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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 1999
ALLIANCE CAPITAL MANAGEMENT HOLDING L.P.
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(Exact Name of Registrant as Specified in its Charter)
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<S> <C> <C>
Delaware 1-9818 13-3434400
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(State or Other Jurisdiction of (Commission File Number) (IRS Employer Identification No.)
Incorporation or Organization)
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1345 Avenue of the Americas
New York, New York 10105
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(Address of Principal Executive Offices) (Zip Code)
(212) 969-1000
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(Registrant's telephone number, including area code)
None
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. Other Events.
As previously announced, at a special meeting of unitholders held on
September 22, 1999, the unitholders of Alliance Capital Management Holding
L.P., f/k/a Alliance Capital Management L.P. ("Alliance Holding"), approved
both the transfer of Alliance Holding's business to Alliance Capital
Management L.P., f/k/a Alliance Capital Management L.P. II ("Alliance
Capital"), a newly-formed private limited partnership, in exchange for all
units of Alliance Capital (the "Reorganization") and the amendment and
restatement of Alliance Holding's partnership agreement. In connection with
the Reorganization, Alliance Holding offered to its unitholders the
opportunity to exchange Alliance Holding units for Alliance Capital units on a
one-for-one basis (the "Exchange Offer").
On October 29, 1999, the parties to the litigation brought against Alliance
Holding, Alliance Capital, Alliance Capital Management Corporation (the "General
Partner"), Dave H. Williams, Bruce W. Calvert, Robert H. Joseph, Jr. and John D.
Carifa (together with Alliance Holding, Alliance Capital and the General
Partner, the "Defendants") by R.S.M. Inc. and Mel Mohr, trustee for the Irene
Mohr Revocable Trust (the "Plaintiffs"), purportedly on behalf of themselves and
other unitholders of Alliance Holding, entered into a memorandum of
understanding (the "Memorandum of Understanding") setting forth the parties'
agreement in principle to the terms of a proposed settlement of that action.
Pursuant to the Memorandum of Understanding, Defendants agreed, in order to
avoid the burden, expense and distraction of further litigation and to put to
rest all claims arising out of or relating in any way to the Reorganization, the
Exchange Offer or the amendment and restatement of the Alliance Holding
partnership agreement and the Alliance Capital partnership agreement and to
permit the Reorganization, the Exchange Offer and the amendment and restatement
of both the Alliance Holding partnership agreement and the Alliance Capital
partnership agreement to proceed without risk of injunctive relief, that: (1)
Alliance Holding will amend certain provisions of Sections 6, 7 and 15 of the
Alliance Holding partnership agreement to, among other things, restore the
unanimous vote of partners and unitholders required to continue the partnership
upon certain dissolution events, and Alliance Capital will amend certain
provisions of Sections 6 and 7 of its partnership agreement to, among other
things, permit Alliance Holding's unitholders the same access and inspection
rights with respect to the books and records of Alliance Capital as such
unitholders will have with respect to the books and records of Alliance Holding;
(2) Alliance Holding will disseminate the notice of the settlement to its
unitholders and will pay any attorneys' fees and expenses the Court of Chancery
of the State of Delaware in and for New Castle County (the "Court") may award;
and (3) Plaintiffs and Defendants will attempt in good faith to execute as soon
as practicable a Stipulation of Settlement of all claims asserted in the
Complaint and all other claims, if any, arising out of or relating in any way to
the Reorganization, the Exchange Offer or the amendment and restatement of
either the Alliance Holding partnership agreement or the Alliance Capital
partnership agreement.
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The settlement contemplated in the Memorandum of Understanding is subject
to the consummation of the Reorganization and the Exchange Offer, the completion
by Plaintiffs of appropriate discovery reasonably satisfactory to Plaintiffs'
counsel and final Court approval of the settlement and dismissal of the action
with prejudice and without costs to any party except as provided below. If the
Court approves the settlement that is contemplated in the Memorandum of
Understanding, Defendants and certain of their affiliates will be released from
all claims, whether known or unknown, that were or could have been raised
against them in the action (or that relate in any way to the Reorganization, the
Exchange Offer or the amendment and restatement of either the Alliance Holding
partnership agreement or the Alliance Capital partnership agreement), and the
action will be dismissed with prejudice as to Plaintiffs' and a class consisting
of all Alliance Holding unitholders. In connection with the Court approval of
the settlement contemplated in the Memorandum of Understanding, Plaintiffs'
counsel may apply to the Court for an award of fees and expenses of up to an
aggregate amount of $400,000 which, if awarded, will be paid by Alliance Holding
to Plaintiffs' counsel. Defendants will not oppose any such application for fees
and expenses.
This description of the terms of the proposed settlement is qualified in
its entirety by reference to the complete Memorandum of Understanding, a copy of
which is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
ITEM 7(c). Exhibits.
99.1 Memorandum of Understanding dated October 29, 1999 relating to an
action pending in the Court of Chancery of the State of Delaware
in and for New Castle County titled R.S.M., Inc. et ux v.
Alliance Capital Management L.P., et al., C. A.
No. 17449 NC.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ALLIANCE CAPITAL MANAGEMENT HOLDING L.P.
ALLIANCE CAPITAL MANAGEMENT
CORPORATION, its General Partner
Dated: November 1, 1999 By: /s/ David R. Brewer, Jr.
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Name: David R. Brewer, Jr.
Title: Senior Vice President and
General Counsel
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EXHIBIT 99.1
MEMORANDUM OF UNDERSTANDING
W H E R E A S:
A. There is now pending a putative class action lawsuit in the Court of
Chancery of the State of Delaware in and for New Castle County (the "Court")
entitled R.S.M. Inc., et al. v. Alliance Capital Management L.P., et al., Civil
Action No. 17449-NC (the "Action"), brought on behalf of public unitholders of
Alliance Capital Management L.P. ("Alliance" or the "Partnership");
B. The Complaint challenges a proposed restructuring, publicly announced
on April 8, 1999, in which Alliance would reorganize by establishing a private
partnership to which it would transfer its business in exchange for all units
of the private partnership (the "Reorganization"), and thereafter, through an
exchange offer (the "Exchange Offer"), Alliance would offer its unitholders the
choice of continuing to hold their Alliance units or exchanging their Alliance
units on a one-for-one basis for units in the new private partnership.
C. The Action challenges the vote of the Alliance unitholders taken on
September 22, 1999 alleging, inter alia, that the vote of a majority of
unitholders other than the general partner, Alliance Capital Management
Corporation, or its affiliates was insufficient under the terms of the Alliance
limited partnership agreement (the "Partnership Agreement") to approve a
proposed amendment and restatement of the Partnership Agreement. In addition,
the Complaint alleges, among other things, certain disclosure violations.
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D. Plaintiffs' counsel and counsel for defendants engaged in arm's-length
negotiations concerning a possible settlement of the Action. During these
negotiations, defendants' counsel provided to plaintiffs' counsel information
and analysis regarding the effects of the Reorganization on the rights of
unitholders.
NOW, THEREFORE, counsel for the parties have reached an agreement in
principle providing for the settlement of the Action (the "Settlement") between
and among plaintiffs, on behalf of themselves and the putative class of persons
defined in paragraph 5(a) below, on behalf of whom plaintiffs have brought the
Action, and defendants on the terms and subject to the conditions set forth
below:
1. Section 15.01(b) of the Partnership Agreement will be amended to
substitute "15.01(a)(i), 15.01(a)(ii), 15.01(a)(v) or 15.01(a)(viii)" for
"15.1(a)(ii), 15.1(a)(iii), 15.1(a)(vi) or 15.1(a)(ix)" and will not otherwise
be amended in connection with the Reorganization and will continue to require a
unanimous vote of all partners and unitholders to continue the Partnership
following the events of dissolution enumerated in Section 15.01(b).
2. The Partnership and Alliance Capital Management L.P. II ("Alliance
Capital") agree that after the Reorganization, the Partnership's unitholders
will have the same access and inspection rights with respect to books and
records for Alliance Capital as they will have for Alliance, and the
Partnership Agreement and the Alliance Capital agreement of limited partnership
will each be amended prior to or simultaneously with the Reorganization
consistent with Annex A hereto.
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3. In connection with the Reorganization, Alliance proposed to add a new
Section 6.08(c) to the Partnership Agreement and to include an identical
6.08(c) in the Alliance Capital agreement of limited partnership. The
Partnership and Alliance Capital agree that the second sentence of Section
6.08(c) in the Partnership Agreement and Section 6.08(c) of the Alliance
Capital agreement of limited partnership shall be amended to read, "The
provisions of this Agreement shall be given effect as permitted in the Delaware
Act."
4. The costs of providing notice of the Settlement to unitholders, and any
attorneys' fees and expenses awarded by the Court pursuant to Paragraph 5(f)
hereof, shall be paid by the Partnership.
5. The parties to the Action will attempt in good faith to agree upon and
execute as soon as practicable (i) an appropriate Stipulation of Settlement
(the "Stipulation") of all claims asserted in the Complaint filed in the Action
and all other claims (as described hereinafter), if any, arising out of or
relating, in whole or in part, to the Reorganization, the amendment and
restatement of the Partnership Agreement or the Exchange Offer, including
without limitation the Partnership's solicitation of unitholder approval of the
Reorganization and the amendment and restatement of the Partnership Agreement,
and (ii) such other documentation as may be required in order to obtain any and
all necessary or appropriate Court approvals of the Stipulation, upon and
consistent with the terms set forth in this Memorandum of Understanding,
including that in exchange for the consideration set forth above, the
Stipulation shall provide for the dismissal of
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all such claims with prejudice and without costs to any party (except as set
forth in Paragraphs 4 and 5(f) herein). The Stipulation will also expressly
provide, inter alia:
a. for class certification pursuant to Delaware Court of Chancery Rule
23(b)(1) and (b)(2) of a class consisting of all record holders and beneficial
owners of the units of the Partnership on any day during the period from April
8, 1999 (the date that the Reorganization was publicly announced) to and
including the effective date of consummation of the Reorganization (other than
defendants) including the legal representatives, heirs, successors in interest,
transferees and assigns of all such foregoing holders and/or owners, immediate
and remote (the "Class");
b. that all defendants have denied, and continue to deny, that they have
committed any violations of law and that they are entering into the Stipulation
solely because the proposed Settlement would eliminate the burden, expense, and
distraction of further litigation, and would permit the Reorganization, the
amendment and restatement of the Partnership Agreement and the Exchange Offer
to proceed without risk of injunctive or other relief;
c. for the release of all claims, rights, demands, suits, matters, issues
or causes of action, whether known or unknown, of plaintiffs and of all Class
members against all defendants, AXA, AXA Financial, Inc., The Equitable Life
Assurance Society of the United States and any of their respective present or
former officers, directors, employees, agents, attorneys, advisors, insurers,
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accountants, trustees, financial advisors, commercial bank lenders, persons who
provided fairness opinions, investment bankers, associates, representatives,
affiliates, parents, subsidiaries (including the directors and officers of such
affiliates, parents, and subsidiaries), general partners, limited partners,
partnerships, heirs, executors, personal representatives, estates,
administrators, successors and assigns (collectively, "Defendants'
Affiliates"), whether under state or federal law, including the federal
securities laws, and whether directly, derivatively, representatively or
arising in any other capacity, in connection with, or that arise out of, any
claim that was or could have been brought in the Action, or that arise now or
hereafter out of, or that relate in any way to, the acts, facts or the events
alleged in the Action, including without limitation, the Reorganization, the
amendment and restatement of the Partnership Agreement, the Exchange Offer, the
negotiation and consideration of the Reorganization and any agreements and
disclosures relating thereto, the negotiation and consideration of the Exchange
Offer and any agreements and disclosures relating thereto, the vote of
unitholders obtained to approve the Reorganization and the amendment and
restatement of the Partnership Agreement and any agreements and disclosures
relating thereto, and any acts, facts, matters, transactions, occurrences,
conduct or representations relating to or arising out of the subject matter
referred to in the Action, and the fiduciary and disclosure obligations of any
of the defendants (or other persons to be released) with respect to any of the
foregoing (whether or not such claim could have been asserted in the Action);
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d. that the Settlement shall be subject to completion by plaintiffs of
reasonable discovery in the Action reasonably satisfactory to plaintiffs'
counsel including but not limited to (i) information with respect to how the
annual advisory fee payable to Alliance Capital was determined; (ii) the results
of the vote of limited partners and unitholders; (iii) defendants' analysis,
including communications with the SEC, regarding why the Reorganization is not a
"roll up transaction" under applicable securities laws and regulations; and (iv)
information regarding why the percentage necessary to call a meeting of Alliance
unitholders was increased from 25% to 50%;
e. that the parties to the Action will present the Settlement to the Court
for hearing and approval as soon as practicable and, following appropriate
notice to members of the Class, will use their best efforts to obtain final
Court approval of the Settlement, and the release and the dismissal of the
Action with prejudice as against plaintiffs and the Class, without awarding
costs to any party (except as provided for in Paragraphs 4 and 5(f) herein). As
used in this Memorandum of Understanding, "final Court approval of the
Settlement" means that the Court has entered an Order approving the Settlement
in accordance with the Stipulation, and that Order is finally affirmed on
appeal or is no longer subject to appeal;
f. that plaintiffs' counsel of record in the Action may jointly apply to
the Court for an award of attorneys' fees not to exceed $390,000 and
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costs not to exceed $10,000 (including, but not limited to, fees and expenses
of plaintiffs' counsel's independent financial advisor, but not including costs
of providing Notice of the Settlement). Defendants agree that they will not
oppose such application. If the Court finally approves the settlement and
dismisses the action with prejudice in accordance with the Stipulation of
Settlement, the Partnership shall within ten business days of final Court
approval of the settlement and dismissal of the Action, pay to plaintiffs'
counsel any fees or expenses awarded by the Court. Plaintiffs' counsel's
application for fees and expenses shall be presented to the Court at the same
time as the Settlement is presented to the Court; and
g. that plaintiffs accept defendants' position that the changes to the
Partnership Agreement agreed to by the parties are changes which may be
implemented by the General Partner without a vote of Alliance's unitholders or
limited partners, pursuant to the Partnership Agreement.
6. This Memorandum of Understanding shall be null and void and of no force
and effect if: (a) either the Reorganization or the Exchange Offer are not
effectuated for any reason whatsoever; or (b) final Court approval of the
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Settlement does not occur for any reason. In any such event, this Memorandum of
Understanding shall not be deemed to prejudice in any way the respective
positions of the parties with respect to the Action, and neither the existence
of this Memorandum of Understanding nor its contents shall be admissible in
evidence or shall be referred to for any purpose in the Action or in any other
litigation or judicial proceeding.
7. This Memorandum of Understanding may be executed in counterpart by any
of the signatories hereto, including by facsimile, and as so executed shall
constitute one agreement.
8. This Memorandum of Understanding and the Settlement contemplated by it
shall be governed by, and construed in accordance with, the laws of the State
of Delaware, without regard to Delaware's conflict of law rules.
9. This Memorandum of Understanding may be modified or amended only by a
writing signed by the signatories hereto.
10. This Memorandum of Understanding shall be binding upon and inure to
the benefit of the parties and their respective agents, executors, heirs,
successors and assigns.
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Dated: /s/ Craig B. Smith
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Craig B. Smith
Smith, Katzenstein & Furlow, LLP
800 Delaware Avenue
P. O. Box 410
Wilmington, DE 19899
(302) 652-8400
Attorney for Plaintiffs
OF COUNSEL:
Stuart Wechsler, Esq.
Wechsler Harwood Halebian & Feffer LLP
488 Madison Avenue, 8th Floor
New York, NY 10022
(212) 935-7400
/s/ A. Gilchrist Sparks, III
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A. Gilchrist Sparks, III
Alan J. Stone
MORRIS, NICHOLS, ARSHT & TUNNELL
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899
(302) 658-9200
Attorneys for Certain Defendants
OF COUNSEL:
Dennis Glazer, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
(212) 450-4000
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/s/ Charles F. Richards, Jr.
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Charles F. Richards, Jr.
Srinivas M. Raju
Richards, Layton & Finger
One Rodney Square
P. O. Box 551
Wilmington, DE 19899
(302) 658-6548
Attorneys for Certain Defendants
OF COUNSEL:
Leon Gold, Esq.
Proskauer Rose LLP
1585 Broadway
New York, NY 10036-8299
(212) 969-3000
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ANNEX A
ALLIANCE HOLDING PARTNERSHIP AGREEMENT
SECTION 7.05. Rights of Limited Partners and Unitholders Relating to the
Partnership and Alliance Capital. In addition to other rights provided by this
Agreement or by applicable law, the Limited Partners and Unitholders shall have
the following rights relating to the Partnership and Alliance Capital:
(a) Each Limited Partner and Unitholder, and each Limited Partner's and
Unitholder's duly authorized representatives, shall have the right upon
reasonable notice and at reasonable times and at such Limited Partner's or
Unitholder's own expense, but only upon written request and for a purpose
reasonably related to such Person's interest as a Limited Partner or
Unitholder, (i) to have reasonable information regarding the status of the
business and financial condition of the Partnership, (ii) to inspect and copy
the books of the Partnership and other reasonably available records and
information concerning the operation of the Partnership, including the
Partnership's federal, state and local income tax returns for each year, (iii)
to have on demand a current list of the full name and last known business,
residence or mailing address of each Limited Partner and Unitholder, (iv) to
have reasonable information regarding the Net Value of any Contribution made by
any Partner or Unitholder and the date on which each such Person became a
Partner or Unitholder, (v) to have a copy of this Agreement and the Certificate
of Limited Partnership and all amendments thereto, and (vi) to have any other
information regarding the affairs of the Partnership as is just and reasonable.
(b) Anything in Section 7.05(a) to the contrary notwithstanding, the
General Partner may keep confidential from the Limited Partners and
Unitholders, and each Limited Partner's and Unitholder's duly authorized
representatives, for such period of time as the General Partner deems
reasonable, any information that the General Partner reasonably believes to be
in the nature of trade secrets or other information the disclosure of which the
General Partner in good faith believes is not in the best interests of the
Partnership or could damage the Partnership or its business or which the
Partnership is required by law or by agreements with third parties to keep
confidential.
(c) In addition to the rights described in Section 7.05(a), each Limited
Partner and Unitholder, and each Limited Partner's and Unitholder's duly
authorized representatives, shall have the right upon reasonable notice and at
reasonable times and at such Limited Partner's or Unitholder's own expense, but
only upon written request and for a purpose reasonably related to such Person's
interest as a Limited Partner or Unitholder, to obtain information regarding
the operation and affairs of Alliance Capital in accordance with the provisions
of
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Section 7.05 of the Alliance Capital Partnership Agreement and to have a copy
of the Alliance Capital Partnership Agreement and the certificate of limited
partnership of Alliance Capital and all amendments thereto.
ALLIANCE CAPITAL PARTNERSHIP AGREEMENT
SECTION 7.05. Rights of Limited Partners and Alliance Holding Unitholders
and Limited Partners Relating to the Partnership. In addition to other rights
provided by this Agreement or by applicable law, the Limited Partners and the
holders of Alliance Holding LP Units, and limited partnership interests shall
have the following rights relating to the Partnership:
(a) Each Limited Partner and each holder of Alliance Holding LP Units
and limited partnership interests, and each of their duly authorized
representatives, shall have the right upon reasonable notice and at reasonable
times and at such Person's own expense, but only upon written request and for a
purpose reasonably related to such Person's interest as a Limited Partner or
holder of Alliance Holding LP Units or limited partnership interests, as the
case may be, (i) to have reasonable information regarding the status of the
business and financial condition of the Partnership, (ii) to inspect and copy
the books of the Partnership and other reasonably available records and
information concerning the operation of the Partnership, including the
Partnership's federal, state and local income tax returns for each year, (iii)
to have on demand a current list of the full name and last known business,
residence or mailing address of each Limited Partner, (iv) to have reasonable
information regarding the Net Value of any Contribution made by any Partner and
the date on which each such Person became a Partner, (v) to have a copy of this
Agreement and the Certificate of Limited Partnership and all amendments
thereto, and (vi) to have any other information regarding the affairs of the
Partnership as is just and reasonable.
(b) Anything in Section 7.05(a) to the contrary notwithstanding, the
General Partner may keep confidential from the Limited Partners and the holders
of Alliance Holding LP Units and limited partnership interests, and each of
their duly authorized representatives, for such period of time as the General
Partner deems reasonable, any information that the General Partner reasonably
believes to be in the nature of trade secrets or other information the
disclosure of which the General Partner in good faith believes is not in the
best interests of the Partnership or could damage the Partnership or its
business or which the Partnership is required by law or by agreements with
third parties to keep confidential.
