as filed with the Internal Revenue Service),
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(i) (Form of First Amendment to the American Dental
Association Members Retirement Trust), incorporated by
reference to Post-Effective Amendment No. 1 to Registration No.
33-40162 on Form N-3 of Registrant, filed December 20, 1991.
(d) Exhibit 11(g) (Copy of Administration Services Agreement, dated
January 10, 1986, among The Equitable Life Assurance Society of
the United States, the Trustees of the Trust maintained under
the American Dental Association Members Retirement Plan, the
Trustees of the Pooled Trust maintained by the American Dental
Association and the Council of Insurance of the American Dental
Association), 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 11(n) (Form of American Dental Association Members
Defined Benefit Pension Plan, as proposed to be filed with the
Internal Revenue Service), incorporated by reference to Post-
Effective Amendment No. 2 to Registration No. 33-21417 on Form
N-3 of Registrant, filed April 26, 1989.
(f) Exhibit 11(j) (Copy of American Dental Association Members
Pooled Trust for Retirement Plans, dated as of January 1,
1984), incorporated by reference to Post-Effective Amendment
No. 1 to Registration No. 33-40162 on Form N-3 of Registrant on
Form N-3 of Registrant, filed December 20, 1991.
(g) Exhibit 11(k) (Form of First Amendment to the American Dental
Association Members Pooled Trust for Retirement Plans, dated as
of January 1, 1984), incorporated by reference to
Post-Effective Amendment No. 1 to Registration No. 33-40162 on
Form N-3 of Registrant, filed December 20, 1991.
(h) Administrative Services Agreement among The Equitable Life
Assurance Society of the United States, the Trustees of the
American Dental Association Members Retirement Trust and of the
American Dental Association Members Pooled Trust for Retirement
Plans and the Council on Insurance of the American Dental
ssociation, incorporated by reference to Registration No. 33-
75614 on Form N-3 of Registrant, filed April 29, 1994.
C-6
<PAGE>
12. (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.
(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.
33-91648 on Form N-3 of Registrant, filed April 28, 1995.
(f) Opinion and Consent of Mary B. Breen, Vice President and Senior
Counsel of The Equitable Life Assurance Society of the United States,
incorporated herein by reference to Registration Statement
No. 333-50949, filed April 24, 1998.
(g) Opinion and Consent of Mary Joan Hoene, Vice President and Counsel to
The Equitable Life Assurance Society of the United States,
incorporated herein by reference to Exhibit 12(g) to Registration
Statement No. 333-77115 filed on April 27, 1999.
(h) Opinion and Consent of Robin Wagner, Vice President and Counsel to the
Equitable Life Assurance Society of the United States.
13. (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(d)), 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 12(e)
to Registration No. 33-91648 on Form N-3 of Registrant; see
Exhibit 12(e) above.
(f) Consent of Mary P. Breen (included with Exhibit 12(f)).
(g) Consent of Mary Joan Hoene (included with Exhibit 12(g)).
(h) Consent of Robin Wagner (included with Exhibit No. 12(h)).
(i) Powers of Attorney.
(j) Consent of PricewaterhouseCoopers LLP.
27. Financial Data Schedule.
C-7
<PAGE>
Item 29: 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.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
<S> <C> <C>
DIRECTORS
- -----------
Francoise Colloc'h Director Senior Executive Vice President, Human Resources and
AXA Communications, AXA and various positions with
23, Avenue Matignon AXA affiliated companies. (Director, AXA Financial,
75008 Paris, France Inc.).
Henri de Castries Director Senior Executive Vice President, Financial Services
AXA and Life Insurance Activities of AXA and various
23, Avenue Matignon positions with AXA affiliated companies; (Director
75008 Paris, France and Chairman, AXA Financial, Inc. (April 1998 to
present), and prior thereto, Director and Vice
Chairman (February 1996 to April 1998));
</TABLE>
C-8
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
<S> <C> <C>
Joseph L. Dionne Director Chairman and former Chief Executive Officer (until
The McGraw-Hill Companies April 1998) (Director, AXA Financial, Inc., Harris
1221 Avenue of the Americas Corporation, and Ryder System, Inc.))
New York, NY 10020
Denis Duverne Director Executive Vice President--International (US-UK-Benelux),
AXA AXA and member of AXA Executive Board (since January
23, Avenue Matignon 2000); (Director, Alliance (since February 1996) and DLJ
75008 Paris, France (since February 1997)).
Jean-Rene Fourtou Director Vice Chairman of the Management Board of Aventis (since
Rhone-Poulenc, S.A. December 1999). Chairman and Chief Executive Officer
25, Quai Paul Doumer Rhone-Poulenc, S.A. (1986 to December 1999); (Director,
92408 Courvbevoie Cedex, AXA Financial, Inc., Societe Generale, Schneider S.A.
France and Groupe Pernod-Ricard (July 1997 to present); Member,
Supervisory Board, AXA, European Advisory Board of
Bankers Trust Company and Consulting Council of Banque
de France).
Norman C. Francis Director President, Xavier University of Louisiana (Chairman,
Xavier University of Louisiana Liberty Bank and Trust, New Orleans, LA; (Director,
7325 Palmetto Street First National Bank of Commerce, New Orleans, LA,
New Orleans, LA 70125 Piccadilly Cafeterias, Inc., and Entergy Corporation).
</TABLE>
C-9
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
<S> <C> <C>
Donald J. Greene Director Of Counsel, LeBoeuf, Lamb, Greene & MacRae, LLP.;
LeBoeuf, Lamb, Greene & MacRae Prior thereto, Partner of the firm (1965-1999).
125 West 55th Street (Director, AXA Financial, Inc. (since May 1992)).
New York, NY 10019-4513
John T. Hartley Director Retired Chairman and Chief Executive Officer, the
Harris Corporation Harris Corporation and the McGraw-Hill Companies
1025 NASA Boulevard Director, AXA Financial, Inc. (since May 1992),
Melbourne, FL 32919 Harris Corporation and The McGraw-Hill Companies)).
John H.F. Haskell, Jr. Director Director, AXA Financial, Inc. (since July 1992); Director
Warburg Dillon Read LLC and Senior Advisor, Warburg Dillon Read LLC (since
535 Madison Avenue 1999); prior thereto, Managing Director and member of
New York, NY 10028 its Board of Directors (1975-1999); Chairman,
Supervisory Board, Dillon Read (France) Gestion (until
1998); Director, Dillon Read Limited; (Director, Pall
Corporation (November 1998 to present) and Kaydon
Corporation (until March 1998)).
Mary R. (Nina) Henderson Director President, Bestfoods Grocery; Corporate Vice President,
Bestfoods Grocery Core Business Development of BESTFOODS (since June
BESTFOODS 1999). Prior thereto, President, Bestfood's Grocery and
International Plaza Vice President, Bestfoods (formerly CPC International,
700 Sylvan Avenue Inc.); (Director, Hunt Corporation PACTIV Corporation
Englewood Cliffs, NJ 07632-9976 and AXA Financial, Inc. (since December 1996)).
W. Edwin Jarmain Director President, Jarmain Group, Inc. (since 1979) and an
Jarmain Group, Inc. officer or director of several affiliated companies;
121 King Street West Chairman, FCA International, Ltd. (until May 1998);
Suite 2525 (Director, DLJ (since October 1992), Anglo Canada General
Toronto, Ontario M5H 3T9, Insurance Company, AXA Insurance (Canada), AXA Pacific
Canada Insurance Company and Alternate Director, AXA Asia
Pacific Holdings Limited. Chairman (non-executive) and
Director, FCA International Ltd. (January 1994 to May
1998). Director, AXA Financial, Inc. (since July 1992)).
</TABLE>
C-10
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
<S> <C> <C>
George T. Lowy Director Counselor-at-Law; Partner, Cravath, Swaine & Moore.
Cravath, Swaine & Moore (Director, Eramet).
825 Eighth Avenue
New York, NY 10019
Didier Pineau-Valencienne Director Vice Chairman, Credit Suisse First Boston (since March 1999).
Schneider S.A. Chairman and Chief Executive Officer, Schneider S.A. (1981
64/70 Avenue Jean-Baptiste Clement to February 1999); Chairman and Chief Executive Officer,
92646 Boulogne-Billancourt Cedex Square D; (Director, AXA Financial, Inc. (since February
France 1996); Member, Supervisory Board, AXA and Lagardere ERE,
Director, CGIP, Sema Group plc (UK), and Aventis (formerly
Rhone-Poulenc, S.A.), Soft Computing and Swiss Helvetic Fund;
Member of Advisory Board of Booz Allen & Hamilton).
George J. Sella, Jr. Director Director, AXA Financial, Inc. (since May 1992) (Director,
P.O. Box 397 Coulter Pharmaceutical (May 1987 to present).
Newton, NJ 07860
Peter J. Tobin Director Dean, Peter J. Tobin College of Business Administration, St.
St. John's University John's University (August 1998 to present).
8,000 Utopia Parkway
Jamaica, NY 11439
Dave H. Williams Director Senior Executive Vice President of AXA (since January 1997).
Alliance Capital Management Chairman and former Chief Executive Officer (until January
Corporation 1999), Alliance, and Chairman and Director of numerous
1345 Avenue of the Americas subsidiary and affiliated companies of Alliance; (Director,
New York, NY 10105 AXA Financial, Inc. (since May 1992)).
</TABLE>
C-11
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
<S> <C> <C>
OFFICERS AND DIRECTORS
- ----------------------
*Michael Hegarty Director and President See Column 2; Director (Since January 1998); Senior Vice Chairman
(since January 1998) (since November 1999); Vice Chairman (since April 1998); Chief
and Chief Operating Operating Officer (since January 1998) and Senior Executive
Officer (since February Vice President, AXA Financial, Inc. (January 1998 to April
1998) 1998); Director ACMC, Inc. (since March 1998), Director,
Equitable Capital Management Corporation("ECMC") (since
March 1998), Alliance (since May 1998) and DLJ(since May
1998). Director, President and Chief Operating Officer,
Equitable of Colorado (since December 1999), AXA Client
Solutions, LLC and Equitable Distribution Holding Corp. (since
September 1999).
*Edward D. Miller Director (since August See Column 2; Director, President and Chief Executive Officer,
1997), Chairman of the AXA Financial, Inc. (since August 1997); Member of the Management
Board (since January Board, AXA (since January 2000); (Director, Alliance (since August
1998) and Chief Executive 1997), DLJ (since November 1997), ECMC (since March 1998), ACMC,
Officer (since August Inc. (since March 1998), and AXA Canada (since September 1998),
1997) and KeySpan Energy). Director, Chairman of the Board and Chief
Executive Officer, Equitable of Colorado (since December 1999),
AXA Client Solutions, LLC and Equitable Distribution Holding Corp.
(since September 1999)
*Stanley B. Tulin Director and Vice See Column 2; Vice Chairman of the Board (since November 1999)
Chairman of the Board and Chief Financial Officer (since May 1997); prior
(since February 1998) thereto, Senior Executive Vice President (February 1998 to
and Chief Financial November 1999), AXA Financial, Inc.; Director, Vice Chairman and
Officer (since May Chief Financial Officer (since December 1999), Equitable of
1996) Colorado, AXA Client Solutions, LLC and Equitable Distributions
Holding Corp. (since September 1999). (Director, Alliance (since
July 1997) and DLJ (since June 1997)).
</TABLE>
C-12
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
<S> <C> <C>
OTHER OFFICERS
*Leon B. Billis Executive Vice President See Column 2; prior thereto, Senior Vice President
(since February 1998) (until February 1998) and Chief Information Officer;
and Chief Information Director, J.M.R. Realty Services, Inc.
Officer (since November
1994)
Derry E Bishop Executive Vice President See Column 2; Director and Executive Vice President,
(since September 1998), AXA Advisors LLC and Executive Vice President, Chief
Chief Agency Officer Agency Officer, AXA Client Solutions, LLC (all since
(since December 1997) September 1999). Director (since 1995) and Executive
and Senior Vice President Vice President (since 1994) of AXA Advisors,LLC
(January 1995 to September (formerly EQF).
1998)
</TABLE>
C-13
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
<S> <C> <C>
*Harvey Blitz Senior Vice President See Column 2; Senior Vice President, AXA Financial,
Inc.; Director, The Equitable of Colorado, Inc.;
Director and Chairman, Frontier Trust Company
("Frontier"); Executive Vice President and Director,
AXA Advisors LLC (since September 1999) (formerly,
"EQF" (until September 1999)); Senior Vice President
and Director, AXA Network, LLC (formerly EquiSource);
Director and Officer of various Equitable Life affiliates.
*Kevin R. Byrne Senior Vice President and See Column 2; Senior Vice President and Treasurer, AXA
Treasurer Financial, Inc. Senior Vice President and Treasurer, AXA
Client Solutions, LLC and Equitable Distributors, Inc.
(since September 1999) and Equitable of Colorado, Inc.
(since December 1999). Treasurer, Frontier (since 1990)
and AXA Network, LLC (since 1999). President and Chief
Executive Officer (since September 1997), Vice President
and Treasurer (since March 1997), EQ ADVISORS TRUST.
Director, Chairman, President and Chief Executive Officer,
Equitable JV Holdings (since August 1997). Director (since
July 1997), and Senior Vice President and Chief Financial
Officer (since April 1998), ACMC and ECMC. Previously held
other officerships with Equitable Life and its affiliates.
</TABLE>
C-14
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
<S> <C> <C>
*John A. Caroselli Executive Vice President See Column 2; Senior Vice President (February 1998
(since September 1998) to September 1998).
*Judy A. Faucett Senior Vice President See Column 2;
(since September 1996)
and Actuary (September
1996 to December 1998).
*Alvin H. Fenichel Senior Vice President and See Column 2; Senior Vice President and Controller,
Controller AXA Financial, Inc. and The Equitable of Colorado, LLC
Inc. (since December 1999). Previously held other
officerships with Equitable Life and its affiliates.
</TABLE>
C-15
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
<S> <C> <C>
*Paul J. Flora Senior Vice President and See Column 2; Vice President and Auditor, AXA
Auditor Financial, Inc.
*Robert E. Garber Executive Vice President See Column 2; Executive Vice President and General
and Chief Legal Officer Counsel, AXA Financial, Inc. Prior thereto, Executive
(since November 1999) Vice President and General Counsel, Equitable Life. Previously
held other officerships with Equitable Life and its affiliates.
*Donald R. Kaplan Senior Vice President See Column 2; Previously held other officerships with
(since September 1999) Equitable Life and its affiliates.
and Chief Compliance
Officer and Associate
General Counsel
*Michael S. Martin Executive Vice President See Column 2; Prior thereto, Senior Vice President and
(September 1998 to Chief Marketing Officer. Chairman and Chief Executive
present) and Chief Officer, AXA Advisors LLC (since September 1999). Vice
Marketing Officer President, EQ ADVISORS TRUST (until April 1998), Director
(since December 1997) Equitable Underwriting and Sales Agency (Bahamas), Ltd.
and AXA Network LLC; President (since February 2000);
Executive Vice President (since December 1998), Colorado;
prior thereto, Director and Senior Vice President (since
December 1998). Previously held other officerships with
Equitable Life and its affiliates.
*Richard J. Matteis Executive Vice President Director, AXA Advisors LLC (October 1998 to May 1999).
(since May 1998)
*Peter D. Noris Executive Vice President See Column 2; Executive Vice President (since May 1995)
and Chief Investment and Chief Investment Officer (since July 1995), AXA Financial.
Officer Chairman, President and Trustee (since March 1997),
EQ ADVISORS TRUST. Executive Vice President and Chief
Investment Officer, Equitable of Colorado (since
December 1999), Executive Vice President, AXA Client
Solutions, LLC (since September 1999). Executive Vice President,
EQF, (November 1996 to September 1999). Director, EREIM
Managers Corp. (since July 1997), and EREIM LP Corp. (since
October 1997).
*Brian S O'Neil Executive Vice President See Column 2; Executive Vice President, AXA Financial, Inc. and
(since June 1998) AXA Client Solutions, LLC (since September 1999). Director of
Investment, AXA Investment Management (January 1998 to June
1998); Chief Investment Officer, AXA Investment Management
(July 1995 to January 1998). Trustee (since September 1999),
EQ ADVISORS TRUST.
</TABLE>
C-16
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME AND PRINCIPAL POSITIONS AND OFFICES (AND OTHER POSITIONS)
BUSINESS ADDRESS WITH EQUITABLE WITHIN PAST 2 YEARS
- ------------------------------------ -------------------------- ----------------------------------------------------
<S> <C> <C>
*Anthony C. Pasquale Senior Vice President See Column 2; Senior Vice President, AXA Client
Solutions LLC (since September 1999). Director, Chairman
and Chief Operating Officer, Casualty, (since
September 1997). Previously held other officerships
with Equitable Life and its affiliates.
*Pauline Sherman Senior Vice President See Column 2, Prior thereto, Vice President, Secretary
(since February 1999) and Associate General Counsel. Associate General Counsel,
Secretary and Associate AXA Financial Inc. and AXA Client Solutions LLC (since
General Counsel (since November 1999). Senior Vice President and Secretary,
September 1995) Equitable of Colorado (since December 1999). Previously
held other officerships with Equitable Life.
*Samuel B. Shlesinger Senior Vice President See Column 2; Chairman, President and Chief Executive
Officer, Colorado; Vice President, HRT (until 1998);
Director, (December 1996 to March 1998).
*Richard V. Silver Senior Vice President and See Column 2; prior thereto, Deputy General
General Counsel Counsel (1996-1999). Senior Vice President and Associate
(since November 1999) General Counsel, AXA Financial, Inc. (since September 1996).
Senior Vice President and General Counsel, AXA Client
Solutions LLC (since November 1999). Vice President and
General Counsel, Equitable of Colorado, Inc. (since December
1999). Director, AXA Advisors LLC. Senior Vice President and
General Counsel, EIC (June 1997 to March 1998).
Previously held other officerships with Equitable Life
and its affiliates.
*Jose Suquet Senior Executive Vice See Column 2; prior thereto, Executive Vice President
President (February 1998 and Chief Agency Officer (until December 1997); Executive
to present) and Chief Vice President, AXA Financial, Inc.; Vice President, HRT
Distribution Officer (March 1998 to present).
(December 1997 to present)
*Maureen K. Wolfson Vice President See Column 2.
*Gregory C. Wilcox Executive Vice President See Column 2; Executive Vice President (since November 1999),
(since September 1998), AXA Financial, Inc.; prior thereto, Senior Vice President.
Senior Vice President
(May 1992 to September
1998)
*R. Lee Wilson Executive Vice President See Column 2; Executive Vice President, AXA Client Solutions
(since May 1998) and LLC (since September 1999). Prior thereto, Executive Vice
Deputy Chief Financial President, Chase Manhattan Bank.
Officer (September 1998
to July 1999)
</TABLE>
C-17
<PAGE>
Item 30. Persons Controlled by or Under Common Control
with the Insurance Company or Registrant
Separate Account Nos. 4, 8, 30, 191, 200 and 206 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 AXA Financial, Inc. (formerly The Equitable
Companies Incorporated) (the "Holding Company"), a publicly traded company.
The largest stockholder of the Holding Company is AXA. As of
December 31, 1999, AXA beneficially owned 58.0% of the outstanding common stock
of the Holding Company. 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 services companies.
C-18
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
AXA Financial, Inc. (formerly the Equitable Companies, Incorporated) (1991)
(Delaware)
Donaldson Lufkin & Jenrette, Inc. (1933) (Delaware) (38.31%)
(See Addendum B(1) for subsidiaries)
AXA Client Solutions, LLC (1999) (Delaware)
AXA Distribution Holding Corporation (1999) (Delaware)
AXA Advisors, LLC (formerly EQ Financial Consultants, Inc. (1971)
Delaware)(a)(b)
The Equitable Life Assurance Society of the United States (1989)
(New York)(a)(b)
The Equitable of Colorado, Inc. (l983) (Colorado)
EVLICO East Ridge, Inc. (1995) (California)
GP/EQ Southwest, Inc. (1995) (Texas)
Franconom, Inc. (1985) (Pennsylvania) (50.00%)
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)
Real Estate Partnership Equities (various)
EREIM LP Associates (99%)
EML Associates, L.P. (19.8%)
Alliance Capital Management L.P. (2.7% limited partnership
interest)
ACMC, Inc. (1991) (Delaware)(s) (Note 5)
Alliance Capital Management L.P. (1988) (Delaware)
(38.6% limited partnership interest)
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
i
<PAGE>
AXA Financial, Inc. (cont.)
Donaldson Lufkin & Jenrette, Inc. (cont.)
AXA Client Solutions, LLC (cont.)
AXA Distribution Holding Corp. (cont.)
Equitable Life Assurance Society of the United States (cont.)
Fox Run, Inc. (1994) (Massachusetts)
STCS, Inc. (1992) (Delaware)
CCMI Corporation (1994) (Maryland)
HVM Corporation (199 ) (Maryland)
EVSA Incorporated ( ) (Delaware)
FTM Corporation (1994) (Maryland)
Equitable BJVS, Inc. (1992) (California)
Equitable Rowes Wharf, Inc. (1995) (Massachusetts)
ELAS Realty, Inc. (1996) (Delaware)
ELAS Realty, Inc. (Georgia)
Equitable Structured Settlement Corporation (1996) (Delaware)
Prime Property Funding II, Inc. (1997) (Delaware)
Sarasota Prime Hotels, Inc. (1997) (Florida)
ECLL, Inc. (1997) (Michigan)
Equitable Holdings LLC (1997) (New York) (into which Equitable
Holding Corporation was merged in 1997)
ELAS Securities Acquisition Corp. (l980) (Delaware)
100 Federal Street Realty Corporation ( ) (Massachusetts)
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 (L.P.) (1%)
EML Associates (L.P.) (.02%)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
ii
<PAGE>
AXA Financial, Inc. (cont.)
Donaldson Lufkin & Jenrette, Inc. (cont.)
AXA Client Solutions, LLC (cont.)
AXA Distribution Holding Corp. (cont.)
The Equitable Life Assurance Society of the United States (cont.)
Equitable Holdings, LLC (cont.)
Equitable JVS, Inc. (1988) (Delaware)
Astor/Broadway Acquisition Corp. (1990) (New York)
Astor Times Square Corp. (1990) (New York)
PC Landmark, Inc. (1990) (Texas)
Equitable JVS II, Inc. (1994) (Maryland)
EJSVS, Inc. (1995) (New Jersey)
Donaldson, Lufkin & Jenrette, Inc. (1985 by EIC; 1993 by EQ and
EHC) (Delaware) (31.47%) (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)
Equitable Capital Private Income and Equity
Partnership II, L.P. (Delaware)
EQ Services, Inc. (1992) (Delaware)
EREIM Managers Corp. (1986) (Delaware)
ML/EQ Real Estate Portfolio, L.P. (Delaware)
EML Associates, L.P. (New York)
(a) Registered Broker/Dealer (b) Registered Investment
Advisor
iii
<PAGE>
ORGANIZATION CHART OF EQUITABLE'S AFFILIATES
ADDENDUM A - SUBSIDIARY
OF EQUITABLE HOLDINGS, LLC
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 of Puerto Rico, Inc. (1997) (Puerto Rico)
EquiSource Insurance Agency of Utah, Inc. (1986) (Utah)
EquiSource of Washington, Inc. (1987) (Washington)
EquiSource of Wyoming, Inc. (1986) (Wyoming)
iv
<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)
Alliance Capital Management Corporation (as general partner) (b) has the
following subsidiaries:
Alliance Capital Management L.P. (1988) (Delaware) (b)
Albion Alliance LLC (Delaware) (37.6%)
Cursitor Alliance LLC (Delaware) (93%)
Cursitor Alliance Holdings Ltd. (U.K.)
Draycott Partners, Ltd (MA)
Cursitor Alliance Services Ltd. (U.K.)
Cursitor Management Co. S.A. (Lux.)
Alliance Asset Allocation Ltd. (U.K.)
Cursitor Eaton Asset Allocation Management Co. (NY) (50%)
Alliance Cecogest S.A. (France) (75%)
Cursitor Courtage SARL (France)
Cursitor Gestion S.A. (France)
Alliance Capital Management Corporation of Delaware (Delaware) (100%)
Alliance Fund Services, Inc. (Delaware) (a)
Alliance Fund Distributors, Inc. (Delaware) (a)
Alliance Capital Oceanic Corp. (Delaware)
Alliance Capital Management (Brazil) Ltd. (Brazil) (99%)
Alliance Capital Management Australia Limited (Australia)
Meiji - Alliance Capital Corp. (Delaware) (50%)
Alliance Capital (Luxembourg) S.A. (Lux.) (99%)
Alliance Barra Research Institute, Inc. (Delaware)
Alliance Capital Management Canada, Inc. (Delaware)
Alliance Capital Global Derivatives Corp. (Delaware)
ACM Fund Services, S.A. (Lux.) (99%)
ACM Fund Services (Espana) S.L. (Spain)
Alliance Capital Management (Singapore) Ltd. (Singapore)
ACM CIIC Investment Management Ltd. (Cayman Islands) (54%)
ACM Software Services Ltd. (Delaware)
East Fund Managementberatung GmbH. (Australia) (51%)
Albion Alliance EFM (Czech) (49%)
East Fund Management (Cyprus) Ltd. (Cyprus) (99%)
EFM Consultanta Financiara Bucuresti SRL (Romania)
Alliance Capital (Mauritius) Private Ltd. (Mauritius)
Alliance Capital Asset Management (India) Private Ltd.
(India) (75%)
ACSYS Software India Private Ltd. (India) (51%)
ACAM Trust Company Private Ltd. (India)
Alliance Eastern Europe, Inc. (Delaware)
Alliance Capital Management (Asia) Ltd. (Delware)
Alliance Capital Management (Turkey) Ltd. (Turkey)
Alliance Capital Mangement (Japan) Inc. 1261 (Delaware)
Alliance Capital Invest Tr. Mgmt. K.K. (Japan)
Alliance Capital Limited (U.K)
Alliance Capital Services Ltd. (U.K.)
Dimentional Trust Management Ltd. (U.K)
Alliance Corporate Finance Group Inc. (Delaware)
BCN Alliance Capital Management SA (Brazil) (50%)
Przymierze Trust Fund Co. (Poland) (49%)
Alliance SBS-AGRO Captial Management Co. (Russia) (49%)
Pekao/Alliance PTE S.A. (Poland) (49%)
Whittingdale Holdings Ltd. (U.K.)
Alliance Capital Whittingdale Ltd. (U.K)
ACM Investments Ltd. (U.K.)
Whittingdale Nominees Ltd. (U.K.)
Hanwha Investment Trust Mgmt. Co., Ltd. (South Korea) (20%)
New Alliance Asset Mangement (Asia) Ltd. (H.K.) (50%)
ACM New-Alliance (Luxemborg) S.A. (Lux.)
Alliance Odyssey Capital Mgmt. (Porprietary) Ltd. (South Africa) (80%)
Alliance-MBCA Capital (Private) Ltd. (Zimbabwe) (50%)
Alliance Odyssey Capital Mgmt. (Nambia) (Proprietary) Ltd. (Nambia)
(a) Registered Broker/Dealer (b) Registered Investment Advisor
v
<PAGE>
AXA GROUP CHART
The information listed below is dated as of January 1, 2000; percentages
shown represent voting power. The name of the owner is noted when AXA
indirectly controls the company.
AXA INSURANCE AND REINSURANCE
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
AXA Assurances IARD France 100% by AXA France Assurance
AXA Assurances Vie France 6.48% by AXA Assurances IARD,
82.40% by AXA France Assurance
and 11.13% by AXA Collectives
AXA Courtage IARD France 99.77% by AXA France Assurance
AXA Conseil Vie France 100% by AXA France Assurance
AXA Conseil IARD France 100% by AXA France Assurance
Direct Assurances Vie France 100% by AXA Direct
Juridica France 7.81% by AXA Assurance IARD,
89.27% by AXA France Assurance
1.44% by AXA Courtage IARD
AXA Assistance France 100% by AXA
AXA Collectives France 94.47% by AXA France Assurance,
3.69% by AXA Assurances IARD
and 1.25% by AXA Courtage IARD
NSM Vie France 40.64% by AXA France Assurance
AXA Global Risks France 98.49% by AXA France
Assurance
Argovie France 94.03% by AXA Collectives
S.P.S. Re France 69.03% by AXA Reassurance
vi
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Direct Assurance France 100% by AXA Direct
Natio Assurances France 50% by AXA Assurances IARD
AXA Assistance France 100% by AXA
AXA Reassurance France 86.33% by AXA, 8.25% by AXA
Assurances IARD, 5.07% by
AXA Global Risks, 0.13% by
AXA France Assurances and
0.02% by AXA Collectives
AXA Re Finance France 79% owned by AXA Reassurance
AXA Cessions France 100% by AXA
UAB Belgium 100% by AXA Holdings Belgium
Ardenne Prevoyante Belgium 99.99% by AXA Holdings Belgium
and 0.01% by AXA Royale Belge
Assurance Courtraisienne Belgium 100% by AXA Holdings Belgium
AXA Royale Belge Belgium 99.57% by AXA Holdings Belgium
and 0.43% by UAB
Assurances de la Poste Belgium 50% by AXA Holdings Belgium
Assurances de la Poste Vie Belgium 50% by AXA Holdings Belgium
C.G.R.M. Monte Carlo France 99.99% by AXA Reassurance
AXA Assurance Vie Luxembourg Luxembourg 100% by AXA Luxembourg S.A.
Paneurore Luxembourg 5% by AXA Portugal Companhia de
Seguros, 20% by AXA Colonia
Versicherungs, 5% by AXA
Assicurazioni, 10% by Aurora
Iberica SA de Seguros y Reas,
20% by AXA Insurance IK,
20% by Royale Belge
Investissement and
20% by Saint George Re
Crealux Luxembourg 100% by AXA Holdings Belgium
Futur Re Luxembourg 100% by AXA Global Risks
AXA Assurances Luxembourg Luxembourg 100% by AXA Luxembourg SA
Hilo Direct Seguros y Reaseguros Spain 71.43% by AXA Aurora
Ayuda Legal SA de Seguros y Spain 88% by AXA Aurora Iberica SA de
Reaseguros Seguros y Reaseguros and 12% by
AXA Seguros de Seguros
Reaseguros
Aurora Iberica SA de Spain 99.82% by AXA Aurora
Seguros y Reaseguros
AXA Seguros de Seguros y Spain 1.45% by AXA and 97.06% by
Reasegiros Aurora Iberica SA de Seguros y
Reas
Eurovita Italy 30% owned by AXA Assicurazioni
UAP Vita Italy 62.21% by AXA, 18.70% by AXA
Conseil Vie, and 19.08% by AXA
Collectives
AXA Interlife Italy 100% by AXA
AXA Assicurazioni Italy 84.10% by AXA, 11.70% by
Grupo UAP Italiana, 2.11% by
AXA Conseil Vie and 2.07%%
by AXA Collectives
AXA Equity & Law Plc U.K. 100% by AXA Sun Life
Assurance Society
AXA Global Risks (U.K) Ltd U.K. 100% by AXA Global Risks
(France)
English & Scottish U.K. 100% by AXA UK
AXA UK U.K. 100% by AXA
AXA Sun Life U.K. 100% by Sun Life and Provincial
Holdings Plc
AXA UK Holding Ltd. U.K. 100% by AXA Reassurance
Guardian Insurance Ltd. U.K. 100% by Guardian Royal Exchange
Plc
GREA Assurance U.K. 100% by Guardian Royal
Exchange Plc
PPP Group Plc. U.K. 100% by Guardian Royal
Exchange Plc
PPP Healthcare Ltd. U.K. 100% by Guardian Royal
Exchange Plc
PPP Lifetimecare U.K. 100% by Guardian Royal
Exchange Plc
AXA Insurance UK U.K. 100% by Guardian Royal
Exxchange Plc
AXA Reinsurance UK Plc. U.K. 100% by AXA UK Holding Ltd.
AXA Sun Life Holdings Plc. U.K. 100% by SLPH
AXA Nederland BV The Nether- 51.31% AXA Royal Belge, 38.94%
lands by Gelderland and 4.11% by
AXA Holdings Belgium
AXA Schade The Nether- 100% by AXA Verzekeringen
lands
AXA Zorg NV The Nether- 100% by UAP Verzekeringen
lands
Vinci BV The Nether- 100% by AXA
lands
AXA Leven NV The Nether- 100% by AXA Verzekeringen
lands
UAP Niew Rotterdam Beheer The Nether- 100% by AXA Nederland BV
lands
AXA Zorg NV The Nether- 100% by AXA Verzekeringen
lands
AXA Portugal Companhia de Portugal 9.63% by AXA Global Risk, 2.28%
Serguros by AXA Portugal Seguros
Vida, 5.71% by AXA Conseil Vie
and 81.93% by AXA
Participations
AXA Portugal Seguros Vida Portugal 87.63% by AXA Conseil Vie and
7.46% by AXA Participations
AXA Compagnie d' Assurances Switzerland 99.95% AXA Participations
AXA Compagnie d' Assurances Switzerland 94.99% by AXA Participations
sur la Vie and 5.01% by AXA Compagnie
d'Assurance.
AXA Al Amane Assurances Morocco 99.99% by AXA Ona
Epargne Croissance Morocco 99.59% by AXA Al Amane
Assurances
Compagnie Africaine Morocco 100% by AXA Al Almane
d'Assurance Assurances
AXA Canada Canada 100% by AXA
AXA Canada ADP Canada 100% by AXA Canada
AXA Colonia Krankenversicherung Germany 51% by AXA Colonia Konzern AG
and 48.36% by AXA Colonia Leben
Colonia Nordstern Versicherungs Germany 100% by AXA Colonia Konzern AG
Sicher Direct Germany 50% by AXA Colonia Konzern AG
and 50% by AXA Direct
Albingia Versicherung Germany 98.98% by GRE Continental
Europe Holding Gmbh
Albingia Lebenversicherung Germany 100% by Albingia Versicherung
AXA Colonia Leben Germany 50% by AXA Colonia Konzern AG
and 50% by AXA Colonia
Versicherung
AXA Colonia Versicherung Germany 100% by AXA Colonia Konzern AG
AXA Norstern Art Germany 100% by AXA Colonia Konzern AG
Tellit Vie Germany 100% by AXA-Colonia Konzern
AG
National Mutual Financial Australia 100% by National Mutual
Services Holdings
AXA Oyak Hayat Sigorta Turkey 100% by AXA Oyak Holding AS
AXA Oyak Sigorta Turkey 0.70% by AXA Oyak Hayat
Sigorta and 70.32% by AXA
Oyak Holding AS
AXA Minmerals Assurance Co. Ltd. China 51% by AXA China
vii
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
AXA Non Life Insurance Co. Ltd. Japan 100% by AXA Direct
AXA Life Insurance Japan 100% by AXA
Dongbu AXA Life South Korea 100% by AXA
AXA Insurance Investment Singapore 100% by AXA
Holdings
AXA Insurance Singapore Singapore 100% by AXA Insurance
Investment Holding
AXA Life Singapore Singapore 100% by National Mutual
International
GRE Singapore Branch Singapore 100% by AXA
AXA Life Hong Kong Singapore 100% by AXA
AXA Insurance Hong Kong Hong Kong 82.5% by AXA Insurance
Investment Holdings Pte Ltd
and 17.5% by AXA
National Mutual Asia Ltd. Hong Kong 53.8% by National Mutual
Holdings, Ltd and 20% by Detura
AXA China Region Ltd. Hong Kong 73.55% by National Mutual
Holdings
Guardian Insurance Ltd. Hong Kong 100% by AXA
Hong Kong
The Equitable Life Assurance U.S.A. 100% by AXA Financial Inc.
Society of the United States
(ELAS)
AXA Reinsurance U.S.A. 100% by AXA America
AXA America U.S.A. 100% by AXA Reassurance
AXA Global Risks US U.S.A. 96.39% by AXA Global Risks and
3.61% by Colonia Nordstern
Versicherungs AG
AXA Re Life Insurance Company U.S.A. 100% by AXA America
National Mutual Holdings Australia 42.1% by AXA and 8.9% by
AXA Equity & Law Life
Assurance Society
National Mutual International Australia 100% by National Mutual
Holdings Ltd
Australian Casualty Insurance Australia 100% by National Mutual
Property Ltd Holdings
National Mutual Health Australia 100% by National Mutual
Insurance Pty Ltd Holdings Ltd
Guardian Dublin Docks Ireland 100% by Guardian PMPA Group
Ltd.
Guardian PMPA Group Ltd. Ireland 100 by Guardian Royal
Exchange Plc
Detura Hong Kong 75% by National Mutual Holdings
AXA Insurance Singapore Singapore 100% by AXA Insurance
Investment Holdings
AXA Reinsurance Asia Singapore 100% by AXA Reassurance
viii
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
AXA Reinsurance U.K. Plc. U.K. 100% owned by AXA U.K.
Holding Ltd.
Nordstern Colonia Versicherung Austria 89.95% by AXA Colonia
Versicherungs
and 10.05% by Colonia Leben
ix
<PAGE>
FINANCIAL SERVICES AND REAL ESTATE
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Compagnie Financiere de Paris France 96.89% by AXa 0.27% by AXA
(C.F.P.) Assurance IARD and 0.01% by
Societe Beaujon
AXA Banque France 98.7% by Compagnie
Financiere de Paris
AXA Credit France 65% by Compagnie
Financiere de Paris
Sofapi France 100% by Compagnie
Financiere de Paris
Holding Soffim France 100% by Compagnie
Financiere de Paris
Sofinad France 100% by Compagnie
Financiere de Paris
Banque des Tuileries France 100% by Compagnie
Financiere de Paris
Banque de Marches et d'Arbitrage France 19.51% by AXA and 8.2% by AXA
Courtage IARD
AXA Investment Managers France 5.28% by AXA Royale Belge,
56.48 BY AXA, 1.02% by AXA
Reassurance, 19.46% by AXA
Assurance IARD, 5.12% by AXA
Colonia Konzern and 0.25% By
Direct Assurances, 2.63% by
AXA Leven NV, 5.10% by National
Fund Management, 2.03% by AXA
Courtege IARD
Banque Worms France 1.91% by AXA France Assurance,
5.32% by AXA Collectives, 6.30%
by AXA Courtage IARD, 3.06% by
AXA Conseil Vie, 10.72% by AXA
Assurances IARD, 21.63% by AXA
Assurance Vie, 49.56% by
Compagnie Financiere de Paris
Investment Managers Paris France 100% by AXA Investment Managers
Transaxim France 100% by Compagnie Financiere
de Participations
AXA Millesimes 10.10% by AXA Reassurance,
11.95% by AXA Reassurance,
7.26% by Societe Beaujon,
6.87% by Jour Finance
AXA Colonia Asset Management Germany 51% by AXA Investment
Managers and 49% by AXA
Colonia Konzern AG
AXA Colonia KAG Germany 51% by AXA Investment
Managers and 26.50% by AXA
Colonia Konzern AG
AXA Colonia Bausparkasse AG Germany 66.67% by AXA Colonia
Konzern AG and 32.99% by
AXA Colonia Leben
Banque IPPA Belgium 100% by AXA Holdings Belgium
Royal Belge Investissement Belgium 100% by AXA Royale Belge
AXA IM Bruxelles Belgium 100% by AXA Investment
Managers
AXA Banque Belgium Belgium 100% by AXA Holdings Belgium
Royale Belge Investissement Belgium 100% by AXA Royale Belge
Sun Life Asset Management U.K. 66.67% by Sun Life and
Provincial Holdings Plc and
33.33% by AXA Asset Management
Ltd.
x
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Alliance Capital Management Corp. U.S.A. 100% held by The Equitable
Life Assurance Society
Donaldson Lufkin & Jenrette U.S.A. 0.13% by AXA, 31.44% by
the ELAS, 38.27% by AXA
Financial Inc. and 1.31%
by AXA Participations Belgium
AXA IM Holdings Inc. U.S.A. 100% by AXA Investment
Managers
AXA IM Rose U.S.A. 90% by AXA Investment
Managers and 10% by AXA IM
Holdings Inc.
AXA Rosenberg LLC U.S.A. 50% by AXA IM Rose
National Mutual Funds Australia 100% owned by National
Management Mutual Holdings
AXA Investment Managers Japan 100% by AXA Investment
Tokyo Managers
AXA Investment Managers The Nether- 100% by AXA Investment
Den Haag lands Managers
AXA IM HK SAR Hong Kong 100% by AXA Investment
Managers
AXA Investment Managers Hong Kong 100% by AXA Investment
Hong Kong Managers
xi
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
S.G.C.I. France 100% by AXA
Compagnie Parisienne de France 100% by Sofinad
Participations (C.P.P.)
Monte Scopeto France 99.99% by Compagnie
Parisienne de Participations
Colisee Jeuneurs France 99.82% by Colisee Suresnes and
0.17% by Compagnie Parislenne
de Participation
Colisee Delcasse France 99.98% by Colisee Suresnes
Colisee Victoire France 99.74% by S.G.C.I.
Colisee Suresnes France 21.19% by AXA Assurance IARD,
0.92% by Societe Beaujon,
51.07% by Compagnie Financiere
de Paris, 20.63% by Jour
Finance and 2.53% by AXA
Courtage IARD
Colisee 21 Matignon France 99.44% by S.G.C.I. and 0.55% by
AXA
xii
<PAGE>
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
Colisee Saint Georges SA France 100% by SGCI
xiii
<PAGE>
HOLDINGS AND MISCELLANEOUS BUSINESS
COMPANY COUNTRY VOTING POWER
- ------- ------- ------------
AXA Direct France 100% by AXA
Societe Beaujon France 100% by AXA
Lor Finance France 99.87% by AXA
Jour Finance France 60.47% by AXA Conseil Vie,
39.53% by AXA Assurance IARD
Financiere 45 France 100% by AXA
Mofipar France 99.92% by AXA
AXA Participations France 53.15% by AXA, 21.90% by AXA
Global Risks and 24.95% by AXA
Courtage IARD
Colisee Excellence France 100% by Financiere Mermoz
Financiere Mermoz France 100% by AXA
AXA France Assurance France 100% by AXA
AXA China France 49% by AXA Region Limited
and 51% by AXA
AXA Participations Belgium Belgium 17.65% by AXA Global Risks,
75% by AXA, 1.82% by AXA
Conseil IARD and 5.53% by AXA
Courtage IARD
Finaxa Belgium Belgium 99.99% by AXA
AXA Holdings Belgium Belgium 43.75% by AXA, 3.02% by AXA
Global Risks, 49.10% by AXA
Participations Belgium and
4.11% by Vinci BV
GRE Continental Europe Germany 100% by AXA Cononia Konzern AG
Holding Gmbh
AXA-Colonia Konzern AG Germany 39.73% by Vinci BV, 25.63% by
Kolnische Verwaltungs and
21.62% by AXA
Kolnische Verwaltungs Germany 67.72% by Vinci BV, 22.99% by
AXA Colonia Konzern AG and
8.83% by AXA
AXA Luxembourg SA Luxembourg 100% by AXA Holdings Belgium
AXA Ona Morocco 51% by AXA Participations
Gelderland The Nether- 100% by AXA Holdings Belgium
lands
AXA Oyak Holdings AS Turkey 50% by AXA
AXA Financial Inc. U.S.A. 4.12% by AXA Equity & Law
Life Assurance Society, 43.01
by AXA, 2.97% by AXA
Reassurance, 0.03% by AXA
America, 0.44% by Societe
Beaujon, 3.21% by Fianciere 45
and 6.46% by LOR Finance
AXA Aurora Spain 30% owned by AXA and 40% by
AXA Participations
AXA Equity & Law Plc U.K. 99.94 by AXA Life
Sun Life and Provincial U.K. 34.52% by AXA and 21.81% by
Holdings (SLPH) AXA Equity & Law Plc
xiv
<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) AXA Financial, Inc.'s 38.6% interest in Donaldson, Lufkin &
Jenrette, Inc., and Equitable Holdings, LLC's 31.7% 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.; and (d) as noted for certain
subsidiaries of Alliance Capital Management Corp. of Delaware, Inc.
4. 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 entity, it
is under the direction of at least a majority of "outside" trustees:
EQ Advisors Trust
Separate Accounts
5. This chart was last revised on January 1, 2000.
xv
C-19
<PAGE>
Item 31. Number of Contractowners
As of March 31, 2000, the number of participants in the American Dental
Association Members Programs offered by the Registrant was 26,936.
Item 32. Indemnification
(a) Equitable Life:
The by-laws of The Equitable Life Assurance Society of the United States
("Equitable Life") provide, in Article VII, as follows:
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
ss.ss.721-726; Insurance Law ss.1216)
The directors and officers of Equitable Life are insured under policies
issued by Lloyd's of London, X.L. Insurance Company and ACE Insurance Company.
The annual limit on such policies is $100 million, and the policies insure the
officers and directors against certain liabilities arising out of their conduct
in such capacities.
(b) Principal Underwriter:
To the extent permitted by the laws of the State of New York and subject to
all applicable requirements thereof, AXA Advisors, LLC ("AXA Advisors," formerly
EQ Financial Consultants, Inc.) 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 AXA Advisors, LLC.
(c) Undertaking: Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors and officers pursuant to
the undertaking described above, or otherwise, Registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in that Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by Registrant of expenses incurred or paid by a director or
officer in the successful defense of any action, suit or proceeding) is asserted
by such director or officer in connection with the interests, 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 that Act and
will be governed by the final adjudication of such issue.
Item 33. Business and Other Connections of Investment Adviser
The Equitable Life Assurance Society of the United States ("Equitable")
acts as the investment manager for Separate Account Nos. 3, 4, 190 and 191.
With respect to Separate Account No. 191, Equitable acts as investment manager
within guidelines established by the Trustees of the American Dental
Association Members Retirement Trusts. Alliance Capital Management L.P.
("Alliance"), a publicly-traded limited partnership, is indirectly
majority-owned by Equitable, provides personnel and facilities for portfolio
selection and transaction services. Alliance recommends the securities
investments to be purchased and sold for Separate Account Nos. 3, 4 and 190
and the portion of Separate Account No. 191 which is invested in its Separate
Account No. 2A, and arranges for the execution of portfolio transactions.
Alliance coordinates related accounting and bookkeeping functions with
Equitable. Both Equitable and Alliance are registered investment advisers
under the Investment Advisers Act of 1940.
Information regarding the directors and principal officers of Equitable
is provided in Item 29 of this Part C and is incorporated herein by reference.
C-20
<PAGE>
Set forth below is certain information regarding the directors and
principal officers of Alliance Capital Management Corporation. The business
address of the Alliance persons whose names are preceded by an asterisk is 1345
Avenue of the Americas, New York, New York 10105.
(1) (2) (3)
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ---------------- -------- -------------------
Directors
*Dave H. Willams Director and Chairman See Column 2; Chief
of the Board Executive Officer (until
January 1999); Director -
The Equitable Life
Assurance Society of the
United States ("Equitable
Life") and AXA Financial,
Inc.; Senior Executive
Vice President and
Member of Executive
Committee - AXA (January
1997 to present).
Luis Javier Bastida Director Chief Financial Officer
Banco Bilbao Vizcaya and Member of the
P(o), Castella, 81-25(o) Executive Committee -
28046 Madrid, Spain Banco Bilbao Vizcaya,
S.A.
C-21
<PAGE>
<TABLE>
<CAPTION>
(1) (2) (3)
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ---------------- -------- -------------------
<S> <C> <C>
Donald H. Brydon Director Chairman and Chief
AXA Asset Management Europe Executive Officer -
60 Grace Church Street AXA Investment Managers
London EC3V 0HN England S.A.
*Bruce W. Calvert Director, Vice Chairman, See Column 2; Chief
and Chief Executive Investment Officer
Officer (January 1999 (until January 1999)
to present)
</TABLE>
C-22
<PAGE>
(1) (2) (3)
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ---------------- -------- -------------------
*John D. Carifa Director, President and See Column 2.
Chief Operating Officer
Henri de Castries Director Senior Executive Vice
AXA President, Financial
23, Avenue Matignon Services and Life
75008, Paris, France Insurance Activities -
AXA and various positions
with AXA affiliated
companies; Director,
and Chairman (April 1998
to present) - AXA
Financial, Inc.;
Director Donaldson
Lufkin & Jenrette, Inc.
("DLJ"), and Equitable
Life.
Kevin C. Dolan Director Senior Vice President -
AXA Asset Management Europe AXA; Chief Executive
60 Grace Church Street Officer - AXA Investment
London EC3V 0 OHN Managers Paris;
England Director, Alliance
Capital Management, L.P.
Denis Duverne Director Senior Vice President
AXA International (US - UK-
23, Avenue Matignon Benelux) AXA; Director -
75008, Paris, France Equitable Life (February
1998 to present) and DLJ.
Alfred Harrison Director, Vice Chairman See Column 2.
Alliance Capital
Management L.P.
601 Second Avenue South
Suite 5000
Minneapolis, MN 55402
Herve Hatt Director Senior Vice President,
AXA AXA.
23 Ave. Matignon
75008, Paris France
Michael Hegarty Director President and Director
(January 1998 to
present), Chief Operating
Officer (February 1998 to
present) Equitable; prior
thereto, Vice Chairman
Chase Manhattan
Corporation.
C-23
<PAGE>
(1) (2) (3)
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ---------------- -------- -------------------
Benjamin D. Holloway Director Consultant to
Continental Companies Tishman/Speyer, Edward
3250 Mary Street Debartolo and The
Miami, Florida 33133 Continental Companies.
Director - Rockefeller
Center Properties, Inc.;
Chairman - Duke
University Management
Corporation.
Edward D. Miller Director Chairman (January 1998
The Equitable Life Assurance to present) and Chief
Society of the United States Executive Officer
1290 Avenue of the Americas (August 1997 to present)
New York, NY 10104 - Equitable Life;
Director, President
and Chief Executive
Officer - AXA Financial,
Inc. (all August 1997
to present); Senior
Executive Vice President
and Member of Executive
Committee - AXA
(September 1997 to
present); Director - DLJ
(November 1997 to
present), AXA Canada
(September 1998 to
present), ACMC, Inc.
(March 1998 to present,
Equitable Capital
Management Corporation
("ECMC") (March 1998 to
present); Chairman,
President and Chief
Executive Officer,
Equitable Investment
Corporation ("EIC")
(March 1998 to present);
Director - KeySpan
Energy.
C-24
<PAGE>
(1) (2) (3)
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ---------------- -------- -------------------
Peter D. Noris Director Executive Vice President
The Equitable Life and Chief Investment
Assurance Society Officer - Equitable
of the United States Life and AXA Financial,
1290 Avenue of the Americas Inc.; Director - EREIM
New York, NY 10104 Managers Corp. (July 1997
to present), and EREIM LP
Corp. (October 1997 to
present)
C-25
<PAGE>
(1) (2) (3)
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ---------------- -------- -------------------
*Frank Savage Director Chairman - Alliance
Capital Management
International;
Director - ACFG; Vice-
Chairman - ECMC;
Director - Lockheed
Martin Corporation, and
ARCO Chemical
Corporation and Qualcomm
Incorporated.
C-26
<PAGE>
(1) (2) (3)
POSITIONS AND PRINCIPAL OCCUPATION
NAME AND PRINCIPAL OFFICES WITH (AND OTHER POSITIONS)
BUSINESS ADDRESS ALLIANCE WITHIN PAST 2 YEARS
- ---------------- -------- -------------------
Stanley B. Tulin Director Director and Vice
The Equitable Life Chairman (both February
Assurance Society of 1998 to present) and
the United States Chief Financial Officer
1290 Avenue of the Americas (May 1996 to present) -
New York, NY 10104 Equitable Life; Executive
Vice President (May 1996
to present) and Chief
Financial Officer (May
1997 to present) - AXA
Financial, Inc.; Director
- DLJ (June 1997 to
present); Director,
Chairman, President and
Chief Executive Officer
(July 1997 to present) -
ACMC, Inc.; Director,
Chairman, President and
Chief Executive Officer
(July 1997 to present) -
ECMC; Director, Executive
Vice President and Chief
Financial Officer (June
1997 to present) - EIC.
*Reba White Williams Director Director of Special
Projects.
Robert B. Zoellick Director President and Chief
Center for Strategic and Executive Officer (April
International Studies 1998 to July 1999) CSIS;
Washington, D.C. Professor - The U.S.
The German Marshall Fund Naval Academy (December
of the United States 1997 to present).
11 Dupont Circle NW
Suite 750
Washington D.C. 20036
OFFICERS
*David R. Brewer, Jr. Senior Vice President, See Column 2.
General Counsel and
Secretary
*Robert H. Joseph, Jr. Senior Vice President & See Column 2.
Chief Financial Officer
Item 34. Principal Underwriters
(a) AXA Advisors, LLC (formerly EQ Financial Consultants, Inc.), an
affiliate of Equitable, is the principal underwriter for its Separate
Account A. Separate Account No. 301, Separate Account No. 45, Separate
Account I, Separate Account FP and EQ Advisors Trust. AXA Advisors,
LLC's principal business address is 1290 Avenue of the Americas, New
York, NY 10104.
(b) Incorporated herein by reference to Item 29(b) to Registration
Statement File No. 333-77117 on Form N-4, filed April 25, 2000.
(c) Not Applicable.
Item 35. Location of Accounts and Records
The Equitable Life Assurance Society of the United States
135 West 50th Street
New York, New York 10020
1290 Avenue of the Americas
New York, New York 10104
200 Plaza Drive
Secaucus, New Jersey 07094
Item 36. Management Services
Not applicable.
C-27
<PAGE>
Item 37. Undertakings
The Registrant hereby undertakes the following:
(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 sixteen months old for so long as payments
under the variable annuity contracts may be accepted;
(b) to include (1) as part of its applications to purchase any
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; and
(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.
C-28
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, the registrant and has caused
this Registration Statement to be signed on its behalf in the City and State of
New York on the 24th day of April, 2000.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
(Registrant)
By: /s/ Maureen K. Wolfson
--------------------------
Maureen K. Wolfson
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:
*Edward D. Miller Chairman of the Board, Chief
Executive Officer and Director
*Michael Hegarty President, Chief Operating Officer
and Director
PRINCIPAL FINANCIAL OFFICER
*Stanley B. Tulin Vice Chairman of the Board,
Chief Financial Officer and Director
PRINCIPAL ACCOUNTING OFFICER:
*Alvin H. Fenichel Senior Vice President and
Controller
*DIRECTORS:
Francoise Colloc'h Donald J. Greene George T. Lowy
Henri de Castries John T. Hartley Edward D. Miller
Joseph L. Dionne John H.F. Haskell, Jr. Didier Pineau-Valencienne
Denis Duverne Michael Hegarty George J. Sella, Jr.
Jean-Rene Fourtou Mary R. (Nina) Henderson Peter J. Tobin
Norman C. Francis W. Edwin Jarmain Stanley B. Tulin
Dave H. Williams
*By:/s/ Maureen K. Wolfson
----------------------------
Maureen K. Wolfson
Attorney-in-Fact
April 24, 2000
C-29
<PAGE>
EXHIBIT INDEX
Exhibit No. Page No.
12(h) Opinion and Consent of Counsel
13(i) Powers of Attorney
13(j) Consent of PricewaterhouseCooper LLP
C-30
<PAGE>
Robin Wagner
Vice President and Counsel
(212) 314-3962
Fax (212) 707-7927
April 24, 2000
The Equitable Life Assurance
Society of the United States
1290 Avenue of the Americas
New York, NY 10 104
Dear Sirs:
This opinion is furnished in connection with the Form N-3 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, as amended, issued by Equitable to the Trustees of the American
Dental Association Members Retirement Trust and of the American Dental
Association Members Pooled Trust for Retirement Plans (the "ADA Contract") (the
separate accounts included in the ADA Contract being referred to herein
collectively as the "Separate Accounts"). The ADA Contract is designed to
provide benefits under retirement plans and trusts adopted by members of the
American Dental Association 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 $10 million of
the plan contributions to be received under the ADA Contract.
I have examined a11 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 24, 2000
Page 2
3. Assets allocated to the Separate Accounts are owned by Equitable;
Equitable is not a trustee with respect thereto. Under New York
State law, the income, gains and losses, whether or not
realized, from assets allocated to a Separate Account must be
credited to or charged against such Account, without regard to
the other income, gains or losses of Equitable.
4. The ADA 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 ADA Contract and the Units issued thereunder have been duly
authorized: and the ADA Contract constitutes, and the Units when
issued thereunder will constitute, validly issued and binding
obligations of Equitable in accordance with their terms.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Robin Wagner
----------------------------------
Robin Wagner
Vice President and Counsel
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
23rd day of March, 2000.
/s/ Francoise Colloc'h
-------------------------------------
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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
23rd day of March, 2000.
/s/ Norman C. Francis
-------------------------------------
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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
23rd day of March, 2000.
/s/ Michael Hegarty
-------------------------------------
Michael Hegarty
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
23rd day of March, 2000.
/s/ Edward Miller
-------------------------------------
Edward Miller
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
23rd day of March, 2000.
/s/ Denis Duverne
-------------------------------------
Denis Duverne
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
23rd day of March, 2000.
/s/ Donald J. Greene
-------------------------------------
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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
23rd day of March, 2000.
/s/ George T. Lowy
-------------------------------------
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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
23rd day of March, 2000.
/s/ Peter J. Tobin
-------------------------------------
Peter J. Tobin
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
23rd day of March, 2000.
/s/ Joseph L. Dionne
-------------------------------------
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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
23rd day of March, 2000.
/s/ John T. Hartley
-------------------------------------
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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
23rd day of March, 2000.
/s/ John H. F. Haskell, Jr.
-------------------------------------
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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
5th day of April, 2000.
/s/ Dave H. Williams
-------------------------------------
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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
23rd day of March, 2000.
/s/ Mary B. (Nina) Henderson
-------------------------------------
Mary B. (Nina) Henderson
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
4th day of April, 2000.
/s/ George J. Sella, Jr.
-------------------------------------
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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
23rd day of March, 2000.
/s/ W. Edwin Jarmain
-------------------------------------
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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
13th day of April, 2000.
/s/ Alvin H. Fenichel
-------------------------------------
Alvin H. Fenichel
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
13th day of April, 2000.
/s/ Jean-Rene Fourtou
-------------------------------------
Jean-Rene Fourtou
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
23rd day of March, 2000.
/s/ Stanley B. Tulin
-------------------------------------
Stanley B. Tulin
<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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
4th day of April, 2000.
/s/ Henri de Castries
-------------------------------------
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 R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred
Oliver, Robin Wagner 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, 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
10th day of April, 2000.
/s/ Didier Pineau Valencienne
-------------------------------------
Didier Pineau Valencienne
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Registration Statement on Form N-3 (the "Registration
Statement") of (1) our reports dated February 1, 2000 relating to the financial
statements of Separate Account Nos. 4, 191 and 200 of The Equitable Life
Assurance Society of the United States for the year ended December 31, 1999; (2)
our reports dated February 1, 2000 relating to the financial statements of
Separate Accounts Nos. 8 and 30 of The Equitable Life Assurance Society of the
United States for the year ended December 31, 1999; and (3) our report dated
February 1, 2000 relating to the consolidated financial statements of The
Equitable Life Assurance Society of the United States for the year ended
December 31, 1999, 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 1, 2000 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, 1999, which report
appears in such Prospectus Supplement. We also consent to the references to us
under the headings "Appendix I: Condensed financial information" and "About our
independent accountants" in the Prospectus.
PricewaterhouseCoopers LLP
New York, New York
April 24, 2000
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000727920
<NAME> Sep Acct. No. 4 (ADA)
<SERIES>
<NUMBER> 01
<NAME> The Growth Equity Fund
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
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<OTHER-ITEMS-LIABILITIES> 40,224,820
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<NET-ASSETS> 1,792,139,485
<DIVIDEND-INCOME> 9,728,926
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<OTHER-INCOME> 0
<EXPENSES-NET> (14,373,662)
<NET-INVESTMENT-INCOME> (4,223,520)
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<APPREC-INCREASE-CURRENT> 264,368,034
<NET-CHANGE-FROM-OPS> 554,956,457
<EQUALIZATION> 0
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<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 0
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<NET-CHANGE-IN-ASSETS> (320,907,701)
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<PER-SHARE-NAV-BEGIN> 343.18
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<EXPENSE-RATIO> 1.05
</TABLE>
