AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 24, 1996
REGISTRATION NO. 333-03224
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE EQUITABLE COMPANIES INCORPORATED
(Exact name of registrant as specified in its charter)
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<TABLE>
<S> <C> <C>
DELAWARE 787 SEVENTH AVENUE 13-3623351
(State or other jurisdiction NEW YORK, NEW YORK 10019 (I.R.S. Employer
of (212) 554-1234 Identification Number)
incorporation or
organization)
</TABLE>
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
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ROBERT E. GARBER, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
THE EQUITABLE COMPANIES INCORPORATED
787 SEVENTH AVENUE
NEW YORK, NEW YORK 10019
(212) 554-1234
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
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PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO:
MICHAEL W. BLAIR, ESQ.
DEBEVOISE & PLIMPTON
875 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 909-6000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time as determined by market conditions, after the effective date of this
Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. X
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED MAY 24, 1996
11,940,299 SHARES
THE
EQUITABLE
COMPANIES INCORPORATED
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
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This Prospectus relates to the resale, from time to time, by The Chase
Manhattan Bank, N.A., acting solely as trustee (the "SECT Trustee") of The
Equitable Companies Incorporated Stock Trust (the "SECT Trust" or "Selling
Stockholder"), of up to 11,940,299 shares (the "Offered Shares") of Common
Stock, $.01 par value ("Common Stock"), of The Equitable Companies Incorporated
(the "Company"). The Offered Shares were or will be issued to the SECT Trust
upon conversion of certain shares of the Company's Series D Convertible
Preferred Stock sold in a private transaction by the Company to the SECT Trust
in 1993. The SECT Trust was established to provide a source of funding for a
portion of the obligations arising under certain employee compensation and
benefit programs of the Company's subsidiaries (the "Plans"). A committee (the
"Committee") comprised of officers, directors and/or employees of the Company,
its subsidiaries or companies affiliated with AXA, the Company's largest
stockholder, will give instructions to the SECT Trustee concerning the time and
manner of sale or disposition of the Offered Shares. See "Selling Stockholder"
and "Plan of Distribution".
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE OFFERED
SHARES.
The Common Stock of the Company is listed on the New York Stock Exchange
(the "NYSE") under the symbol "EQ".
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The Offered Shares may be sold from time to time to or through underwriters,
through dealers or agents or directly to purchasers, in transactions on the NYSE
or on other exchanges on which the Common Stock may be traded, in the
over-the-counter market, through negotiated transactions or otherwise, at market
prices prevailing at the time of sale or at other prices. See "Plan of
Distribution".
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The date of this Prospectus is , 1996.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
FOR NORTH CAROLINA INVESTORS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA,
NOR HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR ADEQUACY OF
THIS DOCUMENT.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, NW,
Judiciary Plaza, Washington, D.C. 20549 and at the regional offices of the
Commission located at 7 World Trade Center, 13th Floor, Suite 1300, New York,
New York 10048 and Suite 1400, Northwest Atrium Center, 14th Floor, 500 West
Madison Street, Chicago, Illinois 60611. Copies of such material can also be
obtained at prescribed rates by writing to the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
In addition, such reports, proxy statements and other information can be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with any amendments thereto, the "Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the securities offered hereby. This Prospectus, which constitutes a part of the
Registration Statement, omits certain information contained in the Registration
Statement as permitted by the rules and regulations of the Commission. For
further information with respect to the Company and the securities offered
hereby, reference is made to the Registration Statement and the exhibits and the
financial statements, notes and schedules filed as a part thereof or
incorporated by reference therein, which may be inspected at the public
reference facilities of the Commission, at the addresses set forth above.
Statements made in this Prospectus concerning the contents of any documents
referred to herein are not necessarily complete, and in each instance are
qualified in all respects by reference to the copy of such document filed as an
exhibit to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated into this Prospectus by reference:
1. the Company's Annual Report on Form 10-K for the year ended December
31, 1995 (the "1995 10-K");
2. the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996 (the "First Quarter 10-Q"); and
3. the Company's Registration Statement on Form 8-A, dated May 26, 1992,
incorporating the description of the Company's Common Stock in the
Company's Registration Statement on Form S-1 (Registration No.
33-48115).
All documents or reports subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and
prior to the termination of the offering described herein shall be deemed to be
incorporated by reference into this Prospectus and to be a part of this
Prospectus from the date of filing of such document. Any statement contained
herein, or in a document all or a portion of which is incorporated or deemed to
be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of the Registration
Statement or this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference (other than
exhibits not specifically incorporated by reference into the texts of such
documents). Requests for such documents should be directed to: The Equitable
Companies Incorporated, 787 Seventh Avenue, New York, New York 10019 Attention:
Corporate Secretary (telephone (212) 554-1234).
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<PAGE>
THE EQUITABLE
For the purpose of this Prospectus, the term "The Equitable" refers to The
Equitable Companies Incorporated (the "Company") and its subsidiaries.
The Equitable is a diversified financial services organization serving a
broad spectrum of insurance, investment management and investment banking
customers. The Equitable Life Assurance Society of the United States ("Equitable
Life"), a subsidiary of the Company, was established in the State of New York in
1859. For more than 100 years it has been among the largest life insurance
companies in the United States. Equitable Life and the Company's other insurance
subsidiaries distribute a variety of insurance, annuity and investment products
through a career agency force, which at March 31, 1996 consisted of over 7,200
professional insurance agents.
At March 31, 1996, the Company's holdings in its investment subsidiaries
included an approximately 80% interest in Donaldson, Lufkin & Jenrette, Inc.
("DLJ"), an approximately 58% interest in Alliance Capital Management L.P.
("Alliance") and a 100% interest in Equitable Real Estate Investment Management,
Inc. ("Equitable Real Estate"). The Company's investment subsidiaries provide
investment management and investment banking services to institutional and
individual clients, including the Company's insurance subsidiaries.
The Company is a Delaware corporation. The following chart sets forth the
organization of the Company and its principal subsidiaries at March 31, 1996.
<TABLE>
<S> <C> <C> <C>
The Equitable Companies
Incorporated
The Equitable Life
Assurance Society of DLJ (approximately 44% owned)
the United States
Insurance Investment
Subsidiary Subsidiaries
</TABLE>
<TABLE>
<S> <C>
. Equitable Variable . DLJ (approximately 36% owned)
Life Insurance . Alliance (approximately 58% owned)
Company ("EVLICO") . Equitable Real Estate
</TABLE>
AXA is the Company's largest stockholder, beneficially owning at March 31,
1996 60.7% of the outstanding shares of Common Stock and $392.2 million of the
Company's Series E Convertible Preferred Stock. The Company's principal
headquarters are located at 787 Seventh Avenue, New York, New York 10019
(telephone (212) 554-1234).
BUSINESS
The Equitable is engaged in two related financial services businesses: an
insurance business, which is comprised of an Individual Insurance and Annuities
segment and a Group Pension segment, and operates through the Insurance Group
(consisting principally of Equitable Life and EVLICO); and an investment
management and investment banking business, which comprises the Investment
Services segment and operates through the Investment Subsidiaries (consisting of
DLJ, Alliance and Equitable Real Estate).
3
<PAGE>
INSURANCE BUSINESS
Insurance operations accounted for $3.60 billion, or approximately 49.5% of
consolidated revenues for the year ended December 31, 1995. The Insurance Group
offers a variety of products which include traditional, variable and
interest-sensitive life insurance products, annuity products and mutual fund and
other investment products. The Insurance Group emphasizes the sale of individual
variable and interest-sensitive life insurance and annuity products. The
Insurance Group maintains a substantial market share in sales of individual
variable life insurance in the United States and also maintains a strong
position in the market for individual variable annuity products. This segment
also includes the Insurance Group's Separate Accounts for certain individual
insurance and annuity products in which customers may invest their accumulated
policy funds.
The Equitable believes the experience and training of its career agency
force constitutes a key competitive advantage in the sale of the Insurance
Group's sophisticated insurance products, including variable life insurance and
annuity products which offer a broad range of investment options. At December
31, 1995, the Insurance Group led the insurance industry in the number of agents
and employees who hold both the Chartered Life Underwriter (CLU) and Chartered
Financial Consultant (ChFC) designation.
As of the date of this Prospectus, the financial strength or claims-paying
rating of each of Equitable Life and EVLICO was "AA-" from Standard & Poor's
Corporation (4th highest rating of 18) and Duff & Phelps Inc. (4th highest
rating of 18), "A" from A.M. Best Company, Inc. (3rd highest rating of 15), "A1"
from Moody's Investors Service, Inc. (5th highest rating of 19) and AA from
Fitch Investors Service, L.P. (3rd highest rating of 18).
INVESTMENT BUSINESS
The Investment Services segment, which accounted for $3.69 billion, or
approximately 50.8%, of consolidated revenues for the year ended December 31,
1995, provides investment management, investment banking, securities transaction
and brokerage services to both corporate and institutional clients, including
the Insurance Group, and to high net worth individuals.
The Investment Subsidiaries have steadily added to third party assets under
management, while continuing to provide investment management services to the
Insurance Group. Of the $212.05 billion of assets under management at March 31,
1996, $161.23 billion (76.0%) were managed by the Investment Subsidiaries for
third parties, including domestic and overseas investors, mutual funds, pension
funds, endowment funds and, through the Insurance Group's Separate Accounts,
insurance and annuity customers of the Insurance Group. During 1995,
approximately $128.2 million (17.3%) of the fees earned by the Investment
Subsidiaries from asset management consisted of fees for services provided to
the Insurance Group.
DLJ is a leading integrated investment and merchant bank that serves
institutional, corporate, governmental and individual clients both domestically
and internationally. DLJ's businesses include securities underwriting, sales and
trading; merchant banking; financial advisory services; investment research;
correspondent brokerage services; and asset management. DLJ's revenues for the
year ended December 31, 1995 were $2.76 billion. DLJ conducts its operations
through three principal operating groups: the Banking Group, the Capital Markets
Group and the Financial Services Group. The Banking Group includes the
investment banking, merchant banking and recently formed emerging markets
divisions. The Capital Markets Group is comprised of DLJ's fixed income,
institutional equities and equities derivatives divisions, as well as Sprout,
its venture capital affiliate. The Financial Services Group is comprised of its
Pershing clearing division, its investment services group and Wood Struthers &
Winthrop, which provides investment management and trust services primarily to
high-net-worth individual investors and institutions. DLJ's business also
includes its Autranet subsidiary, a distributor of investment research products.
4
<PAGE>
Alliance is one of the largest investment advisors in the United States and
provides diversified investment management services to a variety of institutions
including The Equitable, as well as to individual investors through a broad line
of mutual funds. Alliance had assets under management at March 31, 1996 of
$163.02 billion (including $141.05 billion for third party clients).
Equitable Real Estate is the largest United States manager of tax-exempt
assets invested in real estate, with total assets under management of $25.10
billion at March 31, 1996 (including $13.50 billion for third party clients).
Equitable Real Estate provides real estate investment management services,
property management services, mortgage servicing, loan asset management,
mortgage loan origination and agricultural investment management. In addition,
Equitable Real Estate has capabilities in a variety of other major real estate
disciplines, including acquisitions and financings, portfolio management, asset
management, appraisals, asset dispositions and workouts, and capital markets.
RISK FACTORS
In addition to the other information contained in this Prospectus, the
following factors should be carefully considered prior to deciding whether or
not to purchase the Offered Shares.
INVESTMENT ASSETS
As of March 31, 1996, commercial mortgages and equity real estate comprised
12.2% ($4.54 billion) and 13.8% ($5.14 billion), respectively, of the $37.34
billion aggregate amortized cost net of valuation allowances ("net amortized
cost") of assets held in the Insurance Group's General Account ("General Account
Investment Assets") and assets held in the General Account associated with the
Insurance Group's discontinued guaranteed investment contract ("GIC") Segment
("GIC Segment Investment Assets"). Since December 31, 1990, The Equitable has
substantially reduced its exposure to commercial mortgages. The percentage of
General Account and GIC Segment Investment Assets represented by The Equitable's
equity real estate portfolio has increased modestly since December 31, 1990,
primarily due to the acquisition of properties through foreclosure. At March 31,
1996, the equity real estate portfolio included properties acquired as
investment real estate having an aggregate amortized cost of $3.88 billion
(74.6% of the aggregate amortized cost of all equity real estate held) and
properties acquired through foreclosure (including in-substance foreclosure)
having an aggregate amortized cost of $1.32 billion (25.4% of the aggregate
amortized cost of all equity real estate held). It is management's continuing
objective to reduce the size of the equity real estate portfolio relative to
total assets over the next several years. Management anticipates that reductions
will depend on real estate market conditions, the level of mortgage foreclosures
and expenditures required to fund necessary or desired improvements to
properties. There can be no assurance The Equitable will not realize investment
losses in connection with future sales of equity real estate.
Since 1990, General Account and GIC Segment Investment Assets have included
a large amount of problem, potential problem and restructured assets,
particularly problem commercial mortgages and restructured commercial mortgages.
While the amounts of problem, potential problem and restructured commercial
mortgages have decreased significantly since the beginning of 1992, both the
General Account and GIC Segment portfolios continue to have a significant amount
of such commercial mortgages. At March 31, 1996, these commercial mortgages
aggregated $1.15 billion (3.1% of the aggregate amortized cost of General
Account and GIC Segment Investment Assets). In the last three quarters of 1996,
approximately $754.1 million of commercial mortgage principal payments are
scheduled, including $682.9 million of payments at maturity on commercial
mortgage balloon loans. An additional $1.24 billion of payments at maturity on
commercial mortgage balloon loans are scheduled in 1997 and 1998. Depending on
market conditions and lending practices in future years, many maturing
commercial mortgages may have to be refinanced, restructured or foreclosed upon.
5
<PAGE>
Since 1990, The Equitable has recognized significant additions to asset
valuation allowances and writedowns on commercial mortgages and equity real
estate. At March 31, 1996, such asset valuation allowance balances for
continuing and discontinued operations totaled $176.0 million. As a result of
the adoption of SFAS No. 121 on January 1, 1996, $224.3 million of asset
valuation allowances related to equity real estate were released and impairment
losses of $219.4 million were recognized on equity real estate held and used.
The determination of asset valuation allowances and writedowns requires numerous
forecasts and the exercise of a significant degree of judgment, and is an
inherently subjective process. No assurance can be given as to the amount of
future writedowns and additions to the asset valuation allowances. For more
information concerning The Equitable's General Account Investment Assets and GIC
Segment Investment Assets, including problem, potential problem and restructured
investments and asset valuation allowances, see "Management's Discussion and
Analysis of Financial Condition and Results of Operations-- Continuing
Operations Investment Portfolio" in the First Quarter 10-Q and the 1995 10-K and
Note 8 of Notes to Consolidated Financial Statements in the First Quarter 10-Q.
At March 31, 1996 the net amortized cost of below investment grade fixed
maturities in General Account and GIC Segment Investment Assets (including
redeemable preferred stock) was $2.54 billion (representing 6.8% of the net
amortized cost of all General Account and GIC Segment Investment Assets). See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Continuing Operations Investment Portfolio" in the First Quarter
10-Q and the 1995 10-K, Note 8 of Notes to Consolidated Financial Statements in
the First Quarter 10-Q and Note 3 of Notes to Consolidated Financial Statements
in the 1995 10-K.
DISCONTINUED GIC SEGMENT
At March 31, 1996, $1.40 billion of liabilities in the GIC Segment were
outstanding to contract holders as compared to $14.29 billion at December 31,
1986. The GIC Segment had total assets of $3.69 billion at March 31, 1996 which
are not reflected in total assets within The Equitable's consolidated balance
sheet but are netted against total GIC Segment liabilities. The Equitable
experienced pre-tax losses in the GIC Segment of $10.4 million, $19.6 million,
$25.1 million, $21.7 million and $24.7 million in the three months ended March
31, 1996 and 1995 and for the years 1995, 1994 and 1993, respectively. All such
pre-tax losses were charged to the GIC Segment loss allowances. Management
believes the aggregate loss allowances for GICs and Wind-Up Annuities ($151.2
million at March 31, 1996) are adequate to provide for all future losses.
However, the determination of loss allowances involves numerous estimates and
subjective judgments regarding the expected performance of GIC Segment
Investment Assets, including assumed improvements over time in the returns on
equity real estate compared to recent periods. If the investment results on GIC
Segment Investment Assets were to be worse than the assumptions underlying the
loss allowances, the GIC Segment could produce losses in excess of such loss
allowances. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations-- Discontinued Operations--GIC Segment" in the 1995 10-K
and Note 8 of Notes to Consolidated Financial Statements in the First Quarter
10-Q.
VOLATILE NATURE OF SECURITIES BUSINESS
In recent periods, DLJ has contributed a significant portion of The
Equitable's earnings. In October, 1995 DLJ completed an initial public offering
which reduced The Equitable's ownership position in DLJ common stock to
approximately 80%. Assuming full vesting of certain forfeitable restricted stock
units and the exercise of stock options granted to certain DLJ employees in
connection with the offering (but excluding any shares issued under employee
stock options granted after March 31, 1996), The Equitable's ownership position
in DLJ common stock would be reduced to approximately 63%. DLJ's principal
business activities, investment and merchant
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<PAGE>
banking, securities sales and trading and correspondent brokerage services are,
by their nature, highly competitive and subject to general market conditions,
volatile trading markets and fluctuations in the volume of market activity.
Consequently, DLJ's net income and revenue have been, and are likely to continue
to be, subject to wide fluctuations, reflecting the impact of many factors
beyond DLJ's control, including securities market conditions, the level and
volatility of interest rates, competitive conditions and the size and timing of
transactions. There can be no assurance that such fluctuations in DLJ's earnings
will not affect the level of The Equitable's future earnings. The securities
industry generally experienced favorable market conditions in 1995, as strong
rallies in the stock and bond markets and strong trading volumes on all major
exchanges led to increased merger and acquisition activity as well as
underwriting activity. Through March 31, 1996, these favorable conditions have
continued. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Combined Results of Continuing Operations by Segment--
Investment Services" in the First Quarter 10-Q and the 1995 10-K.
PAYMENT OF DIVIDENDS AND LIQUIDITY
The Company's ability to make cash payments with respect to its securities,
including the payment of dividends on its Common Stock, depends on the
availability of adequate sources of funds. The New York Insurance Law gives the
Superintendent of Insurance of the State of New York (the "New York
Superintendent") broad discretion in determining whether the financial condition
of a New York domiciled insurer, such as Equitable Life, supports the payment of
dividends to its shareholders. Dividends from Equitable Life are not expected to
be a source of liquidity for the Company for several years. Management believes
the Company's primary sources of liquidity will be sufficient to meet its cash
requirements for several years. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital Resources--
Liquidity Requirements" and "--Liquidity Sources" in the 1995 10-K.
RATINGS
Ratings are an important factor in establishing the competitive position of
insurance companies. A significant downgrade in the financial strength or
claims-paying ratings of Equitable Life or EVLICO could have a material adverse
effect on the Insurance Group's business, liquidity and results of operations.
For a discussion of the Insurance Group's current ratings, see "Business--
Competition" in the 1995 10-K.
RISK-BASED AND STATUTORY CAPITAL
Since 1993, life insurers, including Equitable Life and EVLICO, have been
subject to certain risk-based capital ("RBC") guidelines. The RBC guidelines
provide a method to measure the adjusted capital (statutory capital and surplus
plus the asset valuation reserve and other adjustments) that a life insurance
company should have for regulatory purposes, taking into account the risk
characteristics of the company's investments and products. A life insurance
company's RBC ratio will vary over time depending upon many factors, including
its earnings, the mix of assets in its investment portfolio, the nature of the
products it sells and its rate of sales growth. Under the RBC formula, Equitable
Life's year-end RBC ratio depends in part on the closing price of units
representing assignments of beneficial ownership of limited partnership
interests in Alliance (the "Alliance Units") on the last trading day of the
year. At December 31, 1995, the valuation formula for Alliance Units increased
the statutory carrying value of Equitable Life's investment in Alliance Units to
$914.3 million from $736.4 million at December 31, 1994. The RBC guidelines are
intended to be a regulatory tool only, and are not intended as a means to rank
insurers generally. However, comparisons of RBC ratios of life insurers have
become generally available. Equitable Life and
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EVLICO were above their target RBC ratios at year-end 1995. Management believes
that principally because of the RBC formula's treatment of Equitable Life's
large holdings of subsidiary common stock (including its interests in Alliance,
DLJ, and Equitable Real Estate), equity real estate and mortgages, Equitable
Life's year end 1995 RBC ratio was lower than those of its competitors in the
life insurance industry. See "Business--Regulation--Insurance--Risk Based
Capital" in the 1995 10-K.
The NAIC has undertaken a comprehensive codification of statutory accounting
practices for insurers. The resulting changes, once the codification project has
been completed and the new principles adopted and implemented, could have a
significant adverse effect on the Insurance Group's statutory results and
financial position. The codification project is not expected to be completed
prior to 1997.
CHANGES IN INTEREST RATES
Changes in prevailing interest rates can affect both the Insurance Group's
investment results and its results of operations. For a discussion of the
effects on the Insurance Group of changes in prevailing interest rates, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Continuing Operations--Individual Insurance and Annuities--Margins
on Individual Insurance and Annuity Products" in the 1995 10-K.
PRINCIPAL STOCKHOLDER
AXA is the Company's largest stockholder, beneficially owning at March 31,
1996 (i) 60.7% of the outstanding shares of Common Stock (63.8% assuming
conversion of the Company's convertible preferred stock owned by AXA) and (ii)
$392.2 million of the Company's Series E Convertible Preferred Stock.
Accordingly, AXA currently beneficially owns, without acquiring any additional
shares of Common Stock, shares of Common Stock in an amount sufficient to permit
it to control the outcome of any stockholder vote, including any vote relating
to the election of directors to the Company's Board of Directors.
Under a Standstill and Registration Rights Agreement, dated as of July 18,
1991, as amended (the "Standstill Agreement"), between the Company and AXA, AXA
currently has certain demand and piggyback registration rights with respect to
the Common Stock owned by it and has certain preemptive rights entitling it to
participate in any sale by the Company of voting securities to the extent
necessary to maintain AXA's percentage of voting power. However, all other
contractual restrictions in the Standstill Agreement, including restrictions on
the ability of AXA and certain affiliates to purchase voting securities, have
expired and AXA and such affiliates are currently free to acquire additional
shares of Common Stock. Neither AXA nor any of its affiliates has any obligation
to provide additional capital or credit support to The Equitable. See
"Business-- Principal Shareholder" in the 1995 10-K.
SELLING STOCKHOLDER
The SECT Trust was established in 1993 to provide a source of funding for a
portion of the obligations arising under the Plans. The SECT Trust is intended
to be a grantor trust within the meaning of Section 671 of the Internal Revenue
Code. In the event of insolvency of the Company, the SECT Trust shall be subject
to the claims of the Company's general creditors.
The Offered Shares were or will be issued to the SECT Trust upon conversion
of certain of the shares of the Company's Series D Convertible Preferred Stock
purchased by the SECT Trust in a private transaction in 1993. The Company agreed
under a 1993 agreement establishing the SECT
8
<PAGE>
Trust to prepare and file a registration statement with respect to any shares of
Common Stock to be sold by the SECT Trust.
As of March 31, 1996, the SECT Trust held 60,000 shares of Series D
Convertible Preferred Stock which are convertible into 11,940,299 shares of
Common Stock, subject to certain anti-dilution adjustments, or approximately
6.1% of the Company's outstanding shares of Common Stock after giving effect to
such conversion.
USE OF PROCEEDS
The SECT Trustee will contribute the net proceeds from the sale of the
Offered Shares to the Plans, in accordance with instructions from the Committee,
to fund a portion of the obligations arising thereunder. Pending such use, such
net proceeds may be invested temporarily in short-term marketable securities. In
consideration of such contributions to the Plans, the Company's subsidiaries
sponsoring such Plans will pay the Company an amount equal to any such
contributions.
9
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected historical consolidated financial
information for The Equitable. The selected historical consolidated financial
information (other than General Account Investment Assets and assets under
management) at December 31, 1995 and 1994 and for each of the years in the
three-year period ended December 31, 1995 has been derived from consolidated
financial statements audited by Price Waterhouse LLP, independent accountants,
included in the Annual Report on Form 10-K of the Company for the year ended
December 31, 1995 incorporated by reference herein and should be read in
conjunction with and is qualified by reference to such statements and related
notes. The selected historical consolidated financial information (other than
General Account Investment Assets and assets under management) at December 31,
1993, 1992 and 1991 and for the two-year period ended December 31, 1992 have
been derived from consolidated financial statements not included or incorporated
herein. The selected historical consolidated financial information at and for
the three months ended March 31, 1996 and 1995 (other than General Account
Investment Assets and assets under management), has been derived from the
Company's unaudited financial statements included in the First Quarter 10-Q
incorporated by reference herein and should be read in conjunction with and is
qualified by reference to such statements and related notes. This unaudited
interim information reflects, in the view of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of
such information. Results for the three months ended March 31, 1996 are not
necessarily indicative of results which may be expected for any other interim
period or for the year as a whole. Certain Consolidated Statements of Earnings
Data for the three months ended March 31, 1995 and for each of the years in the
five-year period ended December 31, 1995 has been reclassified to conform with
the 1996 presentation.
10
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA--CONTINUED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
----------------------- -----------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991(1)
---------- ---------- ---------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
(IN MILLIONS)
CONSOLIDATED STATEMENTS OF
EARNINGS DATA
REVENUES
Universal life and
investment-type product policy
fee income...................... $ 212.9 $ 192.5 $ 788.2 $ 715.0 $ 644.5 $ 571.7 $ 532.3
Premiums........................ 141.0 148.4 606.8 625.6 599.1 1,185.3 1,637.7
Net investment income(2)........ 780.5 716.8 3,047.4 2,842.7 2,731.1 2,693.8 2,976.1
Investment gains (losses),
net(3)(4)....................... 170.3 116.5 552.3 338.6 526.4 371.8 (162.3)
Commissions, fees and other
income.......................... 599.3 443.6 2,142.4 1,746.7 1,850.3 1,400.1 1,133.0
Contribution from the Closed
Block(3)........................ 26.7 28.5 124.4 151.0 128.3 59.3 --
---------- ---------- ---------- --------- ---------- --------- ---------
Total revenues.................. 1,930.7 1,646.3 7,261.5 6,419.6 6,479.7 6,282.0 6,116.8
---------- ---------- ---------- --------- ---------- --------- ---------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to
policyholders' account
balances........................ 320.6 295.9 1,249.2 1,202.2 1,325.6 1,440.8 1,567.8
Policyholders' benefits......... 253.2 246.4 1,010.5 920.6 1,003.9 1,755.7 2,229.5
Other operating costs and
expenses(5)(6).................. 1,147.9 987.9 4,379.9 3,746.6 3,774.9 3,066.6 2,797.7
---------- ---------- ---------- --------- ---------- --------- ---------
Total benefits and other
deductions...................... 1,721.7 1,530.2 6,639.6 5,869.4 6,104.4 6,263.1 6,595.0
---------- ---------- ---------- --------- ---------- --------- ---------
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE FEDERAL
INCOME TAXES AND MINORITY
INTEREST........................ 209.0 116.1 621.9 550.2 375.3 18.9 (478.2)
Federal income tax expense
(benefit)....................... 62.9 32.7 184.2 158.0 108.9 16.1 (198.5)
Minority interest in net income
of consolidated subsidiaries... 39.7 18.2 87.5 68.3 31.9 35.0 28.1
---------- ---------- ---------- --------- ---------- --------- ---------
Earnings (loss) from continuing
operations...................... 106.4 65.2 350.2 323.9 234.5 (32.2) (307.8)
Discontinued operations, net of
Federal income
taxes(2)(5)(7)(8)............... -- -- -- -- -- -- (561.9)
Extraordinary charge for
demutualization expenses........ -- -- -- -- -- (101.3) (28.3)
Cumulative effect of accounting
changes, net of Federal income
taxes(9)........................ (23.1) -- -- (27.1) -- 4.9 --
---------- ---------- ---------- --------- ---------- --------- ---------
NET EARNINGS (LOSS)............. $ 83.3 $ 65.2 $ 350.2 $ 296.8 $ 234.5 $ (128.6) $ (898.0)
---------- ---------- ---------- --------- ---------- --------- ---------
---------- ---------- ---------- --------- ---------- --------- ---------
Net earnings after
demutualization................. $ 83.3 $ 65.2 $ 350.2 $ 296.8 $ 234.5 $ 3.8
Dividends on preferred stocks... 6.7 6.7 26.7 80.1 65.4 14.5
---------- ---------- ---------- --------- ---------- ---------
Net Earnings (Loss) Applicable
to Common Shares............... $ 76.6 $ 58.5 $ 323.5 $ 216.7 $ 169.1 $ (10.7)
---------- ---------- ---------- --------- ---------- ---------
---------- ---------- ---------- --------- ---------- ---------
NET EARNINGS (LOSS) PER COMMON
SHARE:
Assuming No Dilution............ $ .41 $ .32 $ 1.75 $ 1.51 $ 1.19 $ (.08)
---------- ---------- ---------- --------- ---------- ---------
---------- ---------- ---------- --------- ---------- ---------
Assuming Full Dilution.......... $ .39 $ .31 $ 1.68 $ 1.38 $ 1.09 $ (.08)
---------- ---------- ---------- --------- ---------- ---------
---------- ---------- ---------- --------- ---------- ---------
Cash Dividend Per Common
Share........................... $ .05 $ .05 $ .20 $ .20 $ .20 $ .10
---------- ---------- ---------- --------- ---------- ---------
---------- ---------- ---------- --------- ---------- ---------
</TABLE>
11
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA--CONTINUED
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
----------------------- -----------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991(1)
---------- ---------- ---------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
(IN MILLIONS)
REVENUES BY SEGMENT:
Individual Insurance and
annuities(2)(4)................. $ 819.3 $ 794.6 $ 3,247.8 $ 3,087.7 $ 2,981.5 $ 3,479.6 $ 3,674.1
Group pension................... 62.7 57.4 286.8 354.4 426.6 512.0 602.0
Attributed insurance capital(2). 18.3 14.6 61.2 79.4 61.6 85.2 31.1
---------- ---------- ---------- --------- ---------- --------- ---------
Insurance operations............ 900.3 866.6 3,595.8 3,521.5 3,469.7 4,076.8 4,307.2
Investment services(4).......... 1,027.3 780.0 3,689.8 2,908.6 3,024.1 2,314.4 1,812.4
Corporate, other and
eliminations.................... 3.1 (0.3) (24.1) (10.5) (14.1) (109.2) (2.8)
---------- ---------- ---------- --------- ---------- --------- ---------
Total Revenues.................. $ 1,930.7 $ 1,646.3 $ 7,261.5 $ 6,419.6 $ 6,479.7 $ 6,282.0 $ 6,116.8
---------- ---------- ---------- --------- ---------- --------- ---------
---------- ---------- ---------- --------- ---------- --------- ---------
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE FEDERAL
INCOME TAXES AND MINORITY
INTEREST, BY SEGMENT:
Individual Insurance and
annuities....................... $ 84.0 $ 58.9 $ 274.4 $ 245.5 $ 76.2 $ (148.0) $ (491.5)
Group pension................... (11.7) (11.7) (13.3) 15.8 2.0 16.2 (26.5)
Attributed insurance capital.... 7.2 6.9 18.7 69.8 49.0 (17.2) (6.7)
---------- ---------- ---------- --------- ---------- --------- ---------
Insurance operations............ 79.5 54.1 279.8 331.1 127.2 (149.0) (524.7)
Investment services............. 159.5 85.7 466.3 375.2 359.3 324.8 190.6
Corporate interest expense and
other eliminations............. (30.0) (23.7) (124.2) (156.1) (111.2) (156.9) (144.1)
---------- ---------- ---------- --------- ---------- --------- ---------
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE FEDERAL
INCOME TAXES AND MINORITY
INTEREST........................ $ 209.0 $ 116.1 $ 621.9 $ 550.2 $ 375.3 $ 18.9 $ (478.2)
---------- ---------- ---------- --------- ---------- --------- ---------
---------- ---------- ---------- --------- ---------- --------- ---------
GENERAL ACCOUNT INVESTMENT
ASSETS (AT PERIOD
END)(10)(11).................... $ 33,872.6 $ 32,637.8 $ 33,777.1 $32,338.6 $ 32,695.4 $31,419.7 $33,557.1
---------- ---------- ---------- --------- ---------- --------- ---------
---------- ---------- ---------- --------- ---------- --------- ---------
ASSETS UNDER MANAGEMENT
(AT PERIOD END):
The Equitable................... $ 50,819 $ 46,185 $ 50,900 $ 47,376 $ 51,003 $ 45,141 $ 45,677
Third Party(12)................. 161,231 129,018 144,441 125,145 121,643 105,944 99,047
---------- ---------- ---------- --------- ---------- --------- ---------
Total........................... $ 212,050 $ 175,203 $ 195,341 $ 172,521 $ 172,646 $ 151,085 $ 144,724
---------- ---------- ---------- --------- ---------- --------- ---------
---------- ---------- ---------- --------- ---------- --------- ---------
CONSOLIDATED BALANCE SHEETS DATA
(AT PERIOD END):
Total assets(11)(13)............ $116,402.1 $100,956.1 $113,749.4 $94,640.0 $100,351.9 $80,788.6 $76,272.3
Long-term debt.................. 3,994.3 3,111.0 3,852.0 2,925.9 2,662.3 1,897.9 2,693.0
Total liabilities(11)(13)....... 112,722.4 97,759.8 109,898.0 91,626.2 96,839.8 78,241.8 74,916.8
Redeemable preferred stock...... 264.9 262.1
Shareholders' equity............ 3,679.7 3,196.3 3,851.4 3,013.8 3,247.2 2,284.7 1,355.5
Book value per common share..... 17.53 15.02 18.49 14.03 15.43 14.29
</TABLE>
- ------------
(1) Equitable Life's demutualization significantly affected the presentation of
the consolidated financial statements. The consolidated statements of
earnings data for the three months ended March 31, 1996 and 1995 and the
years ended December 31, 1995, 1994, 1993 and 1992 are not comparable with
1991 because results of the Closed Block for periods beginning on and
subsequent to July 22, 1992, the date of demutualization, are reported on
one line. See Note 6 of Notes to Consolidated Financial Statements and the
captions "Business--Closed Block" in the 1995 10-K and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Combined Results of Operations" in the 1995 10-K. Also see Note
9 of Notes to the Consolidated Financial Statements and the caption
"Management's Discussion and Analysis of Financial Conditions and Results
of Operations--Combined Results of Operations" in the First Quarter 10-Q.
(2) Net investment income and discontinued operations included $37.6 million,
$38.7 million, $154.6 million, $219.7 million, $197.1 million, $132.8
million and $30.7 million for the three months ended March 31, 1996 and
1995 and for the years ended December 31, 1995, 1994, 1993, 1992 and 1991,
respectively, recognized as investment income by continuing operations and
as interest expense by the GIC Segment relating to intersegment loans to
the GIC Segment.
(Footnotes continued on following page)
12
<PAGE>
(Footnotes continued from preceding page)
(3) Investment gains (losses), net, included additions to asset valuation
allowances and writedowns of publicly traded securities for continuing
operations aggregating $51.4 million ($65.5 million including amounts
related to the Closed Block), $29.6 million ($36.8 million including
amounts related to the Closed Block), $197.6 million ($224.9 million
including amounts related to the Closed Block), $100.5 million ($137.5
million including amounts related to the Closed Block), $108.7 million
($147.3 million including amounts related to the Closed Block), $278.6
million ($300.2 million including amounts related to the Closed Block) and
$647.7 million for the three months ended March 31, 1996 and 1995 and for
the years ended December 31, 1995, 1994, 1993, 1992 and 1991, respectively.
Additionally, as a result of the adoption of SFAS No. 121, $152.4 million
of allowances on assets held for investment were released and impairment
losses of $144.0 million ($149.6 million including amounts related to the
Closed Block) were recognized on real estate held and used as of January 1,
1996.
(4) Investment gains (losses), net for the three months ended March 31, 1996
included a $20.6 million gain resulting from the issuance of Alliance Units
to third parties upon completion of the Cursitor acquisition. Investment
gains (losses), net, for the year ended December 31, 1995 included a $34.7
million gain resulting from the sale of a minority interest in DLJ.
Investment gains (losses), net for the year ended December 31, 1994
included a $52.4 million gain related to the sale by Alliance of 4.96
million of newly issued Alliance Units. Investment gains (losses), net for
the year ended December 31, 1993 included a $49.3 million gain (before
variable compensation and related expenses) related to the sale of shares
of one investment in the DLJ long-term corporate development portfolio.
Investment gains (losses), net for the year ended December 31, 1992
included a gain on that same investment of $166.2 million, which consisted
of an $82.4 million net gain on shares sold and an $83.8 million investment
gain from the recognition of an increase in fair value of the investment.
Investment losses for the year ended December 31, 1991 included a pre-tax
gain of $51.9 million from the sale of an equity interest in Equitable
Life's Japanese life insurance subsidiary, Equitable Seimei Hoken, all of
which was attributable to the Individual Insurance and Annuities Segment.
(5) Other operating costs and expenses included corporate interest expenses of
$34.6 million, $24.0 million, $100.5 million, $50.6 million, $28.4 million,
$58.4 million and $75.9 million for the three months ended March 31, 1996
and 1995 and for the years ended December 31, 1995, 1994, 1993, 1992 and
1991, respectively, and interest credited to the discontinued GIC Segment
of $88.2 million, $97.7 million, $94.2 million and $71.0 million for the
years ended December 31, 1994, 1993, 1992 and 1991, respectively.
(6) Other operating costs and expenses included restructuring costs of $0.7
million, $11.1 million, $39.2 million, $20.4 million, $96.4 million, $24.8
million and $60.7 million for the three months ended March 31, 1996 and
1995 and for the years ended December 31, 1995, 1994, 1993, 1992 and 1991,
respectively (including $0.7 million, $3.4 million, $19.0 million, $19.4
million, $44.0 million, $24.3 million and $49.7 million attributable to
Individual Insurance and Annuities for the three months ended March 31,
1996 and 1995 and for the years ended December 31, 1995, 1994, 1993, 1992
and 1991, respectively; $0.2 million, $.8 million, $1.0 million, $1.6
million, $0.5 million and $4.3 million attributable to Group Pension for
the three months ended March 31, 1995 and for the years ended December 31,
1995, 1994, 1993, 1992 and 1991, respectively; $8.3 million and $6.7
million attributable to Attributed Insurance Capital for the years ended
December 31, 1995 and 1991, respectively; and $7.5 million, $11.1 million
and $50.8 million attributable to Investment Services for the three months
ended March 31, 1995 and for the years ended December 31, 1995 and 1993,
respectively).
(7) Discontinued operations, net of Federal income taxes, included additions to
asset valuation allowances and writedowns of publicly traded securities for
the discontinued GIC Segment aggregating $3.7 million, $16.3 million, $38.2
million, $50.8 million, $53.0 million, $105.6 million and $275.0 million
for the three months ended March 31, 1996 and 1995 and for the years ended
December 31, 1995, 1994, 1993, 1992 and 1991, respectively. Additionally,
as a result of the adoption of SFAS No. 121, $71.9 million of allowances on
assets held for investment were released and impairment losses of $69.8
million were recognized on real estate held and used as of January 1, 1996.
(8) Discontinued operations, net of Federal income taxes, included GIC Segment
after-tax losses of $561.9 million for the year ended December 31, 1991.
Pre-tax losses incurred after the date of discontinuance of $10.4 million,
$19.6 million, $25.1 million, $21.7 million, $24.7 million, $160.9 million
and $194.3 million for the three months ended March 31, 1996 and 1995 and
for the years ended December 31, 1995, 1994, 1993, 1992 and 1991,
respectively, were charged to the GIC Segment allowance for future losses.
(9) Cumulative effect of accounting changes, net of Federal income taxes,
included a charge of $23.1 million, net of a Federal income tax benefit of
$12.4 million, related to SFAS No. 121 for the three months ended March 31,
1996, a charge of $27.1 million, net of a Federal income tax benefit of
$14.6 million related to SFAS No. 112 for the year ended December 31, 1994
and a credit of $252.3 million related to SFAS No. 109 and a charge of
$247.4 million, net of a Federal income tax benefit of $130.9 million,
related to SFAS No. 106 for the year ended December 31, 1992.
(10) General Account Investment Assets does not include the GIC Segment
Investment Assets, which had an aggregate carrying value of $3.47 billion,
$3.83 billion, $3.26 billion, $3.90 billion, $4.82 billion, $5.73 billion
and $6.49 billion at March 31, 1996 and 1995 and at December 31, 1995,
1994, 1993, 1992 and 1991, respectively.
(11) Total assets, total liabilities and General Account Investment Assets
included the assets and liabilities of the Closed Block and, therefore, are
comparable for all periods presented. See Notes 9 and 6 of Notes to
Consolidated Financial Statements included in the First Quarter 10-Q and
1995 10-K, respectively.
(12) Third party assets under management included Separate Accounts assets under
management of $25.98 billion, $21.67 billion, $24.72 billion, $20.67
billion, $19.74 billion, $18.07 billion and $18.25 billion at March 31,
1996 and 1995 and at December 31, 1995, 1994, 1993, 1992 and 1991,
respectively.
(13) Assets and liabilities relating to the discontinued GIC Segment are not
reflected on the consolidated balance sheets of Equitable Life, except that
as of March 31, 1996 and 1995 and December 31, 1995, 1994, 1993 and 1992,
the net amount due to continuing operations for intersegment loans made to
the discontinued GIC Segment in excess of continuing operations'
obligations to fund the discontinued GIC Segment's accumulated deficit (the
amount required to make assets equal to liabilities) is reflected as
"Amounts due from discontinued GIC Segment." In 1995, continuing operations
transferred $1,215.4 million in cash to the GIC Segment in settlement of
its obligation. Subsequently, the GIC Segment remitted $1,155.4 million in
cash to continuing operations in partial repayment of borrowings by the GIC
Segment. At December 31, 1991, there was a net amount due from continuing
operations to the GIC Segment reflected as "Amounts due to discontinued GIC
Segment." See Notes 8 and 7 of Notes to Consolidated Financial Statements
included in the First Quarter 10-Q and the 1995 10-K, respectively.
13
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The following summary descriptions with respect to the capital stock of the
Company are summaries and are subject to the detailed provisions of the
Company's restated certificate of incorporation (the "Restated Certificate") and
by-laws (the "By-Laws"). These statements do not purport to be complete, do not
give effect to the provisions of statutory or common law, and are subject to,
and are qualified in their entirety by reference to, the terms of the Restated
Certificate and the By-Laws.
The Restated Certificate authorizes the Company to issue 510 million shares
of capital stock, of which 500 million shares are designated as Common Stock
having a par value of $.01 per share and 10 million shares are designated as
preferred stock having a par value of $1.00 per share. The preferred stock may
be issued by the Company's Board of Directors in one or more series and may have
such voting rights, if any, designations, preferences and relative,
participating, optional and other special rights, and such qualifications,
limitations and restrictions, as the Board of Directors (or a duly authorized
committee thereof) may fix by resolution or resolutions. Moreover, the Company's
Board of Directors may issue such preferred stock from time to time in
transactions that may not require the approval of the stockholders of the
Company and the preferences, designations, voting and other rights of any such
shares of preferred stock may materially limit or qualify the rights of the
outstanding shares of Common Stock. As of the date hereof, there are three
series of preferred stock outstanding. For a description of the Company's
preferred stock, see Note 10 to Notes to Consolidated Financial Statements in
the 1995 10-K.
DESCRIPTION OF COMMON STOCK
DIVIDENDS. Subject to the rights of any holders of preferred stock, each
holder of Common Stock is entitled to receive dividends out of funds legally
available therefor when, as and if declared by the Company's Board of Directors.
Dividends may be paid in cash, property or shares of the Company's capital
stock.
VOTING RIGHTS. The holders of Common Stock possess exclusive voting rights
in the Company, except to the extent that the Company's Board of Directors shall
have designated voting power with respect to any preferred stock issued. Each
holder of Common Stock is entitled, on each matter submitted for a vote of
holders of Common Stock, to one vote for each share of such stock registered in
such holder's name on the books of the Company. Except as otherwise required by
law and subject to the rights of any holders of preferred stock, the presence in
person or by proxy of the holders of record of a majority of the shares entitled
to vote at a meeting of stockholders constitutes a quorum for the transaction of
business at that meeting. Actions requiring approval of stockholders will
generally require approval by a majority vote at a meeting at which a quorum is
present, except that at each stockholder meeting for the election of directors,
provided a quorum is present, directors will be elected by a plurality of votes
validly cast in the election. Stockholders will not have any right to cumulate
votes in the election of directors.
The holders of preferred stock issued by the Company may be given the right
to vote for the election of directors generally or to elect a specified number
or percentage of the members of the Company's Board of Directors. The number of
directors that may be elected by the holders of any class or series of preferred
stock having the right, voting separately by class or series, to elect directors
will be in addition to the number of directors fixed by or pursuant to the
Restated Certificate.
LIQUIDATION RIGHTS. In the event of liquidation, dissolution or winding-up
of the Company, the holders of the Common Stock will be entitled to share
ratably in the distribution of all assets of the
14
<PAGE>
Company remaining after payment of all of the Company's debts and liabilities
and of all sums to which holders of any preferred stock may be entitled.
PREEMPTIVE RIGHTS. Holders of the Common Stock are not generally entitled to
preemptive rights with respect to any shares of capital stock which may be
issued by the Company. Under the Standstill Agreement, AXA has preemptive rights
with respect to voting securities and securities convertible into voting
securities of the Company.
MISCELLANEOUS. The issued and outstanding shares of Common Stock are duly
authorized, validly issued, fully paid and nonassessable and, upon issuance as
herein described, the Offered Shares will be duly authorized, validly issued,
fully paid and nonassessable.
The transfer agent for the Common Stock is First Chicago Trust Company of
New York.
RESTRICTIONS ON ACQUISITIONS OF
SECURITIES OF THE COMPANY
Section 7312 of the New York Insurance Law ("Section 7312") provides that,
for a period of five years after the effective date of Equitable Life's
demutualization (July 22, 1992), no person may directly or indirectly offer to
acquire or acquire in any manner the beneficial ownership (defined as the power
to vote or dispose of, or to direct the voting or disposition of a security) of
5% or more of any class of the Company's voting security (which term includes
the Common Stock) or any class of security convertible into a voting security of
the Company without the prior approval of the New York Superintendent. Pursuant
to Section 7312, voting securities acquired in excess of the 5% threshold
without such prior approval will be deemed non-voting.
State insurance laws also regulate changes of control (generally presumed
upon acquisitions of 10% or more of securities then having voting power for the
election of directors) of insurance holding companies, such as the Company.
State insurance laws, including the New York Insurance Law, require certain
filings concerning changes in ownership of insurance companies. Although the
specific provisions vary, insurance laws in states such as New York generally
prohibit a person from acquiring a controlling interest in an insurer
incorporated in the state or in any other person controlling such insurer unless
the insurance regulatory authority has approved the proposed acquisition in
accordance with the applicable regulations. In accordance with these
restrictions, the issuance of Common Stock and preferred stock to AXA required
the prior approval of the New York Superintendent and the prior approval of the
insurance regulatory authorities in the other states where Equitable Life's
insurance company subsidiaries were domiciled. AXA has obtained the requisite
approvals described above and in the preceding paragraph for its acquisitions of
Common Stock and the Company's preferred stock.
In addition, Section 203 of the Delaware General Corporation law prohibits
an "interested stockholder" of a Delaware corporation from engaging In certain
business combinations with the corporation, including mergers or consolidations
or acquisitions of additional shares of the corporation, for a period of three
years following the date the stockholder becomes an "interested stockholder." An
"interested stockholder" is defined to include persons owning directly or
indirectly 15% or more of the outstanding voting stock of a corporation. The
prohibitions under Section 203 are not applicable in certain circumstances,
including those in which (i) the business combination or the transaction which
results in the stockholder becoming an "interested stockholder" is approved by
the corporation's board of directors prior to the date the stockholder becomes
an "interested stockholder," (ii) the "interested stockholder" upon consummation
of such transaction owns at least 85% of the voting stock of the corporation
outstanding prior to such transaction or (iii) the corporation has elected not
to be governed by such prohibitions. The Company's Board of Directors approved
AXA's acquisition of Common Stock as part of its approval of AXA's original
15
<PAGE>
investment and, accordingly, the prohibitions under Section 203 do not apply to
any business combination with AXA.
PLAN OF DISTRIBUTION
The SECT Trust, at the discretion of the Committee, may from time to time
offer and sell all or a portion of the Offered Shares to or through one or more
underwriters, through one or more dealers or agents or directly to purchasers.
The offer and sale of the Offered Shares may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Sales may be effected from time to time in one or more transactions (which
may involve block transactions) (i) on the NYSE, or on other national securities
exchanges on which the Common Stock may be traded, in transactions that may
include special offerings, exchange distributions pursuant to and in accordance
with the rules of such exchanges or otherwise, (ii) in the over-the-counter
market, (iii) in transactions otherwise than on such exchanges or in the
over-the-counter market, (iv) in negotiated transactions through the writing of
options on shares of Common Stock (whether such options are listed on an options
exchange or otherwise) or otherwise, (v) pursuant to a distribution through one
or more underwriters on a firm commitment or best-efforts basis or (vi) in a
combination of any such transactions. The SECT Trust may effect such
transactions by selling Offered Shares to or through underwriters, agents or
dealers, and such underwriters, agents or dealers may receive compensation in
the form of discounts or commissions from the SECT Trust and may receive
commissions from the purchasers of Offered Shares for whom they may act as
agent, in each case in amounts which will not exceed those customary in the
types of transactions involved.
If required, a prospectus supplement to this Prospectus may be distributed
in connection with an offer and sale of the Offered Shares. Such prospectus
supplement may identify underwriters, dealers or agents participating in such
offer and sale and any discounts, commissions or other terms thereof, and may
set forth such additional information as may be determined to be required.
Offers to purchase Offered Shares may be solicited directly by the Company
and the sale thereof may be made by the SECT Trust directly to institutional
investors or others, who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any resale thereof.
The SECT Trust, the Company and any other persons participating in such
distribution, including underwriters, dealers and agents, may be subject to
applicable provisions of the Exchange Act and rules and regulations thereunder,
including without limitation Rules 10b-6 and 10b-7, which provisions may limit
the timing of purchases and sales of shares of Common Stock by the SECT Trust,
the Company and any other such person. All of the foregoing may limit the
marketability of the Offered Shares and the ability of any underwriter, dealer
or agent to engage in market-making activities or other transactions in the
Common Stock.
In making any offer on behalf of the SECT Trust, underwriters, agents and
any other broker or dealer may be deemed to be underwriters within the meaning
of the Securities Act, and the compensation of the underwriter, agent or other
broker or dealer may be deemed to be underwriting commissions or discounts.
Underwriters, agents and dealers may be entitled under relevant agreements
with the Company and the SECT Trustee to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act.
16
<PAGE>
Underwriters, agents and dealers who participate in offers and sales of the
Offered Shares may be customers of, engage in transactions with, or perform
services for, the Company and its subsidiaries from time to time in the ordinary
course of business.
LEGAL OPINIONS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022.
EXPERTS
The consolidated financial statements and consolidated financial statement
schedules of The Equitable as of December 31, 1995 and 1994 and for each of the
years in the three year period ended December 31, 1995 incorporated by reference
in this Prospectus have been so incorporated in reliance on the reports of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
The United States firm of Price Waterhouse has registered as a Registered
Limited Liability Partnership (LLP) under the laws of the State of Delaware and
from August 10, 1994 has conducted its practice under the name of Price
Waterhouse LLP. All references to Price Waterhouse and the documents
incorporated herein by reference are to Price Waterhouse LLP.
ERISA MATTERS
The Company and certain affiliates of the Company, including Equitable Life,
Alliance and DLJ, may each be considered a "party in interest" within the
meaning of ERISA or a "disqualified person" within the meaning of ERISA or a
"disqualified person" within the meaning of the Internal Revenue Code of 1986,
as amended (the "Code") with respect to many employee benefit plans. Prohibited
transactions within the meaning of ERISA or the Code may arise, for example, if
the Offered Shares are acquired by or on behalf of a pension or other employee
benefit plan with respect to which the Company or any of its affiliates is a
service provider, unless such Offered Shares are acquired pursuant to an
exemption for transactions effected on behalf of such plan by a "qualified
professional asset manager" or pursuant to any other available exemption. Any
such pension or employee benefit plan or other person proposing to invest in the
Offered Shares should consult with its legal counsel.
17
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- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE
CONTAINED OR INCORPORATED BY 11,940,299 SHARES
REFERENCE IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE THE EQUITABLE COMPANIES
COMPANY, THE SECT TRUST, THE SECT INCORPORATED
TRUSTEE, OR ANY AGENT, DEALER OR
UNDERWRITER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THIS PROSPECTUS OR AN
OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY SUCH SECURITIES
IN ANY CIRCUMSTANCES IN WHICH SUCH COMMON STOCK
OFFER OR SOLICITATION IS UNLAWFUL. PAR VALUE $.01 PER SHARE)
NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE EQUITABLE COMPANIES
INCORPORATED SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF SUCH INFORMATION.
-------------------
-------------------
PROSPECTUS
TABLE OF CONTENTS -------------------
PROSPECTUS
PAGE
----
Available Information................... 2
Incorporation of Certain Documents by
Reference............................... 2
The Equitable........................... 3
Risk Factors............................ 5
Selling Stockholder..................... 8
Use of Proceeds......................... 9
Selected Consolidated Financial Data.... 10
Description of Capital Stock............ 14
Description of Common Stock............. 14
Restrictions on Acquisitions of
Securities of the Company............. 15
Plan of Distribution.................... 16
, 1996
Legal Opinions.......................... 17
Experts................................. 17
ERISA Matters........................... 17
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth those expenses to be incurred by the Company
in connection with the issuance and distribution of the securities being
registered. Except for the Securities and Exchange Commission filing fee, all
amounts shown are estimates.
Securities and Exchange Commission filing fee.................... $101,905
Blue Sky fees and expenses....................................... 15,000
Printing expenses................................................ 8,000
Accountant's fees and expenses................................... 25,000
Legal fees and expenses.......................................... 85,000
Trustee fees and expenses........................................ 13,000
Miscellaneous expenses........................................... 5,095
--------
Total........................................................ $253,000
--------
--------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, as amended, provides in
regards to indemnification of directors and officers as follows:
145. Indemnification of Officers, Directors, Employees and Agents;
Insurance.
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection with the defense of settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of
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<PAGE>
any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made
(1) by a majority vote of the directors who were not parties to such action,
suit or proceeding, even though less than a quorum, or (2) if there are no
such directors, or if such directors so direct, by independent legal counsel
in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount
if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the board of directors deems
appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with
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<PAGE>
respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to
in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Article SIXTH of the Company's Restated Certificate of Incorporation
provides in regard to indemnification of directors and officers as follows:
ARTICLE SIXTH: (i) Each person who is or was or had agreed to become a
Director or officer of the Corporation, and each person who is or was or was
serving or who had agreed to serve at the request of the Board of Directors
or an officer of the Corporation as a director or officer of another
corporation (including, without limitation, The Equitable Life Assurance
Society of the United States and its subsidiaries), partnership, joint
venture, trust, employee benefit plan or other enterprise (including the
heirs, executor, administrators or estate of such person), shall be
indemnified by the Corporation, and (ii) each person who is or was or who
had agreed to become an employee or agent of the Corporation or who is or
was serving or who had agreed to serve at the request of the Board of
Directors or an officer of the Corporation as an employee or agent of
another corporation (including, without limitation, The Equitable Life
Assurance Society of the United States and its subsidiaries), partnership,
joint venture, trust, employee benefit plan or other enterprise (including
the heirs, executor, administrators or estate of such person) may be
indemnified by the Corporation, in each case in accordance with the By-Laws,
to the full extent permitted from time to time by the General Corporation
Law of the State of Delaware as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader amendment rights than
said law permitted the Corporation to provide prior to such amendment) or
any other applicable laws as presently or hereafter in effect. Without
limiting the generality or the effect of the foregoing, the Corporation may
enter into one or more agreements with any person which provide for
indemnification greater or different than provided in this Article SIXTH.
Any amendment or repeal of this Article SIXTH shall not adversely affect any
right or protection existing hereunder immediately prior to such amendment
or repeal.
Article VI of the Company's By-Laws provides in regard to indemnification of
directors and officers as follows:
Section 6.01. NATURE OF INDEMNITY. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or
she is or was or has agreed to become a Director or officer of the
Corporation, or is or was serving or has agreed to serve at the request of
the Corporation as a
II-3
<PAGE>
Director or officer of another corporation (including, without limitation,
The Equitable Life Assurance Society of the United States and its
subsidiaries), partnership, joint venture, trust or other enterprise,
including an employee benefit plan, or by reason of any action alleged to
have been taken or omitted in such capacity, and may indemnify any person
who was or is a party or is threatened to be made a party to such an action,
suit or proceeding by reason of the fact that he or she is or was or has
agreed to become an employee or agent of the Corporation, or is or was
serving or has agreed to serve at the request of the Corporation as an
employee or agent of another corporation (including, without limitation, The
Equitable Life Assurance Society of the United States and its subsidiaries),
partnership, joint venture, trust or other enterprise, including an employee
benefit plan, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him or
her or on his or her behalf in connection with such action, suit or
proceeding and any appeal therefrom, if he or she acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding had no reasonable cause to believe his or her conduct was
unlawful; except that in the case of an action or suit by or in the right of
the Corporation to procure a judgment in its favor (i) such indemnification
shall be limited to expenses (including attorneys' fees) actually and
reasonably incurred by such person in the defense or settlement of such
action or suit, and (ii) no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to
be liable to the Corporation unless and only to the extent that the Delaware
Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Delaware Court
of Chancery or such other court shall deem proper.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in
good faith and in a manner which he or she reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that his
or her conduct was unlawful. [Section 145(a), (b)]
Section 6.02. SUCCESSFUL DEFENSE. To the extent that a Director,
officer, employee or agent of the Corporation has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to
in Section 6.01 hereof or in defense of any claim, issue or matter therein,
he or she shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection therewith.
Section 6.03. DETERMINATION THAT INDEMNIFICATION IS PROPER. Any
indemnification of a Director or officer of the Corporation under Section
6.01 hereof (unless ordered by a court) shall be made by the Corporation
unless a determination is made that indemnification of the Director or
officer is not proper in the circumstances because he or she has not met the
applicable standard of conduct set forth in Section 6.01 hereof. Any
indemnification of an employee or agent of the Corporation under Section
6.01 hereof (unless order by a court) may be made by the Corporation upon a
determination that indemnification of the employee or agent is proper in the
circumstances because he or she has met the applicable standard of conduct
set forth in Section 6.01 hereof. Any such determination shall be made (i)
by the Board of Directors by a majority vote of a quorum consisting of
Directors who were not parties to such action, suit or proceeding, or (ii)
if such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested Directors so directs, by independent legal counsel in a
written opinion, or (iii) by the stockholders. [Section 145(d), (f)]
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<PAGE>
Section 6.04. ADVANCE PAYMENT OF EXPENSES. Expenses (including
attorneys' fees) incurred by a Director or officer in defending any civil,
criminal, administrative or investigative action, suit or proceeding shall
be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
the Director or officer to repay such amount if it shall ultimately be
determined that he or she is not entitled to be indemnified by the
Corporation as authorized in this Article VI. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon
such terms and conditions, if any, as the Board of Directors deems
appropriate. The Board of Directors may authorize the Corporation's counsel
to represent such Director, officer, employee or agent in any action, suit
or proceeding, whether or not the Corporation is a party to such action,
suit or proceeding. [Section 145(e)]
Section 6.05. PROCEDURE FOR INDEMNIFICATION OF DIRECTORS AND
OFFICERS. Any indemnification of a Director or officer of the Corporation
under Sections 6.01 and 6.02, or advance of costs, charges and expenses to a
Director or officer under Section 6.04 of this Article VI, shall be made
promptly, and in any event within 30 days, upon the written request of the
Director or officer. If a determination by the Corporation that the Director
or officer is entitled to indemnification pursuant to this Article is
required, and the Corporation fails to respond within sixty days to a
written request for indemnity, the Corporation shall be deemed to have
approved such request. If the Corporation denies a written request for
indemnity or advancement of expenses, in whole or in part, or if payment in
full pursuant to such request is not made within 30 days, the right to
indemnification or advances as granted by this Article VI shall be
enforceable by the Director or officer in any court of competent
jurisdiction. Such person's cost and expenses incurred in connection with
successfully establishing his or her right to indemnification, in whole or
in part, in any such action shall also be indemnified by the Corporation. It
shall be a defense to any such action (other than an action brought to
enforce a claim for the advance of costs, charges and expenses under Section
6.04 of this Article VI where the required undertaking, if any, has been
received by the Corporation) that the claimant has not met the standard of
conduct set forth in Section 6.01 of this Article, but the burden of proving
such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, its independent legal
counsel, and its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper
in the circumstances because he or she has met the applicable standard of
conduct set forth in Section 6.01 of this Article VI, nor the fact that
there has been an actual determination by the Corporation (including its
Board of Directors, its independent legal counsel, and its stockholders)
that the claimant has not met such applicable standard of conduct, shall be
a defense to the action or create a presumption that the claimant has not
met the applicable standard of conduct.
Section 6.06. SURVIVAL, PRESERVATION OF OTHER RIGHTS. The foregoing
indemnification provisions shall be deemed to be a contract between the
Corporation and each Director, officer, employee and agent who serves in any
such capacity at any time while these provi-sions as well as the relevant
provisions of the General Corporation Law of the State of Delaware are in
effect, and any repeal or modification thereof shall not affect any right or
obligation then existing with respect to any state of facts then or
previously existing or any action, suit or proceeding previously or
thereafter brought or threatened based in whole or in part upon any such
state of facts. Such a "contract right" may not be modified retroactively
without the consent of such Director, officer, employee or agent.
The indemnification provided by this Article VI shall not be deemed
exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement, vote of stockholders or disinterested Directors
or otherwise, both as to action in his or her official
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<PAGE>
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a Director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 6.07. INSURANCE. The Corporation shall purchase and maintain
insurance on behalf of any person who is or was or has agreed to become a
Director or officer of the Corporation, or is or was serving at the request
of the Corporation as a Director or officer of another corporation
(including, without limitation, The Equitable Life Assurance Society of the
United States and its subsidiaries), partnership, joint venture, trust or
other enterprise, including an employee benefit plan, against any liability
asserted against him or her and incurred by him or her or on his or her
behalf in any such capacity, or arising out of his or her status as such,
whether or not the Corporation would have the power to indemnify him or her
against such liability under the provisions of this Article, provided that
such insurance is available on acceptable terms, which determination shall
be made by a vote of a majority of the entire Board of Directors.
Section 6.08. SEVERABILITY. If this Article or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each Director or officer and
may indemnify each employee or agent of the Corporation as to costs, charges
and expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Corporation, to the fullest extent permitted by any applicable
portion of this Article VI that shall not have been invalidated and to the
fullest extent permitted by applicable law.
Section 102(b)(7) of the Delaware General Corporation Law, as amended,
provides in regard to the limitation of liability of directors and officers as
follows:
(b) In addition to the matters required to be set forth in the
certificate of incorporation by subsection (a) of this section, the
certificate of incorporation may also contain any or all of the following
matters:
* * * *
(7) A provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, provided that such provision shall
not eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
of a knowing violation of law, (iii) under section 174 of this Title, or
(iv) for any transaction from which the director derived an improper
personal benefit. No such provision shall eliminate or limit the liability
of a director for any act or omission occurring prior to the date when such
provision becomes effective. All references in this paragraph to a director
shall also be deemed to refer (x) to a member of the governing body of a
corporation which is not authorized to issue capital stock, and (y) to such
other person or persons, if any, who, pursuant to a provision of the
certificate of incorporation in accordance with subsection (a) of Sec. 141
of this title, exercise or perform any of the powers or duties otherwise
conferred or imposed upon the board of directors by this title.
Article FIFTH (f) of the Company's Restated Certificate of Incorporation, as
amended, provides in regard to the limitation of liability of directors and
officers as follows:
(f) No Director of the Corporation shall be liable to the Corporation or
its stockholders for monetary damages for breach of his or her fiduciary
duty as a Director, provided that nothing contained in this paragraph (f) of
this Article FIFTH shall eliminate or limit the liability of a
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director (i) for any breach of the Director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of the
law, (iii) under Section 174 of the General Corporation Law of the State of
Delaware or (iv) for any transaction from which the Director derived an
improper personal benefit. No amendment, modification or repeal of this
paragraph (f) of this Article FIFTH shall adversely affect any right or
protection of a Director that exists at the time of such amendment,
modification or repeal.
Reference is made to the Standstill Agreement and the Company's and AXA's
respective agreements made therein to indemnify each other, and to provide
contribution in circumstances where indemnification is unavailable.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
<C> <S>
1.01 Form of Sales Agreement for Common Stock.
4.01 Restated Charter of the Registrant, filed as Exhibit 3.1 to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994 and incorporated herein
by reference.
4.02 By-laws of the Registrant, filed as Exhibit 3.2 to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1994 and incorporated herein by
reference.
5.01 Opinion of Debevoise & Plimpton.*
10.01 The Equitable Companies Incorporated Stock Trust Agreement, effective as of December
2, 1993, filed as Exhibit 10.01 to the registrant's Form S-4 Registration
Statement No. 33-73102, dated December 17, 1993 and incorporated herein by
reference.
23.01 Consent of Price Waterhouse LLP.
23.02 Consent of Debevoise & Plimpton (included in Exhibit 5.01).
24.01 Powers of Attorney of certain officers and directors of the Company (previously
filed on the signature page hereto).
</TABLE>
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* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) Rule 415 Offering.
The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
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Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference.
The undersigned registrants hereby undertake that, for purpose of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Acceleration of Effectiveness.
Insofar as indemnifications for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons, if any,
of the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by a registrant of expenses
incurred or paid by a director, officer or controlling person, if any, of such
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, such registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(d) Rule 430A.
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, The Equitable
Companies Incorporated certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, on this 22nd day of
May, 1996.
THE EQUITABLE COMPANIES INCORPORATED
By /s/ JOSEPH J. MELONE
__________________________________________
Name: Joseph J. Melone
Title: President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------------------- ------------------------------------ --------------
<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICERS:
/s/ JOSEPH J. MELONE President, Chief Executive Officer May 22, 1996
Joseph J. Melone and Director
* Senior Executive Vice President and
James M. Benson Chief Operating Officer
PRINCIPAL FINANCIAL OFFICER:
/s/ JERRY M. DE ST. PAER Senior Executive Vice President and May 22, 1996
Jerry M. de St. Paer Chief Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
/s/ ALVIN H. FENICHEL Senior Vice President and Controller May 22, 1996
Alvin H. Fenichel
* Chairman of the Board,
Claude Bebear Director
* Director
Henri de Castries
* Director
John S. Chalsty
* Director
Joseph L. Dionne
* Director
William T. Esrey
Jean-Rene Fourtou Director
</TABLE>
II-9
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------------------- ------------------------------------ --------------
<S> <C> <C>
* Director
Donald J. Greene
* Director
John T. Hartley
* Director
Anthony J. Hamilton
John H.F. Haskell, Jr. Director
* Director
W. Edwin Jarmain
* Director
Winthrop Knowlton
Arthur L. Liman Director
Didier Pineau-Valencienne Director
* Director
George J. Sella, Jr.
Dave H. Williams Director
*By /s/ HENRY Q. CONLEY
(Attorney-in-Fact)
May 22, 1996
</TABLE>
II-10
<PAGE>
EXHIBIT INDEX
<TABLE><CAPTION>
Exhibit No. Description Page No.
- ----------- ----------- --------
<S> <C> <C>
1.01 Form of Sales Agreement for Common Stock.
4.01 Restated Charter of the Registrant, filed as Exhibit 3.1 to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994 and incorporated herein
by reference.
4.02 By-laws of the Registrant, filed as Exhibit 3.2 to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1994 and incorporated herein by
reference.
5.01 Opinion of Debevoise & Plimpton.*
10.01 The Equitable Companies Incorporated Stock Trust Agreement, effective as of December
2, 1993, filed as Exhibit 10.01 to the registrant's Form S-4 Registration
Statement No. 33-73102, dated December 17, 1993 and incorporated herein by
reference.
23.01 Consent of Price Waterhouse LLP.
23.02 Consent of Debevoise & Plimpton (included in Exhibit 5.01).
24.01 Powers of Attorney of certain officers and directors of the Company (previously
filed on the signature page hereto).
</TABLE>
- ------------
* Previously filed.
Exhibit 1.01
THE EQUITABLE COMPANIES INCORPORATED STOCK TRUST
AND
THE EQUITABLE COMPANIES INCORPORATED
_________
Common Stock
_________
Sales Agreement
_________
New York, New York
May , 1996
To the Agent named in the
Terms Agreement hereinafter
described.
Ladies and Gentlemen:
From time to time The Equitable Companies Incorporated, a Delaware
corporation (the "Company"), and The Equitable Companies Incorporated Stock
Trust (the "Trust") created under The Equitable Companies Incorporated Stock
Trust Agreement effective as of December 2, 1993 (the "Trust Agreement") among
the Company and The Chase Manhattan Bank, N.A., as Trustee (the "Trustee") for
the Trust, propose to enter into one or more agreements, which may be written
agreements, substantially in the form of Annex I hereto, or which may be oral
agreements confirmed in writing containing such of the information set forth in
Annex I as may be applicable, in each case with such additions or deletions as
the parties thereto may agree (each such agreement, whether oral or in writing,
a "Terms Agreement"), to provide for the sale by the Trust from time to time of
up to 11,940,299 shares (the "Offered Shares") of Common Stock, par value $.01
per share ("Common Stock"), of the Company issuable upon conversion of the
shares of Series D Convertible Preferred Stock, par value $1.00 per share (the
"Series D Preferred Shares"), of the Company owned by the Trust. As used in
this Agreement, the term "Agent" means the broker or dealer named as the Agent
<PAGE>
in any such agreement, whether acting as principal or agent. The standard
provisions set forth herein shall be incorporated by reference in any such
agreement.
Subject to the terms and conditions stated herein and to the reservation
by the Trust of the right to sell Offered Shares directly on its own behalf, the
Trust and the Company (i) may from time to time appoint the Agent named in a
Terms Agreement as an agent of the Trust and the Company for the purpose of
soliciting and receiving offers to purchase from the Trust the number of Offered
Shares set forth in such Terms Agreement pursuant to Section 3(a) hereof (any
such Terms Agreement for purposes of this Agreement being hereinafter referred
to as a "Soliciting Terms Agreement") and (ii) hereby agree that, except as
otherwise contemplated herein, whenever the Trust determines to sell Offered
Shares directly to an Agent as principal pursuant to Section 4(b) hereof, the
Company and the Trust will enter into a Terms Agreement relating to such sale in
accordance with Section 3(b) hereof (any such Terms Agreement for purposes of
this Agreement being hereinafter referred to as a "Principal Terms Agreement").
The Trust and the Company further agree with each Agent as set forth in this
Agreement.
1. This Agreement shall not be construed as an obligation of the Trust
to sell any of the Offered Shares or as an obligation of any Agent to purchase
or solicit offers to purchase the Offered Shares. The obligation of the Trust
to sell any of the Offered Shares and the obligation of any Agent to purchase or
solicit offers to purchase any of the Offered Shares shall be evidenced by the
Terms Agreement with respect to the Offered Shares specified therein. Each
Terms Agreement shall specify the aggregate number of Offered Shares to which it
relates and such other information as may be required pursuant to Section 3
hereof and shall also specify any requirements for opinions of counsel,
accountants' letters, officers' certificates and Trustee certificates pursuant
to Section 9 hereof. A written Terms Agreement or any confirmation in writing
of an oral Terms Agreement may be evidenced by a telegraphic or facsimile
communication or any other rapid transmission device designed to produce a
written record of communications transmitted.
2. The Company represents and warrants to, and agrees with, each Agent
that:
(a) A registration statement on Form S-3 (File No. 333-3224) in respect
of the Offered Shares has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and any
post-effective amendment thereto, each in the form heretofore delivered or to
be delivered to such Agent, excluding exhibits to such registration
statement, but including all documents incorporated by reference in the
prospectus contained therein, have been declared effective by the Commission
in such form; from the date of any such Terms Agreement with such Agent, no
other document with respect to such registration statement or document
incorporated by reference
2
<PAGE>
therein has heretofore been filed or transmitted for filing with the
Commission (other than any prospectuses filed pursuant to Rule 424(b) of the
rules and regulations of the Commission under the Securities Act of 1933, as
amended (the "Act") or except as permitted by Section 7(a) hereof); and no
stop order suspending the effectiveness of such registration statement has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in such
registration statement or filed with the Commission pursuant to Rule 424(a)
under the Act, is hereinafter called a "Preliminary Prospectus"; the various
parts of such registration statement, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective, each as amended at the time such part of the registration
statement became effective, are hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Offered Shares, in
the form in which it has most recently been filed, or transmitted for filing,
with the Commission, being hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein pursuant
to the applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any amendment
or supplement to any Preliminary Prospectus or the Prospectus, including any
supplement to the Prospectus that sets forth only the terms of a particular
offering of Offered Shares (a "Pricing Supplement"), shall be deemed to
refer to and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and incorporated by reference
in such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to
Sections 13(a) or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the Registration
Statement; and any reference to the Prospectus as amended or supplemented
shall be deemed to refer to the Prospectus as amended or supplemented
(including by the applicable Pricing Supplement filed in accordance with
Section 7(a) hereof) in relation to the Offered Shares in the form in which
it is filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 7(a) hereof, including any documents incorporated by
reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make
3
<PAGE>
the statements therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, or any further amendment or
supplement thereto, when such documents become effective or are filed with
the Commission, as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by such Agent expressly for
use in the Prospectus or the Prospectus as amended or supplemented;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder and do not and
will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable filing date as
to the Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by such Agent expressly for
use in the Prospectus or the Prospectus as amended or supplemented;
(d) Neither the Company nor any of its Significant Subsidiaries (as
defined below) has sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus and other than any such loss or interference
which would not, individually or in the aggregate, have a material adverse
effect on (A) the assets, business, financial position, equity or prospects
of either the DLJ Group (as defined below) or the Alliance Group (as defined
below) or (B) the assets, business, financial position, equity, results of
operations or prospects of either the Investment Subsidiaries Group (as
defined below) or the Insurance Group (as defined below) or of The Equitable
(as defined below) considered as a consolidated entity (a "Material Adverse
Effect"); and, since the date of the latest financial statements included or
incorporated by reference in the Prospectus, there has not been any increase
in the consolidated long-term debt of The Equitable (other than long-term
debt related to consolidated real estate joint ventures which
4
<PAGE>
is non-recourse to the Company or any of its Insurance Subsidiaries (as
defined below) and other than long-term debt that may have been incurred by
The Equitable not in excess of the amount, if any, set forth in a Schedule to
the Terms Agreement applicable to the Offered Shares ("Other Permitted
Debt")), or any material adverse change, or any development involving a
prospective material adverse change, in or affecting (X) the assets, general
affairs, management, financial position or equity of either the Alliance
Group or the DLJ Group, (Y) the assets, general affairs, management,
financial position, equity or results of operations of either the Investment
Subsidiaries Group or the Insurance Group, or of The Equitable considered as
a consolidated entity or (Z) the statutory capital or surplus of The
Equitable Life Assurance Society of the United States ("Equitable Life") or
Equitable Variable Life Insurance Company ("EVLICO"), in each case otherwise
than as set forth or contemplated in the Prospectus. As used herein,
"Significant Subsidiaries" shall mean Equitable Life, EVLICO, The Equitable
of Colorado, Alliance Capital Management Corporation ("ACMC"), Equitable Real
Estate Management, Inc. ("EREIM"), Donaldson, Lufkin & Jenrette, Inc.
("DLJ"), Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC"),
Alliance Capital Management L.P. ("Alliance"), ACMC, Inc. ("ACMCI"),
Equitable Holding Corporation ("EHC") and Equitable Investment Corporation
("EIC"); the "DLJ Group" shall mean DLJ and its consolidated subsidiaries,
considered as a whole; the "Investment Subsidiaries Group" shall mean the
Alliance Group, the DLJ Group and EHC and its consolidated subsidiaries,
including without limitation EIC and EREIM and its subsidiaries considered as
a whole; the "Insurance Group" shall mean Equitable Life and its subsidiaries
which are engaged in the insurance business, considered as a whole; the
"Alliance Group" shall mean Alliance and its consolidated subsidiaries, ACMC
and ACMCI considered as a whole; and "The Equitable" shall mean the Company
and its subsidiaries;
(e) Each of the Company and its Significant Subsidiaries has good and
insurable title in fee simple to all property owned by it (other than real
property held solely for investment purposes) and good title to all personal
property owned by it which in any such case is material to any of the
Alliance Group, the DLJ Group, the Investment Subsidiaries Group or the
Insurance Group, or to The Equitable considered as a consolidated entity, in
each case free and clear of all liens, encumbrances and defects except such
as are described in the Prospectus or such as do not, individually or in the
aggregate, have a Material Adverse Effect; and any real property and
buildings held under lease by the Company or any Significant Subsidiary are
held under valid, subsisting and enforceable leases with such exceptions as
do not, individually or in the aggregate, have a Material Adverse Effect;
(f) Each of the Company and its Significant Subsidiaries has been duly
organized and is validly existing as a corporation or partnership in good
standing
5
<PAGE>
under the laws of its jurisdiction of organization; each of the Company and
its Significant Subsidiaries has the power and authority (corporate and
other) to own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation or
partnership for the transaction of business and is in good standing under the
laws of each jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification except where the failure to
be so qualified or in good standing would not, individually or in the
aggregate, have a Material Adverse Effect;
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company,
including, without limitation the Series D Preferred Shares, have been duly
and validly authorized and issued and are fully paid and non-assessable; the
outstanding Common Stock of the Company conforms in all material respects to
the description thereof contained or incorporated by reference in the
Prospectus; and all of the issued shares of capital stock or partnership
interests of each Significant Subsidiary have been duly and validly
authorized and issued and are fully paid and non-assessable, and except as
set forth in the Prospectus, are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(h) The Trust Agreement has been duly authorized, executed and
delivered by the Company and the Trustee on behalf of the Trust and is a
valid and binding agreement of the Company and the Trust, enforceable in
accordance with its terms except as such enforceability may be limited by
applicable bankruptcy, insolvency, rehabilitation, fraudulent transfer,
reorganization, moratorium and similar laws relating to the creditors of
insurance companies or affecting the rights of creditors generally and by
general equitable principles; the Committee (as defined in the Trust
Agreement) has been duly constituted in accordance with the Trust Agreement
and the Committee, the Company and the Trustee have taken all action required
to be taken by any of them under the Trust Agreement or applicable law to
authorize the sale and delivery of the Offered Shares contemplated by this
Agreement and the Terms Agreement ;
(i) The shares of Common Stock issuable upon conversion of the Series D
Preferred Shares have been duly authorized and reserved for issuance upon
such conversion and when issued upon conversion in accordance with the terms
of the Certificate of Designations for such Series D Preferred Shares (the
"Certificate of Designation") will have been validly issued and will be fully
paid and non-assessable and the issuance of such shares of Common Stock will
not be subject to any presently existing preemptive or other similar rights;
(j) The Trust has, and at the Time of Delivery (as defined below) will
have, valid title to the Series D Preferred Shares and the Offered Shares
issuable
6
<PAGE>
on conversion thereof to be sold by the Trust at such Time of Delivery and
the legal right and power, and all authorization and approval required by
law, to enter into this Agreement and the Terms Agreement and to sell,
transfer and deliver the Offered Shares to be sold by the Trust at such Time
of Delivery;
(k) Delivery of the Offered Shares by the Trust pursuant to this
Agreement and the Terms Agreement will pass valid title to such Offered
Shares free and clear of any security interests, claims, liens, equities or
other encumbrances;
(l) This Agreement has been, and upon delivery thereof each Terms
Agreement will be, duly authorized, executed and delivered by the Company and
the Trust;
(m) The execution and delivery by the Company and the Trust of, and the
performance by the Company and the Trust of their respective obligations
under this Agreement and the Terms Agreement, the performance by the Company
of its obligations under the Trust Agreement and the Certificate of
Designations, the issuance of Common Stock on conversion of the Series D
Preferred Shares and the sale of the Offered Shares as set forth herein and
in the Terms Agreement, the compliance by the Company with all of the
provisions of the Trust Agreement, the Certificate of Designations and this
Agreement and the Terms Agreement, and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, the Trust Agreement or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
subsidiaries or the Trust is a party or by which the Company or any of its
subsidiaries or the Trust is bound or to which any of the property or assets
of the Company or any of its subsidiaries or the Trust is subject, except for
such conflicts, breaches, violations or defaults that would not, individually
or in the aggregate, have a Material Adverse Effect, nor will such action
result in any violation of (A) any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Trust or Company or any of its subsidiaries or any of their properties,
except for such violations that would not, individually or in the aggregate,
have a Material Adverse Effect, (B) the provisions of the charter or by-laws
(or with respect to Alliance, other organizational documents) of the Company
or any Significant Subsidiary or (C) any term or provision of Equitable
Life's Plan of Reorganization, as adopted November 27, 1991 and as amended by
Amendment No. 1 thereto on December 31, 1991 by the Board of Directors of
Equitable Life (the "Plan");
(n) All consents, approvals, authorizations, orders, registrations or
qualifications of or with any court or governmental agency or body of the
United
7
<PAGE>
States or any state thereof required for the issuance of Common Stock upon
conversion of the Series D Preferred Shares or the sale of the Offered Shares
have been obtained and are in full force and effect, except as may be
required under state securities or Blue Sky laws or state insurance
securities laws in connection with the purchase and distribution of the
Offered Shares;
(o) Each of the Company and the Significant Subsidiaries has all
necessary consents, licenses, authorizations, approvals, orders, certificates
and permits (collectively, the "Consents") of and from, and has made all
filings and declarations (collectively, the "Filings") with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease, license and
use its properties and assets and to conduct its business in the manner
described in or contemplated by the Prospectus, except where the failure to
obtain any such Consent or to make any such Filing would not, individually or
in the aggregate, have a Material Adverse Effect; all such Consents and
Filings are in full force and effect and neither the Company nor any
Significant Subsidiary has received any notice of any event, inquiry,
investigation or proceeding that would reasonably be expected to result in
the suspension, revocation or limitation of any such Consent or otherwise
impose any limitation on the conduct of the business of the Company or any
Significant Subsidiary, except as set forth in the Prospectus and except for
any such suspension, revocation or limitation which would not, individually
or in the aggregate, have a Material Adverse Effect, and, to the best of the
Company's and the Significant Subsidiaries' knowledge, there is no
sustainable basis for any such suspension, revocation or limitation;
(p) Each of Equitable Life and its subsidiaries which are engaged in
the insurance business (the "Insurance Subsidiaries") is duly licensed or
authorized to conduct such business under the insurance laws of each
jurisdiction in which it conducts such business so as to require such
licensing or authorization, except where the failure to be so licensed or
authorized would not, individually or in the aggregate, have a material
adverse effect on the assets, business, financial position, equity, results
of operations or prospects of the Insurance Group; all such licenses or
authorizations are in full force and effect and neither the Company nor
Equitable Life nor any Insurance Subsidiary has received any notice of any
event, inquiry, investigation or proceeding that would reasonably be expected
to result in the suspension, revocation or limitation of any such licenses or
authorizations or otherwise impose any limitation on the conduct of the
business of Equitable Life or any Insurance Subsidiary, except any such
suspension, revocation or limitation which would not, individually or in the
aggregate, have a material adverse effect on the assets, business, financial
position, equity, results of operations or prospects of the Insurance Group,
and, to the best of the Company's, Equitable Life's and the Insurance
Subsidiaries' knowledge, there is no sustainable basis for any such
suspension, revocation or
8
<PAGE>
limitation; each of the Company, Equitable Life and the Insurance
Subsidiaries is in compliance with, and conducts its businesses in conformity
with, all applicable insurance laws and regulations, except where the failure
to so comply or conform would not have a material adverse effect on the
assets, business, financial position, equity, results of operations or
prospects of the Insurance Group; and the Company or Equitable Life have
disclosed in writing to the Agent all pending significant examinations by,
and all significant examinations which have been completed and filed since
December 13, 1995 by, any governmental authority having jurisdiction to
regulate the insurance operations of Equitable Life or any Insurance
Subsidiary;
(q) None of the Trust, the Company or any Significant Subsidiary (other
than certain separate accounts of Equitable Life and EVLICO) is required to
be registered as an investment company with the Commission or in any
jurisdiction where it conducts business; each of the Company and the
Significant Subsidiaries is registered in all capacities with each federal,
state, local or other governmental authority and is registered with, a member
of, or a participant in, each self-regulatory organization, in each case, as
is necessary to conduct its business as described in or contemplated by the
Prospectus, except where the failure to be so registered, or to be a member
or participant, would not, individually or in the aggregate, have a Material
Adverse Effect; all such registrations and memberships are in full force and
effect and neither the Company nor any of its Significant Subsidiaries has
received any notice of any event, inquiry, investigation or proceeding that
would reasonably be expected to result in the suspension, revocation or
limitation of any such registrations or memberships, except any such
suspension, revocation or limitation which would not, individually or in the
aggregate, have a Material Adverse Effect; and, to the best of the Company's
and the Significant Subsidiaries' knowledge, there is no sustainable basis
for any such suspension, revocation or limitation; each of the Company and
the Significant Subsidiaries is in compliance with all applicable laws,
rules, regulations, orders, by-laws and similar requirements in connection
with such registrations or memberships, as the case may be, except where the
failure to so comply would not, individually or in the aggregate, have a
Material Adverse Effect;
(r) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by government authorities or threatened by others;
9
<PAGE>
(s) Price Waterhouse LLP, who certified the financial statements of the
Company incorporated by reference in the Registration Statement and the
Prospectus, are independent public accountants as required by the Act and the
rules and regulations of the Commission thereunder;
(t) None of the Company or any Significant Subsidiary has received
written notice that it is not in compliance with, and, to the best of the
Company's and each Significant Subsidiary's knowledge, each is in compliance
with, any applicable foreign, federal, state or local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), and each of the Company and its Significant
Subsidiaries has received all permits, licenses or other approvals required
of it under applicable Environmental Laws to conduct its business and is in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or approvals would
not, singly or in the aggregate, have a Material Adverse Effect; the costs
and liabilities (including, without limitation, any capital or operating
expenditures required for clean-up or closure of properties and any potential
liabilities to third parties) associated with compliance with Environmental
Laws would not, singly or in the aggregate, have a Material Adverse Effect;
(u) The financial statements of the Company and its consolidated
subsidiaries, together with the related notes, incorporated by reference in
the Registration Statement and the Prospectus (or any amendment or supplement
thereto), comply in all material respects with the requirements of the Act
and the Exchange Act and the rules and regulations of the Commission
thereunder and present fairly in all material respects the financial
position, the results of operations and the changes in cash flows of such
entities in conformity with generally accepted accounting principles at the
respective dates or for the respective periods to which they apply; and the
financial and statistical information and data included or incorporated by
reference in the Registration Statement and the Prospectus are presented
fairly in all material respects;
(v) The Company and its Significant Subsidiaries own, possess, have
adequate rights to use or can acquire on reasonable terms, all licenses,
logos, copyrights, trademarks, service marks and trade names which are
material in the United States to the Alliance Group, the DLJ Group, the
Investment Subsidiaries Group or the Insurance Group or to The Equitable
considered as a consolidated entity, and neither the Company nor any
Significant Subsidiary has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an
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unfavorable decision, ruling or finding, would result in any Material Adverse
Effect;
(w) The pro forma condensed consolidated balance sheet and condensed
consolidated statements of earnings and the related notes thereto, if any,
included or incorporated by reference in the Registration Statement and the
Prospectus have been prepared in all material respects in accordance with the
applicable requirements of Rule 11-02 of Regulation S-X promulgated under the
Exchange Act, have been compiled on the pro forma basis described therein,
and in the opinion of the Company, the assumptions used in the preparation
thereof were reasonable at the time made and the adjustments used therein are
based upon good faith estimates and assumptions believed by the Company to be
reasonable at the time made;
(x) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes (Chapter 92-128, Laws of
Florida);
(y) The Trust is not subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"); and
(z) No consents, licenses, authorizations, approvals, orders,
certificates or permits of or from any federal, state, local or other
governmental authority, self-regulatory organization or court or other
tribunal are required with respect to payments to the Company by Equitable
Life, DLJ or EREIM in respect of contributions made by the Trust (whether
such contributions are made in securities or cash) to any of such
subsidiary's compensation or benefit plans, other than those which have been
obtained or made.
To the extent the foregoing representations and warranties contained in this
Section 2 relate to the sale of Offered Shares, the Company has assumed, with
your approval, that any such sale will not result in a violation of (i) Section
7312(v) of the New York Insurance Law or (ii) any state insurance holding
company statute relating to the acquisition of control of the Company or any of
its subsidiaries.
3. (a) On the basis of the representations and warranties, and subject
to the terms and conditions herein and in the Soliciting Terms Agreement set
forth, the Agent specified therein agrees to act as exclusive sales agent of the
Company and the Trust during the term of such Soliciting Terms Agreement and to
use its reasonable efforts to solicit and receive offers to purchase the Offered
Shares specified in such Soliciting Terms Agreement upon the terms and
conditions set forth in the Prospectus as amended or supplemented from time to
time.
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The Company reserves the right, in its sole discretion, to instruct the
Agent to suspend at any time after the date of a Soliciting Terms Agreement for
any period of time or permanently, the solicitation of offers to purchase the
Offered Shares referred to in such Soliciting Terms Agreement. As soon as
practicable, but in any event not later than one business day in New York City,
after receipt of such notice from the Company, the Agent will suspend
solicitation of offers to purchase such Offered Shares. If, at any time that
the Company has notified the Agent to suspend such solicitations under this
Agreement there shall be any sales of Offered Shares by the Trust outstanding
and not yet settled, the Company will promptly advise the Agent whether such
sales may be settled and whether the Prospectus as then in effect may be
delivered in connection with the settlement of such sales. If the Company
determines in its sole discretion that such sales may not be settled or that
such Prospectus may not be so delivered, the Agent will make reasonable efforts
to arrange for the cancellation of such sales, but the Company shall have the
sole responsibility for, and shall hold the Agent harmless from, any losses,
claims, damages or liabilities (and expenses in connection therewith) that may
result from the inability to make settlement of such sales.
The Trust agrees to pay the Agent a commission, at the time of
settlement of any sale of Offered Shares as a result of a solicitation made by
the Agent, in an amount per Offered Share to be negotiated and which will be
specified in the related Soliciting Terms Agreement but which it is understood
will not exceed that which is customary for the types of transactions involved.
Discounts, commissions, concessions, the offering price and other terms of
offerings or distributions of the types referred to in Section 4 hereof will be
agreed upon by the Company and the Agent prior to any such offering or
distribution. The Company and the Trust understand and agree that in any sale
of Offered Shares where the Agent is also acting as broker for a buyer of
Offered Shares, the Agent may also receive a brokerage commission from the buyer
in any amount negotiated by the Agent and such buyer and that the Agent may
reallow all or any part of its discount, commission or concession to other
brokers or dealers.
(b) Each sale of Offered Shares to the Agent as principal shall be made
in accordance with the terms of this Agreement and a Principal Terms Agreement
which will provide for the sale of such Offered Shares to, and the purchase
thereof by, the Agent. Any such Terms Agreement may also specify certain
provisions relating to the reoffering of such Offered Shares by the Agent. The
commitment of the Agent to purchase Offered Shares as principal, whether
pursuant to any written Terms Agreement or otherwise, shall be deemed to have
been made on the basis of the representations and warranties of the Company
herein contained and shall be subject to the terms and conditions herein set
forth. Each Principal Terms Agreement shall specify the number of Offered
Shares to be purchased by the Agent pursuant thereto, the price to be paid to
the Trust for such Offered Shares, any provisions relating to rights of, and
default by, underwriters acting together with the Agent in the reoffering of the
Offered Shares and the time and date and place of delivery of and payment for
such Offered Shares. If agreed to by the Company and the Agent and specified in
such Principal Terms
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Agreement, the Trust may grant to the Agent and the underwriters specified
therein the right to purchase at their election an additional number of Offered
Shares solely for the purpose of covering overallotments.
Each time and date of delivery of and payment for Offered Shares to be
purchased by any buyer or by the Agent acting as principal, whether in either
case pursuant to a written Terms Agreement or otherwise, is referred to herein
as a "Time of Delivery".
4. The Offered Shares may be offered and sold by any of the following
methods:
(a) The Offered Shares may be offered and sold by the Agent in ordinary
brokers' transactions in the auction market on the floor of the New York
Stock Exchange, Inc. (the "NYSE"), or any other exchange on which the Common
Stock is or may be listed or admitted to trading (the NYSE and such other
exchanges being herein sometimes called the "Exchanges"). However, the Agent
agrees to notify the Company prior to effecting any offers on the floor of an
Exchange not named in the Prospectus.
(b) The Agent may solicit offers to purchase Offered Shares, and offer
Offered Shares for sale, in transactions on the Exchanges in "crosses" of
blocks where the Agent acts as broker for the buyers in addition to acting as
agent for the Company and the Trust. It is understood that on occasion the
Agent may also act as a principal and purchase for its own account a portion
of the Offered Shares being sold in the cross of a block. The Agent may also
offer and sell Offered Shares (i) in block transactions on the Exchanges in
which other broker-dealers are acting as broker for all or some of the buyers
of the Offered Shares being sold in such transactions and (ii) in negotiated
transactions through the writing of options on shares of Common Stock
(whether such options are listed on an option exchange or otherwise). In the
discretion of the Agent, the Agent may also sell Offered Sales in block
transactions to one or more broker-dealers purchasing such Offered Shares, or
a portion of such Offered Shares, as principal for their own account. Any of
the transactions contemplated by this Section 4(b) may also be executed in
the over-the-counter market, with broker-dealers who are not Exchange members
or otherwise, provided that such transactions are in compliance with the
rules of such Exchanges.
(c) With the prior authorization of the Company and any necessary
permission from officials of the Exchanges, the Agent may conduct "fixed
price offerings" or "at-the-market offerings" off the floor of the Exchanges,
in which the Agent has committed to purchase as principal the Offered Shares
involved in such offering and dealers selected by the Agent participate in
the resale of such Offered Shares. With the prior authorization of the
Company and any necessary
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<PAGE>
permission from officials of the Exchanges, the Agent may also conduct
"special offerings" or "exchange distributions" of Offered Shares on the
Exchanges in compliance with the rules of such Exchanges.
(d) A distribution made through one or more underwriters on a firm
commitment or best efforts basis.
(e) The Company and the Trust understand that offers and sales of
Offered Shares may be made at a fixed price or prices, which may be changed,
at market prices prevailing at the time of sale, at prices related to
prevailing market prices or at prices negotiated by the Agent; provided,
however, that the price per share to be paid to the Trust for such Offered
Shares shall not be less than an amount (determined pursuant to a formula or
otherwise) authorized by the Company from time to time and conveyed to the
Agent in writing.
(f) The Company and the Trust agree that, concurrently with the offer
and sale of Offered Shares on behalf of the Trust as contemplated by this
Agreement, the Agent (i) may act as broker for the sale of shares of Common
Stock by customers other than the Company and the Trust and, to the extent
permitted by the rules and regulations of the Commission under the Exchange
Act, may solicit the sale of shares of Common Stock through the Agent as
broker for the seller, solicit the sale of shares of Common Stock to the
Agent as principal and solicit offers to buy shares of Common Stock and (ii)
may offer and sell as principal for its own account Offered Shares which the
Agent has purchased from the Trust as contemplated by Section 4(b) above or
shares of Common Stock which the Agent has otherwise acquired in transactions
permitted by this Agreement.
5. Except as may otherwise be agreed, delivery of Offered Shares sold
in transactions of the types referred to in Section 3(b) hereof shall be made to
the Agent by electronic or other means as may be specified by such Agent for the
account of the Agent through the facilities of The Depositary Trust Company not
later than 10:00 a.m. New York City time, on that date which is the third
business day (or if permitted by the rules and regulation of the Commission, the
fourth business day) after the "trade date" for the sale of such Offered Shares,
against delivery for the account of the Trust c/o The Chase Manhattan Bank,
N.A., 1211 Avenue of the Americas, New York, New York 10036, Account No.
_________, Attention: __________, or such other address and account number as
the Trustee shall have notified the Company and the Agent in writing, in
immediately available funds of the net amount due to the Trust for such Offered
Shares; provided, however, that the Company, the Trustee on behalf of the Trust
and the Agent may agree upon physical delivery of certificates for the Offered
Shares at the offices of the Agent specified in the Terms Agreement against
payment therefor in immediately available funds in particular transactions or
upon settlement at such other time and place or in such other manner as they may
determine. Delivery of, and
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<PAGE>
payment for, Offered Shares sold as contemplated by Section 3(a) hereof shall be
made in accordance with the agreement of the Company, the Trustee on behalf of
the Trust and the Agent relating to such sales.
6. The documents required to be delivered pursuant to Section 9 hereof
pursuant to any Terms Agreement shall be delivered to the Agent at the offices
of Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022, at 10:00
a.m., New York City time, on the date of any such Soliciting Terms Agreement or
(except as otherwise required pursuant to Section 9(e) hereof) at the Time of
Delivery with respect to any such Principal Terms Agreement, or such other date
and time as may be mutually agreed by the Agent and the Company (such time and
date being referred to herein as the "Delivery Date").
7. The Company and, in the case of Sections 7(e), (h), (i) and (j)
hereof, the Trust agree with the Agent:
(a) To make no amendment or supplement to the Registration Statement or
Prospectus as then amended or supplemented (i) during the term of a
Soliciting Terms Agreement which shall be reasonably disapproved by the Agent
promptly after reasonable notice thereof or (ii) after the date of the
Principal Terms Agreement or other agreement by the Agent to purchase Offered
Shares as principal and prior to the related Time of Delivery which shall be
reasonably disapproved by the Agent party to such Terms Agreement or so
purchasing as principal promptly after reasonable notice thereof; to prepare,
with respect to any Offered Shares to be sold through or to such Agent, if
required by law, a Pricing Supplement with respect to such Offered Shares in
a form reasonably approved by such Agent and to file such Pricing Supplement
pursuant to Rule 424(b)(3) under the Act not later than the close of business
of the Commission on the fifth business day (or such earlier time as may be
required by the Act and the rules and regulations of the Commission
thereunder) after the date on which such Pricing Supplement is first used; to
make no amendment or supplement to the Registration Statement or the
Prospectus during the term of any Terms Agreement at any time prior to having
afforded such Agent a reasonable opportunity to review and comment thereon;
to file in a timely manner all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
for so long as the delivery of a prospectus is required in connection with
the offering or sale of the Offered Shares, and during such same period to
advise such Agent, promptly after the Company receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus (other than any Pricing Supplement that relates to Offered Shares
not purchased by or through such Agent) has been filed with the Commission,
of the issuance by the Commission of any stop order or of any order
preventing or
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<PAGE>
suspending the use of any prospectus relating to the Offered Shares, of the
suspension of the qualification of Offered Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order or of
any such order preventing or suspending the use of any prospectus relating to
the Offered Shares or suspending any such qualification, to use promptly its
best efforts to obtain the withdrawal of such order;
(b) Promptly to take such action as the Agent may reasonably request to
qualify the Offered Shares for offering and sale under the securities laws of
such United States jurisdictions as the Agent may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of such Offered Shares, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) To furnish such Agent with copies of the Registration Statement and
each amendment thereto, with copies of the Prospectus as amended or
supplemented, other then any Pricing Supplement that relates to Offered
Shares not purchased by or through such Agent, in the form in which it is
filed with the Commission pursuant to Rule 424 under the Act, and with copies
of the documents incorporated by reference therein, all in such quantities
and by such times as the Agent may from time to time reasonably request, and,
if the delivery of a prospectus is required at any time in connection with
the offering or sale of the Offered Shares (including Offered Shares
purchased from the Trust by such Agent as principal) and if at such time any
event shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it shall
be necessary during such same period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act or the Exchange Act, to notify
such Agent and to so advise such Agent promptly by telephone (with
confirmation in writing) (and if so notified, the Agent shall cease any
solicitation as soon as practicable, but in no event later than one business
day later) and if the Company shall decide to amend or supplement the
Registration Statement or the Prospectus, to prepare and cause to be filed
promptly with the Commission an amendment or supplement to the Registration
Statement or the Prospectus as then amended or supplemented that will correct
such statement or omission or effect such compliance, provided that if the
--------
Agent is required to
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deliver the Prospectus in connection with sales of Offered Shares any time
more than 9 months after the date of the Terms Agreement relating to such
Offered Shares, the cost of such preparation and filing of such amended or
supplemented Prospectus shall be borne by the Agent of such Offered Shares
and, provided, further, should the event requiring an amendment or supplement
-------- -------
to the Registration Statement or Prospectus relate solely to the Agent, the
Agent shall assume the cost of such preparation and filing;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Act), an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Act and the rules
and regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(e) Except as may be set forth in a Terms Agreement, that, from the
date of any Terms Agreement with such Agent and continuing to and including
the later of (i) the termination of trading restrictions, if any, for the
Offered Shares purchased thereunder, as notified to the Company and the
Trustee on behalf of the Trust by the Agent and (ii) the last Time of
Delivery for such Offered Shares, not to offer, sell, contract to sell or
otherwise dispose of any Common Stock of the Company or any securities that
are convertible into or exchangeable or exercisable for, or that represent
the right to receive, Common Stock of the Company (other than pursuant to
director, employee or agent stock option or purchase plans, or dividend
reinvestment or direct purchase plans sponsored by the Company, existing on,
or upon the conversion of convertible or exchangeable securities outstanding
as of, the date of the Terms Agreement for such Offered Shares), without the
prior written consent of such Agent;
(f) That each acceptance by the Trustee on behalf of the Trust of an
offer to purchase Offered Shares (including any purchase by such Agent as
principal not pursuant to a written Principal Terms Agreement or agreement to
act as agent not pursuant to a written Soliciting Terms Agreement), and each
execution and delivery by the Company and the Trustee on behalf of the Trust
of a written Terms Agreement with such Agent, shall be deemed to be an
affirmation to such Agent that the representations and warranties of the
Company contained in or made pursuant to this Agreement are true and correct
as of the date of such acceptance or agreement or as of the date of such
written Terms Agreement, as the case may be, as though made at and as of such
date, and an undertaking that such representations and warranties will be
true and correct as of the settlement date for the Offered Shares relating to
such acceptance or as of the Time of Delivery relating to such sale, as the
case may be, as though made at and as of such date (except that such
representations and warranties shall be
17
<PAGE>
deemed to relate to the Registration Statement and the Prospectus as then
amended and supplemented relating to such Offered Shares);
(g) That at the time the Company, the Trustee on behalf of the Trust
and such Agent enter into a Soliciting Terms Agreement and such Soliciting
Terms Agreement specifies the delivery of, and at the time the Trust sells
Offered Shares to such Agent as principal pursuant to a Principal Terms
Agreement and such Principal Terms Agreement specifies the delivery of, an
opinion or opinions by Davis Polk & Wardwell, counsel to the Agent, as a
condition to the Agent's obligations under such Soliciting Terms Agreement or
the purchase of Offered Shares pursuant to such Principal Terms Agreement, as
the case may be, the Company shall furnish to such counsel such papers and
information and make available such appropriate officers of the Company as
they may reasonably request to enable them to furnish to such Agent the
opinion or opinions referred to in Section 9(b) hereof;
(h) To offer to any person who has agreed to purchase Offered Shares
from the Trust as the result of an offer to purchase solicited by such Agent
the right to refuse to purchase and pay for such Offered Shares if, on the
related settlement date, any condition set forth in Section 9(a), 9(i)
(excluding for purposes of this paragraph (h), the reference to any other
"nationally recognized statistical rating organization" in said Section 9(i)
or clauses (i)), (ii) and (iii) of 9(j) hereof shall not have been satisfied;
(i) That prior to the sale of Offered Shares, the Company and the Trust
will have received all consents, approvals, authorizations, orders,
registrations and qualifications of or with any court or any federal or state
regulatory authority or other governmental agency or body having jurisdiction
over the Trust or Company or any of its properties which are legally required
for the issuance by the Company of such Offered Shares upon conversion of the
Series D Preferred Shares or for the sale by the Trust of such Offered
Shares, except for consents, approvals, authorizations, registrations or
qualifications which may be required under state securities or Blue Sky laws
as to which no covenant is made except as provided in Section 7(b) hereof;
and
(j) On or prior to each Time of Delivery, the Company and the Trustee
on behalf of the Trust will take, or cause to be taken, such action as may be
necessary to cause a sufficient number of shares of Common Stock to be issued
upon conversion of the Series D Preferred Shares to effect delivery of
Offered Shares at such Time of Delivery.
8. The Company covenants and agrees with the Agent that the Company
will pay or cause to be paid the following: (i) the fees, disbursements and
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expenses of the Company's counsel and accountants in connection with the
registration of the Offered Shares under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus, the Prospectus, any preliminary pricing
supplement and any Pricing Supplement and amendments and supplements thereto and
the mailing and delivering of copies thereof to such Agent; (ii) the cost of
printing or producing this Agreement, any Terms Agreement, any Blue Sky
Memoranda, and any other documents in connection with the offering, purchase,
sale and delivery of the Offered Shares; (iii) all expenses in connection with
the qualification of the Offered Shares for offering and sale under state
securities laws and state insurance securities laws as provided in Section 7(b)
hereof, including the fees and disbursements of Davis Polk & Wardwell in
connection with such qualification and in connection with the Blue Sky
Memoranda; (iv) any filing fees incident to any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the Offered
Shares and any listing fees of the NYSE; (v) the cost of preparing the Offered
Shares; (vi) the fees and expenses of the Trustee and any agent of the Trustee
and the fees and disbursements of counsel for the Trustee in connection with the
transactions contemplated by this Agreement; (vii) the fees and expenses of any
transfer or paying agent or registrar of the Company in connection with the
Offered Shares (including the fees and expenses of counsel for such transfer or
paying agent or registrar); (viii) any advertising expenses connected with the
solicitation of offers to purchase and the sale of Offered Shares so long as
such advertising expenses have been approved by the Company; and (ix) all other
costs and expenses incident to the performance of its and the Trust's
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 10 and 13 hereof, any Agent will pay all of its own costs and
expenses, including the fees of its counsel, transfer taxes on resale of any of
the Offered Shares by it, and any advertising expenses connected with any offers
it may make which are not so approved by the Company.
9. The obligation of any Agent, as sales agent of the Trust and
Company, at any time ("Solicitation Time") to solicit offers to purchase the
Offered Shares and the obligation of any Agent to purchase Offered Shares as
principal, in each case pursuant to any Terms Agreement or otherwise, shall in
each case be subject, in the discretion of the Agent, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Terms Agreement with such Agent are true and
correct at and as of the Time of Delivery, any applicable date referred to in
Section 7(f) hereof and at and as of such Solicitation Time, the condition that
the Company and the Trust shall have performed all of their respective
obligations hereunder theretofore to be performed, and to the following
additional conditions:
(a) The Prospectus as amended or supplemented (including any Pricing
Supplement) in relation to the applicable Offered Shares shall have been
filed with the Commission pursuant to Rule 424(b) under the Act within the
applicable time period prescribed for such filing by the rules and
regulations under the Act and
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in accordance with Section 7(a) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on
the part of the Commission shall have been complied with to the Agent's
reasonable satisfaction.
(b) If required pursuant to the terms of the Terms Agreement with the
Agent, Davis Polk & Wardwell, counsel for the Agent, shall have furnished to
the Agent such opinion or opinions, dated the date of a Soliciting Terms
Agreement or the Time of Delivery with respect to any Principal Terms
Agreement, with respect to this Agreement and the Terms Agreement, the
Offered Shares, the Registration Statement and the Prospectus, and such other
related matters as the Agent may reasonably request, and such counsel shall
have received such papers and information as they may reasonably request to
enable them to pass upon such matters.
(c) If required pursuant to the terms of the Terms Agreement with the
Agent, Debevoise & Plimpton, counsel for the Company, shall have furnished to
the Agent their written opinion, dated the date of a Soliciting Terms
Agreement or the Time of Delivery with respect to any Principal Terms
Agreement, in form and substance satisfactory to the Agent, to the effect
that:
(i) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware
and Equitable Life is duly incorporated and is validly existing as a
stock life insurance company in good standing under the laws of the
State of New York;
(ii) Each of the Company and Equitable Life had full corporate
power and authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented;
(iii) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented and all of the issued
shares of capital stock of the Company, including the Series D Preferred
Shares, have been duly and validly authorized and issued and are fully
paid and non-assessable;
(iv) This Agreement and the Terms Agreement with such Agent have
been duly authorized, executed and delivered by the Company;
(v) The Trust Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, enforceable in accordance with its terms except as such
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<PAGE>
enforceability may be limited by applicable bankruptcy, insolvency,
rehabilitation, fraudulent transfer, reorganization, moratorium and
similar laws relating to the creditors of insurance companies or
affecting the rights of creditors generally and by general equitable
principles;
(vi) The shares of Common Stock issuable upon conversion of the
Series D Preferred Shares have been duly authorized and reserved for
issuance upon such conversion and when issued upon conversion in
accordance with the terms of the Certificate of Designations will have
been validly issued and will be fully paid and non-assessable and the
issuance of such shares of Common Stock will not be subject to any
presently existing preemptive or other similar rights;
(vii) The Common Stock conforms in all material respects as to
legal matters to the description thereof contained in the Prospectus as
amended or supplemented;
(viii) The execution and delivery by the Company and the Trust
of, and the performance by the Company and the Trust of their respective
obligations under, this Agreement and the Terms Agreement, the
performance by the Company of its obligations under the Trust Agreement
and the Certificate of Designations, the issuance of Common Stock upon
conversion of the Series D Preferred Shares and the sale of the Offered
Shares by the Trust as set forth herein and in the Terms Agreement, the
compliance by the Company with all of the provisions of the Trust
Agreement, the Certificate of Designations, this Agreement and such
Terms Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, the Plan;
(ix) All consents, approvals, authorizations, orders,
registrations or qualifications of or with any governmental agency or
body of the United States or the State of Delaware (insofar as the
General Corporation Law of such State is concerned) and New York
required by the Company for the issuance of Common Stock upon
conversion of the Series D Preferred Shares or the sale of the Offered
Shares have been obtained and are in full force and effect, except that
such counsel need express no opinion as to state securities or Blue Sky
laws or state insurance securities laws in connection with the purchase
and distribution of Offered Shares;
(x) The Trust is a separate and independent legal entity distinct
and apart from the Company and the assets held by the Trust pursuant to
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the Trust Agreement, including the Series D Preferred Shares, will
constitute property of the Trust and not the Company;
(xi) No consents, licenses, authorizations, approvals, orders,
certificates or permits are required under ERISA or the New York
Insurance Law or, in each case, the rules and regulations thereunder
with respect to payments to the Company by Equitable Life, DLJ or EREIM
in respect of contributions made by the Trust (whether such
contributions are made in securities or cash) to any of such
subsidiary's compensation or benefit plans, other than those which have
been obtained or made;
(xii) The statements, if any, in the Prospectus as amended or
supplemented under the captions "Description of Capital Stock",
"Restrictions on Acquisitions of Securities of the Company" and "Plan of
Distribution", and any other captions specified in the Schedule to the
Terms Agreement, insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, fairly
summarize in all material respects the matters referred to therein with
respect to such legal matters, documents or proceedings;
(xiii) The Registration Statement has become effective under the
Act, and to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or any part
thereof has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission; and the Prospectus as amended
or supplemented was filed with the Commission pursuant to Rule 424(b)
within the applicable time period prescribed for such filing by the
rules and regulations under the Act; and
(xiv) The Registration Statement and the Prospectus as amended
or supplemented and any further amendments and supplements thereto made
by the Company prior to the date of such opinion (other than the
financial statements, schedules and notes thereto and other financial
and statistical information contained or incorporated by reference
therein, as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the Act and the
rules and regulations thereunder.
In rendering such opinion, Debevoise & Plimpton may state that they
express no opinion as to the laws of any jurisdiction other than the Federal
laws of the United States, the laws of the State of New York and the General
Corporation Law of the State of Delaware. Debevoise & Plimpton may also assume,
to the extent their opinion relates to the sale of Offered Shares that any such
sale will not result in a violation of (i) Section 7312(v) of the New York
Insurance Law or (ii) any state
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insurance holding company statute relating to the acquisition of control of the
Company or any of its subsidiaries.
Debevoise & Plimpton shall also have stated that, while they have not
themselves checked the accuracy and completeness of, or otherwise verified, and
are not passing upon and assume no responsibility for the accuracy or
completeness of, the statements contained in the Registration Statement and the
Prospectus as amended or supplemented, except to the limited extent stated in
paragraphs (ix) and (xiv) above, in the course of their review and discussion of
the contents of the Registration Statement and the Prospectus as amended or
supplemented, with certain officers and employees of the Company and Equitable
Life and the Company's independent accountants, but without independent check or
verification, no facts have come to their attention which cause them to believe
that the Registration Statement (including the prospectus contained therein) or
any further amendment or supplement thereto made by the Company prior to the
date of such opinion, at the time it became effective (other than the financial
statements, schedules and notes thereto and other financial and statistical
information contained or incorporated by reference therein, as to which such
counsel need express no belief) contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements contained therein not misleading, or that the Prospectus
as amended or supplemented or any further amendments or supplements thereto made
by the Company prior to the date of such opinion (other than the financial
statements, schedules and notes thereto and other financial and statistical
information contained or incorporated by reference therein, as to which such
counsel need express no belief) contained as of its date or contains as of the
date of such opinion any untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the statement therein, in light of
the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, in lieu of any opinion required by this
Section 9(c), Debevoise & Plimpton may furnish or cause to be furnished to such
Agent a reliance letter to the effect that such Agent may rely on the opinion of
such counsel set forth in this Section 9(c) which was last furnished to such
Agent to the same extent as though it were dated the date of such letter (except
that the statements in such last opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
date).
(d) If required pursuant to the terms of the Terms Agreement with the
Agent, Debevoise & Plimpton shall have also furnished to the Agent such written
opinions, dated the date of a Soliciting Terms Agreement or the Time of Delivery
with respect to a Principal Terms Agreement, in form and substance satisfactory
to the Agent, with respect to ERISA matters related to the Trust as the Agent
may reasonably request, or in lieu of any such opinions, a reliance letter to
the effect that such Agent may rely on the opinions of such counsel which were
last furnished to such Agent pursuant to this
23
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Section 9(d) to the same extent as though such opinions were dated the date of
such letter.
(e) If required pursuant to the terms of the Terms Agreement with the
Agent, Robert E. Garber, Executive Vice President and General Counsel of the
Company, or other counsel satisfactory to the Agent, shall have furnished to the
Agent his written opinion, dated the date of a Soliciting Terms Agreement or the
Time of Delivery with respect to a Principal Terms Agreement, in form and
substance satisfactory to the Agent, to the effect that:
(i) Each of the Significant Subsidiaries other than Equitable Life and
Alliance is a corporation duly incorporated, Alliance is a limited
partnership duly authorized and each of the Significant Subsidiaries other
than Equitable Life is validly existing and in good standing under the laws
of its jurisdiction of organization;
(ii) Each Significant Subsidiary other than Equitable Life has the full
corporate or partnership power and authority to own its properties and
conduct its business as described in the Prospectus as amended or
supplemented; and each of the Company and the Significant Subsidiaries is
duly qualified as a foreign corporation or partnership to transact business
and is in good standing under the laws of each jurisdiction in which it owns
or leases properties, or conducts any business, so as to require such
qualification except where the failure to be so qualified or in good standing
would not, individually or in the aggregate, have a material adverse effect
on the assets, business, financial position, equity or results of operations
of The Equitable considered as a consolidated entity (a "Material Adverse
Effect on The Equitable");
(iii) Each of the Company and the Significant Subsidiaries has all
necessary Consents of and from, and has made all Filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations (as defined in the Exchange Act) to own, lease, license and use
its properties and assets and to conduct its business in the manner described
in or contemplated by the Prospectus as amended or supplemented, except where
the failure to obtain any such Consent or to make any such Filing would not,
individually or in the aggregate, have a Material Adverse Effect on The
Equitable; all such Consents and Filings are in full force and effect and, to
the best of such counsel's knowledge, neither the Company nor any Significant
Subsidiary has received any notice of any event, inquiry, investigation or
proceeding that would reasonably be expected to result in the suspension,
revocation or limitation of any such Consent or otherwise impose any
limitation on the conduct of the business of the Company or any Significant
Subsidiary, except for any such suspension, revocation or limitation which
would not, individually or in the aggregate, have a Material Adverse Effect
on The Equitable;
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<PAGE>
(iv) Each of Equitable Life and the Insurance Subsidiaries is duly
licensed or authorized to conduct its insurance business under the insurance
laws of each jurisdiction in which it conducts such business so as to require
such licensing or authorization, except where the failure to be so licensed
or authorized would not, individually or in the aggregate, have a Material
Adverse Effect on The Equitable; all such licenses or authorizations are in
full force and effect and, to the best of such counsel's knowledge, neither
the Company nor Equitable Life nor any Insurance Subsidiary has received any
notice of any event, inquiry, investigation or proceeding that would
reasonably be expected to result in the suspension, revocation or limitation
of any such licenses or authorizations or otherwise impose any limitation on
the conduct of the business of Equitable Life or any Insurance Subsidiary,
except any such suspension, revocation or limitation which would not,
individually or in the aggregate, have a Material Adverse Effect on The
Equitable;
(v) Neither the Company nor any Significant Subsidiary (other than
certain separate accounts of Equitable Life and EVLICO) is required to be
registered as an investment company with the Commission or in any United
States jurisdiction where it conducts business; each of the Company and the
Significant Subsidiaries is registered in all capacities with each federal,
state, local or other governmental authority and is registered with, a member
of, or a participant in, each self-regulatory organization, in each case, as
is necessary to conduct its business as described in or contemplated by the
Prospectus as amended or supplemented, except where the failure to be so
registered, or to be a member or participant, would not, individually or in
the aggregate, have a Material Adverse Effect on The Equitable; all such
registrations and memberships are in full force and effect and, to the best
of such counsel's knowledge, neither the Company nor any of its Significant
Subsidiaries has received any notice of any event, inquiry, investigation or
proceeding that would reasonably be expected to result in the suspension,
revocation or limitation of any such registrations or memberships, except any
such suspension, revocation or limitation which would not, individually or in
the aggregate, have a Material Adverse Effect on The Equitable;
(vi) All of the issued shares of capital stock of the Company, including
the Series D Preferred Shares have been duly and validly authorized and
issued and are fully paid and non-assessable; and all of the issued shares of
capital stock or partnership interests of each Significant Subsidiary have
been duly and validly authorized and issued and are fully paid and non-
assessable, and except as set forth in the Prospectus as amended or
supplemented, are owned directly or indirectly by the Company, free and clear
of all liens, encumbrances, equities or claims;
25
<PAGE>
(vii) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Terms Agreement, the Trust Agreement and the Certificate of Designations, the
issuance of Common Stock upon conversion of the Series D Preferred Shares and
the sale and delivery of Offered Shares as set forth herein and in the Terms
Agreement, the compliance by the Company with all of the provisions of the
Trust Agreement, the Certificate of Designations, this Agreement and such
Terms Agreement and the consummation of the transactions herein and therein
contemplated will not, to the best of such counsels' knowledge, conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, the Trust Agreement or any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any Significant Subsidiary is a party or by which the Company or
any Significant Subsidiary is bound or to which any of the property or assets
of the Company or any Significant Subsidiary is subject, except for such
conflicts, breaches, violations or defaults that would not, individually or
in the aggregate, have a Material Adverse Effect on The Equitable, nor will
such action result in any violation of (A) to the best of such counsel's
knowledge, any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
Significant Subsidiary or any of their properties, except for such violations
that would not, individually or in the aggregate, have a Material Adverse
Effect on The Equitable, (B) the provisions of the charter or by-laws (or
with respect to Alliance, other organizational documents) of the Company or
any Significant Subsidiary or (C) any term or provision of the Plan;
(viii) All consents, approvals, authorizations, orders, registrations
or qualifications of or with any court or governmental agency or body of the
United States or any state thereof required by the Company for the issuance
of Common Stock upon conversion of the Series D Preferred Shares or the sale
of the Offered Shares have been obtained and are in full force and effect,
except that such counsel need express no opinion as to state securities or
Blue Sky laws or state insurance securities laws in connection with the
purchase and distribution of the Offered Shares;
(ix) To the best of such counsel's knowledge and other than as set
forth or contemplated in the Prospectus as amended or supplemented, there
are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect
on The Equitable, and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by government authorities or
threatened by others;
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<PAGE>
(x) Such counsel does not know of any contracts or other documents of
a character required to be filed as an exhibit to the Registration Statement
or required to be described in the Registration Statement or the Prospectus
which are not filed or described as required;
(xi) The documents incorporated by reference in the Prospectus (other
than the financial statements, schedules and notes thereto and other
financial and statistical information contained therein as to which such
counsel need express no opinion) when they became effective or were filed
with the Commission, as the case may be, complied in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder; and
(xii) No consents, licenses, authorizations, approvals, orders,
certificates or permits of or from any federal, state, local or other
governmental authority, self-regulatory organization or court or other
tribunal are required with respect to payments to the Company by Equitable
Life, DLJ or EREIM in respect of contributions made by the Trust (whether
such contributions are made in securities or cash) to any of such
subsidiary's compensation or benefit plans, other than those which have been
obtained or made, except that such counsel need express no opinion as to any
such consents, licenses, authorizations, approvals, orders, certificates or
permits which may be required under ERISA and the rules and regulations
thereunder.
In rendering such opinion, such counsel may indicate that he is a member
of the bar of the State of New York. Insofar as the foregoing opinion relates
to the DLJ Group or any member of the DLJ Group or to the Alliance Group or any
member of the Alliance Group or to EREIM , such counsel may rely on the opinion
or opinions of the General Counsel of DLJ, Alliance or EREIM (or other counsel
satisfactory to the Agent), provided that a copy of each such opinion is
delivered to the Agent and is in form and substance satisfactory to the Agent.
In addition, such counsel may rely on the opinions of local counsel provided
that a copy of each such opinion is delivered to the Agent and is in form and
substance satisfactory to the Agent or, to the extent such counsel deems
appropriate, on the members of the Company's or Equitable Life's Law Department
under his supervision who have familiarity with the laws of any applicable
jurisdiction. In rendering such opinion, Robert E. Garber (or such other
counsel) may also assume, to the extent his opinion relates to the sale of
Offered Shares, that any such sale will not result in a violation of (i) Section
7312(v) of the New York Insurance Law or (ii) any state insurance holding
company statute relating to the acquisition of control of the Company or any of
its subsidiaries.
Robert E. Garber (or such other counsel) shall also have stated that,
while neither he nor any member of Equitable Life's law department under his
supervision have checked the accuracy and completeness of, or otherwise
verified, and are not passing upon and assume no responsibility for the accuracy
or completeness of, the statements
27
<PAGE>
contained in the Registration Statement and the Prospectus as amended or
supplemented, in the course of such members of Equitable Life's law department's
review and discussion of the contents of the Registration Statement and the
Prospectus as amended or supplemented with certain officers and employees of the
Company and Equitable Life and the Company's independent accountants, but
without his or their independent check or verification, no facts have come to
his attention which cause him to believe that (i) the documents incorporated by
reference in the Prospectus as amended or supplemented (other than the financial
statements, schedules and notes thereto and other financial and statistical
information contained or incorporated by reference therein, as to which such
counsel need express no belief), when such documents became effective or were
filed with the Commission, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, not misleading; or (ii) the Registration Statement
(including the prospectus contained therein) or any further amendment or
supplement thereto made by the Company prior to the date of such opinion, at the
time it became effective (other than the financial statements, schedules and
notes thereto and other financial and statistical information contained or
incorporated by reference therein, as to which such counsel need express no
belief) contained an untrue statement of material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
contained therein not misleading, or that the Prospectus as amended or
supplemented or any further amendments or supplements thereto made by the
Company prior to the date of such opinion (other than the financial statements,
schedules and notes thereto and other financial and statistical information
contained or incorporated by reference therein, as to which such counsel need
express no belief) contained as of its date or contains as of the date of such
opinion any untrue statement of material fact or omitted or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Notwithstanding the foregoing, in lieu of any opinion required by this
Section 9(e), Robert E. Garber (or such other counsel) may furnish or cause to
be furnished to such Agent a reliance letter to the effect that such Agent may
rely on the opinion of such counsel set forth in this Section 9(e) which was
last furnished to such Agent to the same extent as though it were dated the date
of such letter (except that the statements in such last opinion shall be deemed
to relate to the Registration Statement and the Prospectus as amended and
supplemented to such date).
(f) If required pursuant to the terms of the Terms Agreement with the Agent,
Winthrop, Stimson, Putnam & Roberts, counsel for the Trustee, or other counsel
for the Trustee satisfactory to such Agent, shall have furnished to the Agent
their written opinion, dated the date of a Soliciting Terms Agreement or the
Time of Delivery with respect to any Principal Terms Agreement in form and
substance satisfactory to the Agent, to the effect that:
28
<PAGE>
(i) This Agreement and the Terms Agreement with such Agent have been
duly authorized, executed and delivered by the Trust;
(ii) The Trust Agreement has been duly authorized, executed and
delivered by the Trustee and is a valid and binding agreement of the Trustee,
enforceable in accordance with its terms except as such enforceability may be
limited by applicable bankruptcy, insolvency, rehabilitation, fraudulent
transfer, reorganization, moratorium and similar laws relating tot he
creditors of issuance companies or affecting the rights of creditors
generally and by general equitable principles;
(iii) The Trust has [ for Soliciting Terms Agreement only:, and at
the Time of Delivery will have,] the legal right and power, and all
authorization and approval required by law, to enter into this Agreement and
the Terms Agreement, and to sell, transfer and deliver the Offered Shares to
be sold by the Trust at such Time of Delivery;
(iv) The [for Soliciting Terms Agreement only: purchaser[s] of the
Offered Shares solicited by the Agent] [for Principal Terms Agreement only:
Agent] (assuming that [it/they] [is/are] [a] bona fide purchaser[s] within
the meaning of the Uniform Commercial Code) will acquire good and marketable
title to the Offered Shares, free and clear of all adverse claims, liens,
encumbrances, security interests, restrictions on transfer or other defects
in title (other than any claim on or to the Offered Shares that may attach to
the Offered Shares at the Time of Delivery as a result of any contract,
agreement, note, bond, judgment or other restriction, instrument or
obligation to which [for Soliciting Terms Agreement only: such purchaser[s]]
[for Principal Terms Agreement only: the Agent] may be a party or by which
[it/any of them] or any of [its/their] properties or assets may be bound;
(v) All consents, approvals, authorizations, orders, registrations or
qualifications of or with any court or governmental agency or body of the
United States or any state thereof required by the Trust for the sale of the
Offered Shares by the Trust have been obtained and are in full force and
effect, except that such counsel need express no opinion as to state
securities or Blue Sky laws or state insurance securities laws in connection
with the purchase and distribution of Offered Shares;
(vi) The Trust is not required to be registered as an investment
company with the Commission or in any United States jurisdiction where it
conducts business; and
(vii) The execution and delivery by the Trustee on behalf of the
Trust of, and the performance by the Trustee on behalf of the Trust of its
obligations
29
<PAGE>
under, this Agreement, the Terms Agreement and the Trust Agreement, the sale
of the Offered Shares by the Trust as set forth herein and in the Terms
Agreement, the compliance by the Trustee on behalf of the Trust with all of
the provisions of this Agreement, the Terms Agreement and the Trust Agreement
and the consummation of the transactions herein and therein contemplated will
not, to be the best of such counsels' knowledge, conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, the Trust Agreement or any agreement or instrument listed on a
schedule attached to such opinion of counsel (it being understood that the
form and content of such schedule shall be satisfactory to counsel to the
Agent) to which the Trust is a party or by which the Trust is bound or to
which any of the property or assets of the Trust is subject, nor will such
action result in any violation of to the best of such counsel's knowledge,
any statue or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Trust or any of its assets,
except for such violations that would not, individually or in the aggregate,
have a material adverse effect on the Trust.
Such counsel's opinion may state that such opinion is limited to the laws of the
State of New York and the United States. In rendering such opinion, such
counsel may rely as to factual matters upon certificates or written statements
from appropriate representatives of the Trustee, the Company, the Agent or any
purchaser of Offered Shares or upon certificates of public officials.
(g) If required pursuant to the terms of the Terms Agreement with the Agent,
on the date of the Terms Agreement at a time prior to the execution of the Terms
Agreement and at the Time of Delivery with respect to a Principal Terms
Agreement, the independent accountants of the Company who have certified the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement shall have furnished to
the Agent a letter or letters, dated the respective date of delivery thereof, in
form and substance satisfactory to the Agent, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and the financial and
statistical information included and incorporated by reference in the
Prospectus, provided that any such letter shall use a "cut-off date" not more
--------
than three business days prior to the date of such letter.
(h) (i) Neither the Company nor any of its Significant Subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended prior to the
date of the Terms Agreement, any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended prior
to the date of the Terms Agreement, and (ii) since the date of the latest
financial statements included or incorporated by reference in the Prospectus as
amended
30
<PAGE>
prior to the date of the Terms Agreement, there shall not have been any increase
in the consolidated long-term debt of The Equitable (other than long-term debt
related to consolidated real estate joint ventures which is non-recourse to the
Company and any of its Insurance Subsidiaries and other than Other Permitted
Debt), or any change, or any development involving a prospective change, in or
affecting (a) the assets, general affairs, management, financial position,
equity or prospects of either the Alliance Group or the DLJ Group, (b) the
assets, general affairs, management, financial position, equity, results of
operations or prospects of either the Investment Subsidiaries Group or the
Insurance Group or of The Equitable considered as a consolidated entity or (c)
the statutory capital or surplus of Equitable Life or EVLICO, in each case
otherwise than as set forth or contemplated in the Prospectus as amended prior
to the date of the Soliciting Agreement or Terms Agreement, as applicable, the
effect of which, in any such case described in clause (i) or (ii), is in the
judgment of the Agent, so material and adverse as to make it impracticable or
inadvisable to proceed with the solicitation by the Agent of offers to purchase
Offered Shares from the Trust or the purchase by the Agent as principal of
Offered Shares from the Trust, as the case may be, on the terms and in the
manner contemplated in the Prospectus as amended or supplemented.
(i) On or after the date of the Terms Agreement, (i) no downgrading shall
have occurred in any rating of Equitable Life or EVLICO or the rating accorded
any debt securities or preferred stock of the Company, Equitable Life or any of
its subsidiaries by A.M. Best & Co., Duff & Phelps Inc., Standard & Poor's
Corporation, Moody's Investors Service, Inc. or any other "nationally recognized
statistical rating organization", and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, any such rating.
(j) On or after the date of the Terms Agreement, there shall not have
occurred any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange, the American
Stock Exchange, the London Stock Exchange, the Tokyo Stock Exchange or the
National Association of Securities Dealers, Inc.; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; (iv) the outbreak or escalation
of hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event specified
in this clause (iv) in the judgment of the Agent makes it impracticable or
inadvisable to proceed with the solicitation by the Agent of offers to purchase
Offered Shares from the Trust or the purchase by the Agent as principal of
Offered Shares from the Trust, as the case may be, on the terms and in the
manner contemplated in the Prospectus as amended or supplemented; (v) the
occurrence of any material adverse change in the existing financial, political
or economic conditions in the United States or elsewhere which in the judgment
of the Agent would materially and adversely affect the financial markets or the
market for the Common Stock; or (vi) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or
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<PAGE>
other governmental authority or any proposal to enact, publish, decree or
otherwise promulgate any such statute, regulation, rule or order, if the effect
of any such event specified in this clause (vi) on the business, operations or
prospects of the Company, Equitable Life or any Significant Subsidiary is in the
judgment of the Agent material and adverse so as to make it impracticable to
proceed with the solicitation by the Agent of offers to purchase Offered Shares
from the Trust or the purchase by the Agent as principal of Offered Shares from
the Trust, as the case may be, on the terms and in the manner contemplated in
the Prospectus as amended or supplemented.
(k) If required pursuant to the terms of the Terms Agreement with the Agent,
the Company shall have furnished or caused to be furnished to the Agent a
certificate or certificates, dated the date of a Soliciting Terms Agreement or
the Time of Delivery with respect to a Principal Terms Agreement, of officers of
the Company satisfactory to the Agent as to the accuracy of the representations
and warranties of the Company herein at and as of the date of such certificate
or certificates, as to the performance by the Company and the Trust of all of
their respective obligations hereunder and under such Terms Agreement, to be
performed at or prior to the date of such certificate or certificates, as to the
matters set forth in subsections (a), (h) and, in the case of a Principal Terms
Agreement, (i) of this Section 9 and as to such other matters as the Agent may
reasonably request, provided that in lieu of such certificate the Company may
--------
furnish or cause to be furnished to such Agent a certificate of such officers of
the Company to the effect that the statements contained in the last certificate
furnished to such Agent pursuant to this Section 9(k) are true and correct at
such date as though made at and as of such date (except that such statements
shall be deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented to such date).
(l) If required pursuant to the terms of the Terms Agreement with the Agent,
the Trustee shall have furnished to the Agent a certificate, dated the date of
any Soliciting Terms Agreement or Time of Delivery with respect to any Principal
Terms Agreement, substantially the form attached hereto as Annex II.
10. (a) The Company will indemnify and hold harmless the Agent against
any losses, claims, damages or liabilities, joint or several, to which such
Agent may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary pricing
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Offered Shares, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Agent for any legal or other expenses reasonably incurred by such
Agent in connection with investigating or defending any such action or claim as
such expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent
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<PAGE>
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, any preliminary pricing supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Offered Shares, or any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company by the Agent expressly for use in the Prospectus as amended or
supplemented.
(b) The Agent will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary pricing supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Offered Shares, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary pricing
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Offered Shares, or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Agent expressly for use therein;
and will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any such
action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation.
33
<PAGE>
(d) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Agent on the
other from the offering of the Offered Shares to which such loss, claim, damage
or liability (or action in respect thereof) relates. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Agent on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and such Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of the Offered Shares (before
deducting expenses) received by the Company bear to the total commissions or
discounts received by the Agent in respect thereof. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or such Agent on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Agent agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), Agent shall not be required to contribute any amount in excess
of the amount by which the total offering price at which the Offered Shares
purchased by or through it were sold exceeds the amount of any damages which
such Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Company under this Section 10 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Agent within the
34
<PAGE>
meaning of the Act; and the obligations of the Agent under this Section 10 shall
be in addition to any liability which the Agent may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company and to each person, if any, who controls the Company within the meaning
of the Act.
11. The Agent, in soliciting offers to purchase Offered Shares from the
Trust and in performing the other obligations of the Agent hereunder (other than
in respect of any purchase of Offered Shares by the Agent as principal, pursuant
to a Terms Agreement or otherwise), is acting solely as agent for the Company
and the Trust and not as principal. The Agent will make reasonable efforts to
assist the Company and the Trust in obtaining performance by each purchaser
whose offer to purchase Offered Shares from the Trust was solicited by the Agent
and has been accepted by the Trust, but the Agent shall not have any liability
to the Company or the Trust in the event such purchase is not consummated for
any reason. If the Company or the Trust shall default on its obligations
hereunder or the Trust shall default on its obligation to deliver Offered Shares
to a purchaser whose offer it has accepted, the Company shall (i) hold the Agent
harmless against any loss, claim or damage arising from or as a result of such
default and (ii) notwithstanding such default, pay to the Agent any commission
to which it would be entitled in connection with such sale.
12. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Trust and the Agent, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of the Agent or any controlling person of the Agent, or the Company or the
Trust, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Offered Shares.
13. The provisions of this Agreement incorporated by reference in any
Soliciting Terms Agreement may be suspended or terminated at any time by the
Company or by the Agent specified in such Terms Agreement, upon the giving of
written notice of such suspension or termination to the other parties thereto.
In the event of such suspension or termination the provisions of this Agreement
as incorporated by reference in such Terms Agreement shall remain in full force
and effect with respect to the rights and obligations of any party thereto which
have previously accrued or which relate to Offered Shares which are already
issued, agreed to be issued or the subject of a pending offer at the time of
such suspension or termination, and, in any event, this Agreement shall remain
in full force and effect insofar as Sections 7(d), 7(i), 7(j), 8, 10, 11 and 12
hereof are concerned. In the event of any inconsistency between a Terms
Agreement and this Agreement, the provisions of the Terms Agreement shall be
controlling.
14. Except as otherwise specifically provided for herein, all
statements, requests, notices and advices hereunder shall be in writing, and if
to the Agent shall be delivered or sent by mail, telex or facsimile transmission
to the address, telex or
35
<PAGE>
facsimile number of the Agent set forth in the Terms Agreement; if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
787 Seventh Avenue, New York, New York 10019, telex no. _________, facsimile
transmission no. _____________, Attention: Treasurer; and if to the Trust shall
be delivered or sent by mail, telex or facsimile transmission to The Chase
Manhattan Bank, N.A., as trustee, at 1211 Avenue of the Americas, New York, New
York 10036, telex no. ___________, facsimile transmission no. (212) 944-0959,
Attention: Mark J. Altschuler, Vice President. Any such statements, requests,
notices or advice shall take effect upon receipt thereof.
15. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, the Company, the Trust and the Agent specified
in such Terms Agreement, and, to the extent provided in Sections 10, 11 and 12
hereof, the officers and directors of the Company and each person who controls
the Company or such Agent, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement or any Terms Agreement. No
purchaser of any of the Offered Shares through or from such Agent shall be
deemed a successor or assign by reason merely of such purchase.
16. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
17. This Agreement and each Terms Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
36
<PAGE>
18. This Agreement and each Terms Agreement may be executed by the
Company, the Trustee on behalf of the Trust and the Agent, in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
Very truly yours,
THE EQUITABLE COMPANIES
INCORPORATED
By:
-------------------------------------------
Name:
Title:
THE EQUITABLE COMPANIES
INCORPORATED STOCK TRUST
By: The Chase Manhattan Bank, N.A.,
Trustee
By:
-------------------------------------------
Name:
Title:
37
<PAGE>
ANNEX I
Terms Agreement*
---------------
___________, 199_
[Name of Agent]1
[Name of Representative(s),
As Representative(s) of the
several Underwriters named
in Schedule I hereto,2]
[c/o ________________3]
[Address]
Ladies and Gentlemen:
The Equitable Companies Incorporated Stock Trust (the "Trust") created
under The Equitable Companies Incorporated Stock Trust Agreement effective as of
December 2, 1993 among The Equitable Companies Incorporated, a Delaware
corporation (the "Company"), and The Chase Manhattan Bank, N.A., as trustee of
the Trust, proposes, subject to the terms and conditions stated herein and in
the Sales Agreement dated May __, 1996 (the "Sales Agreement") executed by the
Company and the Trustee on behalf of the Trust, a signed copy of which has been
delivered to you [(the "Agent")1] [, as representative[s3] (the
"Representative[s3]") of the several Underwriters referred to below2], [to sell
through the Agent, as exclusive sales agent of the Company and the Trust for the
purpose of soliciting and receiving offers to purchase from the Trust,4] [to
sell to the Agent5] [the Underwriters named in Schedule I hereto (the
"Underwriters")2] the number of shares of Common Stock of the Company specified
in Schedule [I/II6] hereto [(the "Offered Shares")7] [(the "Firm Shares") and up
to the number of additional shares of Common Stock of the Company (the "Option
Shares" and, together with the Firm Shares, the "Offered Shares") specified in
Schedule II hereto as the Underwriters may purchase as herein provided.8] Each
of the provisions of the Sales Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Terms Agreement to the
same extent as if such provisions had been set forth in full herein but shall,
in each case, give full effect to the matters, terms and provisions set forth in
[Schedule [I/II6] hereto; and each of the representations and warranties set
forth in the Sales Agreement shall be deemed to have been made at and as of the
date of this Terms Agreement, except that each representation and warranty which
refers to the Prospectus in Section 2 of the Sales Agreement shall be deemed to
be a representation or warranty as of the date of the Sales Agreement in
relation to the
- --------------------
* Footnote explanations follow the forms of the Schedules.
<PAGE>
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Terms Agreement [, any Solicitation Time and each Time of
Delivery, in each case4] in relation to the Prospectus as amended or
supplemented relating to the shares of Common Stock of the Company which are the
subject of this Terms Agreement, in each case giving full effect to the matters,
terms and provisions set forth in [Schedule I/II6] hereto. Unless otherwise
defined herein or in [Schedule I/II6] hereto, terms defined in the Sales
Agreement are used herein as therein defined. [Except as provided in paragraph
(b) under the caption "Syndicate Terms" in Schedule II hereto, each reference to
the Agent in the Sales Agreement shall for purposes of this Terms Agreement and
the Sales Agreement be deemed to be you, as Representative[s3] of the several
Underwriters2] [and the Representative designated to act on behalf of the
Representatives and on behalf of each of the Underwriters pursuant to this Terms
Agreement, and the address of such Representative, are set forth in paragraphs
(c) and (d) under such caption in Schedule II hereto.3]
[An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Offered Shares in the form
heretofore delivered to you is now proposed to be filed with the Commission.9]
Subject to the terms and conditions set forth herein and in the Sales
Agreement incorporated herein by reference, [(a)8] the Trust agrees to sell
[through the Agent, 4] [to the Agent,5] [to each of the Underwriters,2] and [the
Agent agrees1] [each of the Underwriters agrees, severally and not jointly,2]
[to act as agent of the Company and the Trust for the purpose of soliciting and
receiving offers to purchase from the Trust 4] [to purchase from the Trust, at
the time and place and at the purchase price per share set forth in Schedule
[I/II6] hereto10], [the Offered Shares set forth in Schedule I hereto1] [the
number of [Offered/Firm11] Shares set forth opposite the name of such
Underwriter in Schedule I hereto2] [and (b) in the event and to the extent that
the Underwriters shall exercise the election to purchase Option Shares (the
"Over-allotment Option"), as provided below, the Trust agrees to sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Trust at the purchase price per share set forth in
Schedule II hereto that portion of the number of Option Shares as to which such
election shall have been exercised8].
[The Trust hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Option Shares set forth opposite
the name of such Underwriter in Schedule I hereto on the terms referred to in
the paragraph above for the sole purpose of covering over-allotments in the sale
of the Firm Shares. Any such election to purchase Option Shares may be
exercised by written notice from the Representative[s9] to the Company and the
Trust given within a period of 30 calendar days after the date of this Terms
Agreement, setting forth the aggregate number of Option Shares to be purchased
and the date on which such Option Shares are to be delivered, as determined by
the Representative[s9], but in no event earlier than the First Time of Delivery
as defined in Schedule II hereto or, unless the Representative[s9], the
2
<PAGE>
Company and the Trust otherwise agree in writing, no earlier than two or later
than ten business days after the date of such notice.8]
[Upon the execution of this Terms Agreement and authorization by the
Representative[s9] of the release of the [Offered/Firm11] Shares, the several
Underwriters propose to offer the [Offered/Firm11] Shares for sale upon the
terms and conditions set forth in the Prospectus as amended or supplemented.2]
If the foregoing is in accordance with your understanding, please sign
and return to us ____12 counterparts hereof, and upon acceptance hereof by you
[, on behalf of each of the Underwriters,2] this letter and such acceptance
hereof, including the provisions of the Sales Agreement incorporated herein by
reference, shall constitute a binding agreement among [the Agent,1] [each of the
Underwriters,2] the Trust and the Company. [It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Trustee on behalf of the Trust and
the Company for examination upon request, but without warranty on the part of
the Representative[s9] as to the authority of the signers thereof.2]
Very truly yours,
THE EQUITABLE COMPANIES
INCORPORATED
By:
---------------------------------------
Name:
Title:
THE EQUITABLE COMPANIES
INCORPORATED STOCK TRUST
By: The Chase Manhattan Bank, N.A.,
Trustee
By:
--------------------------------------
Name:
Title:
3
<PAGE>
Accepted as of the date hereof:
[Name of Agent1]
[Name(s) of Representative(s)2]
[On behalf of each of the Underwriters2]
By:___________________________________________
Name:
Title:
4
<PAGE>
SCHEDULE I13
Number of
[Offered/Firm11] [Maximum Number of
Shares Option Shares which
Underwriter to be Purchased may be Purchased14]
----------- ---------------------- -------------------
[Name(s) of Representative(s)]
[Names of other Underwriters]
Total
<PAGE>
SCHEDULE [I/II6]
Number of [Offered/Firm15] Shares:
________ shares of Common Stock
[Maximum Number of Option Shares:
________ shares of Common Stock8]
Price Per Share to Public, if applicable2:
[May include "at-the-market" offerings]
Purchase Price Per Share:
Commissions or Discounts Per Share1:
Form of Delivery of Offered Shares16:
[As specified in Section 5 of the Sales Agreement.]
[Definitive form certificates to be made available for checking and
packaging by the [Agent] [Representative(s)] at least twenty-four hours
prior to the [applicable8] Time of Delivery at the office of ___________.]
[Offered Shares to be delivered to the [Agent] [Representatives] through
the facilities of The Depository Trust Company ("DTC") or its designated
custodian, and to be made available for checking by the [Agent]
[Representative(s)] at least twenty-four hours prior to the [applicable8]
Time of Delivery at the office of DTC.]
Method of and Specified Funds for Payment of Purchase Price16:
[As specified in Section 5 of the Sales Agreement.]
[By certified or official bank check or checks, payable to the order of the
Trust, in immediately available funds]
<PAGE>
[By wire transfer to the bank account of the Trustee specified in Section 5
of the Sales Agreement in immediately available funds]
Time of Delivery16:
[As specified in Section 5 of the Sales Agreement.]
[ a.m. (New York City time), , 19 ] [(hereinafter the
"First Time of Delivery")8]
[With respect to any Option Shares, on the date and at the time specified
in the notice form the Representative[s9] of the Underwriters' election to
purchase the number of Option Shares specified therein (the "Second Time of
Delivery")8]
Documents to be Delivered:
[Pursuant to the Sales Agreement the delivery of opinions, comfort letters, a
Company officer's certificate and a Trustee's certificate are not required
---
unless specifically referenced in the Terms Agreement. Accordingly, before
signing the Terms Agreement, the parties must agree which, if any, of the
foregoing will be delivered.]
The following documents referred to in the referenced Sections of the
Sales Agreement shall be delivered:
(1) The opinion or opinions of Davis Polk & Wardwell referred to in
Section 9(b).
(2) The opinions of counsels to the Company referred to in Sections 9(c),
9(d) and 9(e).
(3) The opinion of counsel to the Trustee referred to in Section 9(f).
(4) The accountants' letter[s10] referred to in Section 9(g).
(5) The Company officers' certificate referred to in Section 9(k).
(6) The Trustee's certificate referred to in Section 9(l).
Other Permitted Debt:
For purposes of Section 2(d) of the Sales Agreement the amount of Other
Permitted Debt is $ [, of which no more than $ may have
been incurred by the DLJ Group].
2
<PAGE>
Completed and Pending Insurance Examinations:
[The Company must review the requirements of the last clause of Section 2(p) of
the Sales Agreement prior to the signing of the Terms Agreement.]
Notices to Agent1:
[Insert information required by Section 14 of the Sales Agreement]
Syndicate Terms17:
(a) (i) If any Underwriter shall default in its obligation to purchase
the [Offered/Firm11] Shares [or Option Shares8] which it has agreed to purchase
under this Terms Agreement, the Representative[s9] may in [its/their18]
discretion arrange for [itself/themselves18] or another party or other parties
to purchase such [Offered/Firm11] Shares [or Option Shares, as the case may
be,8] on the terms contained herein. If within thirty-six hours after such
default by any Underwriter the Representative[s9] [does/do18] not arrange for
the purchase of such [Offered/Firm11] Shares [or Option Shares, as the case may
be,8] then the Company and the Trust shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to the Representative[s9] to purchase such Offered Shares on such
terms. In the event that, within the respective prescribed period, the
Representative[s9] [notifies/notify18] the Company and the Trust that
[it/they18] have so arranged for the purchase of such Offered Shares, or the
Company and the Trust notify the Representative[s9] that they have so arranged
for the purchase of such Offered Shares, the Representative[s9] or the Company
and the Trust shall have the right to postpone the [applicable8] Time of
Delivery for such Offered Shares for a period of not more than seven days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representative[s9] may thereby be made necessary. The
term "Underwriter" as used in this Terms Agreement shall include any person
substituted under this provision with like effect as if such person had
originally been a party to this Terms Agreement.
(ii) If, after giving effect to any arrangements for the purchase of the
[Offered/Firm11] Shares [or Option Shares, as the case may be,8] of a defaulting
Underwriter or Underwriters by the Representative[s9] and the Company and the
Trust as provided in paragraph (a)(i) above, the aggregate number of such
Offered Shares which remains unpurchased does not exceed one-eleventh of the
aggregate number of [Offered/Firm11] Shares [or Option Shares, as the case may
be,8] to be purchased at the [respective8] Time of Delivery, then the Trust
shall have the right to require each non-defaulting Underwriter to purchase the
[Offered/Firm11] Shares [or Options Shares, as the case may be,8] which such
Underwriter agreed to purchase under this Terms Agreement relating to such
[Offered/Firm11] Shares [or Option Shares, as the case may be,8] and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share
3
<PAGE>
(based on the [Offered/Firm11] Shares [or Option Shares, as the case may be,8]
which such Underwriter agreed to purchase under this Terms Agreement) of the
[Offered/Firm11] Shares [or Option Shares, as the case may be,8] of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(iii) If, after giving effect to any arrangements for the purchase of the
[Offered/Firm11] Shares [or Option Shares, as the case may be,8] of a defaulting
Underwriter or Underwriters by the Representative[s9] and the Company and the
Trust as provided in paragraph (a)(i) above, the aggregate number of
[Offered/Firm11] Shares [or Option Shares, as the case may be,8] which remains
unpurchased exceeds one-eleventh of the aggregate number of [Offered/Firm11]
Shares [or Option Shares, as the case may be,8] to be purchased at the
[respective8] Time of Delivery, as referred to in paragraph (a)(ii) above, or if
the Trust shall not exercise the right described in paragraph (a)(ii) above to
require non-defaulting Underwriters to purchase [Offered/Firm11] Shares [or
Option Shares, as the case may be,8] of a defaulting Underwriter or
Underwriters, then this Terms Agreement [relating to such Firm Shares or the
Over-allotment Option relating to such Option Shares, as the case may be,8]
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company or the Trust, except for the expenses to be borne by
the Company and the Underwriters as provided in Section 8 of the Sales Agreement
and the indemnity and contribution agreements in Section 10 of the Sales
Agreement (as modified as set forth in paragraph (b) below); but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(b) For purpose of the sale and offering of the Offered Shares contemplated
hereby, (i) references to the Agent in Sections 10, 12 and 15 of the Sales
Agreement shall be deemed to refer to the Underwriters, (ii) references in the
Sales Agreement to the Agent purchasing Offered Shares as principal shall be
deemed to refer to the Underwriters, (iii) with respect to the Underwriters'
obligations (y) to indemnify the Company pursuant to Section 10(b) of the Sales
Agreement, such obligation shall be several and not joint and (z) to contribute
a portion of losses, claims, damages or liabilities pursuant to Section 10(d) of
the Sales Agreement, such Underwriters' respective obligations shall be several
in proportion to the respective underwriting obligations with respect to the
Offered Shares, and not joint, and (iv) Section 10(d) of the Sales Agreement is
hereby amended to add the words "(even if the Underwriters were treated as one
entity for such purpose)" after the words "pro rata allocation" in the fifth
sentence thereof.
(c) In all dealings under this Terms Agreement, the Representative[s9]
shall act on behalf of the Underwriters, and the parties to this Terms
Agreement shall be entitled to act and rely upon any statement request, notice
or agreement on behalf of the Underwriters made or given by the
Representative[s jointly or by the first of the named Representatives set
forth on the first page of this Terms Agreement.9]
(d) For purposes of Section 14 of the Sales Agreement, the address for the
Representative[s9] shall be as set forth on the first page of this Terms
Agreement, telex no. __________, facsimile transmission no. __________,
Attention _________; provided, however,
4
<PAGE>
that any notice to an Underwriter pursuant to Section 10(c) of the Sales
Agreement shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company and the Trustee on behalf of the Trust by the Representative[s9] upon
request.
(e) This Terms Agreement is subject to termination on the terms incorporated
by reference herein and as provided in paragraph (a) above. If this Terms
Agreement or the Over-allotment Option shall be terminated pursuant to paragraph
(a) above, the Company and the Trust shall not then be under any liability to
any Underwriter with respect to the Offered Shares with respect to which this
Terms Agreement shall have been terminated except as provided in Sections 8 and
10 of the Sales Agreement; but, if for any other reason, Offered Shares are not
delivered by or on behalf of the Trust as provided herein, the Company will
reimburse the Underwriters through the Representative[s9] for all out-of-pocket
expenses approved in writing by the Representative[s9], including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such Offered Shares, but the
Company and the Trust shall then be under no further liability to any
Underwriter with respect to such Offered Shares except as provided in Sections 8
and 10 of the Distribution Agreement.
Other Terms and Provisions:
[Insert here any additional closing conditions, modifications to
opinions or the representations of the Company, modification to the lock-up, or
other provisions relating to this transaction.]
5
<PAGE>
Footnotes to Terms Agreement
----------------------------
1. Include if agency or principal, non-syndicated transaction.
2. Include if syndicated transaction.
3. Include in syndicated transaction if more than one Representative.
4. Include if agency, non-principal transaction.
5. Include if principal, non-syndicated transaction.
6. Schedule I if agency or principal, non-syndicated transaction; Schedule
II if syndicated transaction.
7. Include if agency or principal, non-syndicated transaction or, if
syndicated, there is no overallotment option.
8. Include if syndicated transaction and there is an overallotment option.
9. Include or delete as appropriate.
10. Include if principal or syndicated transaction.
11. If syndicated but no overallotment option use "Offered"; if syndicated
and there is an overallotment option use "Firm."
12. Insert 6 if agency or principal, non-syndicated transaction; if
syndicated insert number equal to 5 plus one for each Representative.
13. Delete Schedule if not syndicated.
14. Delete column if no overallotment option.
15. Use "Offered" if agency or principal, non-syndicated transaction, or, if
syndicated, there is no overallotment option; use "Firm" if syndicated
and there is an overallotment transaction.
16. Use appropriate paragraph.
17. Entire section is deleted if not syndicated.
18. Insert as appropriate.
6
<PAGE>
ANNEX II
THE CHASE MANHATTAN BANK
(National Association)
Trustee's Certificate
---------------------
The undersigned, The Chase Manhattan Bank (National Association), as
Trustee (the "Trustee") under The Equitable Companies Incorporated Stock Trust
Agreement effective as of December 2, 1993 (the "Trust Agreement") between The
Equitable Companies Incorporated (the "Company") and the Trustee, DOES HEREBY
CERTIFY THAT:
1. The Trust Agreement has been duly signed, acknowledged and
delivered in the name of and on behalf of the Trustee by Diana
Jacobs, one of its Second Vice Presidents.
2. The Sales Agreement dated May __, 1996 (the "Sales Agreement")
executed by the Company and Trustee has been duly signed, acknowledged and
delivered in the name and on behalf of the Trustee by _________, one of its
___________.
3. The Terms Agreement dated as of ___________, 19__ (the "Terms
Agreement") among the Company, the Trustee and ___________ [for syndicated
transaction insert:, as representative(s) of the several Underwriters named in
Schedule I thereto,] has been duly signed, acknowledged and delivered in the
name and on behalf of the Trustee by ___________, one of its ________.
4. The person who, on behalf of the Trustee, executed each of the
Trust Agreement, the Sales Agreement and the Terms Agreement was duly elected or
appointed, authorized, qualified and acting as an officer or employee of the
Trustee and empowered to perform such acts at the respect times of such acts,
and the signatures of such persons appearing on the Trust Agreement, the Sales
Agreement and the Terms Agreement are their genuine signatures.
5. Each of the persons referred to in paragraphs (1), (2) and (3) is
duly authorized to sign, acknowledge and deliver in the name and on behalf of
the Trustee under its corporate seal or otherwise all other instruments
necessary or proper in connection with the exercise of the fiduciary powers of
the Trustee under the Trust Agreement, the Sales Agreement and the Terms
Agreement.
<PAGE>
6. Attached hereto as Exhibit A is a true and correct copy of an
extract of the Board Resolution of the Trustee conferring the requisite
authority to such persons to perform the acts above mentioned, which have not
been amended and which were on the date of each such action and are now in full
force and effect.
7. Insofar as the Terms Agreement and the Sales Agreement incorporated
by reference therein are concerned, the Trustee has performed all of its
obligations thereunder to be performed at or prior to the date hereof in all
material respects.
[For Soliciting Terms Agreements only:] 8. The Trustee has no reason to
believe that it will not be able to deliver the Offered Shares specified in the
Terms Agreement on the dates and at the times specified in the Terms Agreement.
IN WITNESS WHEREOF, THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as
Trustee has caused this Certificate to be executed and its seal duly affixed
hereto this ____ day of ____________, 19__.
The Chase Manhattan Bank
(National Association)
By:______________________
Name:
Title:
I ____________________, an ____________________ of the CHASE MANHATTAN
BANK (NATIONAL ASSOCIATION), do hereby certify that _______________ was at the
time he executed the foregoing Certificate, a duly appointed and authorized
officer of THE CHASE MANHATTAN BANK (NATIONAL Association), and he was duly
authorized and empowered to act and that his signature thereon is genuine.
IN WITNESS WHEREOF, I hereto subscribe my name as of this ____ day of
______________, 19__.
By:____________________
Name:
Title:
2
Exhibit 23.01
Exhibit 23.01
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated February 7, 1966 appearing on page F-1 of The Equitable Companies
Incorporated's Annual Report on Form 10-K for the year ended December 31,
1995. We also consent to the incorporation by reference for our report on the
Consolidated Financial Statement Schedules, which appears on page F-50 of such
Annual Report on Form 10-K. We also consent to the references to us under the
headings "Experts and "Selected Consolidated Financial Data" in such Prospectus.
However, it should be noted that Price Waterhouse LLP has not prepared or
certified such "Selected Consolidated Financial Data."
PRICE WATERHOUSE LLP
New York, New York
May 22, 1996
