<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
ALLIANCE CAPITAL MANAGEMENT L.P.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
ALLIANCE LOGO
December 4, 1997
Dear Limited Partners and Unitholders:
You are cordially invited to attend the Special Meeting of Limited Partners
and Unitholders to be held at 9:00 a.m. on December 16, 1997 at the headquarters
of Alliance Capital Management L.P., at 1345 Avenue of the Americas, New York,
New York, in the Audio Visual Conference Room on the 41st floor. Detailed
information as to the business to be transacted at the meeting is contained in
the accompanying Notice of Special Meeting and Proxy Statement.
Regardless of whether you plan to attend the meeting, it is important that
your interests be voted. Accordingly, we ask that you sign and return your Form
of Voting Instructions as soon as possible in the envelope provided. If you do
plan to attend the meeting, please mark the appropriate box on the Form of
Voting Instructions.
We appreciate your considering the enclosed proxy materials.
Sincerely,
/s/ DAVE H. WILLIAMS
Dave H. Williams
Chief Executive Officer and
Chairman of the Board of
Alliance Capital Management
Corporation
<PAGE> 3
ALLIANCE CAPITAL MANAGEMENT L.P.
NOTICE OF SPECIAL MEETING OF LIMITED
PARTNERS AND UNITHOLDERS
TO BE HELD
DECEMBER 16, 1997
To the Limited Partners and Unitholders
of Alliance Capital Management L.P.:
Notice is hereby given that a Special Meeting of Limited Partners and
Unitholders (the "Special Meeting") of Alliance Capital Management L.P., a
Delaware limited partnership (the "Partnership"), will be held in the Audio
Visual Conference Room, 41st Floor at 1345 Avenue of the Americas, New York, New
York 10105 at 9:00 a.m. on December 16, 1997, to consider the following
proposals, which are more fully described in the accompanying Proxy Statement:
- To approve and adopt the Partnership's 1997 Long Term Incentive Plan.
- To approve amendments to the Partnership's Century Club Plan to
increase by 400,000 the number of Units authorized for issuance under,
and to modify the amendment procedure of, such plan.
- To transact such other business as may properly come before the
Special Meeting or any adjournments or postponements thereof.
Unitholders are invited to attend the Special Meeting in person. Whether or
not you expect to attend, please sign, date and mail promptly the enclosed Form
of Voting Instructions in the prepaid return envelope provided to ensure
representation of the Limited Partnership Interests underlying your Units.
By Order of the General Partner
/s/ DAVID R. BREWER, JR.
David R. Brewer, Jr.
Senior Vice President, General
Counsel and Secretary of
Alliance Capital Management
Corporation
New York, New York
December 4, 1997
YOUR INSTRUCTIONS FOR VOTING ARE IMPORTANT
PLEASE INDICATE YOUR INSTRUCTIONS FOR VOTING THE LIMITED PARTNERSHIP
INTERESTS UNDERLYING YOUR UNITS ON THE ENCLOSED FORM OF VOTING INSTRUCTIONS,
SIGN AND DATE THE FORM, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO
POSTAGE IF MAILED IN THE UNITED STATES. PLEASE MAIL YOUR FORM OF VOTING
INSTRUCTIONS PROMPTLY.
<PAGE> 4
ALLIANCE CAPITAL MANAGEMENT L.P.
1345 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10105
------------------------
PROXY STATEMENT
------------------------
This Proxy Statement is being furnished to the holders (the "Unitholders")
of units (the "Units") representing assignments of beneficial ownership of
limited partnership interests ("Limited Partnership Interests") in Alliance
Capital Management L.P., a Delaware limited partnership (the "Partnership"), in
connection with the solicitation by the Partnership of written instructions
("Voting Instructions") with respect to voting the Limited Partnership Interests
underlying the Units for use at a Special Meeting (the "Special Meeting") of
Limited Partners (as defined below) and Unitholders to be held in the Audio
Visual Conference Room, 41st floor, at 1345 Avenue of the Americas, New York,
New York, 10105 at 9:00 a.m. on December 16, 1997, and any adjournments or
postponements thereof.
The approximate date on which this Proxy Statement and the accompanying
Form of Voting Instructions are being sent to Unitholders is December 4, 1997.
MATTERS TO BE CONSIDERED
The primary purpose of the Special Meeting is to vote upon proposals to
approve and adopt the Partnership's 1997 Long Term Incentive Plan (the "1997
Plan") ("Proposal 1"), and to amend the Partnership's Century Club Plan (the
"Century Club Plan") to increase by 400,000 the number of Units with respect to
which awards may be granted under, and to modify the amendment procedure of,
such plan ("Proposal 2," and, collectively with Proposal 1, the "Proposals").
The 1997 Plan is attached to this Proxy Statement as Annex I.
VOTING PROCEDURES; RECORD DATE
The record owner of all of the Limited Partnership Interests underlying the
Units is Alliance ALP, Inc., a Delaware corporation, which is the assignor
limited partner of the Partnership (the "Assignor Limited Partner"). Unitholders
may provide Voting Instructions to the Assignor Limited Partner with respect to
voting on the Proposals using the enclosed Form of Voting Instructions. Under
the partnership agreement of the Partnership (the "Partnership Agreement"), the
Assignor Limited Partner will vote for the sole benefit of, and in accordance
with all properly executed Voting Instructions of Unitholders with respect to
their Units held as of the record date for the Special Meeting, with each
Unitholder being entitled to direct the vote of one Limited Partnership Interest
of the Partnership in respect of each Unit so held.
Alliance Capital Management Corporation, a Delaware corporation ("ACMC" or
the "General Partner"), the General Partner of the Partnership, has set the
close of business on December 2, 1997 as the Record Date for the determination
of (i) who is a limited partner under the Partnership Agreement (the "Limited
Partners") entitled to be given notice of, and to vote at, the Special Meeting
and any adjournments or postponements thereof and (ii) the Unitholders entitled
(a) to be given notice of the Special Meeting and (b) to give Voting
Instructions to the Assignor Limited Partner with respect to the voting at the
Special Meeting of the Limited Partnership Interests underlying their Units.
VOTE REQUIRED; QUORUM
Approval of the Proposals requires the approval of the General Partner,
which has already been obtained, and the affirmative vote of Limited Partners
and Unitholders holding more than 50% of the Units, at a meeting at which a
quorum is present. The presence, in person or by proxy, of Limited Partners of
record representing more than 50% of the total number of all outstanding Limited
Partnership Interests entitled to vote for which Voting Instructions have been
received from Unitholders will constitute a quorum at the Special Meeting.
<PAGE> 5
To the extent that Voting Instructions are not given to the Assignor
Limited Partner by a Unitholder, the Limited Partnership Interests underlying
the Units held by the Unitholder will be deemed not to be present for purposes
of determining a quorum and will not be voted at the Special Meeting. Units
represented by Voting Instructions which are marked "abstain" or which are not
marked as to any particular matter or matters will be counted as Units present
for purposes of determining the presence of a quorum on all matters. Abstentions
present will not be counted as votes cast in favor of the Proposals. Voting
Instructions relating to "street name" Units that are voted by brokers will be
counted as present for purposes of determining the presence of a quorum on all
matters, but will not be treated as having voted at the Special Meeting as to
any Proposal as to which authority to vote is withheld by the broker.
As of the Record Date, there were 84,427,338 Units outstanding. The
Equitable Life Assurance Society of the United States ("Equitable"), together
with certain of its affiliates (the "Equitable Group") holds, in the aggregate,
approximately 57% of the issued and outstanding Units (the "Equitable Units")
and has advised the Partnership that it will vote in favor of the Proposals. The
Equitable Units include the Class A Limited Partnership Interest which
represents voting power equivalent to approximately 551,395 Units. The Voting
Instructions provided by the Equitable Group to the Assignor Limited Partner
will constitute a quorum at the Special Meeting and will be sufficient to
approve the Proposals. For further information concerning the ownership of Units
by management and certain affiliates of the General Partner, see "Principal
Security Holders."
The Class A Limited Partnership Interest is entitled to vote as a class
with the Limited Partners and has the same voting rights as a Limited Partner
holding a Limited Partnership Interest represented by approximately 551,395
Units. Equitable Capital Management Corporation ("ECMC"), a member of the
Equitable Group, is the holder of the Class A Limited Partnership Interest.
VOTING AND REVOCATION OF VOTING INSTRUCTIONS
The Limited Partnership Interests underlying Units that are entitled to
vote and are represented by Forms of Voting Instructions properly signed and
received at or prior to the Special Meeting, unless subsequently properly
revoked, will be voted in accordance with the instructions indicated thereon. If
Forms of Voting Instructions are signed and returned without indicating any
voting instructions, Units represented by such Forms of Voting Instructions will
be voted FOR the Proposals. The Board of Directors of the General Partner is not
currently aware of any business to be acted upon at the Special Meeting other
than as described herein. If, however, other matters are properly brought before
the Special Meeting or any adjournments or postponements thereof, the Assignor
Limited Partner will have the discretion to vote or act thereon in accordance
with its best judgment. Limited Partnership Interests for which Forms of Voting
Instructions have been received indicating a vote against the Proposals will be
voted by the Assignor Limited Partner against adjournment.
Any Voting Instructions given pursuant to this solicitation may be revoked
by the person giving it at any time before the vote at the Special Meeting (i)
by attending the Special Meeting and delivering a new Form of Voting
Instructions to the Assignor Limited Partner in person, (ii) by giving a written
notice of revocation to the Assignor Limited Partner and the Secretary of the
General Partner at the address specified below or (iii) by signing a new Form of
Voting Instructions relating to the same Units and matters to be considered at
the Special Meeting, and bearing a date later than the previously executed Form
of Voting Instructions. Attendance at the Special Meeting will not in and of
itself constitute a revocation of Voting Instructions. All written notices of
revocation and other communications with respect to revocation of Voting
Instructions pursuant to clauses (ii) and (iii) above should be addressed to the
Assignor Limited Partner and the Secretary of the Partnership c/o Georgeson &
Company Inc., Wall Street Plaza, 30th Floor, New York, New York 10005 and must
be received before the taking of the votes at the Special Meeting.
FORM OF VOTING INSTRUCTIONS
The accompanying Form of Voting Instructions is designed to permit each
Unitholder to approve, disapprove or to abstain from approving the Proposals.
When a Unitholder's Form of Voting Instructions is marked to abstain with
respect to the Proposals, the Units represented by the Form of Voting
Instructions will not be deemed by the General Partner to constitute approval of
the Proposals.
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<PAGE> 6
Unitholders are asked to promptly return the enclosed Form of Voting
Instructions, signed and dated, in the enclosed postage-prepaid envelope to the
address set forth below or by hand delivery to the location indicated below:
<TABLE>
<S> <C>
By mail: Alliance Capital Management L.P.
c/o First Chicago Trust Company
P.O. Box 8091
Edison, NJ 08818-9357
By hand: First Chicago Trust Company of New York
Raritan Center
118 Fernwood Avenue
Edison, NJ 08837-3857
</TABLE>
To be effective, Forms of Voting Instructions must be properly completed,
executed, and delivered to the Partnership as described above on or before the
date of the Special Meeting, unless such date is extended by the General Partner
in its sole discretion for as long as the General Partner deems necessary.
Delaware General Corporation Law pertaining to the validity and use of corporate
proxies will govern the validity and use of proxies given by Limited Partners
and the validity and use of Voting Instructions given to the Assignor Limited
Partner by Unitholders, except to the extent such law is inconsistent with the
Partnership Agreement.
ADJOURNMENTS
In the event that a quorum is not represented at the Special Meeting or,
even if a quorum is so represented, in the event that Voting Instructions for
sufficient votes in favor of the Proposals are not received prior to the Special
Meeting, the Assignor Limited Partner may propose and vote for one or more
adjournments of the Special Meeting with no notice other than an announcement at
the Special Meeting, and further solicitation of Voting Instructions with
respect to the Proposals may be made.
SOLICITATION OF FORMS OF VOTING INSTRUCTIONS
This solicitation is being made by the General Partner on behalf of the
Partnership. The Partnership will pay the cost of soliciting Forms of Voting
Instructions and will reimburse brokerage houses and other nominees and
custodians for their reasonable expenses of forwarding proxy materials to
beneficial owners of Units. The Partnership has retained Georgeson & Company
Inc. to act as Information and Exchange Agent with respect to the Special
Meeting. The Information and Exchange Agent will solicit Voting Instructions
from Unitholders by mail, telephone, telegram, personal interview or other means
and will provide copies of this Proxy Statement and related proxy materials to
Unitholders. In addition, officers of the General Partner and employees or
representatives of the General Partner may solicit Voting Instructions by
telephone, telegraph, facsimile transmission or telex, without additional
compensation, as will persons employed by the Information and Exchange Agent.
Arrangements have been made for the Partnership's transfer agent, and nominees
and custodians for Unitholders to send proxy materials to the beneficial owners
of Units held of record by such persons on the Record Date.
INFORMATION AND EXCHANGE AGENT AND TRANSFER AGENT
Georgeson & Company Inc. has agreed to provide certain services as the
Information and Exchange Agent in connection with the solicitation of Voting
Instructions and the return thereof. In connection with such engagement, the
Information and Exchange Agent will receive a fee of $3,500 and will be
reimbursed by the Partnership for reasonable out-of-pocket expenses. None of the
compensation paid to the Information and Exchange Agent will be contingent on
the outcome of the solicitation efforts or the result of the solicitation with
respect to the Proposals or based on the number of affirmative votes received.
In addition, the First Chicago Trust Company of New York will act as Transfer
Agent in connection with the return of Forms of Voting Instructions and
tabulation of votes, and will receive reasonable and customary compensation from
the Partnership for such services.
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<PAGE> 7
Requests for assistance regarding the Special Meeting and for copies of
related documents should be made directly to the Information and Exchange Agent
by calling, toll-free, 1-800-223-2064.
NO APPRAISAL RIGHTS
Unitholders have no appraisal, dissenter or other similar rights under
Delaware Law in connection with the Proposals. The giving by a Unitholder of
Voting Instructions to the Assignor Limited Partner to vote in favor of the
Proposals may adversely affect a Unitholder's right to challenge, either
individually or as a member of a class of the Partnership's Unitholders, the
fairness of the Proposals.
PROPOSAL 1
In November 1997, the Board of Directors of the General Partner (the
"Board") declared advisable and unanimously adopted the 1997 Plan, subject to
approval of the Limited Partners and Unitholders. If so approved, the 1997 Plan
will provide for the granting of options and other Unit-based awards in order to
facilitate the attraction, retention, and motivation of key employees, as well
as enabling such employees to participate in the long-term growth and financial
success of the Company.
The continued success of the Partnership depends upon its ability to
attract and retain highly qualified and competent employees. The Plan enhances
that ability and provides additional incentive to such personnel to advance the
interests of the Partnership and its Limited Partners and Unitholders. THE BOARD
RECOMMENDS THAT THE LIMITED PARTNERS AND UNITHOLDERS VOTE IN FAVOR OF THE
APPROVAL AND ADOPTION OF THE PLAN.
The following brief description of the material features of the 1997 Plan
is qualified in its entirety by reference to the full text of the 1997 Plan that
is attached to this Proxy Statement as Annex I.
UNITS AUTHORIZED UNDER THE 1997 PLAN
The initial number of Units with respect to which awards may be granted
under the 1997 Plan shall not exceed 8 million, less the excess of (a) the
number of Units issued under the Century Club Plan over (b) the number of Units
authorized for issuance under the Century Club Plan prior to the amendments
which are the subject of Proposal 2. The number of Units authorized under the
1997 Plan is subject to adjustment in the event of any distribution (whether in
the form of limited partnership interests, other securities or other property),
recapitalization (including, without limitation, any subdivision or combination
of limited partnership interests), reorganization, consolidation, combination,
repurchase, or exchange of limited partnership interests or other securities of
the Partnership, issuance of warrants or other rights to purchase limited
partnership interests or other securities of the Partnership, any incorporation
of the Partnership, or other similar transaction or event affects the Units such
that an adjustment is determined to be appropriate in order to prevent dilution
or enlargement of the benefits or potential benefits intended to be made
available under the 1997 Plan. Such adjustments may be made by the Committee (as
defined below). The Units issuable under the 1997 Plan may be drawn from either
authorized but previously unissued Units or from reacquired Units.
MATERIAL FEATURES OF THE 1997 PLAN
The Plan shall be administered by the Board or a committee of the Board
designated by the Board (the "Committee"). Except as limited by the Board, the
Committee shall have, among other powers, the power to interpret, waive, amend,
establish, or suspend rules and regulations of the 1997 Plan in its
administration of the 1997 Plan.
Except as limited by the Board, the Committee shall have sole and complete
authority to grant to eligible participants one or more equity awards, including
options, restricted Units and phantom restricted Units, performance awards,
other Unit-based awards, or any combination thereof (each an "Award"). Except as
limited by the Board, the Committee shall have the sole discretion to determine
the number or amount of any Award to be awarded to any participant.
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<PAGE> 8
Each Award will be evidenced by an award agreement that will be delivered
to the participant specifying the terms and conditions of the Award and any
rules applicable to such Award. The material terms and features of the various
forms of Awards available under the 1997 Plan are set forth below.
Options -- These are options to purchase Units upon payment of a
pre-established exercise price. The exercise price, vesting schedule (if any)
and other terms and conditions of options granted under the 1997 Plan are
established at the time of grant by the Committee.
Restricted Units -- These are grants of Units to employees, subject
generally to forfeiture and transfer restrictions which lapse in accordance with
a vesting schedule or upon the satisfaction of specified conditions. The vesting
schedule or conditions are established by the Committee at the time of grant.
Phantom Restricted Units -- These are rights to receive Units at a future
date, in accordance with a vesting schedule or upon satisfaction of other
specified conditions. The vesting schedule or other conditions are established
by the Committee at the time of grant.
Performance Awards -- These are rights to receive amounts, denominated in
Units, based upon the Partnership's performance during the period between the
date of grant and a pre-established future date. Performance criteria, the
length of the performance period, and the form and time of payment of the Award
are established by the Committee at the time of grant.
Other Unit-Based Awards -- These are Awards based on, or related to, Units
that do not constitute any of the Awards described above. Such Awards shall have
such terms and conditions as are established by the Committee.
ELIGIBLE PARTICIPANTS
Under the 1997 Plan, and as designated by the Committee, any officer or
employee of or any adviser or consultant to the Partnership or the Partnership's
affiliates or any Board member may be a participant in the 1997 Plan and receive
Awards thereunder.
The 1997 Plan is a discretionary plan and, accordingly, it is not possible
at present to determine the amount or form of any Award that will be available
for grant to any individual during the term of the 1997 Plan.
AMENDMENTS TO THE 1997 PLAN
The Board may amend, alter, suspend, discontinue, or terminate the 1997
Plan or any portion thereof at any time; provided that no such action will be
made without Unitholder approval if such approval is necessary to comply with
any tax or regulatory requirement with which the Board deems it necessary or
desirable to comply.
DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Under current federal income tax law, the grant and/or exercise of Awards
under the 1997 Plan would have the following material tax consequences.
Options. A participant will not recognize taxable income solely as a
result of being granted an option or holding an unexercised option. When a
participant exercises an option, the participant will recognize ordinary income
equal to the excess, if any, of the fair market value of the option Units
purchased thereunder over the purchase price. When a participant disposes of the
option Units, any amount received in excess of the fair market value of the
Units on the date of exercise generally will be treated as long-, mid- or
short-term capital gain, depending upon the holding period of the Units. If the
amount received on disposition of the option Units is less than the fair market
value of the Units on the date of exercise, the loss generally will be treated
as long-, mid- or short-term capital loss, depending upon the holding period of
the Units. Upon the exercise of an option, the Partnership (or, if a subsidiary
is the employer in a given case, the subsidiary) will generally be entitled to a
deduction for federal income tax purposes in an amount equal to the amount of
ordinary income recognized by the participant in respect of the exercise.
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<PAGE> 9
To the extent that a participant pays all or part of the purchase price of
option Units by surrendering Units owned by the participant, the rules described
in the preceding paragraph will apply, except that the number of Units received
upon the exercise which is equal to the number of Units so surrendered will
generally have the same tax holding period as the Units surrendered. Generally,
the additional option Units received upon such purchase will have a holding
period which commences on the date of purchase.
The aggregate basis of a participant in all of his or her Units immediately
after the option Units have been so acquired generally will equal the sum of (i)
the adjusted basis of any Units owned by the participant immediately prior to
exercise (including any Units surrendered as payment of the purchase price),
(ii) the amount of cash paid by the participant upon exercise of the option and
(iii) the amount of ordinary income recognized by the participant upon the
exercise of the option. A participant will not recognize gain or loss with
respect to Units used to pay the purchase price upon exercise of an option.
Restricted Units. Except in the case of a Section 83(b) election as
described below, a recipient of restricted Units will, at the time the Units
vest, realize ordinary income in an amount equal to the fair market value of the
Units and any other property received at the time of vesting, and the
Partnership (or, if a subsidiary is the employer in a given case, the
subsidiary) generally will be entitled to a corresponding deduction for federal
income tax purposes. Partnership distributions paid to the participant with
respect to the Units during the period prior to vesting will be ordinary income
to the participant and deductible as such by the Partnership or its subsidiary.
Alternatively, a recipient of restricted Units may, at the time of receipt of
such Units, elect under Section 83(b) of the U.S. Internal Revenue Code (the
"Code") to recognize the fair market thereof as of the date of receipt, in which
case the Partnership or its subsidiary will be entitled to a corresponding
deduction at that time. If a recipient of restricted Units makes a Section 83(b)
election and subsequently forfeits the Units prior to lapsing of the relevant
restrictions, the recipient will not recognize any loss, for federal income tax
purposes, with respect to such forfeiture.
The basis of a participant in his or her Units received in respect of an
Award of restricted Units generally will equal the amount of ordinary income
recognized by the participant as described in the preceding paragraph. Upon
disposition of such Units, the participant will generally recognize long-, mid-
or short-term capital gain (or loss), depending upon the holding period of the
Units.
Awards Settled in Property. Awards under the 1997 Plan that are settled in
vested property, such as phantom restricted Units and performance Awards, will
generally cause the recipient to realize ordinary income, at the time of
receipt, in the amount or fair market value of the property received. The
Partnership (or, if a subsidiary is the employer in a given case, the
subsidiary) will generally be entitled to a deduction of the same amount.
Other Unit-Based Awards. The federal income tax consequences of Other
Unit-Based Awards will depend upon the form such Awards take.
The Partnership (or, if a subsidiary is the employer in a given case, the
subsidiary) may be required to recognize gain as a result of the transfer of
Units to employees under the 1997 Plan, in an amount generally equal to the
amount of the deduction allowed to the Partnership (or the subsidiary, as the
case may be) under the rules described in the preceding paragraphs at the time
the deduction is allowed.
The foregoing discussion is based upon current provisions of the Code,
which are subject to change. The summary does not cover any state or local tax
consequences.
The 1997 Plan is not subject to any provision of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), nor is it a qualified
employee benefit plan under Section 401(a) of the Code.
PROPOSAL 2
In May 1993, the Board adopted, and the Limited Partners and Unitholders
subsequently approved, the Partnership's Century Club Plan (the "Century Club
Plan"). The Century Club Plan provides for the grant of Units to employees of
certain subsidiaries of the Partnership whose primary responsibilities are the
sale and
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distribution of interests in investment companies managed by the Partnership and
its subsidiaries. As of September 30, 1997, 33,900 Units had been awarded under
the Century Club Plan.
In November 1997, the Board approved amendments to the Century Club Plan,
subject to approval of the Limited Partners and Unitholders, to increase by
400,000 the number of Units authorized for issuance under, and to modify the
amendment procedure of, the Century Club Plan. The Board adopted these
amendments to ensure that the Partnership can continue to grant Units under the
Century Club Plan to sales employees at levels determined appropriate by the
Board and the Compensation Committee, as well as to reflect a change in
applicable securities regulations such that Unitholder approval is no longer
required for certain changes to employee benefit plans.
The Century Club Plan enhances the Partnership's ability to attract, retain
and motivate a highly qualified and competent sales force. THE BOARD RECOMMENDS
THAT THE LIMITED PARTNERS AND UNITHOLDERS VOTE IN FAVOR OF THE PROPOSED
AMENDMENTS TO THE CENTURY CLUB PLAN.
The essential features of the Century Club Plan and the proposed amendments
are outlined below.
UNITS PRESENTLY AUTHORIZED UNDER THE CENTURY CLUB PLAN
The number of Units with respect to which awards are presently authorized
for issuance under the Century Club Plan may not exceed the lesser of (a)
200,000 and (b) the amount by which 3,200,000 exceeds the sum of (i) the
aggregate number of Units subject to options granted under the Partnership's
1993 Unit Option Plan (the "1993 Plan") (excluding any Units with respect to
which options have expired unexercised) and (ii) the aggregate number of Units
awarded (and not forfeited) under the Partnership's Unit Bonus Plan (the "Bonus
Plan"), subject to adjustment by the Board in the event of any adjustment,
recapitalization or other change in the partnership interests of the
Partnership. In applying the foregoing limitations, Units awarded under the
Bonus Plan or Units subject to options granted under the 1993 Plan as a
consequence of Units having been tendered under either such plan to the
Partnership are not taken into account. The maximum number of Units that may
otherwise be awarded under the Century Club Plan is subject to increase by the
number of Units tendered to the Partnership in payment of withholding tax. The
Units issuable under the Century Club Plan may be drawn from either authorized
but previously unissued Units or from reacquired Units.
MATERIAL FEATURES OF THE CENTURY CLUB PLAN
The Century Club Plan is administered by a Committee ("the Century Club
Committee"), which has discretion to grant Units to certain employees in the
class of eligible participants, as described below. The Century Club Committee
may, in its discretion, provide for the grant of Units upon satisfaction of
certain sales targets or other criteria, and may provide that Units granted
under the Century Club Plan will be subject to specified vesting conditions.
Unvested Units awarded under the Century Club Plan are nontransferable.
The Century Club Plan provides for vesting of Units awarded under the
Century Club Plan upon termination of the recipient's employment due to death,
disability, involuntary termination other than for "cause" (as defined in the
Century Club Plan), and immediately prior to the sale of all or substantially
all of the Partnership's business or assets to an unaffiliated person or entity
in connection with a liquidation of the Partnership (other than in connection
with an "adverse tax determination," as defined in the Partnership Agreement).
Unvested Units are forfeited upon termination of employment in any circumstance
other than those described in the preceding paragraph, or upon the insolvency or
bankruptcy of the Partnership.
The Board may amend, alter, suspend, discontinue, or terminate the Century
Club Plan or any portion thereof at any time; provided that no such action may,
without approval of the holders of a majority of the outstanding Units entitled
to vote thereon, materially (i) increase the benefits accruing to participants
under the Century Club Plan, (ii) increase the total number of Units which may
be awarded under the Century Club Plan or (iii) modify the requirements for Plan
eligibility.
7
<PAGE> 11
ELIGIBLE PARTICIPANTS
Awards may be made under the Century Club Plan to "Sales Employees,"
defined as employees of Alliance Fund Distributors, Inc. ("AFD"), a subsidiary
of the Partnership, or another subsidiary of the Partnership, whose primary
responsibilities are to assist in the distribution of shares of or interests in
investment companies, including business development companies, managed by the
Partnership or its subsidiaries. Eligible employees include, among others,
individuals employed by AFD customarily referred to as "wholesalers" and "dealer
marketers." Recipients of awards under the Century Club Plan are selected in the
discretion of the Century Club Committee from among the class of eligible
employees.
The Century Club Plan is a discretionary plan and, accordingly, it is not
possible at present to determine the amount or terms of any award that will be
available for grant to any individual during the term of the Century Club Plan.
THE AMENDMENTS
As discussed under "Material Features of the Century Club Plan" above, the
number of Units currently authorized for award under the Century Club Plan is
partially a function of the number of Units awarded under the 1993 Plan and the
Bonus Plan. Based on the number of awards granted under the Century Club Plan,
the 1993 Plan and the Bonus Plan, as of November 18, 1997, only approximately
320,233 Units remain available to be granted under the Century Club Plan, 1993
Plan and Bonus Plan. The Board believes that it is in the best long-term
interest of the Partnership to have available for issuance under the Century
Club Plan a sufficient number of Units to provide for continuing, meaningful
incentives to the sales force of AFD and the Partnership's other subsidiaries.
Accordingly, subject to approval of the Limited Partners and Unitholders,
the Board has approved an amendment under which the number of Units with respect
to which awards are authorized under the Century Club Plan would be revised to
equal the sum of 400,000 and the present limit. (The present limit is described
in detail under "Units Presently Authorized Under the Century Club Plan,"
above.) This would have the effect of increasing by 400,000 the number of Units
authorized for issuance under the Century Club Plan.
In addition, subject to approval of the Limited Partners and Unitholders,
the Board has approved an amendment modifying the amendment procedure of the
Century Club Plan consistent with a change in applicable securities regulations,
under which Unitholder approval is no longer required for certain changes to
employee benefit plans. Under the Century Club Plan as so amended, Unitholder
approval would be required for a Plan amendment only if such approval were
necessary to comply with any tax or regulatory requirement for which or with
which the Board deems it necessary or desirable to comply.
FEDERAL INCOME TAX CONSEQUENCES
Units granted under the Century Club Plan generally have the federal income
tax consequences described above under the description of the 1997 Plan with
respect to restricted Units.
The Century Club Plan is not subject to any provision of ERISA, nor is it a
qualified employee benefit plan under Section 401(a) of the Code.
PRINCIPAL SECURITY HOLDERS
The Partnership has no information that any person beneficially owns more
than 5% of the outstanding Units except (i) Equitable, ACMC and ECMC, wholly
owned subsidiaries of the Equitable Companies Incorporated ("ECI"), and (ii) as
reported on Amendment No. 5 to a Schedule 13D dated September 4, 1997, filed
with the SEC by AXA-UAP, a French insurance holding company, and certain of its
affiliates pursuant to the 1934 Act.
8
<PAGE> 12
The following table and notes have been prepared in reliance upon such filing
for the nature of ownership and an explanation of overlapping ownership.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNERSHIP PERCENT OF
BENEFICIAL OWNER REPORTED ON SCHEDULE CLASS
-------------------------------------------------------- -------------------- ----------
<S> <C> <C>
AXA-UAP(1)(2)(3)........................................ 48,111,283(4) 57.2%
9 place Vendome,
75001 Paris,
France
ECI(3).................................................. 48,111,283(4) 57.2%
1290 Avenue of the Americas
New York, New York 10104
</TABLE>
- - ---------------
(1) At October 31, 1997, AXA-UAP and certain of its subsidiaries beneficially
owned approximately 58.8% of ECI's outstanding common stock. At that date,
based on information provided by AXA-UAP, approximately (i) 20.9% of the
issued ordinary shares (representing 30.6% of the voting power) of AXA-UAP
were controlled directly and indirectly by FINAXA, a French holding company,
and (ii) 61.9% of the shares (representing 73.8% of the voting power) of
FINAXA were owned by four French mutual insurance companies (the "Mutuelles
AXA"). For insurance regulatory purposes the shares of capital stock of ECI
beneficially owned by AXA-UAP and its subsidiaries have been deposited into
a voting trust which has an initial term of 10 years ("Voting Trust")
commencing May 12, 1992. The trustees of the Voting Trust (the "Voting
Trustees") are Claude Bebear, Patrice Garnier and Henri de
Clermont-Tonnerre. The Voting Trustees have agreed to exercise their voting
rights to protect the legitimate economic interests of AXA-UAP, but with a
view to ensuring that certain minority shareholders of AXA-UAP do not
exercise control over ECI or certain of its insurance subsidiaries.
(2) The Voting Trustees may be deemed to be beneficial owners of all Units
beneficially owned by AXA-UAP and its subsidiaries. In addition, the
Mutuelles AXA, as a group, and FINAXA may be deemed to be beneficial owners
of all Units beneficially owned by AXA-UAP and its subsidiaries. By virtue
of the provisions of the Voting Trust Agreement, AXA-UAP may be deemed to
have shared voting power with respect to the Units. AXA-UAP and its
subsidiaries have the power to dispose or direct the disposition of all
shares of the capital stock of ECI deposited in the Voting Trust. By reason
of their relationship with AXA-UAP, the Mutuelles AXA, as a group, and
FINAXA may be deemed to share the power to vote or to direct the vote and to
dispose or to direct the disposition of all the Units beneficially owned by
AXA-UAP and its subsidiaries. The address of each of AXA-UAP and the Voting
Trustees is 9 place Vendome, 75001 Paris, France. The address of FINAXA is
23 avenue Matignon, 75008 Paris, France. The addresses of the Mutuelles AXA
are as follows: The address of AXA Assurances Vie Mutuelle and AXA
Assurances I.A.R.D. Mutuelle is 21 rue de Chateaudun, 75009 Paris, France;
the address of Alpha Assurances Vie Mutuelle is Tour Franklin, 100/101
Terrasse Boidlieu, Cedex 11, 92042 Paris La Defense, France; and the address
of AXA Courtage Assurance Mutuelle is 26 rue Louis-le Grand, 75002 Paris,
France. The address of Banque Paribas (which, at October 31, 1997, owned
approximately 23.3% of the shares representing 14.8% of the voting power of
FINAXA) is 3 rue d'Antin, Paris, France.
(3) By reason of their relationship, AXA-UAP, the Voting Trustees, ECI,
Equitable, Equitable Holding Corporation, Equitable Investment Corporation
("EIC"), ACMC, ECMC, the Mutuelles AXA and FINAXA may be deemed to share the
power to vote or to direct the vote or to dispose or direct the disposition
of all or a portion of the 48,111,283 Units.
(4) Includes 551,395 Units which are issuable upon conversion of the Class A
Limited Partnership Interest held by ECMC.
9
<PAGE> 13
The following table sets forth as of October 31, 1997 certain information
regarding beneficial ownership of Units by the named directors and executive
officers of the Partnership and by all directors and executive officers as a
group.
<TABLE>
<CAPTION>
NAME OF NUMBER PERCENTAGE
BENEFICIAL OWNER OF UNITS OF CLASS
- - ----------------------------------------------------------------------- --------- ----------
<S> <C> <C>
Dave H. Williams(1)(2)................................................. 1,044,456 1.2%
Luis Javier Bastida.................................................... 0 *
Claude Bebear(1)....................................................... 0 *
Donald H. Brydon(1).................................................... 0 *
Bruce W. Calvert(1)(3)................................................. 760,000 *
John D. Carifa(1)(4)................................................... 997,568 1.1%
Henri de Castries(1)................................................... 0 *
Kevin C. Dolan(1)...................................................... 0 *
Denis Duverne(1)....................................................... 0 *
Alfred Harrison(1)..................................................... 365,410 *
Jean-Pierre Hellebuyck(1).............................................. 0 *
Benjamin D. Holloway................................................... 5,800 *
Joseph J. Melone(1).................................................... 5,000 *
Edward D. Miller(1).................................................... 0 *
Peter D. Noris(1)...................................................... 1,000 *
Frank Savage(1)........................................................ 50,500 *
Stanley B. Tulin(1).................................................... 0 *
Reba W. Williams(1)(5)................................................. 1,044,456 *
Robert B. Zoellick..................................................... 300 *
David R. Brewer, Jr.(1)(6)............................................. 119,154 *
Robert H. Joseph, Jr.(1)(7)............................................ 61,000 *
All Directors and executive officers of the General Partner as a Group
(21 persons)(1)(8)................................................... 3,410,188 4.0%
</TABLE>
- - ---------------
* Number of Units listed represents less than 1% of the Units outstanding.
(1) Excludes Units beneficially owned by AXA-UAP and ECI. Messrs. Williams,
Bebear, Brydon, de Castries, Dolan, Duverne, Hellebuyck, Melone, Miller,
Noris and Tulin are directors and/or officers of AXA-UAP, ECI, Equitable
and/or a subsidiary thereof. Messrs. Calvert, Carifa, Harrison, Savage,
Brewer and Joseph, and Reba W. Williams, are directors and/or officers of
ACMC.
(2) Includes 80,000 Units owned by Reba W. Williams.
(3) Includes 180,000 Units which may be acquired within 60 days under the
Partnership's Unit Option Plan and the 1993 Plan (together, the "Existing
Option Plans").
(4) Includes 190,000 Units which may be acquired within 60 days under the
Partnership's Existing Option Plans.
(5) Includes 964,456 Units owned by Dave H. Williams.
(6) Includes 74,000 Units which may be acquired within 60 days under the
Partnership's Existing Option Plans.
(7) Includes 51,000 Units which may be acquired within 60 days under the
Partnership's Existing Option Plans.
(8) Includes 499,000 Units which may be acquired within 60 days under the
Partnership's Existing Option Plans.
10
<PAGE> 14
EXECUTIVE COMPENSATION
The information set forth below describes the components of the total
compensation of the Chief Executive Officer and the four other most highly
compensated executive officers of the General Partner, based on 1996 salary and
annual bonuses (the "Named Executive Officers").
Summary Compensation Table. The following Summary Compensation Table sets
forth all plan and non-plan compensation awarded to, earned by or paid to the
Named Executive Officers for the year ended December 31, 1996.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
-------------------------------
AWARDS PAYOUTS
--------------------- -------
ANNUAL COMPENSATION(1)
----------------------------- (e) (f) (h) (i)
OTHER ANNUAL RESTRICTED (g) LTIP ALL OTHER
(a) (b) (c) (d) COMPENSATION STOCK OPTIONS/ PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) AWARD(S) (#UNITS) ($)(2) ($)(3)
- - ---------------------------------- ---- --------- ---------- ------------ ---------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dave H. Williams.................. 1996 $ 263,443 $4,000,000 $ -- 0 0 $ 0 $ 267,568
Chairman & Chief 1995 225,000 1,000,000 62,595 0 0 0 213,689
Executive Officer 1994 225,000 1,500,000 170,352 0 0 0 68,322
John D. Carifa.................... 1996 238,461 3,000,000 54,752 0 0 0 426,398
President & Chief 1995 200,000 1,000,000 74,822 0 175,000 0 135,191
Operating Officer 1994 200,000 1,500,000 75,927 0 200,000 76,250 4,043,576
Bruce W. Calvert.................. 1996 238,461 3,000,000 -- 0 0 0 425,101
Vice Chairman & Chief 1995 200,000 1,000,000 -- 0 150,000 0 138,048
Investment Officer 1994 200,000 1,500,000 -- 0 200,000 76,149 4,038,491
Robert H. Joseph, Jr. ............ 1996 157,692 385,000 -- 0 10,000 0 61,434
Senior Vice President & 1995 150,000 312,500 -- 0 30,000 0 24,066
Chief Financial Officer 1994 147,461 290,000 682,195 0 20,000 0 23,685
David R. Brewer, Jr. ............. 1996 146,538 395,750 -- 0 10,000 0 62,108
Senior Vice President & 1995 132,692 272,250 136,788 0 20,000 0 22,496
General Counsel 1994 125,000 249,250 -- 0 10,000 0 20,316
</TABLE>
- - ---------------
(1) Perquisites and personal benefits are not included in column (e) if the
aggregate amount did not exceed the lesser of $50,000 or 10% of the total
annual salary bonus reported in columns (c) and (d). Column (e) for 1996
includes for Mr. Carifa, among other perquisites and personal benefits,
$26,775 representing interest rate subsidies equal to 3% per annum of the
outstanding balances of personal loans obtained by Mr. Carifa from
commercial banks the proceeds of which were used to pay withholding tax
liabilities related to the vesting of Units acquired in 1988 and $7,500, for
personal tax services.
Column (e) for 1995 includes for (i) Mr. Carifa, among other perquisites and
personal benefits, $22,319 representing interest rate subsidies equal to 3%
per annum of the outstanding balances of personal loans obtained by Mr.
Carifa from commercial banks the proceeds of which were used to pay
withholding tax liabilities related to the vesting of Units acquired in
1988, (ii) Messrs. Williams and Carifa, among other perquisites and personal
benefits, $50,100 and $33,400, respectively, for personal tax services, and
(iii) Mr. Brewer, among other perquisites and personal benefits, $129,562
representing the dollar value of the difference between the exercise price
and the fair market value of Units acquired as a result of the exercise of
options granted under the Partnership's Existing Option Plans.
Column (e) for 1994 includes for (i) Messrs. Williams and Carifa, among
other perquisites and personal benefits, $122,943 and $19,282, respectively,
representing interest rate subsidies equal to 3% per annum of the
outstanding balances of personal loans obtained by Messrs. Williams and
Carifa from commercial banks the proceeds of which were used to pay
withholding tax liabilities related to the vesting of Units acquired in
1988, and (ii) Mr. Joseph, among other perquisites and personal benefits,
$677,563 representing the dollar value of the difference between the
exercise price and the fair market value of Units acquired as a result of
the exercise of options granted under the Partnership's Existing Option
Plans.
(2) Column (h) includes cash distributions paid in 1994 from Available Cash Flow
of the Partnership on unvested Units acquired in 1988 and payments in cash
of all or a portion of account balances under the Partners Plan, as provided
by the terms of that plan (See "Employee Benefit Plans -- Partners Plan"),
including earnings included in column (i).
11
<PAGE> 15
(3) Column (i) includes award amounts vested and earnings credited in 1996 in
respect of the Alliance Partners Compensation Plan. Column (i) does not
include any amounts in respect of awards made in 1996 in respect of the
Alliance Partners Compensation Plan since none of these awards have vested
and no earnings have been credited in respect of these awards. (See
"Employee Benefit Plans -- Alliance Partners Compensation Plan"). Column (i)
includes the following amounts for 1996 (See "Employee Benefit
Plans -- Partners Plan, Capital Accumulation Plan, Profit Sharing Plan and
Alliance Partners Compensation Plan"):
<TABLE>
<CAPTION>
VESTING OF
VESTING OF AWARDS
AWARDS AND ACCRUED
AND ACCRUED EARNINGS UNDER
EARNINGS EARNINGS UNDER ALLIANCE
ACCRUED ON CAPITAL PARTNERS PROFIT SHARING TERM LIFE
PARTNERS PLAN ACCUMULATION COMPENSATION PLAN INSURANCE
BALANCES PLAN PLAN CONTRIBUTION PREMIUMS TOTAL
------------- -------------- -------------- -------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Dave H. Williams........ $13,557 $ 42,336 $184,634 $ 15,525 $11,516 $ 267,568
John D. Carifa.......... 5,301 24,911 369,266 22,500 4,420 426,398
Bruce W. Calvert........ 4,676 25,989 369,266 22,500 2,670 425,101
Robert H. Joseph,
Jr. .................. 0 0 36,926 22,500 2,008 61,434
David R. Brewer, Jr. ... 0 0 36,926 21,981 3,201 62,108
</TABLE>
Option Grants in 1996. The table below shows information regarding grants
of options to purchase Units which were made to the Named Executive Officers
under the Partnership's Existing Option Plans during 1996. The amounts shown for
each of the Named Executive Officers as potential realizable values are based on
assumed annualized rates of appreciation of five percent and ten percent over
the full ten-year term of the options, which would result in Unit prices of
approximately $43.40 and $68.96, respectively. The amounts shown as potential
realizable values for all Unitholders represent the corresponding increases in
the market value of 83,336,109 outstanding Units held by all Unitholders as of
December 31, 1996, which would total approximately $1.4 billion and $3.6
billion, respectively. No gain to the optionees is possible without an increase
in Unit price which would benefit all Unitholders proportionately. These
potential realizable values are based solely on assumed rates of appreciation
required by applicable SEC regulations. See "Employee Benefit Plans -- Unit
Award and Option Plans."
OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
------------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE
SECURITIES % OF TOTAL AT ASSUMED ANNUAL RATES
UNDERLYING OPTIONS OF UNIT PRICE APPRECIATION
OPTIONS OPTIONS GRANTED EXERCISE FOR OPTION TERM
GRANTED TO EMPLOYEES IN PRICE EXPIRATION ---------------------------
NAME (#) FISCAL YEAR(2) ($/UNIT) DATE 5%($) 10%($)
- - ---------------------------------- --------- --------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dave H. Williams.................. 0 N/A N/A N/A N/A N/A
John D. Carifa.................... 0 N/A N/A N/A N/A N/A
Bruce W. Calvert.................. 0 N/A N/A N/A N/A N/A
Robert H. Joseph, Jr. ............ 10,000 N/A 25.125 12/16/06 178,000 466,000
David R. Brewer, Jr. ............. 10,000 N/A 25.125 12/16/06 178,000 466,000
</TABLE>
- - ---------------
(1) Options on Units are awarded at the fair market value of Units at the date
of award and become exercisable in 20% increments commencing one year from
such date if the optionee has not died or terminated employment. Such
options lapse at the earliest of ten years after award, three months after
the optionee's normal termination of employment or disability, six months
after the optionee's death, or at the time of the optionee's termination of
employment otherwise than normally.
(2) 725,000 Units were subject to outstanding option grants.
12
<PAGE> 16
Aggregated Option Exercises in 1996 and 1996 Year-End Option Values. The
following table summarizes for each of the Named Executive Officers the number
of options exercised during 1996, the aggregate dollar value realized upon
exercise, the total number of Units subject to unexercised options held at
December 31, 1996, and the aggregate dollar value of in-the-money, unexercised
options held at December 31, 1996. Value realized upon exercise is the
difference between the fair market value of the underlying Units on the exercise
date and the exercise price of the option. Value of unexercised, in-the-money
options at fiscal year-end is the difference between its exercise price and the
fair market value of the underlying Units on December 31, 1996, which was
$26.625 per Unit. These values have not been, and may never be, realized. The
underlying options have not been, and may never be, exercised; and actual gains,
if any, on exercise will depend on the value of the Partnership's Units on the
date of exercise. There can be no assurance that these values will be realized.
AGGREGATED OPTION EXERCISES IN 1996
AND DECEMBER 31, 1996 OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNITS IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS AT
OPTIONS AT DECEMBER 31, 1996
OPTIONS VALUE DECEMBER 31, 1996 ($)(1)
EXERCISED REALIZED ---------------------------- ----------------------------
NAME (# UNITS) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ------------------------------ --------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dave H. Williams.............. 0 N/A 0 0 0 0
John D. Carifa................ 0 N/A 115,000 260,000 801,875 1,857,500
Bruce W. Calvert.............. 0 N/A 110,000 240,000 765,625 1,712,500
Robert H. Joseph, Jr. ........ 0 N/A 37,000 48,000 430,750 268,375
David R. Brewer, Jr. ......... 0 N/A 68,000 34,000 1,036,250 169,875
</TABLE>
- - ---------------
(1) In-the-Money Options are those where the fair market value of the underlying
Units exceeds the exercise price of the option. The Named Executive Officers
hold no other options in respect of the Units.
Compensation Agreements with Certain Executive Officers. In connection
with the transfer of ACMC's business to the Partnership on April 21, 1988
Messrs. Carifa and Calvert entered into employment agreements with the
Partnership. Each of these agreements provided for a base salary and bonus
eligibility. These agreements expired on December 31, 1996.
The employment agreements provided for discretionary bonus eligibility.
Bonus amounts are fixed by the Board Compensation Committee after receiving
recommendations from the Management Compensation Committee. The aggregate amount
available for bonuses and contributions and awards under various employee plans
to all employees is based on the annual adjusted consolidated net operating
earnings of the Partnership.
In connection with Equitable's 1985 acquisition of Donaldson Lufkin &
Jenrette, Inc. ("DLJ"), the former parent of ACMC, ACMC entered into employment
agreements with Messrs. Williams, Carifa and Calvert. Each agreement provided
for deferred compensation payable in stated monthly amounts for ten years
commencing at age 65, or earlier in a reduced amount in the event of disability
or death, if the individual involved so elects. The right to receive such
deferred compensation is vested. Assuming payments commence at age 65, the
annual amount of deferred compensation payable for ten years to Messrs.
Williams, Carifa and Calvert is $378,900, $522,036 and $434,612, respectively.
While the Partnership assumed responsibility for payment of these deferred
compensation obligations, ACMC is required, subject to certain limitations, to
make capital contributions to the Partnership in an amount equal to the
payments, and ACMC is also obligated to the employees for the payments. ACMC's
obligations to make capital contributions to the Partnership are guaranteed,
subject to certain limitations, by EIC, a wholly owned subsidiary of Equitable,
the parent of ACMC.
13
<PAGE> 17
EMPLOYEE BENEFIT PLANS
Unit Award and Option Plans. During 1988, the Unit Option Plan was
established under which options to purchase up to 4,923,076 Units may be granted
to certain key employees. A committee of the Board of Directors of the General
Partner administers the plan and determines the grantees and the number of
options to be granted. Options may be granted for terms of up to ten years and
each option must have an exercise price of not less than the fair market value
of the Units on the date of grant. Options are exercisable at a rate of 20% of
the Units subject to options on each of the first five anniversary dates of the
date of grant.
During 1993, the 1993 Plan, the Bonus Plan and the Century Club Plan
(together the "1993 Equity Plans") were established by the Partnership.
Committees of the Board of Directors of the General Partner administer the 1993
Equity Plans and determine the recipients of grants and awards. Under the 1993
Plan, options to purchase Units may be granted to key employees for terms of up
to ten years. Each option must have an exercise price of not less than the fair
market value of the Units on the date of grant. Options are exercisable at a
rate of 20% of the Units subject to options on each of the first five
anniversary dates of the date of grant. Under the Bonus Plan, Units may be
awarded to key employees in lieu of all or a portion of the cash bonuses they
would otherwise receive under the Partnership's incentive compensation program.
The Century Club Plan is described in detail under "Proposal 2" above. The
aggregate number of Units that can be the subject of options granted or that can
be awarded under the 1993 Equity Plans may not exceed 3,600,000 Units. In
addition, no more than 800,000 Units in the aggregate may be granted or awarded
under the 1993 Equity Plans in any of the first four years of their operation.
As of December 31, 1996, 2,926,500 Units were subject to options granted and
22,635 Units were subject to awards made under the 1993 Equity Plans.
During 1996 and 1995, the Partnership authorized the grant of options to
officers of the Partnership to purchase 725,000 and 1,805,500 of the
Partnership's Units, respectively, under the Unit Option Plan and 1993 Equity
Plans. The per Unit weighted average fair value of options granted during 1996
and 1995 was $2.69 and $2.24, respectively, on the date of grant using the
Black-Scholes option pricing model with the following weighted average
assumptions: risk-free interest rates of 5.8% and 6.0% for 1996 and 1995,
respectively, expected dividend yield of 8.0% for each year; and a volatility
factor of the expected market price of the Partnership's Units of 23% for each
year.
For a discussion of the material terms of the 1997 Plan currently being
submitted for Unitholder approval and adoption, see "Proposal 1" above.
Profit Sharing Plan. The Partnership maintains a qualified defined
contribution profit sharing plan covering most employees of the Partnership who
have attained age 21 and completed one year of service. Annual contributions are
determined by the Board of Directors in its sole discretion and are allocated
among participants who are employed by a participating employer on the last
business day of the calendar year involved by crediting each participant with
the same proportion of the contribution as the participant's base compensation
bears to the total base compensation of all participants. The plan provides for
a 401(k) salary reduction election under which the Partnership may match a
participant's election to reduce up to 5% of base salary. A participant's
interest in the plan is 100% vested after the participant has completed three
years of service although account balances deriving from salary reductions are
100% vested at all times. The Partnership's contributions under the plan for a
given year may not exceed 15% of the aggregate compensation paid to all
participants for that year. Contributions to a participant's plan account
(including contributions made by a participant) for a particular year may not
exceed 25% of the participant's compensation for that year or $30,000, whichever
is less. The amount of the benefits ultimately distributed to an employee is
dependent on the investment performance of the employee's account under the
plan. Distribution of vested account balances under the plan is made upon
termination of employment either in a lump sum or in installments for a specific
period of years. If a participant dies prior to termination of his employment,
the entire value of his account is paid to the participant's beneficiary. For
1996 vested contributions to the plan for the accounts of Messrs. Williams,
Carifa, Calvert, Joseph and Brewer were $15,525, $22,500, $22,500, $22,500 and
$21,981, respectively. These amounts are included in column (i) of the Summary
Compensation Table.
Retirement Plan. The Partnership maintains a qualified, non-contributory,
defined benefit retirement plan covering most employees of the Partnership who
have completed one year of service and attained age 21.
14
<PAGE> 18
Employer contributions are determined by application of actuarial methods and
assumptions to reflect the cost of benefits under the plan. Each participant's
benefits are determined under a formula which takes into account years of
credited service, the participant's average compensation over prescribed periods
and Social Security covered compensation. The maximum annual benefit payable
under the plan may not exceed the lesser of $100,000 or 100% of a participant's
average aggregate compensation for three consecutive years in which he received
the highest aggregate compensation from the Partnership or such lower limit as
may be imposed by the Code on certain participants by reason of their coverage
under another qualified plan maintained by the Partnership. A participant is
fully vested after the completion of five years of service. The plan generally
provides for payments to or on behalf of each vested employee upon such
employee's retirement at the normal retirement age provided under the plan or
later, although provision is made for payment of early retirement benefits on an
actuarially reduced basis. Normal retirement age under the plan is 65. Death
benefits are payable to the surviving spouse of an employee who dies with a
vested benefit under the plan.
The table below sets forth with respect to the retirement plan the
estimated annual straight life annuity benefits payable upon retirement at
normal retirement age for employees with the remuneration and years of service
indicated.
ESTIMATED ANNUAL BENEFITS
<TABLE>
<CAPTION>
AVERAGE YEARS OF SERVICE AT RETIREMENT
FINAL ------------------------------------------------------------------------------------------------------------------
COMPENSATION 15 20 25 30 35 40 45
- - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$100,000 $ 19,643 $ 26,190 $ 32,738 $ 39,286 $ 45,833 $ 50,833 $ 55,833
150,000 30,893 41,190 51,488 61,786 72,083 79,583 87,083
200,000 42,143 56,190 70,238 84,286 98,333 100,000 100,000
250,000 53,393 71,190 88,988 100,000 100,000 100,000 100,000
300,000 64,643 86,190 100,000 100,000 100,000 100,000 100,000
</TABLE>
Assuming they are employed by the Partnership until age 65, the credited
years of service under the plan for Messrs. Williams, Carifa, Calvert, Joseph
and Brewer would be 20, 40, 38, 28 and 22, respectively. Compensation on which
plan benefits are based includes only base compensation and not bonuses,
incentive compensation, profit-sharing plan contributions or deferred
compensation. The compensation for calculation of plan benefits for each of
these five individuals for 1996 is $150,000, $150,000, $150,000, $150,000 and
$135,000, respectively.
Alliance Partners Compensation Plan. During 1995 the Partnership
established a nonqualified, unfunded deferred compensation program known as the
Alliance Partners Compensation Plan ("Partners Compensation Plan") under which
certain eligible employees are granted awards by the Management Compensation
Committee. The awards consist of cash amounts which are generally credited with
earnings based on the Partnership's earnings growth rate. The Partners
Compensation Plan is administered by the Management Compensation Committee which
determines the recipients of awards and the amount of awards. The Board of
Directors of the General Partner may terminate the Partners Compensation Plan at
any time without cause in which case the Partnership's liability would be
limited to the payment of vested awards. All awards granted in 1995 vest over
three years and all awards granted in 1996 and subsequent years vest over eight
years to the extent the grantee remains employed by the Partnership during such
three or eight year period. Payment of vested benefits generally will be made in
cash over a five year period commencing at retirement. The amount awarded in
1996 under the Partners Compensation Plan was $12,350,000 and for 1997 and
subsequent years the Partnership may award 4.5% and 5%, respectively, of
operating revenues less operating expenses under the Partners Compensation Plan.
Messrs. Carifa, Calvert, Joseph and Brewer were granted awards of $1,000,000,
$1,000,000, $250,000 and $250,000, respectively, under the Partners Compensation
Plan for 1996. These amounts are not included in column (i) of the Summary
Compensation Table since none of these awards have vested and no earnings have
been credited in respect of the awards.
Partners Plan. Since 1983 a nonqualified, unfunded deferred compensation
program known as the Partners Plan has been maintained under which certain key
employees received incentive awards pursuant to a formula set
15
<PAGE> 19
each year by the Management Compensation Committee. No awards have been or will
be made under the Partners Plan for any year after 1987. All awards are fully
vested. Unless accelerated, award account balances generally are distributed
upon resignation, retirement, disability or death. The Board of Directors of the
General Partner has the right to accelerate vesting and make distributions of up
to 90% of a participant's account balance if the key employee agrees to extend
the term of his employment for a period of at least one year. Until distributed,
the awards are credited with interest based on prevailing market rates plus, for
the years prior to 1989, a premium if the Partnership's earnings growth rate
exceeded certain levels. Interest credited during 1996 for the accounts of
Messrs. Williams, Carifa and Calvert was $13,557, $5,301, and $4,676,
respectively. These amounts are included in column (i) of the Summary
Compensation Table. No amounts were distributed under the Partners Plan for any
of the Named Executive Officers in 1996.
Capital Accumulation Plan. Since 1985 a nonqualified, unfunded deferred
compensation program known as the Capital Accumulation Plan has been maintained
to provide retirement benefits for key employees and their beneficiaries which
supplement their benefits under the Retirement Plan described above. Under this
plan, at the end of 1985, 1986 and 1987, awards were made for each participant,
selected on the basis of performance by the Management Compensation Committee,
equal to a percentage of the participant's base salary and the participant's
discretionary bonus for the year. The amount awarded was credited to the
participant's account on the Partnership's books to which interest is thereafter
credited, until distributed or forfeited, based on prevailing market rates. A
participant's account balance vests based on the participant's years in the plan
with no vesting for zero to four years of participation, 30% vesting after five
to seven years with gradually increased vesting thereafter ranging to 87% after
35 years of participation and 100% vesting at age 65 or death. Upon termination
of employment other than by reason of permanent disability or death, the
participant's vested account balance is to be paid out in ten equal annual
installments. In the event of permanent disability, the participant is to
receive the higher of the vested balance at the time of disability or 50% of the
total balance at the time of disability, in either case payable in ten equal
annual installments. In the event of death, the participant's beneficiary is to
receive the higher of (i) the participant's account balance paid in ten equal
annual installments together with interest or (ii) annually 50% of the
participant's total cash compensation for the year prior to the year of the
participant's death payable until the participant would have attained age 65,
but in no event for less than ten years.
While the Partnership is responsible for the payment of all obligations
under the plan, ACMC is required, subject to certain limitations, to make
capital contributions to the Partnership in an amount equal to the payments.
ACMC's obligations are guaranteed, subject to certain limitations, by EIC. No
additional awards will be made under this plan, but employees will continue to
vest in their existing account balances and to be credited with interest at
prevailing market rates on balances. A participant's total cash compensation for
1987 increased by 5% per year, compounded annually, will be considered his total
cash compensation for purposes of determining the amount of any death benefits
payable in respect of the participant. The Board of Directors of the General
Partner has reserved the right to cancel this plan if tax legislation is enacted
which adversely affects certain benefits derived by ACMC from insurance on the
lives of certain of the Partnership's employees purchased in connection with the
plan. If the plan is canceled, the Board of Directors of the General Partner
may, at its option, either pay each participant his then-vested account balance
or continue to maintain the account balances for vesting and distribution as
described above as if the plan had not terminated, provided that in such event
no death benefit based on a participant's total cash compensation will be paid.
The plan account balances which became vested during 1996 for the accounts of
Messrs. Williams, Carifa and Calvert were $42,336, $24,911 and $25,989,
respectively. These amounts are included in column (i) of the Summary
Compensation Table.
Deferral Plan. Under this plan, certain employees of the Partnership may
elect to defer for at least one year the receipt of base or bonus compensation
otherwise payable in a given year to January 31 of the year selected. Interest
is credited at prevailing market rates on the amounts deferred under this plan
until paid. In certain cases, 10% of a deferred amount is subject to forfeiture
if the employee's employment terminates prior to the January 31 payment date for
any reason other than death or disability. There was no compensation deferred
from 1996 to a subsequent year for the Named Executive Officers. During 1996
there were no payments of previously deferred compensation to or interest
credited on amounts deferred by any of the Named Executive Officers.
16
<PAGE> 20
DLJ Plans. Prior to Equitable's 1985 acquisition of DLJ, certain employees
of the Partnership participated in various DLJ employee benefit plans and
arrangements. Since the acquisition, no employer contributions or awards have
been made, nor in the future are any employer contributions or awards to be
made, under these plans or arrangements for any employee of the Partnership. No
deferral of compensation earned by any such employee for services rendered since
the acquisition has been permitted under any such plan or arrangement. The
Partnership has no liability for and will not bear the cost of any benefits
under these plans and arrangements.
In 1983 DLJ adopted an Executive Supplemental Retirement Program (the
"Program") under which certain employees of the Partnership deferred a portion
of their 1983 compensation in return for which DLJ agreed to pay each of them a
specified annual retirement benefit for 15 years beginning at age 65. Benefits
are based upon the participant's age and the amount deferred and are calculated
to yield an approximate 12.5% annual compound return. In the event of the
participant's disability or death, an equal or lesser amount is to be paid to
the participant or his beneficiary. After age 55, participants the sum of whose
age and years of service equals 80 may elect to have their benefits begin in an
actuarially reduced amount before age 65. DLJ has funded its obligation under
the Program through the purchase of life insurance policies. The following table
shows as to the Named Executive Officers who are participants in the Program the
estimated annual retirement benefit payable at age 65. Each of these individuals
is fully vested in the applicable benefit.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL
NAME RETIREMENT BENEFIT
------------------------------------------------------------ ------------------
<S> <C>
Dave H. Williams............................................ $ 41,825
John D. Carifa.............................................. 114,597
Bruce W. Calvert............................................ 145,036
</TABLE>
OTHER MATTERS
Management knows of no other matters which will be brought before the
Special Meeting, but if such matters are properly presented the Forms of Voting
Instructions solicited hereby will be voted in accordance with the judgment of
the persons holding such Forms of Voting Instructions.
17
<PAGE> 21
ANNEX I
ALLIANCE CAPITAL MANAGEMENT L.P.
1997 LONG TERM INCENTIVE PLAN
SECTION 1. Purpose.
The purposes of this Alliance Capital Management L.P. 1997 Long Term
Incentive Plan (the "PLAN") are to promote the interest of Alliance Capital
Management L.P. (together with any successor thereto, the "PARTNERSHIP") and its
partners by (i) attracting and retaining officers, key employees or directors of
the Partnership and its Affiliates, (ii) motivating such employees or directors
by means of performance-related incentives to achieve longer-range performance
goals, and (iii) enabling such employees or directors to participate in the
long-term growth and financial success of the Partnership.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth
below:
"AFFILIATE" shall mean (i) any entity that, directly or indirectly, is
controlled by the Partnership and (ii) any entity in which the Partnership has a
significant equity interest, in either case as determined by the Board or, if so
authorized by the Board, the Committee.
"AWARD" shall mean any Option, Restricted Unit, Phantom Restricted Unit,
Performance Award or Other Unit-Based Award.
"AWARD AGREEMENT" shall mean any written agreement, contract or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"BOARD" shall mean the Board of Directors of the general partner of the
Partnership.
"COMMITTEE" shall mean the Board or one or more committees of the Board
designated by the Board to administer the Plan.
"DIRECTOR" shall mean any member of the Board.
"EMPLOYEE" shall mean (i) an officer or employee of the Partnership or of
any Affiliate, or (ii) an advisor or consultant to the Partnership or to any
Affiliate, in each case as determined by the Committee.
"EXCHANGE ACT" shall mean the U.S. Securities Exchange Act of 1934, as
amended.
"FAIR MARKET VALUE" shall mean, as of any given date and except as
otherwise expressly provided by the Board: (i) with respect to a Unit, the
closing price of a Unit on the New York Stock Exchange on such date or, if no
sale of Units occurs on the New York Stock Exchange on such date, the closing
price of a Unit on such Exchange on the last preceding day on which such sale
occurred; and (ii) with respect to any other property, the fair market value of
such property as determined by the Board in its sole discretion.
"NON-EMPLOYEE DIRECTOR" shall mean a member of the Board who is not an
officer or employee of the Partnership or of any of its subsidiaries.
"OPTION" shall mean an option granted under Section 6(a) of the Plan.
"OTHER UNIT-BASED AWARD" shall mean any right granted under Section 6(d) of
the Plan.
"PARTICIPANT" shall mean any Employee or Director granted an Award under
the Plan.
"PERFORMANCE AWARD" shall mean any right granted under Section 6(c) of the
Plan.
"PERSON" shall mean any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.
"PHANTOM RESTRICTED UNIT" shall mean any Award granted under Section 6(b)
of the Plan and designated as a Phantom Restricted Unit.
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<PAGE> 22
"RESTRICTED UNIT" shall mean any Unit granted under Section 6(b) of the
Plan and designated as a Restricted Unit.
"RESTORATION OPTION" shall mean an Option granted under Section 6(a)(iv) of
the Plan.
"SUBSTITUTE AWARDS" shall mean Awards granted in assumption of, or in
substitution for, outstanding awards previously granted by a company acquired by
the Partnership or its Affiliate, or with which the Partnership or its Affiliate
combines.
"UNITS" mean units representing assignments of beneficial ownership of
limited partnership interests in the Partnership.
SECTION 3. Administration.
(a) Authority of Committee. The Plan shall be administered by the
Committee. Subject to the terms of the Plan and applicable law, in addition to
other express powers and authorizations conferred on the Committee by the Plan,
and except as otherwise limited by the Board, the Committee shall have full
power and authority to (i) designate Participants; (ii) determine the type or
types of Awards to be granted to an eligible Employee or, subject to Section
3(b), Director; (iii) determine the number of Units to be covered by, or with
respect to which payments, rights, or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may
be exercised, canceled, forfeited, or suspended and the method or methods by
which Awards may be exercised, canceled, forfeited, or suspended; (vi) determine
whether, to what extent, and under what circumstances Units, other securities,
other Awards, other property and other amounts payable with respect to an Award
shall be deferred either automatically or at the election of the holder thereof
or of the Committee; (vii) interpret and administer the Plan and any instrument
or agreement relating to, or Award made under, the Plan; (viii) establish,
amend, suspend, or waive such rules and regulations and appoint such agents as
it shall deem appropriate for the proper administration of the Plan; and (ix)
make any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan.
(b) Grants of Awards to Non-Employee Directors. Notwithstanding the
provisions of Section 3(a), grants of Awards to Non-Employee Directors must be
approved by the Board.
(c) Committee Discretion Binding. Unless otherwise expressly provided in
the Plan, all designations, determinations, interpretations, and other decisions
under or with respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive, and binding upon all Persons, including the Partnership, any
Affiliate, any Participant, any holder or beneficiary of any Award, any
Unitholder and any Employee or, subject to Section 3(b), Director.
SECTION 4. Units Available for Awards.
(a) Units Available.
(i) Subject to adjustment as provided in Section 4(c), the number of
Units with respect to which Awards may be granted under the Plan shall be 8
million less the excess of (i) the number of Units awarded (and not
forfeited) under the Partnership's Century Club Plan (the "Century Club
Plan) over (ii) the Pre-1997 Century Club Limit, as defined in the Century
Club Plan.
(ii) If, after the effective date of the Plan, any Units covered by an
Award granted under the Plan or by an award granted under any prior Unit
award plan of the Partnership, or to which such an Award or award relates,
are forfeited, or if such an Award or award terminates or is canceled
without the delivery of Units, then the Units covered by such Award or
award, or to which such Award or award relates, or the number of Units
otherwise counted against the aggregate number of Units with respect to
which Awards may be granted, to the extent of any such forfeiture,
termination or cancellation, shall again become Units with respect to which
Awards may be granted. In the event that any Option or other Award granted
hereunder or any award granted under any prior Unit award plan of the
Partnership is exercised through the delivery of Units or in the event that
withholding tax liabilities arising from such Award or award are, with the
approval
I-2
<PAGE> 23
of the Board, satisfied by the withholding of Units by the Partnership, the
number of Units available for Awards under the Plan shall be increased by
the number of Units so surrendered or withheld. Any Units underlying
Substitute Awards shall not be counted against the Units available for
Awards under the Plan.
(b) Units Available for Awards other than Options. Subject to adjustment
as provided in Section 4(c), and except as otherwise expressly provided by the
Board, of the number of Units with respect to which Awards may be granted in
accordance with Section 4(a), the number of Units with respect to which Awards
may be granted under Sections 6(b), (c), or (d) of the Plan shall be 1 million.
If, after the effective date of the Plan, Awards granted under Sections 6(b),
(c), or (d) are forfeited, terminated, or canceled, or if, with the approval of
the Board, Units otherwise deliverable pursuant to such Awards are applied to
satisfy withholding tax liabilities, then the applicable number of Units shall
not be counted against the limit set forth in the preceding sentence, to the
same extent such Units again become Units with respect to which Awards may be
granted under Section 4(a) or are otherwise not counted against the limit set
forth in Section 4(a). Any Units underlying Substitute Awards shall not be
counted against the limit set forth in the first sentence of this Section 4(b).
(c) Adjustments. In the event that the Committee determines that any
distribution (whether in the form of cash, limited partnership interests, other
securities, or other property), recapitalization (including, without limitation,
any subdivision or combination of limited partnership interests),
reorganization, consolidation, combination, repurchase, or exchange of limited
partnership interests or other securities of the Partnership, issuance of
warrants or other rights to purchase limited partnership interests or other
securities of the Partnership, any incorporation of the Partnership, or other
similar transaction or event affects the Units such that an adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee may, if so authorized by the Board, in such
manner as it may deem equitable, adjust any or all of (i) the number of Units or
other securities of the Partnership (or number and kind of other securities or
property) with respect to which Awards may be granted under Sections 4(a) and
4(b), (ii) the number of Units or other securities of the Partnership (or number
and kind of other securities or property) subject to outstanding Awards, and
(iii) the grant or exercise price with respect to any Award, or, if deemed
appropriate, make provision for a cash payment to the holder of an outstanding
Award. In the event of incorporation of the Partnership, the Committee may, if
so authorized by the Board, make such adjustments as it deems appropriate and
equitable with respect to Options for the optionee to purchase stock in the
resulting corporation in place of the Options. Any such adjustment or
arrangement may provide for the elimination without compensation of any
fractional Unit which might otherwise become subject to an Option, and shall be
final and binding upon the optionee.
SECTION 5. Eligibility.
Subject to Section 3(b), any Employee or Director shall be eligible to be
designated a Participant.
SECTION 6. Awards.
(a) Options.
(i) Grant. Subject to the provisions of the Plan, the Committee shall
(subject to Section 3(b)) have sole and complete authority to determine the
Employees and/or Directors to whom Options shall be granted, the number of
Units to be covered by each Option, the exercise price therefor and the
conditions and limitations applicable to the exercise of the Option.
(ii) Exercise Price. Unless otherwise expressly determined or
authorized by the Board, the exercise price of an Option shall be not less
than the Fair Market Value of the Units subject to the Option on the date
the Option is granted.
(iii) Exercise. Unless otherwise determined or authorized by the
Committee, (A) no Option (other than a Restoration Option or an Option that
is a Substitute Award) shall become initially exercisable at a rate in
excess of 20% of the Units subject to the Option on each anniversary of the
date of grant beginning with the first such anniversary, and (B) no Option
shall be exercisable after the expiration of ten years from the date of
grant. The right to exercise an Option shall be cumulative, so that to the
extent that an Option is not
I-3
<PAGE> 24
exercised when it becomes initially exercisable with respect to any Units,
it shall be exercisable with respect to such Units at any time thereafter
until the expiration of the term of the Option. The Committee may impose
such conditions with respect to the exercise of Options, including without
limitation, any relating to the application of federal or state securities
laws, as it may deem necessary or advisable.
(iv) Restoration Options. In the event that any Participant delivers
Units in payment of the exercise price of any Option granted hereunder in
accordance with Section 7(b), or in the event that the withholding tax
liability arising upon exercise of any Option by a Participant is satisfied
through the withholding by the Partnership of Units otherwise deliverable
upon exercise of the Option, the Committee shall have the authority, if so
authorized by the Board, to grant or provide for the automatic grant of a
Restoration Option to such Participant. The grant of a Restoration Option
shall be subject to the satisfaction of such conditions or criteria as the
Committee in its sole discretion shall establish from time to time, to the
extent authorized by the Board. A Restoration Option shall entitle the
holder thereof to purchase a number of Units equal to the number of such
Units so delivered or withheld upon exercise of the original Option, in the
discretion of the Committee. A Restoration Option shall have a per Unit
exercise price and such other terms and conditions as the Committee in its
sole discretion shall determine, to the extent authorized by the Board.
(b) Restricted Units and Phantom Restricted Units.
(i) Grant. Subject to the provisions of the Plan, the Committee shall
(subject to Section 3(b)) have sole and complete authority to determine the
Employees and/or Directors to whom Restricted Units and Phantom Restricted
Units shall be granted, the number of Restricted Units and/or the number of
Phantom Restricted Units to be granted to each Participant, the duration of
the period during which, and the conditions under which, the Restricted
Unit and Phantom Restricted Units may be forfeited to the Partnership, and
the other terms and conditions of such Awards.
(ii) Transfer Restrictions. Restricted Units and Phantom Restricted
Units may not be sold, assigned, transferred, pledged or otherwise
encumbered, except, in the case of Restricted Units, as provided in the
Plan or the applicable Award Agreements. Each certificate issued in respect
of Restricted Units with respect to which transfer restrictions remain in
effect shall bear a legend describing the restrictions to which the
Restricted Units are subject. Upon the lapse of the restrictions applicable
to such Restricted Units, the owner thereof may surrender to the
Partnership the certificate or certificates representing such Units and
receive in exchange therefor a new certificate or certificates representing
such Units free of the legend and a certificate or certificates
representing the remainder of the Units, if any, with the legend.
(iii) Payment. Each Phantom Restricted Unit shall have a value equal
to the Fair Market Value of a Unit. Phantom Restricted Units shall be paid
in Units, other securities or other property, as determined in the sole
discretion of the Committee, upon the lapse of the restrictions applicable
thereto, or otherwise in accordance with the applicable Award Agreement.
(iv) Distributions. Distributions paid on or in respect of any
Restricted Units or Phantom Restricted Units may be paid directly to the
Participant, or may be reinvested in additional Restricted Units or in
additional Phantom Restricted Units, as determined by the Committee in its
sole discretion.
(c) Performance Awards.
(i) Grant. The Committee shall (subject to Section 3(b)) have sole
and complete authority to determine the Employees and/or Directors who
shall receive a "Performance Award", which shall consist of a right which
is (i) denominated in Units, (ii) valued, as determined by the Committee,
in accordance with the achievement of such performance goals during such
performance periods as the Committee shall establish, and (iii) payable at
such time and in such form as the Committee shall determine.
(ii) Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the performance
goals to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award and the amount and
kind of any payment or transfer to be made pursuant to any Performance
Award.
I-4
<PAGE> 25
(iii) Payment of Performance Awards. Performance Awards may be paid
in a lump sum or in installments following the close of the performance
period or, in accordance with procedures established by the Committee, on a
deferred basis.
(d) Other Unit-Based Awards. The Committee shall (subject to Section 3(b))
have authority to grant to eligible Employees and/or Directors an "Other
Unit-Based Award", which shall consist of any right which is (i) not an Award
described in paragraphs (a) through (c) above of this Section 6 and (ii) an
Award of Units or an Award denominated or payable in, valued in whole or in part
by reference to, or otherwise based on or related to, Units (including, without
limitation, securities convertible into Units), as deemed by the Committee to be
consistent with the purposes of the Plan. Subject to the terms of the Plan and
any applicable Award Agreement, the Committee shall determine the terms and
conditions of any such Other Unit-Based Award.
SECTION 7. General Provisions Applicable to Awards.
(a) Awards May be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with, or in substitution for any other Award granted under the Plan or
any award granted under any other plan of the Partnership or any Affiliate.
Awards granted in addition to or in tandem with other Awards or awards granted
under any other plan of the Partnership or any Affiliate may be granted either
at the same time as or at a different time from the grant of such other Awards
or awards.
(b) Forms of Payment by Partnership Under Awards. Subject to the terms of
the Plan and of any applicable Award Agreement and the requirements of
applicable law, payments or transfers to be made by the Partnership or an
Affiliate upon the grant, exercise or payment of an Award may be made in such
form or forms as the Committee shall determine, including Units, other
securities, other Awards or other property, or any combination thereof, and may
be made in a single payment or transfer, in installments, or on a deferred
basis, in each case in accordance with rules and procedures established by the
Committee. Such rules and procedures may include, without limitation, provisions
for the payment or crediting of reasonable interest on installment or deferred
payments.
(c) Limits on Transfer of Awards. Except as otherwise provided by the
Committee with respect to any Award, no Award shall be transferable by a holder
other than by will or the laws of descent and distribution.
(d) Terms of Awards. The term of each Award shall be for such period as
may be determined by the Committee.
(e) Consideration for Grants. Awards may be granted for no cash
consideration, for such nominal cash consideration as may be required by
applicable law or for such greater amount as may be established by the
Committee.
SECTION 8. Amendment and Termination.
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without the approval of the limited partners of the Partnership if
such approval is necessary to comply with any tax or regulatory requirement for
which or with which the Board deems it necessary or desirable to qualify or
comply. Notwithstanding anything to the contrary herein, the Board or, if so
authorized by the Board, the Committee may amend the Plan in such manner as may
be necessary so as to have the Plan conform with local rules and regulations in
any jurisdiction outside the United States.
(b) Amendments to Awards. The Board or, if so authorized by the Board, the
Committee may waive any conditions or rights under, amend any terms of, or
alter, suspend, discontinue, cancel or terminate, any Award theretofore granted,
prospectively or retroactively; provided that any such waiver, amendment,
alteration, suspension, discontinuance, cancellation or termination that would
adversely affect the rights of any Participant or any holder or beneficiary of
any Award theretofore granted shall not to that extent be effective without the
consent of the affected Participant, holder or beneficiary.
I-5
<PAGE> 26
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee is hereby authorized to make adjustments in
the terms and conditions of, and the criteria included in, Awards in recognition
of unusual or nonrecurring events (including, without limitation, the events
described in Section 4(c) hereof) affecting the Partnership, any Affiliate, or
the financial statements of the Partnership or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.
(d) Cancellation. Any provision of this Plan or any Award Agreement to the
contrary notwithstanding, the Committee may, if so authorized by the Board,
cause any Award granted hereunder to be canceled in consideration of a cash
payment or alternative Award made to the holder of such canceled Award equal in
value to the Fair Market Value of such canceled Award.
SECTION 9. Miscellaneous.
(a) No Rights to Awards. No Employee, Director, Participant or other
Person shall have any claim to be granted any Award, and there is no obligation
for uniformity of treatment of Employees, Directors, Participants, or holders or
beneficiaries of Awards. The terms and conditions of Awards need not be the same
with respect to each recipient.
(b) Unit Certificates. All certificates for Units or other securities of
the Partnership or any Affiliate delivered under the Plan pursuant to any Award
or the exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any Unit exchange upon which such Units or other securities are then listed, and
any applicable Federal or state laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to such
restrictions.
(c) Delegation. Subject to the terms of the Plan and applicable law, the
Committee, if so authorized by the Board, may delegate to one or more officers
or managers of the Partnership or any Affiliate, or to a committee of such
officers or managers, the authority, subject to the terms and limitations as the
Committee, as authorized by the Board, shall determine, to grant Awards to, or
to cancel, modify or waive rights with respect to, or to alter, discontinue,
suspend, or terminate Awards held by, Employees who are not officers or
directors of the Partnership for purposes of Section 16 of the Exchange Act, or
any successor section thereto, or who are otherwise not subject to such Section.
(d) Withholding. A Participant may be required to pay to the Partnership
or any Affiliate and the Partnership or any Affiliate shall have the right and
is hereby authorized to withhold from any Award, from any payment due or
transfer made under any Award or under the Plan or from any compensation or
other amount owing to a Participant the amount (in cash, Units, other
securities, other Awards or other property) of any applicable withholding taxes
in respect of an Award, its exercise, or any payment or transfer under an Award
or under the Plan and to take such other action as may be necessary in the
opinion of the Partnership to satisfy all obligations for the payment of such
taxes.
(e) Award Agreements. Each Award hereunder shall be evidenced by an Award
Agreement which shall be delivered to the Participant and shall specify the
terms and conditions of the Award and any rules applicable thereto, including
but not limited to the effect on such Award of the death, retirement or other
termination of employment of a Participant.
(f) No Limit on Other Compensation Arrangements. Nothing contained in the
Plan shall prevent the Partnership or any Affiliate from adopting or continuing
in effect other compensation arrangements, including without limitation any such
arrangements that provide for the grant of options, restricted Units, Units and
other types of Awards provided for hereunder (subject to approval of the limited
partners of the Partnership if such approval is required), and such arrangements
may be either generally applicable or applicable only in specific cases.
(g) No Right to Employment or Directorship. The grant of an Award shall
not be construed as giving a Participant the right to be retained in the employ
of the Partnership or any Affiliate, or to be retained as a
I-6
<PAGE> 27
Director. Further, the Partnership or an Affiliate may at any time dismiss a
Participant from service, free from any liability or any claim under the Plan,
unless otherwise expressly provided in the Plan, in any Award Agreement or in
any other agreement between the Partnership or any Affiliate and the
Participant.
(h) No Rights as Unitholder. Subject to the provisions of the applicable
Award, no Participant or holder or beneficiary of any Award shall have any
rights as a Unitholder with respect to any Units to be distributed under the
Plan until he or she has become the holder of such Units. Notwithstanding the
foregoing, in connection with each grant of a Restricted Unit hereunder, the
applicable Award shall specify if and to what extent the Participant shall not
be entitled to the rights of a Unitholder in respect of such Restricted Unit.
(i) Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the internal laws of the State of New York.
(j) Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to applicable laws, or if it cannot be construed or deemed
amended without, in the determination of the Committee, materially altering the
intent of the Plan of the Award, such provision shall be stricken as to such
jurisdiction, Person or Award and the remainder of the Plan and any such Award
shall remain in full force and effect.
(k) Additional Powers. The Committee may refuse to issue or transfer any
Units or other consideration under an Award if, acting in its sole discretion,
it determines that the issuance or transfer of such Units or such other
consideration might violate any applicable law or regulation or entitle the
Partnership to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Partnership by a Participant, other holder or
beneficiary in connection with the exercise of such Award shall be promptly
refunded to the relevant Participant, holder or beneficiary. Without limiting
the generality of the foregoing, no Award granted hereunder shall be construed
as an offer to sell securities of the Partnership, and no such offer shall be
outstanding, unless and until the Committee in its sole discretion has
determined that any such offer, if made, would be in compliance with all
applicable requirements of the U.S. federal securities laws and any other laws
to which such offer, if made, would be subject.
(l) No Trust or Fund Created. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Partnership or any Affiliate and a Participant or any
other Person. To the extent that any Person acquires a right to receive payments
from the Partnership or any Affiliate pursuant to an Award, such right shall be
no greater than the right of any unsecured general creditor of the Partnership
or any Affiliate.
(m) No Fractional Units. No fractional Units shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Units or whether such fractional Units or any rights thereto
shall be canceled, terminated or otherwise eliminated.
(n) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
SECTION 10. Term of the Plan.
(a) Effective Date. This amended Plan shall be effective as of November
20, 1997, subject to approval by the limited partners of the Partnership within
one year thereafter.
(b) Expiration Date. No Award shall be granted under the Plan after
November 20, 2007. However, unless otherwise expressly provided in the Plan or
in an applicable Award Agreement, any Award theretofore granted may, and the
authority of the Board or the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Award or to waive any conditions or rights
under any such Award shall, extend beyond such date.
I-7
<PAGE> 28
ALLIANCE CAPITAL MANAGEMENT L.P.
INSTRUCTION OF UNITHOLDER OF
ALLIANCE CAPITAL MANAGEMENT L.P. IN CONNECTION WITH
THE SPECIAL MEETING OF LIMITED PARTNERS AND UNITHOLDERS
TO BE HELD ON DECEMBER 16, 1997
THIS FORM OF VOTING INSTRUCTIONS IS
SOLICITED ON BEHALF OF THE PARTNERSHIP
The undersigned hereby instructs Alliance ALP, Inc., the assignor
limited partner (the "Assignor Limited Partner"), of Alliance Capital Management
L.P. (the "Partnership"), to vote the limited partnership interests underlying
all of the units registered in the name of the undersigned at the Special
Meeting of Limited Partners and Unitholders (the "Special Meeting") to be held
at 9:00 a.m. on December 16, 1997 in the Audio Visual Conference Room, 41st
Floor, at 1345 Avenue of the Americas, New York, New York 10105, and at all
adjournments or postponements thereof. The undersigned acknowledges receipt of
the Notice of the Special Meeting and the accompanying Proxy Statement and
hereby instructs the Assignor Limited Partner to vote as indicated hereon.
IF INSTRUCTIONS TO VOTE ARE NOT GIVEN TO THE ASSIGNOR LIMITED PARTNER,
THE LIMITED PARTNERSHIP INTERESTS UNDERLYING THE UNITS HELD BY THE UNDERSIGNED
WILL NOT BE DEEMED REPRESENTED AT THE SPECIAL MEETING FOR PURPOSES OF
DETERMINING WHETHER A QUORUM IS PRESENT AND, ACCORDINGLY, WILL NOT BE VOTED AT
THE SPECIAL MEETING.
PLEASE SIGN AND DATE THIS FORM OF VOTING INSTRUCTIONS
AND RETURN IT IN THE ENCLOSED ENVELOPE.
(Continued and to be signed and dated on reverse side)
<PAGE> 29
1. Proposal to approve and adopt the Partnership's 1997 Long Term Incentive
Plan.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
</TABLE>
2. Proposal to amend the Century Club Plan to increase by 400,000 the number of
Units with respect to which awards may be granted under, and to modify the
amendment procedure of, such plan.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
</TABLE>
SIGNATURE(S) DATE
----------------------------------------- --------------------
Note: In signing as attorney, executor, administrator, trustee or guardian,
please indicate full title as such, and, if signing for a corporation,
please give your title. When Units are in the name of more than one
person, each should sign.
